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As filed with the Securities and Exchange Commission on April 30, 1998
File No. 33-31375
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE
[X] SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. ____
[X] Post-Effective Amendment No. 15
and/or
REGISTRATION STATEMENT UNDER THE
[X] INVESTMENT COMPANY ACT OF 1940
[X] Amendment No. 16
(Check appropriate box or boxes)
AUL AMERICAN UNIT TRUST
(Exact Name of Registrant)
AMERICAN UNITED LIFE INSURANCE COMPANY(R)
(Name of Depositor)
One American Square, Indianapolis, Indiana 46282
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number: (317) 263-1877
Richard A. Wacker, One American Square, Indianapolis, Indiana 46282
(Name and Address of Agent for Service)
Title of Securities Being Registered: Interests in group variable annuity
contracts
It is proposed that this filing will become effective (Check appropriate Space)
immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1998 pursuant to paragraph (b) of Rule 485
_____ --------------
_____ 60 days after filing pursuant to paragraph (a) (i) of Rule 485
_____ on (date) pursuant to paragraph (a)(1) of Rule 485
_____ 75 days after filing pursuant to paragraph (a)(ii)
_____ on (date) pursuant to paragraph (a) (ii) of Rule 485
_____ this post-effective amendment designates a new effective date for a
previously filed amendment.
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CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus) and Part B (Statement of Additional
Information) of Registration Statement of Information Required by Form N-4
PART A - PROSPECTUS
Item of Form N-4 Prospectus Caption
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1. Cover Page ...........................Cover Page
2. Definitions ..........................Definitions
3. Synopsis .............................Summary; Expense Table
4. Condensed Financial Information ......Condensed Financial Information
5. General Description ..................Information About AUL, The Variable
Account, and the Funds; Voting
Shares of the Funds
6. Deductions and Expenses ..............Charges and Deductions
7. General Description of Variable
Annuity Contracts ...................The Contracts; Contributions and
Contract Values During the
Accumulation Period; Cash
Withdrawals and Death Benefits;
Summary
8. Annuity Period .......................Annuity Period
9. Death Benefit ........................Cash Withdrawals and The Death Benefit
10. Purchase and Policy Values ...........Contributions and Contract Values
During the Accumulation Period
11. Redemptions ..........................Cash Withdrawals and The Death Benefit
12. Taxes ................................Federal Tax Matters
13. Legal Proceedings ....................Other Information
14. Table of Contents for the Statement
of Additional Information ...........Statement of Additional Information
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PART B - STATEMENT OF ADDITIONAL INFORMATION
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Statement of Additional Statement of Additional
Information Item of Form N-4 Information Caption
- ---------------------------- -------------------
15. Cover Page ...........................Cover Page
16. Table of Contents ....................Table of Contents
17. General Information and History ......General Information and History
18. Services .............................Custody of Assets; Independent
Accountants
19. Purchase of Securities Being Offered .Distribution of Contracts;
(Prospectus) Charges and
Deductions
20. Underwriters .........................Distribution of Contracts
21. Calculation of Performance Data ......Performance Information
22. Annuity Payments .....................(Prospectus) Annuity Period
23. Financial Statements .................Financial Statements
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PART C - OTHER INFORMATION
Item of Form N-4 Part C Caption
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24. Financial Statements and Exhibits ....Statement of Additional Information)
Financial Statements and Exhibits
25. Directors and Officers of the
Depositor ...........................Directors and Officers of AUL
26. Persons Controlled By or Under
Common Control with Depositor
or Registrant .......................Persons Controlled By or Under Common
Control With the Depositor or
Registrant
27. Number of Policyowners ...............Number of Contractholders
28. Indemnification ......................Indemnification
29. Principal Underwriters ...............Principal Underwriters
30. Location of Accounts and Records .....Location of Accounts and Records
31. Management Services ..................Management Services
32. Undertakings .........................Undertakings
33. Signature Page .......................Signatures
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PROSPECTUS
for
AUL American Unit Trust
AUL American Series Fund, Inc.
Dated May 1, 1998
Sponsored by:
American United Life Insurance Company(R)
P.O. Box 6148
Indianapolis, Indiana 46206-6148
AUL
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Prospectus
AUL American Unit Trust
GROUP VARIABLE ANNUITY CONTRACTS
Offered By
American United Life Insurance Company(R)
One American Square
Indianapolis, Indiana 46282
(800) 634-1629
Annuity Service Office Mailing Address:
P.O. Box 6148, Indianapolis, Indiana 46206-6148
The date of this Prospectus is May 1, 1998
This Prospectus describes group annuity contracts (the "Contracts") offered
by American United Life Insurance Company(R) ("AUL" or the "Company"). The
Contracts are designed for use in connection with employer, association, and
other group retirement plans (each a "Plan") that qualify for favorable
tax-deferred treatment as retirement programs under Sections 401, 403(b), 408,
or 457 of the Internal Revenue Code of 1986, as amended. The Contracts may be
entered into by any employer, association, or other group.
This Prospectus describes several types of Contracts, including Contracts
for which contributions may vary in amount and frequency, subject to certain
limitations ("Recurring Contribution Contracts") and Contracts for which only a
single contribution may be made ("Single Contribution Contracts"). As of the
date of this Prospectus, Single Contribution Contracts are available only for
use in connection with retirement plans that meet the requirements of Sections
403(b) and 408 of the Internal Revenue Code. All of the Contracts provide for
the accumulation of values on either a variable basis, a fixed basis, or both.
The Contracts also provide several options for fixed annuity payments to begin
on a future date.
Contributions designated to accumulate on a variable basis may be allocated
to one or more of the Investment Accounts that comprise a separate account of
AUL called AUL American Unit Trust (the "Variable Account"). Each Investment
Account of the Variable Account invests in shares of one of the following mutual
funds:
<TABLE>
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Portfolio Mutual Fund Investment Adviser
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AUL American Equity AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Bond AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Managed AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Money Market AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Tactical Asset Allocation AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Conservative Investor AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Moderate Investor AUL American Series Fund, Inc. American United Life Insurance Company(R)
AUL American Aggressive Investor AUL American Series Fund, Inc. American United Life Insurance Company(R)
Alger American Growth Alger American Fund Fred Alger & Company
American Century VP Capital Appreciation American Century Variable Portfolios, Inc. American Century Investment Management, Inc.
Calvert Social Mid Cap Growth Calvert Variable Series Calvert Asset Management Corporation
Fidelity Asset Manager Fidelity Variable Insurance Products Fund II Fidelity Management & Research Company
Fidelity Contrafund Fidelity Variable Insurance Products Fund II Fidelity Management & Research Company
Fidelity Equity-Income Fidelity Variable Insurance Products Fund Fidelity Management & Research Company
Fidelity Growth Fidelity Variable Insurance Products Fund Fidelity Management & Research Company
Fidelity High Income Fidelity Variable Insurance Products Fund Fidelity Management & Research Company
Fidelity Index 500 Fidelity Variable Insurance Products Fund II Fidelity Management & Research Company
Fidelity Overseas Fidelity Variable Insurance Products Fund Fidelity Management & Research Company
Janus Flexible Income Janus Aspen Series Janus Capital Corporation
Janus Growth Janus Aspen Series Janus Capital Corporation
PBHG Growth II PBHG Insurance Series Fund, Inc. Pilgrim Baxter & Associates, Ltd.
PBHG Technology & Communication PBHG Insurance Series Fund, Inc. Pilgrim Baxter & Associates, Ltd.
SAFECO Equity SAFECO Resource Series Trust SAFECO Asset Management Company
SAFECO Growth SAFECO Resource Series Trust SAFECO Asset Management Company
T. Rowe Price Equity Income T. Rowe Price Equity Series, Inc. T. Rowe Price Associates, Inc.
</TABLE>
Contributions may be allocated to one or more Investment Accounts available
under a Contract. Not all of the Investment Accounts may be available under a
particular Contract and some of the Investment Accounts are either not available
for certain types of Contracts or are not in operation as of the date of this
Prospectus. Contributions allocated to an Investment Account of the Variable
Account will increase or decrease in dollar value depending on the investment
performance of the corresponding mutual fund portfolio in which the Investment
Account invests. These amounts are not guaranteed.
Contributions designated to accumulate on a fixed basis may be allocated to
AUL's Fixed Account and will earn interest at rates that are paid by AUL as
described in "The Fixed Account."
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This Prospectus concisely sets forth information about the Contracts and
the Variable Account that a prospective investor should know before investing.
Certain additional information is contained in a "Statement of Additional
Information," dated May 1, 1998, which has been filed with the Securities and
Exchange Commission (the "SEC"). The Statement of Additional Information is
incorporated by reference into this Prospectus. A copy may be obtained without
charge by calling or writing to AUL at the telephone number or address indicated
above. The table of contents of the Statement of Additional Information is
located at the end of this Prospectus.
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 IS ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR
THE MUTUAL FUND OR FUNDS BEING CONSIDERED. EACH OF THESE PROSPECTUSES
SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
(This page left intentionally blank.)
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TABLE OF CONTENTS
Description Page
DEFINITIONS............................................. 4-5
SUMMARY................................................. 6-9
Purpose of the Contracts.............................. 6
Types of Contracts.................................... 6
The Variable Account and the Funds.................... 6
Fixed Account......................................... 6
Contributions......................................... 6
Transfers............................................. 7
Withdrawals........................................... 7
The Death Benefit..................................... 7
Annuity Options....................................... 7
Charges............................................... 7
Withdrawal Charge.................................... 7
Premium Tax Charge................................... 8
Mortality and Expense Risk Charge.................... 8
Administrative Charge................................ 8
Expenses of the Funds................................ 8
Ten-Day Free Look..................................... 8
Termination by the Owner.............................. 8
Contacting AUL........................................ 9
EXPENSE TABLE........................................... 9-13
CONDENSED FINANCIAL INFORMATION......................... 13-15
PERFORMANCE OF THE INVESTMENT
ACCOUNTS.............................................. 15-16
INFORMATION ABOUT AUL, THE VARIABLE
ACCOUNT, AND THE FUNDS................................ 17-20
American United Life Insurance Company(R)............. 17
Variable Account...................................... 17
The Funds............................................. 17
AUL American Series Fund, Inc........................ 18
Alger American Fund.................................. 19
American Century Variable Portfolios, Inc............ 19
Calvert Variable Series.............................. 19
Fidelity Variable Insurance Products Fund............ 19
Fidelity Variable Insurance Products Fund II......... 19
Janus Aspen Series................................... 20
PBHG Insurance Series Fund, Inc...................... 20
SAFECO Resource Series Trust......................... 20
T. Rowe Price Equity Series, Inc..................... 20
THE CONTRACTS........................................... 21
General............................................... 21
CONTRIBUTIONS AND CONTRACT VALUES
DURING THE ACCUMULATION PERIOD........................ 21-24
Contributions under the Contracts..................... 21
Ten-Day Free Look..................................... 21
Initial and Single Contributions...................... 21
Allocation of Contributions........................... 22
Subsequent Contributions Under Recurring
Contribution Contracts............................... 22
Transfers of Account Value............................ 22
Participant's Variable Account Value.................. 22
Accumulation Units................................... 22
Accumulation Unit Value.............................. 22
Net Investment Factor................................ 23
DOLLAR COST AVERAGING................................... 23
CASH WITHDRAWALS AND THE DEATH
BENEFIT............................................... 24-27
Cash Withdrawals...................................... 24
Systematic Withdrawal Service for 403(b) and
408 Programs......................................... 24
Constraints on Withdrawals............................ 25
General.............................................. 25
403(b) Programs...................................... 25
Texas Optional Retirement Program.................... 25
The Death Benefit..................................... 25
Termination by the Owner.............................. 26
Termination by AUL.................................... 27
Payments from the Variable Account.................... 27
CHARGES AND DEDUCTIONS.................................. 27-29
Premium Tax Charge.................................... 27
Withdrawal Charge..................................... 27
Mortality and Expense Risk Charge..................... 28
Variable Investment Plus Factor....................... 28
Administrative Charge................................. 29
Other Charges......................................... 29
Variations in Charges................................. 29
Guarantee of Certain Charges.......................... 29
Expenses of the Funds................................. 29
ANNUITY PERIOD.......................................... 29-30
General............................................... 29
Annuity Options....................................... 30
Option 1 - Life Annuity.............................. 30
Option 2 - Certain and Life Annuity.................. 30
Option 3 - Survivorship Annuity...................... 30
Option 4 - Installment Refund Life Annuity........... 30
Option 5 - Fixed Periods............................. 30
Selection of an Option................................ 30
THE FIXED ACCOUNT....................................... 31-33
Interest.............................................. 31
Withdrawals and Transfers............................. 31
Transfer of Interest Option........................... 32
Contract Charges...................................... 32
Payments from the Fixed Account....................... 32
Loans from the Fixed Account.......................... 32
MORE ABOUT THE CONTRACTS................................ 33
Designation and Change of Beneficiary................. 33
Assignability......................................... 33
Proof of Age and Survival............................. 33
Misstatements......................................... 33
Acceptance of New Participants or Contributions....... 33
FEDERAL TAX MATTERS..................................... 34-37
Introduction.......................................... 34
Tax Status of the Company and
the Variable Account................................. 34
Tax Treatment of Retirement Programs.................. 34
Employee Benefit Plans................................ 34
403(b) Programs....................................... 35
408 Programs.......................................... 35
457 Programs.......................................... 35
Tax Penalty........................................... 35
Withholding........................................... 36
Effect of Tax-Deferred Accumulation................... 36
OTHER INFORMATION....................................... 37-38
Voting of Shares of the Funds......................... 37
Substitution of Investments........................... 37
Changes to Comply with Law and Amendments............. 38
Reservation of Rights................................. 38
Periodic Reports...................................... 38
Legal Proceedings..................................... 38
Legal Matters......................................... 38
YEAR 2000 ISSUES AND READINESS.......................... 38-39
PERFORMANCE INFORMATION................................. 39
STATEMENT OF ADDITIONAL
INFORMATION........................................... 40
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4
DEFINITIONS
Various terms commonly used in this Prospectus are defined as follows:
ACCOUNT DATE - The date on which a Participant's initial contribution is applied
to a Participant's Account and on which AUL begins to determine account values.
It is the date used to determine Account Years and Account Anniversaries.
ACCUMULATION PERIOD - The period commencing on a Participant's Account Date and
terminating when the Participant's Account is closed, either through a
surrender, withdrawal(s), annuitization, payment of charges, payment of the
death benefit, or a combination thereof.
ACCUMULATION UNIT - A unit of measure used to record amounts of increases to,
decreases from, and accumulations in the Investment Accounts of the Variable
Account during the Accumulation Period.
ANNUITANT - The person or persons on whose life annuity payments depend.
ANNUITY - A series of payments made by AUL to an Annuitant or Beneficiary during
the period specified in the Annuity Option.
ANNUITY COMMENCEMENT DATE - The first day of any month in which an annuity
begins under a Contract, which shall not be later than the required beginning
date under applicable federal requirements.
ANNUITY OPTIONS - Options under a Contract that prescribe the provisions under
which a series of annuity payments are made to an Annuitant, contingent
Annuitant, or Beneficiary.
ANNUITY PERIOD - The period during which annuity payments are made.
AUL - American United Life Insurance Company(R)
BENEFICIARY - The person having the right to the death benefit, if any, payable
during the Accumulation Period, and the person having the right to benefits, if
any, payable upon the death of an Annuitant during the Annuity Period under any
Annuity Option other than a survivorship option (i.e., Option 3 - under which
the contingent Annuitant has the right to benefits payable upon the death of an
Annuitant).
BUSINESS DAY - A day on which AUL's Home Office is customarily open for
business. Traditionally, in addition to federal holidays, AUL is not open for
business on the day after Thanksgiving and either the day before or after
Christmas or Independence Day.
CERTIFICATE - The document for each Participant that evidences the coverage of
the Participant under a Contract.
CONTRACT DATE - The date shown as the Contract Date in a Contract. It will not
be later than the date any contribution is accepted under a Contract, and it is
the date used to determine Contract Months, Contract Years, and Contract
Anniversaries.
CONTRACT YEAR - A period beginning with one Contract Anniversary, or, in the
case of the first Contract Year, beginning on the Contract Date, and ending the
day before the next Contract Anniversary. The first Contract Year may, at the
request of the Owner, be less than 12 months so that the Contract Year will
coincide with the Owner's accounting year. Thereafter, each Contract Year will
consist of a 12 month period.
CONTRIBUTIONS - Any amount deposited under a Contract by a Participant or by an
Owner or other duly authorized entity on behalf of a Participant under a 403(b)
Program, a 408 Program, or an Employee Benefit Plan, or by an Employer in
connection with a 457 Program. Depending on the type of Contract, contributions
may be made on a recurring basis or on a single premium basis. To allow the
consolidation of funds from different sources, contributions made under single
premium contracts may be made for a period of twelve months, measured from the
date of first deposit. After this twelve month period, no further single premium
contributions to that specific Account will be accepted.
EMPLOYEE BENEFIT PLAN - A pension or profit sharing plan established by an
Employer for the benefit of its employees and which is qualified under Section
401 of the Internal Revenue Code.
EMPLOYER - A tax-exempt or public school organization or other employer with
respect to which a Contract has been entered into for the benefit of its
employees. In some cases, a trustee or custodian may act as the Owner for
Participants. In this case, rights usually reserved to the Employer will be
exercised either directly by the employees or through such trustee or custodian,
which will act as the agent of such employees.
EMPLOYER SPONSORED 403(B) PROGRAM - A 403(b) Program to which an Employer makes
contributions on behalf of its employees by means other than a salary reduction
arrangement, or other 403(b) Program that is subject to the requirements of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
FIXED ACCOUNT - An account that is part of AUL's General Account in which all or
a portion of a Participant's Account Value may be held for accumulation at fixed
rates of interest paid by AUL.
FUNDS - AUL American Series Fund, Inc., Alger American Fund, American Century
Variable Portfolios, Inc., Calvert Variable Series, Fidelity Variable Insurance
Products Fund, Fidelity Variable Insurance Products Fund II, Janus Aspen
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Series, PBHG Insurance Series Fund, Inc., SAFECO Resource Series Trust, and T.
Rowe Price Equity Series. Each of the Funds is a diversified, open-end
management investment company commonly referred to as a mutual fund.
GENERAL ACCOUNT - All assets of AUL other than those allocated to the Variable
Account or to any other separate account of AUL.
HOME OFFICE - The Annuity Service Office at AUL's principal business office, One
American Square, Indianapolis, Indiana 46282.
HR-10 PLAN - An Employee Benefit Plan established by a self-employed person in
accordance with Section 401 of the Internal Revenue Code.
INVESTMENT ACCOUNT - A sub-account of the Variable Account that invests in
shares of a specific Portfolio of AUL American Series Fund, Inc., Alger American
Fund, American Century Variable Portfolios, Inc., Calvert Variable Series,
Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance Products
Fund II, Janus Aspen Series, PBHG Insurance Series Fund, Inc., SAFECO Resource
Series Trust, and T. Rowe Price Equity Series, Inc. Not all of the Investment
Accounts may be available under a particular Contract and some of the Investment
Accounts are not available for certain types of Contracts.
OWNER - The employer, association, trust, or other entity entitled to the
ownership rights under the Contract and in whose name or names the Contract is
issued. A trustee or custodian may be designated to exercise an owner's rights
and responsibilities under a Contract in connection with a retirement plan that
meets the requirements of Sections 401, 408, or 457 of the Internal Revenue
Code. An administrator, custodian, or other person performing similar functions
may be designated to exercise an Owner's responsibilities under a Contract in
connection with a 403(b) Program. The term "Owner," as used in this Prospectus,
shall include, where appropriate, such a trustee, custodian, or administrator.
PARTICIPANT - An eligible employee, member, or other person named in the
Certificate who is entitled to benefits under the Plan as determined and
reported to AUL by the Owner or other duly authorized entity.
PARTICIPANT'S ACCOUNT - An account established for each Participant.
PARTICIPANT'S ACCOUNT VALUE - The current value of a Participant's Account under
a Contract, which is equal to the sum of a Participant's Fixed Account Value and
Variable Account Value. Initially, it is equal to the initial contribution, and
thereafter will reflect the net result of contributions, investment experience,
charges deducted, loans, and any partial withdrawals taken.
PARTICIPANT'S FIXED ACCOUNT VALUE - The total value of a Participant's interest
in the Fixed Account.
PARTICIPANT'S VARIABLE ACCOUNT VALUE - The total value of a Participant's
interest in the Investment Accounts of the Variable Account.
PARTICIPANT'S WITHDRAWAL VALUE - A Participant's Account Value minus the
applicable withdrawal charge and minus the Participant's outstanding loan
balances, if any, and any expense charges due thereon.
PLAN - The retirement plan or plans in connection with which the Contract is
issued and any subsequent amendment to such a plan.
VALUATION DATE - Each date on which the Variable Account is valued, which
currently includes each Business Day that is also a day on which the New York
Stock Exchange is open for trading.
VALUATION PERIOD - A period used in measuring the investment experience of each
Investment Account of the Variable Account. The Valuation Period begins at the
close of one Valuation Date and ends at the close of the next succeeding
Valuation Date.
VARIABLE ACCOUNT - AUL American Unit Trust, which is a separate account of AUL,
and whose assets and liabilities are maintained separately from those of AUL's
General Account.
403(B) PROGRAM - An arrangement by a public school organization or a charitable,
educational, or scientific organization that is described in Section 501(c)(3)
of the Internal Revenue Code under which employees are permitted to take
advantage of the Federal income tax deferral benefits provided for in Section
403(b) of the Internal Revenue Code.
408 PROGRAM - A plan of individual retirement accounts or annuities, including a
simplified employee pension plan or SIMPLE IRA plan established by an employer,
that meets the requirements of Section 408 of the Internal Revenue Code.
457 PROGRAM - A plan established by a unit of a state or local government or
a tax-exempt organization under Section 457 of the Internal Revenue Code.
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SUMMARY
This summary is intended to provide a brief overview of the more
significant aspects of the Contracts. Further detail is provided in this
Prospectus, the Statement of Additional Information, and the Contracts. Unless
the context indicates otherwise, the discussion in this summary and the
remainder of the Prospectus relates to the portion of the Contracts involving
the Variable Account. The Fixed Account is briefly described under "The Fixed
Account" and in the pertinent Contract.
PURPOSE OF THE CONTRACTS
The group variable annuity contracts ("Contracts") described in this
Prospectus are offered for use in connection with retirement plans that meet the
requirements of Sections 401, 403(b), 408, or 457 of the Internal Revenue Code
(collectively, "Plans"). A Contract presents a dynamic concept in retirement
planning designed to give employers and employees and other Participants in
Plans flexibility in attaining investment goals. A Contract provides for the
accumulation of values on a variable basis, a fixed basis, or both, and provides
several options for fixed annuity payments. During the Accumulation Period, a
Participant can pursue various investment options by allocating contributions to
the Investment Accounts of the Variable Account or to the Fixed Account. See
"The Contracts."
TYPES OF CONTRACTS
AUL offers several types of contracts that are described in this
Prospectus. These include recurring contribution contracts under which
contributions may vary in amount and frequency, subject to the limitations
described below. Recurring contribution contracts are available for use in
connection with retirement plans that meet the requirements of Sections 401,
403(b), 408, or 457 of the Internal Revenue Code. AUL also offers single
contribution contracts which require a minimum contribution of at least
$100,000. As of the date of this Prospectus, single contribution contracts are
available only for use in connection with retirement plans that meet the
requirements of Sections 403(b) and 408 of the Internal Revenue Code.
THE VARIABLE ACCOUNT AND THE FUNDS
Contributions designated to accumulate on a variable basis are allocated to
the Variable Account. See "Variable Account." The Variable Account is currently
divided into sub-accounts referred to as Investment Accounts. Each Investment
Account invests exclusively in shares of a specific mutual fund or in shares of
a specific Portfolio of one of the following mutual funds: AUL American Series
Fund, Inc., Alger American Fund, American Century Variable Portfolios, Inc.,
Calvert Variable Series, Fidelity Variable Insurance Products Fund, Fidelity
Variable Insurance Products Fund II, Janus Aspen Series, PBHG Insurance Series
Fund, Inc., SAFECO Resource Series Trust, and T. Rowe Price Equity Series, Inc.
(the "Funds"). Each of the mutual funds or Portfolios of the Funds has a
different investment objective or objectives. AUL American Series Fund, Inc.
offers the Equity, Bond, Money Market, Managed, Tactical Asset Allocation
Portfolios and three Lifestyle Portfolios consisting of the Conservative
Investor Portfolio, the Moderate Investor Portfolio and the Aggressive Investor
Portfolio. The Alger American Fund offers the Alger American Growth Portfolio.
The American Century Variable Portfolios, Inc. offers the American Century VP
Capital Appreciation Portfolio. Calvert Variable Series offers the Calvert
Social Mid Cap Growth Portfolio. The Fidelity Variable Insurance Products Fund
offers the Equity-Income, Growth, High Income and Overseas Portfolios. The
Fidelity Variable Insurance Products Fund II offers the Asset Manager,
Contrafund, and Index 500 Portfolios. The Janus Aspen Series offers the
Worldwide Growth and the Flexible Income Portfolios. The PBHG Insurance Series
Fund, Inc. offers the PBHG Growth II and the Technology & Communications
Portfolios. The SAFECO Resource Series Trust offers the Equity and Growth
Portfolios. The T. Rowe Price Equity Series, Inc. offers the Equity Income
Portfolio. Contributions may be allocated to one or more Investment Accounts
available under a Contract. Not all Investment Accounts may be available under a
particular Contract, and some of the Investment Accounts are not available for
certain types of Contracts. The value of the Accumulation Units held in an
Investment Account will increase or decrease in dollar value depending on the
investment performance of the corresponding Portfolio of a Fund in which the
Investment Account invests. A Participant bears the investment risk for amounts
allocated to an Investment Account of the Variable Account.
FIXED ACCOUNT
Contributions designated to accumulate on a fixed basis may be allocated to
the Fixed Account, which is part of AUL's General Account. Amounts allocated to
the Fixed Account earn interest at rates periodically determined by AUL that are
guaranteed to be at least an effective annual rate of 4%. See "The Fixed
Account."
CONTRIBUTIONS
For Recurring Contribution Contracts, contributions may vary in amount and
frequency, but contributions for each Participant under a Contract used for a
403(b) Program must total at least $200 each Contract Year. Contributions for
each Participant under a Recurring Contribution Contract used for any other Plan
must total at least $300 each Contract Year. In addition, the maximum and
minimum amounts that may be contributed under a Plan may be subject to
limitations depending on the type of Plan. In a Single Contribution Contract,
contributions for each Participant must be at least $100,000. Contributions of
less than $100,000 will initially be allocated to a Recurring Contribution
Contract. To allow the consolidation of assets from different sources,
Participants will be allowed a twelve month period, measured from the date of
first deposit, to reach the $100,000 minimum required contribution for Single
Contribution Contracts. If less than $100,000 is received and allocated to a
Recurring Contribution Contract, but the $100,000 required minimum contribution
for Single Contribution Contracts is received within the twelve month period,
measured from the date of the first deposit, then the
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7
Participant's Account Value will be immediately transferred from the Recurring
Contribution Contract to a Single Contribution Contract pursuant to the terms of
a Transfer Agreement between AUL and the Participant. However, after this twelve
month period, no further contributions will be accepted under Single
Contribution Contracts and any subsequent contributions will be allocated to a
Recurring Contribution Contract, unless the $100,000 minimum contribution for
establishing an additional Participant's Account under a Single Contribution
Contract is made. See "Contributions under the Contracts."
TRANSFERS
A Participant's Variable Account Value may be transferred among the
Investment Accounts of the Variable Account that are available under the
Contract or to the Fixed Account at any time during the Accumulation Period.
Part of a Participant's Fixed Account Value may be transferred to one or more
available Investment Accounts of the Variable Account during the Accumulation
Period, subject to certain restrictions. The minimum transfer from any
Investment Account or from the Fixed Account is the lesser of $500 or a
Participant's entire Account Value in that Investment Account or in the Fixed
Account, provided however, that amounts transferred from the Fixed Account to an
Investment Account during any given Contract Year cannot exceed 20% of the
Participant's Fixed Account Value as of the beginning of that Contract Year.
However, if a Participant's Fixed Account Value at the beginning of the Contract
Year is less than $2,500, the amount that will be transferred for that Contract
Year from the Fixed Account is the lesser of $500 or the entire Fixed Account
Value as of the date the transfer request is received by AUL at its Home Office.
If, after any transfer, the Participant's remaining Account Value in an
Investment Account or in the Fixed Account would be less than $500, then such
request will be treated as a request for a transfer of the entire Account Value.
See "Transfers of Account Value."
WITHDRAWALS
At any time before the Annuity Commencement Date, a Participant's Account
may be surrendered or a partial withdrawal may be taken from a Contract or a
Participant's Account subject to the provisions of the Contract. The minimum
amount that may be withdrawn from a Participant's Account Value in any one
Investment Account or the Fixed Account is the lesser of $500 or the
Participant's entire Account Value in the Investment Account or Fixed Account as
of the date the withdrawal request is received by AUL at its Home Office. If a
partial withdrawal is requested that would leave a Participant's Account Value
in the Fixed Account or any Investment Account from which the withdrawal is
requested, less than $500, then such request will be treated as a request for a
full surrender from the Fixed Account or Investment Account. See "Cash
Withdrawals."
Certain retirement programs, such as 403(b) Programs, are subject to
constraints on withdrawals and full surrenders. See "Constraints on
Withdrawals." In addition, distributions under certain retirement programs may
result in a tax penalty. See "Tax Penalty." A withdrawal or surrender may also
be subject to a withdrawal charge. See "Withdrawal Charge."
THE DEATH BENEFIT
If a Participant dies during the Accumulation Period, AUL will pay a death
benefit to the Beneficiary. The amount of the death benefit is equal to the
vested portion of the Participant's Account Value minus any outstanding loan
balances and any due and unpaid charges on those loans. If the death of the
Participant occurs on or after the Annuity Commencement Date, no death benefit
will be payable, except as may be provided under the Annuity Option elected. See
"The Death Benefit" and "Annuity Options."
ANNUITY OPTIONS
The Contracts provide for several fixed Annuity Options, any one of which
may be elected if permitted by the applicable Plan and applicable law. Payments
under the Annuity Options will be fixed and guaranteed by AUL. See "Annuity
Period."
CHARGES
Certain charges will be deducted in connection with the operation of the
Contracts and the Variable Account:
WITHDRAWAL CHARGE - AUL does not impose a sales charge at the time a
contribution is made to a Participant's Account under a Contract. If a cash
withdrawal is made or a Participant's Account is surrendered, a withdrawal
charge (which may also be referred to as a contingent deferred sales charge) may
be assessed by AUL where the Participant's Account has not been in existence for
a certain period of time (see chart below). No withdrawal charge will be taken
upon payment of a death benefit under a Contract. Under certain Contracts known
as "benefit responsive" Contracts, withdrawal charges are not imposed for
payment of retirement, death, disability, termination of employment, hardship,
loan, age 70 1/2 required minimum distribution benefits, or benefits upon
attainment of age 59 1/2 (provided that the age 59 1/2 benefit is a taxable
distribution paid to the Participant and not to any other person or entity,
including any alternative or substitute funding medium). For certain other
Contracts known as "modified benefit responsive" Contracts, withdrawal charges
are not imposed for cash lump-sum payments of death benefits. Withdrawal charges
are also not imposed for cash lump-sum payments provided the Participant has (1)
attained age 55 and has 10 years of service with the employer identified in the
Plan, or (2) attained age 62, and is receiving benefits for retire-
<TABLE>
<CAPTION>
Charge on Withdrawal Exceeding 10% Allowable Amount
---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11 or
Account Year 1 2 3 4 5 6 7 8 9 10 more
- -------------- - - - - - - - - -- ----
Recurring
Contribution
Contracts 8% 8% 8% 8% 8% 4% 4% 4% 4% 4% 0%
Single
Contribution
Contracts 6% 5% 4% 3% 2% 1% 0% 0% 0% 0% 0%
</TABLE>
<PAGE>
8
ment, disability, termination of employment, hardships, loans, or required
minimum distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder, or for benefits upon attainment of
age 59 1/2 (provided that such benefit upon attainment of age 59 1/2 is a
taxable distribution paid to the Participant and not to any other person or
entity, including any substitute funding medium).
However, even in benefit responsive or modified benefit responsive
contracts, withdrawal charges will be applied to any withdrawal to pay a Plan
benefit if the benefit is payable because of, or the underlying reason for
payment of the benefit results in, the termination or partial termination of the
Plan, as determined under applicable IRS guidelines.
For the first two Contract Years that a Participant's Account exists, the
amount withdrawn during a Contract Year that will not be subject to an otherwise
applicable withdrawal charge is 10% of (i) the total of all contributions made
during the year that the withdrawal is being made, plus (ii) the Participant
Account Value at the beginning of the Contract Year. After the first two
Contract Years, and until the withdrawal charge has decreased to 0% (the
eleventh year for Recurring Contribution Contracts and the seventh year for
Single Contribution Contracts), the amount withdrawn during a Contract Year that
will not be subject to a withdrawal charge is 10% of the Participant's Account
Value at the beginning of the Contract Year in which the withdrawal is being
made.
If a Participant's contributions were initially allocated to a Recurring
Contribution Contract and then transferred to a Single Contribution Contract
pursuant to the terms of a Transfer Agreement between AUL and the Participant
when the required minimum of $100,000 was reached, then for purposes of
establishing the number of Account Years that an account has been in existence,
credit will be given for the time that the contributions were in the Recurring
Contribution Contract.
If a surrender or a withdrawal in excess of this 10% allowable amount is
made to pay a non-benefit responsive benefit, a withdrawal charge will be
assessed on the amount withdrawn in excess of the 10% allowable amount. The
chart above illustrates the amount of the withdrawal charge that applies to the
different types of contracts based on the number of years that the Account has
been in existence. However, the total withdrawal charge will never exceed 9% of
total contributions made by or on behalf of a Participant. See "Withdrawal
Charge" on page 25.
PREMIUM TAX CHARGE - Various states and municipalities impose a tax on
premiums received by insurance companies. AUL assesses a premium tax charge to
reimburse itself for premium taxes that it incurs, which usually will be
deducted at the time annuity payments commence. Premium taxes currently range
from 0% to 3.5%, but are subject to change by such governmental entities. See
"Premium Tax Charge."
MORTALITY AND EXPENSE RISK CHARGE - AUL deducts a daily charge in an amount
equal to an annual rate of 1.25% of the average daily net assets of each
Investment Account of the Variable Account for mortality and expense risks that
AUL assumes in connection with the Contracts. For certain contracts, a portion
of the mortality and expense risk charges may be credited back to Participant
accounts based on aggregate variable investment account assets.
ADMINISTRATIVE CHARGE - Under Recurring Contribution Contracts, AUL deducts
from a Participant's Account an administrative charge equal to the lesser of
0.5% of the Participant's Account Value or $7.50 per quarter. The charge is
assessed every quarter on a Participant Account if the account exists on the
quarterly Contract Anniversary, and is assessed only during the Accumulation
Period. Such charge may be billed to the Owner in a "benefit responsive"
Employer Sponsored 403(b) Contract or in a combined contract which contains both
Employee Benefit Plan contributions and 403(b) contributions. There is no
Administrative Charge imposed on Single Contribution Contracts or on some
Recurring Contribution contracts. See "Administrative Charge."
EXPENSES OF THE FUNDS - Each Investment Account of the Variable Account
purchases shares of the corresponding Portfolio of one of the Funds at the net
asset value of such shares. The net asset value reflects investment advisory
fees and other expenses paid by each Portfolio. See the Funds' Prospectuses for
a description of these fees and expenses.
TEN-DAY FREE LOOK
Under 403(b) and 408 Contracts, the Owner has the right to return the
Contract for any reason within ten days of receipt. If this right is exercised,
the Contract will be considered void from its inception and any contributions
will be fully refunded.
TERMINATION BY THE OWNER
An Owner of a Contract acquired in connection with an Employee Benefit
Plan, a 457 Program, or an Employer Sponsored 403(b) Program may terminate the
Contract by sending proper written notice of termination to AUL at its Home
Office. Upon termination of such a Contract, the Owner may elect from two
payment options. Under one option, AUL will assess an Investment Liquidation
Charge on a Participants' Fixed Account Withdrawal Value from Contracts acquired
in connection with Employee Benefit Plans and 457 Programs (but not Employer
Sponsored 403(b) Programs). Under the second payment option, AUL will not assess
an Investment Liquidation Charge; however, amounts attributable to the aggregate
Withdrawal Values derived from the Fixed Account of all Participants under the
Contract shall be paid in six or seven (depending on the Contract) equal annual
installments, starting with the first Contract Anniversary immediately
succeeding the effective date of termination. For more information on
termination by an Owner, including information on the payment options and the
Investment Liquidation Charge, see "Termination by the Owner."
<PAGE>
9
CONTACTING AUL
All written requests, notices, and forms required by the Contracts, and any
questions or inquiries should be directed to AUL at the address of the Annuity
Service Office provided in the front of this Prospectus.
<TABLE>
<CAPTION>
EXPENSE TABLE
The purpose of the following table is to assist investors in understanding
the various costs and expenses that Participants in the Contracts bear directly
and indirectly. The table reflects expenses of the Variable Account as well as
the Funds. Expenses of the Variable Account shown under "Participant Transaction
Expenses" (including the withdrawal charge and annual contract fee) and
"Variable Account Annual Expenses" are fixed and specified under the terms of
the Contract. Expenses of the Funds as shown under "Fund Annual Expenses" are
not fixed or specified under the terms of the Contract, and may vary from year
to year. The fees in this Expense Table have been provided by the Funds and have
not been independently verified by AUL. The table does not reflect premium taxes
that may be imposed by various jurisdictions. See "Premium Tax Charge." The
information contained in the table is not generally applicable to amounts
allocated to the Fixed Account or to annuity payments under an Annuity Option.
For a complete description of a Contract's costs and expenses, see "Charges
and Deductions." For a more complete description of the Funds' costs and
expenses, see the Funds' Prospectuses. Costs and expenses for the Conservative
Investor Portfolio, the Moderate Investor Portfolio, and the Aggressive Investor
Portfolio are not available because these portfolios had not commenced
operations on the effective date of this Prospectus.
<S> <C>
Participant Transaction Expenses
Maximum withdrawal charge................................................................................................ 8%
Recurring Contribution Contracts(1)........................................................................................ 8%
Single Contribution Contracts(2)........................................................................................ 6%
Maximum administrative charge (per year)(3).............................................................................. $30
Variable Account Annual Expenses (as a percentage of average account value)
Mortality and expense risk fee...........................................................................................1.25%(4)
Fund Annual Expenses After Expense Limitation (as a percentage of average net assets of each Portfolio)
<S> <C> <C> <C> <C>
Total Port-
Management/ Other 12b-1 folio Annual
Portfolio Advisory Fee Expenses Fees Expenses
- --------- ------------ --------- ----- --------
AUL American Series Fund, Inc.:
Equity Portfolio 0.50%(5) 0.16% -- 0.66%
Bond Portfolio 0.50%(5) 0.17% -- 0.67%
Managed Portfolio 0.50%(5) 0.17% -- 0.67%
Money Market Portfolio 0.50%(5) 0.16% -- 0.66%
Tactical Asset Allocation Portfolio 0.68%(5) 0.32% -- 1.00%
<FN>
(1) For the first two Contract Years that a Participant's Account exists, the
amount withdrawn during a Contract Year that will not be subject to an otherwise
applicable withdrawal charge is 10% of (i) the total of all contributions made
during the year that the withdrawal is being made, plus (ii) the Participant's
Account Value at the beginning of the Contract Year. After the first two
Contract Years, and until the withdrawal charge has decreased to 0%, the amount
withdrawn during a Contract Year that will not be subject to a withdrawal charge
is 10% of the Participant's Account Value at the beginning of the Contract Year
in which the withdrawal is being made. The withdrawal charge, which is applied
to amounts withdrawn in excess of the 10% allowable amount, decreases from 8% to
4% for Account years 6 through 10, and to 0% thereafter. See "Withdrawal
Charge."
(2) For the first two Contract Years that a Participant's Account exists, the
amount withdrawn during a Contract Year that will not be subject to an otherwise
applicable withdrawal charge is 10% of (i) the total of all contributions made
during the year that the withdrawal is being made, plus (ii) the Participant's
Account Value at the beginning of the Contract Year. After the first two
Contract Years, and until the withdrawal charge has decreased to 0%, the amount
withdrawn during a Contract Year that will not be subject to a withdrawal charge
is 10% of the Participant's Account Value at the beginning of the Contract Year
in which the withdrawal is being made. The withdrawal charge, which is applied
to amounts withdrawn in excess of the 10% allowable amount, decreases by 1% in
each account Year until it is 0% in Account Year 7 and thereafter. If a
Participant's contributions were initially allocated to a Recurring Contribution
Contract and then transferred to a Single Contribution Contract when the
required minimum of $100,000 was reached, then for purposes of establishing the
number of Account Years that an account has been in existence, credit will be
given for the time that the contributions were in the Recurring Contribution
Contract. See "Withdrawal Charge."
(3) The Administrative Charge may be less than $30.00 per year, based on the
size of the Participant's Account. The maximum charge imposed will be the lesser
of 0.5% of the Participant's Account Value or $30.00 per year. There are no
Administrative Charges applied to Single Contribution Contracts and on some
recurring contribution contracts.
(4) This charge may be less than 1.25% for certain Contracts. In these
Contracts, a portion of the mortality and expense risk charge may be credited
back to Participant's accounts in the form of Accumulation Units. The number of
Accumulation Units credited will depend on the aggregate variable investment
account assets on deposit.
(5) AUL has currently agreed to waive its advisory fee if the ordinary expenses
of a Portfolio exceed 1% and, to the extent necessary, assume any expenses in
excess of its advisory fee so that the expenses of each Portfolio, including the
advisory fee but excluding extraordinary expenses, will not exceed 1% of the
Portfolio's average daily net asset value per year. The Adviser may terminate
the policy of reducing its fee and/or assuming Fund expenses upon 30 days
written notice to the Fund and such policy will be terminated automatically by
the termination of the Investment Advisory Agreement. With the exception of the
Tactical Asset Allocation Portfolio, during 1997, expenses did not exceed 1% of
the average daily net asset value.
</FN>
<PAGE>
10
<CAPTION>
EXPENSE TABLE (CONTINUED)
<S> <C> <C> <C> <C>
Total Port-
Management/ Other 12b-1 folio Annual
Portfolio Advisory Fee Expenses Fees Expenses
- --------- ------------ -------- ----- --------
Alger American Fund
Alger American Growth Portfolio 0.75% 0.04% -- 0.79%
American Century Variable Portfolios, Inc.
VP Capital Appreciation 1.00% 0.00% -- 1.00%
Calvert Variable Series
Calvert Social Mid Cap Growth Portfolio 0.90%(6) 0.15% -- 1.05%
Fidelity Variable Insurance Products Fund
Equity-Income Portfolio 0.50% 0.08% -- 0.58%(7)
Growth Portfolio 0.60% 0.09% -- 0.69%(7)
High Income Portfolio 0.59% 0.12% -- 0.71%
Overseas Portfolio 0.75% 0.17% -- 0.92%(7)
Fidelity Variable Insurance Products Fund II
Asset Manager Portfolio 0.55% 0.10% -- 0.65%(7)
Contrafund Portfolio 0.60% 0.11% -- 0.71%(7)
Index 500 Portfolio 0.24% 0.04% -- 0.28%(8)
Janus Aspen Series
Flexible Income 0.65% 0.10% -- 0.75%
Worldwide Growth 0.66% 0.08% -- 0.74%(9)
PBHG Insurance Series Fund, Inc.
Growth II 0.00% 1.20% -- 1.20%(10)
Technology & Communications 0.00% 1.20% -- 1.20%(10)
SAFECO Resource Series Trust
Equity 0.73% 0.02% -- 0.75%
Growth 0.74% 0.03% -- 0.77%
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Income 0.85% 0.00% -- 0.85%
<FN>
(6) The figures above are based on expenses for fiscal year 1997, and have been
restated to reflect an increase in transfer agency expenses of 0.01% for the
Portfolio expected to be incurred in 1998. Management and Advisory Expenses
includes a performance adjustment, which depending on performance, could cause
the fee to be as high as 0.95% or as low as 0.85%. "Other Expenses" reflect an
indirect fee. Net fund operating expenses after reductions for fees paid
indirectly (again, restated) would be 0.97%. Management and Advisory expenses
for the Portfolio include an administrative service fee of 0.10%, paid to
Adviser's affiliate.
(7) A portion of the brokerage commissions that certain funds pay was used to
reduce funds expenses. In addition, certain funds have entered into arrangements
with their custodian whereby credits realized, as a result of uninvested cash
balances were used to reduce custodian expenses. Including these reductions, the
total operating expenses presented in the table would have been 0.57% for the
Equity-Income portfolio, 0.67% for the Growth portfolio, 0.90% for the Overseas
portfolio, 0.64% for the Asset Manager portfolio, and 0.68% for the Contrafund
portfolio.
(8) Fidelity Management & Research Company agreed to reimburse a portion of
Index 500 Portfolio's expenses during the period. Without this reimbursement,
the fund's management fee, other expenses and total expenses would have been
0.27%, 0.13%, and 0.40% respectively.
(9) Management fees for the Worldwide Growth Portfolio reflect a reduced fee
schedule effective July 1, 1997. The management fee reflects the new rate
applied to net assets as of December 31, 1997. Other expenses are based on gross
expenses of the shares before expense offset arrangements for the fiscal year
ended December 31, 1997. The information is net of fee waivers or reductions
from Janus Capital. Fee reductions for the Worldwide Growth Portfolio reduce the
management fee to the level of the corresponding Janus retail fund. Other
waivers, if applicable, are first applied against the management fee and then
against other expenses. Without such waivers or reductions, the Management Fee,
Other Expenses and Total Operating Expenses for the Shares would have been
0.72%, 0.09% and 0.81% for the Worldwide Growth Portfolio. Janus Capital may
modify or terminate the waivers or reductions at any time upon at least 90 days'
notice to the Trustees.
(10) The Investment Adviser agreed to reimburse a portion of the funds' expenses
during the period. Without this reimbursement, the funds' management fee, other
expenses and total expenses would have been 0.85%, 3.53%, and 4.38%,
respectively, for the PBHG Growth II Portfolio and 0.85%, 4.24% and 5.09%,
respectively, for the PBHG Technology and Communications Portfolio.
</FN>
</TABLE>
<PAGE>
11
EXAMPLES (FOR ANY INVESTMENT ACCOUNT)
The following examples show expenses that a Participant would pay at the
end of one, three, five, or ten years if at the end of those time periods, the
Account is (1) surrendered, or (2) not surrendered. Example (2) will also apply
to a Participant Account that is annuitized at the end of the applicable time
period. The information below represents expenses on a $1,000 contribution and
assumes a 5% return per year. For an account that is surrendered, the example
shows expenses for Recurring Contribution Contracts, and Single Contribution
Contracts. Expenses will be the same for all Contracts if not surrendered. These
examples should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown. The assumed 5% return
is hypothetical and should not be considered a representation of past or future
returns, which may be greater or less than the assumed amount. For Recurring
Contribution Contracts, the Administrative charge used in these examples is
based on an estimated average Participant Account of $10,000. A pro-rata portion
of the annual Administrative Charge has, therefore, been used in the
calculations for Recurring Contribution Contracts.
<TABLE>
<CAPTION>
<S> <C> <C>
(2) If your Contract
is not Surrendered
(1) If your Contract is Surrendered or is Annuitized
----------------------------------- ----------------
<S> <C> <C> <C>
Recurring Single
Contribution Contribution
Contracts Contracts All Contracts
--------- --------- -------------
Investment Account
AUL American Equity
1 year $ 96.31 $ 77.82 $ 22.35
3 years 146.69 107.67 68.65
5 years 199.55 137.77 117.18
10 years 296.38 249.18 249.18
AUL American Bond
1 year 96.41 77.92 22.46
3 years 146.99 107.99 68.98
5 years 200.06 138.32 117.74
10 years 297.45 250.31 250.31
AUL American Managed
1 year 96.41 77.92 22.46
3 years 146.99 107.99 68.98
5 years 200.06 138.32 117.74
10 years 297.45 250.31 250.31
AUL American Money Market
1 year 96.31 77.82 22.35
3 years 146.69 107.67 68.65
5 years 199.55 137.77 117.18
10 years 296.38 249.18 249.18
AUL American Tactical Asset Allocation
1 year 99.46 81.03 25.76
3 years 156.14 117.52 78.90
5 years 215.28 154.55 134.31
10 years 329.19 283.59 283.59
AUL American Conservative Investor
1 year 99.46 81.03 25.76
3 years 156.14 117.52 78.90
5 years 215.28 154.55 134.31
10 years 329.19 283.59 283.59
AUL American Moderate Investor
1 year 99.46 81.03 25.76
3 years 156.14 117.52 78.90
5 years 215.28 154.55 134.31
10 years 329.19 283.59 283.59
AUL American Aggressive Investor
1 year 99.46 81.03 25.76
3 years 156.14 117.52 78.90
5 years 215.28 154.55 134.31
10 years 329.19 283.59 283.59
Alger American Growth
1 year 97.53 79.06 23.67
3 years 150.36 111.49 72.63
5 years 205.67 144.30 123.85
10 years 309.22 262.65 262.65
<PAGE>
12
<CAPTION>
EXAMPLES (FOR ANY INVESTMENT ACCOUNT) (CONTINUED)
<S> <C> <C>
(2) If your Contract
is not Surrendered
(1) If your Contract is Surrendered or is Annuitized
----------------------------------- ----------------
<S> <C> <C> <C>
Recurring Single
Contribution Contribution
Contracts Contracts All Contracts
--------- --------- -------------
Investment Account
American Century VP Capital Appreciation
1 year $ 99.46 $ 81.03 $ 25.76
3 years 156.14 117.52 78.90
5 years 215.28 154.55 134.31
10 years 329.19 283.59 283.59
Calvert Social Mid Cap Growth
1 year 99.93 81.51 26.27
3 years 157.55 118.99 80.43
5 years 217.62 157.05 136.86
10 years 334.02 288.66 288.66
Fidelity VIP Equity-Income
1 year 95.56 77.06 21.55
3 years 144.44 105.32 66.21
5 years 195.79 133.76 113.08
10 years 288.43 240.85 240.85
Fidelity VIP Growth
1 year 96.61 78.13 22.68
3 years 147.61 108.63 69.65
5 years 201.08 139.41 118.85
10 years 299.61 252.57 252.57
Fidelity VIP High Income
1 year 96.78 78.30 22.87
3 years 148.12 109.16 70.20
5 years 201.94 140.32 119.78
10 years 301.40 254.44 254.44
Fidelity VIP Overseas
1 year 98.75 80.31 24.99
3 years 154.01 115.30 76.59
5 years 211.75 150.79 130.47
10 years 321.89 275.93 275.93
Fidelity VIP II Asset Manager
1 year 96.24 77.75 22.28
3 years 146.48 107.46 68.43
5 years 199.21 137.41 116.81
10 years 295.66 248.42 248.42
Fidelity VIP II Contrafund
1 year 96.78 78.30 22.87
3 years 148.12 109.16 70.20
5 years 201.94 140.32 119.78
10 years 301.40 254.44 254.44
Fidelity VIP II Index 500
1 year 92.77 74.21 18.53
3 years 136.00 96.53 57.07
5 years 181.62 118.65 97.66
10 years 258.20 209.15 209.15
Janus Flexible Income
1 year 97.15 78.68 23.27
3 years 149.24 110.33 71.42
5 years 203.81 142.31 121.82
10 years 305.32 258.55 258.55
Janus Worldwide Growth
1 year 97.05 78.58 23.16
3 years 148.93 110.01 71.09
5 years 203.30 141.77 121.26
10 years 304.25 257.43 257.43
<PAGE>
13
<CAPTION>
EXAMPLES (FOR ANY INVESTMENT ACCOUNT) (CONTINUED)
<S> <C> <C>
(2) If your Contract
is not Surrendered
(1) If your Contract is Surrendered or is Annuitized
----------------------------------- ----------------
<S> <C> <C> <C>
Recurring Single
Contribution Contribution
Contracts Contracts All Contracts
--------- --------- -------------
Investment Account
PBHG Growth II
1 year $ 101.32 $ 82.93 $ 27.76
3 years 161.68 123.29 84.91
5 years 224.45 164.33 144.30
10 years 348.03 303.34 303.34
PBHG Technology & Communications
1 year 101.32 82.93 27.76
3 years 161.68 123.29 84.91
5 years 224.45 164.33 144.30
10 years 348.03 303.34 303.34
SAFECO Equity
1 year 97.15 78.68 23.27
3 years 149.24 110.33 71.42
5 years 203.81 142.31 121.82
10 years 305.32 258.55 258.55
SAFECO Growth
1 year 97.32 78.86 23.45
3 years 149.75 110.86 71.97
5 years 204.65 143.22 122.74
10 years 307.10 260.42 260.42
T. Rowe Price Equity Income
1 year 98.07 79.62 24.26
3 years 151.98 113.19 74.39
5 years 208.38 147.19 126.80
10 years 314.88 268.58 268.58
</TABLE>
CONDENSED FINANCIAL INFORMATION
The following table presents Condensed Financial Information with respect to
each of the Investment Accounts of the Variable Account for the period from the
date of first deposit on April 12, 1990 through December 31, 1997. The following
table should be read in conjunction with the Variable Account's financial
statements, which are included in the Variable Account's Annual Report dated as
of December 31, 1997. The Variable Account's financial statements have been
audited by Coopers & Lybrand L.L.P., the Variable Account's independent
accountants. Information on the Investment Accounts that had not commenced
operations as of the date of this prospectus are not presented. These Investment
Accounts include the AUL American Conservative Investor, the AUL American
Moderate Investor, and the AUL American Aggressive Investor Investment Accounts.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year End December 31,
---------------------
Investment Account 1997 1996 1995 1994 1993 1992 1991 1990(1)
- ------------------ ---- ---- ---- ---- ---- ---- ---- -------
AUL American Equity
Unit Value at beginning of
period 2.107 1.790 1.518 1.497 1.321 1.215 0.980 1.000
Unit Value at end of period 2.698 2.107 1.790 1.518 1.497 1.321 1.215 0.980
Number of Units outstanding
at end of period (000's) 12,586.036 10,589.355 9,332.222 7,471.155 3,727.950 2,576.500 620.180 3.471
AUL American Bond
Unit Value at beginning of
period 1.615 1.600 1.375 1.444 1.321 1.247 1.085 1.000
Unit Value at end of period 1.720 1.615 1.600 1.375 1.444 1.321 1.247 1.085
Number of Units outstanding
at end of period (000's) 4,937.428 4,535.171 3,613.483 2,640.900 784.086 544.295 191.389 1.023
AUL American Managed
Unit Value at beginning of
period 1.838 1.664 1.415 1.446 1.296 1.215 1.054 1.000
Unit Value at end of period 2.197 1.838 1.664 1.415 1.446 1.296 1.215 1.054
Number of Units outstanding
at end of period (000's) 10,816.324 10,087.186 9,242.020 8,146.955 2,935.365 1,979.513 399.535 1.612
<PAGE>
14
CONDENSED FINANCIAL INFORMATION (CONTINUED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year End December 31,
---------------------
Investment Account 1997 1996 1995 1994 1993 1992 1991 1990(1)
- ------------------ ---- ---- ---- ---- ---- ---- ---- -------
AUL American Money Market
Unit Value at beginning of
period 1.230 1.189 1.144 1.118 1.107 1.088 1.042 1.000
Unit Value at end of period 1.275 1.230 1.189 1.144 1.118 1.107 1.088 1.042
Number of Units outstanding
at end of period (000's) 5,765.433 3,931.272 2,066.492 1,083.828 253.762 161.750 81.498 2.051
AUL American Tactical Asset Allocation(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.120 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 0.100 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Alger American Growth(2)
Unit value at beginning of
period 1.409 1.259 1.000 N.A. N.A. N.A. N.A. N.A.
Unit value at end of period 1.750 1.409 1.259 N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 10,920.405 6,674.992 1,028.839 N.A. N.A. N.A. N.A. N.A.
American Century VP Capital Appreciation(2)
Unit Value at beginning of
period 1.225 1.297 1.002 1.000 N.A. N.A. N.A. N.A.
Unit Value at end of period 1.172 1.225 1.297 1.002 N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 1,970.129 1,785.854 747.779 254.316 N.A. N.A. N.A. N.A.
Calvert Social Mid Cap Growth(2)
Unit value at beginning of
period 1.343 1.266 1.000 N.A. N.A. N.A. N.A. N.A.
Unit value at end of period 1.639 1.343 1.266 N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 1,070.537 970.440 71.033 N.A. N.A. N.A. N.A. N.A.
Fidelity VIP Equity-Income(2)
Unit value at beginning of
period 1.380 1.223 1.000 N.A. N.A. N.A. N.A. N.A.
Unit value at end of period 1.750 1.380 1.223 N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 6,959.675 4,243.458 762.132 N.A. N.A. N.A. N.A. N.A.
Fidelity VIP Growth(2)
Unit Value at beginning of
period 1.705 1.505 1.126 1.138 1.000 N.A. N.A. N.A.
Unit Value at end of period 2.080 1.705 1.505 1.126 1.138 N.A. N.A. N.A.
Number of Units outstanding
at end of period (000's) 26,493.376 22,560.070 14,966.606 9,247.290 2,051.512 N.A. N.A. N.A.
Fidelity VIP High Income(2)
Unit Value at beginning of
period 1.447 1.285 1.078 1.108 1.000 N.A. N.A. N.A.
Unit Value at end of period 1.681 1.447 1.285 1.078 1.108 N.A. N.A. N.A.
Number of Units outstanding
at end of period (000's) 8,053.332 6,679.227 4,719.928 3,013.462 598.051 N.A. N.A. N.A.
Fidelity VIP Overseas(2)
Unit Value at beginning of
period 1.383 1.237 1.142 1.136 1.000 N.A. N.A. N.A.
Unit Value at end of period 1.524 1.383 1.237 1.142 1.136 N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 9,308.550 8,245.189 6,385.519 4,748.284 872.248 N.A. N.A. N.A.
Fidelity VIP II Asset Manager(2)
Unit Value at beginning of
period 1.368 1.209 1.047 1.129 1.000 N.A. N.A. N.A.
Unit Value at end of period 1.631 1.368 1.209 1.047 1.129 N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 30,831.927 26,868.078 22,931.562 19,540.376 5,859.606 N.A. N.A. N.A.
<FN>
(1) Period from April 12, 1990 through December 31, 1990.
(2) The Fidelity High Income, Growth, Overseas, Asset Manager, and Index 500
Investment Accounts first became available on May 1, 1993. The American Century
VP Capital Appreciation Investment Account (then known as TCI Growth) first
became available on May 1, 1994. The Alger American Growth, Calvert Social Mid
Cap Growth (then known as Calvert Capital Accumulation), Fidelity Contrafund and
Equity-Income, and the T. Rowe Price Equity Income Investment Accounts first
became available on April 28, 1995. The AUL American Tactical Asset Allocation
Investment Account first became available on May 1, 1997. Therefore, there is no
information available for any period prior to these dates.
</FN>
<PAGE>
15
<CAPTION>
CONDENSED FINANCIAL INFORMATION (CONTINUED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Year End December 31,
---------------------
Investment Account 1997 1996 1995 1994 1993 1992 1991 1990(1)
- ------------------ ---- ---- ---- ---- ---- ---- ---- -------
Fidelity VIP II Contrafund(2)
Unit value at beginning of
period 1.516 1.266 1.000 N.A. N.A. N.A. N.A. N.A.
Unit value at end of period 1.859 1.516 1.266 N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 8,965.623 4,656.175 691.978 N.A. N.A. N.A. N.A. N.A.
Fidelity VIP II Index 500(2)
Unit Value at beginning of
period 1.744 1.437 1.061 1.068 1.000 N.A. N.A. N.A.
Unit Value at end of period 2.286 1.744 1.437 1.061 1.068 N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 18,374.733 9,841.199 3,976.682 1,966.816 507.196 N.A. N.A. N.A.
Janus Aspen Series Flexible Income(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.184 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 289.354 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Janus Aspen Series Worldwide Growth(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.142 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 2,126.372 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
PBHG Growth II(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.066 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 58.505 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
PBHG Technology & Communications(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.032 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 101.585 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
SAFECO Equity(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.161 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 186.090 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
SAFECO Growth(2)
Unit Value at beginning of
period 1.000 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Unit Value at end of period 1.408 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 1,069.115 N.A. N.A. N.A. N.A. N.A. N.A. N.A.
T. Rowe Price Equity Income(2)
Unit value at beginning of
period 1.452 1.230 1.000 N.A. N.A. N.A. N.A. N.A.
Unit value at end of period 1.848 1.452 1.230 N.A. N.A. N.A. N.A. N.A.
Number of units outstanding
at end of period (000's) 11,646.682 4,259.154 388.732 N.A. N.A. N.A. N.A. N.A.
<FN>
(1) Period from April 12, 1990 through December 31, 1990.
(2)The Fidelity High Income, Growth, Overseas, Asset Manager, and Index 500
Investment Accounts first became available on May 1, 1993. The American Century
VP Capital Appreciation Investment Account (then known as TCI Growth) first
became available on May 1, 1994. The Alger American Growth, Calvert Social Mid
Cap Growth (then known as Calvert Capital Accumulation), Fidelity Contrafund and
Equity-Income, and the T. Rowe Price Equity Income Investment Accounts first
became available on April 28, 1995. The AUL American Tactical Asset Allocation,
The Janus Aspen Series Flexible Income, Janus Aspen Series Worldwide Growth,
PBHG Growth II, PBHG Technology & Communications, SAFECO Equity and SAFECO
Growth Investment Accounts first became available on May 1, 1997. Therefore,
there is no information available for any period prior to these dates.
</FN>
</TABLE>
<PAGE>
16
PERFORMANCE OF THE INVESTMENT ACCOUNTS
The following tables present the return on investment for the Investment
Accounts. For all of the figures shown below, return on investment represents a
change in the Account Value allocated to an Investment Account and takes into
account Variable Account annual expenses such as the mortality and expense risk
charge. For the Investment Accounts that have not been in existence for the time
periods indicated, the reported performance represents hypothetical returns that
the Investment Accounts that invest in the corresponding Mutual Fund Portfolios
would have achieved had they invested in such Portfolios for the periods
indicated. For the periods that a particular Investment Account has been in
existence (see "Inception Date of Investment Account"), then the performance is
actual performance and not hypothetical in nature.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Performance (excluding charges)(1)
----------------------------------
Average Average Average Average
Annual Annual Annual Annual Cumulative
Return on Return on Return on Return on Return on
Inception Inception Investment Investment Investment Investment Investment for
Date of Date of for Year for 3 Years for 5 Years for lesser of lesser of 10
Investment Mutual Investment ending ending ending 10 Years or Years or Since
Account Fund Account 12/31/97 12/31/97 12/31/97 Since Inception Inception
- ------- ---- ------- -------- -------- -------- --------------- ---------
AUL American Equity 04/10/90 04/12/90 27.98% 21.12% 15.35% 13.73% 169.97%
AUL American Bond 04/10/90 04/12/90 6.50% 7.74% 5.42% 7.29% 72.15%
AUL American Managed 04/10/90 04/12/90 19.44% 15.77% 11.11% 10.74% 119.79%
AUL American Money Market 04/10/90 04/12/90 3.63% 3.68% 2.87% 3.20% 27.53%
AUL American Tactical Asset Allocation 08/01/95 05/01/97 14.05% N.A. N.A. 14.26% 38.06%
AUL American Conservative Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
AUL American Moderate Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
AUL American Aggressive Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
Alger American Growth 01/09/89 04/28/95 24.18% 23.25% 17.81% 17.70% 331.98%
American Century VP Capital Appreciation 11/20/87 05/01/94 (4.46%) 5.34% 4.44% 7.34% 103.06%
Calvert Social Mid Cap Growth 07/16/91 04/28/95 22.08% 21.28% 11.01% 11.69% 104.25%
Fidelity VIP Equity-Income 10/09/86 04/28/95 26.52% 23.96% 18.67% 15.28% 314.51%
Fidelity VIP Growth 10/09/86 05/01/93 21.95% 22.69% 16.54% 15.74% 331.35%
Fidelity VIP High Income 09/19/85 05/01/93 16.20% 15.94% 12.50% 11.41% 194.61%
Fidelity VIP Overseas 01/28/87 05/01/93 10.17% 10.09% 12.70% 8.26% 121.15%
Fidelity VIP II Asset Manager 09/06/89 05/01/93 19.15% 15.92% 11.58% 11.47% 146.72%
Fidelity VIP II Contrafund 01/03/95 04/28/95 22.60% N.A. N.A. 27.99% 109.53%
Fidelity VIP II Index 500 08/27/92 05/01/93 31.05% 29.14% 18.42% 18.40% 146.72%
Janus Flexible Income 09/13/93 05/01/97 10.08% 13.26% N.A. 8.68% 43.04%
Janus Worldwide Growth 09/13/93 05/01/97 20.79% 24.66% N.A. 20.86% 125.85%
PBHG Growth II 05/01/97 05/01/97 N.A. N.A. N.A. N.A. 6.61%
PBHG Technology & Communications 05/01/97 05/01/97 N.A. N.A. N.A. N.A. 3.23%
SAFECO Equity 11/06/86 05/01/97 23.30% 24.53% 21.29% 17.77% 413.27%
SAFECO Growth 01/07/93 05/01/97 42.75% 37.40% N.A. 31.34% 289.12%
T. Rowe Price Equity Income 03/31/94 04/28/95 27.25% 25.98% N.A. 22.23% 112.28%
<FN>
(1) These figures do not reflect deduction of the withdrawal charge and a
pro-rata portion of the administrative charge.
</FN>
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE OF THE INVESTMENT ACCOUNTS (CONTINUED)
<S> <C> <C> <C> <C> <C> <C> <C>
Performance (including charges)(1)
----------------------------------
Average Average Average Average
Annual Annual Annual Annual Cumulative
Return on Return on Return on Return on Return on
Inception Inception Investment Investment Investment Investment Investment for
Date of Date of for Year for 3 Years for 5 Years for lesser of lesser of 10
Investment Mutual Investment ending ending ending 10 Years or Years or Since
Account Fund Account 12/31/97 12/31/97 12/31/97 Since Inception Inception
- ------- ---- ------- -------- -------- -------- --------------- ---------
AUL American Equity 04/10/90 04/12/90 17.39% 17.45% 13.10% 12.79% 153.22%
AUL American Bond 04/10/90 04/12/90 (2.31%) 4.48% 3.37% 6.40% 61.43%
AUL American Managed 04/10/90 04/12/90 9.56% 12.25% 8.95% 9.82% 106.08%
AUL American Money Market 04/10/90 04/12/90 (4.95%) 0.53% 0.86% 2.34% 19.55%
AUL American Tactical Asset Allocation 08/01/95 05/01/97 4.61% N.A. N.A. 10.05% 26.07%
AUL American Conservative Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
AUL American Moderate Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
AUL American Aggressive Investor 05/01/98 05/01/98 N.A. N.A. N.A. N.A. N.A.
Alger American Growth 01/09/89 04/28/95 13.91% 19.51% 15.52% 16.81% 303.52%
American Century VP Capital Appreciation 11/20/87 05/01/94 (12.37%) 2.14% 2.41% 6.59% 89.31%
Calvert Social Mid Cap Growth 07/16/91 04/28/95 11.97% 17.61% 8.85% 10.65% 92.27%
Fidelity VIP Equity-Income 10/09/86 04/28/95 16.05% 20.20% 16.36% 14.47% 286.29%
Fidelity VIP Growth 10/09/86 05/01/93 11.85% 18.97% 14.27% 14.92% 301.75%
Fidelity VIP High Income 09/19/85 05/01/93 6.59% 12.43% 10.31% 10.63% 174.62%
<FN>
(2) These figures reflect deduction of the withdrawal charge and a pro-rata
portion of the administrative charge.
</FN>
<PAGE>
17
PERFORMANCE OF THE INVESTMENT ACCOUNTS (Continued)
<S> <C> <C> <C> <C> <C> <C> <C>
Performance (including charges)(1)
----------------------------------
Average Average Average Average
Annual Annual Annual Annual Cumulative
Return on Return on Return on Return on Return on
Inception Inception Investment Investment Investment Investment Investment for
Date of Date of for Year for 3 Years for 5 Years for lesser of lesser of 10
Investment Mutual Investment ending ending ending 10 Years or Years or Since
Account Fund Account 12/31/97 12/31/97 12/31/97 Since Inception Inception
- ------- ---- ------- -------- -------- -------- --------------- ---------
Fidelity VIP Overseas 01/28/87 05/01/93 1.05% 6.75% 10.51% 7.50% 106.10%
Fidelity VIP II Asset Manager 09/06/89 05/01/93 9.29% 12.40% 9.40% 10.59% 130.98%
Fidelity VIP II Contrafund 01/03/95 04/28/95 12.45% N.A. N.A. 24.00% 90.55%
Fidelity VIP II Index 500 08/27/92 05/01/93 20.20% 25.22% 16.11% 17.14% 133.00%
Janus Flexible Income 09/13/93 05/01/97 0.97% 9.82% N.A. 6.25% 29.78%
Janus Worldwide Growth 09/13/93 05/01/97 10.80% 20.88% N.A. 18.16% 104.94%
PBHG Growth II 05/01/97 05/01/97 N.A. N.A. N.A. N.A. (2.14%)
PBHG Technology & Communications 05/01/97 05/01/97 N.A. N.A. N.A. N.A. (5.24%)
SAFECO Equity 11/06/86 05/01/97 13.10% 20.75% 18.93% 16.94% 378.22%
SAFECO Growth 01/07/97 05/01/97 30.94% 33.24% N.A. 28.74% 252.21%
T. Rowe Price Equity Income 03/31/94 04/28/95 16.72% 22.16% N.A. 19.18% 93.09%
<FN>
(2) These figures reflect deduction of the withdrawal charge and a pro-rata
portion of the administrative charge.
</FN>
</TABLE>
INFORMATION ABOUT AUL, THE VARIABLE ACCOUNT, AND THE FUNDS
AMERICAN UNITED LIFE INSURANCE COMPANY(R)
AUL is a legal reserve mutual life insurance company existing under the
laws of the State of Indiana. It was originally incorporated as a fraternal
society on November 7, 1877 under the laws of the Federal government, and
reincorporated under the laws of the State of Indiana in 1933. It is qualified
to do business in 48 states and the District of Columbia. As a mutual company,
it is owned by and operated exclusively for the benefit of its policyowners. AUL
has its principal business office located at One American Square, Indianapolis,
Indiana 46282.
AUL conducts a conventional life insurance, reinsurance, and annuity
business. At December 31, 1997, AUL had admitted assets of $8,597,755,587 and a
policyowners' surplus of $664,638,385.
The principal underwriter for the Contracts is AUL, which is registered
with the SEC as a broker-dealer.
VARIABLE ACCOUNT
AUL American Unit Trust was established by AUL on August 17, 1989, under
procedures established under Indiana law. The income, gains, or losses of the
Variable Account are credited to or charged against the assets of the Variable
Account without regard to other income, gains, or losses of AUL. AUL owns the
assets in the Variable Account and is required to maintain sufficient assets in
the Variable Account to meet all Variable Account obligations under the
Contracts. AUL may transfer to its General Account assets that exceed
anticipated obligations of the Variable Account. All obligations arising under
the Contracts are general corporate obligations of AUL. AUL may invest its own
assets in the Variable Account, and may accumulate in the Variable Account
proceeds from Contract charges and investment results applicable to those
assets.
The Variable Account is currently divided into sub-accounts referred to as
Investment Accounts. Each Investment Account invests exclusively in shares of a
specific mutual fund or in a specific Portfolio of one of the Funds.
Contributions may be allocated to one or more Investment Accounts available
under a Contract. Not all of the Investment Accounts may be available under a
particular Contract and some of the Investment Accounts are not available for
certain types of Contracts. AUL may in the future establish additional
Investment Accounts of the Variable Account, which may invest in other
Portfolios of the Funds or in other securities, mutual funds, or investment
vehicles.
The Variable Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). Registration with the
SEC does not involve supervision by the SEC of the administration or investment
practices of the Variable Account or of AUL.
THE FUNDS
Each of the Funds is a diversified, open-end management investment company
commonly referred to as a mutual fund. Each of the Funds is registered with the
SEC under the 1940 Act. Such registration does not involve supervision by the
SEC of the investments or investment policies or practices of the Fund. AUL
American Series Fund, Inc. currently has eight separate investment portfolios
that it offers to the Variable Account, namely: the Equity, Bond, Managed, Money
Market, Tactical Asset Allocation, Conservative Investor, Moderate Investor, and
Aggressive Investor. The Alger American Fund offers the Alger American Growth
Portfolio. The American Century Variable Portfolios, Inc. offers the VP Capital
Appreciation Portfolio. Calvert Variable Series offers the Calvert Social Mid
Cap Growth Portfolio. The Fidelity Variable Insurance Products Fund offers the
Equity-Income, Growth, High Income, and Overseas Portfolios. The Fidelity
<PAGE>
18
Variable Insurance Products Fund II offers the Asset Manager, Contrafund, and
Index 500 Portfolios. The Janus Aspen Series offers the Worldwide Growth and
Flexible Income Portfolios. The PBHG Insurance Series Fund, Inc. offers the PBHG
Growth II and the PBHG Technology & Communications Portfolios. The SAFECO
Resource Series Trust offers the Equity and Growth Portfolios. T. Rowe Price
Equity Series, Inc. offers the Equity Income Portfolio. Each Portfolio has its
own investment objective or objectives and policies. The shares of each mutual
fund Portfolio are purchased by AUL for the corresponding Investment Account at
the Portfolio's net asset value per share, i.e., without any sales load. All
dividends and capital gain distributions received from a Portfolio are
automatically reinvested in such Portfolio at net asset value, unless AUL
instructs otherwise. AUL has entered into agreements with the
Distributors/Advisers of American Century Variable Portfolios, Inc., Calvert
Variable Series, Fidelity Management & Research Company, Janus Capital
Corporation, Pilgrim Baxter & Associates, SAFECO Asset Management Company, and
T. Rowe Price Equity Series, Inc., under which AUL has agreed to render certain
services and to provide information about these funds to its Contractowners
and/or Participants who invest in these Funds. Under these agreements and for
providing these services, AUL receives compensation from the Distributor/Adviser
of these funds, ranging from zero basis points until a certain level of fund
assets have been purchased to twenty-five basis points on the net average
aggregate deposits made.
AUL serves as investment adviser to each Portfolio of the AUL American
Series Fund, Inc. Fred Alger & Company acts as investment adviser to the Alger
American Fund. American Century Investment Management, Inc. acts as investment
adviser to American Century Variable Portfolios, Inc. Calvert Asset Management
Corporation acts as investment adviser to the Calvert Variable Series. Fidelity
Management & Research Company acts as investment adviser to the Fidelity
Variable Insurance Products Fund and to the Fidelity Variable Insurance Products
Fund II. Janus Capital Corporation acts as investment adviser to the Janus Aspen
Series. Pilgrim Baxter & Associates, Inc. acts as investment adviser to PBHG
Insurance Series Fund, Inc. T. Rowe Price & Associates, Inc. acts as investment
adviser to T. Rowe Price Equity Series, Inc.
A summary of the investment objective or objectives of each Portfolio of
each of the Funds is provided below. There can be no assurance that any
Portfolio will achieve its objective or objectives. More detailed information is
contained in the Prospectuses for the Funds, including information on the risks
associated with the investments and investment techniques of each Portfolio.
AUL AMERICAN SERIES FUND, INC.
AUL AMERICAN EQUITY PORTFOLIO
The primary investment objective of the AUL American Equity Portfolio is
long-term capital appreciation. The Portfolio seeks current investment income as
a secondary objective. The Portfolio attempts to achieve these objectives by
investing primarily in equity securities selected on the basis of fundamental
investment research for their long-term growth prospects.
AUL AMERICAN BOND PORTFOLIO
The primary investment objective of the AUL American Bond Portfolio is to
provide a high level of income consistent with prudent investment risk. As a
secondary objective, the Portfolio seeks to provide capital appreciation to the
extent consistent with the primary objective. The Portfolio attempts to achieve
these objectives by investing primarily in corporate bonds and other debt
securities.
AUL AMERICAN MANAGED PORTFOLIO
The investment objective of the AUL American Managed Portfolio is to
provide a high total return consistent with prudent investment risk. The
Portfolio attempts to achieve this objective through a fully managed investment
policy utilizing publicly traded common stock, debt securities (including
convertible debentures), and money market securities.
AUL AMERICAN MONEY MARKET PORTFOLIO
The investment objective of the AUL American Money Market Portfolio is to
provide a high level of current income while preserving assets and maintaining
liquidity and investment quality. The Portfolio attempts to achieve this
objective by investing in short-term money market instruments that are of the
highest quality.
AUL AMERICAN TACTICAL ASSET ALLOCATION PORTFOLIO
The investment objective of the Tactical Asset Allocation Portfolio is
preservation of capital and competitive investment returns. The Portfolio seeks
to achieve its objective by investing primarily in stocks, United States
Treasury bonds, notes and bills, and money market funds.
AUL AMERICAN CONSERVATIVE INVESTOR PORTFOLIO
The investment objective of the AUL American Conservative Investor
Portfolio is high current income, with opportunities for capital appreciation.
The Portfolio seeks this objective by investing in a strategically allocated
portfolio consisting primarily of bond and money market instruments with the
remainder of the Portfolio invested in equities. The Portfolio's emphasis on
bonds and money market securities is intended to help provide gains through
income accumulation and a measure of principal protection in the event that the
stock market is in decline.
AUL AMERICAN MODERATE INVESTOR PORTFOLIO
The investment objective of the AUL American Moderate Investor Portfolio is
a blend of capital appreciation and income. The Portfolio seeks this objective
by investing in a strategically allocated portfolio of equities, bonds and money
market instruments with a weighting that normally is slightly heavier in
equities. The asset mix for this Portfolio is intended to provide long-term
growth and some regular income, while helping to moderate losses in the event of
stock market declines.
<PAGE>
19
AUL AMERICAN AGGRESSIVE INVESTOR PORTFOLIO
The investment objective of the AUL American Aggressive Investor Portfolio
is long-term capital appreciation. The Portfolio seeks this objective by
investing in a strategically allocated portfolio consisting primarily of
equities. Current income is not a primary consideration. The asset mix for this
Portfolio is intended to provide long-term growth, together with a small amount
of income to help cushion the volatility of the equity securities.
FOR ADDITIONAL INFORMATION CONCERNING AUL AMERICAN SERIES FUND, INC. AND ITS
PORTFOLIOS, PLEASE SEE THE AUL AMERICAN SERIES FUND, INC. PROSPECTUS, WHICH
SHOULD BE READ CAREFULLY BEFORE INVESTING.
ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO
The Alger American Growth Portfolio is a growth portfolio that seeks to
obtain long-term capital appreciation by investing in a diversified, actively
managed portfolio of equity securities. Except during temporary defensive
periods, the Portfolio invests at least 65% of its total assets in equity
securities of companies that at the time of purchase have a total market
capitalization of one billion dollars or greater.
FOR ADDITIONAL INFORMATION CONCERNING THE ALGER AMERICAN FUND AND ITS PORTFOLIO,
PLEASE SEE THE ALGER AMERICAN FUND PROSPECTUS, WHICH SHOULD BE READ CAREFULLY
BEFORE INVESTING.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AMERICAN CENTURY VP CAPITAL APPRECIATION
The American Century VP Capital Appreciation Portfolio seeks capital growth
by investing primarily in common stocks (including securities convertible into
common stocks and other equity equivalents) and other securities that meet
certain fundamental and technical standards of selection and have, in the
opinion of the Fund's investment manager, better than average potential for
appreciation. The Fund tries to stay fully invested in such securities,
regardless of the movement of prices generally. This Portfolio is not currently
available to AUL Participants under 457 Contracts.
FOR ADDITIONAL INFORMATION CONCERNING AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
AND ITS PORTFOLIO, PLEASE SEE THE AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
CALVERT VARIABLE SERIES
CALVERT SOCIAL MID CAP GROWTH PORTFOLIO
The Calvert Social Mid Cap Growth Portfolio is a socially responsible
growth Portfolio that seeks long-term capital appreciation by investing
primarily in the stock of medium sized companies. To the extent possible,
investments are made in enterprises that make a significant contribution to
society through their products and services and through the way they do
business.
FOR ADDITIONAL INFORMATION CONCERNING CALVERT VARIABLE SERIES AND THE CALVERT
SOCIAL MID CAP GROWTH PORTFOLIO, PLEASE SEE THE CALVERT VARIABLE SERIES
PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
EQUITY-INCOME PORTFOLIO
The Equity-Income Portfolio seeks reasonable income by investing primarily
in income-producing equity securities; the fund will also consider the potential
for capital appreciation.
GROWTH PORTFOLIO
The Growth Portfolio seeks to achieve capital appreciation.
The Portfolio normally purchases common stocks, although the Portfolio's
investments are not restricted to any one type of security. Capital appreciation
may also be found in other types of securities, including bonds and preferred
stocks.
HIGH INCOME PORTFOLIO
The High Income Portfolio seeks to obtain a high level of current income by
investing primarily in high-yielding, lower-rated, fixed-income securities,
while also considering growth of capital. These include securities commonly
referred to as junk bonds, the risks of which are described in the prospectus
for the Fund.
OVERSEAS PORTFOLIO
The Overseas Portfolio seeks long-term growth of capital primarily through
investments in foreign securities. The Overseas Portfolio provides a means for
investors to diversify their own portfolios by participating in companies and
economies outside of the United States.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
ASSET MANAGER PORTFOLIO
The Asset Manager Portfolio seeks high total return with reduced risk over
the long-term by allocating its assets among domestic and foreign stocks, bonds
and short-term money market instruments.
CONTRAFUND
The Contrafund Portfolio seeks capital appreciation by investing primarily
in securities of companies that the investment adviser believes are not fully
recognized by the public.
INDEX 500 PORTFOLIO
The Index 500 Portfolio seeks to provide investment results
<PAGE>
20
that correspond to the total return (i.e., the combination of capital changes
and income) of a broad range of common stocks publicly traded in the United
States. In seeking this objective, the Portfolio attempts to duplicate the
composition and total return of the Standard & Poor's 500 Composite Stock Price
Index.
FOR ADDITIONAL INFORMATION CONCERNING FIDELITY'S VARIABLE INSURANCE PRODUCTS
FUND AND FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II AND THEIR PORTFOLIOS,
PLEASE SEE THE FIDELITY VARIABLE INSURANCE PRODUCTS FUND AND FIDELITY VARIABLE
INSURANCE PRODUCTS FUND II PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING.
JANUS ASPEN SERIES
FLEXIBLE INCOME PORTFOLIO
The Flexible Income Portfolio is a diversified portfolio that seeks to
maximize total return from a combination of income and capital appreciation by
investing primarily in income-producing securities. This Portfolio may have
substantial holdings of lower rated debt securities or "junk" bonds.
WORLDWIDE GROWTH PORTFOLIO
The Worldwide Growth Portfolio is a diversified portfolio that seeks
long-term growth of capital by investing primarily in common stocks of foreign
and domestic issuers.
FOR ADDITIONAL INFORMATION CONCERNING JANUS ASPEN SERIES FUND AND ITS PORTFOLIO,
PLEASE SEE THE JANUS ASPEN SERIES FUND PROSPECTUS, WHICH SHOULD BE READ
CAREFULLY BEFORE INVESTING
PBHG INSURANCE SERIES FUND, INC.
PBHG GROWTH II PORTFOLIO
The investment objective of the PBHG Growth II Portfolio seeks capital
appreciation. The Portfolio normally will be invested in common stocks and
convertible securities of small and medium-sized companies (market
capitalization or annual revenues up to $4 billion) which, in the Adviser's
opinion, have an outlook for strong earnings growth. The PBHG Growth II
Portfolio is co-managed by Gary Pilgrim, CFA, who manages the PBHG Growth Fund
of the PBHG Funds, Inc., and Jeffrey A. Wrona, CFA, who is responsible for
managing other mid-cap institutional accounts.
PBHG TECHNOLOGY & COMMUNICATIONS PORTFOLIO
The primary objective of the PBHG Technology & Communications Portfolio is
long-term growth of capital. The Portfolio will seek out companies which rely
extensively on technology or communications in their product development or
operations, or those which are experiencing exceptional growth in sales and
earnings driven by technology or communications related products and services.
The Portfolio is managed by John Force, CFA, who co-manages the PBHG Technology
& Communications Fund of the PBHG Funds, Inc.
FOR MORE COMPLETE INFORMATION, INCLUDING INFORMATION ON CHARGES AND EXPENSES,
CONCERNING THE PBHG INSURANCE SERIES FUND, INC. PLEASE CALL (800) 433-0051 OR
WRITE THE PBHG INSURANCE SERIES FUND, INC. FOR A PROSPECTUS, WHICH SHOULD BE
READ CAREFULLY BEFORE INVESTING.
SAFECO RESOURCE SERIES TRUST
EQUITY PORTFOLIO
The Equity Portfolio has as its investment objective to seek long-term
capital and reasonable current income. The Equity Portfolio ordinarily invests
principally in common stocks selected for long-term appreciation and/or dividend
potential.
GROWTH PORTFOLIO
The Growth Portfolio has as its investment objective to seek growth of
capital and the increased income that ordinarily follows from such growth. The
Growth Portfolio ordinarily invests a preponderance of its assets in common
stocks selected for potential appreciation.
FOR ADDITIONAL INFORMATION CONCERNING SAFECO RESOURCE SERIES TRUST AND ITS
PORTFOLIOS, PLEASE SEE THE SAFECO RESOURCE SERIES TRUST PROSPECTUS, WHICH SHOULD
BE READ CAREFULLY BEFORE INVESTING.
T. ROWE PRICE EQUITY SERIES, INC.
T. ROWE PRICE EQUITY INCOME PORTFOLIO
The T. Rowe Price Equity Income Portfolio seeks to provide substantial
dividend income as well as long-term capital appreciation through investments in
common stocks of established companies.
FOR ADDITIONAL INFORMATION CONCERNING T.ROWE PRICE EQUITY SERIES, INC. AND ITS
PORTFOLIO, PLEASE SEE THE T. ROWE PRICE EQUITY SERIES, INC. PROSPECTUS, WHICH
SHOULD BE READ CAREFULLY BEFORE INVESTING.
<PAGE>
21
THE CONTRACTS
GENERAL
The Contracts are offered for use in connection with retirement plans that
meet the requirements of Sections 401, 403(b), 408, or 457 of the Internal
Revenue Code. Certain Federal tax advantages are currently available to
retirement plans that qualify as (1) self-employed individuals' retirement plans
under Section 401, such as HR-10 Plans, (2) pension or profit-sharing plans
established by an Employer for the benefit of its employees under Section 401,
(3) annuity purchase plans sponsored by certain tax-exempt organizations or
public school organizations under Section 403(b), (4) individual retirement
accounts or annuities, including those established by an employer as a
simplified employee pension plan or SIMPLE IRA plan, under Section 408, or (5)
deferred compensation plans for employees established by a unit of a state or
local government or by a tax-exempt organization under Section 457.
A Contract is issued to the Owner. Generally, persons eligible to
participate in the Owner's Plan are eligible to become Participants under the
Contract. The Owner shall be responsible for determining persons who are
eligible to become Participants and for designating such persons to AUL. AUL
will issue to the Owner for delivery to each Participant (or may deliver
directly to each Participant) a Certificate that evidences the Participant's
participation in the Contract. For purposes of determining benefits under a
Contract, an account called a Participant's Account is established for each
Participant during the Accumulation Period.
The Owner of the Contract is generally responsible for providing all
communications and instructions concerning Participant Accounts to AUL. However,
in some instances a Participant may communicate directly with AUL. For example,
a Participant in a 403(b) Program may request a partial withdrawal directly from
AUL. While the Owner generally is responsible for transmitting contributions and
instructions for Participants, the Participant may be permitted or required to
make certain decisions and elections under the Contract, as specified by the
Owner in the Plan, trust, or other appropriate document. The pertinent Plan
document and, if applicable, the Employer's plan administrator should be
consulted with any questions on benefits under the Contract.
CONTRIBUTIONS AND CONTRACT VALUES DURING THE ACCUMULATION PERIOD
CONTRIBUTIONS UNDER THE CONTRACTS
Contributions under Recurring Contribution Contracts may be made by or on
behalf of a Participant at any time during the Participant's life and before the
Participant's Annuity Commencement Date. Contributions must be at least equal to
the minimum required contribution, and the amount of contributions made by or on
behalf of a Participant is subject to certain limitations. Contributions for
each Participant under a Recurring Contribution Contract used for a 403(b)
Program must total at least $200 each Contract Year. Contributions for each
Participant under a Recurring Contribution Contract used for any other Plan must
total at least $300 each Contract Year. In Single Contribution Contracts, the
minimum contributions for each Participant must be at least $100,000.
Contributions of less than $100,000 will initially be allocated to a Recurring
Contribution Contract. To allow the consolidation of assets from different
sources, Participants will be allowed a twelve month period, measured from the
date of first deposit, to reach the $100,000 minimum required contribution for
Single Contribution Contracts. If the $100,000 required minimum contribution for
Single Contribution Contracts is received within the twelve month period,
measured from the date of the first deposit, then the Participant's Account
Value will be immediately transferred to a Single Contribution Contract pursuant
to a Transfer Agreement between AUL and the Participant. However, after this
twelve month period, no further contributions will be accepted to that specific
Account under a Single Contribution Contract, and any subsequent contributions
will be allocated to a Recurring Contribution Contract, unless the $100,000
minimum contribution for an additional Single Contribution Contract is met. AUL
may change the minimum contributions permitted under a Contract, but any such
change shall apply only to Participant Accounts established on or after the
effective date of the change. AUL may, at its discretion, waive any minimum
required contribution.
Annual contributions under any of the Plans are subject to maximum limits
imposed by the Internal Revenue Code. See the Statement of Additional
Information for a discussion of these limits, or consult the pertinent Plan
document.
TEN-DAY FREE LOOK
Under 403(b) and 408 Contracts, the Owner has the right to return the
Contract for any reason within ten days of receipt. If a particular state
requires a longer free-look period, Owners in that state will be allowed the
longer statutory period in which to return the Contract. If this right is
exercised, the Contract will be considered void from its inception, and any
contributions will be fully refunded.
INITIAL AND SINGLE CONTRIBUTIONS
Initial contributions received for a Participant will be credited to the
Participant's Account no later than the end of the second Business Day after it
is received by AUL at its Home Office if it is preceded or accompanied by a
completed annuity enrollment form for the Participant that contains all the
information necessary for opening the Participant's Account. The enrollment form
will be provided by AUL. If AUL does not receive a complete enrollment form for
a Participant, AUL will notify the individual that AUL does not have the
necessary information to open the account. If the necessary information is not
provided to AUL within five Business Days after AUL first receives the initial
contribution, AUL will return the
<PAGE>
22
initial contribution to the contributing party. However, if the Contract so
allows, AUL may retain the contribution, if consent is received, until the
earliest of: the time the enrollment form for the Participant is made complete,
or 25 days after receipt at AUL's Home Office.
ALLOCATION OF CONTRIBUTIONS
Initial and subsequent contributions under the Contracts will be allocated
among the Investment Accounts of the Variable Account and the Fixed Account as
instructed by the Owner or Participant and as provided by the terms of the
Contract. The investment allocation of the initial contribution is to be
designated on an investment allocation form at the time the annuity enrollment
form is completed, and the completed allocation form should accompany the
enrollment form to open an account for a Participant. The enrollment application
specifies that in the absence of an investment allocation form or other
instructions, initial and subsequent contributions shall be allocated to the AUL
American Money Market Investment Account. A Participant's Account Value that has
been initially allocated to the Money Market Investment Account may be
transferred to other available investment options upon receipt by AUL at its
Home Office of an investment allocation form or other proper request. Under some
Contracts, allocation to any Investment Account or the Fixed Account must be
made in increments of 10%, 25%, or 33 1/3% of any contribution. Not all of the
Investment Accounts may be available under a particular Contract, and some of
the Investment Accounts are either not available for certain types of Contracts
or are not in operation as of the date of this Prospectus.
Any change in allocation instructions will be effective upon receipt by AUL
at its Home Office and will continue in effect until subsequently changed.
Changes in the allocation of future contributions have no effect on amounts
already contributed on behalf of a Participant. Such amounts, however, may be
transferred among the Investment Accounts of the Variable Account or the Fixed
Account in the manner described in "Transfers of Account Value."
SUBSEQUENT CONTRIBUTIONS UNDER RECURRING CONTRIBUTION CONTRACTS
When forwarding contributions to AUL, the amount being contributed on
behalf of each Participant must be specified. The contributions shall be
allocated among the Investment Accounts of the Variable Account that are
available under a Contract and the Fixed Account as described above in
"Allocation of Contributions." Contributions (other than the initial
contribution for each Participant) are credited as of the end of the Valuation
Period in which they are received by AUL its Home Office at such time as AUL has
received full payment for the contribution, the information needed to establish
the Participant's account, and proper instructions regarding the application and
allocation of the contributions among Participants.
TRANSFERS OF ACCOUNT VALUE
All or part of a Participant's Variable Account Value may be transferred
among the Investment Accounts of the Variable Account that are available under a
Contract or to the Fixed Account at any time during the Accumulation Period upon
receipt of a proper written request by AUL at its Home Office. Transfers may be
made by telephone if a Telephone Authorization Form has been properly completed
and received by AUL at its Home Office. The minimum transfer from any Investment
Account or from the Fixed Account is the lesser of $500 or a Participant's
entire Account Value in that Investment Account or in the Fixed Account as of
the date the transfer request is received by AUL at its Home Office, provided
however, that amounts transferred from the Fixed Account to an Investment
Account during any given Contract Year cannot exceed 20% of the Participant's
Fixed Account Value as of the beginning of that Contract Year. However, if a
Participant's Fixed Account Value at the beginning of the Contract Year is less
than $2,500, the amount that will be transferred for that Contract Year from the
Fixed Account is the lesser of $500 or the entire Fixed Account Value as of the
date the transfer request is received by AUL at its Home Office. If, after any
transfer, the Participant's remaining Account Value in an Investment Account or
in the Fixed Account would be less than $500, then such request will be treated
as a request for a transfer of the entire Account Value. Transfers may also be
subject to other limitations provided in a Plan document and in the Contract.
Currently, there are no limitations on the number of transfers between
Investment Accounts available under a Contract or the Fixed Account. In
addition, no charges are currently imposed upon transfers. AUL reserves the
right, however, at a future date, to change the limitation on the minimum
transfer, to assess transfer charges, to change the limit on remaining balances,
to limit the number and frequency of transfers, and to suspend the transfer
privilege or the telephone transfer authorization. Any transfer from an
Investment Account of the Variable Account shall be effective as of the end of
the Valuation Date in which AUL receives the request in proper form.
PARTICIPANT'S VARIABLE ACCOUNT VALUE
ACCUMULATION UNITS
Contributions to be allocated to the Investment Accounts available under a
Contract will be credited to the Participant's Account in the form of
Accumulation Units. Except for allocation of a Participant's initial
contribution, the number of Accumulation Units to be credited is determined by
dividing the dollar amount allocated to the particular Investment Account by the
Accumulation Unit value for the particular Investment Account at the end of the
Valuation Period in which the contribution is received by AUL at its Home
Office. The number of Accumulation Units so credited to the account shall not be
changed by a subsequent change in the value of an Accumulation Unit, but the
dollar value of an Accumulation Unit may vary from Valuation Date to Valuation
Date depending upon the investment experience of the Investment Account and
charges against the Investment Account.
ACCUMULATION UNIT VALUE
AUL determines the Accumulation Unit value for each
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23
Investment Account of the Variable Account on each Valuation Date. The
Accumulation Unit value for each Investment Account was initially set at one
dollar ($1) when operations commenced. Subsequently, the Accumulation Unit value
for each Investment Account is determined by multiplying the Net Investment
Factor for the particular Investment Account by the Accumulation Unit value for
the Investment Account as of the immediately preceding Valuation Period. The
Accumulation Unit value for each Investment Account may increase, decrease, or
remain the same from Valuation Period to Valuation Period in accordance with the
Net Investment Factor.
NET INVESTMENT FACTOR
The Net Investment Factor is used to measure the investment performance of
an Investment Account from one Valuation Period to the next. For any Investment
Account for a Valuation Period, the Net Investment Factor is determined by
dividing (a) by (b) and then subtracting (c) from the result where
(a) is equal to:
(1)the net asset value per share of the Portfolio of the Fund in which
the Investment Account invests, determined as of the end of the
Valuation Period, plus
(2)the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the Valuation Period, plus or minus
(3)a credit or charge with respect to taxes paid, if any, or reserved for
by AUL during the Valuation Period that are determined by AUL to be
attributable to the operation of the Investment Account (although no
Federal income taxes are applicable under present law and no such
charge is currently assessed).
(b) is the net asset value per share of the Portfolio, determined as of the
end of the preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the fee assessed
against the assets of the Investment Account for the mortality and expense risk
charge.
DOLLAR COST AVERAGING PROGRAM
Contract Owners and Participants who wish to purchase units of an
Investment Account over a period of time may do so through the Dollar Cost
Averaging ("DCA") Program. The theory of dollar cost averaging is that greater
numbers of Accumulation Units are purchased at times when the unit prices are
relatively low than are purchased when the prices are higher. This has the
effect, when purchases are made at different prices, of reducing the aggregate
average cost per Accumulation Unit to less than the average of the Accumulation
Unit prices on the same purchase dates. However, participation in the Dollar
Cost Averaging Program does not assure a Contract Owner or Participant of
greater profits from the purchases under the Program, nor will it prevent or
necessarily alleviate losses in a declining market.
For example, assume that a Contract Owner or Participant requests that
$1,000 per month be transferred from the Money Market Investment Account to the
AUL American Equity Investment Account. The following Table illustrates the
effect of dollar cost averaging over a six month period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Transfer Unit Units
Month Amount Value Purchased
----- -------- ----- ---------
1 $1,000 $20 50
2 $1,000 $25 40
3 $1,000 $30 33.333
4 $1,000 $40 25
5 $1,000 $35 28.571
6 $1,000 $30 33.333
</TABLE>
The average price per unit for these purchases is the sum of the prices
($180) divided by the number of monthly transfers (6) or $30. The average cost
per Accumulation Unit for these purchases is the total amount transferred
($6,000) divided by the total number of Accumulation Units purchased (210.237)
or $28.54. THIS TABLE IS FOR ILLUSTRATIVE PURPOSES ONLY AND IS NOT
REPRESENTATIVE OF FUTURE RESULTS.
Under a DCA Program, the owner deposits premiums into the AUL American
Money Market Investment Account or the Fixed Account and then authorizes AUL to
transfer a specific dollar amount for a specific length of time from such
Account into one or more other Investment Accounts at the unit values determined
on the dates of the transfers. This may be done monthly, quarterly,
semi-annually, or annually on the last business day of such period. These
transfers will continue automatically until the earliest of: the date AUL
receives notice to discontinue the Program; until there is not enough money in
the Money Market Investment Account or the Fixed Account to continue the
Program; until the expiration of the length of time selected; or if the
transfers are being drawn from the Fixed Account, until the time a transfer
would exceed the 20% limitation on transfers from the Fixed Account.
Currently, the minimum required amount of each transfer is $500, although
AUL reserves the right to change this minimum transfer amount in the future. DCA
transfers to the Fixed Account and to the Money Market Investment Account are
not permitted under the Dollar Cost Averaging Program. At least ten days advance
written notice to AUL is required before the date of the first proposed transfer
under the DCA Program. AUL offers the Dollar Cost Averaging Program to Contract
Owners and Participants at no charge, and the Company reserves the right to
temporarily discontinue, terminate, or change the Program at any time. Contract
Owners and Participants may discontinue participation in the Program at any time
by providing written notice to AUL, provided that AUL must receive written
notice of such a change at least five days before a previously scheduled
transfer is to occur.
Contract Owners or Participants may initially elect to participate in the
DCA Program, and if this election is made at the time the Contract is applied
for, the Program will take effect on the first monthly, quarterly, semi-annual,
or annual transfer date following the premium receipt by AUL at its Home Office.
The
<PAGE>
24
Contract Owner or Participant may select the month, quarter, or year that
the transfers are to be made and such transfers will automatically be performed
on the last business day of such period. To participate in the Program, a
minimum balance of $10,000 in the Money Market Investment Account or in the
Fixed Account is required.
CASH WITHDRAWALS AND THE DEATH BENEFIT
CASH WITHDRAWALS
During the lifetime of the Participant, at any time before the Annuity
Commencement Date and subject to the limitations under the applicable Plan and
applicable law, a Participant's Account may be surrendered or a partial
withdrawal may be taken from a Participant's Account Value. A surrender or
withdrawal request will be effective as of the end of the Valuation Date that a
proper written request in a form acceptable to AUL is received by AUL at its
Home Office.
A full surrender of a Participant's Variable Account Value will result in a
withdrawal payment equal to the value of the Participant's Variable Account
Value as of the end of the Valuation Period during which a proper withdrawal
request is received by AUL at its Home Office, minus any applicable withdrawal
charge. A partial withdrawal may be requested for a specified percentage or
dollar amount of a Participant's Variable Account Value. A request for a partial
withdrawal will result in a payment by AUL equal to the amount specified in the
partial withdrawal request. Upon payment, the Participant's Variable Account
Value will be reduced by an amount equal to the payment and any applicable
withdrawal charge. If a partial withdrawal is requested that would leave a
Participant's Variable Account Value in any Investment Account less than $500,
then such partial withdrawal request will be treated as a request for a full
withdrawal from the Investment Account.
The minimum amount that may be withdrawn from a Participant's Variable
Account Value in an Investment Account is the lesser of $500 or the
Participant's entire Account Value in the Investment Account as of the date the
withdrawal request is received by AUL. However, if after the withdrawal, the
amount or value of the Investment Account would be less than $500, then the
request will be treated as a request for a withdrawal of the entire Account
Value of the Investment Account.
The amount of a partial withdrawal will be taken from the Investment
Accounts and the Fixed Account as instructed. A partial withdrawal will not be
effected until proper instructions are received by AUL at its Home Office.
A surrender or a partial withdrawal may result in the deduction of a
withdrawal charge. See "Withdrawal Charge."
In addition, distributions under certain retirement programs may result in
a tax penalty. See "Tax Penalty."
SYSTEMATIC WITHDRAWAL SERVICE FOR 403(b) AND 408 PROGRAMS
A Participant in a Contract used in connection with a 403(b) plan (other
than an Employer Sponsored 403(b) plan) or 408 Program who is at least age 59
1/2 can arrange to have systematic cash withdrawals from his or her Account
Value paid on a regular monthly, quarterly, or annual basis. Each withdrawal
payment must be at least equal to $100. An application form containing details
of the service is available upon request from AUL. The service is voluntary and
can be terminated at any time by the Participant or Owner. AUL does not
currently deduct a service charge for withdrawal payments, but reserves the
right to do so in the future and similarly, reserves the right to increase the
minimum required amount for each withdrawal payment.
Participants will pay a withdrawal charge in connection with the systematic
cash withdrawals to the extent the withdrawal charge is applicable (e.g., for a
Recurring Contribution Contract, during the first ten Account Years and
excluding the 10% allowable amount each Contract Year). Systematic withdrawals
of up to 10% of (i) the total of all contributions made during the year that the
withdrawal is being made, plus (ii) the Participant's Account Value at the
beginning of the Contract Year may begin in the year the Participant's Account
is established. After the first two Contract Years, and until the withdrawal
charge has decreased to 0%, the amount withdrawn during a Contract Year that
will not be subject to a withdrawal charge is 10% of the Participant's Account
Value at the beginning of the Contract Year in which the withdrawal is being
made. See "Withdrawal Charge." In addition, receipt of the cash withdrawals may
result in the receipt of taxable income to the Participant. See "Federal Tax
Matters." No withdrawal charges are applied to "benefit responsive" Contracts
for payment of retirement, death, disability, termination of employment,
hardship, loan, age 70 1/2 required minimum distribution benefits or benefits
upon attainment of age 59 1/2 (provided that the age 59 1/2 benefit is a taxable
distribution paid to the Participant and not to any other person or entity,
including any alternative or substitute funding medium). For certain other
Contracts known as "modified benefit responsive" Contracts, withdrawal charges
are not imposed for cash lump-sum payments of death benefits. For Modified
Benefit Responsive Contracts, withdrawal charges are not imposed for cash
lump-sum payments provided the Participant has (1) attained age 55 and has 10
years of service with the employer identified in the Plan, or (2) attained age
62, and is receiving benefits for retirement, disability, termination of
employment, hardships, loans, or required minimum distribution benefits pursuant
to Internal Revenue Code Section 401(a)(9) and Regulations issued thereunder, or
for benefits upon attainment of age 59 1/2 (provided that such benefit upon
attainment of age 59 1/2 is a taxable distribution paid to the Participant and
not to any other person or entity, including any alternative or substitute
funding medium).
However, even in benefit responsive or modified benefit responsive
contracts, withdrawal charges will be applied to any withdrawal to pay a Plan
benefit if the benefit is payable because of, or the underlying reason for
payment of the benefit
<PAGE>
25
results in, the termination or partial termination of the Plan, as determined
under applicable IRS guidelines.
CONSTRAINTS ON WITHDRAWALS
GENERAL
Since the Contracts offered by this Prospectus will be issued in connection
with retirement plans that meet the requirements of Section 401, Section 403(b),
Section 408, or Section 457 of the Internal Revenue Code, reference should be
made to the terms of the particular Plan or Contract for any limitations or
restrictions on cash withdrawals. A surrender or withdrawal that results in
receipt of proceeds by a Participant may result in receipt of taxable income to
the Participant and, in some instances, in a tax penalty. The tax consequences
of a surrender or withdrawal under the Contracts should be carefully considered.
See "Federal Tax Matters."
403(b) PROGRAMS
Section 403(b) of the Internal Revenue Code permits public school employees
and employees of certain types of charitable, educational, and scientific
organizations specified in Section 501(c)(3) of the Internal Revenue Code to
purchase annuity contracts, and, subject to certain limitations, to exclude the
amount of purchase payments from gross income for federal tax purposes. Section
403(b) imposes restrictions on certain distributions from tax-sheltered annuity
contracts meeting the requirements of Section 403(b) that apply to tax years
beginning on or after January 1, 1989.
Section 403(b) requires that distributions from Section 403(b)
tax-sheltered annuities that are attributable to employee contributions made
after December 31, 1988 under a salary reduction agreement not begin before the
employee reaches age 59 1/2, separates from service, dies, becomes disabled, or
incurs a hardship. Furthermore, distributions of income or gains attributable to
such contributions accrued after December 31, 1988 may not be made on account of
hardship. Hardship, for this purpose, is generally defined as an immediate and
heavy financial need, such as paying for medical expenses, the purchase of a
principal residence, or paying certain tuition expenses.
A Participant in a Contract purchased as a tax-deferred Section 403(b)
annuity contract will not, therefore, be entitled to exercise the right of
surrender or withdrawal, as described in this Prospectus, in order to receive
his or her Account Value attributable to contributions made under a salary
reduction agreement or any income or gains credited to such Participant after
December 31, 1988 under the Contract unless one of the above-described
conditions has been satisfied, or unless the withdrawal is otherwise permitted
under applicable federal tax law. In the case of transfers of amounts
accumulated in a different Section 403(b) contract to this Contract under a
Section 403(b) Program, the withdrawal constraints described above would not
apply to the amount transferred to the Contract attributable to a Participant's
December 31, 1988 account balance under the old contract, provided that the
amounts transferred between contracts qualifies as a tax-free exchange under the
Internal Revenue Code. A Participant's Account Withdrawal in a Contract may be
able to be transferred to certain other investment alternatives meeting the
requirements of Section 403(b) that are available under an Employer's Section
403(b) arrangement.
TEXAS OPTIONAL RETIREMENT PROGRAM
AUL intends to offer the Contract within the Texas Optional Retirement
Program. Under the terms of the Texas Optional Retirement Program, if a
Participant makes the required contribution, the State of Texas will contribute
a specified amount to the Participant's Account. If a Participant does not
commence the second year of participation in the plan as a "faculty member," as
defined in Title 110B of the State of Texas Statutes, AUL will return the
State's contribution. If a Participant does begin a second year of
participation, the Employer's first-year contributions will then be applied as a
contribution under the Contract, as will the Employer's subsequent
contributions.
The Attorney General of the State of Texas has ruled that under Title 110B
of the State of Texas Statutes, withdrawal benefits of contracts issued under
the Optional Retirement Program are available only in the event of a
participant's death, retirement, termination of employment due to total
disability, or other termination of employment in a Texas public institution of
higher education. A Participant under a Contract issued in connection with the
Texas Optional Retirement Program will not, therefore, be entitled to exercise
the right of surrender or withdrawal to receive the Account Value credited to
such Participant unless one of the foregoing conditions has been satisfied. The
Withdrawal Value of such Participant's Account may, however, be transferred to
other contracts or other carriers during the period of participation in the
program.
THE DEATH BENEFIT
If a Participant dies during the Accumulation Period, AUL will pay a death
benefit to the Beneficiary upon receipt of due proof of the Participant's death
and instructions regarding payment to the Beneficiary. If there is no designated
Beneficiary living on the date of death of the Participant, AUL will pay the
death benefit in one sum to the estate of the Participant upon receipt of due
proof of death of both the Participant and the designated Beneficiary and
instructions regarding payment. If the death of the Participant occurs on or
after the Annuity Commencement Date, no death benefit will be payable under the
Contract except as may be provided under the Annuity Option elected.
The amount of the death benefit equals the vested portion of the
Participant's Account Value minus any outstanding loan balances and any due and
unpaid charges on those loans. Under Contracts acquired in connection with 408
Programs, 457 Programs, and 403(b) Programs other than Employer Sponsored 403(b)
Programs, the vested portion of a Participant's Account Value shall be the
Participant's entire Account Value. Under Employee Benefit Plans and Employer
Sponsored 403(b) Programs, the vested portion of a Participant's Account Value
is the amount to which the Participant is entitled upon death or separation from
service under a vesting schedule contained in
<PAGE>
26
the pertinent Plan. If the death benefit is less than a Participant's Account
Value, the death benefit shall be paid pro rata from the Investment Accounts and
the Fixed Account, and the remainder of the Account Value shall be distributed
to the Owner or as directed by the Owner. Prior to such distribution, any
remaining Account Value in the Investment Accounts shall be transferred to AUL's
General Account. In the case of a 457 Program, the Owner of the Contract shall
be the Beneficiary.
The death benefit will be paid to the Beneficiary in a single sum or under
one of the Annuity Options, as directed by the Participant or as elected by the
Beneficiary. If the Beneficiary is to receive annuity payments under an Annuity
Option, there may be limits under applicable law on the amount and duration of
payments that the Beneficiary may receive, and requirements respecting timing of
payments. A tax adviser should be consulted in considering payout options.
TERMINATION BY THE OWNER
An Owner of a Contract acquired in connection with an Employee Benefit
Plan, a 457 Program, or an Employer Sponsored 403(b) Program may terminate the
Contract by sending proper written notice of termination to AUL at its Home
Office. Termination shall be effective as of the end of the Valuation Date that
the notice is received by AUL at its Home Office. Proper notice of termination
must include an election of the method of payment or payments from AUL, an
indication of the person or persons to whom payment is to be made, and the
Owner's agreement (and the Plan Sponsor's agreement, if the Contract is issued
in connection with an Employee Benefit Plan or an Employer Sponsored 403(b)
Program) that AUL shall not be held responsible for any losses or claims that
may arise against AUL in connection with making a payment or payments upon
termination.
Upon termination of such a Contract used in connection with an Employee
Benefit Plan, a 457 Program, or Employee Benefit Plan contributions in a
combined Contract for an Employee Benefit Plan and Employer Sponsored 403(b)
Plan, the Owner (and the Plan Sponsor, if the Contract is issued in connection
with an Employee Benefit Plan) may elect from two payment options. Under one
option, AUL will pay an amount equal to the aggregate Withdrawal Values of all
of the Participant Accounts under the Contract determined as of the end of the
Valuation Date that the termination is effective, minus any applicable
Investment Liquidation Charge. The Investment Liquidation Charge applies only to
Participants' Fixed Account Values under these Contracts. The charge is equal to
a certain percentage, as described below, multiplied by the Withdrawal Value
derived from the Fixed Account of each Participant under a Contract. The
percentage is determined by the following formula: 6(x - y), where "x" is the
Current Rate of interest, as described under "Interest," being credited by AUL
to new Contributions allocated to the Fixed Account as of the effective date of
termination, and "y" is the average rate of interest being credited by AUL to
various portions of a Participant's Fixed Account Value as of the effective date
of termination. Payment under this option shall be made as described under
"Payments from the Variable Account," except that payment of amounts
attributable to the Fixed Account may be delayed for up to six months after the
effective date of termination.
Under the second payment option for a 457 Program Contract, AUL will pay an
amount equal to the aggregate Withdrawal Values derived from the Variable
Account of all Participants under the Contract determined as of the end of the
Valuation Date on which termination is effective. Payment of this amount shall
be made as described under "Payments from the Variable Account." AUL will also
pay an amount equal to the aggregate Withdrawal Values derived from the Fixed
Account of all Participants under the Contract as of the Contract Anniversary
immediately succeeding the effective date of termination. This amount shall be
payable in six equal annual installments, the first of which shall be paid on
the Contract Anniversary immediately succeeding the effective date of
termination. As of this date, AUL shall have the right to refuse to accept
further contributions and shall cease to maintain individual Participant
Accounts, and amounts remaining under the Contract after each annual installment
shall be paid interest by AUL at an annual effective rate that shall be equal to
the lesser of (a) the weighted average of each of the various Current Rates of
interest being credited to amounts held in the Fixed Account under the Contract
determined as of the Contract Anniversary immediately succeeding the effective
date of termination, or (b) the interest rate for U.S. Government Security
Treasury Constant Maturity for three years (as set forth in the Federal Reserve
Statistical Releases), as determined on the Business Day coincident with or next
following the Contract Anniversary immediately succeeding the effective date of
termination. Interest earned during the Contract Year following payment of any
annual installment shall be paid by AUL on the next succeeding Contract
Anniversary.
Under the second payment option for an Employee Benefit Plan Contract, or
for the Employee Benefit Plan contributions in a combined Contract for an
Employee Benefit Plan and Employer Sponsored 403(b) Plan, AUL will pay an amount
equal to the aggregate Withdrawal Values derived from the Variable Account of
all Participants under the Contract determined as of the end of the Valuation
Date on which termination is effective. Payment shall be made as described under
"Payments from the Variable Account." AUL will also pay amounts derived from the
Fixed Account in seven annual installments as follows: As of the first Contract
Anniversary immediately succeeding the effective date of termination,
one-seventh of that portion of the Withdrawal Value of each Participant's
Account consisting of the net dollar balance in the Fixed Account credited to
each such Participant's Account will be calculated and paid. On the next
succeeding six Contract Anniversaries thereafter, a fraction of the remaining
Withdrawal Values will be paid. The fraction paid in each succeeding year shall
have the number "1" as the numerator and the denominator shall be a number which
is, numerically, "1" less than the denominator of the fraction paid on the prior
Contract Anniversary. Therefore, the payment on the second Contract Anniversary
would be one-sixth, on the third Contract Anniversary, the payment would be
one-fifth, and so forth until the final payment is the remaining balance in the
Fixed Account credited to each such Participant. Until all
<PAGE>
27
funds have been paid by AUL, the Current Rates of interest credited to other
Contracts of the same type will be credited to the remaining Withdrawal Values.
Upon termination of a Contract used in connection with an Employer
Sponsored 403(b) Program or a combined Contract for an Employee Benefit Plan and
Employer Sponsored 403(b) Plan, AUL shall have the right to refuse to accept
further contributions. Upon such a termination, amounts attributable to Employer
Sponsored 403(b) contributions will be paid by AUL as described in the prior
paragraph.
TERMINATION BY AUL
AUL has the right, subject to applicable state law, to terminate any
Participant's Account established under a Contract acquired in connection with
an Employee Benefit Plan, a 457 Program, or an Employer Sponsored 403(b) Program
at any time during the Contract Year if the Participant's Account Value falls
below $300 ($200 for an Employer Sponsored 403(b) Program or for a Contract with
both 403(b) and 401(a) funds) during the first Contract Year, or $500 ($400 for
an Employer Sponsored 403(b) Program or for a Contract with both 403(b) and
401(a) funds) during any subsequent Contract Year, provided that at least six
months have elapsed since the Owner's last contribution to the Contract. AUL
will give notice to the Owner and the Participant that the Participant's Account
is to be terminated. Termination shall be effective six months from the date
that AUL gives such notice, provided that any contributions made during the six
month notice period are insufficient to bring the Participant's Account Value up
to the applicable minimum. Single Contribution Contracts have a minimum required
contribution of $100,000. After the twelve month contribution period, as
measured from the date of first deposit, no further contributions to that
specific Account will be accepted or required under Single Contribution
Contracts, and AUL will not terminate such a Contract or Account for failure to
make further contributions.
Upon termination of a Participant's Account by AUL, AUL will pay an amount
equal to the Participant's Account Value as of the close of business on the
effective date of termination. Payment of this amount will be made within seven
days from such effective date of termination.
AUL may, at its option, terminate any Contract if there are no Participant
Accounts in existence under the Contract.
PAYMENTS FROM THE VARIABLE ACCOUNT
Payment of an amount from the Variable Account resulting from a surrender,
cash withdrawal, transfer from a Participant's Variable Account Value, payment
of the death benefit, or payment upon termination by the Owner will be made
within seven days from the date a proper request is received at AUL's Home
Office. However, AUL can postpone the calculation or payment of such an amount
to the extent permitted under applicable law, which is currently permissible
only for any period: (a) during which the New York Stock Exchange is closed
other than customary week-end and holiday closings, (b) during which trading on
the New York Stock Exchange is restricted as determined by the SEC, (c) during
which an emergency, as determined by the SEC, exists as a result of which (i)
disposal of securities held by the Variable Account is not reasonably
practicable, or (ii) it is not reasonably practicable to determine the value of
the assets of the Variable Account, or (d) for such other periods as the SEC may
by order permit for the protection of investors. For information concerning
payment of an amount from the Fixed Account, see "The Fixed Account" and
"Termination by the Owner."
CHARGES AND DEDUCTIONS
PREMIUM TAX CHARGE
Various states and municipalities impose a tax on premiums received by
insurance companies. Whether or not a premium tax is imposed will depend upon,
among other things, the Owner's state of residence, the Annuitant's state of
residence, and the insurance tax laws and AUL's status in a particular state.
AUL assesses a premium tax charge to reimburse itself for premium taxes that it
incurs. This charge will be deducted as premium taxes are incurred by AUL, which
is usually when an annuity is effected. Premium tax rates currently range from
0% to 3.5%, but are subject to change by such governmental entities.
WITHDRAWAL CHARGE
No deduction for sales charges is made from contributions for a Contract.
However, if a cash withdrawal is made, a Participant's Account is surrendered,
or the Contract is terminated by the Owner, then, depending on the type of
Contract, a withdrawal charge (which may also be referred to as a contingent
deferred sales charge) may be assessed by AUL if the Participant's Account has
not been in existence for a certain period of time. For the first two Contract
Years that a Participant's Account exists, the amount withdrawn during a
Contract Year that will not be subject to a withdrawal charge is 10% of (1) the
total of all contributions made during the year that the withdrawal is being
made, plus (2) the Participant's Account Value at the beginning of the Contract
Year. After the first two Contract Years, and until the withdrawal charge has
decreased to 0%, the amount withdrawn during a Contract Year that will not be
subject to an otherwise applicable withdrawal charge is 10% of the Participant's
Account Value at the beginning of the Contract Year in which the withdrawal is
being made. If a Participant's contributions were initially allocated to a
Recurring Contribution Contract and then transferred to a Single Contribution
Contract pursuant to a Transfer Agreement between AUL and the Participant when
the required minimum of $100,000 was reached, then, for purposes of establishing
the number of Account Years that an account has been in existence, credit will
be given for the time that the contributions were in the Recurring Contribution
Contract.
<PAGE>
28
The chart below illustrates the amount of the withdrawal charge that applies to
the different types of Contracts based on the number of years that the Account
has been in existence.
<TABLE>
<CAPTION>
Charge on Withdrawal Exceeding 10% Allowable Amount
---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11 or
Account Year 1 2 3 4 5 6 7 8 9 10 more
- -------------- - - - - - - - - -- ----
Recurring
Contribution
Contracts 8% 8% 8% 8% 8% 4% 4% 4% 4% 4% 0%
Single
Contribution
Contracts 6% 5% 4% 3% 2% 1% 0% 0% 0% 0% 0%
</TABLE>
Withdrawal charges are not imposed for many benefits provided under
"benefit responsive" Contracts. A "benefit responsive" Contract can be
distinguished from a Contract that is not "benefit responsive" by the
contractual condition that under a "benefit responsive" Contract, withdrawal
charges are not imposed for payment of retirement, death, disability,
termination of employment, hardship, loan, age 70 1/2 required minimum
distribution benefits, or benefits upon attainment of age 59 1/2 (provided that
the age 59 1/2 benefit is a taxable distribution paid to the Participant and not
to any other person or entity, including any alternative or substitute funding
medium). Under certain circumstances, withdrawal charges are not imposed under
"modified benefit responsive" Contracts. A "modified benefit responsive"
Contract can be distinguished from a Contract that is not "modified benefit
responsive" by the contractual condition that under a "modified benefit
responsive" Contract, withdrawal charges are not imposed for cash lump-sum
payments of death benefits, or, provided the Participant has (1) attained age 55
and has 10 years of service with the employer identified in the Plan, or (2)
attained age 62 for Plan benefits due to retirement, disability, termination of
employment, hardships, loans, or required minimum distribution benefits pursuant
to Internal Revenue Code Section 401(a)(9) and Regulations issued thereunder, or
for benefits upon attainment of age 59 1/2 (provided that such benefit upon
attainment of age 59 1/2 is a taxable distribution paid to the Participant and
not to any other person or entity, including any alternative or substitute
funding medium).
However, even in benefit responsive or modified benefit responsive
contracts, withdrawal charges will be applied to any withdrawal to pay a Plan
benefit if the benefit is payable because of, or the underlying reason for
payment of the benefit results in, the termination or partial termination of the
Plan, as determined under applicable IRS guidelines.
In no event will the amount of any withdrawal charge, when added to any
withdrawal charges previously assessed against any amount withdrawn from a
Participant's Account, exceed 9% of the contributions made by or on behalf of a
Participant under a Contract. In addition, no withdrawal charge will be imposed
upon payment of a death benefit under the Contract.
The withdrawal charge will be used to recover certain expenses relating to
sales of the Contracts, including commissions paid to sales personnel and other
promotional costs. AUL reserves the right to increase the withdrawal charge for
any Participant Accounts established on or after the effective date of the
change, but the withdrawal charge will not exceed 9% of the contributions made
by or on behalf of a Participant.
MORTALITY AND EXPENSE RISK CHARGE
AUL deducts a daily charge from the assets of each Investment Account for
mortality and expense risks assumed by AUL. The charge is equal to an annual
rate of 1.25% of the average daily net assets of each Investment Account. This
amount is intended to compensate AUL for certain mortality and expense risks AUL
assumes in offering and administering the Contracts and in operating the
Variable Account. The 1.25% charge was originally based on estimates of .40% for
expense risk and .85% for mortality risk.
The expense risk is the risk that AUL's actual expenses in issuing and
administering the Contracts and operating the Variable Account will be more than
the charges assessed for such expenses. The mortality risk borne by AUL is the
risk that Annuitants, as a group, will live longer than the Company's actuarial
tables predict. AUL may ultimately realize a profit from this charge to the
extent it is not needed to address mortality and administrative expenses, but
AUL may realize a loss to the extent the charge is not sufficient. AUL may use
any profit derived from this charge for any lawful purpose, including any
distribution expenses not covered by the withdrawal charge.
VARIABLE INVESTMENT PLUS OPTION
Certain Contracts, such as Employer Sponsored 403(b) Contracts, 457
Contracts, and Combination Contracts used in connection with an Employee Benefit
Plan and Employer Sponsored 403(b) contributions may, at the option of the
Contract Holder, receive a portion of the Mortality and Expense Risk Charge in
the form of Accumulation Units credited to Participant Accounts. If this Option
is elected by the Contract holder, and if the total amount of assets invested in
variable investment options meets certain underwriting minimums, then the Plus
Factor used to credit units on an annual basis will be as follows:
<TABLE>
<S> <C> <C> <C>
Month End Aggregate Annual Monthly
Participant Variable Plus Equivalent of
Investment Assets Factor Plus Factor
--------------------- ------- -------------
Up to $500,000 0.00% 0.00000%
$500,001-$1,000,000 0.25% 0.02081%
$1,000,001-$3,000,000 0.35% 0.02912%
$3,000,001-$5,000,000 0.40% 0.03327%
$5,000,001-$6,000,000 0.50% 0.04157%
Over $6,000,000 0.75% 0.06229%
</TABLE>
Under this Option, the appropriate Plus Factor for aggregate Participant
Variable Investment Assets of less than $500,000 is
<PAGE>
29
0%. Therefore, if the aggregate Participant Variable Investment Assets were
$1,000,000 at the end of a particular month, an annual Plus Factor of 0% would
be applied to the first $500,000 received. For that particular month, a monthly
Plus Factor of .02081% would be applied to the next $500,000 and the sum of
$104.17 would be applied by AUL to purchase Accumulation Units in each Variable
Investment Option owned by each Participant under the Contract. Units will be
credited to Participant Accounts on a monthly basis and purchased at the
Accumulation Unit Value next computed following the calculation of the
appropriate Factor. Accumulation Units purchased will be reported to
Participants as Earnings.
To qualify for this Option, contracts must have a minimum of $220,000 in
contributions during the first contract year. Up to 10% of any assets
transferred into a contract may qualify to meet the required first year
contribution minimum and ongoing contributions after the first contract year
must be at least $50,000 per year.
AUL reserves the right at any time to change the aggregate investment
amounts, the Plus Factor and the underwriting minimums.
ADMINISTRATIVE CHARGE
Under some recurring contribution contracts, AUL deducts an administrative
charge from each Participant's Account equal to the lesser of 0.5% of the
Participant's Account Value or $7.50 per quarter. The charge is assessed every
quarter on a Participant Account if the account exists on the quarterly Contract
Anniversary, and is assessed only during the Accumulation Period. When a
Participant annuitizes or surrenders on any day other than a quarterly Contract
Anniversary, a pro rata portion of the charge for that portion of the quarter
will not be assessed. The charge is deducted proportionately from the
Participant's Account Value allocated among the Investment Accounts and the
Fixed Account. The purpose of this charge is to reimburse AUL for the expenses
associated with administration of the Contracts and operation of the Variable
Account.
The Administrative charge may, at the Employer's option, be billed directly
to and paid directly by, the Employer in lieu of being deducted from a
Participant's Account under Employer Sponsored 403(b) Contracts or under
combined Contracts containing an Employee Benefit Plan and Employer Sponsored
403(b) contributions, or the charge may be paid on any other basis mutually
agreed upon by the Employer and AUL. AUL does not expect to profit from this
charge. There is no Administrative Charge deducted from Participant's accounts
that are allocated to Single Contribution Contracts, and on some Recurring
Contribution Contracts.
OTHER CHARGES
AUL may charge the Investment Accounts of the Variable Account for the
federal, state, or local income taxes incurred by AUL that are attributable to
the Variable Account and its Investment Accounts. No such charge is currently
assessed. An Investment Liquidation Charge, which applies only to Participants'
Fixed Account Values under a Contract, may be imposed upon termination by an
Owner of a Contract acquired in connection with an Employee Benefit Plan or 457
Program. See "Termination by the Owner."
VARIATIONS IN CHARGES
AUL may reduce or waive the amount of the withdrawal charge and
administrative charge for a Contract where the expenses associated with the sale
of the Contract or the administrative costs associated with the Contract are
reduced. For example, the withdrawal and/or administrative charge may be reduced
in connection with acquisition of the Contract in exchange for another annuity
contract issued by AUL. AUL may also reduce or waive the withdrawal charge and
administrative charge on Contracts sold to the directors or employees of AUL or
any of its affiliates or to directors or any employees of any of the Funds.
GUARANTEE OF CERTAIN CHARGES
AUL guarantees that the mortality and expense risk charge shall not
increase. AUL also guarantees that through the year 2000, the administrative
charge may not increase to more than $15.00 per quarter. After the year 2000,
AUL may increase the fee but only to the extent necessary to recover the
expenses associated with administration of the Contracts and operation of the
Variable Account.
EXPENSES OF THE FUNDS
Each Investment Account of the Variable Account purchases shares at the net
asset value of the corresponding Portfolio of one of the Funds. The net asset
value reflects the investment advisory fee and other expenses that are deducted
from the assets of the Portfolio. The advisory fees and other expenses are more
fully described in the Funds' Prospectuses.
ANNUITY PERIOD
GENERAL
On the Annuity Commencement Date, the adjusted value of the Participant's
Account may be applied to provide an annuity under one of the options described
below. The adjusted value will be equal to the value of the Participant's
Account as of the Annuity Commencement Date, reduced by any applicable premium
or similar taxes and any outstanding loan balances and unpaid expense charges on
those loans.
The Contracts provide for five optional annuity forms, any one of which may
be elected if permitted by the particular Plan or applicable law. A lump-sum
distribution may also be elected under most Plans. Other Annuity Options may be
available upon request at the discretion of AUL. All Annuity Options are fixed
and the annuity payments remain constant throughout
<PAGE>
30
the Annuity Period. Annuity payments are based upon annuity rates that vary with
the Annuity Option selected and the age of the Annuitant (except that in the
case of Option 5, the Fixed Period Option, age is not a consideration). The
annuity rates are based upon an assumed interest rate of 2%, compounded
annually. If no Annuity Option has been selected for a Participant, annuity
payments will be made to the Annuitant under an automatic option. For 403(b)
(other than Employer Sponsored 403(b) Programs) and 457 Programs, the automatic
option shall be an annuity payable during the lifetime of the Annuitant with
payments certain for 120 months. For an Employee Benefit Plan or Employer
Sponsored 403(b) Program, the automatic option shall be an annuity payable
during the lifetime of the Annuitant with payments certain for 120 months or,
for a married Annuitant, a Survivorship Annuity as described in Option 3 below.
For 408 Programs, the automatic option for unmarried Participants shall be a 10
Year Certain and Life Annuity; for married Participants, the automatic option
shall be a 50% Survivorship Annuity. For "benefit responsive" Employer Sponsored
403(b) Contracts, and for an Employee Benefit Plan combined with an Employer
Sponsored 403(b) Contract, there is no automatic annuity option.
Once annuity payments have commenced, a Participant cannot surrender his or
her annuity and receive a lump-sum settlement in lieu thereof and cannot change
the Annuity Option. If, under any option, monthly payments are less than $25
each, AUL has the right to make either a lump-sum settlement or to make larger
payments at quarterly, semi-annual, or annual intervals. AUL also reserves the
right to change the minimum payment amount. AUL will not allow annuitization of
a Participant's Account if the total Account Value is less than $2000. Should
this occur, a Participant will receive the Account Value in a lump-sum
settlement.
Annuity payments will begin on the Annuity Commencement Date. No withdrawal
charge will be applied on this Date.
A Participant or, depending on the Contract, an Owner on behalf of a
Participant, may designate an Annuity Commencement Date, Annuity Option,
contingent Annuitant, and Beneficiary on an Annuity Election Form that must be
received by AUL at its Home Office at least 30 days prior to the Annuity
Commencement Date. AUL may also require additional information before annuity
payments commence. During the lifetime of the Participant and up to 30 days
prior to the Annuity Commencement Date, the Annuity Option, the Annuity
Commencement Date, or the designation of a contingent Annuitant or Beneficiary,
if any, under an Annuity Option may be changed. To help ensure timely receipt of
the first annuity payment, a transfer of a Participant's Variable Account Value
should be made to the Fixed Account at least two weeks prior to the Annuity
Commencement Date.
ANNUITY OPTIONS
OPTION 1 - LIFE ANNUITY
An annuity payable monthly during the lifetime of the Annuitant that ends
with the last monthly payment before the death of the Annuitant.
OPTION 2 - CERTAIN AND LIFE ANNUITY
An annuity payable monthly during the lifetime of the Annuitant with the
promise that if, at the death of the Annuitant, payments have been made for less
than a stated period, which may be five, ten, fifteen, or twenty years, as
elected, annuity payments will be continued during the remainder of such period
to the Beneficiary.
OPTION 3 - SURVIVORSHIP ANNUITY
An annuity payable monthly during the lifetime of the Annuitant, and, after
the death of the Annuitant, an amount equal to 50%, 66 2/3%, or 100% (as
specified in the election) of such annuity will be paid to the contingent
Annuitant named in the election if and so long as such contingent Annuitant
lives.
An election of this option is automatically cancelled if either the
Participant or the contingent Annuitant dies before the Annuity Commencement
Date.
OPTION 4 - INSTALLMENT REFUND LIFE ANNUITY
An annuity payable monthly during the lifetime of the Annuitant that ends
with the last payment due prior to the death of the Annuitant, except, that at
the death of the Annuitant, the Beneficiary will receive additional annuity
payments until the amount paid to purchase the annuity has been distributed.
OPTION 5 - FIXED PERIODS
An annuity payable monthly for a fixed period (not less than 5 years or
more than 30 years) as elected, with the guarantee that if, at the death of the
Annuitant, payments have been made for less than the selected fixed period,
annuity payments will be continued during the remainder of said period to the
Beneficiary.
SELECTION OF AN OPTION
Participants should carefully review the Annuity Options with their
financial or tax advisers, and reference should be made to the terms of a
particular Plan for pertinent limitations respecting annuity payments and other
matters. For instance, under requirements for retirement plans that qualify for
treatment under Sections 401, 403(b), 408, or 457 of the Internal Revenue Code,
annuity payments generally must begin no later than April 1 of the calendar year
following the calendar year in which the Participant reaches age 70 1/2,
provided the Participant is no longer employed. For Options 2 and 5, the period
elected for receipt of annuity payments under the terms of the Annuity Option
generally may be no longer than the joint life expectancy of the Annuitant and
Beneficiary in the year that the Annuitant reaches age 70 1/2 and must be
shorter than such joint life expectancy if the Beneficiary is not the
Annuitant's spouse and is more than 10 years younger than the Annuitant. Under
Option 3, if the contingent Annuitant is not the Annuitant's spouse and is more
than 10 years younger than the Annuitant, the 66 2/3% and 100% elections
specified above may not be available.
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THE FIXED ACCOUNT
Contributions or transfers to the Fixed Account become part of AUL's
General Account. The General Account is subject to regulation and supervision by
the Indiana Insurance Department as well as the insurance laws and regulations
of other jurisdictions in which the Contracts are distributed. In reliance on
certain exemptive and exclusionary provisions, interests in the Fixed Account
have not been registered as securities under the Securities Act of 1933 (the
"1933 Act") and the Fixed Account has not been registered as an investment
company under the 1940 Act. Accordingly, neither the Fixed Account nor any
interests therein are generally subject to the provisions of the 1933 Act or the
1940 Act. AUL has been advised that the staff of the SEC has not reviewed the
disclosure in this Prospectus relating to the Fixed Account. This disclosure,
however, may be subject to certain generally applicable provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in the Prospectus. This Prospectus is generally intended to serve as a
disclosure document only for aspects of a Contract involving the Variable
Account and contains only selected information regarding the Fixed Account. For
more information regarding the Fixed Account, see the Contract itself or a
Participant's Certificate.
INTEREST
A Participant's Fixed Account Value earns interest at fixed rates that are
paid by AUL. The Account Value in the Fixed Account earns interest at one or
more interest rates determined by AUL at its discretion and declared in advance
("Current Rate"), which are guaranteed to be at least an annual effective rate
of 4% per year ("Guaranteed Rate"). AUL will determine a Current Rate from time
to time, and any Current Rate that exceeds the Guaranteed Rate will be in effect
for a period of at least one year. If AUL determines a Current Rate in excess of
the Guaranteed Rate, contributions or transfers to a Participant's Account
during the time the Current Rate is in effect are guaranteed to earn interest at
that particular Current Rate for at least one year. AUL may declare a different
Current Rate for a particular contract based on costs of acquisition to AUL or
the level of service provided by AUL. Transfers from other AUL annuity contracts
may be transferred at a rate of interest different than the Current Rate.
Except for transfers from other AUL annuity contracts, and automatic
transfers to Single Contribution Contracts from Recurring Contribution Contracts
when the minimum required contribution of $100,000 is reached, amounts
contributed or transferred to the Fixed Account earn interest at the Current
Rate then in effect. Amounts transferred from other AUL annuity contracts may
not earn the Current Rate, but may, at AUL's discretion, continue to earn the
rate of interest which was paid under the former Contract. Automatic transfers
to Single Contribution Contracts will, as of the date of such transfer, be
credited with the Single Contribution Contract interest rate which was in effect
on the date the transferred contribution was originally deposited into the
Recurring Contribution Contract. If AUL changes the Current Rate, such amounts
contributed or transferred on or after the effective date of the change earn
interest at the new Current Rate; however, amounts contributed or transferred
prior to the effective date of the change may earn interest at the prior Current
Rate or other Current Rate determined by AUL. Therefore, at any given time,
various portions of a Participant's Fixed Account Value may be earning interest
at different Current Rates for different periods of time, depending upon when
such portions were originally contributed or transferred to the Fixed Account.
AUL bears the investment risk for Participant's Fixed Account Values and for
paying interest at the Current Rate on amounts allocated to the Fixed Account.
AUL reserves the right at any time to change the Guaranteed Rate of
interest for any Participant Accounts established on or after the effective date
of the change, although once a Participant Account is established, the
Guaranteed Rate may not be changed for the duration of that Account.
WITHDRAWALS AND TRANSFERS
A Participant (or a Contract Owner on behalf of a Participant) may make a
full surrender or a partial withdrawal from his or her Fixed Account Value
subject to the provisions of the Contract. A full surrender of a Participant's
Fixed Account Value will result in a withdrawal payment equal to the value of
the Participant's Fixed Account Value as of the day the surrender is effected,
minus any applicable withdrawal charge and minus the Participant's outstanding
loan balance(s), if any, and any expense charges due thereon. A partial
withdrawal may be requested for a specified percentage or dollar amount of the
Participant's Fixed Account Value, except, where a Participant has outstanding
loans under a Contract, a partial withdrawal will be permitted only to the
extent that the Participant's remaining Withdrawal Value in the Fixed Account
equals twice the total of the outstanding loans under the Participant's account.
The minimum amount that may be withdrawn from a Participant's share of the Fixed
Account is the lesser of $500 or the Participant's entire Fixed Account Value as
of the date the withdrawal request is received by AUL at its Home Office. If a
partial withdrawal is requested that would leave the Participant's Fixed Account
Value less than $500, then such partial withdrawal request will be treated as a
request for a full withdrawal from the Fixed Account. If a Participant has more
than one Account, then the Account from which the partial withdrawal is to be
taken must be specified and any withdrawal restrictions shall be effective at an
Account level. For a further discussion of surrenders and partial withdrawals as
generally applicable to a Participant's Variable Account Value and Fixed Account
Value, see "Cash Withdrawals."
A Participant's Fixed Account Value may be transferred from the Fixed
Account to the Variable Account subject to certain limitations. Where a
Participant has outstanding loans under a Contract, a transfer will be permitted
only to the extent that the Participant's remaining Withdrawal Value in the
Fixed Account equals twice the total of the outstanding loans under the
Participant's Account. The minimum transfer from any
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32
Investment Account or from the Fixed Account is the lesser of $500 or a
Participant's entire Account Value in that Investment Account or in the Fixed
Account as of the date the transfer request is received by AUL at its Home
Office, provided, however, that amounts transferred from the Fixed Account to an
Investment Account during any given Contract Year cannot exceed 20% of the
Participant's Fixed Account Value as of the beginning of that Contract Year.
However, if a Participant's Fixed Account Value at the beginning of the Contract
Year is less than $2,500, the amount that will be transferred for that Contract
Year from the Fixed Account is the lesser of $500 or the entire Fixed Account
Value as of the date the transfer request is received by AUL at its Home Office.
If, after any transfer, the Participant's remaining Account Value in an
Investment Account or in the Fixed Account would be less than $500, then such
request will be treated as a request for a transfer of the entire Account Value.
Transfers and withdrawals of a Participant's Fixed Account Values will be
effected on a first-in, first-out basis. If a Participant has more than one
Account, then the Account from which the transfer is to be taken must be
specified and any transfer restrictions shall be effective at an Account level.
For a discussion of transfers as generally applicable to a Participant's
Variable Account Value and Fixed Account Value, see "Transfers of Account
Value."
TRANSFER OF INTEREST OPTION
Participants may elect to use interest earned in their Fixed Account to
purchase Accumulation Units in one or more Variable Accounts. Upon receipt at
AUL's Home Office of properly executed written instructions to do so, AUL will,
on the last business day of each month and monthly thereafter, use the interest
earned in the Fixed Account during that month to purchase Accumulation Units at
the corresponding Accumulation Unit Value on each date that a purchase is made.
To elect this Option, the Participant must have previously provided AUL with
instructions specifying the Variable Investment Account or Accounts to be
purchased and a percentage allocation among Investment Accounts if more than one
Investment Account has been elected. If no such instructions are received by
AUL, then the Participant's prior investment allocation instructions will be
used by AUL to allocate purchases under this Option.
To participate in this Option, a Participant's Fixed Account Value must be
greater than $10,000. Amounts transferred out of the Fixed Account under this
Option will be considered a part of the 20% maximum amount that can be
transferred from the Fixed Account to a Variable Account during any given
Contract Year.
CONTRACT CHARGES
The withdrawal charge will be the same for amounts surrendered or withdrawn
from a Participant's Fixed Account Value as for amounts surrendered or withdrawn
from a Participant's Variable Account Value. In addition, the administrative
charge will be the same whether or not a Participant's Account Value is
allocated to the Variable Account or the Fixed Account. The charge for mortality
and expense risks will not be assessed against the Fixed Account, and any
amounts that AUL pays for income taxes allocable to the Variable Account will
not be charged against the Fixed Account. In addition, the investment advisory
fees and operating expenses paid by the Funds will not be paid directly or
indirectly by Participants to the extent the Account Value is allocated to the
Fixed Account; however, such Participants will not participate in the investment
experience of the Variable Account. See "Charges and Deductions."
An Investment Liquidation Charge may be imposed upon termination by an
Owner of a Contract acquired in connection with an Employee Benefit Plan or 457
Program. See "Termination by the Owner."
PAYMENTS FROM THE FIXED ACCOUNT
Surrenders, withdrawals, and transfers from the Fixed Account and payment
of a death benefit based upon a Participant's Fixed Account Value may be delayed
for up to six months after a written request in proper form is received by AUL
at its Home Office. During the period of deferral, interest at the applicable
interest rate or rates will continue to be credited to the Participant's Fixed
Account Value. For information on payment upon termination by the Owner of a
Contract acquired in connection with an Employee Benefit Plan, an Employer
Sponsored 403(b) Program, or a 457 Program, see "Termination by the Owner."
LOANS FROM THE FIXED ACCOUNT
A Participant under a 403(b) Program, other than an Employer Sponsored
403(b) Program, who has a Participant Account Value in the Fixed Account may
borrow money from AUL using his or her Fixed Account Value as the only security
for the loan by submitting a proper written request to AUL's Home Office. A loan
may be taken any time prior to the Annuity Commencement Date. The minimum loan
that can be taken at any time is $2000, unless a lower minimum loan amount is
specified by state law or Department of Labor regulations. The maximum amount
that can be borrowed at any time is an amount which, when combined with the
largest loan balance during the prior 12 months, does not exceed the lesser of
(1) 50% of the Participant's Withdrawal Value in the Fixed Account, or (2)
$50,000. The Participant's Withdrawal Value in the Fixed Account, which must be
at least twice the amount of the outstanding loan balance, shall serve as
security for the loan, and shall continue to earn interest as described under
"Interest." Payment by AUL of the loan amount may be delayed for up to six
months. If a Participant has more than one Participant Account invested in the
Fixed Account, then the account in which funds are to be held as security for
the loan must be specified, and any loan restrictions shall be effective at an
Account level.
Interest will be charged for the loan, and will accrue on the loan balance
from the effective date of any loan. The interest rate will be declared by AUL
at the beginning of each calendar quarter, or, with respect to Contracts or
Participants in some states, annually. The interest charged will be determined
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33
under a procedure specified in the loan provision of the Contract; the interest
rate generally follows the Moody's Corporate Bond Yield Average-Monthly Average
Corporates as published by Moody's Investors Service. However, no change from a
previously established rate will be made in an amount less than .50% in any
periodic adjustment. The Contract should be consulted for more information. The
loan balance shall also be subject to a loan expense charge equal to 2% of each
loan repayment unless such a charge is prohibited by state law.
Loans to Participants must be repaid within a term of five years, unless
the Participant certifies to AUL that the loan is to be used to acquire a
principal residence for the Participant, in which case the term may be longer.
Loan repayments must be made at least quarterly. Upon receipt of a repayment,
AUL will deduct the 2% expense charge from the repayment and will apply the
balance first to any accrued interest and then to the outstanding loan
principal.
If a loan either remains unpaid at the end of its term, or if at any time
during the Accumulation Period, 102% of the total of all the Participant's loan
balances equals the Participant's Withdrawal Value allocated to the Fixed
Account, then AUL will deduct these loan balances, as well as an expense charge
equal to 2% of the outstanding loan balances, from the Participant's Fixed
Account Value to the extent permitted by law. If a Participant has outstanding
loans, then withdrawals or transfers to the Variable Account will be permitted
only to the extent that the remaining Participant's Withdrawal Value in the
Fixed Account equals or exceeds twice the total of any outstanding loans under
the Contract. All loan balances plus the 2% expense charge must be paid or
satisfied in full before any amount based upon a Participant's Fixed Account
Value is paid upon surrender, as a death benefit, upon annuitization, or other
permitted distribution.
The restrictions or limitations stated above may be modified, or new
restrictions and limitations added, to the extent necessary to comply with
Section 72(p) of the Internal Revenue Code or its regulations, under which a
loan will not be treated as a distribution under a 403(b) Program, or other
applicable law as determined by AUL. It should be noted that the Internal
Revenue Service has issued regulations which cause the outstanding balance of a
loan to be treated as a taxable distribution if the loan is not repaid in a
timely manner.
MORE ABOUT THE CONTRACTS
DESIGNATION AND CHANGE OF BENEFICIARY
The Beneficiary designation contained in an enrollment form application to
open a Participant's Account will remain in effect until changed. Payment of
benefits to any Beneficiary are subject to the specified Beneficiary surviving
the Participant. Unless otherwise provided, if no designated Beneficiary is
living upon the death of the Participant prior to the Annuity Commencement Date,
the Participant's estate is the Beneficiary. Unless otherwise provided, if no
designated Beneficiary under an Annuity Option is living after the Annuity
Commencement Date, upon the death of the Annuitant, the Annuitant's estate is
the Beneficiary.
Subject to the rights of an irrevocably designated Beneficiary, the
designation of a Beneficiary may be changed or revoked at any time while the
Participant is living by filing with AUL a written beneficiary designation or
revocation in such form as AUL may require. The change or revocation will not be
binding upon AUL until it is received by AUL at its Home Office. When it is so
received, the change or revocation will be effective as of the date on which the
beneficiary designation or revocation was signed, but the change or revocation
will be without prejudice to AUL if any payment has been made or any action has
been taken by AUL prior to receiving the change or revocation.
Reference should be made to the terms of the particular Plan and any
applicable law for any restrictions on the beneficiary designation. For
instance, under an Employee Benefit Plan or Employer Sponsored 403(b) Program,
the Beneficiary (or contingent Annuitant) must be the Participant's spouse if
the Participant is married, unless the spouse properly consents to the
designation of a Beneficiary (or contingent Annuitant) other than the spouse.
ASSIGNABILITY
No benefit or privilege under a Contract may be sold, assigned, discounted,
or pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose to any person or entity other than AUL.
PROOF OF AGE AND SURVIVAL
AUL may require proof of age or survival of any person on whose life
annuity payments depend.
MISSTATEMENTS
If the age of an Annuitant or contingent Annuitant has been misstated, the
correct amount paid or payable by AUL shall be such as the Participant's Account
Value would have provided for the correct age.
ACCEPTANCE OF NEW PARTICIPANTS OR CONTRIBUTIONS
AUL reserves the right to refuse to accept new Participants or new
Contributions to a Contract at any time.
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34
FEDERAL TAX MATTERS
INTRODUCTION
The Contracts described in this Prospectus are designed for use by
Employer, association, and other group retirement plans under the provisions of
Sections 401, 403, 408, and 457 of the Internal Revenue Code ("Code"). The
ultimate effect of Federal income taxes on values under a Contract, the
Participant's Account, on annuity payments, and on the economic benefits to the
Owner, the Participant, the Annuitant, and the Beneficiary or other payee may
depend upon the type of Plan for which the Contract is purchased and a number of
different factors. The discussion contained herein and in the Statement of
Additional Information is general in nature. It is based upon AUL's
understanding of the present Federal income tax laws as currently interpreted by
the Internal Revenue Service ("IRS"), and is not intended as tax advice. No
representation is made regarding the likelihood of continuation of the present
Federal income tax laws or of the current interpretations by the IRS. Moreover,
no attempt is made to consider any applicable state or other laws. Because of
the inherent complexity of such laws and the fact that tax results will vary
according to the particular circumstances of the Plan or individual involved,
any person contemplating the purchase of a Contract, or becoming a Participant
under a Contract, or receiving annuity payments under a Contract should consult
a qualified tax adviser.
AUL DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS, FEDERAL, STATE, OR
LOCAL, OF ANY CONTRACT OR PARTICIPANT'S ACCOUNT OR ANY TRANSACTION INVOLVING THE
CONTRACTS.
TAX STATUS OF THE COMPANY AND THE VARIABLE ACCOUNT
AUL is taxed as a life insurance company under Part I, Subchapter L of the
Code. Because the Variable Account is not taxed as a separate entity and its
operations form a part of AUL, AUL will be responsible for any Federal income
taxes that become payable with respect to the income of the Variable Account.
However, each Investment Account will bear its allocable share of such
liabilities. Under current law, no item of dividend income, interest income, or
realized capital gain attributable, at a minimum, to appreciation of the
Investment Accounts will be taxed to AUL to the extent it is applied to increase
reserves under the Contracts.
Each of the Funds in which the Variable Account invests has advised AUL
that it intends to qualify as a "regulated investment company" under the Code.
AUL does not guarantee that any Fund will so qualify. If the requirements of the
Code are met, a Fund will not be taxed on amounts distributed on a timely basis
to the Variable Account. Were such a Fund not to so qualify, the tax status of
the Contracts as annuities might be lost, which could result in immediate
taxation of amounts earned under the Contracts (except those held in Employee
Benefit Plans and 408 Programs).
Under regulations promulgated under Code Section 817(h), each Investment
Account must meet certain diversification standards. Generally, compliance with
these standards is determined by taking into account an Investment Account's
share of assets of the appropriate underlying Fund. To meet this test, on the
last day of each calendar quarter, no more than 55% of the total assets of a
Fund may be represented by any one investment, no more than 70% may be
represented by any two investments, no more than 80% may be represented by any
three investments, and no more than 90% may be represented by any four
investments. For the purposes of Section 817(h), securities of a single issuer
generally are treated as one investment, but obligations of the U.S. Treasury
and each U.S. Governmental agency or instrumentality generally are treated as
securities of separate issuers.
TAX TREATMENT OF RETIREMENT PROGRAMS
The Contracts described in this Prospectus are offered for use with several
types of retirement programs as described in "The Contracts." The tax rules
applicable to Participants in such retirement programs vary according to the
type of retirement plan and its terms and conditions. Therefore, no attempt is
made herein to provide more than general information about the use of the
Contracts with the various types of retirement programs. Participants under such
programs, as well as Owners, Annuitants, Beneficiaries and other payees are
cautioned that the rights of any person to any benefits under these programs may
be subject to the terms and conditions of the Plans themselves, regardless of
the terms and conditions of the Contracts issued in connection therewith.
Generally, no taxes are imposed on the increases in the value of a Contract
by reason of investment experience or Employer contributions until a
distribution occurs, either as a lump-sum payment or annuity payments under an
elected Annuity Option or in the form of cash withdrawals, surrenders, or other
distributions prior to the Annuity Commencement Date.
The amounts that may be contributed to the Plans are subject to limitations
that may vary depending on the type of Plan. In addition, early distributions
from most Plans may be subject to penalty taxes, or in the case of distributions
of amounts contributed under salary reduction agreements, could cause the Plan
to be disqualified. Furthermore, distributions from most Plans are subject to
certain minimum distribution rules. Failure to comply with these rules could
result in disqualification of the Plan or subject the Annuitant to penalty
taxes. As a result, the minimum distribution rules could limit the availability
of certain Annuity Options to Participants and their Beneficiaries.
Below are brief descriptions of various types of retirement programs and
the use of the Contracts in connection therewith.
EMPLOYEE BENEFIT PLANS
Code Section 401 permits business employers and certain associations to
establish various types of retirement plans for employees. Such retirement plans
may permit the purchase of Contracts to provide benefits thereunder.
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35
If a Participant under an Employee Benefit Plan receives a lump-sum
distribution, the portion of the distribution equal to any contribution that was
taxable to the Participant in the year when paid is received tax free. The
balance of the distribution will be treated as ordinary income. Special
five-year forward averaging provisions under Code Section 402 may be utilized on
any amount subject to ordinary income tax treatment, provided that the
Participant has reached age 59 1/2, has not previously elected forward averaging
for a distribution from any Employee Benefit Plan after reaching age 59 1/2, and
has not rolled over a partial distribution from a similar plan into an
individual retirement account or annuity. Special ten-year averaging and a
capital-gains election may be available to a Participant who reached age 50
before 1986.
Under an Employee Benefit Plan under Section 401 of the Code, when annuity
payments commence (as opposed to a lump-sum distribution), under Section 72 of
the Code, the portion of each payment attributable to contributions that were
taxable to the Participant in the year made, if any, is excluded from gross
income as a return of the Participant's investment. The portion so excluded is
determined at the time the payments commence by dividing the Participant's
investment in the Contract by the expected return. The periodic payments in
excess of this amount are taxable as ordinary income. Once the Participant's
investment has been recovered, the full annuity payment will be taxable. If the
annuity should stop before the investment has been received, the unrecovered
portion is deductible on the Annuitant's final return. If the Participant made
no contributions that were taxable to the Participant in the year made, there
would be no portion excludable.
403(b) PROGRAMS
Code Section 403(b) permits public school systems and certain types of
charitable, educational, and scientific organizations specified in Code Section
501(c)(3) to purchase annuity contracts on behalf of their employees, and,
subject to certain limitations, allows employees of those organizations to
exclude the amount of contributions from gross income for Federal income tax
purposes.
If a Participant under a 403(b) Program makes a surrender or partial
withdrawal from the Participant's Account, the Participant will realize income
taxable at ordinary tax rates on the full amount received. See "Constraints on
Withdrawal - 403(b) Programs." Since, under a 403(b) Program, contributions
generally are excludable from the taxable income of the employee, the full
amount received will usually be taxable as ordinary income when annuity payments
commence.
408 PROGRAMS
Code Sections 219 and 408 permit eligible individuals to contribute to an
individual retirement program, including Simplified Employee Pension Plans,
SIMPLE IRA plans and Employer/Association Established Individual Retirement
Account Trusts, known as an Individual Retirement Account ("IRA"). These IRA
accounts are subject to limitations on the amount that may be contributed, the
persons who may be eligible, and on the time when distributions may commence. In
addition, certain distributions from some other types of retirement plans may be
placed on a tax-deferred basis in an IRA. Sale of the Contracts for use with
IRA's may be subject to special requirements imposed by the Internal Revenue
Service. Purchasers of the Contracts for such purposes will be provided with
such supplementary information as may be required by the Internal Revenue
Service or other appropriate agency, and will have the right to revoke the
Contract under certain circumstances.
If a Participant under a 408 Program makes a surrender or partial
withdrawal from the Participant's Account, the Participant generally will
realize income taxable at ordinary tax rates on the full amount received. Since,
under a 408 Program, contributions generally are deductible from the taxable
income of the employee, the full amount received will usually be taxable as
ordinary income when annuity payments commence.
457 PROGRAMS
Section 457 of the Code permits employees of state and local governments
and units and agencies of state and local governments as well as tax-exempt
organizations described in Section 501(c)(3) of the Code to defer a portion of
their compensation without paying current taxes. The employees must be
Participants in an eligible deferred compensation plan.
If the Employer sponsoring a 457 Program requests and receives a withdrawal
for an eligible employee in connection with a 457 Program, then the amount
received by the employee will be taxed as ordinary income. Since, under a 457
Program, contributions are excludable from the taxable income of the employee,
the full amount received will be taxable as ordinary income when annuity
payments commence or other distribution is made.
TAX PENALTY
Any distribution made to a Participant from an Employee Benefit Plan or a
408 Program other than on account of one or more of the following events will be
subject to a 10% penalty tax on the amount distributed:
(a) the Participant has attained age 59 1/2;
(b) the Participant has died; or
(c) the Participant is disabled.
In addition, a distribution from an Employee Benefit Plan will not be
subject to a 10% penalty tax on the amount distributed if the Participant is 55
and has separated from service. Distributions received at least annually as part
of a series of substantially equal periodic payments made for the life of the
Participant will not be subject to a penalty tax. Certain amounts paid for
medical care also may not be subject to a penalty tax.
Any permitted distribution from a Participant Account under a 403(b)
Program will be subject to a 10% excise tax unless the Participant satisfies one
of the exemptions listed above for Employee Benefit Plans. See "Constraints on
Withdrawals - 403(b) Programs."
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36
WITHHOLDING
Distributions from an Employee Benefit Plan under Code Section 401(a) or a
403(b) Program to an employee, surviving spouse, or former spouse who is an
alternate payee under a qualified domestic relations order, in the form of a
lump-sum settlement or periodic annuity payments for a fixed period of fewer
than 10 years are subject to mandatory federal income tax withholding of 20% of
the taxable amount of the distribution, unless the distributee directs the
transfer of such amounts to another Employee Benefit Plan or 403(b) Program or
to an Individual Retirement Account under Code Section 408. The taxable amount
is the amount of the distribution, less the amount allocable to after-tax
contributions.
All other types of distributions from Employee Benefit Plans and 403(b)
Programs, and all distributions from Individual Retirement Accounts, are subject
to federal income tax withholding on the taxable amount unless the distributee
elects not to have the withholding apply. The amount withheld is based on the
type of distribution. Federal tax will be withheld from annuity payments (other
than those subject to mandatory 20% withholding) pursuant to the recipient's
withholding certificate. If no withholding certificate is filed with AUL, tax
will be withheld on the basis that the payee is married with three withholding
exemptions. Tax on all surrenders and lump-sum distributions from Individual
Retirement Accounts will be withheld at a flat 10% rate.
Withholding on annuity payments and other distributions from the Contract
will be made in accordance with regulations of the Internal Revenue Service.
EFFECT OF TAX DEFERRED ACCUMULATION
In general, participants in retirement plans that own annuity contracts are
not taxed on increases in the value of their accounts until some form of
distribution is made to the Participant. Due to this tax deferral during the
accumulation period, participation in a retirement plan funded by an annuity
contract generally results in more rapid growth than a comparable investment
under which contributions and increases in value are taxed on a current basis.
The chart illustrates this benefit by comparing a retirement plan that invests
in a variable annuity contract to accumulation from an investment whose
contributions and gains are taxed on a current basis. The chart illustrates
accumulation of $250 of monthly before-tax contributions going into an annuity
contract for a retirement plan and $172.50 of monthly after-tax contributions
going into a conventional savings plan ($250 minus $77.50 of income taxes based
on an assumed combined rate of 31% for state and federal income tax equals
$172.50 of after-tax contributions). Each contribution is made at the end of
each month. This chart also assumes a 6% before-tax earnings rate. Values for
Tax Deferred Accumulation After Tax and Pre-Tax Accumulation Value do not
reflect the deduction for mortality and expense risk charges under a variable
annuity contract and the values shown for Tax Deferred Accumulation After Tax
would be lower if these charges were included. Values shown for Tax Deferred
Accumulation After Tax reflect appropriate withdrawal charges at the end of the
periods shown.
The hypothetical rate of return used in the chart is an assumption only,
and no implication is intended that the return is guaranteed in any way or that
it represents an average or expected rate of return over the period depicted.
The portion of a Participant's Account Value that exceeds the variable annuity
contract owner's or participant's investment in the Participant's Account is
taxed at ordinary income tax rates upon distribution, and a 10% tax penalty may
apply to withdrawals taken before the taxpayer reaches the age of 59 1/2.
(Chart omitted; the following information is an explanation of the
information contained in the chart.)
<TABLE>
<CAPTION>
$250 per month at gross annual rate of 6.00%, taxed at 31%
<S> <C> <C> <C>
Period After Tax Conventional Savings Tax Deferred Accumulation After Tax Pre-Tax Accumulation Value
- ------ ------------------------------ ----------------------------------- --------------------------
5 Years $11,455 $11,555 $17,371
10 Years $25,486 $28,027 $40,618
20 Years $63,722 $78,218 $113,360
30 Years $121,087 $168,103 $243,628
40 Years $207,152 $329,074 $476,919
</TABLE>
After state and federal income tax at 31% has been paid on the amount
distributed, with a variable annuity, after 5 years
<PAGE>
37
there would be an additional $100 available; after 10 years there would be an
additional $2,541 available; after 20 years, there would be an additional
$14,496 available; after 30 years, there would be an additional $47,016
available; and after 40 years, there would be an additional $121,922 available.
Tax rates may vary for different taxpayers from the 31% used in this chart,
which would result in different values from those shown in the chart.
OTHER INFORMATION
VOTING OF SHARES OF THE FUNDS
AUL is the legal owner of the shares of the Portfolios of the Funds held by
the Investment Accounts of the Variable Account. In accordance with its view of
present applicable law, AUL will exercise voting rights attributable to the
shares of the Funds held in the Investment Accounts at any regular and special
meetings of the shareholders of the Funds on matters requiring shareholder
voting under the 1940 Act.
AUL will exercise these voting rights based on instructions received from
persons having the voting interest in corresponding Investment Accounts of the
Variable Account and consistent with any requirements imposed on AUL under
contracts with any of the Funds, or under applicable law. However, if the 1940
Act or any regulations thereunder should be amended, or if the present
interpretation thereof should change, and as a result AUL determines that it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The person having the voting interest under a Contract is the Owner or the
Participant, depending on the type of Plan. Generally, a Participant will have a
voting interest under a Contract to the extent of the vested portion of his or
her Account Value. AUL shall send to each Owner or Participant a Fund's proxy
materials and forms of instruction by means of which instructions may be given
to AUL on how to exercise voting rights attributable to the Funds' shares. In
the case of a Contract acquired in connection with an Employee Benefit Plan or
an Employer Sponsored 403(b) Program, AUL may furnish the Owner with sufficient
Fund proxy materials and voting instruction forms for all Participants under a
Contract with any voting interest.
Unless otherwise required by applicable law or under a contract with any of
the Funds, with respect to each of the Funds, the number of Fund shares of a
particular Portfolio as to which voting instructions may be given to AUL is
determined by dividing the value of all of the Accumulation Units of the
corresponding Investment Account attributable to a Contract or a Participant's
Account on a particular date by the net asset value per share of that Portfolio
as of the same date. Fractional votes will be counted. The number of votes as to
which voting instructions may be given will be determined as of the date
coincident with the date established by a Fund for determining shareholders
eligible to vote at the meeting of the Fund. If required by the SEC or under a
contract with any of the Funds, AUL reserves the right to determine in a
different fashion the voting rights attributable to the shares of the Fund.
Voting instructions may be cast in person or by proxy.
Voting rights attributable to the Contracts or Participant Accounts for
which no timely voting instructions are received will be voted by AUL in the
same proportion as the voting instructions which are received in a timely manner
for all Contracts and Participant Accounts participating in that Investment
Account. AUL will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Fund offers its shares to
any insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received in a
timely manner for Contracts and Participant Accounts participating in the
Investment Account.
Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Owners or others to instruct the
voting of shares of any of the Funds.
SUBSTITUTION OF INVESTMENTS
AUL reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from, substitutions for, or combinations
of the securities that are held by the Variable Account or any Investment
Account or that the Variable Account or any Investment Account may purchase. If
shares of any or all of the Portfolios of a Fund should no longer be available
for investment, or if, in the judgment of AUL's management, further investment
in shares of any or all Portfolios of a Fund should become inappropriate in view
of the purposes of the Contracts, AUL may substitute shares of another Portfolio
of a Fund or of a different fund for shares already purchased, or to be
purchased in the future under the Contracts. AUL may also purchase, through the
Variable Account, other securities for other classes of contracts, or permit a
conversion between classes of contracts on the basis of requests made by Owners
or as permitted by Federal law.
Where required under applicable law, AUL will not substitute any shares
attributable to an Owner's interest in an Investment Account or the Variable
Account without notice, Owner or Participant approval, or prior approval of the
SEC or a state insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
AUL also reserves the right to establish additional Investment Accounts of
the Variable Account that would invest in a new Portfolio of a Fund or in shares
of another investment company, a series thereof, or other suitable investment
vehicle. New Investment Accounts may be established in the sole discretion of
AUL, and any new Investment Account will be made available to existing Owners on
a basis to be determined by AUL. Not all Investment Accounts may be available
under a particular Contract. AUL may also eliminate or combine one or more
<PAGE>
38
Investment Accounts or cease permitting new allocations to an Investment Account
if, in its sole discretion, marketing, tax, or investment conditions so warrant.
Subject to any required regulatory approvals, AUL reserves the right to
transfer assets of any Investment Account of the Variable Account to another
separate account or Investment Account.
In the event of any such substitution or change, AUL may, by appropriate
endorsement, make such changes in these and other Contracts as may be necessary
or appropriate to reflect such substitution or change. If deemed by AUL to be in
the best interests of persons having voting rights under the Contracts, the
Variable Account may be operated as a management investment company under the
1940 Act or any other form permitted by law, it may be deregistered under that
Act in the event such registration is no longer required, or it may be combined
with other separate accounts of AUL or an affiliate thereof. Subject to
compliance with applicable law, AUL also may combine one or more Investment
Accounts and may establish a committee, board, or other group to manage one or
more aspects of the operation of the Variable Account.
CHANGES TO COMPLY WITH LAW AND AMENDMENTS
AUL reserves the right, without the consent of Owners or Participants, to
make any change to the provisions of the Contracts to comply with, or to give
Owners or Participants the benefit of, any Federal or state statute, rule, or
regulation, including, but not limited to, requirements for annuity contracts
and retirement plans under the Internal Revenue Code and regulations thereunder
or any state statute or regulation.
AUL reserves the right to make certain changes in the Contracts. AUL has
the right at any time to change the Guaranteed Rate of interest credited to
amounts allocated to the Fixed Account for any Participant Accounts established
on or after the effective date of the change, although once a Participant's
Account is established, the Guaranteed Rate may not be changed for the duration
of the Account.
After the fifth anniversary of a Contract, AUL has the right to change any
annuity tables included in the Contract, but any such change shall apply only to
Participant Accounts established on or after the effective date of such a
change. AUL also has the right to change the withdrawal charge and, within the
limits described under "Guarantee of Certain Charges," the administrative
charge.
RESERVATION OF RIGHTS
AUL reserves the right to refuse to accept new contributions under a
Contract and to refuse to accept new Participants under a Contract.
PERIODIC REPORTS
AUL will send quarterly statements showing the number, type, and value of
Accumulation Units credited to the Contract or to the Participant's Account, as
the case may be. AUL will also send statements reflecting transactions in a
Participant's Account as required by applicable law. In addition, every person
having voting rights will receive such reports or Prospectuses concerning the
Variable Account and the Funds as may be required by the 1940 Act and the 1933
Act.
LEGAL PROCEEDINGS
There are no legal proceedings pending to which the Variable Account is a
party, or which would materially affect the Variable Account.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the Contracts
described in this Prospectus and the organization of AUL, its authority to issue
the Contracts under Indiana law, and the validity of the forms of the Contracts
under Indiana law have been passed upon by the Associate General Counsel of AUL.
Legal matters relating to the Federal securities and Federal income tax
laws have been passed upon by Dechert Price & Rhoads, Washington, D.C.
YEAR 2000 ISSUES AND READINESS
In recent years, the Year 2000 problem has received extensive publicity.
The problem arises because most computer systems and programs were written with
dates expressed as a 2 digit code. Unless steps are taken, on January 1, 2000,
many systems may read the year "2000" as "1900" and date-related computations
either would not be processed or would be processed incorrectly. This could have
a material and adverse effect on financial institutions such as banks and
insurance companies like AUL. To prevent this, AUL began assessing the potential
impact in early 1996 and adopted a detailed written work plan in June, 1997 to
deal with Year 2000 issues.
Due to the complexity of this issue and the ever-increasing
interrelationships of computer systems in the United States, it would be
extremely difficult for any company to state that it has or will achieve
complete Year 2000 compliance or to guarantee that its systems will not be
affected in any way on January 1, 2000. However, AUL currently believes that all
critical computer systems and software (those systems or software, which would
cause great disruption to the Company if they were inoperable for any length of
time or if they were to generate erroneous data) will, before January 1, 2000,
be Year 2000 compliant. Although AUL has no reason to believe that these steps
will not be sufficient to avoid any material adverse impact from Year 2000
issues and is addressing its Year 2000 issues by using both internal staff and
external consultants, by replacing hardware, operating systems, and application
software, and by remediating current application software, there can be no
assurance that the Company's efforts will be sufficient to avoid any adverse
impact. This project is currently expected to
<PAGE>
39
require more than 285,000 hours of labor at a cost of approximately $17,000,000,
which will be expensed against current operating funds.
As a part of its plan, the Company has surveyed its primary service
providers to be sure that such providers have taken steps to address the Year
2000 issues. AUL will continue to periodically monitor the status of all service
providers' Year 2000 efforts.
PERFORMANCE INFORMATION
Performance information for the Investment Accounts is shown under
"Performance of the Investment Accounts." Performance information for the
Investment Accounts may also appear in promotional reports and literature to
current or prospective Owners or Participants in the manner described in this
section. Performance information in promotional reports and literature may
include the yield and effective yield of the Investment Account investing in the
AUL American Money Market Portfolio ("Money Market Investment Account"), the
yield of the remaining Investment Accounts, the average annual total return and
the total return of all Investment Accounts.
Current yield for the Money Market Investment Account will be based on
income received by a hypothetical investment over a given 7-day period (less
expenses accrued during the period), and then "annualized" (i.e., assuming that
the 7-day yield would be received for 52 weeks, stated in terms of an annual
percentage return on the investment). "Effective yield" for the Money Market
Investment Account is calculated in a manner similar to that used to calculate
yield, but reflects the compounding effect of earnings.
For the remaining Investment Accounts, quotations of yield will be based on
all investment income per Accumulation Unit earned during a given 30-day period,
less expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of an Accumulation Unit
on the last day of the period. Quotations of average annual total return for any
Investment Account will be expressed in terms of the average annual compounded
rate of return on a hypothetical investment in a Contract over a period of one,
five, and ten years (or, if less, up to the life of the Investment Account), and
will reflect the deduction of the applicable withdrawal charge, the mortality
and expense risk charge, and, if applicable, the administrative charge.
Hypothetical quotations of average annual total return may also be shown for an
Investment Account for periods prior to the time that the Investment Account
commenced operations, based upon the performance of the mutual fund portfolio in
which that Investment Account invests, and will reflect the deduction of the
applicable withdrawal charge, the administrative charge, and the mortality and
expense risk charge as if, and to the extent that, such charges had been
applicable. Quotations of total return, actual and hypothetical, may
simultaneously be shown that do not take into account certain contractual
charges such as the withdrawal charge and the administrative charge.
Performance information for an Investment Account may be compared, in
promotional reports and literature, to: (i) the Standard & Poor's 500 Composite
Index ("S & P 500"), Dow Jones Industrial Average ("DJIA"), Donoghue Money
Market Institutional Averages, or other indices measuring performance of a
pertinent group of securities so that investors may compare an Investment
Account's results with those of a group of securities widely regarded by
investors as representative of the securities markets in general; (ii) other
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other ratings services, companies,
publications, or persons who rank separate accounts or other investment products
on overall performance or other criteria; and (iii) the Consumer Price Index
(measure for inflation) to assess the real rate of return from an investment in
the Contract. Unmanaged indices may assume the reinvestment of dividends but
generally do not reflect deductions for administrative and management costs and
expenses.
Performance information for any Investment Account reflects only the
performance of a hypothetical Contract under which Account Value is allocated to
an Investment Account during a particular time period on which the calculations
are based. Performance information should be considered in light of the
investment objectives and policies, characteristics, and quality of the
Portfolio of a Fund in which the Investment Account invests, and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future. For a description of the
methods used to determine yield and total return in promotional reports and
literature for the Investment Accounts, see the Statement of Additional
Information.
Promotional reports and literature may also contain other information
including: (i) the ranking of any Investment Account derived from rankings of
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services or by other rating services, companies, publications,
or other persons who rank separate accounts or other investment products on
overall performance or other criteria, (ii) the effect of tax-deferred
compounding on an Investment Account's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which may
include a comparison, at various points in time, of the return from an
investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a taxable basis, and (iii)
AUL's rating or a rating of AUL's claim-paying ability by firms that analyze and
rate insurance companies and by nationally recognized statistical rating
organizations.
<PAGE>
40
STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to AUL. The Table of Contents of the Statement of
Additional Information is set forth below:
<TABLE>
<S> <C>
GENERAL INFORMATION AND HISTORY............................................................................................... 3
DISTRIBUTION OF CONTRACTS..................................................................................................... 3
CUSTODY OF ASSETS............................................................................................................. 3
LIMITS ON CONTRIBUTIONS TO RETIREMENT PLANS................................................................................... 3-4
403(b) Programs............................................................................................................. 3
408 Programs................................................................................................................ 4
457 Programs................................................................................................................ 4
Employee Benefit Plans...................................................................................................... 4
INDEPENDENT ACCOUNTANTS....................................................................................................... 4
PERFORMANCE INFORMATION....................................................................................................... 4-6
FINANCIAL STATEMENTS.......................................................................................................... 6-17
</TABLE>
A Statement of Additional Information may be obtained by calling or writing to
AUL at the telephone number and address set forth in the front of this
Prospectus.
<PAGE>
41
================================================================================
No dealer, salesman or any other person is authorized by the AUL
American Unit Trust or by AUL to give any information or to make any
representation other than as contained in this Prospectus in connection
with the offering described herein.
There has been filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended,
with respect to the offering herein described. For further information
with respect to the AUL American Unit Trust, AUL and its variable
annuities, reference is made thereto and the exhibits filed therewith
or incorporated therein, which include all contracts or documents
referred to herein.
================================================================================
AUL AMERICAN UNIT TRUST
Group Variable Annuity Contracts
Sold By
AMERICAN UNITED
LIFE INSURANCE COMPANY(R)
One American Square
Indianapolis, Indiana 46282
PROSPECTUS
Dated: May 1, 1998
================================================================================
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
AUL American Unit Trust
Group Variable Annuity Contracts
Offered By
American United Life Insurance Company(R)
One American Square
Indianapolis, Indiana 46282
(800) 634-1629
Annuity Service Office Mail Address:
P.O. Box 6148, Indianapolis, Indiana 46206-6148
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the current Prospectus for AUL American
Unit Trust, dated May 1, 1998.
A Prospectus is available without charge by calling or writing to
American United Life Insurance Company(R) at the telephone number or
address shown above or by mailing the Business Reply Mail card included
in this Statement of Additional Information.
<PAGE>
2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Description Page
GENERAL INFORMATION AND HISTORY............................................................................................ 3
DISTRIBUTION OF CONTRACTS.................................................................................................. 3
CUSTODY OF ASSETS.......................................................................................................... 3
LIMITS ON CONTRIBUTIONS TO RETIREMENT PLANS................................................................................ 3-4
403(b) Programs.......................................................................................................... 3
408 Programs............................................................................................................. 4
457 Programs............................................................................................................. 4
Employee Benefit Plans................................................................................................... 4
INDEPENDENT ACCOUNTANTS.................................................................................................... 4
PERFORMANCE INFORMATION.................................................................................................... 4-6
FINANCIAL STATEMENTS....................................................................................................... 6-17
</TABLE>
<PAGE>
3
GENERAL INFORMATION AND HISTORY
For a general description of AUL and AUL American Unit Trust (the "Variable
Account"), see the section entitled "Information about AUL, The Variable
Account, and The Funds" in the Prospectus.
DISTRIBUTION OF CONTRACTS
AUL is the Principal Underwriter for the group variable annuity contracts
(the "Contracts") described in the Prospectus and in this Statement of
Additional Information. AUL is registered with the Securities and Exchange
Commission (the "SEC") as a broker-dealer. The Contracts are currently being
sold in a continuous offering. While AUL does not anticipate discontinuing the
offering of the Contracts, it reserves the right to do so. The Contracts are
sold by registered representatives of AUL who are also licensed insurance
agents.
AUL also has sales agreements with various broker-dealers under which the
Contracts will be sold by registered representatives of the broker-dealers. The
registered representatives are required to be authorized under applicable state
regulations to sell variable annuity contracts. The broker-dealers are required
to be registered with the SEC and members of the National Association of
Securities Dealers, Inc.
AUL serves as the Principal Underwriter without compensation from the
Variable Account.
CUSTODY OF ASSETS
The assets of the Variable Account are held by AUL. The assets are kept
physically segregated and are held separate and apart from the assets of other
separate accounts of AUL and from AUL's General Account assets. AUL maintains
records of all purchases and redemptions of shares of AUL American Series Fund,
Inc., Alger American Fund, American Century Variable Portfolios, Inc., Calvert
Variable Series, Fidelity Variable Insurance Products Fund, Fidelity Variable
Insurance Products Fund II, Janus Aspen Series, PBHG Insurance Series Fund,
Inc., SAFECO Resource Series Trust, and T. Rowe Price Equity Series, Inc., (each
a "Fund" and collectively the "Funds").
LIMITS ON CONTRIBUTIONS TO RETIREMENT PLANS
403(b) PROGRAMS
Contributions to a 403(b) Program are excludable from a Participant's gross
income if they do not exceed the smallest of the limits calculated under
Sections 402(g), 403(b)(2), and 415 of the Internal Revenue Code. Section 402(g)
generally limits a Participant's salary reduction contributions to a 403(b)
Program to $10,000 a year. The $10,000 limit may be reduced by salary reduction
contributions to another type of retirement plan. A Participant with at least 15
years of service for a "qualified employer" (i.e., an educational organization,
hospital, home health service agency, health and welfare service agency, church
or convention or association of churches) generally may exceed the $10,000 limit
by $3,000 per year, subject to an aggregate limit of $15,000 for all years.
Section 403(b)(2) provides an overall limit on Employer and Participant
salary reduction contributions that may be made to a 403(b) Program. Section
403(b)(2) generally provides that the maximum amount of contributions a
Participant may exclude from his gross income in any taxable year is equal to
the excess, if any, of:
(a) the amount determined by multiplying 20% of his includable compensation
by the number of his years of service with his Employer, over
(b) the total amount contributed to retirement plans sponsored by his
Employer, including the Section 403(b) Program, that were excludable from his
gross income in prior years.
Participants employed by "qualified employers" may elect to have certain
alternative limitations apply.
Section 415(c) also provides an overall limit on the amount of Employer and
Participant's salary reduction contributions to a Section 403(b) Program that
will be excludable from an employee's gross income in a given year. The Section
415(c) limit is the lesser of (a) $30,000, or (b) 25% of the Participant's
annual compensation. This limit will be reduced if a Participant also
participates in an Employee Benefit Plan maintained by a business that he or she
controls.
The limits described above do not apply to amounts "rolled over" from
another Section 403(b) Program. A Participant who receives an "eligible rollover
distribution" will be permitted either to roll over such amount to another
Section 403(b) Program or an IRA within 60 days of receipt or to make a direct
rollover to another Section 403(b) Program or an IRA without recognition of
income. An "eligible rollover distribution" means any distribution to a
Participant of all or any taxable portion of the balance to his credit under a
Section 403(b) Program, other than a required minimum distribution to a
Participant who has reached age 70 1/2 and excluding any distribution which is
one of a series of substantially equal payments made (1) over the life
expectancy of the Participant or his beneficiary or (2) over a specified period
of 10 years or more. Provisions
<PAGE>
4
of the Internal Revenue Code require that 20% of every eligible rollover
distribution that is not directly rolled over be withheld by the payor for
federal income taxes.
408 PROGRAMS
Contributions to the individual retirement account of a Participant under a
408 Program that is described in Section 408(c) of the Internal Revenue Code are
subject to the limits on contributions to individual retirement accounts under
Section 219(b) of the Internal Revenue Code. Under Section 219(b) of the Code,
contributions to an individual retirement account are limited to the lesser of
$2,000 per year or the Participant's annual compensation. For tax years
beginning after 1996, if a married couple files a joint return, each spouse may,
in a great majority of cases, make contributions to his or her IRA up to the
$2,000 limit. The extent to which a Participant may deduct contributions to this
type of 408 Program depends on his or her spouse's gross income for the year and
whether either participate in another employer-sponsored retirement plan.
Contributions to a 408 Program that is a simplified employee pension plan
are subject to limits under Section 402(h) of the Internal Revenue Code. Section
402(h) currently limits Employer contributions and Participant salary reduction
contributions (if permitted) to a simplified employee pension plan to the lesser
of (a) 15% of the Participant's compensation, or (b) $30,000. Salary reduction
contributions, if any, are subject to additional annual limits.
457 PROGRAMS
Deferrals by a Participant to a 457 Program generally are limited under
Section 457(b) of the Internal Revenue Code to the lesser of (a) $7,500 or (b)
33 1/3% of the Participant's includable compensation. If the Participant
participates in more than one 457 Program, the $7,500 limit applies to
contributions to all such programs. The $7,500 limit is reduced by the amount of
any salary reduction contribution the Participant makes to a 403(b) Program, a
408 Program, or an Employee Benefit Program. The Section 457(b) limit is
increased during the last three years ending before the Participant reaches his
normal retirement age under the 457 Program. Effective January 1, 1997 the
$7,500 limit on deferrals is indexed in $500 increments.
EMPLOYEE BENEFIT PLANS
The applicable annual limits on contributions to an Employee Benefit Plan
depend upon the type of plan. Total contributions on behalf of a Participant to
all defined contribution plans maintained by an Employer are limited under
Section 415(c) of the Internal Revenue Code to the lesser of (a) $30,000, or (b)
25% of a Participant's annual compensation. Salary reduction contributions to a
cash-or-deferred arrangement under a profit sharing plan are subject to
additional annual limits. Contributions to a defined benefit pension plan are
actuarially determined based upon the amount of benefits the Participants will
receive under the plan formula. The maximum annual benefit any Participant may
receive under an Employer's defined benefit plan is limited under Section 415(b)
of the Internal Revenue Code. The limits determined under Section 415(b) and (c)
of the Internal Revenue Code are further reduced for a Participant who
participates in a defined contribution plan and a defined benefit plan
maintained by the same employer.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., One American Square, Indianapolis, Indiana 46282,
independent accountants, performs certain accounting and auditing services for
AUL and performs similar services for the Variable Account. The AUL financial
statements included in this Statement of Additional Information have been
audited to the extent and for the periods indicated in their report thereon and
its internal accounting controls have been reviewed.
PERFORMANCE INFORMATION
Performance information for the Investment Accounts is shown in the
prospectus under "Performance of the Investment Accounts." Performance
information for the Investment Accounts may also appear in promotional reports
and literature to current or prospective Owners or Participants in the manner
described in this section. Performance information in promotional reports and
literature may include the yield and effective yield of the Investment Account
investing in the AUL American Money Market Portfolio ("Money Market Investment
Account"), the yield of the remaining Investment Accounts, the average annual
total return and the total return of all Investment Accounts.
Current yield for the Money Market Investment Account will be based on the
change in the value of a hypothetical investment (exclusive of capital charges)
over a particular 7-day period, less a pro rata share of the Investment
Account's expenses accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the "base period
return"). The base period return is then annualized by multiplying by 365/7,
with the resulting yield figures carried to at least the nearest hundredth of
one percent.
Calculation of "effective yield" begins with the same "base period return"
used in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
<PAGE>
5
Effective Yield = [(Base Period Return + 1)**365/7] - 1
For the 7-day period ending December 31, 1997, the current yield for the
AUL Money Market Investment Account was 4.77% and the effective yield was 4.89%.
Quotations of yield for the remaining Investment Accounts will be based on
all investment income per Accumulation Unit earned during a particular 30-day
period, less expenses accrued during the period ("net investment income"), and
will be computed by dividing net investment income by the value of the
Accumulation Unit on the last day of the period, according to the following
formula:
YIELD = 2[((a - b / cd) + 1)**6 - 1]
where a = net investment income earned during the period by the Portfolio
attributable to shares owned by the Investment Account,
b = expenses accrued for the period (net of reimbursements),
c = the average daily number of Accumulation Units outstanding during the
period that were entitled to receive dividends, and
d = the value (maximum offering period) per Accumulation Unit on the last
day of the period.
For the one year period ending December 31, 1997, the yield for the Investment
Accounts corresponding to the Portfolios of the AUL American Series Fund, Inc.
was 0.08% for the Equity Investment Account, 3.29% for the Bond Investment
Account, and 1.79% for the Managed Investment Account. The Tactical Asset
Allocation Investment Account commenced operations May 1, 1997, and therefore
has not been in operation for a one year period.
Quotations of average annual total return for any Investment Account will
be expressed in terms of the average annual compounded rate of return of a
hypothetical investment in a Contract over a period of one, five, and ten years
(or, if less, up to the life of the Investment Account), calculated pursuant to
the following formula: P(1 + T)**n = ERV (where P = a hypothetical initial
payment of $1,000, T = the average annual total return, n = the number of years,
and ERV = the ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the period). Hypothetical quotations of average annual total
return may also be shown for an Investment Account for periods prior to the time
that the Investment Account commenced operations based upon the performance of
the mutual fund portfolio in which that Investment Account invests, as adjusted
for applicable charges. All total return figures reflect the deduction of the
applicable withdrawal charge, the administrative charge, and the mortality and
expense risk charge. Quotations of total return, actual and hypothetical, may
simultaneously be shown that do not take into account certain contractual
charges such as the withdrawal charge and the administrative charge and
quotations of total return may reflect other periods of time.
The average annual total return is calculated from the actual inception
date of the AUL American Investment Accounts and from the inception date of the
corresponding mutual funds for all of the other Investment Accounts. The
reported performance is, therefore, hypothetical to the extent and for the
periods that the Investment Accounts have not been in existence and reflects the
performance that such Investment Accounts would have achieved had they invested
in the corresponding Mutual Funds for those periods. For the periods that an
Investment Account has actually been in existence, however, the performance
represents actual and not hypothetical performance. The average annual return
that the Investment Accounts achieved for the one year, three year, five year,
and the lesser of ten years or since inception for the periods ending December
31, 1997 may be found in the Prospectus.
Performance information for an Investment Account may be compared, in
promotional reports and literature, to: (i) the Standard & Poor's 500 Composite
Index ("S&P 500"), Dow Jones Industrial Average ("DJIA"), Donoghue Money Market
Institutional Averages, or other indices that measure performance of a pertinent
group of securities so that investors may compare an Investment Account's
results with those of a group of securities widely regarded by investors as
representative of the securities markets in general; (ii) other groups of
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services, a widely used independent research firm which ranks
mutual funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons who rank such investment companies on overall performance or other
criteria; and (iii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment in the Contract. Unmanaged indices
may assume the reinvestment of dividends but generally do not reflect deductions
for administrative and management costs and expenses.
Performance information for any Investment Account reflects only the
performance of a hypothetical Contract under which a Participant's Account Value
is allocated to an Investment Account during a particular time period on which
the calculations are based. Performance information should be considered in
light of the investment objectives and policies, characteristics and quality of
the Portfolio of the Funds in which the Investment Account invests, and the
market conditions during the given time period, and should not be considered as
a representation of what may be achieved in the future.
Promotional reports and literature may also contain other information
including (i) the ranking of any Investment Account derived from rankings of
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services or by other rating services, companies, publications,
or other persons who rank separate accounts or other investment products on
overall performance or other criteria; (ii) the effect of tax-deferred
compounding on an Investment Account's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which may
include a comparison, at various points in time, of the return from an
investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the
<PAGE>
6
return on a taxable basis; and (iii) AUL's rating or a rating of AUL's
claim-paying ability by firms that analyze and rate insurance companies and by
nationally recognized statistical rating organizations.
FINANCIAL STATEMENTS
Financial Statements for the Variable Account, including the Notes thereto,
are incorporated by reference to the Annual Report for the Variable Account
dated as of December 31, 1997.
The financial statements of AUL, which are included in this Statement of
Additional Information, should be considered only as bearing on the ability of
AUL to meet its obligations under the Contracts. They should not be considered
as bearing on the investment performance of the assets held in the Variable
Account.
FINANCIAL STATEMENTS - AUL
The following financial statements relate solely to the condition and operations
of AUL.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
American United Life Insurance Company
Indianapolis, Indiana
We have audited the accompanying combined balance sheet of American United Life
Insurance Company(R) and affiliates as of December 31, 1997 and 1996, and the
related combined statements of operations, policyholders' surplus and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of American United Life
Insurance Company(R) and affiliates as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Indianapolis, Indiana
February 27, 1998
<PAGE>
7
COMBINED BALANCE SHEET
December 31, 1997 and 1996 1997(in millions)1996
-------------------------------------------------------------------------
Assets
Investments:
Fixed Maturities:
Available for sale at fair value ........... $ 1,653.8 $ 1,593.4
Held to maturity at amortized cost ......... 2,902.2 3,013.6
Equity securities at fair value ............. 18.6 15.2
Mortgage loans .............................. 1,120.4 1,114.6
Real estate ................................. 52.1 52.3
Policy loans ................................ 143.1 143.5
Short term and other invested assets ........ 102.0 43.8
Cash and cash equivalents ................... 41.2 20.2
-------------------------------------------------------------------------
Total investments ........................... 6,033.4 5,996.6
Accrued investment income ................... 79.3 82.1
Reinsurance receivables ..................... 244.3 209.5
Deferred acquisition costs .................. 421.2 348.2
Property and equipment ...................... 55.5 54.0
Insurance premiums in course of collection .. 72.9 47.5
Other assets ................................ 17.2 35.7
Assets held in separate accounts ............ 1,674.0 1,078.7
-------------------------------------------------------------------------
Total assets ................................ $ 8,597.8 $ 7,852.3
-------------------------------------------------------------------------
Liabilities and policyholders' surplus
Liabilities
Policy reserves ............................ $ 5,642.9 $ 5,688.6
Other policyholder funds ................... 175.2 176.2
Pending policyholder claims ................ 164.3 137.6
Surplus notes .............................. 75.0 75.0
Other liabilities and accrued expenses ..... 201.8 123.4
Liabilities related to separate accounts ... 1,674.0 1,078.7
-------------------------------------------------------------------------
Total liabilities ........................... 7,933.2 7,279.5
-------------------------------------------------------------------------
Unrealized appreciation of securities,
net of deferred income tax ................. 36.5 19.0
Policyholders' surplus ...................... 628.1 553.8
-------------------------------------------------------------------------
Total policyholders' surplus ................ 664.6 572.8
-------------------------------------------------------------------------
Total liabilities and policyholders' surplus $ 8,597.8 $ 7,852.3
-------------------------------------------------------------------------
COMBINED STATEMENT
OF POLICYHOLDERS' SURPLUS
Policyholders' surplus at beginning of year .... $ 572.8 $ 548.9
Net income ..................................... 74.3 52.1
Change in unrealized appreciation (depreciation)
of securities, net ............................. 17.5 (28.2)
- ----------------------------------------------------------------------------
Policyholders' surplus at end of year .......... $ 664.6 $ 572.8
- ----------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
8
COMBINED STATEMENT OF OPERATIONS
December 31, 1997 and 1996 1997(in millions)1996
- ---------------------------------------------------------------------------
Revenues:
Insurance premiums and other
considerations ............................... $ 413.9 $ 401.1
Policy and contract charges ................... 69.3 50.4
Net investment income ......................... 464.9 471.8
Realized investment gains ..................... 13.7 6.6
Other income .................................. 5.9 1.2
- ----------------------------------------------------------------------------
Total revenues ................................. 967.7 931.1
- ----------------------------------------------------------------------------
Benefits and expenses:
Policy benefits ............................... $ 386.2 $ 381.9
Interest expense on annuities and
financial products ........................... 257.3 261.6
Underwriting, acquisition and
insurance expenses ........................... 126.6 111.2
Amortization of deferred acquisition costs .... 53.2 49.8
Dividends to policyholders .................... 25.0 26.3
Interest expense on surplus notes ............. 5.8 5.1
Other operating expenses ...................... 9.5 8.7
- ----------------------------------------------------------------------------
Total benefits and expenses ................... 863.6 844.6
- ----------------------------------------------------------------------------
Income before income tax expense .............. 104.1 86.5
Income tax expense ............................ 29.8 34.4
- ----------------------------------------------------------------------------
Net income .................................... $ 74.3 $ 52.1
- ----------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
9
COMBINED STATEMENT OF CASH FLOWS
December 31, 1997 and 1996 1997(in millions)1996
- ---------------------------------------------------------------------------
Cash flows from operating activities:
- ---------------------------------------------------------------------------
Net Income ..................................... $ 74.3 $ 52.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of deferred acquisition costs ..... 53.2 49.8
Depreciation ................................... 10.1 9.2
Deferred taxes ................................. 7.3 1.8
Realized investment gains ...................... (13.7) (6.6)
Policy acquisition costs capitalized ........... (90.8) (69.3)
Interest credited to deposit liabilities ....... 252.1 254.7
Fees charged to deposit liabilities ............ (32.9) (19.8)
Amortization and accrual of investment income .. (8.2) (6.2)
Increase in insurance liabilities .............. 140.2 93.9
Increase in noninvested assets ................. (66.3) (44.4)
Increase in other liabilities .................. 35.1 19.6
Net cash provided by operating activities ...... 360.4 334.8
Cash flows from investing activities:
Purchases:
Fixed maturities, Held to Maturity ............. (120.8) (194.4)
Fixed maturities, Available for Sale ........... (348.3) (477.7)
Equity securities .............................. (9.4) (24.7)
Mortgage loans ................................. (155.4) (169.1)
Real estate .................................... (1.9) (3.9)
Short term and other invested assets ........... (43.3) (2.6)
Proceeds from sales, calls or maturities:
Fixed maturities, Held to Maturity ............. 241.2 158.8
Fixed maturities, Available for Sale ........... 335.1 466.4
Equity securities .............................. 7.2 28.7
Mortgage loans ................................. 149.7 175.0
Real estate .................................... 4.3 3.1
Short term and other invested assets ........... 1.6 27.6
Net cash provided (used) by investing activities 60.0 (12.8)
Cash flows from financing activities:
Proceeds from issuance of surplus notes ........ 0 75.0
Deposits to insurance liabilities .............. 713.6 595.2
Withdrawals from insurance liabilities ......... (1,112.5) (984.6)
Change in policyholder dividend liability ...... (.9) 3.6
Decrease (increase) in policy loans ............ .4 (1.9)
Net cash used by financing activities .......... (399.4) (312.7)
Net increase in cash and cash equivalents ...... 21.0 9.3
Cash and cash equivalents beginning of year .... 20.2 10.9
Cash and cash equivalents end of year .......... $ 41.2 $ 20.2
The accompanying notes are an integral part of the financial statements.
<PAGE>
10
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations and Basis of Presentation
American United Life Insurance Company (AUL) is an Indiana domiciled mutual life
insurance company with headquarters in Indianapolis. AUL is licensed to do
business in 48 states and the District of Columbia and is an authorized
reinsurer in all states. AUL offers individual life and annuity products through
its career agent distribution system. AUL's qualified group retirement plans,
tax deferred annuities and other non-medical group products are marketed through
independent agents and brokers, as well as career agents who are supported by 29
regional sales offices located throughout the country. Life and pooled
reinsurance is marketed directly to other insurance companies. In 1997, AUL
International began operations to develop reinsurance partners in Central and
South America. The combined Company financial statements include the accounts of
AUL and its affiliate, The State Life Insurance Company (State Life).
Significant intercompany transactions have been excluded.
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles (GAAP). AUL and State Life file
separate financial statements with insurance regulatory authorities which are
prepared on the basis of statutory accounting practices which are significantly
different from financial statements prepared in accordance with GAAP. These
differences are described in detail in Note 9 - Statutory Information.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Investments
Fixed maturity securities which may be sold to meet liquidity and other needs of
the Company are categorized as available for sale and are stated at fair value.
Fixed maturity securities which the Company has the positive intent and ability
to hold to maturity are categorized as held-to-maturity and are stated at
amortized cost. Equity securities are stated at fair value. Mortgage loans on
real estate are carried at amortized cost less an impairment allowance for
estimated uncollectible amounts. Real estate is reported at cost less allowances
for depreciation. Depreciation is provided (straight line) over the estimated
useful lives of the related assets. Investment real estate is net of accumulated
depreciation of $31.7 million and $28.8 million at December 31, 1997 and 1996,
respectively. Depreciation expense for investment real estate amounted to $2.5
million and $2.4 million for 1997 and 1996, respectively. Policy loans are
carried at their unpaid balance. Other invested assets are reported at cost plus
the Company's equity in undistributed net equity since acquisition. Short term
investments include investments with maturities of one-year or less and are
carried at cost which approximates market. Short term certificates of deposit
and savings certificates are considered to be cash equivalents. The carrying
amount for cash and cash equivalents approximates market.
Realized gains and losses on sale or maturity of investments are based upon
specific identification of the investments sold and do not include amounts
allocable to separate accounts. At the time a decline in value of an investment
is determined to be other than temporary, a provision for loss is recorded which
is included in realized investment gains and losses. Unrealized gains and
losses, resulting from carrying available-for-sale securities at fair value, are
reported in policyholders' surplus, net of deferred taxes.
Deferred Policy Acquisition Costs
Those costs of acquiring new business, which vary with and are primarily related
to the production of new business, have been deferred to the extent that such
costs are deemed recoverable. Such costs include commissions, certain costs of
policy underwriting and issue and certain variable agency expenses. These costs
are amortized with interest as follows:
For participating whole life insurance products, over the lesser of 30
years or the lifetime of the policy in relation to the present value of
estimated gross margins from expenses, investments and mortality,
discounted using the expected investment yield.
For universal life-type policies and investment contracts, over the lesser
of the lifetime of the policy or 30 years for life policies or 20 years for
other policies in relation to the present value of estimated gross profits
from surrender charges and investment, mortality and expense margins,
discounted using the interest rate credited to the policy.
For term life insurance products and life reinsurance policies, over the
lesser of the benefit period or 30 years for term life or 20 years for life
reinsurance policies in relation to the ratio of anticipated annual premium
revenue to the anticipated total premium revenue, using the same
assumptions used in calculating policy benefits.
For miscellaneous group life and individual and group health policies,
straight line over the expected life of the policy.
For credit insurance policies, the deferred acquisition cost balance is
primarily equal to the unearned premium reserve multiplied by the ratio of
deferrable commissions to premiums written.
Recoverability of the unamortized balance of deferred policy acquisition costs
is evaluated regularly. For universal life-type contracts, investment contracts
and participating whole life policies, the accumulated amortization is adjusted
(increased or decreased) whenever there is a material change in the estimated
gross profits or gross margins expected over the life of a block of business in
order to maintain a constant relationship between cumulative amortization and
the present value of gross profits or gross margins. For most other contracts,
the unamortized asset balance is reduced by a charge to income only when the
present value of future cash flows, net of the policy liabilities, is not
sufficient to cover such asset balance.
<PAGE>
11
NOTES TO FINANCIAL STATEMENTS
Assets Held in Separate Accounts
Separate accounts are funds on which investment income and gains or losses
accrue directly to certain policies, primarily variable annuity contracts and
equity-based pension and profit sharing plans. The assets of these accounts are
legally segregated, and are valued at fair value. The related liabilities are
recorded at amounts equal to the underlying assets; the fair value of these
liabilities is equal to their carrying amount.
Property and Equipment
Property and equipment includes real estate owned and occupied by the Company.
Property and equipment is carried at cost, net of accumulated depreciation of
$41.6 million and $37.2 million as of December 31, 1997 and 1996, respectively.
The Company provides for depreciation of property and equipment using the
straight-line method over its estimated useful life. Depreciation expense for
1997 and 1996 was $7.6 million and $6.8 million, respectively.
Premium Revenue and Benefits to Policyholders
The premiums and benefits for whole life and term insurance products and certain
annuities with life contingencies (immediate annuities) are fixed and
guaranteed. Such premiums are recognized as premium revenue when due. Group
insurance premiums are recognized as premium revenue over the time period to
which the premiums relate. Benefits and expenses are associated with earned
premiums so as to result in recognition of profits over the life of the
contracts. This association is accomplished by means of the provision for
liabilities for future policy benefits and the amortization of deferred policy
acquisition costs.
Universal life policies and investment contracts are policies with terms that
are not fixed and guaranteed. The terms that may be changed could include one or
more of the amounts assessed the policyholder, premiums paid by the policyholder
or interest accrued to policyholder balances. The amounts collected from
policyholders for these policies are considered deposits, and only the
deductions during the period for cost of insurance, policy administration and
surrenders are included in revenue. Policy benefits and claims that are charged
to expense include interest credited to contracts and benefit claims incurred in
the period in excess of related policy account balances.
Reserves for Future Policy and Contract Benefits
Liabilities for future policy benefits for participating whole life policies are
calculated using the net level premium method and assumptions as to interest and
mortality. The interest rate is the dividend fund interest rate and the
mortality rates are those guaranteed in the calculation of cash surrender values
described in the contract. Liabilities for future policy benefits for term life
insurance and life reinsurance policies are calculated using the net level
premium method and assumptions as to investment yields, mortality and
withdrawals. The assumptions are based on projections of past experience and
include provisions for possible unfavorable deviation. These assumptions are
made at the time the contract is issued. Liabilities for future policy benefits
on universal life and investment contracts consist principally of policy account
values plus certain deferred policy fees which are amortized using the same
assumptions and factors used to amortize the deferred policy acquisition costs.
If the future benefits on investment contracts are guaranteed (immediate
annuities with benefits paid for a period certain) the liability for future
benefits is the present value of such guaranteed benefits. Claim liabilities
include provisions for reported claims and estimates based on historical
experience, for claims incurred but not reported.
Income Taxes
The provision for income taxes includes amounts currently payable and deferred
income taxes resulting from the temporary differences in the assets and
liabilities determined on a tax and financial reporting basis.
<PAGE>
12
NOTES TO FINANCIAL STATEMENTS
2. Investments:
The book value and fair value of investments in fixed maturity securities by
type of investment were as follows:
<TABLE>
<CAPTION>
December 31, 1997
- ----------------------------------------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------------------
Available for sale: (in millions)
<S> <C> <C> <C> <C>
Obligations of U.S. government states,
political subdivisions end foreign governments $ 47.8 $ 4.0 $0.0 $ 51.8
Corporate securities ......................... 1,064.1 55.5 1.8 1,117.8
Mortgage-backed securities ................... 456.8 27.6 0.2 484.2
- ----------------------------------------------------------------------------------------------------------------
$ 1,568.7 $ 87.1 $2.0 $ 1,653.8
- ----------------------------------------------------------------------------------------------------------------
Held to maturity
Obligations of U.S. government, states,
political subdivisions and foreign governments $ 124.2 $ 6.2 $0.3 $ 130.1
Corporate securities ......................... 1,854.4 123.4 3.6 1,9742
Mortgage-backed securities ................... 923.6 55.5 0.2 978.9
- ----------------------------------------------------------------------------------------------------------------
$ 2,902.2 $185.1 $4.1 $ 3,083.2
- ----------------------------------------------------------------------------------------------------------------
December 31, 1997
- ----------------------------------------------------------------------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
- ----------------------------------------------------------------------------------------------------------------
Available for sale: (in millions)
<S> <C> <C> <C> <C>
Obligations of U.S. government, states,
political subdivisions end foreign governments $ 85.2 $ 1.9 $ 1.3 $ 85.8
Corporate securities ......................... 1,000.0 33.9 7.0 1,026.9
Mortgage-backed securities ................... 463.0 19.1 1.4 480.7
- ----------------------------------------------------------------------------------------------------------------
$ 1,548.2 $ 54.9 $ 9.7 $ 1,593.4
- ----------------------------------------------------------------------------------------------------------------
Held to maturity:
Obligations of U.S. government, states,
political subdivisions and foreign governments $ 132.0 $ 5.5 $ 1.1 $ 136.4
Corporate securities ......................... 1,891.1 100.1 14.0 1,977.2
Mortgage-backed securities ................... 990.5 44.9 4.4 1,031.0
- ----------------------------------------------------------------------------------------------------------------
$ 3,013.6 $ 150.5 $ 19.5 $ 3,144.6
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
13
NOTES TO FINANCIAL STATEMENTS
The amortized cost and fair value of fixed maturity securities at December
31,1997, by contractual average maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Available for Sale Held to Maturity Total
Amortized Fair Amortized Fair Amortized Fair
(in millions) Cost Value Cost Value Cost Value
- -----------------------------------------------------------------------------------------------------------
Due in one year or less .............. $ 127.0 $ 127.2 $ 60.8 $ 61.5 $ 187.8 $ 188.7
Due after one year through five years 311.6 318.4 768.5 798.0 1,080.1 1,116.4
Due after five years through ten years 368.9 388.5 738.9 794.7 1,107.8 1,183.2
Due after ten years .................. 304.4 335.5 410.4 450.1 714.8 785.6
- -----------------------------------------------------------------------------------------------------------
1,111.9 1,169.6 1,978.6 2,104.3 3,090.5 3,273.9
Mortgage-backed securities ........... 456.8 484.2 923.6 978.9 1,380.4 1,463.1
- -----------------------------------------------------------------------------------------------------------
$ 1,568.7 $ 1,653.8 $ 2,902.2 $ 3,083.2 $ 4,470.9 $ 4,737.0
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Net investment income consisted of the following:
for years ended December 31 1997(in millions)1996
- ----------------------------------------------------------------------------
Fixed maturity securities $359.4 $364.0
Equity securities 2.5 2.0
Mortgage loans 100.9 104.4
Real estate 11.5 10.8
Policy loans 8.8 9.0
Other 7.3 6.1
- ----------------------------------------------------------------------------
Gross investment income 490.4 496.3
Investment expenses 25.5 24.5
- ----------------------------------------------------------------------------
Net investment income $464.9 $471.8
- ----------------------------------------------------------------------------
Net realized investment gains and (losses) include write downs and changes in
the reserve for losses on mortgage loans and foreclosed real estate of $(1.3)
million and $.5 million for 1997 and 1996, respectively. Proceeds from the
sales, maturities or calls of investments in fixed maturities during 1997 and
1996 were approximately $576.3 million and $625.2 million, respectively. Gross
gains of $11.6 million and $12.0 million, and gross losses of $1.3 million and
$6.9 million were realized in 1997 and 1996, respectively. The changes in
unrealized appreciation (depreciation) of fixed maturities amounted to
approximately $39.9 million and $(64.3) million in 1997 and 1996, respectively.
At December 31, 1997, the unrealized appreciation on equity securities of
approximately $2.3 million is comprised of $3.8 million in unrealized gains and
$1.5 million of unrealized losses and has been reflected directly in
policyholders' surplus. The change in the unrealized appreciation (depreciation)
of equity securities amounted to approximately $.9 million and $(1.1)million in
1997 and 1996, respectively.
The Company maintains a diversified mortgage loan portfolio and exercises
internal limits on concentrations of loans by geographic area, industry, use and
individual mortgagor. At December 31, 1997, the largest geographic concentration
of commercial mortgage loans was in California, Indiana, and Florida where
approximately 33% of the portfolio was invested. A total of 40% of the mortgage
loans have been issued on retail properties, primarily backed by long term
leases or guarantees from strong credits.
The Company has outstanding mortgage loan commitments at December 31, 1997, of
approximately $117.2 million. As of December 31, 1997, the carrying value of
investments that produced no income for the previous twelve month period was
$1.8 million.
<PAGE>
14
NOTES TO FINANCIAL STATEMENTS
3. Insurance Liabilities:
At December 31, 1997 and 1996, insurance liabilities consisted of the following:
<TABLE>
<CAPTION>
(in millions)
- ------------------------------------------------------------------------------------------------------------------------------------
Withdrawal Mortality or morbidity Interest rate
assumption assumption assumption 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Future policy benefits:
Participating whole life contracts ........... Company Company 2.5% to 6.0% $ 594.5 $ 554.9
experience experience
Universal life-type contracts ................ n/a n/a n/a 376.4 352.0
Other individual life contracts .............. Company Company 6.8% to 10.0% 216.4 183.6
experience experience
Accident and health .......................... n/a n/a n/a 51.0 43.7
Annuity products ............................. n/a n/a n/a 4,213.6 4,397.1
Group life and health ........................ n/a n/a n/a 191.0 157.3
Other policyholder funds ..................... n/a n/a n/a 175.2 176.2
Pending policyholder claims .................. n/a n/a n/a 164.3 137.6
- ------------------------------------------------------------------------------------------------------------------------------------
Total insurance liabilities $ 5,982.4 $6,002.4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Participating life insurance policies under generally accepted accounting
principles represent approximately 9% and 11 % of the total individual life
insurance in force at December 31, 1997 and 1996, respectively. Participating
policies represented approximately 39% and 40% of life premium income for 1997
and 1996, respectively. The amount of dividends to be paid is determined
annually by the Board of Directors.
4. Employees' and Agents' Benefit Plans:
The Company has a noncontributory defined benefit pension plan covering
substantially all employees. Company contributions to the employee plan are made
annually in an amount between the minimum ERISA required contribution and the
maximum tax-deductible contribution. Contributions made to the Plan were $2.6
million in 1997 and $2.4 million in 1996. The net periodic pension cost was
$(.5) million and $.6 million for the years ended December 31, 1997 and 1996,
respectively. This includes service cost of $2.2 million and $3.5 million,
interest cost of $1.6 million and $1.4 million, and return on plan assets of
$4.3 million, and $4.3 million for the years ended December 31, 1997 and 1996,
respectively.
The following benefit information for the employees' defined benefit plan was
determined by independent actuaries as of January 1, 1997 and 1996,
respectively, the most recent actuarial valuation dates:
1997 (in millions) 1996
Actuarial present value of accumulated benefits
for the employees' defined benefit plan:
Vested $20.5 $20.1
Nonvested 2.0 .2
- --------------------------------------------------------------------------------
Total accumulated benefits $22.5 $20.3
- --------------------------------------------------------------------------------
Related net assets available for plan benefits $34.0 $28.8
- --------------------------------------------------------------------------------
The Company has a defined contribution plan and a 401(k) plan covering employees
who have completed one full calendar year of service. Annual contributions are
made by the Company in amounts based upon the Company's financial results.
Company contributions to the plan during 1997 and 1996 were $1.4 million and
$1.7 million, respectively.
<PAGE>
15
NOTES TO FINANCIAL STATEMENTS
The Company has a defined contribution pension plan and a 401(k) plan covering
substantially all of the agents, except general agents. Contributions of 3% of
defined commissions (plus 3% for commissions over the Social Security wage base)
are made to the pension plan. An additional contribution of 3% of defined
commissions are made to a 401(k) plan. Company contributions expensed for these
plans for 1997 and 1996 were $268,000 and $612,000, respectively.
The funds for all plans are held by the Company under deposit administration and
group annuity contracts.
The Company also provides certain health care and life insurance benefits (post
retirement benefits) for retired employees and certain agents (retirees).
Employees and agents with at least 10 years of plan participation may become
eligible for such benefits if they reach retirement age while working for the
Company.
The net periodic post retirement benefit cost was $1,035,000 and $956,000 for
the year ended December 31, 1997 and 1996, respectively. This includes service
cost of $336,000 and $255,000, interest cost of $697,000 and $645,000,
amortization of unrecognized loss of $2,000 and $56,000 for the years ended
December 31, 1997 and 1996, respectively.
Accrued post retirement benefits as of December 31: 1997(in millions) 1996
- --------------------------------------------------------------------------------
Accumulated post retirement benefit obligation (APBO):
Retirees and their dependents $5.2 $ 4.6
Active employees fully eligible to retire and
receive benefits 3.1 2.6
Active employees not fully eligible 2.6 2.7
Unrecognized loss (1.6) (1.0)
- --------------------------------------------------------------------------------
Total APBO $9.3 $ 8.9
- --------------------------------------------------------------------------------
The assumed discount rate used in determining the accumulated post retirement
benefit was 7.00% and the assumed health care cost trend rate was 10% graded to
5% until 2004. Compensation rates were assumed to increase 6% at each year end.
The health coverage for retirees 65 and over is capped in the year 2000. The
health care cost trend rate assumption has an effect on the amounts reported. An
increase in the assumed health care cost trend rates by one percentage point
would increase the accumulated post retirement benefit obligation as of December
31, 1997, by $885,000 and increase the accumulated post retirement benefit cost
for 1997 by $126,000.
5. Federal Income Taxes:
A reconciliation of the income tax attributable to continuing operations
computed at U.S. federal statutory tax rates to the income tax expense included
in the statement of operations follows:
for years ended December 31 1997 (in millions) 1996
- --------------------------------------------------------------------------------
Income tax computed at statutory tax rate $36.3 $30.3
Tax exempt income (1.5) (1.6)
Mutual company differential earnings amount 6.1 7.5
Prior year differential earnings amount (3.7) (5.6)
Other (7.4) 3.8
- --------------------------------------------------------------------------------
Federal income tax $29.8 $34.4
- --------------------------------------------------------------------------------
The components of the provision for income taxes on earnings included current
tax provisions of $22.5 million and $32.6 million for the years ended December
31, 1997 and 1996, respectively, and deferred tax expense of $7.3 million and
$1.8 million for the years ended December 31, 1997 and 1996, respectively.
<PAGE>
16
NOTES TO FINANCIAL STATEMENTS
Deferred income tax assets (liabilities)
as of December 31: 1997 1996
- --------------------------------------------------------------------------------
(in millions)
Deferred policy acquisition costs $(137.0) $(110.9)
Investments (12.0) (8.1)
Insurance liabilities 154.7 139.0
Unrealized appreciation of securities (21.9) (11.2)
Other (4.7) (4.9)
- --------------------------------------------------------------------------------
Deferred income tax assets (liabilities) $ (20.9) $ 3.9
- --------------------------------------------------------------------------------
Federal income taxes paid were $28.6 million and $39.0 million for 1997 and
1996, respectively.
6. Reinsurance:
The Company is a party to various reinsurance contracts under which it receives
premiums as a reinsurer and reimburses the ceding companies for portions of the
claims incurred. At December 31,1997 and 1996, life Reinsurance assumed was
approximately 71% and 67%, respectively, of life insurance in force.
The Company cedes that portion of the total risk on an individual life in excess
of $1,500,000. For accident and health and disability policies, the Company has
established various limits of coverage it will retain on any one policy owner
and cedes the remainder of such coverage.
Certain statistical data with respect to reinsurance follows:
for years ended December 31 1997 1996
- --------------------------------------------------------------------------------
(in millions)
Direct statutory premiums $369.4 $353.1
Reinsurance assumed 253.9 214.8
Reinsurance ceded 132.3 109.8
- --------------------------------------------------------------------------------
Net premiums 491.0 458.1
- --------------------------------------------------------------------------------
Reinsurance recoveries $103.4 $ 73.5
- --------------------------------------------------------------------------------
The Company accounts for all reinsurance agreements as transfers of risk. If
companies to which reinsurance has been ceded are unable to meet obligations
under the reinsurance agreements, the Company would remain liable. Six
reinsurers account for approximately 57% of the Company's December 31, 1997,
ceded reserves for life and accident and health insurance. The remainder of such
ceded reserves is spread among numerous reinsurers.
7. Surplus Notes and Lines of Credit:
On February 16, 1996, the Company issued $75 million of Surplus Notes, due March
30, 2026. Interest is payable semi-annually on March 30, and September 30 at a
7.75% annual rate. Any payment of interest on or principal of the Notes may be
made only with the prior approval of the Commissioner of the Indiana Department
of Insurance. The Surplus Notes may not be redeemed at the option of AUL or any
holder of the Surplus Notes. Interest paid during 1997 was $5.8 million. The
Company has available a $125 million committed credit facility. No amounts have
been drawn as of December 31, 1997.
8. Commitments and Contingencies:
Various lawsuits have arisen in the ordinary course of the Company's business.
In each of the matters, the Company believes the ultimate resolution of such
litigation will not result in any material adverse impact to operations or
financial condition of the Company.
Pursuant to an Investment Agreement with Indianapolis Life Insurance Company and
the Indianapolis Life Group of Companies (IL Group), the Company has agreed to
purchase from IL Group $27 million of common stock. As of December 31,1997, $8.9
million of this stock was purchased, with an additional $18.1 million committed
to be purchased upon the approval of the Insurance Departments of various
states. Upon purchase of the full commitment, the Company will own 25% of IL
Group's issued and outstanding stock.
<PAGE>
17
NOTES TO FINANCIAL STATEMENTS
9. Statutory Information:
AUL and State Life prepare statutory financial statements in accordance with
accounting Principles and practices prescribed or permitted by the Indiana
Department of Insurance. Prescribed statutory accounting practices (SAP)
currently include state laws, regulations and general administrative rules
applicable to all insurance enterprises domiciled in a particular state, as well
as practices described in National Association of Insurance Commissioners'
(NAIC) publications.
A reconciliation of SAP surplus to GAAP surplus at December 31 follows:
for years ended December 31 1997 (in millions) 1996
- --------------------------------------------------------------------------------
SAP surplus $464.2 $407.9
Deferred policy acquisition costs 447.4 362.7
Adjustments to policy reserves (303.1) (278.3)
Asset valuation and interest maintenance reserves 86.1 106.4
Unrealized gain on invested assets, net 36.5 19.0
Surplus notes (75.0) (75 0)
Deferred income taxes 1.0 16.8
Other, net 7.5 13.3
- --------------------------------------------------------------------------------
GAAP surplus $664.6 $572.8
- --------------------------------------------------------------------------------
A reconciliation of SAP net income to GAAP net income for the years ended
December 31 follows:
for years ended December 31 1997 (in millions) 1996
- --------------------------------------------------------------------------------
SAP income $41.8 $ 51.4
Deferred policy acquisition costs 37.6 19.5
Adjustments to policy reserves (9.2) (15.0)
Deferred income taxes (7.3) (1.8)
Other, net 11.4 (2.0)
- --------------------------------------------------------------------------------
GAAP net income $74.3 $ 52.1
- --------------------------------------------------------------------------------
Life insurance companies are required to maintain certain amounts of assets on
deposit with state regulatory authorities. Such assets had an aggregate carrying
value of $4.5 million at December 31,1997.
10. Fair Value of Financial Instruments:
The disclosure of fair value information about certain financial instruments is
based primarily on quoted market prices. The fair values of short-term
investments and accrued investment income approximate the carrying amounts
reported in the balance sheets. Fair values for fixed maturity and equity
securities, and surplus notes are based on quoted market prices where available.
For fixed maturity securities not actively traded, fair values are estimated
using values obtained from independent pricing services, or in the case of
private placements, are estimated by discounting expected future cash flows
using a current market rate applicable to the yield, credit quality and maturity
of the investments. The fair value of the aggregate mortgage loan portfolio was
estimated by discounting the future cash flows using current rates at which
similar loans would be made to borrowers with similar credit ratings for similar
maturities.
The estimated fair values of the liabilities for policyholder funds approximate
the statement values because interest rates credited to account balances
approximate current rates paid on similar funds and are not generally guaranteed
beyond one year. Fair values for other insurance reserves are not required to be
disclosed. However, the estimated fair values for all insurance liabilities are
taken into consideration in the Company's overall management of interest rate
risk, which minimizes exposure to changing interest rates through the matching
of investment maturities with amounts due under insurance contracts. The fair
values of certain financial instruments along with their corresponding carrying
values at December 31,1997 and 1996 follow.
- --------------------------------------------------------------------------------
1997 (in millions) 1996
Carrying Fair Carrying Fair
Amount Value Amount Value
- --------------------------------------------------------------------------------
Fixed maturity securities:
Available for sale $1,653.8 $1,653.8 $1,593 4 $1,593.4
Held to Maturity 2,902.2 3,083.2 3,013.6 3,144.6
Equity securities 18.6 18.6 15.2 15.2
Mortgage loans 1,120.4 1,201.0 1,114.6 1,186.3
Policy loans 143.1 143.1 143.5 143.5
Surplus notes 75.0 79.5 75.0 73.0
- --------------------------------------------------------------------------------
<PAGE>
18
================================================================================
No dealer, salesman or any other person is authorized by the AUL American
Unit Trust to give any information or to make any representation other than as
contained in this Statement of Additional Information in connection with the
offering described herein.
There has been filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, with respect to the
offering herein described. For further information with respect to the AUL
American Unit Trust, AUL and its variable annuities, reference is made thereto
and the exhibits filed therewith or incorporated therein, which include all
contracts or documents referred to herein.
================================================================================
AUL AMERICAN UNIT TRUST
Group Variable Annuity Contracts
Sold By
AMERICAN UNITED
LIFE INSURANCE COMPANY(R)
One American Square
Indianapolis, Indiana 46282
STATEMENT OF ADDITIONAL INFORMATION
Dated: May 1, 1998
================================================================================
<PAGE>
1
Part C: Other Information
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS
1. Included in Prospectus (Part A):
Condensed Financial Information
2. Included in Statement of Additional Information (Part B):
a) Financial Statements of American United Life Insurance Company(R)
Report of Independent Accountants
Combined Balance Sheet - Assets, Liabilities and Policyowners' Surplus
as of December 31, 1997 and 1996
Combined Statement of Operations for the years ended December 31, 1997
and 1996
Combined Statement of Policyowner's Surplus for the years ended Decem-
ber 31, 1997 and 1996
Combined Statement of Cash Flows for the years ended December 31, 1997
and 1996
Notes to Financial Statements
(b) Financial Statements of AUL American Unit Trust
1. Registrant's Annual Report for the year ended December 31, 1997
is incorporated by reference thereto and contains the following
Financial Statements:
Message from the Chairman of the Board and President of AUL
American Series Fund to Participants in AUL American Unit Trust
Report of Independent Accountants
Statement of Net Assets as of December 31, 1997
Statement of Operations and Changes in Net Assets for the years
ended December 31, 1997 and 1996
Notes to Financial Statements
(b) Exhibits
1. Resolution of Executive Committee of American United Life Insurance
Company(R) ("AUL") establishing AUL American Unit Trust(1)
2. Not applicable
3. Not applicable
4. Group Annuity Contract Forms:
4.1 TDA Voluntary Contract, Form P-12511(1)
4.2 TDA Employer Sponsored Contract, Form P-12621(1)
4.3 TDA Employer Sponsored Benefit Responsive Contract,
Form P-12621BR(1)
4.4 TDA Custodial SPL Contract, Form P-12833(1)
4.5 TDA Custodial Contract, Form P-12833(1)
4.6 TDA Employer Sponsored and Qualified Conv. Multiple Fund VA
Contract, Form P-14020(1)
4.7 TDA Employer Sponsored and Qualified New Multiple Fund VA
Contract, Form P-14020(1)
4.8 IRA Non-Custodial Contract, Form P-12566(1)
4.9 IRA Custodial Contract, Form P-12867(1)
4.10 DCP Contract, Form P-12518(1)
(1) Re-filed with the Registrant's Post-Effective Amendment No. 15
(File No. 33-31375) on April 30, 1998.
(2) Filed with the Registrant's Post-Effective Amendment No. 15
(File No. 33-31375) on April 30, 1998.
<PAGE>
2
Item 24. FINANCIAL STATEMENTS AND EXHIBITS (CONTINUED)
5. Application Forms and other forms:
5.1 AUL American Series Enrollment Form P-12464(1)
5.2. Employer Sponsored TDA Enrollment Form P-12477(1)
5.3 AUL Select Annuity Enrollment Form P-14009(1)
6. Certificate of Incorporation and By-Laws of the Depositor
6.1 Articles of Merger between American Central Life Insurance Company
and United Mutual Life Insurance Company(1)
6.2 Certification of the Secretary of State as to the filing
of the Articles of Merger between American Central Life Insurance
Company and United Mutual Life Insurance Company(1)
6.3 Code of By-Laws of American United Life Insurance Company(R)(1)
7. Not applicable
8. Form of Participation Agreements:
8.1 Form of Participation Agreement with Alger American Fund(1)
8.2 Form of Participation Agreement with American Century Variable
Portfolios, Inc.(1)
8.3 Form of Participation Agreement with Calvert Variable Series(1)
8.4 Form of Participation Agreement with Fidelity Variable
Insurance Products Fund(1)
8.5 Form of Participation Agreement with Fidelity Variable Insurance
Products Fund II(1)
8.6 Form of Participation Agreement with Janus Aspen Series(1)
8.7 Form of Participation Agreement with PBHG Funds, Inc.(1)
8.8 Form of Participation Agreement with SAFECO Resource Series Trust(1)
8.9. Form of Participation Agreement with T. Rowe Price Equity
Series, Inc.(1)
9. Opinion and Consent of Senior Counsel of AUL as to the legality of
Contracts being registered(1)
10. Miscellaneous Consents
10.1 Consent of Independent Accountants (2)
10.2 Consent of Dechert Price & Rhoads(1)
10.3 Powers of Attorney(1)(2)
11. Financial Statements of AUL American Unit Trust(2)
12. Not applicable
13. Computation of performance quotations(1)
14. Financial Data Schedules (2)
(1) Re-filed with the Registrant's Post-Effective Amendment No. 15
(File No. 33-31375) on April 30, 1998.
(2) Filed with the Registrant's Post-Effective Amendment No. 15
(File No. 33-31375) on April 30, 1998.
Item 25. DIRECTORS AND OFFICERS OF AUL
Name and Address Positions and Offices with AUL
- ---------------- ------------------------------
John H. Barbre* Senior Vice President
Steven C. Beering M.D. Director
Purdue University
West Lafayette, Indiana
William R. Brown* General Counsel and Secretary, AUL
Secretary, State Life Insurance Co.
Arthur L. Bryant Director
141 E. Washington St.
Indianapolis, Indiana
James M. Cornelius Director
P.O. Box 44906
Indianapolis, Indiana
- ----------------------------------------------
*One American Square, Indianapolis, Indiana
<PAGE>
3
Item 25. DIRECTORS AND OFFICERS OF AUL (CONTINUED)
Name and Address Positions and Offices with AUL
- ---------------- ------------------------------
James E. Dora Director
P.O. Box 42908
Indianapolis, Indiana
Otto N. Frenzel III Director and Chairman of the Audit
101 W. Washington St., Suite 400E Committee
Indianapolis, Indiana
David W. Goodrich Director
One American Square, Suite 2500
Indianapolis, Indiana
William P. Johnson Director
P.O. Box 517
Goshen, Indiana
Scott A. Kincaid* Senior Vice President
Charles D. Lineback* Senior Vice President
James T. Morris Director
1220 Waterway Boulevard
Indianapolis, Indiana
James W. Murphy* Senior Vice President
Jerry L. Plummer* Senior Vice President
R. Stephen Radcliffe* Director and Executive Vice President
Thomas E. Reilly Jr. Director and Chairman of the Finance
300 N. Meridian, Suite 1500 Committee
Indianapolis, Indiana
William R. Riggs Director
P.O. Box 82001
Indianapolis, Indiana
G. David Sapp* Senior Vice President
John C. Scully Director
2636 Ocean Dr., # 505
Vero Beach, Florida
Jerry D. Semler* Chairman of the Board, President, Chief
Executive Officer and Chairman of the
Executive Committee, Chairman the Board,
Chief Executive Officer, State Life
Insurance Co.
Yvonne H. Shaheen Director
1310 S. Franklin Road
Indianapolis, Indiana
William L. Tindall* Senior Vice President
Frank D. Walker Director
P.O. Box 40972
Indianapolis, Indiana
Gerald T. Walker* Senior Vice President
- ----------------------------------------------
*One American Square, Indianapolis, Indiana
<PAGE>
4
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
In accordance with current law, it is anticipated that American United Life
Insurance Company(R) ("AUL") will request voting instructions from owners or
participants of any Contracts that are funded by separate accounts that are
registered investment companies under the Investment Company Act of 1940 and
will vote shares in any such separate account attributable to the Contracts in
proportion to the voting instructions received. AUL may vote shares of any
Portfolio, if any, that it owns beneficially in its own discretion.
Registrant and AUL American Individual Unit Trust are separate accounts of AUL,
organized for the purpose of the respective sale of group and individual
variable annuity contracts.
AUL American Individual Variable Life Unit Trust is a separate account of AUL,
organized for the purpose of the sale of individual variable life contracts.
American United Life Pooled Equity Fund B is a separate account of AUL organized
for the purpose of the sale of group variable annuity contracts.
AUL Equity Sales Corp. is a wholly owned subsidiary of AUL, organized under the
laws of the State of Indiana in 1969 as a broker-dealer to market mutual funds.
AUL may also be deemed to control State Life Insurance Company(R) ("State Life")
since a majority of AUL's Directors also serve as Directors of State Life. By
virtue of an agreement between AUL and State Life, AUL provides investment and
other support services for State Life on a contractual basis.
AUL owns a 20% share of the stock of Princeton Reinsurance Managers, LLC, a
limited liability Delaware company. AUl's affiliation provides an alternative
marketing channel for its Reinsurance Division.
AUL American Series Fund, Inc. (the "Fund") was incorporated under the laws of
Maryland on July 26, 1989 and is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940. As a
"series" type of mutual Fund, the Fund issues shares of common stock relating to
separate investment portfolios. Substantially all of the Fund's shares were
originally purchased by AUL in connection with the initial capitalization of the
Fund. On December 31, 1997, AUL owned 8.11% of the outstanding shares of the
Fund's Equity portfolio and 13.97% of the Fund's Tactical Asset Allocation
Portfolio. At a meeting of the Board of Directors held on November 19, 1997, the
Board approved the addition of three new Portfolios to the Fund, namely, the AUL
American Conservative Investor Portfolio, the AUL American Moderate Investor
Portfolio and the AUL American Aggressive Investor Portfolio, collectively
referred to as the LifeStyle Portfolios. On March 31, 1998, AUL provided the
initial capitalization for the LifeStyle Portfolios and therefore, would be able
to control any issue submitted to the vote of shareholders of the LifeStyle
Portfolios.
Indianapolis Life Insurance company ("IL") is an Indiana domestic mutual
insurance company, whose principal business is the sale of life insurance and
annuity contracts. On November 3, 1997, AUL entered into an agreement with IL to
invest $27 million in its wholly owned downstream holding company, Indianapolis
Life Group of Companies, Inc., in exchange for a 25% equity interest. AUL paid
the balance of the $27 million on March 30, 1998; therefore, AUL currently owns
a 25% equity interest in Indianapolis Group of Companies, Inc.
Item 27. NUMBER OF CONTRACTHOLDERS
As of January 31, 1998, AUL has issued 782 qualified contracts with Participants
who have invested funds in the Contracts.
Item 28. INDEMNIFICATION
Article IX, Section 1 of the by-laws of AUL provides as follows:
The corporation shall indemnify any director or officer or former director
or officer of the corporation against expenses actually and reasonably
incurred by him (and for which he is not covered by insurance) in
connection with the defense of any action, suit or proceeding (unless such
action, suit or proceeding is settled) in which he is made a party by
reason of being or having been such director or officer, except in relation
to matters as to which he shall be adjudged in such action, suit or
proceeding, to be liable for negligence or misconduct in the performance of
his duties. The corporation may also reimburse any director or officer or
former director or officer of the corporation for the reasonable costs of
settlement of any such action, suit or proceeding, if it shall be found by
a majority of the directors not involved in the matter in controversy
(whether or not a quorum) that it was to the interest of the corporation
that such settlement be made and that such director or officer was not
guilty of negligence or misconduct. Such rights of indemnification and
reimbursement shall not be exclusive of any other rights to which such
director or officer may be entitled under any By-law, agreement, vote of
members or otherwise.
Item 29. PRINCIPAL UNDERWRITERS
(a) AUL acts as Investment Adviser to American United Life Pooled Equity
Fund B (2-27832) and to AUL American Series Fund, Inc. (33-30156).
(b) For information regarding AUL's Officers and Directors, see Item 25
above.
(c) Not applicable
Item 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and the rules
under that section will be maintained at One American Square, Indianapolis, IN
46282.
<PAGE>
5
Item 31. MANAGEMENT SERVICES
There are no management-related service contracts not discussed in Part A or
Part B.
Item 32. UNDERTAKINGS
The registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in this registration statement are never more than 16
months old for so long as payments under the variable annuity
contracts may be accepted, unless otherwise permitted.
(b) to include either (1) 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, or (2) a post
card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of
Additional Information.
(c) to deliver any Statement of Additional Information and any financial
statements required to be made available under this Form promptly upon
written or oral request.
Additional Representations:
(a) The Registrant and its Depositor are relying upon Rule 6c-7 under the
Investment Company Act of 1940 (17 CFR 270.6c-7), Exemptions from
Certain Provisions of Sections 22(e) and 27 for Registered Separate
Accounts Offering Variable Annuity Contracts to Participants in the
Texas Optional Retirement Program, and the provisions of paragraphs
(a) through (d) of this rule have been complied with.
(b) The Registrant and its Depositor are relying upon American Council of
Life Insurance, SEC No-Action Letter, SEC Ref. No. IP-6-88 (November
28, 1988) with respect to annuity contracts offered as funding
vehicles for retirement plans meeting the requirements of Section
403(b) of the Internal Revenue Code, and the provisions of paragraphs
(1)-(4) of this letter have been complied with.
(c) The Registrant represents that the aggregate fees and charges deducted
under the variable annuity contracts are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks
assumed by the Insurance Company.
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) of the Securities Act of 1933 and
has duly caused this Post-Effective Amendment to the Registration Statement
(Form N-4) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis and the State of Indiana on the 30th
day of April, 1998.
AUL AMERICAN UNIT TRUST (Registrant)
By: American United Life Insurance Company(R)
------------------------------------------------
By: Jerry D. Semler*, Chairman of the
Board, President, and Chief Executive Officer
/s/ Richard A. Wacker
- -------------------------------------------
*By: Richard A. Wacker as Attorney-in-fact
Date: April 30, 1998
Pursuant to the requirements of the Securities Act of 1933, this Post Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
_______________________________ Director April 30, 1998
Steven C. Beering M.D.*
_______________________________ Director April 30, 1998
Arthur L. Bryant*
_______________________________ Director April 30, 1998
James M. Cornelius*
_______________________________ Director April 30, 1998
James E. Dora*
_______________________________ Director April 30, 1998
Otto N. Frenzel III*
_______________________________ Director April 30, 1998
David W. Goodrich*
_______________________________ Director April 30, 1998
William P. Johnson*
_______________________________ Director April 30, 1998
James T. Morris*
<PAGE>
7
Signature Title Date
- --------- ----- ----
______________________________ Principal Financial April 30, 1998
James W. Murphy* and Accounting Officer
______________________________ Director April 30, 1998
R. Stephen Radcliffe*
______________________________ Director April 30, 1998
Thomas E. Reilly Jr*
______________________________ Director April 30, 1998
William R. Riggs*
______________________________ Director April 30, 1998
John C. Scully*
______________________________ Director April 30, 1998
Yvonne H. Shaheen*
______________________________ Director April 30, 1998
Frank D. Walker*
/s/ Richard A. Wacker
- -------------------------------------------
*By: Richard A. Wacker as Attorney-in-fact
Date: April 30, 1998
<PAGE>
8
<TABLE>
EXHIBIT LIST
<S> <C> <C>
Exhibit Exhibit
Number in Form Numbering
N-4, Item 24(b) Value Name of Exhibit
- ---------------- --------- ---------------
1 EX-99.B1 Resolution of the Executive Committee of
American United Life Insurance Company
establishing the AUL American Unit Trust
4.1 EX-99.B4.1 TDA Voluntary Contract, Form P-12511
4.2 EX-99.B4.2 TDA Employer Sponsored Contract, Form P-12621
4.3 EX-99.B4.3 TDA Employer Sponsored Benefit Responsive
Contract, Form P-12621BR
4.4 EX-99.B4.4 TDA Custodial SPL Contract, Form P-12833
4.5 EX-99.B4.5 TDA Custodial Contract, Form P-12833
4.6 EX-99.B4.6 TDA Employer Sponsored and Qualified
Conv. Multiple Fund VA Contract, Form P-14020
4.7 EX-99.B4.7 TDA Employer Sponsored and Qualified
New Multiple Fund VA Contract, Form P-14020
4.8 EX-99.B4.8 IRA Non-Custodial Contract, Form P-12566
4.9 EX-99.B4.9 IRA Custodial Contract, Form P-12867
4.10 EX-99.B4.10 DCP Contract, Form P-12518
5.1 EX-99.B5.1 AUL American Series Enrollment Form P-12464
5.2 EX-99.B5.2 Employer Sponsored TDA Enrollment Form P-12477
5.3 EX-99.B5.3 AUL Select Annuity Enrollment Form P-14009
6.1 EX-99.B6.1 Articles of Merger between American
Central Life Insurance Company and
United Mutual Life Insurance Company
6.2 EX-99.B6.2 Certification of the Secretary of State
as to the filing of the Articles of Merger
between American Central Life Insurance
Company and United Mutual Life Insurance
Company
6.3 EX-99.B6.3 Code of By-Laws of American United Life
Insurance Company(R)
8.1 EX-99.B8.1 Form of Participation Agreement with
Alger American Fund
8.2 EX-99.B8.2 Form of Participation Agreement with
American Century Variable Portfolios, Inc.
8.3 EX-99.B8.3 Form of Participation Agreement with
Calvert Variable Series
8.4 EX-99.B8.4 Form of Participation Agreement with
Fidelity Variable Insurance Products Fund
8.5 EX-99.B8.5 Form of Participation Agreement with
Fidelity Variable Insurance Products
Fund II
8.6 EX-99.B8.6 Form of Participation Agreement with
Janus Aspen Series
8.7 EX-99.B8.7 Form of Participation Agreement with
PBHG Funds, Inc.
8.8 EX-99.B8.8 Form of Participation Agreement with
SAFECO Resource Series Trust
8.9 EX-99.B8.9 Form of Participation Agreement with
T. Rowe Price Equity Series, Inc.
9 EX-99.B9 Opinion and Consent of Senior Counsel of
AUL as to the legality of Contracts
being registered.
10.1 EX-99.B10.1 Consent of Independent Accountants
10.2 EX-99.B10.2 Consent of Dechert Price & Rhoads
10.3 EX-99.B10.3 Powers of Attorney
11 EX-99.B11 Annual Report of AUL American Unit Trust
for the Period Ended December 31, 1997
13 EX-99.B13 Computation of performance quotations
14 EX-27 Financial Data Schedules
</TABLE>
- --------------------------------------------------------------------------------
EXHIBIT 1
RESOLUTION OF THE EXECUTIVE COMMITTEE
OF AMERICAN UNITED LIFE INSURANCE COMPANY(R)
ESTABLISHING THE AUL AMERICAN UNIT TRUST
- --------------------------------------------------------------------------------
AMERICAN UNITED LIFE INSURANCE
COMPANY
CORPORATE RESOLUTIONS
BE IT RESOLVED, that American United Life Insurance Company (the
"Company"), pursuant to the provisions of Section 27-1-5-1 Class l(c) of the
Indiana Insurance Code, hereby establishes a separate account (hereinafter
"Separate Account") as hereinafter set forth:
FURTHER RESOLVED, that the Separate Account is established for the purpose
of providing for the funding of variable annuity contracts ("Contracts") to be
issued by the Company and shall constitute a separate account into which
allocated amounts are paid to or held by the Company under such Contracts; and
FURTHER RESOLVED, that the income, gains, and losses, whether or not
realized, from assets allocated to the Separate Account shall, in accordance
with the Contracts, be credited to or charged against such Separate Account
without regard to other income, gains, or losses of the Company; and
FURTHER RESOLVED, that the Separate Account may be divided into a number of
Variable Accounts to which net payments under the Contracts will be allocated in
accordance with instructions received from contract owners, and that the
President or a Senior Vice President be, and hereby is, authorized to establish,
increase, or decrease the number of Variable Accounts in the Separate Account as
such officer may deem necessary or appropriate; and
FURTHER RESOLVED, that each such Variable Account shall invest only in the
shares of an open-end management investment company, a single portfolio of an
open-end management investment company organized as a series fund, or other
investment vehicle designated in the Contract; and
FURTHER RESOLVED, that the appropriate officers of the Company, with the
assistance of counsel, be, and they hereby are, authorized to take any and all
actions necessary to sponsor and promote an open-end management investment
company that will serve as the investment vehicle for the Contracts and will be
eligible for investment by the Separate Account; and
FURTHER RESOLVED, that the President or a Senior Vice President of the
Company be, and hereby is, authorized to establish and change the designation of
the Separate Account and any Variable Account thereof to such designation as
such officer may deem appropriate; and
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2
FURTHER RESOLVED, that the appropriate officers of the Company, with such
assistance from the Company's auditors, legal counsel, or others as such
officers may determine are appropriate, be, and they hereby are, authorized and
directed to take all action necessary to: (a) register the Separate Account as a
unit investment trust under the Investment company Act of 1940, as amended; (b)
register the Contracts or interests therein in such amounts, which may be an
indefinite amount, as the officers of the Company shall from time to time deem
appropriate under the Securities Act of 1933; and (c) take all other actions
which are necessary in connection with the offering of said Contracts for sale
and the operation of the Separate Account in order to comply with the Investment
Company Act of 1940, the Securities Exchange Act of 1934, the Securities Act of
1933, and other applicable federal laws, including the filing of any amendments
to registration statements, the seeking of any interpretations that are
necessary or advisable from the Securities and Exchange Commission or any other
agency of the U.S. government, the provision of any undertakings, and seeking of
any applications for exemptions from the Investment Company Act of 1940 or other
applicable federal laws as the officers of the Company shall deem necessary or
appropriate; and
FURTHER RESOLVED, that the appropriate officers of the Company be, and they
hereby are, authorized on behalf of the Separate Account and on behalf of the
Company to take any and all action that they may deem necessary or advisable to
register, file, or qualify the Contracts for sale, including the preparation and
filing of any registrations or filings, and seeking the qualification of the
Company, its officers, agents, and employees, and the Contracts under any
applicable insurance, securities, or other laws of any of the states of the
United States or other jurisdictions, and in connection therewith to prepare,
execute, deliver, and file all such applications, reports, covenants,
resolutions, applications for exemptions, consents to service or process, surety
bonds, and other papers and instruments as may be required under such laws, to
pay all necessary fees and expenses, and to take any and all further action
which said officers or counsel of the Company may deem necessary or desirable
(including entering into whatever agreements and contracts may be necessary) in
order to maintain such registrations or qualifications for as long as said
officers deem it to be appropriate; and
<PAGE>
3
FURTHER RESOLVED, that the President or any Senior Vice President of the
Company is hereby authorized to execute such agreement or agreements as are
deemed necessary and appropriate (a) with any qualified entity under which such
entity will be appointed principal underwriter and distributor for the Contracts
and (b) with one or more qualified banks or other qualified entities to provide
administrative and/or custodial services in connection with the establishment
and maintenance of the Separate Account and the design, issuance, and
administration of the Contracts; and
FURTHER RESOLVED, that, since it is expected that the Separate Account will
invest in the securities issued by one or more investment companies, the
President or any Senior Vice President of the Company is hereby authorized to
execute whatever agreement or agreements as may be necessary or appropriate to
enable such investments to be made; and
FINALLY RESOLVED, that the appropriate officers of the Company are hereby
authorized and directed, on behalf of the Company and the Separate Account, to
take whatever action may be necessary or advisable to do or cause to be done all
such acts and things to carry out the foregoing resolutions and the intent and
purposes thereof, to execute and file all requisite papers and documents,
including but not limited to registration statements, notifications of
registration, agreements, applications, reports, surety bonds, irrevocable
consents, powers of attorneys, and appointment of agents for service of process,
and to pay all necessary fees and expenses as in such officer's judgment may be
necessary or advisable.
I, WILLIAM R. BROWN, do hereby certify that I am the duly elected and
qualified Secretary of American United Life Insurance Company and the keeper of
the records and corporate seal of said corporation and that the foregoing is a
true and correct copy of resolutions adopted at a duly convened meeting held
August 17, 1989, at which a quorum was present, of the Executive Committee of
the Board of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto affixed my name as Secretary and have
caused the corporate seal of said corporation to be hereto affixed this 14th day
of September, 1989.
/s/ William R. Brown
------------------------
Secretary
S E A L
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EXHIBIT 4.1
TDA VOLUNTARY CONTRACT, FORM P-12511
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CONTRACT NUMBER
CONTRACTHOLDER
DATE OF ISSUE
CONTRACT DATE
FIRST CONTRACT ANNIVERSARY
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12511
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
ARTICLE 4 BENEFITS AND LOANS
4.1--------Election of Annuity Options
4.2--------Annuity Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
4.9--------Loans from the Fixed Interest Account
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charge
6.6--------Reduction or Waiver of Certain Charges
P-12511
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 MISCELLANEOUS
8.1--------Ownership
8.2--------AUL's Annual Statement
8.3--------Tax Status
8.4--------Essential Data
8.5--------Reliance
8.6--------Misstatement of Essential Data
8.7--------Annuity Certificates
8.8--------Election, Notice, or Direction Requirements
8.9--------Quarterly Statement of Account Value
8.10-------Conformity with State Laws
8.11-------Reference to Federal Laws
8.12-------Sex and Number
8.13-------Facility of Payment
8.14-------Insulation from Liability
8.15-------Voting
8.16-------Acceptance of New Participants or Contributions
8.17-------Nonforfeitability and Nontransferability
8.18-------Termination
8.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12511
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus (b) the value of the Participant Account's
share of each Investment Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date
on which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts
of increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which
an annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same day
of the same month as the day and month which is stated on the face page of this
contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning
with the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL by the Contractholder and
credited to a Participant Account hereunder.
1.10 "Current Rates of Interest" means each of the annual effective rates
of interest as determined and declared by AUL from time-to-time and as credited
to each interest pocket maintained within the Fixed Interest Account. The
Current Rates of Interest shall always be equal to or greater than the
Guaranteed Rate of Interest.
1.11 "Elective Deferrals" means, with respect to any taxable year, any
Contribution made under a salary reduction agreement. A Contribution made under
a salary reduction agreement shall not be treated as an
P-12511.1 (rpl)
<PAGE>
Elective Deferral if, under the salary reduction agreement, such Contribution is
made pursuant to a one-time irrevocable election made by the Participant at the
time of initial eligibility to participate in the agreement, or is made pursuant
to a similar arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code.
1.12 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
1.13 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
1.14 "Guaranteed Rate of Interest" means interest at an annual effective
rate of 4.00%.
1.15 "Home Office" means the principal office of AUL. The mailing address
is P. O. Box 6148, Indianapolis, Indiana 46206-6148.
1.16 "Investment Account" means each subaccount of the Variable Account,
which subaccounts include the Equity Investment Account, the Bond Investment
Account, the Money Market Investment Account, and the Managed Investment
Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
P-12511.2 (rpl)
<PAGE>
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.17 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to provide
other Investment Options under this contract at any time.
1.18 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940.
1.19 "Participant" means any person reported to AUL by the Contractholder
as eligible for, and as participating in, this contract, and for whom a
Participant Account is established.
1.20 "Participant Account" means an account established under this contract
for a Participant. Contributions received by AUL shall be credited to
Participant Accounts as AUL is directed in writing.
1.21 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or supplemented
from time to time.
1.22 "Valuation Date" means any day when the Home Office of AUL and the New
York Stock Exchange are open and operational.
1.23 "Valuation Period" means the period beginning at the close of business
on a Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.24 "Variable Account" means a separate account established by AUL called
the AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.25 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the number of full years measured from the date a Participant Account
is established to the date the Withdrawal Charge is determined. Such percentage
is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
P-12511.3
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In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
1.26 "Withdrawal Value" means a Participant's Account Value minus the
applicable Withdrawal Charge, and minus the Participant's outstanding loan
balance, if any, and any expense charges due on such loans.
P-12511.4
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder. AUL
is not a party to, nor bound by, a plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not a
fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12511.5
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Contractholder or the Participant. Such written
instructions must include the amount to be withdrawn and returned, and
certification that such Contributions constitute Excess Contributions
and that such returns are permitted by applicable provisions of the
Code and Regulations issued thereunder. It shall not be the
responsibility of AUL to determine the existence or amount of Excess
Contributions or gains or losses thereon. In withdrawing and returning
the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to Section 4.8.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
Contractholder unless the Participant consents to AUL retaining the
initial Contribution until AUL receives the data and allocation
instructions for the Participant.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T.,
P-12511.6 (rpl)
<PAGE>
such Contribution shall be deemed to be received, and shall be
credited and allocated as of the close of business, on the next
succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a
Contribution, that amount shall be credited to the Fixed Interest
Account until such time as an appropriate allocation instruction is
received, except as provided above for the initial Contribution. The
Participant may change an allocation instruction with respect to
future allocations to his Participant Account by giving new written
allocation instructions to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Participant approval, or
prior approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate existing Investment Accounts if,
in its sole discretion, marketing, tax, or investment conditions so
warrant. AUL also reserves the right to provide other Investment
Options under this contract at any time.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company or any other form
permitted by law, it may be deregistered in the event such
registration is no longer required, or it may be combined with other
separate accounts of AUL or an affiliate thereof. AUL may take such
action as is necessary to comply with, or to obtain, exemptions from
the Securities and Exchange Commission with regard to the Variable
Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation
of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period.
Any transfer from an Investment Account shall be effective as of the
close of business on the Valuation Date that AUL receives the
Participant's direction, provided that AUL receives such direction by
4:00 p.m. E.S.T. on that Valuation Date. If such direction is received
after 4:00 p.m. E.S.T., such transfer shall be effective as of the
close of business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
P-12511.7
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
P-12511.8
<PAGE>
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge of not more
than $25 on a transfer. AUL reserves the right to change the maximum
limit on such transfer charge upon delivery of written notice to the
Contractholder. Any such change in the maximum limit shall apply only
to transfers by an individual who becomes a Participant on or after
the effective date of such change, and shall apply as long as that
individual remains a Participant.
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
P-12511.9 (PA)
ARTICLE 4 - BENEFITS AND LOANS
4.1 Election of Annuity Options: At the written request of the Participant,
AUL shall apply all or a portion of the Account Value (subject to Section 6.5,
and minus any outstanding loan balance of the Participant and any unpaid expense
charges on such loans) of the Participant Account for the purpose of providing a
fixed payment annuity. Upon receipt of such request, AUL is hereby authorized by
such Participant to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date that AUL receives
such written request at its Home Office. Such transferred amounts shall be held
in the Fixed Interest Account until the Participant's Annuity Commencement Date.
The Participant request shall include certification as to the purpose for the
annuity and the election of one of the following annuity options. The amount of
the annuity shall be computed from the Table of Immediate Annuities then
included in this contract, except as provided under Section 4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the monthly annuity shall be paid to the contingent annuitant named
in the election for as long as the contingent annuitant lives. An
election of this option is automatically cancelled if either the
Participant or the contingent annuitant dies before the Annuity
Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. If the total Account Value is less than $2,000, such
value shall not be annuitized under options (a), (b), (c), (d), (e),
or (g) of this Section, but shall be paid in a lump sum.
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to Section 6.5, and minus any outstanding loan balance of the
Participant and any unpaid expense charges on such loans) of his Participant
Account shall be applied under (b) above as a 10 Year Certain and Life Annuity.
AUL must receive written notification of such Annuity Commencement Date, written
designation of the contingent annuitant or beneficiary, and any election forms
needed in connection with any annuity option provided in this Section.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities are
based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected
shall be provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if such
rates produce a higher income than that provided under the Table of Immediate
Annuities provided in this contract.
4.5 Minimum Payments: If the monthly annuity is less than AUL's then
current established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value (minus any outstanding loan balances
of the Participant and any unpaid expense charges on such loans) in a single
sum.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments
under any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment of
each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under this contract
and any unpaid expense charges due on such loans) of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated to receive any
remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over the life or
life expectancy of the beneficiary. If the beneficiary is
not the Participant's surviving spouse, the annuity must
begin on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's
surviving spouse, the annuity need not begin before December
31 of the calendar year in which the Participant would have
attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account, provided:
(l) the Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above, and it may rely upon the
representations of the Participant made in the withdrawal
request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
provision (a)(1) above is not met).
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Participant may withdraw up to 10% of the Account
Value of his Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal. Also, where a Participant has outstanding loans under this
contract, a partial withdrawal by a Participant from the Fixed
Interest Account shall be permitted only to the extent that the
remaining
<PAGE>
Withdrawal Value of the Participant held in the Fixed Interest
Account equals twice the total of the Participant's outstanding loans
under this contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter. The
interest rate charged shall be equal to the Moody's Corporate Bond
Yield Average - Monthly Average Corporates as of the date of the loan,
as published by Moody's Investors Service. However, no change from a
previously established rate may be made in an amount less than .50% in
any periodic adjustment. The loan balance shall also be subject to a
loan expense charge equal to 2% of each loan repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
Upon receipt of a repayment, AUL shall deduct the 2% expense charge
from the repayment, and shall apply the balance of such repayment
first to any accrued interest and then to the outstanding loan
principal.
P-12511.10
<PAGE>
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar year. The
interest rate charged during a particular calendar year shall be equal
to the Moody's Corporate Bond Yield Average - Monthly Average
Corporates as published by Moody's Investors Service for October of
the previous calendar year. However, no change from a previously
established rate may be made in an amount less than .50% in any
periodic adjustment. If the Moody's rate for any October decreases by
at least .50% from the Moody's rate for the immediately preceding
October, AUL shall declare such reduced interest rate to be in effect
during the next succeeding calendar year. The loan balance shall also
be subject to a loan expense charge equal to 2% of each loan
repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
Upon receipt of a repayment, AUL shall deduct the 2% expense charge
from the repayment, and shall apply the balance of such repayment
first to any accrued interest and then to the outstanding loan
principal.
P-12511.14 (SC)
<PAGE>
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l02% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances plus an expense charge
equal to 2% of the outstanding loan balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
contract. All loan balances plus the 2% expense charge shall be paid
or satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted
distribution.
(e) AUL may modify the loan restrictions or limitations stated above in
this Section, or may add new restrictions and limitations, to the
extent necessary to comply with Code Section 72(p) or other applicable
law, as determined solely by AUL.
P-12511.15
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the Mutual Fund as such prospectus may be amended
or supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant Account
in the form of Accumulation Units on the basis of the value of such units in
that Investment Account as of the end of the Valuation Period on which such
amounts are received by AUL at its Home Office. Such crediting shall be made
separately for amounts allocated to each Investment Account. The number of
Accumulation Units in each Investment Account credited to each Participant
Account as of any Valuation Period shall be determined by dividing the amounts
allocated to that Investment Account for that Participant Account as of such
Valuation Period by the dollar value of one Accumulation Unit in that Investment
Account as of the close of business on the applicable Valuation Period. The
number of Accumulation Units thus determined shall not be changed by any
subsequent change in the dollar value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value of
an Accumulation Unit in each Investment Account as of any Valuation Period
thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
P-12511.16
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual charge of .85% and .40%, respectively, against the
average daily net assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for so long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.1, 4.7, or
4.8, the administrative charge attributable to the period of time which has
elapsed since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied or
withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the same
proportion that the amount transferred from the Investment Option bears to the
total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12511.17
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual charge of .85% and .40%, respectively, against the
average daily net assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for so long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.1, 4.7, or
4.8, the administrative charge attributable to the period of time which has
elapsed since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied or
withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the same
proportion that the amount transferred from the Investment Option bears to the
total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12511.18 (g&w)
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first five Contract
Years, AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but any
such change shall apply only to Participant Accounts established on or after the
effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.25 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.25 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $15 per Contract Quarter until the year 2001.
Any increase in the administrative charge made by AUL for any Contract Quarter
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with the administration of
the contract and the operation of the Variable Account. Any such increase shall
not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: AUL reserves the right to
amend this contract at any time, without the consent of the Contractholder,
Participants, or any other person or entity, to make any change to any
provisions of the contract to comply with, or give the Contractholder or
Participants the benefit of, any provisions of federal or state laws,
regulations, or rulings. Any such amendment shall be stated in a written
instrument and delivered to the Contractholder.
P-12511.19
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely affect
the benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Portfolio, nor any of the other provisions and conditions of this
contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal,
state, or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
8.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to and received by AUL at its Home Office before
becoming effective.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
8.10 Conformity with State Laws: Any benefit payable under this contract
shall not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
8.11 Reference to Federal Laws: Language in this contract referring to
federal tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval or
disapproval by the state in which the contract is issued.
8.12 Sex and Number: Whenever the context so requires, the plural includes
the singular, the singular the plural, and the masculine the feminine.
8.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment due
him, and no guardian has been appointed, AUL may make such payment to the person
or persons who have assumed the care and principal support of such Participant,
contingent annuitant, or beneficiary. Also, AUL may make payment directly to any
person or entity when directed to do so in writing by the Participant. Any
payment made by AUL will fully discharge AUL to the extent of such payment.
8.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may conduct.
8.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
8.16 Acceptance of New Participants or Contributions. AUL reserves the
right to refuse to accept new Participants or new Contributions to this contract
at any time.
8.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value
of a Participant Account under this contract shall be nonforfeitable at all
times. No sum payable under this contract with respect to a Participant may be
sold, assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person or
entity other than AUL. In addition, to the extent permitted by law, no such sum
shall in any way be subject to legal process requiring the payment of any claim
against the payee.
8.18 Termination: This contract shall automatically terminate as of the
date that there are no Participant Accounts maintained hereunder. However, upon
written notice to AUL, the Contractholder shall have the right to stop making
Contributions to the contract at any time. AUL shall have the right to refuse to
accept Contributions as of the last day of the second month following the date
that written notice to this effect is delivered to the Contractholder.
8.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the third
Thursday in February of each year at the hour of ten o'clock A.M. Elections for
directors shall be held at such annual meeting.
P-12511.20
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
<TABLE>
<CAPTION>
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
-------- ------- ----------------
<S> <C> <C> <C>
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
</TABLE>
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12511.21
<PAGE>
The following are the guaranteed annuity rates for the options offered by AUL.
They are based on the following assumptions-
<TABLE>
<CAPTION>
Retirement value - $1000.00 Interest rate - 4% Load - 4%
Participant - Female Commission - 0% Age Adjustment - 0
Contingent - Male (same age as participant)
INSTALLMENT
AGE 5 YR C&L 15 YR C&L 20 YR C&L J&S(FULL) J&2/3S J&1/2S REFUND
--- -------- --------- --------- --------- ------ ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
45 4.0004 3.9807 3.9616 3.7883 3.8571 3.8924 3.7984
46 4.0413 4.0192 3.9979 3.8194 3.8914 3.9284 3.8336
47 4.0844 4.0597 4.0358 3.8523 3.9275 3.9662 3.8706
48 4.1299 4.1020 4.0753 3.8869 3.9656 4.0062 3.9094
49 4.1777 4.1465 4.1176 3.9235 4.0058 4.0482 3.9501
50 4.2281 4.1931 4.1595 3.9620 4.0481 4.0926 3.9929
51 4.2813 4.2420 4.2044 4.0028 4.0928 4.1394 4.0377
52 4.3375 4.2933 4.2511 4.0458 4.1401 4.1889 4.0849
53 4.3969 4.3471 4.2997 4.0913 4.1900 4.2412 4.1345
54 4.4596 4.4035 4.3503 4.1395 4.2429 4.2965 4.1867
55 4.5259 4.4627 4.4029 4.1905 4.2988 4.3551 4.2416
56 4.5962 4.5248 4.4574 4.2446 4.3581 4.4172 4.2993
57 4.6707 4.5899 4.5139 4.3020 4.4210 4.4830 4.3602
58 4.7498 4.6582 4.5722 4.3630 4.4878 4.5529 4.4244
59 4.8338 4.7299 4.6323 4.4278 4.5588 4.6273 4.4921
60 4.9231 4.8049 4.6940 4.4968 4.6345 4.7065 4.5633
61 5.0181 4.8834 4.7572 4.5704 4.7150 4.7908 4.6387
62 5.1191 4.9654 4.8215 4.6488 4.8009 4.8808 4.7183
63 5.2267 5.0508 4.8868 4.7325 4.8925 4.9767 4.8020
64 5.3413 5.1395 4.9526 4.8218 4.9903 5.0790 4.8906
65 5.4635 5.2315 5.0186 4.9172 5.0947 5.1883 4.9844
66 5.5940 5.3266 5.0843 5.0193 5.2063 5.3052 5.0830
67 5.7334 5.4244 5.1492 5.1284 5.3258 5.4303 5.1875
68 5.8829 5.5249 5.2127 5.2454 5.4539 5.5646 5.2985
69 6.0434 5.6275 5.2744 5.3708 5.5916 5.7089 5.4156
70 6.2158 5.7317 5.3336 5.5055 5.7396 5.8643 5.5396
71 6.4011 5.8369 5.3897 5.6502 5.8991 6.0319 5.6720
72 6.6002 5.9422 5.4421 5.8058 6.0709 6.2127 5.8244
73 6.8139 6.0467 5.9404 5.9731 6.2561 6.4078 5.9594
74 7.0425 6.1493 5.5342 6.1532 6.4557 6.6183 6.1174
75 7.2868 6.2489 5.5735 6.3471 6.6707 6.8453 6.2830
</TABLE>
Table-PA
P-12511.22
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax deferred
annuity plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12512
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid to AUL by the Contractholder and credited to
a Participant Account.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Elective Deferrals" means, with respect to any taxable year, any Contribution
made under a salary reduction agreement. A Contribution made under a salary
reduction agreement shall not be treated as an Elective Deferral if, under the
salary reduction agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial eligibility
to participate in the agreement, or is made pursuant to a similar arrangement
involving a one-time irrevocable election specified in Regulations issued under
the Code.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
P-12512.rpl-1
<PAGE>
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts include the Equity Investment Account, the Bond Investment Account,
the Money Market Investment Account, and the Managed Investment Account, as the
case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
The AUL American Managed Portfolio of the Mutual Fund is a managed
Portfolio which invests in the same types of investments as the other
Portfolios listed in (a), (b), and (c) above.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
P-12512.2
<PAGE>
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, the Contract, and for whom a Participant Account
is established.
"Participant Account" means an account established under the Contract for a
Participant. Contributions received by AUL shall be credited to Participant
Accounts as AUL is directed in writing.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge, and minus the Participant's outstanding loan balance, if any,
and any expense charges due on such loans.
P-12512.3
<PAGE>
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full contract year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Contractholder or the Participant. Such written
instructions must include the amount to be withdrawn and returned, and
a certification that such Contributions constitute Excess
Contributions and that such returns are permitted by applicable
provisions of the Code and Regulations issued thereunder. It shall not
be the responsibility of AUL to determine the existence or amount of
Excess Contributions or gains or losses thereon, or that returns of
Excess Contributions are permitted by applicable provisions of the
Code and Regulations. In withdrawing and returning the identified
amount, AUL may rely solely on such written instructions and
certification. Such a withdrawal and return of Excess Contributions
shall not be subject to the withdrawal benefits provisions of the
Contract.
(c) When a Contribution is received at AUL's Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(d) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution.
(e) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a
Contribution, that amount shall be credited to the Fixed Interest
Account until such time as an appropriate allocation instruction is
received, except as provided in (d)
P-12512.rpl-4
<PAGE>
above for the initial Contribution. The Participant may change an
allocation instruction with respect to future allocations to his
Participant Account by giving new written allocation instructions to
AUL.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate existing Investment Accounts if,
in its sole discretion, marketing, tax, or investment conditions so
warrant. AUL also reserves the right to provide other Investment
Options under the Contract at any time.
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company or any other form
permitted by law, it may be deregistered in the event such
registration is no longer required, or it may be combined with other
separate accounts of AUL or an affiliate thereof.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant
may direct AUL in writing to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's direction, provided that AUL receives such
direction by 4:00 p.m. E.S.T. on that Valuation Date. If such
direction is received after 4:00 p.m. E.S.T., such transfer shall be
effective as of the close of business on the next succeeding Valuation
Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
P-12512.5
<PAGE>
(d) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last contract anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge on a transfer.
(g) Where a Participant has outstanding loans under the Contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under the Contract.
BENEFITS AND LOANS
Annuity Options:
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge, and minus any
outstanding loan balance of the Participant and any unpaid expense charges on
such loans) of the Participant Account for the purpose of providing a fixed
payment annuity. Upon receipt of such request, AUL is hereby authorized by such
Participant to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date that AUL receives
such written request at its Home Office. Such transferred amounts shall be held
in the Fixed Interest Account until the Participant's Annuity Commencement Date.
The Participant request shall include certification as to the purpose for the
annuity and the election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
P-12512.6
<PAGE>
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the monthly annuity shall be paid to the contingent annuitant named
in the election for as long as the contingent annuitant lives. An
election of this option is automatically cancelled if either the
Participant or the contingent annuitant dies before the Annuity
Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. A lump sum payment shall be payable to the
annuitant. If the total Account Value is less than $2,000, such value
shall not be annuitized under options (a), (b), (c), (d), (e), or (g),
but shall be paid in a lump sum.
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge, and minus any outstanding
loan balance of the Participant and any unpaid expense charges on such loans) of
his Participant Account shall be applied under (b) above as a 10 Year Certain
and Life Annuity. AUL must receive written notification of such Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any annuity option
provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
If the monthly annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis or to pay the
appropriate amount in a single sum.
P-12512.7
<PAGE>
(d) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last contract anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge of not more than $25 on a transfer. AUL
reserves the right to change the maximum limit on such transfer charge
upon delivery of written notice to the Contractholder. Any such change
shall apply only to transfers by an individual who becomes a
Participant on or after the effective date of such change, and shall
apply as long as that individual remains a Participant.
(g) Where a Participant has outstanding loans under the Contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under the Contract.
BENEFITS AND LOANS
Annuity Options:
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge, and minus any
outstanding loan balance of the Participant and any unpaid expense charges on
such loans) of the Participant Account for the purpose of providing a fixed
payment annuity. Upon receipt of such request, AUL is hereby authorized by such
Participant to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date that AUL receives
such written request at its Home Office. Such transferred amounts shall be held
in the Fixed Interest Account until the Participant's Annuity Commencement Date.
The Participant request shall include certification as to the purpose for the
annuity and the election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
P-12512.PA-6
<PAGE>
Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under the Contract and
any unpaid expense charges due on such loans) of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated to receive any
remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown above over the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant died.
If the beneficiary is the Participant's surviving spouse,
the annuity need not begin before December 31 of the
calendar year in which the Participant would have attained
age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
P-12512.8
<PAGE>
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined in (b)
above, except as AUL may be permitted to defer such payment of
amounts derived from the Variable Account in accordance with the
provisions of federal securities laws. Also, AUL reserves the
right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of 6 months after AUL receives
written instructions at its Home Office.
Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account, provided:
(l) the Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C)); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above, and it may rely upon the
representations of the Participant made in the withdrawal
request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
provision (a)(1) above is not met).
P-12512.9
<PAGE>
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the Participant
shall be paid the Withdrawal Value. If the Participant requests that a
specified percentage or dollar amount be paid to the Participant, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge.
Notwithstanding the previous sentence, in any contract year the
Participant may withdraw up to 10% of the Account Value of his
Participant Account determined as of the last contract anniversary
preceding the request for the withdrawal without application of any
Withdrawal Charge, provided that 12 months have elapsed from the date
that the Participant's first Contribution is credited to his
Participant Account by AUL to the date of such withdrawal. Also, where
a Participant has outstanding loans under the Contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account
P-12512.10
<PAGE>
held in the Fixed Interest Account, or (2) $50,000. The Withdrawal
Value of the Participant Account held in the Fixed Interest Account,
which must be at least twice the amount of the outstanding loan
balance, shall serve as security for the loan, and shall continue to
earn interest. Payment by AUL of the loan amount may be delayed for
up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter. The loan
balance shall also be subject to a loan expense charge equal to 2% of
each loan repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
Upon receipt of a repayment, AUL shall deduct the 2% expense charge
from the repayment, and shall apply the balance of such repayment
first to any accrued interest and then to the outstanding loan
principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l02% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances plus an expense charge
equal to 2% of the outstanding loan balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
Contract. All loan balances plus the 2% expense charge shall be paid
or satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted
distribution.
(e) AUL may modify the loan restrictions or limitations stated above, or
may add new restrictions and limitations, to the extent necessary to
comply with Code Section 72(p) or other applicable law, as determined
solely by AUL.
P-12512.11
<PAGE>
held in the Fixed Interest Account, or (2) $50,000. The Withdrawal
Value of the Participant Account held in the Fixed Interest Account,
which must be at least twice the amount of the outstanding loan
balance, shall serve as security for the loan, and shall continue to
earn interest. Payment by AUL of the loan amount may be delayed for
up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar year. The
interest rate charged during a particular calendar year shall be equal
to the Moody's Corporate Bond Yield Average - Monthly Average
Corporates as published by Moody's Investors Service for October of
the previous calendar year. However, no change from a previously
established rate may be made in an amount less than .50% in any
periodic adjustment. If the Moody's rate for any October decreases by
at least .50% from the Moody's rate for the immediately preceding
October, AUL shall declare such reduced interest rate to be in effect
during the next succeeding calendar year. The loan balance shall also
be subject to a loan expense charge equal to 2% of each loan
repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
Upon receipt of a repayment, AUL shall deduct the 2% expense charge
from the repayment, and shall apply the balance of such repayment
first to any accrued interest and then to the outstanding loan
principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l02% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances plus an expense charge
equal to 2% of the outstanding loan balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
Contract. All loan balances plus the 2% expense charge shall be paid
or satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted
distribution.
(e) AUL may modify the loan restrictions or limitations stated above, or
may add new restrictions and limitations, to the extent necessary to
comply with Code Section 72(p) or other applicable law, as determined
solely by AUL.
P-12512.SC-11
<PAGE>
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual charge of .85% and .40%,
respectively, against the average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
P-12512.12
<PAGE>
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in each Investment Account was established at
$1.00 as of April 12, 1990. The value of an Accumulation Unit in each Investment
Account as of any Valuation Period thereafter is equal to the dollar value of
one Accumulation Unit in that Investment Account as of the immediately preceding
Valuation period multiplied by the Net Investment Factor, as defined below, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or transfers
which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
P-12512.NJ-12
<PAGE>
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual charge of .85% and .40%,
respectively, against the average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
P-12512.NJ-13
<PAGE>
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity, except that no such change or amendment shall adversely affect the
benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to and received by AUL at its Home Office before becoming effective.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to any person or
entity when directed to do so in writing by the Participant. Any payment made by
AUL will fully discharge AUL to the extent of such payment.
P-12512.13
<PAGE>
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under the Contract shall be nonforfeitable at all times. No
sum payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
P-12512.14
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
P-12512.OR-15
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
TAX DEFERRED ANNUITY MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the final paragraph of the face page of the
Certificate is deleted, and the following paragraph is substituted in lieu
thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are deleted and the following provisions are
substituted in lieu thereof:
DEFINITIONS
"Contributions" means amounts paid to AUL, including amounts transferred to the
Contract from another AUL group annuity contract, which are credited to a
Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in Addition, Deletion, or Substitution of
Investments below. Amounts allocated to any Investment Account identified in
Schedule A of the Contract shall be invested in the shares of the corresponding
Mutual Fund or Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
1940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn pursuant to Withdrawal Benefits below, where the
percentage varies by the Participant Account Year in which the withdrawal is
made. The first Participant Account Year begins on the date when AUL establishes
a Participant Account and credits the initial Contribution for the Participant,
and ends on the day immediately preceding the next anniversary of such date.
Each Participant Account Year thereafter begins on such an anniversary date and
ends on the day immediately preceding the next succeeding anniversary date. The
Withdrawal Charge percentage is as follows:
<PAGE>
During Withdrawal Charge
Participant Account Years Percentage
1 - 5 8%
6 - 10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election for
that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Option identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so
directs.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office, or (2) the
Valuation Period in which AUL receives, at its Home Office, the data
required to establish the Participant Account, instructions regarding
the amount of that Contribution for the Participant, and Investment
Option election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Participant in a form acceptable to AUL. If no investment allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the investment allocation
instruction applicable to the immediately preceding Contribution. The
Participant may
<PAGE>
change an investment allocation instruction with respect to future
allocations to the applicable Participant Account by giving new
investment allocation instructions to AUL at its Home Office in a form
acceptable to AUL.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitutions for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant
may direct AUL, in a form acceptable to AUL, to transfer the amounts
credited to an Investment Option to any other Investment Option during
the Accumulation Period. Any transfer from an Investment Account shall
be effective as of the close of business on the Valuation Date that
AUL receives the Participant's direction.
(d) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the contract date or the contract anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
contract date or the contract anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that contract year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
<PAGE>
BENEFITS AND LOANS
Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to any
appropriate premium tax charge and minus the Participant's outstanding
loan balance, if any, under the Contract and any unpaid expense
charges due on such loans) of the Participant Account for the purpose
of providing a death benefit. The death benefit shall be paid to the
beneficiary last properly designated in writing to AUL at its Home
Office by the Participant, or, if there is no designated beneficiary
living on the date of the Participant's death, to the Participant's
estate. The Participant's beneficiary may also designate a
beneficiary. If any beneficiary dies while receiving payments and no
beneficiary is designated to receive any remaining payments, such
remaining payments shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in (ii)
below on or before December 31 of the calendar year which
contains the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown above over a period not to exceed the life
or life expectancy of the beneficiary. If the beneficiary is not
the Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
Withdrawal Benefits:
A Participant may direct AUL at its Home Office, in a form acceptable to AUL, to
withdraw all or a portion of the Withdrawal Value of his Participant Account,
subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
<PAGE>
change an investment allocation instruction with respect to future
allocations to the applicable Participant Account by giving new
investment allocation instructions to AUL at its Home Office in a form
acceptable to AUL.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitutions for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant
may direct AUL, in a form acceptable to AUL, to transfer the amounts
credited to an Investment Option to any other Investment Option during
the Accumulation Period. Any transfer from an Investment Account shall
be effective as of the close of business on the Valuation Date that
AUL receives the Participant's direction.
(d) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the contract date or the contract anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
contract date or the contract anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that contract year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge of not more than $25 on a transfer. AUL
reserves the right to change the maximum limit on such transfer charge
upon delivery of written notice to the Contractholder. Any such change
in the maximum limit shall apply only to transfers by an individual
who becomes a Participant on or after the effective date of such
change, and shall apply as long as that individual remains a
Participant.
(PA)
<PAGE>
BENEFITS AND LOANS
Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to any
appropriate premium tax charge and minus the Participant's outstanding
loan balance, if any, under the Contract and any unpaid expense
charges due on such loans) of the Participant Account for the purpose
of providing a death benefit. The death benefit shall be paid to the
beneficiary last properly designated in writing to AUL at its Home
Office by the Participant, or, if there is no designated beneficiary
living on the date of the Participant's death, to the Participant's
estate. The Participant's beneficiary may also designate a
beneficiary. If any beneficiary dies while receiving payments and no
beneficiary is designated to receive any remaining payments, such
remaining payments shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in (ii)
below on or before December 31 of the calendar year which
contains the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown above over a period not to exceed the life
or life expectancy of the beneficiary. If the beneficiary is not
the Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
Withdrawal Benefits:
A Participant may direct AUL at its Home Office, in a form acceptable to AUL, to
withdraw all or a portion of the Withdrawal Value of his Participant Account,
subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(PA)
<PAGE>
(d) Withdrawal of any amount from the Contract which is transferred
directly by AUL pursuant to Participant instructions to another
tax-deferred annuity funding vehicle under applicable Internal Revenue
Service rules and regulations shall be subject to application of the
Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specified the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above, and it may rely upon the
representations of the Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because (c)
above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to this Section shall be determined, as of the close
of business on the Valuation Date that AUL receives a proper
withdrawal request, in a form acceptable to AUL, at its Home Office.
If it is necessary to withdraw the entire Account Value of a
Participant Account to make a lump-sum cash payment, the amount paid
shall equal the Withdrawal Value, minus any appropriate premium tax
charge. If it is not necessary to withdraw the entire Account Value to
make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any appropriate
premium tax charge. Notwithstanding the previous sentence, in the
first contract year in which a Participant Account is established, the
Participant may withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined
as of the later of the contract date or the contract anniversary
immediately preceding the request for the withdrawal) plus
Contributions made during that contract year, without application of
the Withdrawal Charge. In the next succeeding contract year, the
Participant may also withdraw from that Participant Account up to 10%
of the sum of the Account Value of that Participant Account
(determined as of the as of the contract anniversary immediately
preceding the request for the withdrawal) plus Contributions made
during that contract year, without application of the Withdrawal
Charge. In any subsequent contract year, the Participant may withdraw
from that Participant Account up to 10% of the Account Value of that
Participant Account (determined as of the contract anniversary
immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge. Also, where a Participant has
outstanding loans under the Contract, a partial withdrawal by a
Participant from the Fixed Interest Account shall be permitted only to
the extent that the remaining Withdrawal Value of the Participant held
in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under the Contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from
the appropriate Valuation Date as determined in (h) above, except as
AUL may be permitted to defer such payment of amounts withdrawn from
the Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because (c) above is not met) which have been
on deposit for the longest period of time, as well as the interest
credited thereon, shall be withdrawn first.
<PAGE>
VALUATIONS
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the later of (1) the end of the Valuation Period on which such
amounts are received by AUL at its Home Office, or (2) the end of the Valuation
Period on which the data required to establish the Participant Account and
allocate such amounts to the Participant Account and to Investment Options are
received by AUL at its Home Office. However, if the initial Contribution for a
Participant is allocated pursuant to (d)(1) of Contributions above on the next
succeeding Valuation Period, the unit value as of the end of that Valuation
Period shall be used. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
<PAGE>
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as provided above.
The Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee
and certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge per contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Whenever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of 1940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of 1940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
<PAGE>
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholder,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
<PAGE>
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as provided above.
The Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee
and certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge per contract year quarter equal to the
lesser of $3.00 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Whenever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of 1940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of 1940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(G&W)
<PAGE>
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholder,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
(G&W)
<PAGE>
AMENDMENT
TO THE
MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Section 6.1 and by substituting the following Section
6.1 in lieu thereof:
6.1 Mortality Risk and Expense Risk Charges; Annual Variable Investment
Plus Factors: AUL shall deduct a daily mortality risk charge and a daily expense
risk charge equal to the daily equivalent of an annual combined charge of 1.25%
against the average daily net assets of each Investment Account. These charges
shall be reflected in the Net Investment Factor as provided in Section 5.4(c).
AUL shall multiply the portions (as delineated in the table below) of the total
month-end Account Value in the Variable Account of all Participants in the
contract by the monthly equivalent of the corresponding Annual Variable
Investment Plus Factors appearing in the table below. These products shall be
added together, and the sum shall be divided by the total month-end Account
Value in the Variable Account of all Participants in the contract. This
percentage shall be multiplied by the month-end Account Value of each
Participant in each Investment Account. The resulting amount for each Investment
Account shall be added to the Participant's Account Value for that Investment
Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
CONTRACTHOLDER AUL
By________________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title ____________________________ President, & Chief Executive Officer
Date _____________________________
Attest
By: /s/ William R. Brown
Secretary
P-XXXXX.AMD.DAC
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective January 1, 1993:
If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T Q&A-2,
the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as defined in Q&A-1
of that Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
And by adding the following provision, effective January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-12511.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year
and each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First Contract
Anniversary.
1.9 "Contributions" means amounts paid to AUL, including amounts
transferred to this contract from another AUL group annuity contract, which are
credited to a Participant Account maintained hereunder.
1.16 "Investment Account" means each subaccount of the Variable Account
which is maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts allocated
to any Investment Account identified in Schedule A of the contract shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
<PAGE>
1.18 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL, as listed in Schedule A.
1.21 "Portfolio" (also known as a "Mutual Fund Portfolio") means a
portfolio established within a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.25 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the Participant,
and ends on the day immediately preceding the next anniversary of such date.
Each Participant Account Year thereafter begins on such an anniversary date and
ends on the day immediately preceding the next succeeding anniversary date. The
Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.2 How Contributions Are Handled:
(b) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election for
that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the
Participant, and an
<PAGE>
Investment Option election, AUL shall then transfer such amounts
credited to the AUL American Money Market Investment Account or
other Investment Option identified in the Participant's annuity
enrollment form, plus gains or minus losses thereon, to another
Investment Option, if such election so directs.
<PAGE>
(c) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Participant in a form acceptable to AUL. If no investment allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the investment allocation
instruction applicable to the immediately preceding Contribution. The
Participant may change an investment allocation instruction with
respect to future allocations to the applicable Participant Account by
giving new investment allocation instructions to AUL at its Home
Office in a form acceptable to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment, or if further investment in any or
all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
contract. Where required under applicable law, AUL will not substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory
<PAGE>
approvals, AUL reserves the right to transfer assets from any
Investment Account to another separate account of AUL or Investment
Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL, in a form acceptable to AUL, to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's direction.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to Section
6.5, and minus the Participant's outstanding loan balance, if any,
under this contract and any unpaid expense charges due on such loans)
of the Participant Account for the purpose of providing a death
benefit. The death benefit shall be paid to the beneficiary last
properly designated in writing to AUL at its Home Office by the
Participant, or, if there is no designated beneficiary living on the
date of the Participant's death, to the Participant's estate. The
Participant's beneficiary may also designate a beneficiary. If any
beneficiary dies while receiving payments and no beneficiary is
designated to receive any remaining payments, such remaining payments
shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in
(ii) below on or before December 31 of the calendar year
which contains the fifth anniversary of the date of the
Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of up to 6 months
after AUL receives proper instructions at its Home Office.
4.8 Withdrawal Benefits: A Participant may direct AUL at its Home Office,
in a form acceptable to AUL, to withdraw all or a portion of the Withdrawal
Value of his Participant Account, subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Participant instructions to another
tax-deferred annuity funding vehicle under applicable Internal Revenue
Service rules and regulations shall be subject to application of the
Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above, and it may rely upon the
representations of the Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
Subsection (c) above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to this Section shall be determined, as of the close
of business on the Valuation Date that AUL receives a proper
withdrawal request, in a form acceptable to AUL, at its Home Office.
If it is necessary to withdraw the entire Account Value of a
Participant Account to make a lump-sum cash payment, the amount paid
shall equal the Withdrawal Value, minus any Section 6.5 charges. If it
is not necessary to withdraw the entire Account Value to make such
payment, AUL shall reduce the Account Value of the Participant Account
by an amount sufficient to make the cash payment requested and to
cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous sentence, in the first Contract Year in
which a Participant Account is established, the Participant may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Participant may also withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Participant may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge. Also, where
a Participant has outstanding loans under this contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
<PAGE>
(i) AUL shall pay any cash lump sum to the Participant within 7 days from
the appropriate Valuation Date as determined in Subsection (h) above,
except as AUL may be permitted to defer such payment of amounts
withdrawn from the Variable Account in accordance with appropriate
provisions of the federal securities laws. AUL reserves the right to
defer the payment of amounts withdrawn from the Fixed Interest Account
for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because Subsection (c) above is not met) which
have been on deposit for the longest period of time, as well as the
interest credited thereon, shall be withdrawn first.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in the
prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as such
prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant Account
in the form of Accumulation Units on the basis of the value of such units in
that Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end of
the Valuation Period on which the data required to establish the Participant
Account and allocate such amounts to the Participant Account and to Investment
Options are received by AUL at its Home Office. However, if the initial
Contribution for a Participant is allocated pursuant to Section 3.2(b)(1) on the
next succeeding Valuation Period, the unit value as of the end of that Valuation
Period shall be used. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account available under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment
<PAGE>
Account as of the immediately preceding Valuation Period multiplied by the Net
Investment Factor, as defined in Section 5.4, for that Investment Account for
the current Valuation Period. The value of an Accumulation Unit for each
Investment Account shall be determined for each Valuation Period before giving
effect to any additions, withdrawals, or transfers. After such determination,
the additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual
Fund Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or any
extraordinary expenses, as described in the current prospectus for that Mutual
Fund or Mutual Fund Portfolio as it may be amended or supplemented from time to
time. These expenses may vary from year to year. The net asset value of each
Mutual Fund or Mutual Fund Portfolio share reflects such investment advisory fee
and other expenses which are deducted from the assets of such Mutual Fund or
Mutual Fund Portfolio.
<PAGE>
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc.
8.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Mutual Fund or Mutual Fund Portfolio, nor any of the other provisions
and conditions of this contract.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to and
received by AUL at its Home Office before becoming effective.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
<PAGE>
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund or Mutual Fund Portfolio shares as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting
of Mutual Fund or Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER AUL
By ______________________________ By ________________________________
Title______________________________ Title _____________________________
Date ______________________________ Date _____________________________
(existing business)
<PAGE>
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund or Mutual Fund Portfolio shares as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By___________________________________
Title _______________________________
Date ________________________________
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ----------------- ---------------------------------------------
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA 73,467 (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
__________________________________
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as of the above Effective Date by deleting the former Schedule A,
if any, and by substituting the following Schedule A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
CONTRACTHOLDER AUL
By __________________________________ By _________________________________________
Title _______________________________ Title ______________________________________
Date ________________________________ Date _______________________________________
</TABLE>
P-12511.A
- --------------------------------------------------------------------------------
EXHIBIT 4.2
TDA EMPLOYER SPONSORED CONTRACT, FORM P-12621
- --------------------------------------------------------------------------------
CONTRACT NUMBER XX,XXX
CONTRACTHOLDER ABC HOSPITAL
DATE OF ISSUE JANUARY 1, 1994
CONTRACT DATE JANUARY 1, 1994
FIRST CONTRACT ANNIVERSARY JANUARY 1, 1994
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
Employer-Sponsored TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
p-12621
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
3.6--------Reallocation of Participant Accounts
3.7--------Transferred Amounts
ARTICLE 4 BENEFITS
4.1--------Election of Benefit Options
4.2--------Benefit Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
P-12621.1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 TERMINATION OF CONTRACT
8.1--------Right of Contractholder to Terminate
8.2--------Payment Due to Termination by Contractholder
8.3--------Right of AUL to Terminate
8.4--------Payment Due to Termination by AUL
ARTICLE 9 MISCELLANEOUS
9.1--------Ownership
9.2--------AUL's Annual Statement
9.3--------Certification of Plan Status
9.4--------Essential Data
9.5--------Reliance
9.6--------Misstatement of Essential Data
9.7--------Annuity Certificates
9.8--------Election, Notice, or Direction Requirements
9.9--------Quarterly Statement of Account Value
9.10-------Conformity with State Laws
9.11-------Reference to Federal Laws
9.12-------Sex and Number
9.13-------Facility of Payment
9.14-------Insulation from Liability
9.15-------Voting
9.16-------Acceptance of New Participants or Contributions
9.17-------Nonforfeitability and Nontransferability
9.18-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12621.2
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which an
annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the
applicable sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same
day of the same month as the day and month which is stated on the face page
of this contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL pursuant to the Contractholder's
Code Section 403(b) Plan and credited to a Participant Account hereunder.
The following types of Contributions shall be credited to individual
subaccounts under the Participant Accounts:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement shall not be
treated as an Elective Deferral if, under the salary reduction
agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial
eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement, or is made pursuant to a similar
arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code.
P-12621.3
<PAGE>
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
1.10 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time-to-time and as
credited to each interest pocket maintained within the Fixed Interest
Account. The Current Rates of Interest shall always be equal to or greater
than the Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable
provisions of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that fund of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148.
1.15 "Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
P-12621.4
<PAGE>
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.16 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940.
1.18 "Participant" means any person reported to AUL by the Contractholder as
eligible for, and as participating in, the Plan, and for whom a Participant
Account is established.
1.19 "Participant Account" means an account established under this contract for
a Participant. Within each Participant Account, the Contractholder can
direct the establishment of one or more subaccounts as made available by
AUL. Contributions received by AUL shall be credited to Participant
Accounts and their subaccounts as AUL is directed in writing by the
Contractholder.
1.20 "Plan" means the Plan Sponsor's Code Section 403(b) plan as it exists on
the Contract Date, and any subsequent amendment to it.
1.21 "Plan Sponsor" means ___________________.
1.22 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
1.23 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.24 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.25 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
P-12621.5
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Sections 4.8 or 8.2, where the
percentage varies by the number of full years measured from the date a
Participant Account is established to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.27 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
P-12621.6
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. AUL is not a party
to, nor bound by, a Plan, trust, custodial agreement, or other agreement,
or any amendment or modification to any of the same. AUL is not a fiduciary
under this contract or under any such Plan, trust, custodial agreement, or
other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-12621.7
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
Section 4.8.
3.2 How Contributions Are Handled:
(a) Contributions received at the Home Office shall be identified by the
Contractholder as Elective Deferrals, Employee Mandatory
Contributions, or Employer Contributions, and shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
Contractholder unless the Contractholder consents to AUL retaining the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial Contribution
to the Money Market Investment Account, and shall transfer such
amounts credited to the Money Market Investment Account according to
the applicable allocation instructions upon receipt of the data
required to establish the Participant Account and allocation
instructions.
P-12621.8
<PAGE>
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Contractholder or by that person designated
in writing to AUL by the Contractholder. If no allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the allocation instruction applicable
to the immediately preceding Contribution. The Contractholder or such
designated person may change an allocation instruction with respect to
future allocations to the applicable Participant Account by giving new
written allocation instructions to AUL at its Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
P-12621.9
<PAGE>
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated in writing to AUL by the Contractholder, may direct
AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period.
Any transfer from an Investment Account shall be effective as of the
close of business on the Valuation Date that AUL receives such written
direction, provided that AUL receives such direction by 4:00 p.m.
E.S.T. on that Valuation Date. If such direction is received after
4:00 p.m. E.S.T., such transfer shall be effective as of the close of
business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after
AUL receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) A transfer with regard to the Participant Account's share of any
Investment Option shall not be made in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a
transfer reduces the Participant Account's remaining share of an
Investment Option to less than $500, the entire remaining share shall
also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
P-12621.10
<PAGE>
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
3.6 Reallocation of Participant Accounts: The Contractholder, in accordance
with the provisions of the Plan, may direct AUL to reallocate all or a
portion of the Account Value of any Participant Account among other
Participant Accounts. The Contractholder shall certify that such
reallocation is in accordance with Plan provisions.
3.7 Transferred Amounts: If so permitted under the terms of the Plan, AUL shall
accept amounts transferred from other contracts which are attributable to
contributions made pursuant to Code Section 403(b). Such transferred
amounts shall be credited as directed by the Contractholder to a separate
rollover subaccount established under the appropriate Participant Accounts.
P-12621.11
<PAGE>
ARTICLE 4 - BENEFITS
4.1 Election of Benefit Options: At the written request of the Contractholder,
AUL shall apply all or a portion of the Account Value (subject to Section
6.5) of a Participant Account for the purpose of providing a fixed payment
annuity under the Plan. Upon receipt of a request for an annuity, AUL is
hereby authorized by the Contractholder to value and transfer the
Participant Account's share of the Variable Account to the Fixed Interest
Account as of the date that AUL receives such written request at its Home
Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The
Contractholder request shall include certification as to the purpose for
the benefit and the election of one of the following benefit options. The
amount of any annuity shall be computed from the Table of Immediate
Annuities then included in this contract, except as provided under Section
4.4.
4.2 Benefit Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. A lump sum payment shall be payable to the
annuitant. If the total Account Value is less than $2,000, such value
shall not be annuitized under options (a), (b), (c), (d), (e), or (g)
of this Section, but shall be paid in a lump sum.
P-12621.12
<PAGE>
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no benefit option election for a Participant has been received by AUL at
its Home Office at least 30 days prior to the Annuity Commencement Date,
the Account Value (subject to Section 6.5) of his Participant Account may
be applied under (b) above as a 10 Year Certain and Life Annuity if the
Participant is not married, or may be applied under (c) above as a 50%
Survivorship Annuity if the Participant is married. AUL must receive from
the Contractholder written notification of such Annuity Commencement Date,
written designation of the contingent annuitant or beneficiary, and any
election forms needed in connection with any benefit option provided in
this Section.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which would
extend for a certain period beyond the life expectancy of such Participant
or the joint life expectancy of such Participant and such contingent
annuitant as determined on the Annuity Commencement Date.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.5 Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
4.7 Death Benefits:
(a) Notwithstanding the provisions of Article 8, upon receipt of written
instructions from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period at its Home Office, AUL shall apply the Account
Value of the Participant Account for the purpose of providing a death
benefit under the Plan. The death benefit shall be paid to the
Contractholder or to whomever the Contractholder directs.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written
P-12621.13
<PAGE>
Contractholder instructions at its Home Office, or (2) the Valuation
Date that AUL receives such due proof of death at its Home Office,
provided that such written instructions or due proof of death received
on the later of (1) or (2) above are (is) received by 4:00 p.m. E.S.T.
If the written instructions or due proof of death received on the
later of (1) or (2) above are (is) received after 4:00 p.m. E.S.T.,
such valuation shall be made as of the close of business on the next
succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Benefit Options shown in Section 4.2 over the life or
life expectancy of the beneficiary. If the beneficiary is
not the Participant's surviving spouse, the annuity must
begin on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's
surviving spouse, the annuity need not begin before December
31 of the calendar year in which the Participant would have
attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Benefit Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) At any time prior to termination of the contract pursuant to the
provisions of Article 8, except as stated below, the Contractholder,
upon submitting a proper written request to AUL at its Home Office,
may direct AUL to withdraw all or a portion of the Account Value
(subject to the Withdrawal Charge) of a Participant Account for the
purpose of providing Plan benefits, other than Plan termination
benefits, provided:
(l) that any distribution to a Participant shall not occur until the
Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
P-12621.14
<PAGE>
(iii) become totally disabled (as defined by the Plan); or
(iv) experienced a hardship (as defined by the Plan); or
(2) that the amount being withdrawn is attributable to Contributions
made other than pursuant to a salary reduction agreement (within
the meaning of Code Section 402(g)(3)(C)); or
(3) that the amount being withdrawn is attributable to amounts held
as of December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to
the purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of a
particular Plan. AUL may rely solely upon the representations of
the Contractholder made in the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Contractholder or party named by the Contractholder
shall be paid the Withdrawal Value. If the Contractholder requests
that a specified percentage or dollar amount be paid from a
Participant Account, AUL shall withdraw from the Participant Account
an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Contractholder may withdraw up to 10% of the Account
Value of a Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal.
P-12621.15
<PAGE>
(e) AUL shall pay such amount in a cash lump sum to the Contractholder or
as otherwise directed by the Contractholder. Such cash lump sum will
be paid within 7 days from the date that AUL receives the withdrawal
request at its Home Office, except as AUL may be permitted to defer
such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws.
AUL reserves the right to defer the payment of amounts withdrawn from
the Fixed Interest Account for a period of up to 6 months after AUL
receives the withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
P-12621.16
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as provided
in the prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant
Account in the form of Accumulation Units on the basis of the value of such
units in that Investment Account as of the end of the Valuation Period on
which such amounts are received by AUL at its Home Office. Such crediting
shall be made separately for amounts allocated to each Investment Account.
The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value
of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in
that Investment Account as of the immediately preceding Valuation Period
multiplied by the Net Investment Factor, as defined in Section 5.4, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or
transfers which are effective as of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
P-12621.17
<PAGE>
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-12621.18
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn pursuant to
Sections 4.1, 4.7, 4.8, 8.2, or 8.4, the administrative charge attributable
to the period of time which has elapsed since the first day of the Contract
Quarter in which such application or withdrawal of funds is made shall not
be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
P-12621.19
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.26 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.26 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $15 per Contract
Quarter until the year 2001. Any increase in the administrative charge made
by AUL for any Contract Quarter beginning after December 31, 2000 shall be
limited to an amount which is designed to reimburse AUL for the expenses
associated with the administration of the contract and the operation of the
Variable Account. Any such increase shall not be anticipated to be a source
of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 9.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-12621.20
<PAGE>
ARTICLE 8 - TERMINATION OF CONTRACT
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office, provided that AUL
receives such notice by 4:00 p.m. E.S.T. on that Valuation Date. If such
notice is received after 4:00 p.m. E.S.T., such notice shall be effective
as of the close of business on the next succeeding Valuation Date. This
date shall be the effective date of termination. This contract shall also
terminate automatically as of the date that there are no Participant
Accounts maintained hereunder.
8.2 Payment Due to Termination by Contractholder:
(a) As of the effective date of termination of this contract by the
Contractholder pursuant to Section 8.1, the Contractholder may,
together with the Plan Sponsor, elect to have a payment or payments
made pursuant to (b) below to whomever the Contractholder directs.
Such payment or payments shall be in full settlement of this contract
and in lieu of any other payment under its terms. In order for such an
election to be effective, it must include the Contractholder's and the
Plan Sponsor's agreement to indemnify and hold AUL harmless from any
and all losses, claims, or demands that may later arise or be asserted
against AUL in connection with the making of such a payment or
payments and, if these funds are to be transferred to a substitute
funding medium, such election must contain the Contractholder's
certification that such substitute funding medium meets the
requirements of Code Section 403(b) and the Regulations issued
thereunder. This Contractholder's and Plan Sponsor's agreement must be
received by AUL at its Home Office prior to payment of any termination
benefits provided by this Section 8.2.
(b) Upon termination of this contract by the Contractholder:
(1) A single sum equal to that portion of the aggregate Withdrawal
Value of all Participant Accounts consisting of all of the
Accumulation Units of each Investment Account credited to such
Participant Accounts shall be calculated as of the close of
business on the effective date of termination and shall be
payable within 7 days from the effective date of termination,
except as AUL may be permitted to defer such payment in
accordance with appropriate provisions of the federal securities
laws.
(2) In addition to the amount payable pursuant to Section 8.2(b)(1)
above, commencing on the first Contract Anniversary immediately
succeeding the effective date of termination, a portion of each
Participant Account shall be paid in annual installments as
follows:
(i) As of the first Contract Anniversary immediately succeeding
the effective date of termination, one-seventh of that
portion of the Withdrawal Value of each Participant Account
consisting of the net dollar balance in the Fixed Interest
Account credited to each such Participant Account shall be
calculated and shall be payable.
P-12621.21
<PAGE>
(ii) As of the second Contract Anniversary succeeding the
effective date of termination, one-sixth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(iii) As of the third Contract Anniversary succeeding the
effective date of termination, one-fifth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(iv) As of the fourth Contract Anniversary succeeding the
effective date of termination, one-fourth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(v) As of the fifth Contract Anniversary succeeding the
effective date of termination, one-third of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(vi) As of the sixth Contract Anniversary succeeding the
effective date of termination, one-half of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(vii) As of the seventh Contract Anniversary succeeding the
effective date of termination, the entire remaining portion
of the Withdrawal Value of each Participant Account
consisting of the net dollar balance in the Fixed Interest
Account credited to each such Participant Account shall be
calculated and shall be payable.
The Current Rates of Interest being credited to other contracts of this
class shall be credited from the effective date of termination until the
final payment is made under this subsection (b)(2).
Until such time as the above-referenced election is implemented, the terms
of the contract shall remain applicable, except that AUL shall have the
right to refuse to accept further Contributions.
8.3 Right of AUL to Terminate: AUL has the right, subject to applicable state
law, to terminate any Participant Account established under this contract
at any time during the Contract Year if the Account Value of such
Participant Account is less than $200 for the first Contract Year in which
a Contribution is made for the Participant, and $400 for any subsequent
Contract Year, and at least
P-12621.22
<PAGE>
6 months have elapsed since the last previous Contribution to the contract.
If AUL elects to terminate a Participant Account in such event, such
termination shall be effective on the date
6 months following the date that AUL gives notice to the Contractholder and
the Participant that the Participant Account is to be terminated, provided
any Contributions made during such 6-month period are insufficient to bring
such Account Value up to the minimum level.
8.4 Payment Due to Termination by AUL: As of the effective date of termination
of a Participant Account by AUL pursuant to Section 8.3, AUL may elect to
have a payment made as set out below to the Contractholder. Any such
payment shall be in full settlement of the Participant Account under this
contract and in lieu of any other payment under its terms.
Upon termination of a Participant Account pursuant to Section 8.3, a single
sum equal to the Account Value of the Participant Account shall be
calculated as of the close of business on the effective date of termination
and shall be payable within 7 days from such effective date of termination.
P-12621.23
<PAGE>
ARTICLE 9 - MISCELLANEOUS
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Portfolio, nor any of the other provisions and
conditions of this contract.
9.3 Certification of Plan Status: The Contractholder certifies, upon acceptance
of this contract, that, in the Contractholder's opinion, the Plan meets the
requirements of Code Section 403(b). AUL does not make any guarantee
regarding the federal, state, or local tax status of this contract, any
Participant Account established hereunder, or any transaction involving
this contract.
9.4 Essential Data: The Contractholder shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity
or other benefit in each instance. The Contractholder shall report to AUL
any person for whom a payment becomes due under the Plan and the nature and
amount of such payment before the date on which such payment becomes due or
as soon thereafter as is practicable.
9.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL
by the Contractholder as acting on its behalf, or by a Participant. AUL
need not inquire as to the accuracy or completeness thereof.
9.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
9.7 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to and received by AUL at its Home Office
before becoming effective, unless the Contractholder or Participant is
otherwise directed by AUL.
9.9 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
P-12621.24
<PAGE>
9.10 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
9.11 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
9.12 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
9.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to the Contractholder or to any person or entity when
directed to do so in writing by the Contractholder. Any payment made by AUL
will fully discharge AUL to the extent of such payment.
9.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
9.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund shares of a particular Portfolio as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are
P-12621.25
<PAGE>
received in a timely manner for all contracts and Participant Accounts
participating in that Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
9.16 Acceptance of New Participants or Contributions. AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time.
9.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value of
the vested portion (as determined pursuant to the Plan) of a Participant
Account under this contract shall be nonforfeitable at all times. No sum
payable under this contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person
or entity other than AUL. In addition, to the extent permitted by law, no
such sum shall in any way be subject to legal process requiring the payment
of any claim against the payee.
9.18 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the
third Thursday in February of each year at the hour of ten o'clock A.M.
Elections for directors shall be held at such annual meeting.
P-12621.26
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12621.27
<PAGE>
CONTRACT NUMBER
CONTRACTHOLDER
PARTICIPANT'S NAME
SOCIAL SECURITY NUMBER
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax deferred
annuity Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12622
<PAGE>
CONTRACT NUMBER
CONTRACTHOLDER
PARTICIPANT'S NAME
SOCIAL SECURITY NUMBER
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax deferred
annuity Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the con-
tract for any reason within ten days after receiving it. If returned, the
contract shall be considered void from the beginning and any Contributions shall
be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12622 WV
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid to AUL pursuant to the Contractholder's Code
Section 403(b) Plan and credited to a Participant Account. The following types
of Contributions are credited to individual subaccounts under the Participant
Account:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement shall not be
treated as an Elective Deferral if, under the salary reduction
agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial
eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
P-12622-1
<PAGE>
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts include the Equity Investment Account, the Bond Investment Account,
the Money Market Investment Account, and the Managed Investment Account, as the
case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
P-12622-2
<PAGE>
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, the Plan, and for whom a Participant Account is
established.
"Participant Account" means an account established under the Contract for a
Participant. Within each Participant Account, the Contractholder can direct the
establishment of one or more subaccounts as made available by AUL. Contributions
received by AUL shall be credited to Participant Accounts and their subaccounts
as AUL is directed in writing by the Contractholder.
"Plan" means the Plan Sponsor's Code Section 403(b) plan.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
P-12622-3
<PAGE>
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full contract year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
the withdrawal benefits provisions of the Contract.
(c) Contributions received at AUL's Home Office shall be identified by the
Contractholder as Elective Deferrals, Employee Mandatory
Contributions, or Employer Contributions, and shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(d) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
Contractholder unless the Contractholder consents to AUL retaining the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial Contribution
to the Money Market Investment Account, and shall transfer such
amounts credited to the Money Market Investment
P-12622-4
<PAGE>
Account according to the applicable allocation instructions upon
receipt of the data required to establish the Participant Account and
allocation instructions.
(e) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Contractholder or by that person designated
in writing to AUL by the Contractholder. If no allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the allocation instruction applicable
to the immediately preceding Contribution. The Contractholder or such
designated person may change an allocation instruction with respect to
future allocations to the applicable Participant Account by giving new
written allocation instructions to AUL at its Home Office.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the Contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the Contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant.
P-12622-5
<PAGE>
AUL also reserves the right to provide other Investment Options under
the Contract at any time. Subject to any required regulatory
approvals, AUL reserves the right to transfer assets from any
Investment Account to another separate account of AUL or Investment
Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in the Contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
Transfers:
(a) Subject to the limitations of (d) through (f) below, the
Contractholder, or that person designated in writing to AUL by the
Contractholder, may direct AUL in writing to transfer the amounts
credited to an Investment Option to any other Investment Option during
the Accumulation Period. Any transfer from an Investment Account shall
be effective as of the close of business on the Valuation Date that
AUL receives such written direction, provided that AUL receives such
direction by 4:00 p.m. E.S.T. on that Valuation Date. If such
direction is received after 4:00 p.m. E.S.T., such transfer shall be
effective as of the close of business on the next succeeding Valuation
Date.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after
AUL receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis, so
that amounts credited to the Participant Account's share of the Fixed
Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be transferred
first.
(d) A transfer with regard to the Participant Account's share of any
Investment Option shall not be made in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a
transfer reduces the Participant Account's remaining share of an
Investment Option to less than $500, the entire remaining share shall
also be transferred.
P-12622-6
<PAGE>
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last contract anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge on a transfer.
(g) The Contractholder, in accordance with the Plan, may direct AUL to
reallocate all or a portion of the Account Value of any Participant
Account among other Participant Accounts. The Contractholder shall
certify that such reallocation is in accordance with the Plan.
(h) If so permitted in the Plan, AUL shall accept amounts transferred from
other contracts which are attributable to contributions made pursuant
to Code Section 403(b). Such transferred amounts shall be credited as
directed by the Contractholder to a separate rollover subaccount
established under the appropriate Participant Accounts.
BENEFITS
Benefit Options:
At the written request of the Contractholder, AUL shall apply all or a portion
of the Account Value (subject to any appropriate premium tax or similar tax
charge) of a Participant Account for the purpose of providing a fixed payment
annuity under the Plan. Upon receipt of a request for an annuity, AUL is hereby
authorized by the Contractholder to value and transfer the Participant Account's
share of the Variable Account to the Fixed Interest Account as of the date that
AUL receives such written request at its Home Office. Such transferred amounts
shall be held in the Fixed Interest Account until the Participant's Annuity
Commencement Date. The Contractholder request shall include certification as to
the purpose for the benefit and the election of one of the following benefit
options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of
P-12622-7
<PAGE>
the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically
cancelled if either the Participant or the contingent annuitant dies
before the Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. A lump sum payment shall be payable to the
annuitant. If the total Account Value is less than $2,000, such value
shall not be annuitized under options (a), (b), (c), (d), (e), or (g),
but shall be paid in a lump sum.
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If no benefit option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge) of his Participant Account
may be applied under (b) above as a 10 Year Certain and Life Annuity if the
Participant is not married, or may be applied under (c) above as a 50%
Survivorship Annuity if the Participant is married. AUL must receive from the
Contractholder written notification of such Annuity Commencement Date, written
designation of the contingent annuitant or beneficiary, and any election forms
needed in connection with any benefit option provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
If the elected option produces a monthly benefit amount that is less than AUL's
then current established minimum, AUL reserves the right to make payments on a
less frequent basis or to pay the appropriate amount in a single sum.
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<PAGE>
Death Benefits:
(a) Notwithstanding the Contract termination provisions of the Contract,
upon receipt of written instructions from the Contractholder and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall
apply the Account Value of the Participant Account for the purpose of
providing a death benefit under the Plan. The death benefit shall be
paid to the Contractholder or to whomever the Contractholder directs.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written Contractholder
instructions at its Home Office, or (2) the Valuation Date that AUL
receives such due proof of death at its Home Office, provided that
such written instructions or due proof of death received on the later
of (1) or (2) above are(is) received by 4:00 p.m. E.S.T. If the
written instructions or due proof of death received on the later of
(1) or (2) above are(is) received after 4:00 p.m. E.S.T., such
valuation shall be made as of the close of business on the next
succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on or
before December 31 of the calendar year which contains the fifth
anniversary of the date of the Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Benefit Options shown above over the life or life expectancy of
the beneficiary. If the beneficiary is not the Participant's
surviving spouse, the annuity must begin on or before December 31
of the calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin before
December 31 of the calendar year in which the Participant would
have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Benefit Option selected shall be paid at
least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be made
within 7 days of the date of valuation, as determined in (b) above,
except as AUL may be permitted to defer such payment of amounts
derived from the Variable Account in accordance with the provisions of
federal securities laws. Also, AUL reserves the right to defer the
payment of amounts withdrawn from the Fixed Interest Account for a
period of 6 months after AUL receives written instructions at its
Home Office.
P-12622-9
<PAGE>
Withdrawal Benefits:
(a) At any time prior to Contract termination, except as stated below, the
Contractholder, upon submitting a proper written request to AUL at its
Home Office, may direct AUL to withdraw all or a portion of the
Account Value (subject to the Withdrawal Charge) of a Participant
Account for the purpose of providing Plan benefits, other than Plan
termination benefits, provided:
(l) that any distribution to a Participant shall not occur until the
Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Plan); or
(iv) experienced a hardship (as defined by the Plan); or
(2) that the amount being withdrawn is attributable to Contributions
made other than pursuant to a salary reduction agreement (within
the meaning of Code Section 402(g)(3)(C)); or
(3) that the amount being withdrawn is attributable to amounts held
as of December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to
the purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of the Plan.
AUL may rely solely upon the representations of the
Contractholder made in the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
P-12622-10
<PAGE>
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the
Contractholder or party named by the Contractholder shall be paid the
Withdrawal Value. If the Contractholder requests that a specified
percentage or dollar amount be paid from a Participant Account, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge. Notwith-
standing the previous sentence, in any contract year the Contract-
holder may withdraw up to 10% of the Account Value of a Participant
Account determined as of the last contract anniversary preceding the
request for the withdrawal without application of any Withdrawal
Charge, provided that 12 months have elapsed from the date that the
Participant's first Contribution is credited to his Participant
Account by AUL to the date of such withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Contractholder or
as otherwise directed by the Contractholder. Such cash lump sum will
be paid within 7 days from the date that AUL receives the withdrawal
request at its Home Office, except as AUL may be permitted to defer
such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws.
AUL reserves the right to defer the payment of amounts withdrawn from
the Fixed Interest Account for a period of up to 6 months after AUL
receives the withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such
P-12622-11
<PAGE>
Valuation Date by the dollar value of one Accumulation Unit in that Investment
Account as of such Valuation Date. The value of the Participant Account's share
of any Investment Account as of any date other than a Valuation Date is equal to
the value of its share of that Investment Account as of the immediately
preceding Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of termination, the Contractholder, together with the
P-12622-12
<PAGE>
Valuation Date by the dollar value of one Accumulation Unit in that Investment
Account as of such Valuation Date. The value of the Participant Account's share
of any Investment Account as of any date other than a Valuation Date is equal to
the value of its share of that Investment Account as of the immediately
preceding Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account. However, in no event will any portion of the annual charge
for a Contract year attributable to the Fixed Interest Account subaccount of the
Participant Account exceed the amount of the Contributions allocated to such
Fixed Interest Account subaccount for the Participant during such Contract year
plus interest earned during such Contract year on amounts held in such Fixed
Interest Account subaccount. If the entire balance of a Participant Account is
applied to provide an annuity, death, withdrawal, or termination benefit, the
administrative charge attributable to the period of time which has elapsed since
the first day of the Contract year quarter in which such application of funds is
made will not be deducted from the amount applied.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of termination, the Contractholder, together with the
P-12622-12/WA
<PAGE>
Plan sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) A single sum equal to that portion of the aggregate Withdrawal Value
of all Participant Accounts consisting of all of the Accumulation
Units of each Investment Account credited to such Participant Accounts
shall be calculated as of the close of business on the effective date
of termination and shall be payable within 7 days from the effective
date of termination, except as AUL may be permitted to defer such
payment in accordance with appropriate provisions of the federal
securities laws.
(b) In addition to the amount payable pursuant to (a) above, commencing on
the first Contract anniversary immediately following the effective
date of termination, a portion of each Participant Account shall be
paid in annual installments as follows:
(1) As of the first Contract anniversary immediately following the
effective date of termination, one-seventh of that portion of the
Withdrawal Value of each Participant Account consisting of the
net dollar balance in the Fixed Interest Account credited to each
such Participant Account shall be calculated and shall be
payable.
(2) As of the second Contract anniversary following the effective
date of termination, one-sixth of that portion of the Withdrawal
Value of each Participant Account consisting of the net dollar
balance in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be payable.
(3) As of the third Contract anniversary following the effective date
of termination, one-fifth of that portion of the Withdrawal Value
of each Participant Account consisting of the net dollar balance
in the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(4) As of the fourth Contract anniversary following the effective
date of termination, one-fourth of that portion of the Withdrawal
Value of each Participant Account consisting of the net dollar
balance in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be payable.
(5) As of the fifth Contract anniversary following the effective date
of termination, one-third of that portion of the Withdrawal Value
of each Participant Account consisting of the net dollar balance
in the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(6) As of the sixth Contract anniversary following the effective date
of termination, one-half of that portion of the Withdrawal Value
of each Participant Account consisting of the net dollar balance
in the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
P-12622-13
<PAGE>
(7) As of the seventh Contract anniversary following the effective
date of termination, the entire remaining portion of the
Withdrawal Value of each Participant Account consisting of the
net dollar balance in the Fixed Interest Account credited to each
such Participant Account shall be calculated and shall be
payable.
The Current Rates of Interest being credited to other contracts of
this class shall be credited from the effective date of termination
until the final payment is made under (b) above.
Until such time as the above-referenced election is implemented, the terms of
the Contract remain applicable, except that AUL has the right to refuse to
accept further Contributions.
Termination by AUL:
(a) AUL has the right, subject to applicable state law, to terminate any
Participant Account established under the Contract at any time during
the Contract year if the Account Value of such Participant Account is
less than $200 for the first Contract year in which a Contribution is
made for the Participant, and $400 for any subsequent Contract year,
and at least 6 months have elapsed since the Contractholder's last
previous Contribution to the Contract. If AUL elects to terminate a
Participant Account in such event, such termination shall be effective
on the date 6 months following the date that AUL gives notice to the
Contractholder and the Participant that the Participant Account is to
be terminated, provided that the Contractholder fails to make
Contributions during such 6-month period sufficient to bring such
Account Value up to the minimum level.
(b) Upon termination of a Participant Account by AUL, AUL may elect to
have a single sum equal to the Account Value of the Participant
Account calculated and paid to the Contractholder within 7 days from
the effective date of termination. Any such payment shall be in full
settlement of the Participant Account under the Contract and in lieu
of any other payment under its terms.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Certification of Plan Status: The Contractholder certifies, upon acceptance of
the Contract, that, in the Contractholder's opinion, the Plan meets the
requirements of Code Section 403(b). AUL does not make any guarantee regarding
the federal, state, or local tax status of the Contract, any Participant Account
established thereunder, or any transaction involving the Contract.
P-12622-14
<PAGE>
Essential Data: The Contractholder shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to and received by AUL at its Home Office before becoming effective,
unless the Contractholder or Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to the
Contractholder or to any person or entity when directed to do so in writing by
the Contractholder. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
P-12622-15
<PAGE>
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the share-
holders of the Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws.
AUL shall exercise these voting rights based on instructions received
from persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the
present interpretation thereof should change, and as a result AUL
determines that it is permitted to vote the shares of the Mutual Fund
in its own right, it may elect to do so.
(b) The person having the voting interest under the Contract is the
Contractholder.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of the
vested portion (as determined pursuant to the Plan) of a Participant Account
under the Contract shall be nonforfeitable at all times. No sum payable under
the Contract with respect to a Participant may be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose to any person or entity other than AUL. In
addition, to the extent permitted by law, no such sum shall in any way be
subject to legal process requiring the payment of any claim against the payee.
Acceptance of New Contributions: AUL reserves the right to refuse to accept new
Contributions to the Contract at any time.
P-12622-16
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a Mutual Fund as described in the prospectus for
the Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
Addition, Deletion, or Substitution of Investments:
a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund, Inc.,
of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the Contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute
any shares attributable to the Contractholder's interest in the
Variable Account or any Investment Account without notice,
Contractholder or Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner,
and without following the filing or other procedures established by
applicable state insurance regulators. Nothing contained herein shall
prevent the Variable Account from purchasing other securities for
other series or classes of contracts, or from effecting a conversion
between series or classes of contracts on the basis of requests made
by a majority of other contractholders or as permitted by federal law.
P.12622.ADD.1
<PAGE>
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in the Contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
General Withdrawal Provisions:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue
Code Regulation Section 1.403(b)-2T Q&A-2, the distributee of any
eligible rollover distribution elects to have the distribution paid
directly to an eligible retirement plan (as defined in Q&A-1 of that
Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to
that eligible retirement plan in a direct rollover.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment
P.12622.ADD.2
<PAGE>
Account as of any date other than a Valuation Date is equal to the value of its
share of that Investment Account as of the immediately preceding Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received from
persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the
present interpretation thereof should change, and as a result AUL
determines that it is permitted to vote the shares of a Mutual Fund in
its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
P.12622.ADD.3
<PAGE>
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
P.12622.ADD.4
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "Annuities and Death Benefits," as provided by the
Plan, where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date when
AUL establishes a Participant Account and credits the initial Contribution for
the Participant, and ends on the day immediately preceding the next anniversary
of such date. Each Participant Account Year thereafter begins on such an
anniversary date and ends on the day immediately preceding the next succeeding
anniversary date. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
(participant account year)
(conversion)
P-12622(NBR).ADD.1
<PAGE>
However, for any Participant who also participates in the companion AUL Series
III group annuity contract issued to the Contractholder, the initial Withdrawal
Charge percentage under the Contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the AUL Series I group annuity
contract from which funds have been transferred to such Series III contract,
determined by AUL immediately prior to the date of such transfer, rounded down
to the next whole Withdrawal Charge percentage if the Withdrawal Charge
percentage under such Series I contract is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract Withdrawal
Charge percentage is less than 4%, it shall be rounded up to 4% in the
Contract.) This 4% Withdrawal Charge percentage shall be in effect during the
next 6 consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
(participant account year)
(conversion)
P-12622(NBR).ADD.2
<PAGE>
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
the "General Withdrawal Provisions" and "Other Plan Benefits Payable
in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(3) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office as of the date AUL receives the initial Contribution, AUL
shall allocate the initial Contribution to the AUL American Money
Market Investment Account, and shall send written notice to the
Contractholder following the end of the month in which the unallocable
initial Contribution is received by AUL. Upon receipt of proper
Investment Option election instructions for the Participant, AUL shall
then transfer such amounts credited to the AUL American Money Market
Investment Account, plus gains or minus losses thereon, to another
Investment Option, if such instructions so direct. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
(participant account year)
(conversion)
P-12622(NBR).ADD.3
<PAGE>
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "Annuities and Death Benefits," as provided by the
Plan, where the percentage varies by the Contract year in which the withdrawal
is made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Year Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III group annuity contract issued to the Contractholder, the initial Withdrawal
Charge percentage under the Contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the AUL Series I group annuity
contract from which funds have been transferred to such Series III contract,
determined by AUL immediately prior to the date of such transfer, rounded down
to the next whole Withdrawal Charge percentage if the Withdrawal Charge
percentage under such Series I contract is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Contract year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable Series I contract Withdrawal Charge
percentage is less than 4%, it shall be rounded up to 4% in the Contract.) This
4% Withdrawal Charge percentage shall be in effect during the next 6 consecutive
Contract years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
(contract year)
(conversion)
P-12622(NBR).ADD.1
<PAGE>
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
the "General Withdrawal Provisions" and "Other Plan Benefits Payable
in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(3) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office as of the date AUL receives the initial Contribution, AUL
shall allocate the initial Contribution to the AUL American Money
Market Investment Account, and shall send written notice to the
Contractholder following the end of the month in which the unallocable
initial Contribution is received by AUL. Upon receipt of proper
Investment Option election instructions for the Participant, AUL shall
then transfer such amounts credited to the AUL American Money Market
Investment Account, plus gains or minus losses thereon, to another
Investment Option, if such instructions so direct. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
(contract year)
(conversion)
P-12622(NBR).ADD.2
<PAGE>
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "Annuities and Death Benefits," as provided by the
Plan, where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date when
AUL establishes a Participant Account and credits the initial Contribution for
the Participant, and ends on the day immediately preceding the next anniversary
of such date. Each Participant Account Year thereafter begins on such an
anniversary date and ends on the day immediately preceding the next succeeding
anniversary date. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
(participant account year)
(non-conversion)
P-12622(NBR).ADD.1
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
the "General Withdrawal Provisions" and "Other Plan Benefits Payable
in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(3) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office as of the date AUL receives the initial Contribution, AUL
shall allocate the initial Contribution to the AUL American Money
Market Investment Account, and shall send written notice to the
Contractholder following the end of the month in which the unallocable
initial Contribution is received by AUL. Upon receipt of proper
Investment Option election instructions for the Participant, AUL shall
then transfer such amounts credited to the AUL American Money Market
Investment Account, plus gains or minus losses thereon, to another
Investment Option, if such instructions so direct. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
(participant account year)
(non-conversion)
P-12622(NBR).ADD.2
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "Annuities and Death Benefits," as provided by the
Plan, where the percentage varies by the Contract year in which the withdrawal
is made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
(contract year)
(non-conversion)
P-12622(NBR).ADD.1
<PAGE>
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
the "General Withdrawal Provisions" and "Other Plan Benefits Payable
in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(3) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office as of the date AUL receives the initial Contribution, AUL
shall allocate the initial Contribution to the AUL American Money
Market Investment Account, and shall send written notice to the
Contractholder following the end of the month in which the unallocable
initial Contribution is received by AUL. Upon receipt of proper
Investment Option election instructions for the Participant, AUL shall
then transfer such amounts credited to the AUL American Money Market
Investment Account, plus gains or minus losses thereon, to another
Investment Option, if such instructions so direct. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
(contract year)
(non-conversion)
P-12622(NBR).ADD.2
<PAGE>
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the Contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment, or if further investment in any or
all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute
any shares attributable to the Contractholder's interest in the
Variable Account or any Investment Account without notice,
Contractholder or Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner,
and without following the filing or other procedures established by
applicable state insurance regulators. Nothing contained herein shall
prevent the Variable Account from purchasing other securities for
other series or classes of contracts, or from effecting a conversion
between series or classes of contracts on the basis of requests made
by a majority of other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in the Contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
Transfers:
(a) Subject to the limitations of (d) through (f) below, the
Contractholder, or that person designated to AUL by the
Contractholder, may direct AUL, in a form acceptable to AUL, to
transfer the amounts credited to an Investment Option to any other
Investment Option during the Accumulation Period. Any transfer from an
Investment Account shall be effective as of the close of business on
the Valuation Date that AUL receives such transfer direction.
(d) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract date or the Contract anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract date or the Contract anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
P-12622(NBR).ADD.3
BENEFITS
Benefit Options, Death Benefits, and Withdrawal Benefits are deleted, and the
following General Withdrawal Provisions, Annuities and Death Benefits, Other
Plan Benefits Payable in Cash, and Annuity Options are substituted in lieu
thereof:
General Withdrawal Provisions:
At any time prior to the termination of the Contract, the Contractholder may
direct AUL to withdraw all or a portion of a Participant Account pursuant to
"Annuities and Death Benefits" and "Other Plan Benefits Payable in Cash" to
provide Plan benefits (other than Plan termination benefits). Such
Contractholder direction must be submitted to AUL at its Home Office in a form
acceptable to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age
59 1/2, separated from service, died, become totally disabled (as
defined by the Plan), or experienced a hardship (as defined by the
Plan). However, in the case of a hardship withdrawal, any gain
credited to such Contributions may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for
purposes of "Annuities and Death Benefits," but instead is a Contract
termination as to that amount for that Participant; and any such
withdrawal shall be subject to application of the Withdrawal Charge
pursuant to "Other Plan Benefits Payable in Cash." The Contractholder
hereby grants to a Participant the right to direct the withdrawal and
direct transfer of such Participant's voluntary Elective Deferrals (as
determined by the Contractholder) to another tax-deferred annuity
funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements in (a) through (e) above. Any
withdrawal request submitted by the Contractholder shall include
certification as to the purpose of the withdrawal. The Contractholder
assumes full responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of a particular
Plan. AUL may rely solely upon the representations of the
Contractholder made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to "Annuities and Death Benefits," "Other Plan
Benefits Payable in Cash," or "Annuity Options" shall be determined,
as of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in (h) above, except as AUL may be
permitted to defer such payment of amounts withdrawn from the Variable
Account in accordance with appropriate provisions of the federal
securities laws.
P-12622(NBR).ADD.4
AUL reserves the right to defer the payment of amounts withdrawn from
the Fixed Interest Account for a period of up to 6 months after AUL
receives the withdrawal request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest Account
shall be made on a first-in/first-out basis so that all or a portion of the
amounts credited to the Participant Account's share of the Fixed Interest
Account which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
"Annuities and Death Benefits:
(a) Subject to the limitation provided in "General Withdrawal Provisions,"
and subject to the provisions of (b) below for death benefits, at any
time prior to the termination of the Contract, the Contractholder may
direct AUL to withdraw all or a portion of the Account Value (subject
to any appropriate premium tax or similar tax charge) of a Participant
Account for the purpose of providing an annuity in accordance with the
Annuity Options shown in "Annuity Options," as directed by the
Contractholder, for benefits as provided by the Plan (other than Plan
termination benefits); or
(b) Regarding death benefits specifically, notwithstanding the provisions
of "Contract Termination," upon receipt at its Home Office of
instructions in a form acceptable to AUL from the Contractholder and
of due proof of the Participant's (and, if applicable, the
beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to any appropriate premium tax or similar
tax charge) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to the
appropriate premium tax or similar tax charge) must be paid to
the beneficiary on or before December 31 of the calendar year
which contains the fifth anniversary of the Participant's death,
or
(2) as an annuity in accordance with the Annuity Options shown in
"Annuity Options" over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least as
rapidly as prior to the Participant's death.
Other Plan Benefits Payable in Cash:
Subject to the limitations provided in "General Withdrawal Provisions," at any
time prior to the termination of the Contract, the Contractholder may direct AUL
to make a cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan benefits
other than those provided in (b) of "Annuities and Death Benefits." If it is
necessary to withdraw the entire Account Value of a Participant Account to make
such payment, the amount paid shall equal the Withdrawal Value, minus any
appropriate premium tax or similar tax charge. If it is not necessary to
withdraw the entire Account Value to make such payment, AUL shall reduce the
Account Value of the Participant Account by an amount sufficient to make the
cash payment requested and to cover the Withdrawal Charge and any appropriate
premium tax or similar tax charge.
Notwithstanding the previous paragraph, in the first Contract year in which a
Participant Account is established, the Contractholder may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract date or the
Contract anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract year, without application of the
Withdrawal Charge. In the next succeeding Contract year, the Contractholder may
also withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract anniversary
immediately preceding the request for the withdrawal) plus Contributions made
during that Contract year, without application of the Withdrawal Charge. In any
subsequent Contract year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account (determined
as of the Contract anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
Annuity Options:
At the written request of the Contractholder pursuant to "Annuities and Death
Benefits," AUL shall apply all or a portion of the Account Value (subject to the
appropriate premium tax or similar tax charge) of a Participant Account for the
purpose of providing a fixed payment annuity under the Plan. Upon receipt of a
request for an annuity, AUL is hereby authorized by the Contractholder to value
and transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in (h) of "General Withdrawal
Provisions." Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Contractholder
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options.
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity: The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Annuity. The monthly annuity shall be payable to
the annuitant for as long as the annuitant lives, and shall end with
the last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 20
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option
to elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) above, but shall be paid in a lump sum.
If the monthly annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis or to pay the
appropriate amount in a single sum.
P-12622(NBR).ADD.5
<PAGE>
VALUATIONS
The first and second paragraphs of "Valuations" are deleted, and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to paragraph (d)(1) of "Contributions" on the next succeeding Valuation
Period, the unit value as of the end of that Valuation Period shall be used.
Such crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second and third paragraphs of "Other Charges" are deleted and the following
paragraphs are substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL hereby waives the administrative charge described hereafter in this
paragraph. AUL shall deduct an administrative charge per Contract year quarter
equal to the lesser of $7.50 or 0.5% of the Account Value on the last day of
each such quarter from each Participant Account in existence on such day for so
long as the Participant Account is in effect during the Accumulation Period.
This charge is to be prorated among each subaccount of the Participant Account
which corresponds to each Investment Option utilized under the Contract by that
Participant Account.
(companion)
P-12622(NBR).ADD.6
<PAGE>
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal
to the Account Value of the Participant Account shall be calculated as
of the date of the close of business on the effective date of
termination and shall be payable within 7 days from such effective
date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: William R. Brown
Secretary
(companion)
P-12622(NBR).ADD.7
VALUATIONS
The first and second paragraphs of "Valuations" are deleted, and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to paragraph (d)(1) of "Contributions" on the next succeeding Valuation
Period, the unit value as of the end of that Valuation Period shall be used.
Such crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second and third paragraphs of "Other Charges" are deleted and the following
paragraphs are substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL hereby waives the administrative charge described hereafter in this
paragraph. AUL shall deduct an administrative charge per Contract year quarter
equal to the lesser of $7.50 or 0.5% of the Account Value on the last day of
each such quarter from each Participant Account in existence on such day for so
long as the Participant Account is in effect during the Accumulation Period.
This charge is to be prorated among each subaccount of the Participant Account
which corresponds to each Investment Option utilized under the Contract by that
Participant Account. However, in no event will any portion of the annual charge
for a Contract year attributable to the Fixed Interest Account subaccount of the
Participant Account exceed the amount of the Contributions allocated to such
Fixed Interest Account subaccount for the Participant during such Contract year
plus interest earned during such Contract year on amounts held in such Fixed
Interest Account subaccount. If the entire balance of a Participant Account is
applied to provide an annuity, death, withdrawal, or termination benefit, the
administrative charge attributable to the period of time which has elapsed since
the first day of the Contract year quarter in which such application of funds is
made will not be deducted from the amount applied.
(WA)
(companion)
P-12622(NBR).ADD.7
<PAGE>
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal
to the Account Value of the Participant Account shall be calculated as
of the date of the close of business on the effective date of
termination and shall be payable within 7 days from such effective
date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: William R. Brown
Secretary
(WA)
(companion)
P-12622(NBR).ADD.8
<PAGE>
VALUATIONS
The first and second paragraphs of "Valuations" are deleted and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to paragraph (d)(1) of "Contributions" on the next succeeding Valuation
Period, the unit value as of the end of that Valuation Period shall be used.
Such crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second paragraph of "Other Charges" is deleted, and the following paragraph
is substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
(non-companion)
P-12622(NBR).ADD.7
<PAGE>
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal
to the Account Value of the Participant Account shall be calculated as
of the date of the close of business on the effective date of
termination and shall be payable within 7 days from such effective
date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: William R. Brown
Secretary
(non-companion)
P-12622(NBR).ADD.8
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT
NUMBER (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective January 1, 1993:
If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T Q&A-2,
the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as defined in Q&A-1
of that Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
And by adding the following provision, effective January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-12621.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC HOSPITAL (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.9 and by substituting the following
first sentence in lieu thereof:
1.9 "Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to this contract from another AUL group annuity
contract, which are credited to a Participant Account maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
P-12621.AMD.1
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
By deleting the last sentence of Section 3.1(b) and by substituting the
following last sentence in lieu thereof:
Such a withdrawal and return of Excess Contributions shall not be subject to
Sections 4.1 and 4.3.
3.2 How Contributions Are Handled:
(b) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(par year)
P-12621.AMD.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Contract Year in which the withdrawal is
made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
By deleting the last sentence of Section 3.1(b) and by substituting the
following last sentence in lieu thereof:
Such a withdrawal and return of Excess Contributions shall not be subject to
Sections 4.1 and 4.3.
3.2 How Contributions Are Handled:
(b) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1
the business day that AUL receives the initial Contribution at
its Home Office, or (2) the business day that AUL receives, at
its Home Office, the data required to establish the Participant
Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(con year)
P-12621.AMD.2
<PAGE>
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election for
that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Account identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so
directs.
(c) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment or if further investment in any or all
eligible Mutual Funds or Mutual Fund Portfolios becomes inappropriate
in view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from
P-12621.AMD.3
<PAGE>
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives such transfer direction.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
P-12621.AMD.4
<PAGE>
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
By deleting Sections 4.1, 4.2, 4.7, and 4.8 and by substituting the following
Sections 4.1 through 4.5 in lieu thereof:
4.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, at any time prior to termination of the contract pursuant to
Article 8, the Contractholder may direct AUL to withdraw all or a portion
of a Participant Account pursuant to Sections 4.2 and 4.3 to provide Plan
benefits (other than Plan termination benefits). Such Contractholder
direction must be submitted to AUL at its Home Office in a form acceptable
to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age
59 1/2, separated from service, died, become totally disabled (as
defined by the Plan), or experienced a hardship (as defined by the
Plan). However, in the case of a hardship withdrawal, any gain
credited to such Contributions may not be withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for
purposes of Section 4.2, but instead is a Contract termination as to
that amount for that Participant; and any such withdrawal shall be
subject to application of the Withdrawal Charge pursuant to Section
4.3. The Contractholder hereby grants to a Participant the right to
direct the withdrawal and direct transfer of such Participant's
voluntary Elective Deferrals (as determined by the Contractholder) to
another tax-deferred annuity funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include
P-12621.AMD.5
<PAGE>
certification as to the purpose of the withdrawal. The Contract-
holder assumes full responsibility for determining whether any with-
drawal is permitted under applicable law and under the terms of a
particular Plan. AUL may rely solely upon the representations
of the Contractholder made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 Annuities and Death Benefits:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing an annuity in accordance with the
Annuity Options shown in Section 4.5, as directed by the
Contractholder, for benefits as provided by the Plan (other than Plan
termination benefits).
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, and subject to the limitations provided in Section 4.1,
upon receipt at its Home Office of instructions in a form acceptable
to AUL from the Contractholder and of due proof of the Participant's
(and, if applicable, the beneficiary's) death during the Accumulation
Period, AUL shall apply the Account Value (subject to
P-12621.AMD.6
<PAGE>
Section 6.5) of the Participant Account for the purpose of providing
a death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(b). If it is necessary to
withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge.
4.4 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.2, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of
P-12621.AMD.7
<PAGE>
the date provided in Section 4.1(h). Such transferred amounts shall be
held in the Fixed Interest Account until the Participant's Annuity
Commencement Date. The Contractholder request shall include certification
as to the purpose for the annuity and the election of one of the following
annuity options. The amount of any annuity shall be computed from the
Table of Immediate Annuities then included in this contract, except as
provided under Section 4.7.
4.5 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 20
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option
to elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) of this Section, but shall be paid in a
lump sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL
at its Home Office at least 30 days prior to the Annuity Commencement Date,
the Account Value (subject to Section 6.5) of his Participant Account may
be applied under (b) above as a 10 Year Certain and Life Annuity if the
Participant is not married, or may be applied under (c) above as a 50%
Survivorship Annuity if the Participant is married. AUL must receive from
the Contractholder written notification of such
P-12621.AMD.8
<PAGE>
Annuity Commencement Date, written designation of the contingent annuitant
or beneficiary, and any election forms needed in connection with any
annuity option provided in this Section.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which would
extend for a certain period beyond the life expectancy of such Participant
or the joint life expectancy of such Participant and such contingent
annuitant as determined on the Annuity Commencement Date.
By redesignating Sections 4.3 through 4.6 as Sections 4.6 through 4.9,
respectively.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(b)(1) on the next succeeding Valuation Period, the unit value
as of the end of that Valuation Period shall be used. Such crediting shall
be made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
P-12621.AMD.9
<PAGE>
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period; plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By deleting the last sentence of Section 6.3 and by substituting the following
last sentence in lieu thereof:
If the entire balance of a Participant Account is applied or withdrawn
pursuant to Sections 4.2, 4.3, 4.4, 8.2, or 8.4, the administrative charge
attributable to the period of time which has elapsed since the first day of
the Contract Quarter in which such application or withdrawal of funds is
made shall not be deducted from the amount applied or withdrawn.
(non-companion)
P-12621.AMD.10
<PAGE>
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period; plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the
Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
(stand-alone/select-like basis)
(companion)
P-12621.AMD.10
<PAGE>
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.2 or 4.4
or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
(non-companion)
P-12621.AMD.11
<PAGE>
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.2 or 4.4
or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
AUL, the maximum administrative charge discussed hereafter in this Section
7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
(stand-alone/select-like basis)
(companion)
P-12621.AMD.11
<PAGE>
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By ____________________________________
Title _________________________________
Date __________________________________
(new business)
P-12621.AMD.12
<PAGE>
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER
By ___________________________________
Title ________________________________
Date _________________________________
AMERICAN UNITED LIFE INSURANCE COMPANY
By ___________________________________
Title ________________________________
Date _________________________________
(existing business)
P-12621.AMD.12
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-12621.AMD.13
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA 73,321 (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
________________________________
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
CONTRACTHOLDER AUL
By ________________________________________ By _______________________
Title ____________________________________ Title _____________________
Date ______________________________________ Date ______________________
P-12621.A
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GXX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The effective date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections or Subsections of the
Contract and by inserting the following Sections or Subsections in lieu thereof,
and by making any required corresponding changes in the Table of Contents of the
Contract:
1.15 "Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to
time as described in Section 3.3. Amounts allocated to any Investment
Account identified in Schedule A of the contract shall be invested in the
shares of the corresponding Mutual Fund or Mutual Fund Portfolio listed in
the current prospectus for the Variable Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Sections 4.1 or 4.7, as provided by the
Plan, where the percentage varies by the Participant Account Year in which
the withdrawal is made. The first Participant Account Year begins on the
date when AUL establishes a Participant Account and credits the initial
Contribution for the Participant and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
P-12621NBR.II.1
<PAGE>
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL Series III group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under this
contract shall be equal to the Withdrawal Charge percentage applicable to the
Participant under AUL Series I group annuity contract GXX,XXX, determined
immediately prior to the date funds under such Series I contract are transferred
to such Series III contract, rounded down to the next whole Withdrawal Charge
percentage if the Withdrawal Charge percentage under such Series I contract is a
fractional Withdrawal Charge percentage. However, the Withdrawal Charge
percentage under this paragraph shall never be greater than 8%. The Withdrawal
Charge percentage shall be decreased by 1% for each subsequent Participant
Account Year until the Withdrawal Charge percentage equals 4%. This 4%
Withdrawal Charge percentage shall be in effect during the next 6 consecutive
Participant Account Years. Thereafter, the Withdrawal Charge percentage shall be
reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.2 How Contributions Are Handled:
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution.
If the data required to establish a Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option election instructions regarding the initial
Contribution are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder unless the
Contractholder consents to AUL retaining the initial Contribution
until AUL receives the data required to establish the Participant
Account and such instructions.
However, if the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office when AUL first receives the initial Contribution, AUL may,
in its sole discretion, allocate the initial Contribution to the AUL
American Money Market Investment Account, and shall send written
notice to the Contractholder following the end
P-12621NBR.II.2
<PAGE>
of the month in which the unallocable initial Contribution is received by
AUL. Upon receipt of proper Investment Option election instructions
for the Participant, AUL shall then transfer such amounts credited to
the AUL American Money Market Investment Account, plus gains or minus
losses thereon, if required pursuant to such instructions. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Contractholder or by that person designated in writing to AUL by the
Contractholder. If no allocation instruction is made with respect to
any Participant Account, AUL shall process such credits in accordance
with the allocation instruction applicable to the immediately
preceding Contribution. The Contractholder or such designated person
may change an allocation instruction with respect to future
allocations to the applicable Participant Account by giving new
written allocation instructions to AUL at its Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Mutual Fund Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the contract, if the
shares of any or all eligible Mutual Funds or Mutual Fund Portfolios
are no longer available for investment, or if, in AUL's judgment,
further investment in any or all eligible Mutual Funds or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares attributable to the
Contractholder's interest in the Variable Account or any Investment
Account without notice, Contractholder or Participant approval, or
prior approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current
P-12621NBR.II.3
<PAGE>
prospectus for the Variable Account, or in other securities or investment
vehicles. AUL prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
4.8 Withdrawal Benefits:
(a) (5) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant
instructions to another tax-deferred annuity funding vehicle
under applicable IRS rules and regulations is a Contract
termination as to that amount for that Participant; and any such
withdrawal shall be subject to application of the Withdrawal
Charge.
(6) Effective January 1, 1993, if, as provided in Internal Revenue
Code Regulation Section 1.403(b)-2T Q&A-2, the distributee of
any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as
defined in Q&A-1 of that Section) and specifies the eligible
retirement plan to which the distribution is to be paid, then the
distribution shall be paid to that eligible retirement plan in a
direct rollover.
(7) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to
the purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of a
particular Plan. AUL may rely solely upon the representations of
the Contractholder made in the withdrawal request.
<PAGE>
5.1 Time of Valuation: All assets of each Mutual Fund or Mutual Fund Portfolio
shall be valued as provided in the prospectus for the applicable Mutual
Fund or Mutual Fund Portfolio as such prospectus may be amended or
supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described
in the current prospectus for that Mutual Fund or Mutual Fund Portfolio as
it may be amended or supplemented from time to time. These expenses may
vary from year to year. The net asset value of each Mutual Fund or Mutual
Fund Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Mutual Fund or Mutual Fund
Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc. or any other Mutual Fund made available by AUL.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
<PAGE>
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
Contractholder AUL
By __________________________________ By ________________________________
Title _______________________________ Title ____________________________
Date ________________________________ Date ______________________________
P-12621NBR.II.6
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
Investment Account Mutual Fund or Mutual Fund Portfolio
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
P-12621NBR.II.7
- --------------------------------------------------------------------------------
EXHIBIT 4.3
TDA EMPLOYER SPONSORED BENEFIT RESPONSIVE CONTRACT, FORM P-12621BR
- --------------------------------------------------------------------------------
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
DATE OF ISSUE JANUARY 1, 1993
CONTRACT DATE JANUARY 1, 1993
FIRST CONTRACT ANNIVERSARY JANUARY 1, 1994
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
Employer-Sponsored TDA Multiple-Fund Group Variable Annuity
Nonparticipating
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ACCUMULATION UNITS IS NOT
GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH
ACCUMULATION UNITS.
P-12621(BR)FL
<PAGE>
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629.
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
DATE OF ISSUE JANUARY 1, 1993
CONTRACT DATE JANUARY 1, 1993
FIRST CONTRACT ANNIVERSARY JANUARY 1, 1994
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
Employer-Sponsored TDA Multiple-Fund Group Variable Annuity
Nonparticipating
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ACCUMULATION UNITS IS NOT
GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH
ACCUMULATION UNITS.
P-12621(BR)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
3.6--------Reallocation of Participant Accounts
3.7--------Transferred Amounts
ARTICLE 4 BENEFITS
4.1--------General Withdrawal Provisions
4.2--------Termination of Service Benefits and Minimum Distribution
Benefits
4.3--------In-Service Benefits
4.4--------Election of Annuity Options
4.5--------Annuity Options
4.6--------Guaranteed Rate of Interest
4.7--------Alternate Nonparticipating Retirement Annuity
4.8--------Minimum Payments
4.9--------Due Proof of Date of Birth and Survival
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
P-12621(BR).1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 TERMINATION OF CONTRACT
8.1--------Right of Contractholder to Terminate
8.2--------Payment Due to Termination by Contractholder
8.3--------Right of AUL to Terminate
8.4--------Payment Due to Termination by AUL
ARTICLE 9 MISCELLANEOUS
9.1--------Ownership
9.2--------AUL's Annual Statement
9.3--------Certification of Plan Status
9.4--------Essential Data
9.5--------Reliance
9.6--------Misstatement of Essential Data
9.7--------Annuity Certificates
9.8--------Election, Notice, or Direction Requirements
9.9--------Quarterly Statement of Account Value
9.10-------Conformity with State Laws
9.11-------Reference to Federal Laws
9.12-------Sex and Number
9.13-------Facility of Payment
9.14-------Insulation from Liability
9.15-------Voting
9.16-------Acceptance of New Participants or Contributions
9.17-------Nonforfeitability and Nontransferability
9.18-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12621(BR).2
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date
on which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts
of increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which
an annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same day
of the same month as the day and month which is stated on the face page of this
contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning
with the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL pursuant to the
Contractholder's Code Section 403(b) Plan and credited to a Participant Account
hereunder. The following types of Contributions shall be credited to individual
subaccounts under the Participant Accounts:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement shall not be
treated as an Elective Deferral if, under the salary reduction
agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial
eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
P-12621(BR).3
<PAGE>
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement, or made pursuant to a similar
arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
1.10 "Current Rates of Interest" means each of the annual effective rates
of interest as determined and declared by AUL from time-to-time and as credited
to each interest pocket maintained within the Fixed Interest Account. The
Current Rates of Interest shall always be equal to or greater than the
Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions
or such new amounts transferred to the Fixed Interest Account, the
previous open interest pocket shall close, and any such Contributions
or amounts transferred on or after the effective date of such change
shall be credited to a new open interest pocket and shall earn
interest at the new Current Rate of Interest in effect for such new
open interest pocket. Therefore, at any given time, various funds
credited to a Participant Account and allocated to the Fixed Interest
Account may be earning interest at different Current Rates of Interest
for different periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective
rate of 4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address
is P. O. Box 6148, Indianapolis, Indiana 46206-6148.
1.14 "Home Office" means the principal office of AUL. The mailing address
is P. O. Box 6148, Indianapolis, Indiana 46206-6148. The telephone
number is 1-800-634-1629.
1.15 "Investment Account" means each subaccount of the Variable Account,
which subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
P-12621(BR).4
<PAGE>
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.16 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to provide
other Investment Options under this contract at any time.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940.
1.18 "Participant" means any person reported to AUL by the Contractholder
as eligible for, and as participating in, the Plan, and for whom a Participant
Account is established.
1.19 "Participant Account" means an account established under this contract
for a Participant. Within each Participant Account, the Contractholder can
direct the establishment of one or more subaccounts as made available by AUL.
Contributions received by AUL shall be credited to Participant Accounts and
their subaccounts as AUL is directed in writing by the Contractholder.
1.20 "Plan" means the Plan Sponsor's Code Section 403(b) plan as it exists
on the Contract Date, and any subsequent amendment to it.
1.21 "Plan Sponsor" means ABC School.
1.22 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or supplemented
from time to time.
1.23 "Valuation Date" means any day when the Home Office of AUL and the New
York Stock Exchange are open and operational.
1.24 "Valuation Period" means the period beginning at the close of business
on a Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
P-12621(BR).5
<PAGE>
1.25 "Variable Account" means a separate account established by AUL called
the AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn pursuant to Sections 4.3 or 8.2, where the
percentage varies by the number of full years measured from the date a
Participant Account is established to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During Withdrawal Charge
Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges,
including those previously assessed against any amount withdrawn from
a Participant Account, exceed 9% of total Contributions allocated to
that Participant Account.
1.27 "Withdrawal Value" means a Participant's Account Value minus the
applicable Withdrawal Charge.
P-12621(BR).6
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder. AUL
is not a party to, nor bound by, a Plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not a
fiduciary under this contract or under any such Plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12621(BR).7
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the Plan and by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL
may rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to
Sections 4.1 and 4.3.
3.2 How Contributions Are Handled:
(a) Contributions received at the Home Office shall be identified by the
Contractholder as Elective Deferrals, Employee Mandatory
Contributions, or Employer Contributions, and shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, AUL shall
allocate the initial Contribution to the Money Market Investment
Account, and shall send written notice to the Contractholder following
the end of the month in which the unallocable initial Contribution is
received by AUL. If proper data and allocation instructions are not
provided to AUL within a reasonable period of time, which shall not
exceed 105 days from the date the initial Contribution is first
credited to the Money Market Investment Account, AUL shall return to
the Contractholder all Contributions that remain unallocated, plus
gains or minus losses thereon, or shall follow other instructions
provided by the Contractholder.
P-12621(BR).8
<PAGE>
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Contractholder or by that person
designated in writing to AUL by the Contractholder. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an allocation
instruction with respect to future allocations to the applicable
Participant Account by giving new written allocation instructions to
AUL at its Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
P-12621(BR).9
<PAGE>
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated in writing to AUL by the Contractholder, may direct
AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period.
Any transfer from an Investment Account shall be effective as of the
close of business on the Valuation Date that AUL receives such written
direction, provided that AUL receives such direction by 4:00 p.m.
E.S.T. on that Valuation Date. If such direction is received after
4:00 p.m. E.S.T., such transfer shall be effective as of the close of
business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after
AUL receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) A transfer with regard to the Participant Account's share of any
Investment Option shall not be made in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a
transfer reduces the Participant Account's remaining share of an
Investment Option to less than $500, the entire remaining share shall
also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
P-12621(BR).10
<PAGE>
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
3.6 Reallocation of Participant Accounts: The Contractholder, in accordance
with the provisions of the Plan, may direct AUL to reallocate all or a portion
of the Account Value of any Participant Account among other Participant
Accounts. The Contractholder shall certify that such reallocation is in
accordance with Plan provisions.
3.7 Transferred Amounts: If so permitted under the terms of the Plan, AUL
shall accept amounts transferred from other contracts which are attributable to
contributions made pursuant to Code Section 403(b). Such transferred amounts
shall be credited as directed by the Contractholder to a separate rollover
subaccount established under the appropriate Participant Accounts.
P-12621(BR).11
<PAGE>
ARTICLE 4 - BENEFITS
4.1 General Withdrawal Provisions:
(a) As provided in Sections 4.2 and 4.3, at any time prior to termination
of the contract pursuant to the provisions of Article 8, except as
stated below, the Contractholder, upon submitting a proper written
request to AUL at its Home Office, may direct AUL to withdraw all or a
portion of a Participant Account for the purpose of providing Plan
benefits, other than Plan termination benefits, provided:
(1) that, if the amount being withdrawn is attributable to
Contributions made pursuant to a salary reduction agreement
(within the meaning of Code Section 402(g)(3)(C):
(i) such withdrawal is made to provide a loan; or
(ii) any distribution of such amount shall not occur until the
Participant has:
(A) attained age 59 1/2; or
(B) separated from service; or
(C) died; or
(D) become totally disabled (as defined by the Plan); or
(E) experienced a hardship (as defined by the Plan); or
(2) that the amount being withdrawn is attributable to Contributions
made other than pursuant to a salary reduction agreement (within
the meaning of Code Section 402(g)(3)(C)); or
(3) that the amount being withdrawn is attributable to amounts held
as of December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (a)(1)(ii)(E)
above, any gain credited to such Contributions may not be
withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to
the purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is
permitted under applicable law and under the terms of a
particular Plan. AUL may rely solely upon the representations of
the Contractholder made in the withdrawal request.
P-12621(BR).12
<PAGE>
(6) Effective January 1, 1993, eligible rollover distributions as
provided by applicable federal law, regulations, or rulings may
be transferred to a substitute funding medium.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper written withdrawal request (or due proof of death, if received
later) at its Home Office, provided that AUL receives such request or
due proof of death by 4:00 p.m. E.S.T. on that Valuation Date. If such
request or due proof of death is received after 4:00 p.m. E.S.T., such
request shall be effective as of the close of business on the next
succeeding Valuation Date.
(d) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (c) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(e) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 Termination of Service Benefits and Minimum Distribution Benefits:
(a) At any time prior to termination of the contract pursuant to the
provisions of Article 8, the Contractholder may direct AUL to withdraw
all or a portion of the Account Value (subject to Section 6.5) of a
Participant Account for the purpose of providing benefits upon
termination of service as provided by the Plan (other than Plan
termination benefits) or minimum distribution benefits pursuant to
Code Section 401(a)(9) and Regulations issued thereunder (but only if
an amount equal to the required minimum distribution amount as
calculated pursuant to Code Section 401(a)(9) is withdrawn, or if an
annuity is provided by AUL under this contract), subject to the
limitations provided in Section 4.1. Except for death benefits as
provided in (b) below, payment shall be made in a cash lump sum to the
Contractholder or to whomever the Contractholder directs, or as an
annuity in accordance with the Annuity Options shown in Section 4.5 as
directed by the Contractholder.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of written instructions
from the Contractholder and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period,
AUL shall apply the Account Value (subject to Section 6.5) of the
Participant
P-12621(BR).13
<PAGE>
Account for the purpose of providing a death benefit under the Plan.
The death benefit shall be paid to the Participant's beneficiary
according to the method of payment elected by the beneficiary
(unless such method of payment was previously elected by the
Participant). This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 In-Service Benefits: At any time prior to termination of the contract
pursuant to the provisions of Article 8, the Contractholder may direct AUL to
make a cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing in-service
benefits as provided by the Plan (except for Code Section 401(a)(9) minimum
distribution benefits covered under Section 4.2), such as for loans or hardships
(as defined by the Plan), subject to the limitations provided in Section 4.1.
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value. If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the Participant Account by an amount
determined pursuant to the following formula:
Reduction in cash payment
-------------------------------------------------------
Account Value = (1 - decimal equivalent of Withdrawal Charge percentage)
Notwithstanding the previous paragraph, in any Contract Year the Contractholder
may withdraw up to 10% of the Account Value of a Participant Account determined
as of the last Contract Anniversary preceding the request for the withdrawal
without application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is credited to
his Participant Account by AUL to the date of such withdrawal.
4.4 Election of Annuity Options: At the written request of the
Contractholder pursuant to Section 4.2, AUL shall apply all or a portion of the
Account Value (subject to Section 6.5) of a Participant Account for the purpose
of providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the Fixed
Interest Account as of the date provided in Section 4.1(c). Such transferred
amounts shall be held in the Fixed Interest Account until the Participant's
Annuity Commencement Date. The Contractholder request shall
P-12621(BR).14
<PAGE>
include certification as to the purpose for the annuity and the election of one
of the following annuity options. The amount of any annuity shall be computed
from the Table of Immediate Annuities then included in this contract, except as
provided under Section 4.7.
4.5 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 20
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option
to elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)- (f) of this Section, but shall be paid in a lump
sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
4.6 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities are
based on a guaranteed interest rate of 4.00% compounded annually.
P-12621(BR).15
<PAGE>
4.7 Alternate Nonparticipating Retirement Annuity: Any annuity elected
shall be provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if such
rates produce a higher income than that provided under the Table of Immediate
Annuities provided in this contract.
4.8 Minimum Payments: If the monthly annuity is less than AUL's then
current established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.9 Due Proof of Date of Birth and Survival: Before commencing payments
under any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment of
each or any installment under the option.
P-12621(BR).16
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the Mutual Fund as such prospectus may be amended
or supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant Account
in the form of Accumulation Units on the basis of the value of such units in
that Investment Account as of the end of the Valuation Period on which such
amounts are received by AUL at its Home Office. Such crediting shall be made
separately for amounts allocated to each Investment Account. The number of
Accumulation Units in each Investment Account credited to each Participant
Account as of any Valuation Period shall be determined by dividing the amounts
allocated to that Investment Account for that Participant Account as of such
Valuation Period by the dollar value of one Accumulation Unit in that Investment
Account as of the close of business on the applicable Valuation Period. The
number of Accumulation Units thus determined shall not be changed by any
subsequent change in the dollar value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value of
an Accumulation Unit in each Investment Account as of any Valuation Period
thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
P-12621(BR).17
5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
P-12621(BR).18
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account, as provided by Section 5.4(c).
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.2, 4.3, 4.4,
8.2, or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the amount
applied or withdrawn.
Alternatively, at the election of the Contractholder and upon proper written
notice, this administrative charge shall be billed directly to the
Contractholder on a basis agreed upon by AUL and the Contractholder. Charges to
be paid by the Contractholder are due within 30 days of the billed or due date,
whichever is later. AUL reserves the right to defer the purchase of annuities
and the payment of any benefit until it has collected the administrative charges
due. An election and notice to change the mode of payment shall be effective for
the next succeeding Contract Year and thereafter, until any subsequent election
and notice become effective.
6.4 Transfer Charge: AUL reserves the right to deduct a charge (not to
exceed $25) for each transfer transaction pursuant to Section 3.4. This charge
would be prorated among the Investment Options from which the amounts are
transferred in the same proportion that the amount transferred from the
Investment Option bears to the total amount transferred from all Investment
Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.4 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12621(BR).19 (NJ)
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account, as provided by Section 5.4(c).
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.2, 4.3, 4.4,
8.2, or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the amount
applied or withdrawn.
Alternatively, at the election of the Contractholder and upon proper written
notice, this administrative charge shall be billed directly to the
Contractholder on a basis agreed upon by AUL and the Contractholder. Charges to
be paid by the Contractholder are due within 30 days of the billed or due date,
whichever is later. AUL reserves the right to defer the purchase of annuities
and the payment of any benefit until it has collected the administrative charges
due. An election and notice to change the mode of payment shall be effective for
the next succeeding Contract Year and thereafter, until any subsequent election
and notice become effective.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the same
proportion that the amount transferred from the Investment Option bears to the
total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.4 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12621(BR).19
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: AUL does not reserve the right to
change the Table of Immediate Annuities in this contract.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.26 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.26 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $100 per Contract Quarter. Any increase in the
administrative charge made by AUL for any Contract Quarter shall be limited to
an amount which is designed to reimburse AUL for the expenses associated with
the administration of the contract and the operation of the Variable Account.
Any such increase shall not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the
provisions of Section 9.1, AUL reserves the right to amend this contract at any
time, without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to comply
with, or give the Contractholder or Participants the benefit of, any provisions
of federal or state laws, regulations, or rulings. Any such amendment shall be
stated in a written instrument and delivered to the Contractholder.
P-12621(BR).20 (NJ)
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years,
AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but any
such change shall apply only to Participant Accounts established on or after the
effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.26 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.26 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $15 per Contract Quarter until the year 2001.
Any increase in the administrative charge made by AUL for any Contract Quarter
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with the administration of
the contract and the operation of the Variable Account. Any such increase shall
not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the
provisions of Section 9.1, AUL reserves the right to amend this contract at any
time, without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to comply
with, or give the Contractholder or Participants the benefit of, any provisions
of federal or state laws, regulations, or rulings. Any such amendment shall be
stated in a written instrument and delivered to the Contractholder.
P-12621(BR).20
<PAGE>
ARTICLE 8 - TERMINATION OF CONTRACT
8.1 Right of Contractholder to Terminate: This contract shall terminate if
the Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of the
close of business on the Valuation Date that AUL receives a proper written
Contractholder notice at its Home Office, provided that AUL receives such notice
by 4:00 p.m. E.S.T. on that Valuation Date. If such notice is received after
4:00 p.m. E.S.T., such notice shall be effective as of the close of business on
the next succeeding Valuation Date. This date shall be the effective date of
termination. This contract shall also terminate automatically as of the date
that there are no Participant Accounts maintained hereunder.
8.2 Payment Due to Termination by Contractholder:
(a) As of the effective date of termination of this contract by the
Contractholder pursuant to Section 8.1, the Contractholder may,
together with the Plan Sponsor, elect to have a payment or payments
made pursuant to (b) below to whomever the Contractholder directs.
Such payment or payments shall be in full settlement of this contract
and in lieu of any other payment under its terms. In order for such an
election to be effective, it must include the Contractholder's and the
Plan Sponsor's agreement to indemnify and hold AUL harmless from any
and all losses, claims, or demands that may later arise or be asserted
against AUL in connection with the making of such a payment or
payments and, if these funds are to be transferred to a substitute
funding medium, such election must contain the Contractholder's
certification that such substitute funding medium meets the
requirements of Code Section 403(b) and the Regulations issued
thereunder. This Contractholder's and Plan Sponsor's agreement must be
received by AUL at its Home Office prior to payment of any termination
benefits provided by this Section 8.2.
(b) Upon termination of this contract by the Contractholder:
(1) A single sum equal to that portion of the aggregate Withdrawal
Value of all Participant Accounts consisting of all of the
Accumulation Units of each In vestment Account credited to such
Participant Accounts shall be calculated as of the close of
business on the effective date of termination and shall be
payable within 7 days from the effective date of termination,
except as AUL may be permitted to defer such payment in
accordance with appropriate provisions of the federal securities
laws.
(2) In addition to the amount payable pursuant to Section 8.2(b)(1)
above, commencing on the first Contract Anniversary immediately
succeeding the effective date of termination, a portion of each
Participant Account shall be paid in annual installments as
follows:
(i) As of the first Contract Anniversary immediately succeeding
the effective date of termination, one-seventh of that
portion of the Withdrawal Value of each Participant Account
consisting of the net dollar balance in the Fixed Interest
Account credited to each such Participant Account shall be
calculated and shall be payable.
P-12621(BR).21
<PAGE>
(ii) As of the second Contract Anniversary succeeding the
effective date of termination, one-sixth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(iii) As of the third Contract Anniversary succeeding the
effective date of termination, one-fifth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(iv) As of the fourth Contract Anniversary succeeding the
effective date of termination, one-fourth of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(v) As of the fifth Contract Anniversary succeeding the
effective date of termination, one-third of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(vi) As of the sixth Contract Anniversary succeeding the
effective date of termination, one-half of that portion of
the Withdrawal Value of each Participant Account consisting
of the net dollar balance in the Fixed Interest Account
credited to each such Participant Account shall be
calculated and shall be payable.
(vii) As of the seventh Contract Anniversary succeeding the
effective date of termination, the entire remaining portion
of the Withdrawal Value of each Participant Account
consisting of the net dollar balance in the Fixed Interest
Account credited to each such Participant Account shall be
calculated and shall be payable.
The Current Rates of Interest being credited to other
contracts of this class shall be credited from the effective
date of termination until the final payment is made under
this Subsection (b)(2).
Until such time as the above-referenced election is implemented, the terms of
the contract shall remain applicable, except that AUL shall have the right to
refuse to accept further Contributions.
8.3 Right of AUL to Terminate: AUL has the right, subject to applicable
state law, to terminate any Participant Account established under this contract
at any time during the Contract Year if the Account Value of such Participant
Account is less than $200 for the first Contract Year in which a Contribution is
made for the Participant, and $400 for any subsequent Contract Year, and at
least 6 months have elapsed since the last previous Contribution to the
contract. If AUL elects to terminate a Participant Account in such event, such
termination shall be effective on the date
P-12621(BR).22
<PAGE>
6 months following the date that AUL gives notice to the Contractholder and the
Participant that the Participant Account is to be terminated, provided any
Contributions made during such 6-month period are insufficient to bring such
Account Value up to the minimum level.
8.4 Payment Due to Termination by AUL: As of the effective date of
termination of a Participant Account by AUL pursuant to Section 8.3, AUL may
elect to have a payment made as set out below to the Contractholder. Any such
payment shall be in full settlement of the Participant Account under this
contract and in lieu of any other payment under its terms.
Upon termination of a Participant Account pursuant to Section 8.3, a single sum
equal to the Account Value of the Participant Account shall be calculated as of
the close of business on the effective date of termination and shall be payable
within 7 days from such effective date of termination.
P-12621(BR).23
<PAGE>
ARTICLE 9 - MISCELLANEOUS
9.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
9.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Portfolio, nor any of the other provisions and conditions of this
contract.
9.3 Certification of Plan Status: The Contractholder certifies, upon
acceptance of this contract, that, in the Contractholder's opinion, the Plan
meets the requirements of Code Section 403(b). AUL does not make any guarantee
regarding the federal, state, or local tax status of this contract, any
Participant Account established hereunder, or any transaction involving this
contract.
9.4 Essential Data: The Contractholder shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance. The Contractholder shall report to AUL any
person for whom a payment becomes due under the Plan and the nature and amount
of such payment before the date on which such payment becomes due or as soon
thereafter as is practicable.
9.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contract holder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
9.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
9.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to and received by AUL at its Home Office before
becoming effective, unless the Contractholder or Participant is otherwise
directed by AUL.
9.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
9.10 Conformity with State Laws: Any benefit payable under this contract
shall not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
P-12621(BR).24
<PAGE>
9.11 Reference to Federal Laws: Language in this contract referring to
federal tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval or
disapproval by the state in which the contract is issued.
9.12 Sex and Number: Whenever the context so requires, the plural includes
the singular, the singular the plural, and the masculine the feminine.
9.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment due
him, and no guardian has been appointed, AUL may make such payment to the person
or persons who have assumed the care and principal support of such Participant,
contingent annuitant, or beneficiary. Also, AUL may make payment directly to the
Contractholder or to any person or entity when directed to do so in writing by
the Contractholder. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
9.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may conduct.
9.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund shares of a particular Portfolio as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
P-12621(BR).25
<PAGE>
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
9.16 Acceptance of New Participants or Contributions. AUL reserves the
right to refuse to accept new Participants or new Contributions to this contract
at any time.
9.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value
of the vested portion (as determined pursuant to the Plan) of a Participant
Account under this contract shall be nonforfeitable at all times. No sum
payable under this contract with respect to a Participant may be sold, assigned,
discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
9.18 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the third
Thursday in February of each year at the hour of ten o'clock A.M. Elections for
directors shall be held at such annual meeting.
P-12621(BR).26
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12621(BR).27
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax-deferred
annuity Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
THIS CERTIFICATE IS SUBJECT TO NEW JERSEY INSURANCE LAWS AND REGULATIONS AS
ADMINISTERED BY THE NEW JERSEY DEPARTMENT OF INSURANCE.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH
P-12622(BR)NJ
<PAGE>
ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ACCUMULATION UNITS.
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax-deferred
annuity Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ACCUMULATION UNITS IS NOT
GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE VALUATION OF SUCH
ACCUMULATION UNITS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629.
P-12622(BR)FL
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's tax-deferred
annuity Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ACCUMULATION UNITS IS NOT
GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS
THE VALUATION OF SUCH ACCUMULATION UNITS.
P-12622(BR)
<PAGE>
IMPORTANT NOTICE
To obtain information or make a complaint:
You may contact your Texas AUL office at:
1-512-822-7860
You may call AUL's toll-free telephone number for
information or to make a complaint at:
1-800-338-9189
You may also write to AUL at:
P O Box 368
Indianapolis, IN 46206-0368
You may contact the Texas Department of Insurance to obtain information on
companies, coverages, rights, or complaints at: 1-800-252-3439
You may write the Texas Department of Insurance at: P O Box 149104 Austin, TX
78714-9104 FAX# (512) 475-1771
ATTACH THIS NOTICE TO YOUR POLICY:
This notice is for information only and does not
become a part or condition of the attached document.
P-12622(BR)TX
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment Account on
that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid to AUL pursuant to the Contractholder's Code
Section 403(b) Plan and credited to a Participant Account. The following types
of Contributions are credited to individual subaccounts under the Participant
Account:
(a) "Elective Deferrals," which means, with respect to any taxable year, any
Contribution made under a salary reduction agreement. A Contribution made
under a salary reduction agreement shall not be treated as an Elective
Deferral if, under the salary reduction agreement, such Contribution is
made pursuant to a one-time irrevocable election made by the Participant at
the time of initial eligibility to participate in the agreement, or is made
pursuant to a similar arrangement involving a one-time irrevocable
election specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made under a
salary reduction agreement pursuant to a one-time irrevocable election made
by the Participant at the time of initial eligibility to participate in the
agreement.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder. "Fixed Interest Account" means that fund of
AUL's general asset account in which all or a portion of a Participant's Account
Value may be held for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time that the
Current Rate of Interest exceeds the Guaranteed Rate of Interest, shall
earn interest at such credited Current Rate of Interest for at least 1
year. After such 1-year period, AUL reserves the right to declare, at any
time, a new Current Rate of Interest to be applied to funds held within
that interest pocket. Any such new Current Rate of Interest must remain in
effect for that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
such new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148. The telephone number is
1-800-634-1629.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts include the Equity Investment Account, the Bond Investment Account,
the Money Market Investment Account, and the Managed Investment Account, as the
case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested in
shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be invested
in shares of the AUL American Money Market Portfolio of the Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested in
shares of the AUL American Managed Portfolio of the Mutual Fund.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, the Plan, and for whom a Participant Account is
established.
P-12622(BR).1
<PAGE>
"Participant Account" means an account established under the Contract for a
Participant. Within each Participant Account, the Contractholder can direct the
establishment of one or more subaccounts as made available by AUL. Contributions
received by AUL shall be credited to Participant Accounts and their subaccounts
as AUL is directed in writing by the Contractholder.
"Plan" means the Plan Sponsor's Code Section 403(b) plan.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract (as provided below), where the
percentage varies by the number of full years measured from the date a
Participant Account is established to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During Withdrawal Charge
Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be at
least equal to a minimum annual Contribution of $200 per Participant in any
full Contract year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine the
existence or amount of Excess Contributions or gains or losses thereon, or
that returns of Excess Contributions are permitted by the Plan and by
applicable provisions of the Code and Regulations. In withdrawing and
returning the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to the "General Withdrawal Provisions"
and "In-Service Benefits" provisions of the Contract.
(c) Contributions received at AUL's Home Office shall be identified by the
Contractholder as Elective Deferrals, Employee Mandatory Contributions, or
Employer Contributions, and shall be credited to the appropriate
subaccounts of each of the Participant Accounts as directed by the
Contractholder in written allocation instructions.
(d) The initial Contribution for a Participant shall be credited and allocated
to the Participant Account no later than the close of business on the
second business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account and allocation instructions regarding the initial
Contribution. If the data required to establish the Participant Account and
allocation instructions regarding the initial Contribution are not received
by AUL at its Home Office when AUL first receives the initial Contribution,
AUL shall allocate the initial Contribution to the Money Market Investment
Account, and shall send written notice to the Contractholder following the
end of the month in which the unallocable initial Contribution is received
by AUL. If proper data and allocation instructions are not provided to AUL
within a reasonable period of time, which shall not exceed 105 days from
the date the initial Contribution is first credited to the Money Market
Investment Account, AUL shall return to the Contractholder all
Contributions that remain unallocated, plus gains or minus losses thereon,
or shall follow other instructions provided by the Contractholder.
(e) All Contributions subsequent to the initial Contribution shall be credited
and allocated as of the close of business on the Valuation Period in which
AUL receives the Contribution at its Home Office, provided that the
Contribution is received by 4:00 p.m. E.S.T. If the Contribution is
received after 4:00 p.m. E.S.T., such Contribution shall be deemed to be
received, and shall be credited and allocated as of the close of business,
on the next succeeding Valuation Period.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or 33-1/3%, as
elected by the Contractholder or by that person designated in writing to
AUL by the Contractholder. If no allocation instruction is made with
respect to any Participant Account, AUL shall process such credits in
accordance with the allocation instruction applicable to the immediately
preceding Contribution. The Contractholder or such designated person may
change an allocation instruction with respect to future allocations to the
applicable Participant Account by giving new written allocation
instructions to AUL at its Home Office.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the Mutual Fund, of another open-end, registered investment company, or
other investment vehicle, for shares already purchased or to be purchased
in the future under the Contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares attributable to the Contractholder's interest in the Variable
Account or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following the
filing or other procedures established by applicable state insurance
regulators. Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts on
the basis of requests made by a majority of other contractholders or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in a new Portfolio of the Mutual Fund, or in other
securities, investment vehicles, or shares of another diversified open-end
management investment company or series thereof. AUL reserves the right to
eliminate or combine existing Investment Accounts if, in its sole
discretion, marketing, tax, or investment conditions so warrant.
AUL also reserves the right to provide other Investment Options under the
Contract at any time. Subject to any required regulatory approvals, AUL
reserves the right to transfer assets from any Investment Account to
another separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Transfers:
(a) Subject to the limitations of (d) through (f) below, the Contractholder, or
that person designated in writing to AUL by the Contractholder, may direct
AUL in writing to transfer the amounts credited to an Investment Option to
any other Investment Option during the Accumulation Period. Any transfer
from an Investment Account shall be effective as of the close of business
on the Valuation Date that AUL receives such written direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T, such transfer
shall be effective as of the close of business on the next succeeding
Valuation Date.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL may be
permitted to defer such payment of amounts withdrawn from the Variable
Account in accordance with appropriate provisions of the
P-12622(BR).2
<PAGE>
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after AUL
receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis, so that amounts
credited to the Participant Account's share of the Fixed Interest Account
which have been on deposit for the longest period of time, as well as the
interest credited thereon, shall be transferred first.
(d) A transfer with regard to the Participant Account's share of any Investment
Option shall not be made in an amount less than $500 or the Participant
Account's entire share, if less than $500. If such a transfer reduces the
Participant Account's remaining share of an Investment Option to less than
$500, the entire remaining share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the last Contract anniversary preceding the request for transfer, or the
Participant Account's entire share of the Fixed Interest Account if such
share would be less than $500 after the transfer.
(f) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge on
a transfer.
(g) The Contractholder, in accordance with the Plan, may direct AUL to
reallocate all or a portion of the Account Value of any Participant Account
among other Participant Accounts. The Contractholder shall certify that
such reallocation is in accordance with the Plan.
(h) If so permitted in the Plan, AUL shall accept amounts transferred from
other contracts which are attributable to contributions made pursuant to
Code Section 403(b). Such transferred amounts shall be credited as directed
by the Contractholder to a separate rollover subaccount established under
the appropriate Participant Accounts.
BENEFITS
General Withdrawal Provisions:
(a) As provided below in "Termination of Service Benefits and Minimum
Distribution Benefits" and in "In-Service Benefits," at any time prior to
termination of the Contract, except as stated below, the Contractholder,
upon submitting a proper written request to AUL at its Home Office, may
direct AUL to withdraw all or a portion of a Participant Account for the
purpose of providing Plan benefits, other than Plan termination benefits,
provided:
(1) that, if the amount being withdrawn is attributable to Contributions
made pursuant to a salary reduction agreement (within the meaning of
Code Section 402(g)(3)(C):
(i) such withdrawal is made to provide a loan; or
P-12622(BR).3
<PAGE>
(ii) any distribution of such amount shall not occur until the
Participant has:
(A) attained age 59 1/2; or
(B) separated from service; or
(C) died; or
(D) become totally disabled (as defined by the Plan); or
(E) experienced a hardship (as defined by the Plan); or
(2) that the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C)); or
(3) that the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity contract.
(4) In the case of a hardship withdrawal referred to in (a)(1)(ii)(E)
above, any gain credited to such Contributions may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. AUL may
rely solely upon the representations of the Contractholder made in the
withdrawal request.
(6) Effective January 1, 1993, eligible rollover distributions as provided
by applicable federal law, regulations, or rulings may be transferred
to a substitute funding medium.
(b) Withdrawals from a Participant Account's share of an Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the In vestment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn.
(c) A withdrawal request shall be effective, and the Account Value to be
applied shall be determined, as of the close of business on the Valuation
Date that AUL receives a proper written withdrawal request (or due proof of
death, if received later) at its Home Office, provided that AUL receives
such request or due proof of death by 4:00 p.m. E.S.T. on that Valuation
Date. If such request or due proof of death is received after 4:00 p.m.
E.S.T., such request shall be effective as of the close of business on the
next succeeding Valuation Date.
(d) AUL shall pay any cash lump sum to the Contractholder or to whomever the
Contractholder directs within 7 days from the appropriate Valuation Date as
determined in (c) above, except as AUL may be permitted to defer such
payment of amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves the
right to defer the payment of amounts withdrawn from the Fixed Interest
Account for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(e) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be withdrawn first.
Termination of Service Benefits and Minimum Distribution Benefits:
(a) At any time prior to termination of the Contract, the Contractholder may
direct AUL to withdraw all or a portion of the Account Value (subject to
any appropriate premium tax or similar tax charge) of a Participant Account
for the purpose of providing benefits upon termination of service as
provided by the Plan (other than Plan termination benefits) or minimum
distribution benefits pursuant to Code Section 401(a)(9) and Regulations
issued thereunder (but only if an amount equal to the required minimum
distribution amount as calculated pursuant to Code Section 401(a)(9) is
withdrawn, or if an annuity is provided by AUL under the Contract), subject
to the limitations provided above under "General Withdrawal Provisions."
Except for death benefits as provided in (b) below, payment shall be made
in a cash lump sum to the Contractholder or to whomever the Contractholder
directs, or as an annuity in accordance with the Annuity Options shown
below as directed by the Contractholder.
(b) Regarding death benefits specifically, notwithstanding the Contract
termination provisions of the Contract, upon receipt at its Home Office of
written instructions from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to any
appropriate premium tax or similar tax charge) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). This death benefit shall be
payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to any appropriate
premium tax or similar tax charge) must be paid to the beneficiary on
or before December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown below over
a period not to exceed the life or life expectancy of the beneficiary.
If the beneficiary is not the Participant's surviving spouse, the
annuity must begin on or before December 31 of the calendar year
immediately following the calendar year in which the Participant died.
If the beneficiary is the Participant's surviving spouse, the annuity
need not begin before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
In-Service Benefits:
At any time prior to termination of the Contract, the Contractholder may direct
AUL to make a cash payment from a Participant Account to the Contractholder or
to whomever the Contractholder directs for the purpose of providing in-service
benefits as provided by the Plan (except for Code Section 401(a)(9) minimum
distribution benefits covered above under "Termination of Service Benefits and
Minimum Distribution Benefits"), such as for loans or hardships (as defined by
the Plan), subject to the limitations provided above under "General Withdrawal
Provisions."
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value. If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the Participant Account by an amount
determined pursuant to the following formula:
Reduction in cash payment
Account Value = (1 - decimal equivalent of Withdrawal Charge percentage)
Notwithstanding the previous paragraph, in any Contract year the Contractholder
may withdraw up to 10% of the Account Value of a Participant Account determined
as of the last Contract anniversary preceding the request for the withdrawal
without application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is credited to
his Participant Account by AUL to the date of such withdrawal.
Annuity Options:
At the written request of the Contractholder pursuant to the provisions of
"Termination of Service Benefits and Minimum Distribution Benefits" above, AUL
shall apply all or a portion of the Account Value (subject to any appropriate
premium tax or similar tax charge) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request for
an annuity, AUL is hereby authorized by the Contractholder to value and transfer
the Participant Account's share of the Variable Account to the Fixed Interest
Account as of the date that AUL receives such written request at its Home
Office. Such transferred amounts shall be held in the Fixed Interest Account
until the Participant's Annuity Commencement Date. The Contractholder request
shall include certification as to the purpose for the annuity and the election
of one of the following annuity options.
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the annuitant's
monthly annuity shall be paid to the contingent annuitant named in the
election for as long as the contingent annuitant lives. An election of this
option is automatically cancelled if either the Participant or the
contingent annuitant dies before the Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable to
the annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the death of
the annuitant, the sum of the monthly payments previously received is less
than the amount applied to provide the annuity, monthly payments of the
same amount shall continue to the annuitant's beneficiary until the total
of the monthly payments received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such
fixed period.
(f) Any other annuity options made available by AUL at the time the option to
elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) above, but shall be paid in a lump sum.
If the monthly annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis or to pay the
appropriate amount in a single sum.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
(not to exceed $100 per contract year quarter) is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under the Contract by that Participant Account.
AUL reserves the right to deduct a charge (not to exceed $25) for each transfer
transaction, to deduct the appropriate premium tax charge, or to deduct the
appropriate charges for federal, state, or local income taxes incurred by AUL
that are attributable to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract (except the Table of Immediate
Annuities) to comply with, or give the Contractholder or Participants the
benefit of, any provisions of federal or state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of termination, the Contractholder, together with the Plan
sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) A single sum equal to that portion of the aggregate Withdrawal Value of all
Participant Accounts consisting of all of the Accumulation Units of each
Investment Account credited to such Participant Accounts shall be
calculated as of the close of business on the effective date of termination
and shall be payable within 7 days from the effective date of termination,
except as AUL may be permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(b) In addition to the amount payable pursuant to (a) above, commencing on the
first Contract anniversary immediately following the effective date of
termination, a portion of each Participant Account shall be paid in annual
installments as follows:
(1) As of the first Contract anniversary immediately following the
effective date of termination, one-seventh of that portion of the
Withdrawal Value of each Participant Account consisting of the net
dollar balance in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be payable.
(2) As of the second Contract anniversary following the effective date of
termination, one-sixth of that portion of the Withdrawal Value of each
Participant Account consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall be
calculated and shall be payable.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of termination, the Contractholder, together with the Plan
sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) A single sum equal to that portion of the aggregate Withdrawal Value of all
Participant Accounts consisting of all of the Accumulation Units of each
Investment Account credited to such Participant Accounts shall be
calculated as of the close of business on the effective date of termination
and shall be payable within 7 days from the effective date of termination,
except as AUL may be permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(b) In addition to the amount payable pursuant to (a) above, commencing on the
first Contract anniversary immediately following the effective date of
termination, a portion of each Participant Account shall be paid in annual
installments as follows:
(1) As of the first Contract anniversary immediately following the
effective date of termination, one-seventh of that portion of the
Withdrawal Value of each Participant Account consisting of the net
dollar balance in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be payable.
<PAGE>
(2) As of the second Contract anniversary following the effective date of
termination, one-sixth of that portion of the Withdrawal Value of each
Participant Account consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall be
calculated and shall be payable.
(3) As of the third Contract anniversary following the effective date of
termination, one-fifth of that portion of the Withdrawal Value of each
Participant Account consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall be
calculated and shall be payable.
(4) As of the fourth Contract anniversary following the effective date of
termination, one-fourth of that portion of the Withdrawal Value of
each Participant Account consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
(5) As of the fifth Contract anniversary following the effective date of
termination, one-third of that portion of the Withdrawal Value of each
Participant Account consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall be
calculated and shall be payable.
(6) As of the sixth Contract anniversary following the effective date of
termination, one-half of that portion of the Withdrawal Value of each
Participant Account consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall be
calculated and shall be payable.
(7) As of the seventh Contract anniversary following the effective date of
termination, the entire remaining portion of the Withdrawal Value of
each Participant Account consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
The Current Rates of Interest being credited to other contracts of this
class shall be credited from the effective date of termination until the
final payment is made under (b) above.
Until such time as the above-referenced election is implemented, the terms of
the Contract remain applicable, except that AUL has the right to refuse to
accept further Contributions.
Termination by AUL:
(a) AUL has the right, subject to applicable state law, to terminate any
Participant Account established under the Contract at any time during the
Contract year if the Account Value of such Participant Account is less than
$200 for the first Contract year in which a Contribution is made for the
Participant, and $400 for any subsequent Contract year, and at least 6
months have elapsed since the Contractholder's last previous Contribution
to the Contract. If AUL elects to terminate a Participant Account in such
event, such termination shall be effective on the date 6 months following
the date that AUL gives notice to the Contractholder and the Participant
that the Participant Account is to be terminated, provided that the
Contractholder fails to make Contributions during such 6-month period
sufficient to bring such Account Value up to the minimum level.
(b) Upon termination of a Participant Account by AUL, AUL may elect to have a
single sum equal to the Account Value of the Participant Account calculated
and paid to the Contractholder within 7 days from the effective date of
termination. Any such payment shall be in full settlement of the
Participant Account under the Contract and in lieu of any other payment
under its terms.
P-12622(BR).11
<PAGE>
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Certification of Plan Status: The Contractholder certifies, upon acceptance of
the Contract, that, in the Contractholder's opinion, the Plan meets the
requirements of Code Section 403(b). AUL does not make any guarantee regarding
the federal, state, or local tax status of the Contract, any Participant Account
established thereunder, or any transaction involving the Contract.
Essential Data: The Contractholder shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to and received by AUL at its Home Office before becoming effective,
unless the Contractholder or Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to the
Contractholder or to any person or entity when directed to do so in writing by
the Contractholder. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of the
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of the Mutual Fund in its own right, it may elect to do so.
(b) The person having the voting interest under the Contract is the
Contractholder.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or the Mutual Fund as may
be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of
the vested portion (as deter mined pursuant to the Plan) of a Participant
Account under the Contract shall be nonforfeitable at all times. No sum
payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person
or entity other than AUL. In addition, to the extent permitted by law, no
such sum shall in any way be subject to legal process requiring the payment
of any claim against the payee.
Acceptance of New Contributions: AUL reserves the right to refuse to accept new
Contributions to the Contract at any time.
P-12622(BR).12
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a Mutual Fund as described in the prospectus for
the Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
Addition, Deletion, or Substitution of Investments:
a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the Contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the Contract. Where required under applicable law, AUL
will not substitute any shares attributable to the Contractholder's
interest in the Variable Account or any Investment Account without notice,
Contractholder or Participant approval, or prior approval of the Securities
and Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the Variable
Account from purchasing other securities for other series or classes of
P-12622(BR).ADD.1
<PAGE>
contracts, or from effecting a conversion between series or classes of
contracts on the basis of requests made by a majority of other contract-
holders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
General Withdrawal Provisions:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to be
paid, then the distribution shall be paid to that eligible retirement plan
in a direct rollover.
Termination of Service Benefits and Minimum Distribution Benefits:
(a) At any time prior to termination of the Contract, the Contractholder may
direct AUL to withdraw all or a portion of the Account Value (subject to
any appropriate premium tax or similar tax charge) of a Participant Account
for the purpose of providing benefits upon termination of service as
provided by the Plan (other than Plan termination benefits) or minimum
distribution benefits pursuant to Code Section 401(a)(9) and Regulations
issued thereunder, subject to the limitations provided above under "General
Withdrawal Provisions." Except for death benefits as provided in (b) below,
payment shall be made in a cash lump sum to the Contractholder or to
whomever the Contractholder directs, or as an annuity in accordance with
the Annuity Options shown below as directed by the Contractholder.
In-Service Benefits:
At any time prior to termination of the Contract, the Contractholder may direct
AUL to withdraw all or a portion of the Account Value (subject to any
appropriate premium tax or similar tax charge) of a
P-12622(BR).ADD.2
<PAGE>
Participant Account for the purpose of providing in-service benefits as provided
by the Plan, such as for loans or hardships (as defined by the Plan), subject to
the limitations provided above under "General Withdrawal Provisions." Payment
shall be made in a cash lump sum to the Contractholder or to whomever the
Contractholder directs, or as an annuity in accordance with the Annuity Options
shown below as directed by the Contractholder.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
P-12622(BR).ADD.3
Voting:
P-12622(BR).ADD.4
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund offers its
shares to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL will
vote its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
P-12622(BR).ADD.5
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
(participant account year)
(conversion)
<PAGE>
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities,"
as provided by the Plan, where the percentage varies by the Participant Account
Year in which the withdrawal is made. The first Participant Account Year begins
on the date when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding the
next anniversary of such date. Each Participant Account Year thereafter begins
on such an anniversary date and ends on the day immediately preceding the next
succeeding anniversary date. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III group annuity contract issued to the Contractholder, the initial Withdrawal
Charge percentage under the Contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the AUL Series I group annuity
contract from which funds have been transferred to such Series III contract,
determined by AUL immediately prior to the date of such transfer, rounded down
to the next whole Withdrawal Charge percentage if the Withdrawal Charge
percentage under such Series I contract is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract Withdrawal
Charge percentage is less than 4%, it shall be rounded up to 4% in the
Contract.) This 4% Withdrawal Charge percentage shall be in effect during the
next 6 consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine the
existence or amount of Excess Contributions or gains or losses thereon, or
that returns of Excess Contributions are permitted by the Plan and by
applicable provisions of the Code and Regulations. In withdrawing and
returning the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to the "General Withdrawal Provisions"
and "Other Plan Benefits Payable in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of business on
the second business day of AUL after the later of (1) the business day that
AUL receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount of the
initial Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(participant account year)
(conversion)
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
(contract year)
(conversion)
<PAGE>
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities,"
as provided by the Plan, where the percentage varies by the Contract year in
which the withdrawal is made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Year Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III group annuity contract issued to the Contractholder, the initial Withdrawal
Charge percentage under the Contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the AUL Series I group annuity
contract from which funds have been transferred to such Series III contract,
determined by AUL immediately prior to the date of such transfer, rounded down
to the next whole Withdrawal Charge percentage if the Withdrawal Charge
percentage under such Series I contract is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Contract year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable Series I contract Withdrawal Charge
percentage is less than 4%, it shall be rounded up to 4% in the Contract.) This
4% Withdrawal Charge percentage shall be in effect during the next 6 consecutive
Contract years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine the
existence or amount of Excess Contributions or gains or losses thereon, or
that returns of Excess Contributions are permitted by the Plan and by
applicable provisions of the Code and Regulations. In withdrawing and
returning the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to the "General Withdrawal Provisions"
and "Other Plan Benefits Payable in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of business on
the second business day of AUL after the later of (1) the business day that
AUL receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount of the
initial Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(contract year)
(conversion)
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
(participant account year)
(non-conversion)
<PAGE>
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities,"
as provided by the Plan, where the percentage varies by the Participant Account
Year in which the withdrawal is made. The first Participant Account Year begins
on the date when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding the
next anniversary of such date. Each Participant Account Year thereafter begins
on such an anniversary date and ends on the day immediately preceding the next
succeeding anniversary date. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine the
existence or amount of Excess Contributions or gains or losses thereon, or
that returns of Excess Contributions are permitted by the Plan and by
applicable provisions of the Code and Regulations. In withdrawing and
returning the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to the "General Withdrawal Provisions"
and "Other Plan Benefits Payable in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of business on
the second business day of AUL after the later of (1) the business day that
AUL receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount of the
initial Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(participant account year)
(non-conversion)
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
EMPLOYER-SPONSORED TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
The first sentence of the definition of "Contributions" is deleted, and the
following sentence is substituted in lieu thereof:
"Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to the Contract from another AUL group annuity contract,
which are credited to a Participant Account.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A of the Contract.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
(contract year)
(non-conversion)
<PAGE>
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities,"
as provided by the Plan, where the percentage varies by the Contract year in
which the withdrawal is made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine the
existence or amount of Excess Contributions or gains or losses thereon, or
that returns of Excess Contributions are permitted by the Plan and by
applicable provisions of the Code and Regulations. In withdrawing and
returning the identified amount, AUL may rely solely on such written
instructions and certification. Such a withdrawal and return of Excess
Contributions shall not be subject to the "General Withdrawal Provisions"
and "Other Plan Benefits Payable in Cash" provisions of the Contract.
(d) (1) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of business on
the second business day of AUL after the later of (1) the business day that
AUL receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount of the
initial Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the Contractholder.
(contract year)
(non-conversion)
(3) If the data required to establish a Participant Account and
instructions regarding the amount of the initial Contribution for the
Participant are received, but Investment Option election instructions
regarding the initial Contribution are not received, by AUL at its
Home Office as of the date AUL receives the initial Contribution, AUL
shall allocate the initial Contribution to the AUL American Money
Market Investment Account, and shall send written notice to the
Contractholder following the end of the month in which the unallocable
initial Contribution is received by AUL. Upon receipt of proper
Investment Option election instructions for the Participant, AUL shall
then transfer such amounts credited to the AUL American Money Market
Investment Account, plus gains or minus losses thereon, to another
Investment Option, if such instructions so direct. If proper
Investment Option election instructions are not provided to AUL within
a reasonable period of time, which shall not exceed 105 days from the
date the initial Contribution is first credited to the AUL American
Money Market Investment Account, AUL shall return to the
Contractholder all Contributions that remain unallocated, plus gains
or minus losses thereon, or shall follow other instructions provided
by the Contractholder.
(e) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the close
of business on the later of (1) the Valuation Period in which AUL receives
that Contribution at its Home Office or (2) the Valuation Period in which
AUL receives, at its Home Office, the data required to establish the
Participant Account, instructions regarding the amount of that Contribution
for the Participant, and Investment Option election instructions.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated to AUL
by the Contractholder. If no investment allocation instruction is made with
respect to any Participant Account, AUL shall process such credits in
accordance with the investment allocation instruction applicable to the
immediately preceding Contribution. The Contractholder or such designated
person may change an investment allocation instruction with respect to
future allocations to the applicable Participant Account by giving new
investment allocation instructions to AUL at its Home Office in a form
acceptable to AUL.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible Mutual
Funds or Mutual Fund Portfolios and to substitute shares of, or interests
in, another Portfolio of the AUL American Series Fund, Inc., another
open-end, registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
Contract, if the shares of any or all eligible Mutual Funds or Mutual Fund
Portfolios are no longer available for investment, or if further investment
in any or all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares attributable to the Contractholder's interest in the Variable
Account or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following the
filing or other procedures established by applicable state insurance
regulators. Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts on
the basis of requests made by a majority of other contractholders or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund or Mutual Fund
Portfolio listed in the current prospectus for the Variable Account, or in
other securities or investment vehicles. AUL reserves the right to
eliminate or combine existing Investment Accounts if marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
<PAGE>
Transfers:
(a) Subject to the limitations of (d) through (f) below, the Contractholder, or
that person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period. Any
transfer from an Investment Account shall be effective as of the close of
business on the Valuation Date that AUL receives such transfer direction.
(d) The minimum transfer from the Participant Account's share of any Investment
Option is the lesser of $500 or the Participant Account's entire share of
that Investment Option. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500, the
entire remaining share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the later of the Contract date or the Contract anniversary immediately
preceding the request for transfer. Notwithstanding the previous sentence,
if the Participant Account's share of the Fixed Interest Account is less
than $2,500 determined as of the later of the Contract date or the Contract
anniversary immediately preceding the request for transfer, the amount
transferrable from the Fixed Interest Account for that Contract year is the
lesser of $500 or the Participant Account's entire share of the Fixed
Interest Account. And if that transfer reduces the Participant Account's
remaining share of the Fixed Interest Account to less than $500, the entire
remaining share shall also be transferred.
BENEFITS
General Withdrawal Provisions:
At any time prior to the termination of the Contract, the Contractholder may
direct AUL to withdraw all or a portion of a Participant Account pursuant to
"'Benefit Responsive' Plan Benefits and Annuities" and "Other Plan Benefits
Payable in Cash" to provide Plan benefits (other than Plan termination
benefits). Such Contractholder direction must be submitted to AUL at its Home
Office in a form acceptable to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under another
Code Section 403(b) annuity contract may be withdrawn to provide such
benefits.
(b) Amounts attributable to Contributions made other than pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C)) may
be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary reduction
agreement (within the meaning of Code Section 402(g)(3)(C)) may be
withdrawn to provide such benefits, provided that the withdrawal is made to
provide a loan or that any distribution of such amount shall not occur
until the Participant has either attained age 59 1/2, separated from
service, died, become totally disabled (as defined by the Plan), or
experienced a hardship (as defined by the Plan). However, in the case of a
hardship withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred directly by
AUL pursuant to Contractholder or Participant instructions to another
tax-deferred annuity funding vehicle under applicable IRS rules and
regulations is not the provision of a Plan benefit for purposes of
"'Benefit Responsive' Plan Benefits and Annuities," but instead is a
Contract termination as to that amount for that Participant; and any such
withdrawal shall be subject to application of the Withdrawal Charge
pursuant to "Other Plan Benefits Payable in Cash." The Contractholder
hereby grants to a Participant the right to direct the withdrawal and
direct transfer of such Participant's voluntary Elective Deferrals (as
determined by the Contractholder) to another tax-deferred annuity funding
vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T
Q&A-2, the distributee of any eligible rollover distribution elects to have
the distribution paid directly to an eligible retirement plan (as defined
in Q&A-1 of that Section) and specifies the eligible retirement plan to
which the distribution is to be paid, then the distribution shall be paid
to that eligible retirement plan in a direct rollover.
<PAGE>
(f) AUL shall not be responsible for determining a Participant's compliance
with the requirements in (a) through (e) above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full responsibility
for determining whether any withdrawal is permitted under applicable law
and under the terms of a particular Plan. AUL may rely solely upon the
representations of the Contractholder made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to "'Benefit Responsive' Plan Benefits and Annuities,"
"Other Plan Benefits Payable in Cash," or "Annuity Options" shall be
determined, as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if received
later), in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever the
Contractholder directs within 7 days from the appropriate Valuation Date as
determined in (h) above, except as AUL may be permitted to defer such
payment of amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves the
right to defer the payment of amounts withdrawn from the Fixed Interest
Account for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be withdrawn first.
Termination of Service Benefits and Minimum Distributions is deleted, and the
following "Benefit Responsive" Plan Benefits and Annuities is substituted in
lieu thereof:
"Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitation provided in "General Withdrawal Provisions," and
subject to the provisions of (b) below for death benefits, at any time
prior to the termination of the Contract, the Contractholder may direct AUL
to withdraw all or a portion of the Account Value (subject to any
appropriate premium tax or similar tax charge) of a Participant Account for
the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in "Annuity
Options," as directed by the Contractholder, for benefits as provided
by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9) and
Regulations issued thereunder, or benefits upon attainment of age 59
1/2, provided that such benefit upon attainment of age 59 1/2 is a
taxable distribution paid to the Participant and not to any other
person or entity, including any substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions of
"Contract Termination," upon receipt at its Home Office of instructions in
a form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to any
appropriate premium tax or similar tax charge) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. This death benefit shall be payable:
<PAGE>
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the appropriate
premium tax or similar tax charge) must be paid to the beneficiary on
or before December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in "Annuity
Options" over a period not to exceed the life or life expectancy of
the beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any interest
remaining under the Annuity Option selected shall be paid at least as rapidly as
prior to the Participant's death.
In-Service Benefits is deleted, and the following Other Plan Benefits Payable in
Cash is substituted in lieu thereof:
Other Plan Benefits Payable in Cash:
Subject to the limitations provided in "General Withdrawal Provisions," at any
time prior to the termination of the Contract, the Contractholder may direct AUL
to make a cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan benefits
other than those provided in (a)(2) of "'Benefit Responsive' Plan Benefits and
Annuities." If it is necessary to withdraw the entire Account Value of a
Participant Account to make such payment, the amount paid shall equal the
Withdrawal Value, minus any appropriate premium tax or similar tax charge. If it
is not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the Participant Account by an amount
sufficient to make the cash payment requested and to cover the Withdrawal Charge
and any appropriate premium tax or similar tax charge.
Notwithstanding the previous paragraph, in the first Contract year in which a
Participant Account is established, the Contractholder may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract date or the
Contract anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract year, without application of the
Withdrawal Charge. In the next succeeding Contract year, the Contractholder may
also withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract anniversary
immediately preceding the request for the withdrawal) plus Contributions made
during that Contract year, without application of the Withdrawal Charge. In any
subsequent Contract year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account (determined
as of the Contract anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
Annuity Options:
At the written request of the Contractholder pursuant to "'Benefit Responsive'
Plan Benefits and Annuities," AUL shall apply all or a portion of the Account
Value (subject to the appropriate premium tax or similar tax charge) of a
Participant Account for the purpose of providing a fixed payment annuity under
the Plan. Upon receipt of a request for an annuity, AUL is hereby authorized by
the Contractholder to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date provided in (h) of
"General Withdrawal Provisions." Such transferred amounts shall be held in the
Fixed Interest Account until the Participant's Annuity Commencement Date. The
Contractholder request shall include certification as to the purpose for the
annuity and the election of one of the following annuity options.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 20 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such fixed period.
<PAGE>
VALUATIONS
The first and second paragraphs of "Valuations" are deleted, and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to (d)(1) of "Contributions" on the next succeeding Valuation Period,
the unit value as of the end of that Valuation Period shall be used. Such
crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second and third paragraphs of "Other Charges" are deleted, and the
following paragraphs are substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL hereby waives the administrative charge described hereafter in this
paragraph. AUL shall deduct an administrative charge per Contract year quarter
equal to the lesser of $7.50 or 0.5% of the Account Value on the last day of
each such quarter from each Participant Account in existence on such day for so
long as the Participant Account is in effect during the Accumulation Period.
This charge (not to exceed $100 per Contract year quarter) is to be prorated
among each subaccount of the Participant Account which corresponds to each
Investment Option utilized under the Contract by that Participant Account.
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal to the
Account Value of the Participant Account shall be calculated as of the date
of the close of business on the effective date of termination and shall be
payable within 7 days from such effective date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual Fund
or Mutual Fund Portfolio held in the Investment Accounts at any regular and
special meetings of the shareholders of a Mutual Fund on
(NJ)
(companion)
<PAGE>
matters requiring shareholder voting under The Investment Company Act of
l940 or other applicable laws. AUL shall exercise these voting rights based
on instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of a Mutual
Fund or Mutual Fund Portfolio in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund or Mutual
Fund Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required by
applicable law, AUL will vote its own shares in the same proportion as the
voting instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
(NJ)
(companion)
<PAGE>
VALUATIONS
The first and second paragraphs of "Valuations" are deleted, and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to (d)(1) of "Contributions" on the next succeeding Valuation Period,
the unit value as of the end of that Valuation Period shall be used. Such
crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second and third paragraphs of "Other Charges" are deleted, and the
following paragraphs are substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL hereby waives the administrative charge described hereafter in this
paragraph. AUL shall deduct an administrative charge per Contract year quarter
equal to the lesser of $7.50 or 0.5% of the Account Value on the last day of
each such quarter from each Participant Account in existence on such day for so
long as the Participant Account is in effect during the Accumulation Period.
This charge is to be prorated among each subaccount of the Participant Account
which corresponds to each Investment Option utilized under the Contract by that
Participant Account.
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal to the
Account Value of the Participant Account shall be calculated as of the date
of the close of business on the effective date of termination and shall be
payable within 7 days from such effective date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual Fund
or Mutual Fund Portfolio held in the Investment Accounts at any regular and
special meetings of the shareholders of a Mutual Fund on
(G&W companion)
(corporate companion)
<PAGE>
matters requiring shareholder voting under The Investment Company Act of
l940 or other applicable laws. AUL shall exercise these voting rights based
on instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of a Mutual
Fund or Mutual Fund Portfolio in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund or Mutual
Fund Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required by
applicable law, AUL will vote its own shares in the same proportion as the
voting instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
(G&W companion)
(corporate companion)
<PAGE>
VALUATIONS
The first and second paragraphs of "Valuations" are deleted, and the following
paragraphs are substituted in lieu thereof:
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to (d)(1) of "Contributions" on the next succeeding Valuation Period,
the unit value as of the end of that Valuation Period shall be used. Such
crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
OTHER CHARGES
The second paragraph of "Other Charges" is deleted, and the following paragraph
is substituted in lieu thereof:
A Mutual Fund or Mutual Fund Portfolio shall pay an investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
CONTRACT TERMINATION
Termination by AUL:
(b) Upon termination of a Participant Account by AUL, a single sum equal to the
Account Value of the Participant Account shall be calculated as of the date
of the close of business on the effective date of termination and shall be
payable within 7 days from such effective date of termination.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home office before becoming effective.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual Fund
or Mutual Fund Portfolio held in the Investment Accounts at any regular and
special meetings of the shareholders of a Mutual Fund on
(non-companion)
<PAGE>
matters requiring shareholder voting under The Investment Company Act of
l940 or other applicable laws. AUL shall exercise these voting rights based
on instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of a Mutual
Fund or Mutual Fund Portfolio in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund or Mutual
Fund Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required by
applicable law, AUL will vote its own shares in the same proportion as the
voting instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
(non-companion)
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective January 1, 1993:
If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T Q&A-2,
the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as defined in Q&A-1
of that Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
And by adding the following provision, effective January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-12621BR.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year
and each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First Contract
Anniversary.
By deleting the first sentence of Section 1.9 and by substituting the following
first sentence in lieu thereof:
1.9 "Contributions" means amounts paid to AUL pursuant to the Plan,
including amounts transferred to this contract from another AUL group annuity
contract, which are credited to a Participant Account maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account
which is maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts allocated
to any Investment Account identified in Schedule A of the contract shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
P-12621(BR).AMD.1
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a
portfolio established within a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan, where
the percentage varies by the Participant Account Year in which the withdrawal is
made. The first Participant Account Year begins on the date when AUL establishes
a Participant Account and credits the initial Contribution for the Participant,
and ends on the day immediately preceding the next anniversary of such date.
Each Participant Account Year thereafter begins on such an anniversary date and
ends on the day immediately preceding the next succeeding anniversary date. The
Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment
Option election applicable to the immediately preceding Contribution.
The Contractholder or such designated person may change an Investment
Option election with respect to future allocations to the applicable
Participant Account by giving new Investment Option elections to AUL
at its Home Office in a form acceptable to AUL.
(par year)
P-12621(BR).AMD.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a
portfolio established within a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan, where
the percentage varies by the Contract Year in which the withdrawal is made. The
Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment
Option election applicable to the immediately preceding Contribution.
The Contractholder or such designated person may change an Investment
Option election with respect to future allocations to the applicable
Participant Account by giving new Investment Option elections to AUL
at its Home Office in a form acceptable to AUL.
(con year)
P-12621(BR).AMD.2
<PAGE>
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution,
AUL shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is
generally the AUL American Money Market Investment Account. If AUL
subsequently receives the data required to establish the Participant
Account, instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Option identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or
P-12621(BR).AMD.3
<PAGE>
interests in, another Portfolio of the AUL American Series Fund, Inc.,
another open-end, registered investment company, or another investment
vehicle, for shares already purchased or to be purchased in the future
under the contract, if the shares of any or all eligible Mutual Funds
or Mutual Fund Portfolios are no longer available for investment or if
further investment in any or all eligible Mutual Funds or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares attributable to the
Contractholder's interest in the Variable Account or any Investment
Account without notice, Contractholder or Participant approval, or
prior approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 3 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
4.1 General Withdrawal Provisions: Subject to the following provisions of
this Section, at any time prior to termination of the contract pursuant to
Article 8, the Contractholder may direct AUL to withdraw all or a portion of a
Participant Account pursuant to Sections 4.2 and 4.3 to provide Plan benefits
(other than Plan termination benefits). Such Contractholder direction must be
submitted to AUL at its Home Office in a form acceptable to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age
59 1/2, separated from service, died, become totally disabled (as
defined by the Plan), or
P-12621(BR).AMD.4
<PAGE>
experienced a hardship (as defined by the Plan). However, in the case
of a hardship withdrawal, any gain credited to such Contributions may
not be withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for
purposes of Section 4.2, but instead is a Contract termination as to
that amount for that Participant; and any such withdrawal shall be
subject to application of the Withdrawal Charge pursuant to Section
4.3. The Contractholder hereby grants to a Participant the right to
direct the withdrawal and direct transfer of such Participant's
voluntary Elective Deferrals (as determined by the Contractholder) to
another tax-deferred annuity funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. AUL may
rely solely upon the representations of the Contractholder made in the
withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 3 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
P-12621(BR).AMD.5
<PAGE>
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan
(other than Plan termination benefits) for retirement, death,
disability, termination of employment, hardships, loans, required
minimum distribution benefits pursuant to Code Section 401(a)(9)
and Regulations issued thereunder, or benefits upon attainment of
age 59 1/2, provided that such benefit upon attainment of age 59
1/2 is a taxable distribution paid to the Participant and not to
any other person or entity, including any substitute funding
medium.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.5) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations
provided in Section 4.1, at any time prior to termination of the contract
pursuant to the provisions of Article 8, the Contractholder may direct AUL to
make a cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan benefits
other than those provided in Section 4.2(a)(2). If it is necessary to withdraw
the entire Account Value of a Participant Account to make such payment, the
amount paid shall equal the Withdrawal Value, minus any Section 6.5 charges. If
it is not necessary to withdraw the
(BR)
P-12621(BR).AMD.6
<PAGE>
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan; or
(3) providing the Participant has attained (1) age 55 and has 10
years of service with the employer identified in the Plan or (2)
age 62, a cash lump-sum payment to the Contractholder or to
whomever the Contractholder directs to pay benefits as provided
by the Plan (other than Plan termination benefits) for
retirement, disability, termination of employment, hardships,
loans, required minimum distribution benefits pursuant to Code
Section 401(a)(9) and Regulations issued thereunder, or benefits
upon attainment of age 59 1/2, provided that such benefit upon
attainment of age 59 1/2 is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.5) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations
provided in Section 4.1, at any time prior to termination of the contract
pursuant to the provisions of Article 8, the Contractholder may direct AUL to
make a cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan benefits
other than those provided in Section 4.2(a)(2) and (3). If it is necessary to
withdraw the entire Account Value of a Participant Account to make such payment,
the amount paid shall equal the Withdrawal Value, minus any Section 6.5 charges.
If it is not necessary to withdraw the
(MBR)
P-12621(BR).AMD.7
<PAGE>
entire Account Value to make such payment, AUL shall reduce the Account Value of
the Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which a
Participant Account is established, the Contractholder may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In the next succeeding Contract Year, the Contractholder may
also withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus Contributions made
during that Contract Year, without application of the Withdrawal Charge. In any
subsequent Contract Year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account (determined
as of the Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
4.4 Election of Annuity Options: At the written request of the
Contractholder pursuant to Section 4.2, AUL shall apply all or a portion of the
Account Value (subject to Section 6.5) of a Participant Account for the purpose
of providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the Fixed
Interest Account as of the date provided in Section 4.1(h). Such transferred
amounts shall be held in the Fixed Interest Account until the Participant's
Annuity Commencement Date. The Contractholder request shall include
certification as to the purpose for the annuity and the election of one of the
following annuity options, notification of the Annuity Commencement Date,
written designation of the contingent annuitant or beneficiary, and any election
forms needed in connection with any benefit option requested. The amount of any
annuity shall be computed from the Table of Immediate Annuities then included in
this contract, except as provided under Section 4.7.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in the
prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as such
prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the form
of Accumulation Units on the basis of the value of such units in that Investment
Account as of the later of (1) the end of the Valuation Period on which such
amounts are received by AUL at its Home Office or (2) the end of the Valuation
Period on which the data required to establish the Participant Account and
allocate such amounts to the Participant Account and to Investment Options are
received by AUL at its Home Office. However, if the initial Contribution for a
Participant is allocated pursuant to Section 3.2(c) on the next succeeding
Valuation Period, the unit value as of the end of that Valuation Period shall be
used. Such crediting shall be made separately for amounts allocated to each
Investment Account. The number of Accumulation Units in each Investment Account
credited to each Participant Account as of any Valuation Period shall be
determined by dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on the
applicable Valuation Period. The number of Accumulation Units thus determined
shall not be changed by any subsequent change in the dollar value of the
Accumulation Units.
P-12621(BR).AMD.8
<PAGE>
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account available under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a) by
(b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period; plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual
Fund Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or any
extraordinary expenses, as described in the current prospectus for that Mutual
Fund or Mutual Fund Portfolio as it may be amended or supplemented from time to
time. These expenses may vary from year to year. The net asset value of each
Mutual Fund or Mutual Fund Portfolio share reflects such investment advisory fee
P-12621(BR).AMD.9
<PAGE>
and other expenses which are deducted from the assets of such Mutual Fund or
Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this Section
6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1, 4.2,
4.3, or 4.4 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived by
AUL, the maximum administrative charge discussed hereafter in this Section 7.3
shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if
the Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of the
close of business on the Valuation Date that AUL receives a proper written
Contractholder notice at its Home Office. This date shall be the effective date
of termination. This contract shall also terminate automatically as of the date
that there are no Participant Accounts maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Mutual Fund or Mutual Fund Portfolio, nor any of the other provisions
and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to and
received by AUL at its Home Office before becoming effective.
P-12621(BR).AMD.10
<PAGE>
and other expenses which are deducted from the assets of such Mutual Fund or
Mutual Fund Portfolio.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1, 4.2,
4.3, or 4.4 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if
the Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of the
close of business on the Valuation Date that AUL receives a proper written
Contractholder notice at its Home Office. This date shall be the effective date
of termination. This contract shall also terminate automatically as of the date
that there are no Participant Accounts maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Mutual Fund or Mutual Fund Portfolio, nor any of the other provisions
and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to and
received by AUL at its Home Office before becoming effective.
(Do not use this page without consulting L. Walburn or Ellen Bardwell)
P-12621(BR).AMD.10
<PAGE>
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
P-12621(BR).AMD.11
<PAGE>
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By __________________________________
Title _______________________________
Date ________________________________
(new business)
P-12621(BR).AMD.12
<PAGE>
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER
By __________________________________
Title _______________________________
Date ________________________________
AMERICAN UNITED LIFE INSURANCE COMPANY
By __________________________________
Title _______________________________
Date ________________________________
(existing business)
P-12621(BR).AMD.12
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ----------------- ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-12621(BR).AMD.13
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
CONTRACTHOLDER AUL
By ____________________________________________ By ____________________________________________
Title__________________________________________ Title _________________________________________
Date___________________________________________ Date __________________________________________
</TABLE>
P-12621(BR).A
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC HOSPITAL
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.9 and by substituting the following
first sentence in lieu thereof:
1.9 "Contributions" means amounts paid to AUL pursuant to the Plan, including
amounts transferred to this contract from another AUL group annuity
contract, which are credited to a Participant Account maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
p-12621(BR).II.1
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL
Series III group annuity contract GA XX,XXX, the initial Withdrawal Charge
percentage under this contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the previous AUL Series III
group annuity contract from which funds have been transferred to such
Series III companion contract, determined by AUL immediately prior to the
date of such transfer, rounded down to 8% if the Withdrawal Charge
percentage under such previous Series III contract is greater than 8%. If
the Withdrawal Charge percentage is rounded down from 10% to 8%, the 8%
Withdrawal Charge percentage shall be in effect through that Participant
Account Year and through the next 2 succeeding Participant Account Years.
If the Withdrawal Charge percentage is rounded down from 9% to 8%, the 8%
Withdrawal Charge percentage shall be in effect through that Participant
Account Year and through the next succeeding Participant Account Year.
Thereafter, the Withdrawal Charge percentage shall be decreased by 1% for
each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(original contract TDA III with Series III scale)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VIII(BR)group
annuity contract GA XX,XXX as of the Contract Date of this contract, the
Withdrawal Charge percentage under this contract shall be equal to the
Withdrawal Charge percentage in effect for that Participant under such GRA
VIII (BR) contract for those contributions not transferred from another AUL
group annuity contract. The Withdrawal Charge percentage under this
paragraph shall never be greater than 8%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(TDA contract added after conversion to GRA VIII(BR))
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VIII(BR)group
annuity contract GA XX,XXX, and for whom funds have been transferred to
such GRA VIII (BR) contract from an AUL GRA III group annuity contract
(with a Series I Withdrawal Charge schedule), the initial Withdrawal Charge
percentage under this contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under such GRA III contract,
determined by AUL immediately prior to the date of such transfer, rounded
down to the next whole Withdrawal Charge percentage if the Withdrawal
Charge percentage under such GRA III contract is a fractional Withdrawal
Charge percentage. However, the Withdrawal Charge percentage under this
paragraph shall never be greater than 8%. The Withdrawal Charge percentage
shall be decreased by 1% for each subsequent Participant Account Year until
the Withdrawal Charge percentage equals 4%. (However, if the applicable
Withdrawal Charge percentage under such GRA I contract is less than 4%, it
shall be rounded up to 4% in this contract.) This 4% Withdrawal Charge
percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be
reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(no previous TDA - match with GRA III, Series I)
(TDA contract added at conversion)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VIII(BR)group
annuity contract GA XX,XXX, and for whom funds have been transferred to
such GRA VIII (BR) contract from an AUL GRA VI group annuity contract (with
a Series III Withdrawal Charge schedule), the initial Withdrawal Charge
percentage under this contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under such GRA VI contract,
determined by AUL immediately prior to the date of such transfer, rounded
down to 8% if the Withdrawal Charge percentage under such GRA VI contract
is greater than 8%. If the Withdrawal Charge percentage is rounded down
from 10% to 8%, the 8% Withdrawal Charge percentage shall be in effect
through that Participant Account Year and through the next 2 succeeding
Participant Account Years. If the Withdrawal Charge percentage is rounded
down from 9% to 8%, the 8% Withdrawal Charge percentage shall be in effect
through that Participant Account Year and through the next succeeding
Participant Account Year. Thereafter, the Withdrawal Charge percentage
shall be decreased by 1% for each subsequent Participant Account Year until
the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(no previous TDA --- match with GRA VI, Series III)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series I group annuity contract from which
funds have been transferred to such Series III contract, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract
Withdrawal Charge percentage is less than 4%, it shall be rounded up to 4%
in this contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(original contract TDA I)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series III group annuity contract (with a
Series I Withdrawal Charge scale) from which funds have been transferred to
such Series III contract GXX,XXX, determined by AUL immediately prior to
the date of such transfer, rounded down to the next whole Withdrawal Charge
percentage if the Withdrawal Charge percentage under such Series III
contract (with a Series I Withdrawal Charge scale) is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage
under this paragraph shall never be greater than 8%. The Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
Withdrawal Charge percentage under the applicable Series III contract (with
a Series I Withdrawal Charge scale) is less than 4%, it shall be rounded up
to 4% in this contract.) This 4% Withdrawal Charge percentage shall be in
effect during the next 6 consecutive Participant Account Years. Thereafter,
the Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(original contract TDA III with Series I scale)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII(BR) group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL GRA VII group annuity contract from which
funds have been transferred to such GRA VII (BR) contract, determined by
AUL immediately prior to the date of such transfer, rounded down to the
next whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such GRA VII contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable GRA VII contract
Withdrawal Charge percentage is less than 4%, it shall be rounded up to 4%
in this contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(GRA VII BR -- Series I)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII(BR) group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL GAA V group annuity contract (with a
Series I Withdrawal Charge scale) from which funds have been transferred to
such GRA VII (BR) contract, determined by AUL immediately prior to the date
of such transfer, rounded down to the next whole Withdrawal Charge
percentage if the Withdrawal Charge percentage under such GAA V contract
(with a Series I Withdrawal Charge scale) is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph
shall never be greater than 8%. The Withdrawal Charge percentage shall be
decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the Withdrawal Charge
percentage under the applicable GAA V contract (with a Series I Withdrawal
Charge scale) is less than 4%, it shall be rounded up to 4% in this
contract.) This 4% Withdrawal Charge percentage shall be in effect during
the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(transfer from GAA V to GRA VII(BR) -- Series I)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VIII(BR)group
annuity contract GA XX,XXX, and for whom funds have been transferred to
such GRA VIII (BR) contract from an AUL GRA I group annuity contract, the
initial Withdrawal Charge percentage under this contract shall be equal to
the Withdrawal Charge percentage applicable to the Participant under such
GRA I contract, determined by AUL immediately prior to the date of such
transfer, rounded down to the next whole Withdrawal Charge percentage if
the Withdrawal Charge percentage under such GRA I contract is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage
under this paragraph shall never be greater than 8%. The Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage under such GRA I contract is less
than 4%, it shall be rounded up to 4% in this contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive
Participant Account Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(no previous TDA -- match with GRA I)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII(BR) group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL GRA VII group annuity contract from which
funds have been transferred to such GRA VII (BR) contract, determined by
AUL immediately prior to the date of such transfer, rounded down to 8% if
the Withdrawal Charge percentage under such GRA VII contract is greater
than 8%. If the Withdrawal Charge percentage is rounded down from 10% to
8%, the 8% Withdrawal Charge percentage shall be in effect through that
Participant Account Year and through the next 2 succeeding Participant
Account Years. If the Withdrawal Charge percentage is rounded down from 9%
to 8%, the 8% Withdrawal Charge percentage shall be in effect through that
Participant Account Year and through the next succeeding Participant
Account Year. Thereafter, the Withdrawal Charge percentage shall be
decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(GRA VII BR---Series III)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII(BR) group
annuity contract GA XX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL GAA V group annuity contract (with a
Series III Withdrawal Charge schedule) from which funds have been
transferred to such GRA VII (BR) contract, determined by AUL immediately
prior to the date of such transfer, rounded down to 8% if the Withdrawal
Charge percentage under such GAA V contract (with a Series III Withdrawal
Charge schedule) is greater than 8%. If the Withdrawal Charge percentage is
rounded down from 10% to 8%, the 8% Withdrawal Charge percentage shall be
in effect through that Participant Account Year and through the next 2
succeeding Participant Account Years. If the Withdrawal Charge percentage
is rounded down from 9% to 8%, the 8% Withdrawal Charge percentage shall be
in effect through that Participant Account Year and through the next
succeeding Participant Account Year. Thereafter, the Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(par year)
(transfer from GAA V to GRA VII(BR) -- Series III)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Contract Year in which the withdrawal is
made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series I group annuity contract from which
funds have been transferred to such Series III contract, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Contract Year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable Series I contract Withdrawal Charge
percentage is less than 4%, it shall be rounded up to 4% in this contract.)
This 4% Withdrawal Charge percentage shall be in effect during the next 6
consecutive Contract Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(con year)
(TDA III -- Series I)
p-12621(BR).II.2
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.22 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.26 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Contract Year in which the withdrawal is
made. The Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Contract Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII(BR) group
annuity contract GXX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL GRA VII group annuity contract from which
funds have been transferred to such GRA VII (BR) contract, determined by
AUL immediately prior to the date of such transfer, rounded down to the
next whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such GRA VII contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Contract Year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable GRA VII contract Withdrawal Charge
percentage is less than 4%, it shall be rounded up to 4% in this contract.)
This 4% Withdrawal Charge percentage shall be in effect during the next 6
consecutive Contract Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any
(con year)
(GRA VII BR -- Series I)
p-12621(BR).II.2
<PAGE>
Participant Account, AUL shall process such credits in accordance with
the Investment Option election applicable to the immediately preceding
Contribution. The Contractholder or such designated person may change
an Investment Option election with respect to future allocations to
the applicable Participant Account by giving new Investment Option
elections to AUL at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution,
AUL shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is
generally the AUL American Money Market Investment Account. If AUL
subsequently receives the data required to establish the Participant
Account, instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Option identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or
p-12621(BR).II.3
<PAGE>
interests in, another Portfolio of the AUL American Series Fund, Inc.,
another open-end, registered investment company, or another investment
vehicle, for shares already purchased or to be purchased in the future
under the contract, if the shares of any or all eligible Mutual Funds
or Mutual Fund Portfolios are no longer available for investment or if
further investment in any or all eligible Mutual Funds or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares attributable to the
Contractholder's interest in the Variable Account or any Investment
Account without notice, Contractholder or Participant approval, or
prior approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the
p-12621(BR).II.4
<PAGE>
Fixed Interest Account for a period of up to 6 months after AUL
receives the transfer request at its Home Office.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
4.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, at any time prior to termination of the contract pursuant to
Article 8, the Contractholder may direct AUL to withdraw all or a portion
of a Participant Account pursuant to Sections 4.2 and 4.3 to provide Plan
benefits (other than Plan termination benefits). Such Contractholder
direction must be submitted to AUL at its Home Office in a form acceptable
to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age
59 1/2, separated from service, died, become totally disabled (as
defined by the Plan), or
p-12621(BR).II.5
<PAGE>
experienced a hardship (as defined by the Plan). However, in the case
of a hardship withdrawal, any gain credited to such Contributions may
not be withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for
purposes of Section 4.2, but instead is a Contract termination as to
that amount for that Participant; and any such withdrawal shall be
subject to application of the Withdrawal Charge pursuant to Section
4.3. The Contractholder hereby grants to a Participant the right to
direct the withdrawal and direct transfer of such Participant's
voluntary Elective Deferrals (as determined by the Contractholder) to
another tax-deferred annuity funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. AUL may
rely solely upon the representations of the Contractholder made in the
withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
p-12621(BR).II.6
<PAGE>
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan
(other than Plan termination benefits) for retirement, death,
disability, termination of employment, hardships, loans, required
minimum distribution benefits pursuant to Code Section 401(a)(9)
and Regulations issued thereunder, or benefits upon attainment of
age 59 1/2, provided that such benefit upon attainment of age 59
1/2 is a taxable distribution paid to the Participant and not to
any other person or entity, including any substitute funding
medium.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.5) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2). If it is necessary
to withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.5 charges. If it is not necessary to withdraw the
(BR)
p-12621(BR).II.7
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan; or
(3) providing the Participant has attained (1) age 55 and has 10
years of service with the employer identified in the Plan or (2)
age 62, a cash lump-sum payment to the Contractholder or to
whomever the Contractholder directs to pay benefits as provided
by the Plan (other than Plan termination benefits) for
retirement, disability, termination of employment, hardships,
loans, required minimum distribution benefits pursuant to Code
Section 401(a)(9) and Regulations issued thereunder, or benefits
upon attainment of age 59 1/2, provided that such benefit upon
attainment of age 59 1/2 is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.5) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. This death benefit shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.5) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2) and (3). If it is
necessary to withdraw the entire Account Value of a Participant Account to
make such payment, the amount paid shall equal the Withdrawal Value, minus
any Section 6.5 charges. If it is not necessary to withdraw the
(MBR)
p-12621(BR).II.7
<PAGE>
entire Account Value to make such payment, AUL shall reduce the Account
Value of the Participant Account by an amount sufficient to make the cash
payment requested and to cover the Withdrawal Charge and any Section 6.5
charges.
Notwithstanding the previous paragraph, in the first Contract Year in
which a Participant Account is established, the Contractholder may withdraw
from that Participant Account up to 10% of the sum of the Account Value of
that Participant Account (determined as of the later of the Contract Date
or the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In the next succeeding Contract
Year, the Contractholder may also withdraw from that Participant Account up
to 10% of the sum of the Account Value of that Participant Account
(determined as of the Contract Anniversary immediately preceding the
request for the withdrawal) plus Contributions made during that Contract
Year, without application of the Withdrawal Charge. In any subsequent
Contract Year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account
(determined as of the Contract Anniversary immediately preceding the
request for the withdrawal) without application of the Withdrawal Charge.
4.4 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.2, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.1(h). Such
transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Contractholder request shall
include certification as to the purpose for the annuity and the election of
one of the following annuity options, notification of the Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any benefit
option requested. The amount of any annuity shall be computed from the
Table of Immediate Annuities then included in this contract, except as
provided under Section 4.7.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
p-12621(BR).II.8
<PAGE>
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period; plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee
p-12621(BR).II.9
<PAGE>
and other expenses which are deducted from the assets of such Mutual Fund
or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this Section
6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1, 4.2,
4.3, or 4.4 or such other time that premium taxes are incurred by AUL. AUL
also reserves the right to deduct the appropriate charges for federal,
state, or local income taxes incurred by AUL that are attributable to the
Variable Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
(all companions)
(G & W stand-alone)
p-12621(BR).II.10
<PAGE>
and other expenses which are deducted from the assets of such Mutual Fund
or Mutual Fund Portfolio.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1, 4.2,
4.3, or 4.4 or such other time that premium taxes are incurred by AUL. AUL
also reserves the right to deduct the appropriate charges for federal,
state, or local income taxes incurred by AUL that are attributable to the
Variable Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
(Corporate stand-alone)
p-12621(BR).II.10
<PAGE>
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
p-12621(BR).II.11
<PAGE>
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By _________________________________
Title _______________________________
Date ________________________________
p-12621(BR).II.12
<PAGE>
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER
By________________________________
Title ____________________________
Date______________________________
AMERICAN UNITED LIFE INSURANCE COMPANY
By________________________________
Title_____________________________
Date______________________________
(existing business)
p-12621(BR).II.12
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
- --------------------------------------------------------------------------------
EXHIBIT 4.4
TDA CUSTODIAL SPL CONTRACT, FORM P-12833
- --------------------------------------------------------------------------------
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS
P-12833SPL
<PAGE>
NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH
ASSETS.
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
ARTICLE 4 BENEFITS AND LOANS
4.1--------Election of Annuity Options
4.2--------Annuity Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
4.9--------Loans from the Fixed Interest Account
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share of
any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
P-12833SPL.2
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 MISCELLANEOUS
8.1--------Ownership
8.2--------AUL's Annual Statement
8.3--------Tax Status
8.4--------Essential Data
8.5--------Reliance
8.6--------Misstatement of Essential Data
8.7--------Annuity Certificates
8.8--------Election, Notice, or Direction Requirements
8.9--------Quarterly Statement of Account Value
8.10-------Conformity with State Laws
8.11-------Reference to Federal Laws
8.12-------Sex and Number
8.13-------Facility of Payment
8.14-------Insulation from Liability
8.15-------Voting
8.16-------Acceptance of New Participants or Contributions
8.17-------Nonforfeitability and Nontransferability
8.18-------Termination
8.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12833SPL.3
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which an
annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the
applicable sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same
day of the same month as the day and month which is stated on the face page
of this contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL from time to time by, or on
behalf of, Participants, which are credited to Participant Accounts
hereunder.
1.10 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time to time and as
credited to each interest pocket maintained within the Fixed Interest
Account. The Current Rates of Interest shall always be equal to or greater
than the Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made by, or on behalf of,
a Participant which exceed the limitations in effect under applicable
provisions of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that fund of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148.
1.15 "Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.16 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940.
1.18 "Participant" means any person enrolled in this contract who elects to make
Contributions or for whom Contributions are made, and for whom a
Participant Account is established.
1.19 "Participant Account" means an account established under this contract for
a Participant. Contributions received by AUL shall be credited to
Participant Accounts as AUL is directed in writing.
1.20 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
1.21 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.22 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.23 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the number of full years measured from the date a Participant
Account is established to the date the Withdrawal Charge is determined.
Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.25 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge, and minus the Participant's outstanding loan balance, if
any.
P-12833SPL.4
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. Unless there is a
specific written agreement signed by a corporate officer of AUL, AUL is not
a party to, nor bound by, a plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not
a fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-12833SPL.5
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, when made,
they must be at least equal to a minimum annual Contribution of $200
per Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Participant. Such written instructions must
include the amount to be withdrawn and returned, and certification
that such Contributions constitute Excess Contributions and that such
returns are permitted by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by applicable provisions of the Code and Regulations. In
withdrawing and returning the identified amount, AUL may rely solely
on such written instructions and certification. Such a withdrawal and
return of Excess Contributions shall not be subject to Section 4.8.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
contributing party unless consent is given to AUL to retain the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial Contribution
to the Money Market Investment Account, and shall transfer such
amounts credited to the Money Market Investment Account according to
the applicable allocation instructions upon receipt of the data
required to establish the Participant Account and allocation
instructions.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed
<PAGE>
to be received, and shall be credited and allocated as of the close of
business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a Contribution
other than the initial Contribution, that amount shall be credited to
the Fixed Interest Account until such time as an appropriate
allocation instruction is received, at which time such amount shall be
withdrawn from the Fixed Interest Account and allocated pursuant to
such instructions. The Participant may change an allocation
instruction with respect to future allocations to his Participant
Account by giving new written allocation instructions to AUL at its
Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares in
the Variable Account or any Investment Account without notice,
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a
<PAGE>
management investment company under The Investment Company Act of 1940
or any other form permitted by law, it may be deregistered in the
event such registration is no longer required under The Investment
Company Act of 1940, or it may be combined with other separate
accounts of AUL or an affiliate thereof. AUL may take such action as
is necessary to comply with, or to obtain, exemptions from the
Securities and Exchange Commission with regard to the Variable
Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation
of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL at its Home Office to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. For any transfer from an Investment Account,
Accumulation Units shall be valued as of the close of business on the
Valuation Date that AUL receives the Participant's direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T., such
transfer shall be effective as of the close of business on the next
succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
<PAGE>
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
ARTICLE 4 - BENEFITS AND LOANS
4.1 Election of Annuity Options: At the written request of the Participant, AUL
shall apply all or a portion of the Account Value (subject to Section 6.5,
and minus any outstanding loan balance of the Participant) of the
Participant Account for the purpose of providing a fixed payment annuity.
Upon receipt of such request, AUL is hereby authorized by such Participant
to value and transfer the Participant Account's share of the Variable
Account to the Fixed Interest Account as of the date that AUL receives such
written request at its Home Office. Such transferred amounts shall be held
in the Fixed Interest Account until the Participant's Annuity Commencement
Date. The Participant request shall include certification as to the purpose
for the annuity and the election of one of the following annuity options.
The amount of the annuity shall be computed from the Table of Immediate
Annuities then included in this contract, except as provided under Section
4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
<PAGE>
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at
its Home Office at least 30 days prior to the Annuity Commencement Date,
the Account Value (subject to Section 6.5, and minus any outstanding loan
balance of the Participant) of his Participant Account shall be applied
under (b) above as a 10 Year Certain and Life Annuity. AUL must receive
written notification of such Annuity Commencement Date, written designation
of the contingent annuitant or beneficiary, and any election forms needed
in connection with any annuity option provided in this Section.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which would
extend for a certain period beyond the life expectancy of such Participant
or the joint life expectancy of such Participant and such contingent
annuitant as determined on the Annuity Commencement Date.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (minus any outstanding loan balances of the Participant) shall be
paid in a lump sum to the annuitant rather than annuitized under the
annuity options provided in Section 4.2. Additionally, if the monthly
annuity is less than AUL's then current established minimum, AUL reserves
the right to make payments on a less frequent basis.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under this contract)
of the Participant Account for the purpose of providing a death
benefit. The death benefit shall be paid to the beneficiary last
properly designated in writing to AUL at its Home Office by the
Participant, or, if there is no designated beneficiary living on the
date of the Participant's death, to the Participant's estate. If any
beneficiary dies while receiving payments and no beneficiary is
designated to receive any remaining payments, such remaining payments
shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account, provided that:
(l) any distribution to a Participant shall not occur until the
Participant has:
P-12833SPL.6
<PAGE>
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
shall include certification as to the purpose of the withdrawal.
The Participant assumes full responsibility for determining
whether the withdrawal is permitted under applicable law. AUL may
rely solely upon the representations of the Participant made in
the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
provision (a)(1) above is not met).
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Participant may withdraw up to 10% of the Account
Value of his Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal. Also, where a Participant has outstanding loans under this
contract, a partial withdrawal by a Participant from the Fixed
Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant held in the Fixed
Interest Account equals twice the total of the Participant's
outstanding loans under this contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts with drawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter. The
interest rate charged shall be equal to the Moody's Corporate Bond
Yield Average - Monthly Average Corporates as of the date of the loan,
as published by Moody's Investors Service. If publication of such
Moody's rate should ever cease, a substantially equivalent substitute
rate shall be used. However, no change from a previously established
rate may be made in an amount less than .50% in any periodic
adjustment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used
to acquire a principal residence for the Participant, in which case
the term may be longer. Loan repayments must be made at least
quarterly. AUL shall apply such repayments first to any accrued
interest and then to the outstanding loan principal.
(WA)
P-12833SPL.7
<PAGE>
Participant has outstanding loans under this contract, a partial with-
drawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts with drawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar year. The
interest rate charged during a particular calendar year shall be equal
to the Moody's Corporate Bond Yield Average - Monthly Average
Corporates as published by Moody's Investors Service for October of
the previous calendar year. If publication of such Moody's rate should
ever cease, a substantially equivalent substitute rate shall be used.
However, no change from a previously established rate may be made in
an amount less than .50% in any periodic adjustment. If the Moody's
rate for any October decreases by at least .50% from the Moody's rate
for the immediately preceding October, AUL shall declare such reduced
interest rate to be in effect during the next succeeding calendar
year.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used
to acquire a principal residence for the Participant, in which case
the term may be longer. Loan repayments must be made at least
quarterly. AUL shall apply such repayments first to any accrued
interest and then to the outstanding loan principal. Participant has
outstanding loans under this contract, a partial withdrawal by a
Participant from the Fixed Interest Account shall be permitted only to
the extent that the remaining Withdrawal Value of the Participant held
in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under this contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts with drawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $1,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter. The
interest rate charged shall be equal to the Moody's Corporate Bond
Yield Average - Monthly Average Corporates as of the date of the loan,
as published by Moody's Investors Service. If publication of such
Moody's rate should ever cease, a substantially equivalent substitute
rate shall be used. However, no change from a previously established
rate may be made in an amount less than .50% in any periodic
adjustment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used
to acquire a principal residence for the Participant, in which case
the term may be longer. Loan repayments must be made at least
quarterly. AUL shall apply such repayments first to any accrued
interest and then to the outstanding loan principal.
(OR)
P-12833SPL.14
<PAGE>
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, 100% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
contract. All loan balances shall be paid or satisfied in full before
any amount from the Participant Account's share of the Fixed Interest
Account is paid as a full withdrawal, as a death benefit, upon
annuitization, or as another permitted distribution.
(e) AUL may modify the loan restrictions or limitations stated above in
this Section, or may add new restrictions and limitations, to the
extent necessary to comply with Code Section 72(p) or other applicable
law, as determined solely by AUL.
P-12833SPL.15
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as provided
in the prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant
Account in the form of Accumulation Units on the basis of the value of such
units in that Investment Account as of the end of the Valuation Period on
which such amounts are received by AUL at its Home Office. Such crediting
shall be made separately for amounts allocated to each Investment Account.
The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value
of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in
that Investment Account as of the immediately preceding Valuation Period
multiplied by the Net Investment Factor, as defined in Section 5.4, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or
transfers which are effective as of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-12833SPL.16
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account, as provided in Section 5.4(c).
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, or 4.8, the
administrative charge attributable to the period of time which has elapsed
since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied
or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
(OR)
P-12833SPL.17
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account, as provided in Section 5.4(c).
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge of $7.50
per Contract Quarter on the last day of each Contract Quarter from each
Participant Account in existence on such day for so long as the Participant
Account is in effect during the Accumulation Period. This charge is to be
prorated among each subaccount of the Participant Account which corresponds
to each Investment Option utilized under this contract by that Participant
Account. If the entire balance of a Participant Account is applied or
withdrawn before the last day of the Contract Quarter pursuant to Sections
4.1, 4.7, or 4.8, the administrative charge attributable to the period of
time which has elapsed since the first day of the Contract Quarter in which
such application or withdrawal of funds is made shall not be deducted from
the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change the amount of any transfer charge. Any such
charge shall be limited to a maximum of $30.00 per transfer transaction
until the year 2001. Any increase in any transfer charge made by AUL
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with processing such
transfers. Any such increase shall not be anticipated to be a source of
profit for AUL.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
(WA,SC)
P-12833SPL.17
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account, as provided in Section 5.4(c).
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge of $3.00
per Contract Quarter on the last day of each Contract Quarter from each
Participant Account in existence on such day for so long as the Participant
Account is in effect during the Accumulation Period. This charge is to be
prorated among each subaccount of the Participant Account which corresponds
to each Investment Option utilized under this contract by that Participant
Account. If the entire balance of a Participant Account is applied or
withdrawn before the last day of the Contract Quarter pursuant to Sections
4.1, 4.7, or 4.8, the administrative charge attributable to the period of
time which has elapsed since the first day of the Contract Quarter in which
such application or withdrawal of funds is made shall not be deducted from
the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change the amount of any transfer charge. Any such
charge shall be limited to a maximum of $30.00 per transfer transaction
until the year 2001. Any increase in any transfer charge made by AUL
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with processing such
transfers. Any such increase shall not be anticipated to be a source of
profit for AUL.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
(SC - G&W)
P-12833SPL.17
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.24 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.24 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $15 per Contract
Quarter until the year 2001. Any increase in the administrative charge made
by AUL for any Contract Quarter beginning after December 31, 2000 shall be
limited to an amount which is designed to reimburse AUL for the expenses
associated with the administration of the contract and the operation of the
Variable Account. Any such increase shall not be anticipated to be a source
of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 8.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-12833SPL.18
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely
affect the benefits to be provided by Contributions made prior to the
effective date of such change or amendment unless the consent of all
Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Portfolio, nor any of the other provisions and
conditions of this contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal, state,
or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever information
is necessary to establish the eligibility and amount of annuity or other
benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL
by the Contractholder as acting on its behalf, or by a Participant. AUL
need not inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
8.7 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to, and received by, AUL at its Home Office
before becoming effective, unless the Participant is otherwise directed by
AUL.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
8.10 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
<PAGE>
8.11 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
8.12 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
8.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to any person or entity when directed to do so in writing
by the Participant. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
8.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
8.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so. AUL will vote
shares of any Investment Account, if any, that it owns beneficially in
its own discretion, except that if the Mutual Fund offers its shares
to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL
will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
8.16 Acceptance of New Participants or Contributions. AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time. AUL shall have the right to refuse to accept Contributions as of
the last day of the second month following the date that written notice to
this effect is delivered to any contributing Participant or to any
Participant for whom Contributions are being made.
8.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under this contract shall be nonforfeitable at all
times. No sum payable under this contract with respect to a Participant may
be sold, assigned, discounted, or pledged as collateral for a loan or as
security for the performance of an obligation or for any other purpose to
any person or entity other than AUL. In addition, to the extent permitted
by law, no such sum shall in any way be subject to legal process requiring
the payment of any claim against the payee.
8.18 Termination: This contract shall automatically terminate as of the date
that there are no Participant Accounts maintained hereunder.
8.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL (i.e., contractholders) shall be held at its principal place
of business on the third Thursday in February of each year at the hour of
ten o'clock A.M. Elections for directors shall be held at such annual
meeting.
P-12833SPL.19
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12833SPL.20
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract), and that AUL has created a tax-deferred annuity account
in your name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
AUL American Series
TDA Multiple-Fund Group Variable Annuity Certificate
P-12834SPL
<PAGE>
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12834SPL
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid to AUL from time to time by, or on behalf of,
Participants, which are credited to Participant Accounts.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time to time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made by, or on behalf of, a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Cur rent Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may
be earning interest at different Current Rates of Interest for
different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond Investment
Account, the Money Market Investment Account, and the Managed Investment
Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
The AUL American Managed Portfolio of the Mutual Fund is a managed
Portfolio which invests in the same types of investments as the other
Portfolios listed in (a), (b), and (c) above.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person enrolled in the Contract who elects to make
Contributions or for whom Contributions are made, and for whom a Participant
Account is established.
"Participant Account" means an account established under the Contract for a
Participant. Contributions received by AUL shall be credited to Participant
Accounts as AUL is directed in writing.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is deter mined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge, and minus the Participant's outstanding loan balance, if any.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, when made,
they must be at least equal to a minimum annual Contribution of $200
per Participant in any full contract year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a
<PAGE>
Participant Account and returned to the Participant upon receipt by
AUL at its Home Office of complete written instructions from the
Participant. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted
by applicable provisions of the Code and Regulations issued
thereunder. It shall not be the responsibility of AUL to determine
the existence or amount of Excess Contributions or gains or losses
thereon, or that returns of Excess Contributions are permitted by
applicable provisions of the Code and Regulations. In withdrawing
and returning the identified amount, AUL may rely solely on such
written instructions and certification. Such a withdrawal and return
of Excess Contributions shall not be subject to the withdrawal
benefits provisions of the Contract.
(c) When a Contribution is received at AUL's Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(d) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
contributing party unless consent is given to AUL to retain the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial
Contribution to the Money Market Investment Account, and shall
transfer such amounts credited to the Money Market Investment Account
according to the applicable allocation instructions upon receipt of
the data required to establish the Participant Account and allocation
instructions.
(e) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a Contribu-
tion
<PAGE>
other than the initial Contribution, that amount shall be credited to
the Fixed Interest Account until such time as an appropriate
allocation instruction is received, at which time such amount shall
be withdrawn from the Fixed Interest Account and allocated pursuant
to such instructions. The Participant may change an allocation
instruction with respect to future allocations to his Participant
Account by giving new written allocation instructions to AUL at its
Home Office.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant
may direct AUL at its Home Office to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. For any transfer from an Investment Account,
Accumulation Units shall be valued as of the close of business on the
Valuation Date that AUL receives the Participant's direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T., such
transfer shall be effective as of the close of business on the next
succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
(d) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last contract anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge on a transfer.
(g) Where a Participant has outstanding loans under the Contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value
of the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under the Contract.
Annuity Options:
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge, and minus any
outstanding loan balance of the Participant) of the Participant Account for the
purpose of providing a fixed payment annuity. Upon receipt of such request, AUL
is hereby authorized by such Participant to value and transfer the Participant
Account's share of the Variable Account to the Fixed Interest Account as of the
date that AUL receives such written request at its Home Office. Such transferred
amounts shall be held in the Fixed Interest Account until the Participant's
Annuity Commencement Date. The Participant request shall include certification
as to the purpose for the annuity and the election of one of the following
annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such period.
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
If no annuity option election for a Participant has been received by
AUL at its Home Office at least 30 days prior to the Annuity
Commencement Date, the Account Value (subject to any appropriate
premium tax charge, and minus any outstanding loan balance of the
Participant) of his Participant Account shall be applied under (b)
above as a 10 Year Certain and Life Annuity. AUL must receive written
notification of such Annuity Commencement Date, written designation
of the contingent annuitant or beneficiary and any election forms
needed in connection with any annuity option provided.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which
would extend for a certain period beyond the life expectancy of such
Participant or the joint life expectancy of such Participant and such
contingent annuitant as determined on the Annuity Commencement Date.
If the total Account Value is less than $2,000, such value (minus any
outstanding loan balances of the Participant) shall be paid in a lump
sum to the annuitant rather than annuitized under the annuity options
provided in (a) through (f) above. Additionally, if the monthly
annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis.
Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if applica-
ble, the beneficiary's) death during the Accumulation Period at its
Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under the Contract) of
the Participant Account for the purpose of providing a death benefit.
The death benefit shall be paid to the beneficiary last properly
designated in writing to AUL at its Home Office by the Participant,
or, if there is no designated beneficiary living on the date of the
Participant's death, to the Participant's estate. If any beneficiary
dies while receiving payments and no beneficiary is designated to
receive any remaining payments, such remaining payments shall be made
to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are (is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are (is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown above over a period not to exceed
the life or life expectancy of the beneficiary. If the
beneficiary is not the Participant's surviving spouse, the
annuity must begin on or before December 31 of the calendar
year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's
surviving spouse, the annuity need not begin before December
31 of the calendar year in which the Participant would have
attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall
be paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined in (b)
above, except as AUL may be permitted to defer such payment of
amounts derived from the Variable Account in accordance with the
provisions of federal securities laws. Also, AUL reserves the
right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of 6 months after AUL receives
written instructions at its Home Office.
P-12834SPL.1
<PAGE>
Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account, provided that:
(l) any distribution to a Participant shall not occur until the
Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C)); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
shall include certification as to the purpose of the withdrawal.
The Participant assumes full responsibility for determining
whether the withdrawal is permitted under applicable law. AUL may
rely solely upon the representations of the Participant made in
the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the In vestment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
provision (a)(1) above is not met).
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the Participant
shall be paid the Withdrawal Value. If the Participant requests that a
specified percentage or dollar amount be paid to the Participant, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge.
Notwithstanding the previous sentence, in any contract year the
Participant may withdraw up to 10% of the Account Value of his
Participant Account determined as of the last contract anniversary
preceding the request for the withdrawal without application of any
Withdrawal Charge, provided that 12 months have elapsed from the date
that the Participant's first Contribution is credited to his
Participant Account by AUL to the date of such withdrawal. Also, where
a Participant has outstanding loans under the Contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the Vari-
able Account in accordance with appropriate provisions of the federal
securities laws. AUL reserves the right to defer the payment of
amounts withdrawn from the Fixed Interest Account for a period of up
to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
AUL shall apply such repayments first to any accrued interest and then
to the outstanding loan principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l00% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
Contract. All loan balances shall be paid or satisfied in full before
any amount from the Participant Account's share of the Fixed Interest
Account is paid as a full withdrawal, as a death benefit, upon
annuitization, or as another permitted distribution. Request for the
withdrawal without application of any Withdrawal Charge, provided that
12 months have elapsed from the date that the Participant's first
Contribution is credited to his Participant Account by AUL to the date
of such withdrawal. Also, where a Participant has outstanding loans
under the Contract, a partial withdrawal by a Participant from the
Fixed Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant held in the Fixed
Interest Account equals twice the total of the Participant's
outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the Vari-
able Account in accordance with appropriate provisions of the federal
securities laws. AUL reserves the right to defer the payment of
amounts withdrawn from the Fixed Interest Account for a period of up
to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $1,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the
term may be longer. Loan repayments must be made at least quarterly.
AUL shall apply such repayments first to any accrued interest and then
to the outstanding loan principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l00% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
Contract. All loan balances shall be paid or satisfied in full before
any amount from the Participant Account's share of the Fixed Interest
Account is paid as a full withdrawal, as a death benefit, upon
annuitization, or as another permitted distribution. request for the
withdrawal without application of any Withdrawal Charge, provided that
12 months have elapsed from the date that the Participant's first
Contribution is credited to his Participant Account by AUL to the date
of such withdrawal. Also, where a Participant has outstanding loans
under the Contract, a partial withdrawal by a Participant from the
Fixed Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant held in the Fixed
Interest Account equals twice the total of the Participant's
outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar year. The
interest rate charged during a particular calendar year shall be equal
to the Moody's Corporate Bond Yield Average - Monthly Average
Corporates as published by Moody's Investors Service for October of
the previous calendar year. If publication of such Moody's rate should
ever cease, a substantially equivalent substitute rate shall be used.
However, no change from a previously established rate may be made in
an amount less than .50% in any periodic adjustment. If the Moody's
rate for any October decreases by at least .50% from the Moody's rate
for the immediately preceding October, AUL shall declare such reduced
interest rate to be in effect during the next succeeding calendar
year.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used
to acquire a principal residence for the Participant, in which case
the term may be longer. Loan repayments must be made at least
quarterly. AUL shall apply such repayments first to any accrued
interest and then to the outstanding loan principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, 100% of the total of all the Participant's loan balances equal
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
Contract. All loan balances shall be paid or satisfied in full before
any amount from the Participant Account's share of the Fixed Interest
Account is paid as a full withdrawal, as a death benefit, upon
annuitization, or as another permitted distribution.
P-12834SPL.9B
SC
<PAGE>
(e) AUL may modify the loan restrictions or limitations stated above, or
may add new restrictions and limitations, to the extent necessary to
comply with Code Section 72(p) or other applicable law, as determined
solely by AUL.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each In vestment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in each Investment Account was established at
$1.00 as of April 12, 1990. The value of an Accumulation Unit in each Investment
Account as of any Valuation Period thereafter is equal to the dollar value of
one Accumulation Unit in that Investment Account as of the immediately preceding
Valuation Period multiplied by the Net Investment Factor, as defined below, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or transfers
which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
<PAGE>
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by the mortality and expense risks
provisions of the Contract.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account, as explained in (c) above
under "VALUATIONS."
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for as long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
<PAGE>
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity, except that no such change or amendment shall adversely affect the
benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is enti-
tled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to, and received by, AUL at its Home Office before becoming effective,
unless the Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to any person or
entity when directed to do so in writing by the Participant. Any payment made by
AUL will fully discharge AUL to the extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Port folio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so. AUL will vote
shares of any Investment Account, if any, that it owns beneficially in
its own discretion, except that if the Mutual Fund offers its shares
to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL
will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under the Contract shall be nonforfeitable at all times. No
sum payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
Acceptance of Contributions: AUL shall have the right to refuse to accept
Contributions as of the last day of the second month following the date that
written notice to this effect is delivered to any contributing Participant or to
any Participant for whom Contributions are being made.
P-12834SPL.10
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
R
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
"Contract Anniversary" means the first day of the second Contract Year and each
subsequent Contract Year. Each Contract Anniversary after the First Contract
Anniversary shall be the same day of the same month as the day and month which
is stated on the face page of the Contract for the First Contract Anniversary.
"Contract Year" means, for the first such year, the period beginning with the
Contract Date identified in the Contract and ending on the day immediately
preceding the First Contract Anniversary, and for each succeeding Contract Year,
the period beginning with a Contract Anniversary and ending on the day
immediately preceding the next succeeding Contract Anniversary.
"Contributions" means amounts paid to AUL from time to time by, or on behalf of,
Participants, including amounts transferred to the Contract from another AUL
group annuity contract, which are credited to Participant Accounts maintained
hereunder.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
- -P-12834SPL.X.ADD.1-
<PAGE>
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn pursuant to "Withdrawal Benefits," where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the Participant,
and ends on the day immediately preceding the next anniversary of such date.
Each Participant Account Year thereafter begins on such an anniversary date and
ends on the day immediately preceding the next succeeding anniversary date. The
Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in the companion AUL Series
III group annuity contract, the initial Withdrawal Charge percentage under the
Contract shall be equal to the Withdrawal Charge percentage applicable to the
Participant under the AUL Series I group annuity contract from which funds have
been transferred to such Series III contract, determined by AUL immediately
prior to the date of such transfer, rounded down to the next whole Withdrawal
Charge percentage if the Withdrawal Charge percentage under such Series I
contract is a fractional Withdrawal Charge percentage. However, the Withdrawal
Charge percentage under this paragraph shall never be greater than 8%. The
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 4%.
(However, if the applicable Series I contract Withdrawal Charge percentage is
less than 4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, when made, they
must be at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year.
(c) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the Participant
in a form acceptable to AUL. If no Investment
- -P-12834SPL.X.ADD.2-
<PAGE>
Option election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with the
Investment Option election applicable to the immediately preceding
Contribution. The Participant may change an Investment Option election with
respect to future allocations to the applicable Participant Account by
giving new Investment Option elections to AUL at its Home Office in a form
acceptable to AUL.
(d) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option elections regarding
the initial Contribution.
(e) If the data required to establish a Participant Account and instructions
regarding the amount of a Contribution for the Participant are not received
by AUL at its Home Office within 5 business days after AUL first receives
that Contribution, AUL shall return that Contribution to the contributing
party unless the contributing party consents to AUL retaining that
Contribution until the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that Contribution to the
Participant Account or (ii) 25 days from the date that Contribution is
received by AUL.
(f) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding the
amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by AUL at
its Home Office as of the date AUL first receives that Contribution, AUL
shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is generally
the AUL American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the Participant,
and an Investment Option election, AUL shall then transfer such amounts
credited to the AUL American Money Market Investment Account or other
Investment Option identified in the Participant's annuity enrollment form,
plus gains or minus losses thereon, to another Investment Option, if such
election so directs.
(g) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of business
on the later of (1) the Valuation Period in which AUL receives that
Contribution at its Home Office or (2) the Valuation Period in which AUL
receives, at its Home Office, the data required to establish the
Participant Account, instructions regarding the amount of that Contribution
for the Participant, and Investment Option elections.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible Mutual
Funds or Mutual Fund Portfolios and to substitute shares of, or interests
in, another Portfolio of the AUL American Series Fund, Inc., another
open-end, registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
Contract, if the shares of any or all eligible Mutual Funds or Mutual Fund
Portfolios are no longer available for investment or if further investment
in any or all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares in the Variable Account or any
- -P-12834SPL.X.ADD.3-
<PAGE>
Investment Account without notice, Participant approval, or prior approval
of the Securities and Exchange Commission or a state insurance commis-
sioner, and without following the filing or other procedures established by
applicable state insurance regulators. Nothing contained herein shall
prevent the Variable Account from purchasing other securities for other
series or classes of contracts, or from effecting a conversion between
series or classes of contracts on the basis of requests made by a majority
of participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund or Mutual Fund
Portfolio listed in the current prospectus for the Variable Account, or in
other securities or investment vehicles. AUL reserves the right to
eliminate or combine existing Investment Accounts if marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant may
direct AUL, in a form acceptable to AUL, to transfer the amounts credited
to an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's transfer direction at its Home Office.
(d) The minimum transfer from the Participant Account's share of any Investment
Option is the lesser of $500 or the Participant Account's entire share of
that Investment Option as of the close of business on the Valuation Date
that AUL receives that transfer direction at its Home Office. However, if
that transfer reduces the Participant Account's remaining share of that
Investment Option to less than $500, the entire remaining share shall also
be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the later of the Contract Date or the Contract Anniversary immediately
preceding the request for transfer. Notwithstanding the previous sentence,
if the Participant Account's share of the Fixed Interest Account is less
than $2,500 determined as of the later of the Contract Date or the Contract
Anniversary immediately preceding the request for transfer, the amount
transferrable from the Fixed Interest Account for that Contract Year is the
lesser of $500 or the Participant Account's entire share of the Fixed
Interest Account as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office. And if that transfer
reduces the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
- -P-12834SPL.X.ADD.5-
<PAGE>
BENEFITS AND LOANS
Annuity Options:
The last paragraph of this section is deleted and the following last paragraph
is substituted in lieu thereof:
If the total Account Value is less than $2,000, such value (minus any
outstanding loan balances of the Participant) shall be paid in a lump sum to the
annuitant rather than annuitized under the annuity options provided in (a)
through (f) above. Additionally, if the proposed monthly annuity payment should
fall below AUL's periodically adjusted minimum monthly annuity payment, AUL
reserves the right to make payments on a less frequent basis (i.e., quarterly,
semiannually, or annually), so that the actual annuity payment is equal to or
greater than the established minimum level, or to pay the Account Value (minus
any outstanding loan balances of the Participant) in a single sum.
Death Benefits:
(a) Upon receipt of written instructions from the Participant's beneficiary
(or, if applicable, the secondary beneficiary of the Participant) and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall apply
the Account Value (minus the Participant's outstanding loan balance, if
any, under the Contract) of the Participant Account for the purpose of
providing a death benefit. The death benefit shall be paid to the
beneficiary last properly designated in writing to AUL at its Home Office
by the Participant, or, if there is no designated beneficiary living on the
date of the Participant's death, to the Participant's estate. The
Participant's beneficiary may also designate a beneficiary. If any
beneficiary dies while receiving payments and no beneficiary is designated
to receive any remaining payments, such remaining payments shall be made to
the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be determined
as of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in (ii)
below on or before December 31 of the calendar year which
contains the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown in (a) through (f) above over a period not
to exceed the life or life expectancy of the beneficiary. If the
beneficiary is not the Participant's surviving spouse, the
annuity must begin on or before December 31 of the calendar year
immediately following the calendar year in which the Participant
died. If the beneficiary is the Participant's surviving spouse,
the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
<PAGE>
(2) If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be made
within 7 days of the date of valuation, as determined in (b) above,
except as AUL may be permitted to defer such payment of amounts
derived from the Variable Account in accordance with the provisions of
federal securities laws. Also, AUL reserves the right to defer the
payment of amounts withdrawn from the Fixed Interest Account for a
period of up to 6 months after AUL receives proper instructions at its
Home Office.
Withdrawal Benefits:
A Participant may direct AUL at its Home Office, in a form acceptable to AUL, to
withdraw all or a portion of the Withdrawal Value of his Participant Account,
subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under another
Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C)) may
be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary reduction
agreement (within the meaning of Code Section 402(g)(3)(C)) may be
withdrawn, provided that any distribution of such amounts shall not occur
until the Participant has either attained age 59 1/2, separated from
service, become totally disabled (as defined by the Internal Revenue
Service), or experienced a hardship (as defined by the Internal Revenue
Service). However, in the case of a hardship withdrawal, any gain credited
to such Contributions may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred directly by
AUL pursuant to Participant instructions to another tax-deferred annuity
funding vehicle under applicable Internal Revenue Service rules and
regulations shall be subject to application of the Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T
Q&A-2, the distributee of any eligible rollover distribution elects to have
the distribution paid directly to an eligible retirement plan (as defined
in Q&A-1 of that Section) and specifies the eligible retirement plan to
which the distribution is to be paid, then the distribution shall be paid
to that eligible retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's compliance
with the requirements above. Any withdrawal request shall include
certification as to the purpose of the withdrawal. The Participant assumes
full responsibility for determining whether the withdrawal is permitted
under applicable law. AUL may rely solely upon the representations of the
Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less
<PAGE>
than $500, such remaining share shall also be withdrawn (except for amounts
prohibited from being distributed because paragraph (c) above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied shall be determined, as of the close of business on the Valuation
Date that AUL receives a proper withdrawal request, in a form acceptable to
AUL, at its Home Office. If it is necessary to withdraw the entire Account
Value of a Participant Account to make a lump-sum cash payment, the amount
paid shall equal the Withdrawal Value. If it is not necessary to withdraw
the entire Account Value to make such payment, AUL shall reduce the Account
Value of the Participant Account by an amount sufficient to make the cash
payment requested and to cover the Withdrawal Charge. Notwithstanding the
previous sentence, in the first Contract Year in which a Participant
Account is established, the Participant may withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account (determined as of the later of the Contract Date or the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In the next succeeding Contract Year, the Participant
may also withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In any subsequent Contract Year, the Participant may
withdraw from that Participant Account up to 10% of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) without application
of the Withdrawal Charge. Also, where a Participant has outstanding loans
under the Contract, a partial withdrawal by a Participant from the Fixed
Interest Account shall be permitted only to the extent that the remaining
Withdrawal Value of the Participant Account held in the Fixed Interest
Account equals twice the total of the Participant's outstanding loans under
the Contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from the
appropriate Valuation Date as determined in Subsection (h) above, except as
AUL may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the federal
securities laws. AUL reserves the right to defer the payment of amounts
withdrawn from the Fixed Interest Account for a period of up to 6 months
after AUL receives the withdrawal request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account (other than amounts which are prohibited from being
distributed because Subsection (c) above is not met) which have been on
deposit for the longest period of time, as well as the interest credited
thereon, shall be withdrawn first.
VALUATIONS
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated
pursuant to paragraph (d) of "Contributions" on the next succeeding Valuation
Period, the unit value as of the end of that Valuation Period shall be used.
Such crediting shall be made separately for amounts allocated to each Investment
Account. The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that Participant
Account as of such Valuation Period by the dollar value of one Accumulation Unit
in that Investment Account as of the close of business on the applicable
Valuation Period. The number of Accumulation Units thus determined shall not be
changed by any subsequent change in the dollar value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the current
Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Mutual Fund or Mutual Fund Portfolio during the current
Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share held
in the Investment Account determined as of the end of the immediately
preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized by the first paragraph of "Other Charges."
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
- -P-12834SPL.X.ADD.6-
<PAGE>
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor, as defined under "Valuations."
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge per Contract Year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for as long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective, unless the Contractholder or
Participant is otherwise directed by AUL.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting rights
attributable to the shares of each Mutual Fund or Mutual Fund Portfolio
held in the Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting under
The Investment Company Act of l940 or other applicable laws. AUL shall
exercise these voting rights based on instructions received from persons
having the voting interest in corresponding Investment Accounts of the
Variable Account. However, if The Investment Company Act of l940 or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result AUL determines that it is permitted
to vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion, except
that if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor, as defined under "Valuations."
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge of $7.50 per Contract Year quarter on
the last day of each such quarter from each Participant Account in existence on
such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
the Contract by that Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective, unless the Contractholder or
Participant is otherwise directed by AUL.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting rights
attributable to the shares of each Mutual Fund or Mutual Fund Portfolio
held in the Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting under
The Investment Company Act of l940 or other applicable laws. AUL shall
exercise these voting rights based on instructions received from persons
having the voting interest in corresponding Investment Accounts of the
Variable Account. However, if The Investment Company Act of l940 or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result AUL determines that it is permitted
to vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion, except
that if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
(WA,SC)
- -P-12834SPL.X.ADD.9-
<PAGE>
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor, as defined under "Valuations."
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge of $3.00 per Contract Year quarter on
the last day of each such quarter from each Participant Account in existence on
such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
the Contract by that Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective, unless the Contractholder or
Participant is otherwise directed by AUL.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting rights
attributable to the shares of each Mutual Fund or Mutual Fund Portfolio
held in the Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting under
The Investment Company Act of l940 or other applicable laws. AUL shall
exercise these voting rights based on instructions received from persons
having the voting interest in corresponding Investment Accounts of the
Variable Account. However, if The Investment Company Act of l940 or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result AUL determines that it is permitted
to vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion, except
that if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
(SC-G&W)
- -P-12834SPL.X.ADD.9-
<PAGE>
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
- -P-12834SPL.X.ADD.10-
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
EFFECTIVE DATE: MAY 1, 1993
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding transfers
discussed in (c) below), to the Fixed Interest Account shall be credited to
the open interest pocket and shall earn interest at the Current Rate of
Interest in effect for that interest pocket. Such Contributions or
transferred amounts, during the time that the Current Rate of Interest
exceeds the Guaranteed Rate of Interest, shall earn interest at such
credited Current Rate of Interest for at least 1 year. After such 1-year
period, AUL reserves the right to declare, at any time, a new Current Rate
of Interest to be applied to funds held within that interest pocket. Any
such new Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
new amounts transferred to the Fixed Interest Account, the previous open
interest pocket shall close, and any such Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
(c) Any contribution to another AUL P-12833 contract which is allocated to the
Fixed Interest Account and which is transferred to this Contract (plus
gains and minus losses
P-12834.OTSP.ADD
<PAGE>
thereon) and allocated to the Fixed Interest Account, beginning with the date of
such transfer, shall be credited with the Current Rate of Interest under this
Contract which was in effect on the date the transferred contribution was
originally deposited into the Fixed Interest Account under the previous AUL
contract.
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a Mutual Fund as described in the prospectus for
the Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value of a Participant Account withdrawn under the Contract, where the
percentage varies by the number of full years measured from the date that
Participant Account is established, or from the date a Participant Account is
established under a previous AUL P-12833 contract from which amounts have been
transferred to this Participant Account, to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During
Account Years Percentage
1 6
2 5
3 4
4 3
5 2
6 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
P-12834.OTSP.ADD.1
<PAGE>
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
Contributions:
(a) Contributions may vary in amount and frequency; however, a minimum
Contribution of at least $100,000 must be made for a Participant in order
to establish a Participant Account. Any additional Contributions made
within the 12-month period beginning on the date the initial Contribution
is credited to that Participant Account (hereinafter called a Certificate
Year) shall also be credited to that Participant Account. Any initial
Contribution made within a different Certificate Year shall also be subject
to the $100,000 minimum, and any Contributions made within that Certificate
Year shall be allocated to a separate Participant Account and shall be
evidenced by a separate Certificate issued to the Participant. AUL may
change the minimum Contribution acceptable under the Contract, but any such
change shall apply only to individuals who become Participants on or after
the date of the change.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the Contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the Contract. Where required under applicable law, AUL
will not substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing
P-12834.OTSP.ADD.2
<PAGE>
contained herein shall prevent the Variable Account from purchasing other
securities for other series or classes of contracts, or from effecting a
conversion between series or classes of contracts on the basis of requests
made by a majority of participants or as permitted by federal law.
P-12834.OTSP.ADD.3
<PAGE>
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under this Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Transfers:
(g) Where a Participant has outstanding loans under the Contract, a transfer
from the Fixed Interest Account to the Variable Account shall be permitted
only to the extent that the remaining Withdrawal Value of the Participant
Account held in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under that Participant Account.
<PAGE>
Withdrawal Benefits:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to be
paid, then the distribution shall be paid to that eligible retirement plan
in a direct rollover
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract year in which a Participant Account is established, and in the
next succeeding Contract year, the Participant may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account, determined as of the last Contract anniversary
preceding the request for the withdrawal, plus Contributions made during
the applicable Contract year, without application of any Withdrawal Charge.
In any subsequent Contract year, the Participant may withdraw from that
Participant Account up to 10% of the Account Value of that Participant
Account, determined as of the last Contract anniversary preceding the
request for the withdrawal, without application of any Withdrawal Charge.
Where amounts have been transferred to the Contract from another AUL
P-12833 contract, Contract years of participation for purposes of this 10%
free-out provision shall be determined by using the date o the
Participant's first contribution to the Participant Account in the previous
contract which was transferred. Also, where a Participant has outstanding
loans under the Contract, a partial withdrawal by a Participant from the
Fixed Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant Account held in the Fixed
Interest Account equals twice the total of the Participant's outstanding
loans under that Participant Account.
<PAGE>
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of the Account Value of a
Participant Account held in the Fixed Interest Account may borrow money
from AUL, using such Account Value held in the Fixed Interest Account as
the only security for the loan, by submitting a proper written request to
AUL at its Home Office. The minimum amount of any single loan is $2,000.
The maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12 months,
does not exceed the lesser of (l) 50% of the Withdrawal Value of the
Participant Account held in the Fixed Interest Account, or (2) $50,000. The
Withdrawal Value of the Participant Account held in the Fixed Interest
Account, which must be at least twice the amount of the outstanding loan
balance, shall serve as security for the loan, and shall continue to earn
interest. Payment by AUL of the loan amount may be delayed for up to 6
months.
(d) If a loan either remains unpaid at the end of its term, or if, at any time,
l00% of the total of all the Participant's loan balances under a
Participant Account equals the Withdrawal Value of that Participant Account
allocated to the Fixed Interest Account, then AUL shall deduct these
balances from the Participant Account's share of the Fixed Interest
Account. If a Participant has outstanding loans, then withdrawals or
transfers to the Variable Account shall be permitted only to the extent
that the Participant Account's remaining Withdrawal Value in the Fixed
Interest Account equals twice the total of any outstanding loans of the
Participant under that Participant Account. All loan balances shall be
paid or satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted distribution.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be
<PAGE>
made separately for amounts allocated to each Investment Account. The number of
Accumulation Units in each Investment Account credited to each Participant
Account as of any Valuation Period shall be determined by dividing the amounts
allocated to that In vestment Account for that Participant Account as of such
Valuation Period by the dollar value of one Accumulation Unit in that Investment
Account as of the close of business on the applicable Valuation Period. The
number of Accumulation Units thus determined shall not be changed by any
subsequent change in the dollar value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $0.00 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This
charge is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations there
under should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote the
shares of a Mutual Fund in its own right, it may elect to do so. AUL will
vote shares of any Investment Account, if any, that it owns beneficially
in its own discretion, except that if a Mutual Fund offers its shares to
any insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its
own shares in the same proportion as the voting instructions that are
received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants,
or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
P-12834.OTSP.ADD.4
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund, Inc.,
of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the Contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
P-12834SPL.ADD.1
<PAGE>
classes of contracts on the basis of requests made by a majority
of participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in the Contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
Withdrawal Benefits:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue
Code Regulation Section 1.403(b)-2T Q&A-2, the distributee of any
eligible rollover distribution elects to have the distribution paid
directly to an eligible retirement plan (as defined in Q&A-1 of that
Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to
that eligible retirement plan in a direct rollover.
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the Participant
shall be paid the Withdrawal Value. If the Participant requests that a
specified percentage or dollar amount be paid to the Participant, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge.
Notwithstanding the previous sentence, in the first Contract year in
which a Participant Account is established, and in the next succeeding
Contract year, the Participant may withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account, determined as of the last Contract anniversary preceding the
request for the withdrawal, plus Contributions made during the
applicable Contract year, without application of any Withdrawal
Charge. In any subsequent Contract year, the Participant may withdraw
from that Participant Account up to 10% of the Account Value of that
Participant Account, determined as of the last Contract anniversary
preceding the request for the withdrawal, without application of any
Withdrawal Charge. Also, where a Participant has outstanding loans
under the Contract, a partial withdrawal by a Participant from the
Fixed Interest Account shall be permitted only to the extent that the
P-12834SPL.ADD.2
<PAGE>
remaining Withdrawal Value of the Participant Account held in the
Fixed Interest Account equals twice the total of the Participant's
outstanding loans under that Participant Account.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
P-12834SPL.ADD.3
<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment
P-12834SPL.ADD.4
<PAGE>
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received from
persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the
present interpretation thereof should change, and as a result AUL
determines that it is permitted to vote the shares of a Mutual Fund in
its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
P-12834SPL.ADD.5
<PAGE>
AMENDMENT
TO THE
MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Section 6.1 and by substituting the following Section
6.1 in lieu thereof:
6.1 Mortality Risk and Expense Risk Charges; Annual Variable Investment
Plus Factors: AUL shall deduct a daily mortality risk charge and a daily expense
risk charge equal to the daily equivalent of an annual combined charge of 1.25%
against the average daily net assets of each Investment Account. These charges
shall be reflected in the Net Investment Factor as provided in Section 5.4(c).
AUL shall multiply the portions (as delineated in the table below) of the total
month-end Account Value in the Variable Account of all Participants in the
contract by the monthly equivalent of the corresponding Annual Variable
Investment Plus Factors appearing in the table below. These products shall be
added together, and the sum shall be divided by the total month-end Account
Value in the Variable Account of all Participants in the contract. This
percentage shall be multiplied by the month-end Account Value of each
Participant in each Investment Account. The resulting amount for each Investment
Account shall be added to the Participant's Account Value for that Investment
Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
CONTRACTHOLDER AUL
By _________________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title_______________________________ President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-XXXXX.AMD.DAC
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL from time to time by, or on
behalf of, Participants, including amounts transferred to this contract
from another AUL group annuity contract, which are credited to Participant
Accounts maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
p-12833spl.x.adm.1
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.20 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the
Participant, and ends on the day immediately preceding the next anniversary
of such date. Each Participant Account Year thereafter begins on such an
anniversary date and ends on the day immediately preceding the next
succeeding anniversary date. The Withdrawal Charge percentage is as
follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL Series III group
annuity contract GA XX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series I group annuity contract from which
funds have been transferred to such Series III contract, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract
Withdrawal Charge percentage is less than 4%, it shall be rounded up to 4%
in this contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, when made,
they must be at least equal to a minimum annual Contribution of $200
per Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
p-12833spl.x.adm.2
<PAGE>
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Participant in a form acceptable to AUL. If no Investment Option
election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with
the Investment Option election applicable to the immediately preceding
Contribution. The Participant may change an Investment Option election
with respect to future allocations to the applicable Participant
Account by giving new Investment Option elections to AUL at its Home
Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the contributing party unless the
contributing party consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and instructions
and, therefore, can properly allocate that Contribution to the
Participant Account or (ii) 25 days from the date that Contribution is
received by AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL first receives that
Contribution, AUL shall allocate that Contribution to the Investment
Option election identified in the Participant's annuity enrollment
form, which is generally the AUL American Money Market Investment
Account. If AUL subsequently receives the data required to establish
the Participant Account, instructions regarding the amount of the
Contribution for the Participant, and an Investment Option election,
AUL shall then transfer such amounts credited to the AUL American
Money Market Investment Account or other Investment Option identified
in the Participant's annuity enrollment form, plus gains or minus
losses thereon, to another Investment Option, if such election so
directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any
p-12833spl.x.adm.3
<PAGE>
Investment Account may purchase. AUL reserves the right to eliminate
the shares of any of the eligible Mutual Funds or Mutual Fund
Portfolios and to substitute shares of, or interests in, another
Portfolio of the AUL American Series Fund, Inc., another open-end,
registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
contract, if the shares of any or all eligible Mutual Funds or Mutual
Fund Portfolios are no longer available for investment or if further
investment in any or all eligible Mutual Funds or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares in the Variable Account or any
Investment Account without notice, Participant approval, or prior
approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of participants or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL, in a form acceptable to AUL, to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's transfer direction at its Home Office.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (subject to Section 6.5 and minus any outstanding loan balances of
the Participant) shall be paid in a lump sum to the annuitant rather than
annuitized under the annuity options provided in Section 4.2. Additionally,
if the proposed monthly annuity payment should fall below AUL's
periodically adjusted minimum monthly annuity payment, AUL reserves the
right to make payments on a less frequent basis (i.e., quarterly,
semiannually, or annually), so that the actual annuity payment is equal to
or greater than the established minimum level, or to pay the Account Value
(subject to Section 6.5 and minus any outstanding loan balances of the
Participant) in a single sum.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to Section
6.5, and minus the Participant's outstanding loan balance, if any,
under this contract) of the Participant Account for the purpose of
providing a death benefit. The death benefit shall be paid to the
beneficiary last properly designated in writing to AUL at its Home
Office by the Participant, or, if there is no designated beneficiary
living on the date of the Participant's death, to the Participant's
estate. The Participant's beneficiary may also designate a
beneficiary. If any beneficiary dies while receiving payments and no
beneficiary is designated to receive any remaining payments, such
remaining payments shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in
(ii) below on or before December 31 of the calendar year
which contains the fifth anniversary of the date of the
Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of up to 6 months
after AUL receives proper instructions at its Home Office.
4.8 Withdrawal Benefits: A Participant may direct AUL at its Home Office, in a
form acceptable to AUL, to withdraw all or a portion of the Withdrawal
Value of his Participant Account, subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Participant instructions to another
tax-deferred annuity funding vehicle under applicable Internal Revenue
Service rules and regulations shall be subject to application of the
Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request shall
include certification as to the purpose of the withdrawal. The
Participant assumes full responsibility for determining whether the
withdrawal is permitted under applicable law. AUL may rely solely upon
the representations of the Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
Subsection (c) above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to this Section shall be determined, as of the close
of business on the Valuation Date that AUL receives a proper
withdrawal request, in a form acceptable to AUL, at its Home Office.
If it is necessary to withdraw the entire Account Value of a
Participant Account to make a lump-sum cash payment, the amount paid
shall equal the Withdrawal Value, minus any Section 6.5 charges. If it
is not necessary to withdraw the entire Account Value to make such
payment, AUL shall reduce the Account Value of the Participant Account
by an amount sufficient to make the cash payment requested and to
cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous sentence, in the first Contract Year in
which a Participant Account is established, the Participant may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Participant may also withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Participant may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge. Also, where
a Participant has outstanding loans under this contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant Account held in the Fixed Interest Account equals
twice the total of the Participant's outstanding loans under this
contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from
the appropriate Valuation Date as determined in Subsection (h) above,
except as AUL may be permitted to defer such payment of amounts
withdrawn from the Variable Account in accordance with appropriate
provisions of the federal securities laws. AUL reserves the right to
defer the payment of amounts withdrawn from the Fixed Interest Account
for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the
<PAGE>
Participant Account's share of the Fixed Interest Account (other than
amounts which are prohibited from being distributed because Subsection
(c) above is not met) which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(b)(1) on the next succeeding Valuation Period, the unit value
as of the end of that Valuation Period shall be used. Such crediting shall
be made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective, unless
the Contractholder or Participant is otherwise directed by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund or Mutual Fund Portfolio shares as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
- -12833spl.x.adm.5
<PAGE>
By deleting Section 8.18 and by redesignating Section 8.19 as new Section 8.18.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By _________________________________
Title ______________________________
Date _______________________________
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA ________ (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
BANK ONE AS CUSTODIAN ON BEHALF OF ANY PERSON ELIGIBLE TO
PARTICIPATE IN AN IRC 403(b) TAX-DEFERRED ANNUITY WHO
BECOMES A PARTICIPANT UNDER THIS CONTRACT AND SUCH SUCCESSOR
CUSTODIAN AS MAY BE APPOINTED FROM TIME TO TIME (THE
CONTRACTHOLDER)
EFFECTIVE DATE: MAY ________
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections and Subsections of the
Contract, if any, and by inserting the following Sections and Subsections in
lieu thereof:
1.12 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding transfers
discussed in (c) below), to the Fixed Interest Account shall be credited to
the open interest pocket and shall earn interest at the Current Rate of
Interest in effect for that interest pocket. Such Contributions or
transferred amounts, during the time that the Current Rate of Interest
exceeds the Guaranteed Rate of Interest, shall earn interest at such
credited Current Rate of Interest for at least 1 year. After such 1-year
period, AUL reserves the right to declare, at any time, a new Current Rate
of Interest to be applied to funds held within that interest pocket. Any
such new Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
new amounts transferred to the Fixed Interest Account, the previous open
interest pocket shall close, and any such Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
(c) Any contribution to another AUL P-12833 contract which is allocated to the
Fixed Interest Account and which is transferred to this contract (plus
gains and minus losses thereon) and allocated
P-12833.OT.AMD
<PAGE>
to the Fixed Interest Account, beginning with the date of such transfer,
shall be credited with the Current Rate of Interest under this contract
which was in effect on the date the transferred contribution was originally
deposited into the Fixed Interest Account under the previous AUL contract.
1.15 "Investment Account" means each subaccount of the Variable Account
made available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to time as
described in Section 3.3. Amounts allocated to any Investment Account identified
in Schedule A of the contract shall be invested in the shares of the
corresponding Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL.
1.20 "Portfolio" means a series of a particular Mutual Fund as described in
that prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value of a Participant Account withdrawn pursuant to Section 4.8,
where the percentage varies by the number of full years measured from the date
that Participant Account is established, or from the date a Participant Account
is established under a previous AUL P-12833 contract from which amounts have
been transferred to this Participant Account, to the date the Withdrawal Charge
is determined. Such percentage is as follows:
During
Account Years Percentage
1 6
2 5
3 4
4 3
5 2
6 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, a minimum
Contribution of at least $100,000 must be made for a Participant in order
to establish a Participant Account. Any additional Contributions made
within the 12-month period beginning on the date the initial Contribution
is credited to that Participant Account (hereinafter called
P-12833.OT.AMD.1
<PAGE>
a Certificate Year) shall also be credited to that Participant Account. Any
initial Contribution made within a different Certificate Year shall also be
subject to the $100,000 minimum, and any Contributions made within that
Certificate Year shall be allocated to a separate Participant Account and shall
be evidenced by a separate certificate issued to the Participant. AUL may change
the minimum Contribution acceptable under this contract, but any such change
shall apply only to individuals who become Participants on or after the date of
the change.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law, AUL
will no substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing,
<PAGE>
tax, or investment conditions so warrant. AUL also reserves the right to
provide other Investment Options under this contract at any time. Subject
to any required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in this contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under
this contract, the Variable Account may be operated as a management
investment company under The Investment Company Act of 1940 or any other
form permitted by law, it may be deregistered in the event such
registration is no longer required under The Investment Company Act of
1940, or it may be combined with other separate accounts of AUL or an
affiliate thereof. AUL may take such action as is necessary to comply with,
or to obtain, exemptions from the Securities and Exchange Commission with
regard to the Variable Account. Subject to compliance with applicable law,
AUL also may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.5 Limitations on Transfers:
(e) Where a Participant has outstanding loans under this contract, a transfer
from the Fixed Interest Account to the Variable Account shall be permitted
only to the extent that the remaining Withdrawal Value of the Participant
Account held in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under that Participant Account.
4.8 Withdrawal Benefits:
(a)(6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to be
paid, then the distribution shall be paid to that eligible retirement plan
in a direct rollover.
<PAGE>
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c) above. If
the entire Account Value of a Participant Account is withdrawn, the
Participant shall be paid the Withdrawal Value. If the Participant requests
that a specified percentage or dollar amount be paid to the Participant,
AUL shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1and the decimal
equivalent of the applicable Withdrawal Charge. Notwithstanding the
previous sentence, in the first Contract Year in which a Participant
Account is established, and in the next succeeding Contract Year, the
Participant may withdraw from that Participant Account up to 10% of the sum
of the Account Value of that Participant Account, determined as of the last
Contract Anniversary preceding the request for the withdrawal, plus
Contributions made during the applicable Contract Year, without application
of any Withdrawal Charge. In any subsequent Contract Year, the Participant
may withdraw from that Participant Account up to 10% of the Account Value
of that Participant Account, determined as of the last Contract Anniversary
preceding the request for the withdrawal, without application of any
Withdrawal Charge. Where amounts have been transferred to this contract
from another AUL P-12833 contract, Contract Years of participation for
purposes of this 10% free-out provision shall be determined by using the
date of the Participant's first contribution to the Participant Account in
the previous contract which was transferred. Also, where a Participant has
outstanding loans under this contract, a partial withdrawal by a
Participant from the Fixed Interest Account shall be permitted only to the
extent that the remaining Withdrawal Value of the Participant Account held
in the Fixed Interest Account equals twice the total of the Participant's
outstanding loans under that Participant Account.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of the Account Value of a
Participant Account held in the Fixed Interest Account may borrow money
from AUL, using such Account Value held in the Fixed Interest Account as
the only security for the loan, by submitting a proper written request to
AUL at its Home Office. The minimum amount of any single loan is $2,000.
The maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12 months,
does not exceed the lesser of (l) 50% of the Withdrawal Value of the
Participant Account held in the Fixed Interest Account, or (2) $50,000. The
Withdrawal Value of the Participant Account held in the Fixed Interest
Account, which must be at least twice the amount of the outstanding loan
balance, shall serve as security for the loan, and shall continue to earn
interest. Payment by AUL of the loan amount may be delayed for up to 6
months.
<PAGE>
(d) If a loan either remains unpaid at the end of its term, or if, at any time,
l02% of the total of all the Participant's loan balances under a
Participant Account equals the Withdrawal Value of that Participant
Account allocated to the Fixed Interest Account, then AUL shall deduct
these balances plus an expense charge equal to 2% of the outstanding loan
balances from the Participant Account's share of the Fixed Interest
Account. If a Participant has outstanding loans, then withdrawals or
transfers to the Variable Account shall be permitted only to the extent
that the Participant Account's remaining Withdrawal Value in the Fixed
Interest Account equals twice the total of any outstanding loans of the
Participant under that Participant Account. All loan balances plus the 2%
expense charge shall be paid or satisfied in full before any amount from
the Participant Account's share of the Fixed Interest Account is paid as a
full withdrawal, as a death benefit, upon annuitization, or as another
permitted distribution.
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund as such prospectus may
be amended or supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account avail able under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be deter mined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
<PAGE>
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
deter mined as of the end of the immediately preceding Valuation Period;
and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
P-12833.OT.AMD.3
<PAGE>
6.2 Investment Management Charge: A Mutual Fund shall pay any investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus for that Mutual
Fund as it may be amended or supplemented from time to time. These expenses may
vary from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the assets of
such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $0.00 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn before the last day of the Contract
Quarter pursuant to Sections 4.1, 4.7, or 4.8, the administrative charge
attributable to the period of time which has elapsed since the first day of the
Contract Quarter in which such application or withdrawal of funds is made shall
not be deducted from the amount applied or withdrawn.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc. or any
other Mutual Fund made available by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in
<PAGE>
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL deter mines that it is permitted to vote the shares of a Mutual
Fund in its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any insurance
company separate account that funds variable life insurance contracts or if
otherwise required by applicable law, AUL will vote its own shares in the
same proportion as the voting instructions that are received in a timely
manner for contracts and Participant Accounts participating in the
Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number of
Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value of
all of the Accumulation Units of the corresponding Investment Account
attributable to this contract on a particular date by the net asset value
per share of that Portfolio as of the same date. Fractional votes will be
counted. The number of votes as to which voting instructions may be given
will be determined as of the date coincident with the date established by
the applicable Mutual Fund for determining shareholders eligible to vote
at the meeting of that Mutual Fund. If required by the Securities and
Exchange Commission, AUL reserves the right to determine in a different
fashion the voting rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants,
or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
CONTRACTHOLDER AUL
By ______________________________ By______________________________
Title __________________________ Title___________________________
Date ___________________________ Date____________________________
P-12833.OT.AMD.4
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund Portfolio listed below.
Investment Account Portfolio
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
P-12833.OT.AMD.5
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT
NUMBER (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective January 1, 1993:
If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T Q&A-2,
the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as defined in Q&A-1
of that Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
And by adding the following provision, effective January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-12833.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GXX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections and Subsections of the
Contract, if any, and by inserting the following Sections and Subsections in
lieu thereof:
1.15 "Investment Account" means each subaccount of the Variable Account
made available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to time as
described in Section 3.3. Amounts allocated to any Investment Account identified
in Schedule A of the contract shall be invested in the shares of the
corresponding Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL.
1.20 "Portfolio" means a series of a particular Mutual Fund as described in
that prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law, AUL
will not substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
P-12833SPL.AMD.1
<PAGE>
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in this contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under
this contract, the Variable Account may be operated as a management
investment company under The Investment Company Act of 1940 or any other
form permitted by law, it may be deregistered in the event such
registration is no longer required under The Investment Company Act of
1940, or it may be combined with other separate accounts of AUL or an
affiliate thereof. AUL may take such action as is necessary to comply with,
or to obtain, exemptions from the Securities and Exchange Commission with
regard to the Variable Account. Subject to compliance with applicable law,
AUL also may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
4.8 Withdrawal Benefits:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to be
paid, then the distribution shall be paid to that eligible retirement plan
in a direct rollover.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c) above. If
the entire Account Value of a Participant Account is withdrawn, the
Participant shall be paid the Withdrawal Value. If the Participant requests
that a specified percentage or dollar amount be paid to the Participant,
AUL shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge. Notwithstanding the
previous sentence, in the first Contract Year in which a Participant
Account is established, and in the next succeeding Contract Year, the
Participant may withdraw from that Participant Account up to 10% of the sum
of the Account Value of that Participant Account, determined as of the last
Contract Anniversary preceding the request for the withdrawal, plus
Contributions made during the applicable Contract Year, without application
of any Withdrawal Charge. In any subsequent Contract Year, the Participant
may withdraw from that Participant Account up to 10% of the Account Value
of that Participant Account, determined as of the last Contract Anniversary
preceding the request for the withdrawal, without application of any
Withdrawal Charge. Also, where a Participant has outstanding loans under
this contract, a partial
P-12833SPL.AMD.2
<PAGE>
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of the
Participant Account held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund as such prospectus may
be amended or supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account available under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
P-12833SPL.AMD.3
<PAGE>
6.2 Investment Management Charge: A Mutual Fund shall pay any investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus for that Mutual
Fund as it may be amended or supplemented from time to time. These expenses may
vary from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the assets of
such Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc. or any
other Mutual Fund made available by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund offers its
shares to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL will
vote its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number of
Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value of all
of the Accumulation Units of the corresponding Investment Account
attributable to this contract on a particular date by the net asset value
per share of that Portfolio as of the same date. Fractional votes will be
counted. The number of votes as to which voting instructions may be given
will be determined as of the date coincident with the date established by
the applicable Mutual Fund for determining shareholders eligible to vote at
the meeting of that Mutual Fund. If required by the Securities and Exchange
Commission, AUL reserves the right to determine in a different fashion the
voting rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
P-12833SPL.AMD.4
<PAGE>
CONTRACTHOLDER AUL
By ____________________________ By ______________________________
Title _________________________ Title ____________________________
Date____________________________ Date _____________________________
P-12833SPL.AMD.5
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund Portfolio listed below.
Investment Account Portfolio
- ------------------ ---------
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
P-12833SPL.AMD.6
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
PEOPLES BANK & TRUST COMPANY AS CUSTODIAN ON BEHALF OF ANY PERSON ELIGIBLE TO
PARTICIPATE IN AN IRC 403(b) TAX-DEFERRED ANNUITY WHO
BECOMES A PARTICIPANT UNDER THIS CONTRACT AND SUCH SUCCESSOR
CUSTODIAN AS MAY BE APPOINTED FROM TIME TO TIME (THE CONTRACTHOLDER)
The Effective Date of this Amendment is June 1, 1997.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation AUL American Tactical Asset Allocation
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Janus Aspen Series Flexible Income
Janus Aspen Series Worldwide Growth Janus Aspen Series Worldwide Growth
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology and PBHG Insurance Series Technology and
Communication Communication
SAFECO Resource Series Trust Equity SAFECO Resource Series Trust Equity
SAFECO Resource Series Trust Growth SAFECO Resource Series Trust Growth
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
CONTRACTHOLDER AUL
By: /s/ Jerry D. Semler
By _______________________________ Chairman of the Board,
Title ___________________________ President, & Chief Executive Officer
Date: ____________________________
Attest
By: /s/ William R. Brown
Secretary
P-12833SPL.A
- --------------------------------------------------------------------------------
EXHIBIT 4.5
TDA CUSTODIAL CONTRACT, FORM P-12833
- --------------------------------------------------------------------------------
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman, President, and
Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12833
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman, President, and
Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12833IL
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman, President, and
Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
TDA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629.
P-12833TX
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
ARTICLE 4 BENEFITS AND LOANS
4.1--------Election of Annuity Options
4.2--------Annuity Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
4.9--------Loans from the Fixed Interest Account
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share of
any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 MISCELLANEOUS
8.1--------Ownership
8.2--------AUL's Annual Statement
8.3--------Tax Status
8.4--------Essential Data
8.5--------Reliance
8.6--------Misstatement of Essential Data
8.7--------Annuity Certificates
8.8--------Election, Notice, or Direction Requirements
8.9--------Quarterly Statement of Account Value
8.10-------Conformity with State Laws
8.11-------Reference to Federal Laws
8.12-------Sex and Number
8.13-------Facility of Payment
8.14-------Insulation from Liability
8.15-------Voting
8.16-------Acceptance of New Participants or Contributions
8.17-------Nonforfeitability and Nontransferability
8.18-------Termination
8.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12833.1
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which an
annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the
applicable sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same
day of the same month as the day and month which is stated on the face page
of this contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL from time to time by, or on
behalf of, Participants, which are credited to Participant Accounts
hereunder.
1.10 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time to time and as
credited to each interest pocket maintained within the Fixed Interest
Account. The Current Rates of Interest shall always be equal to or greater
than the Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made by, or on behalf of,
a Participant which exceed the limitations in effect under applicable
provisions of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that fund of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
<PAGE>
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148.
1.15 "Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.16 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940.
1.18 "Participant" means any person enrolled in this contract who elects to make
Contributions or for whom Contributions are made, and for whom a
Participant Account is established.
<PAGE>
1.19 "Participant Account" means an account established under this contract for
a Participant. Contributions received by AUL shall be credited to
Participant Accounts as AUL is directed in writing.
1.20 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
1.21 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.22 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.23 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the number of full years measured from the date a Participant
Account is established to the date the Withdrawal Charge is determined.
Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.25 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge, and minus the Participant's outstanding loan balance, if
any, and any expense charges due on such loans.
P-12833.2
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. Unless there is a
specific written agreement signed by a corporate officer of AUL, AUL is not
a party to, nor bound by, a plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not
a fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-12833.3
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Participant. Such written instructions must
include the amount to be withdrawn and returned, and certification
that such Contributions constitute Excess Contributions and that such
returns are permitted by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by applicable provisions of the Code and Regulations. In
withdrawing and returning the identified amount, AUL may rely solely
on such written instructions and certification. Such a withdrawal and
return of Excess Contributions shall not be subject to Section 4.8.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
contributing party unless consent is given to AUL to retain the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial Contribution
to the Money Market Investment Account, and shall transfer such
amounts credited to the Money Market Investment Account according to
the applicable allocation instructions upon receipt of the data
required to establish the Participant Account and allocation
instructions.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a Contribution
other than the initial Contribution, that amount shall be credited to
the Fixed Interest Account until such time as an appropriate
allocation instruction is received, at which time such amount shall be
withdrawn from the Fixed Interest Account and allocated pursuant to
such instructions. The Participant may change an allocation
instruction with respect to future allocations to his Participant
Account by giving new written allocation instructions to AUL at its
Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares in
the Variable Account or any Investment Account without notice,
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL at its Home Office to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. For any transfer from an Investment Account,
Accumulation Units shall be valued as of the close of business on the
Valuation Date that AUL receives the Participant's direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T., such
transfer shall be effective as of the close of business on the next
succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
<PAGE>
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
P-12833.10
<PAGE>
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge of not more
than $25 on a transfer. AUL reserves the right to change the maximum
limit on such transfer charge upon delivery of written notice to the
Contractholder. Any such change in the maximum limit shall apply only
to transfers by an individual who becomes a Participant on or after
the effective date of such change, and shall apply as long as that
individual remains a Participant.
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under this contract.
P-12833.10 - PA
<PAGE>
ARTICLE 4 - BENEFITS AND LOANS
4.1 Election of Annuity Options: At the written request of the Participant, AUL
shall apply all or a portion of the Account Value (subject to Section 6.5,
and minus any outstanding loan balance of the Participant and any unpaid
expense charges on such loans) of the Participant Account for the purpose
of providing a fixed payment annuity. Upon receipt of such request, AUL is
hereby authorized by such Participant to value and transfer the Participant
Account's share of the Variable Account to the Fixed Interest Account as of
the date that AUL receives such written request at its Home Office. Such
transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Participant request shall
include certification as to the purpose for the annuity and the election of
one of the following annuity options. The amount of the annuity shall be
computed from the Table of Immediate Annuities then included in this
contract, except as provided under Section 4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at
its Home Office at least 30 days prior to the Annuity Commencement Date,
the Account Value (subject to Section 6.5, and minus any outstanding loan
balance of the Participant and any unpaid expense charges on such loans) of
his Participant Account shall be applied under (b) above as a 10 Year
Certain and Life Annuity. AUL must receive written notification of such
Annuity Commencement Date, written designation of the contingent annuitant
or beneficiary, and any election forms needed in connection with any
annuity option provided in this Section.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which would
extend for a certain period beyond the life expectancy of such Participant
or the joint life expectancy of such Participant and such contingent
annuitant as determined on the Annuity Commencement Date.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (minus any outstanding loan balances of the Participant and any
unpaid expense charges on such loans) shall be paid in a lump sum to the
annuitant rather than annuitized under the annuity options provided in
Section 4.2. Additionally, if the monthly annuity is less than AUL's then
current established minimum, AUL reserves the right to make payments on a
less frequent basis.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under this contract
and any unpaid expense charges due on such loans) of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving
<PAGE>
payments and no beneficiary is designated to receive any remaining
payments, such remaining payments shall be made to the deceased
beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at
its Home Office at least 30 days prior to the Annuity Commencement Date,
the Account Value (subject to Section 6.5, and minus any outstanding loan
balance of the Participant and any unpaid expense charges on such loans) of
his Participant Account shall be applied under (b) above as a 10 Year
Certain and Life Annuity. AUL must receive written notification of such
Annuity Commencement Date, written designation of the contingent annuitant
or beneficiary, and any election forms needed in connection with any
annuity option provided in this Section.
In no event shall any option elected provide annuity benefits to the
Participant or to the Participant and the contingent annuitant which would
extend for a certain period beyond the life expectancy of such Participant
or the joint life expectancy of such Participant and such contingent
annuitant as determined on the Annuity Commencement Date.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (minus any outstanding loan balances of the Participant and any
unpaid expense charges on such loans) shall be paid in a lump sum to the
annuitant rather than annuitized under the annuity options provided in
Section 4.2. Additionally, if the proposed monthly annuity payment should
fall below AUL's periodically adjusted minimum monthly annuity payment, AUL
reserves the right to make payments on a less frequent basis
(i.e., quarterly, semiannually, or annually), so that the actual monthly
annuity payment is equal to or greater than the established minimum level.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (minus the
Participant's outstanding loan balance, if any, under this contract
and any unpaid expense charges due on such loans) of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated to receive any
remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written
P-12833.12 - FL
<PAGE>
instructions at its Home Office, or (2) the Valuation Date that AUL
receives such due proof of death at its Home Office, provided that
such written instructions or due proof of death received on the later
of (1) or (2) above are (is) received by 4:00 p.m. E.S.T. If the
written instructions or due proof of death received on the later of
(1) or (2) above are (is) received after 4:00 p.m. E.S.T., such
valuation shall be made as of the close of business on the next
succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account, provided that:
(l) any distribution to a Participant shall not occur until the
Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
<PAGE>
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made
other than pursuant to a salary reduction agreement (within the
meaning of Code Section 402(g)(3)(C); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity
contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv)
above, any gain credited to Contributions made pursuant to a
salary reduction agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
shall include certification as to the purpose of the withdrawal.
The Participant assumes full responsibility for determining
whether the withdrawal is permitted under applicable law. AUL may
rely solely upon the representations of the Participant made in
the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
provision (a)(1) above is not met).
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Participant may withdraw up to 10% of the Account
Value of his Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal. Also, where a Participant has outstanding loans under this
contract, a partial withdrawal by a Participant from the Fixed
Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant held in the Fixed
Interest Account equals twice the total of the Participant's
outstanding loans under this contract.
<PAGE>
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts with drawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in
the Fixed Interest Account may borrow money from AUL, using such
Account Value held in the Fixed Interest Account as the only security
for the loan, by submitting a proper written request to AUL at its
Home Office. The minimum amount of any single loan is $2,000. The
maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12
months, does not exceed the lesser of (l) 50% of the Withdrawal Value
of the Participant Account held in the Fixed Interest Account, or (2)
$50,000. The Withdrawal Value of the Participant Account held in the
Fixed Interest Account, which must be at least twice the amount of the
outstanding loan balance, shall serve as security for the loan, and
shall continue to earn interest. Payment by AUL of the loan amount may
be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan
balance from the effective date of such loan. The interest rate shall
be declared by AUL at the beginning of each calendar quarter. The
interest rate charged shall be equal to the Moody's Corporate Bond
Yield Average - Monthly Average Corporates as of the date of the loan,
as published by Moody's Investors Service. If publication of such
Moody's rate should ever cease, a substantially equivalent substitute
rate shall be used. However, no change from a previously established
rate may be made in an amount less than .50% in any periodic
adjustment. The loan balance shall also be subject to a loan expense
charge equal to 2% of each loan repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used
to acquire a principal residence for the Participant, in which case
the term may be longer. Loan repayments must be made at least
quarterly. Upon receipt of a repayment, AUL shall deduct the 2%
expense charge from the repayment, and shall apply the balance of such
repayment first to any accrued interest and then to the outstanding
loan principal.
<PAGE>
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l02% of the total of all the Participant's loan balances equals
the Participant's Withdrawal Value allocated to the Fixed Interest
Account, then AUL shall deduct these balances plus an expense charge
equal to 2% of the outstanding loan balances from the Participant
Account's share of the Fixed Interest Account. If a Participant has
outstanding loans, then withdrawals or transfers to the Variable
Account shall be permitted only to the extent that the Participant's
remaining Withdrawal Value in the Fixed Interest Account equals twice
the total of any outstanding loans of the Participant under the
contract. All loan balances plus the 2% expense charge shall be paid
or satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted
distribution.
(e) AUL may modify the loan restrictions or limitations stated above in
this Section, or may add new restrictions and limitations, to the
extent necessary to comply with Code Section 72(p) or other applicable
law, as determined solely by AUL.
P-12833.13
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as provided
in the prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant
Account in the form of Accumulation Units on the basis of the value of such
units in that Investment Account as of the end of the Valuation Period on
which such amounts are received by AUL at its Home Office. Such crediting
shall be made separately for amounts allocated to each Investment Account.
The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value
of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in
that Investment Account as of the immediately preceding Valuation Period
multiplied by the Net Investment Factor, as defined in Section 5.4, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or
transfers which are effective as of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the
<PAGE>
assets of the Investment Account for mortality and expense risks.
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-12833.14
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for so long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, or 4.8, the
administrative charge attributable to the period of time which has elapsed
since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied
or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
P-12833.15
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, or 4.8, the
administrative charge attributable to the period of time which has elapsed
since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied
or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge (not to exceed
$25) for each transfer transaction pursuant to Section 3.4. This charge
would be prorated among the Investment Options from which the amounts are
transferred in the same proportion that the amount transferred from the
Investment Option bears to the total amount transferred from all Investment
Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
P-12833.19 - NJ
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.24 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.24 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $15 per Contract
Quarter until the year 2001. Any increase in the administrative charge made
by AUL for any Contract Quarter beginning after December 31, 2000 shall be
limited to an amount which is designed to reimburse AUL for the expenses
associated with the administration of the contract and the operation of
the Variable Account. Any such increase shall not be anticipated to be a
source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 8.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-12833.20
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: AUL does not reserve the right to
change the Table of Immediate Annuities included in this contract.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.24 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.24 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $100 per Contract
Quarter. Any increase in the administrative charge made by AUL for any
Contract Quarter shall be limited to an amount which is designed to
reimburse AUL for the expenses associated with the administration of the
contract and the operation of the Variable Account. Any such increase shall
not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 8.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-12833.20 - NJ
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely
affect the benefits to be provided by Contributions made prior to the
effective date of such change or amendment unless the consent of all
Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Portfolio, nor any of the other provisions and
conditions of this contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal, state,
or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever information
is necessary to establish the eligibility and amount of annuity or other
benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL
by the Contractholder as acting on its behalf, or by a Participant. AUL
need not inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
8.7 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to, and received by, AUL at its Home Office
before becoming effective, unless the Participant is otherwise directed by
AUL.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
8.10 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
<PAGE>
8.11 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
8.12 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
8.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to any person or entity when directed to do so in writing
by the Participant. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
8.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
8.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so. AUL will vote
shares of any Investment Account, if any, that it owns beneficially in
its own discretion, except that if the Mutual Fund offers its shares
to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL
will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
8.16 Acceptance of New Participants or Contributions. AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time. AUL shall have the right to refuse to accept Contributions as of
the last day of the second month following the date that written notice to
this effect is delivered to any contributing Participant or to any
Participant for whom Contributions are being made.
8.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under this contract shall be nonforfeitable at all
times. No sum payable under this contract with respect to a Participant may
be sold, assigned, discounted, or pledged as collateral for a loan or as
security for the performance of an obligation or for any other purpose to
any person or entity other than AUL. In addition, to the extent permitted
by law, no such sum shall in any way be subject to legal process requiring
the payment of any claim against the payee.
8.18 Termination: This contract shall automatically terminate as of the date
that there are no Participant Accounts maintained hereunder.
8.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL (i.e., contractholders) shall be held at its principal place
of business on the third Thursday in February of each year at the hour of
ten o'clock A.M. Elections for directors shall be held at such annual
meeting.
P-12833.21
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
The following are the guaranteed annuity rates for the options offered by AUL.
They are based on the following assumptions-
Retirement value - $1000.00 Interest rate - 4% Load - 4% Participant - Female
Commission - 0% Contingent - Male (same age as participant) Age adjustment - 0
<TABLE>
<CAPTION>
INSTALLMENT
AGE 5 YR C&L 15 YR C&L 20 YR C&L J&S(FULL) J&2/3S J&1/2S REFUND
<S> <C> <C> <C> <C> <C> <C> <C>
45 4.0004 3.9807 3.9616 3.7883 3.8571 3.8924 3.7984
46 4.0413 4.0192 3.9979 3.8194 3.8914 3.9284 3.8336
47 4.0844 4.0597 4.0358 3.8523 3.9275 3.9662 3.8706
48 4.1299 4.1020 4.0753 3.8869 3.9656 4.0062 3.9094
49 4.1777 4.1465 4.1176 3.9235 4.0058 4.0482 3.9501
50 4.2281 4.1931 4.1595 3.9620 4.0481 4.0926 3.9929
51 4.2813 4.2420 4.2044 4.0028 4.0928 4.1394 4.0377
52 4.3375 4.2933 4.2511 4.0458 4.1401 4.1889 4.0849
53 4.3969 4.3471 4.2997 4.0913 4.1900 4.2412 4.1345
54 4.4596 4.4035 4.3503 4.1395 4.2429 4.2965 4.1867
55 4.5259 4.4627 4.4029 4.1905 4.2988 4.3551 4.2416
56 4.5962 4.5248 4.4574 4.2446 4.3581 4.4172 4.2993
57 4.6707 4.5899 4.5139 4.3020 4.4210 4.4830 4.3602
58 4.7498 4.6582 4.5722 4.3630 4.4878 4.5529 4.4244
59 4.8338 4.7299 4.6323 4.4278 4.5588 4.6273 4.4921
60 4.9231 4.8049 4.6940 4.4968 4.6345 4.7065 4.5633
61 5.0181 4.8834 4.7572 4.5704 4.7150 4.7908 4.6387
62 5.1191 4.9654 4.8215 4.6488 4.8009 4.8808 4.7183
63 5.2267 5.0508 4.8868 4.7325 4.8925 4.9767 4.8020
64 5.3413 5.1395 4.9526 4.8218 4.9903 5.0790 4.8906
65 5.4635 5.2315 5.0186 4.9172 5.0947 5.1883 4.9844
66 5.5940 5.3266 5.0843 5.0193 5.2063 5.3052 5.0830
67 5.7334 5.4244 5.1492 5.1284 5.3258 5.4303 5.1875
68 5.8829 5.5249 5.2127 5.2454 5.4539 5.5646 5.2985
69 6.0434 5.6275 5.2744 5.3708 5.5916 5.7089 5.4156
70 6.2158 5.7317 5.3336 5.5055 5.7396 5.8643 5.5396
71 6.4011 5.8369 5.3897 5.6502 5.8991 6.0319 5.6720
72 6.6002 5.9422 5.4421 5.8058 6.0709 6.2127 5.8244
73 6.8139 6.0467 5.9404 5.9731 6.2561 6.4078 5.9594
74 7.0425 6.1493 5.5342 6.1532 6.4557 6.6183 6.1174
75 7.2868 6.2489 5.5735 6.3471 6.6707 6.8453 6.2830
Table-PA
</TABLE>
P-12833.22
<PAGE>
*Special version (P-12834SPL) has been written for SC, OR, and WA.
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract), and that AUL has created a tax-deferred annuity account
in your name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
TDA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12834.IL
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract), and that AUL has created a tax-deferred annuity account
in your name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
THIS CERTIFICATE IS SUBJECT TO NEW JERSEY INSURANCE LAWS AND REGULATIONS AS
ADMINISTERED BY THE NEW JERSEY DEPARTMENT OF INSURANCE.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
TDA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS
NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12834.NJ
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract), and that AUL has created a tax-deferred annuity account
in your name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
TDA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12834
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract), and that AUL has created a tax-deferred annuity account
in your name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
TDA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629.
P-12834.TX
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment Account on
that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid to AUL from time to time by, or on behalf of,
Participants, which are credited to Participant Accounts.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time to time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made by, or on behalf of, a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time that the
Current Rate of Interest exceeds the Guaranteed Rate of Interest, shall
earn interest at such credited Current Rate of Interest for at least 1
year. After such 1-year period, AUL reserves the right to declare, at any
time, a new Current Rate of Interest to be applied to funds held within
that interest pocket. Any such new Current Rate of Interest must remain in
effect for that interest pocket for at least 1 year.
p-12834.1
<PAGE>
(b) If AUL changes the Current Rate of Interest for new Contributions or new
amounts transferred to the Fixed Interest Account, the previous open
interest pocket shall close, and any Contributions or amounts transferred
on or after the effective date of such change shall be credited to a new
open interest pocket and shall earn interest at the new Current Rate of
Interest in effect for such new open interest pocket. Therefore, at any
given time, various funds credited to a Participant Account and allocated
to the Fixed Interest Account may be earning interest at different Current
Rates of Interest for different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond Investment
Account, the Money Market Investment Account, and the Managed Investment
Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested in
shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be invested
in shares of the AUL American Money Market Portfolio of the Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested in
shares of the AUL American Managed Portfolio of the Mutual Fund. The AUL
American Managed Portfolio of the Mutual Fund is a managed Portfolio which
invests in the same types of investments as the other Portfolios listed in
(a), (b), and (c) above.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person enrolled in the Contract who elects to make
Contributions or for whom Contributions are made, and for whom a Participant
Account is established.
"Participant Account" means an account established under the Contract for a
Participant. Contributions received by AUL shall be credited to Participant
Accounts as AUL is directed in writing.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
p-12834.2
<PAGE>
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value with drawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge, and minus the Participant's outstanding loan balance, if any,
and any expense charges due on such loans.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be at
least equal to a minimum annual Contribution of $200 per Participant in any
full contract year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant upon
receipt by AUL at its Home Office of complete written instructions from the
Participant. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by
applicable provisions of the Code and Regulations issued thereunder. It
shall not be the responsibility of AUL to determine the existence or amount
of Excess Contributions or gains or losses thereon, or that returns of
Excess Contributions are permitted by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL may
rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to the
withdrawal benefits provisions of the Contract.
(c) When a Contribution is received at AUL's Home Office, it shall be credited
to Participant Accounts as directed in written allocation instructions.
(d) The initial Contribution for a Participant shall be credited and allocated
to the Participant Account
p-12834.3
<PAGE>
no later than the close of business on the second business day of AUL after
the later of (1) the business day that AUL receives the initial
Contribution at its Home Office, or (2) the business day that AUL receives,
at its Home Office, the data required to establish the Participant Account
and allocation instructions regarding the initial Contribution. If the data
required to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the contributing
party unless consent is given to AUL to retain the initial Contribution
until AUL receives the data and allocation instructions for the
Participant. Alternatively, if the data required to establish the
Participant Account and allocation instructions regarding the initial
Contribution are not received by AUL at its Home Office when AUL first
receives the initial Contribution, to the extent permitted by applicable
law, AUL may allocate the initial Contribution to the Money Market
Investment Account, and shall transfer such amounts credited to the Money
Market Investment Account according to the applicable allocation
instructions upon receipt of the data required to establish the Participant
Account and allocation instructions.
(e) All Contributions subsequent to the initial Contribution shall be credited
and allocated as of the close of business on the Valuation Period in which
AUL receives the Contribution at its Home Office, provided that the
Contribution is received by 4:00 p.m. E.S.T. If the Contribution is
received after 4:00 p.m. E.S.T., such Contribution shall be deemed to be
received, and shall be credited and allocated as of the close of business,
on the next succeeding Valuation Period.
(f) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or 33-1/3%, as
elected by the Participant in writing. If no allocation instruction is made
with respect to any Participant Account, AUL shall process such credits in
accordance with the allocation instruction applicable to the immediately
preceding Contribution. If there should be no allocation instruction
applicable to a portion of a Contribution other than the initial
Contribution, that amount shall be credited to the Fixed Interest Account
until such time as an appropriate allocation instruction is received, at
which time such amount shall be withdrawn from the Fixed Interest Account
and allocated pursuant to such instructions. The Participant may change an
allocation instruction with respect to future allocations to his
Participant Account by giving new written allocation instructions to AUL at
its Home Office.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the Mutual Fund, of another open-end, registered investment company, or
other investment vehicle, for shares already purchased or to be purchased
in the future under the Contract.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in a new Portfolio of the Mutual Fund, or in other
securities, investment vehicles, or shares of another diversified open-end
management investment company or series thereof. AUL reserves the right to
eliminate or combine existing Investment Accounts if, in its sole
discretion, marketing, tax, or investment conditions so warrant. AUL also
reserves the right to provide other Investment Options under the Contract
at any time. Subject to any required regulatory approvals, AUL reserves the
right to transfer assets from any Investment Account to another separate
account of AUL or Investment Account.
p-12834.4
<PAGE>
(c) If deemed by AUL to be in the best interests of persons or entities having
voting rights under the Contract, the Variable Account may be operated as a
management investment company under The Investment Company Act of 1940 or
any other form permitted by law, it may be deregistered in the event such
registration is no longer required under The Investment Company Act of
1940, or it may be combined with other separate accounts of AUL or an
affiliate thereof.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant may
direct AUL at its Home Office to transfer the amounts credited to an
Investment Option to any other Investment Option during the Accumulation
Period. For any transfer from an Investment Account, Accumulation Units
shall be valued as of the close of business on the Valuation Date that AUL
receives the Participant's direction, provided that AUL receives such
direction by 4:00 p.m. E.S.T. on that Valuation Date. If such direction is
received after 4:00 p.m. E.S.T., such transfer shall be effective as of the
close of business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7 days
from the date a proper request is received by AUL at its Home Office,
except as AUL may be permitted to defer such payment of amounts withdrawn
from the Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after AUL
receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis.
(d) The Participant may not direct a transfer with regard to his Participant
Account's share of any Investment Option in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a transfer
reduces the Participant Account's remaining share of an Investment Option
to less than $500, the entire remaining share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the last contract anniversary preceding the request for transfer, or the
Participant Account's entire share of the Fixed Interest Account if such
share would be less than $500 after the transfer.
(f) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge on
a transfer.
(g) Where a Participant has outstanding loans under the Contract, a transfer
from the Fixed Interest Account to the Variable Account shall be permitted
only to the extent that the remaining Withdrawal Value of the Participant
held in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under the Contract.
p-12834.5
<PAGE>
BENEFITS AND LOANS
Annuity Options:
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge, and minus any
outstanding loan balance of the Participant and any unpaid expense charges on
such loans) of the Participant Account for the purpose of providing a fixed
payment annuity. Upon receipt of such request, AUL is hereby authorized by such
Participant to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date that AUL receives
such written request at its Home Office. Such transferred amounts Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant may
direct AUL at its Home Office to transfer the amounts credited to an
Investment Option to any other Investment Option during the Accumulation
Period. For any transfer from an Investment Account, Accumulation Units
shall be valued as of the close of business on the Valuation Date that AUL
receives the Participant's direction, provided that AUL receives such
direction by 4:00 p.m. E.S.T. on that Valuation Date. If such direction is
received after 4:00 p.m. E.S.T., such transfer shall be effective as of the
close of business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7 days
from the date a proper request is received by AUL at its Home Office,
except as AUL may be permitted to defer such payment of amounts withdrawn
from the Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after AUL
receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis.
(d) The Participant may not direct a transfer with regard to his Participant
Account's share of any Investment Option in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a transfer
reduces the Participant Account's remaining share of an Investment Option
to less than $500, the entire remaining share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the last contract anniversary preceding the request for transfer, or the
Participant Account's entire share of the Fixed Interest Account if such
share would be less than $500 after the transfer.
(f) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge of
not more than $25 on a transfer.
(g) Where a Participant has outstanding loans under the Contract, a transfer
from the Fixed Interest Account to the Variable Account shall be permitted
only to the extent that the remaining Withdrawal Value of the Participant
held in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under the Contract.
p-12834.5-PA
BENEFITS AND LOANS
Annuity Options:
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge, and minus any
outstanding loan balance of the Participant and any unpaid expense charges on
such loans) of the Participant Account for the purpose of providing a fixed
payment annuity. Upon receipt of such request, AUL is hereby authorized by such
Participant to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date that AUL receives
such written request at its Home Office. Such transferred amounts shall be held
in the Fixed Interest Account until the Participant's Annuity Commencement Date.
The Participant request shall include certification as to the purpose for the
annuity and the election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the annuitant's
monthly annuity shall be paid to the contingent annuitant named in the
election for as long as the contingent annuitant lives. An election of this
option is automatically cancelled if either the Participant or the
contingent annuitant dies before the Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant. If, at the death of the
annuitant, the sum of the monthly payments previously received is less than
the amount applied to provide the annuity, monthly payments of the same
amount shall continue to the annuitant's beneficiary until the total of the
monthly payments received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such period.
(f) Any other options made available by AUL at the time a Participant exercises
his option to elect an annuity.
p-12834.6
<PAGE>
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge, and minus any outstanding
loan balance of the Participant and any unpaid expense charges on such loans) of
his Participant Account shall be applied under (b) above as a 10 Year Certain
and Life Annuity. AUL must receive written notification of such Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any annuity option
provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
If the total Account Value is less than $2,000, such value (minus any
outstanding loan balances of the Participant and any unpaid expense charge on
such loans) shall be paid in a lump sum to the annuitant rather than annuitized
under the annuity options provided in (a) through (f) above. Additionally, if
the monthly annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis.
shall be held in the Fixed Interest Account until the Participant's Annuity
Commencement Date. The Participant request shall include certification as to the
purpose for the annuity and the election of one of the following annuity
options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the annuitant's
monthly annuity shall be paid to the contingent annuitant named in the
election for as long as the contingent annuitant lives. An election of this
option is automatically cancelled if either the Participant or the
contingent annuitant dies before the Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant. If, at the death of the
annuitant, the sum of the monthly payments previously received is less than
the amount applied to provide the annuity, monthly payments of the same
amount shall continue to the annuitant's beneficiary until the total of the
monthly payments received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such fixed period.
(f) Any other options made available by AUL at the time a Participant exercises
his option to elect an annuity.
p-12834.(a)6-FL
<PAGE>
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge, and minus any outstanding
loan balance of the Participant and any unpaid expense charges on such loans) of
his Participant Account shall be applied under (b) above as a 10 Year Certain
and Life Annuity. AUL must receive written notification of such Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any annuity option
provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
If the total Account Value is less than $2,000, such value (minus any
outstanding loan balances of the Participant and any unpaid expense charge on
such loans) shall be paid in a lump sum to the annuitant rather than annuitized
under the annuity options provided in (a) through (f) above. Additionally, if
the proposed monthly annuity payment should fall below AUL's periodically
adjusted minimum monthly annuity payment, AUL reserves the right to make
payments on a less frequent basis (i.e., quarterly, semiannually, or annually),
so that the actual monthly annuity payment is equal to or greater than the
established minimum level.
P-12834.(b)6-FL
<PAGE>
Death Benefits:
(a) Upon receipt of written instructions from the Participant's beneficiary
(or, if applicable, the secondary beneficiary of the Participant) and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall apply
the Account Value (minus the Participant's outstanding loan balance, if
any, under the Contract and any unpaid expense charges due on such loans)
of the Participant Account for the purpose of providing a death benefit.
The death benefit shall be paid to the beneficiary last properly designated
in writing to AUL at its Home Office by the Participant, or, if there is no
designated beneficiary living on the date of the Participant's death, to
the Participant's estate. If any beneficiary dies while receiving payments
and no beneficiary is designated to receive any remaining payments, such
remaining payments shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be determined
as of the close of business on the later of (1) the Valuation Date that AUL
receives such written instructions at its Home Office, or (2) the Valuation
Date that AUL receives such due proof of death at its Home Office, provided
that such written instructions or due proof of death received on the later
of (1) or (2) above are (is) received by 4:00 p.m. E.S.T. If the written
instructions or due proof of death received on the later of (1) or (2)
above are (is) received after 4:00 p.m. E.S.T., such valuation shall be
made as of the close of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the following
provisions as elected by the Participant or the beneficiary if the
Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on or
before December 31 of the calendar year which contains the fifth
anniversary of the date of the Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown above over a period not to exceed the life
or life expectancy of the beneficiary. If the beneficiary is not
the Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be made
within 7 days of the date of valuation, as determined in (b) above,
except as AUL may be permitted to defer such payment of amounts
derived from the Variable Account in accordance with the provisions of
federal securities laws. Also, AUL reserves the right to defer the
payment of amounts withdrawn from the Fixed Interest Account for a
period of 6 months after AUL receives written instructions at its Home
Office.
p-12834.7
<PAGE>
Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper written
request to AUL at its Home Office, may direct AUL to withdraw all or a
portion of the Account Value (subject to the Withdrawal Charge) of his
Participant Account, provided that:
(l) any distribution to a Participant shall not occur until the
Participant has:
(i) attained age 59 1/2; or
(ii) terminated employment; or
(iii) become totally disabled (as defined by the Internal Revenue
Service); or
(iv) experienced a hardship (as defined by the Internal Revenue
Service); or
(2) the amount being withdrawn is attributable to Contributions made other
than pursuant to a salary reduction agreement (within the meaning of
Code Section 402(g)(3)(C)); or
(3) the amount being withdrawn is attributable to amounts held as of
December 31, l988 under another Code Section 403(b) annuity contract.
(4) In the case of a hardship withdrawal referred to in (1)(iv) above, any
gain credited to Contributions made pursuant to a salary reduction
agreement may not be withdrawn.
(5) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request shall
include certification as to the purpose of the withdrawal. The
Participant assumes full responsibility for determining whether the
withdrawal is permitted under applicable law. AUL may rely solely upon
the representations of the Participant made in the withdrawal request.
(b) Withdrawals from a Participant Account's share of an Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the In vestment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn (except for amounts prohibited
from being distributed because provision (a)(1) above is not met).
(c) A withdrawal request shall be effective as of the close of business on the
Valuation Date that AUL receives a proper written withdrawal request at its
Home Office, provided that AUL receives such request by 4:00 p.m. E.S.T. on
that Valuation Date. If such request is received after 4:00 p.m. E.S.T.,
such request shall be effective as of the close of business on the next
succeeding Valuation Date.
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and
p-12834.8
<PAGE>
the decimal equivalent of the applicable Withdrawal Charge. Notwithstanding
the previous sentence, in any contract year the Participant may withdraw up
to 10% of the Account Value of his Participant Account determined as of the
last contract anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have elapsed
from the date that the Participant's first Contribution is credited to his
Participant Account by AUL to the date of such withdrawal. Also, where a
Participant has outstanding loans under the Contract, a partial withdrawal
by a Participant from the Fixed Interest Account shall be permitted only to
the extent that the remaining Withdrawal Value of the Participant held in
the Fixed Interest Account equals twice the total of the Participant's
outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such cash
lump sum will be paid within 7 days from the date that AUL receives the
withdrawal request at its Home Office, except as AUL may be permitted to
defer such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws. AUL
reserves the right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of up to 6 months after AUL receives the
withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account (other than amounts which are prohibited from being
distributed because provision (a)(1) above is not met) which have been on
deposit for the longest period of time, as well as the interest credited
thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in the
Fixed Interest Account may borrow money from AUL, using such Account Value
held in the Fixed Interest Account as the only security for the loan, by
submitting a proper written request to AUL at its Home Office. The minimum
amount of any single loan is $2,000. The maximum amount that may be
borrowed at any time is an amount which, when combined with the largest
loan balance during the prior 12 months, does not exceed the lesser of (l)
50% of the Withdrawal Value of the Participant Account held in the Fixed
Interest Account, or (2) $50,000. The Withdrawal Value of the Participant
Account held in the Fixed Interest Account, which must be at least twice
the amount of the outstanding loan balance, shall serve as security for the
loan, and shall continue to earn interest. Payment by AUL of the loan
amount may be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan balance
from the effective date of such loan. The interest rate shall be declared
by AUL at the beginning of each calendar quarter. The loan balance shall
also be subject to a loan expense charge equal to 2% of each loan
repayment.
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the term
may be longer. Loan repayments must be made at least quarterly. Upon
receipt of a repayment, AUL shall deduct the 2% expense charge from the
repayment, and shall apply the balance of such repayment first to any
accrued interest and then to the outstanding loan principal.
p-12834.9
<PAGE>
elapsed from the date that the Participant's first Contribution is credited
to his Participant Account by AUL to the date of such withdrawal. Also,
where a Participant has outstanding loans under the Contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of the
Participant held in the Fixed Interest Account equals twice the total of
the Participant's outstanding loans under the Contract.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such cash
lump sum will be paid within 7 days from the date that AUL receives the
withdrawal request at its Home Office, except as AUL may be permitted to
defer such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws. AUL
reserves the right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of up to 6 months after AUL receives the
withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account (other than amounts which are prohibited from being
distributed because provision (a)(1) above is not met) which have been on
deposit for the longest period of time, as well as the interest credited
thereon, shall be withdrawn first.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of his Account Value held in the
Fixed Interest Account may borrow money from AUL, using such Account Value
held in the Fixed Interest Account as the only security for the loan, by
submitting a proper written request to AUL at its Home Office. The minimum
amount of any single loan is $2,000. The maximum amount that may be
borrowed at any time is an amount which, when combined with the largest
loan balance during the prior 12 months, does not exceed the lesser of (l)
50% of the Withdrawal Value of the Participant Account held in the Fixed
Interest Account, or (2) $50,000. The Withdrawal Value of the Participant
Account held in the Fixed Interest Account, which must be at least twice
the amount of the outstanding loan balance, shall serve as security for the
loan, and shall continue to earn interest. Payment by AUL of the loan
amount may be delayed for up to 6 months.
(b) Interest will be charged for the loan, and will accrue on the loan balance
from the effective date of such loan. The interest rate shall be declared
by AUL at the beginning of each calendar year. The interest rate charged
during a particular calendar year shall be equal to the Moody's Corporate
Bond Yield Average - Monthly Average Corporates as published by Moody's
Investors Service for October of the previous calendar year. If publication
of such Moody's rate should ever cease, a substantially equivalent
substitute rate shall be used. However, no change from a previously
established rate may be made in an amount less than .50% in any periodic
adjustment. If the Moody's rate for any October decreases by at least .50%
from the Moody's rate for the immediately preceding October, AUL shall
declare such reduced interest rate to be in effect during the next
succeeding calendar year. The loan balance shall also be subject to a loan
expense charge equal to 2% of each loan repayment.
p-12834.9-SC
<PAGE>
(c) Loans to Participants must be repaid to AUL within a term of 5 years,
unless the Participant certifies to AUL that the loan is to be used to
acquire a principal residence for the Participant, in which case the term
may be longer. Loan repayments must be made at least quarterly. Upon
receipt of a repayment, AUL shall deduct the 2% expense charge from the
repayment, and shall apply the balance of such repayment first to any
accrued interest and then to the outstanding loan principal.
(d) If a loan either remains unpaid at the end of its term, or if, at any time,
l02% of the total of all the Participant's loan balances equals the
Participant's Withdrawal Value allocated to the Fixed Interest Account,
then AUL shall deduct these balances plus an expense charge equal to 2% of
the outstanding loan balances from the Participant Account's share of the
Fixed Interest Account. If a Participant has outstanding loans, then
withdrawals or transfers to the Variable Account shall be permitted only to
the extent that the Participant's remaining Withdrawal Value in the Fixed
Interest Account equals twice the total of any outstanding loans of the
Participant under the Contract. All loan balances plus the 2% expense
charge shall be paid or satisfied in full before any amount from the
Participant Account's share of the Fixed Interest Account is paid as a full
withdrawal, as a death benefit, upon annuitization, or as another permitted
distribution.
(e) AUL may modify the loan restrictions or limitations stated above, or may
add new restrictions and limitations, to the extent necessary to comply
with Code Section 72(p) or other applicable law, as determined solely by
AUL.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in each Investment Account was established at
$1.00 as of April 12, 1990. The value of an Accumulation Unit in each Investment
Account as of any Valuation Period thereafter is equal to the dollar value of
one Accumulation Unit in that Investment Account as of the immediately preceding
Valuation Period multiplied by the Net Investment Factor, as defined below, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or transfers
which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
p-12834.10
<PAGE>
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
p-12834.11
<PAGE>
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity, except that no such change or
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge (not to exceed $25) for each transfer
transaction, to deduct the appropriate premium tax charge, or to deduct the
appropriate charges for federal, state, or local income taxes incurred by AUL
that are attributable to the Variable Account and its Investment Accounts.
p-12834.11-NJ
<PAGE>
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity, except that no such change or amendment shall adversely affect the
benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to, and received by, AUL at its Home Office before becoming effective,
unless the Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such
p-12834.12
<PAGE>
payment to the person or persons who have assumed the care and principal support
of such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to any person or entity when directed to do so in writing by
the Participant. Any payment made by AUL will fully discharge AUL to the extent
of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of the
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of the Mutual Fund in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if the Mutual Fund offers
its shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law, AUL
will vote its own shares in the same proportion as the voting instructions
that are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or the Mutual Fund as may
be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under the Contract shall be nonforfeitable at all times. No
sum payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
Acceptance of Contributions: AUL shall have the right to refuse to accept
Contributions as of the last day of the second month following the date that
written notice to this effect is delivered to any contributing Participant or to
any Participant for whom Contributions are being made.
P-12834.13
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
P-12834.12-MI/OR
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
TDA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the corresponding paragraph on the face page of the
Participant's Certificate under the Contract is deleted and the following
paragraph is substituted in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted, and the following provisions
are substituted in lieu thereof:
DEFINITIONS
"Contract Anniversary" means the first day of the second Contract Year and each
subsequent Contract Year. Each Contract Anniversary after the First Contract
Anniversary shall be the same day of the same month as the day and month which
is stated on the face page of the Contract for the First Contract Anniversary.
"Contract Year" means, for the first such year, the period beginning with the
Contract Date identified in the Contract and ending on the day immediately
preceding the First Contract Anniversary, and for each succeeding Contract Year,
the period beginning with a Contract Anniversary and ending on the day
immediately preceding the next succeeding Contract Anniversary.
"Contributions" means amounts paid to AUL from time to time by, or on behalf of,
Participants, including amounts transferred to the Contract from another AUL
group annuity contract, which are credited to Participant Accounts maintained
hereunder.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments." Amounts allocated to any Investment Account identified in Schedule
A of the Contract shall be invested in the shares of the corresponding Mutual
Fund or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
- -P-12834.X.ADD.1-
<PAGE>
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end
management investment company made available by AUL, as listed in Schedule A.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn pursuant to "Withdrawal Benefits," where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the Participant,
and ends on the day immediately preceding the next anniversary of such date.
Each Participant Account Year thereafter begins on such an anniversary date and
ends on the day immediately preceding the next succeeding anniversary date. The
Withdrawal Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in the companion AUL Series
III group annuity contract, the initial Withdrawal Charge percentage under the
Contract shall be equal to the Withdrawal Charge percentage applicable to the
Participant under the AUL Series I group annuity contract from which funds have
been transferred to such Series III contract, determined by AUL immediately
prior to the date of such transfer, rounded down to the next whole Withdrawal
Charge percentage if the Withdrawal Charge percentage under such Series I
contract is a fractional Withdrawal Charge percentage. However, the Withdrawal
Charge percentage under this paragraph shall never be greater than 8%. The
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 4%.
(However, if the applicable Series I contract Withdrawal Charge percentage is
less than 4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, when made, they
must be at least equal to a minimum annual Contribution of $200 per
Participant in any full Contract Year.
(c) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the Participant
in a form acceptable to AUL. If no Investment
- -P-12834.X.ADD.2-
<PAGE>
Option election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with the
Investment Option election applicable to the immediately preceding
Contribution. The Participant may change an Investment Option election with
respect to future allocations to the applicable Participant Account by
giving new Investment Option elections to AUL at its Home Office in a form
acceptable to AUL.
(d) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option elections regarding
the initial Contribution.
(e) If the data required to establish a Participant Account and instructions
regarding the amount of a Contribution for the Participant are not received
by AUL at its Home Office within 5 business days after AUL first receives
that Contribution, AUL shall return that Contribution to the contributing
party unless the contributing party consents to AUL retaining that
Contribution until the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that Contribution to the
Participant Account or (ii) 25 days from the date that Contribution is
received by AUL.
(f) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding the
amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by AUL at
its Home Office as of the date AUL first receives that Contribution, AUL
shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is generally
the AUL American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the Participant,
and an Investment Option election, AUL shall then transfer such amounts
credited to the AUL American Money Market Investment Account or other
Investment Option identified in the Participant's annuity enrollment form,
plus gains or minus losses thereon, to another Investment Option, if such
election so directs.
(g) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of business
on the later of (1) the Valuation Period in which AUL receives that
Contribution at its Home Office or (2) the Valuation Period in which AUL
receives, at its Home Office, the data required to establish the
Participant Account, instructions regarding the amount of that Contribution
for the Participant, and Investment Option elections.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible Mutual
Funds or Mutual Fund Portfolios and to substitute shares of, or interests
in, another Portfolio of the AUL American Series Fund, Inc., another
open-end, registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
Contract, if the shares of any or all eligible Mutual Funds or Mutual Fund
Portfolios are no longer available for investment or if further investment
in any or all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares in the Variable Account or any
- -P-12834.X.ADD.3-
<PAGE>
Investment Account without notice, Participant approval, or prior approval
of the Securities and Exchange Commission or a state insurance commissioner
and without following the filing or other procedures established by
applicable state insurance regulators. Nothing contained herein shall
prevent the Variable Account from purchasing other securities for other
series or classes of contracts, or from effecting a conversion between
series or classes of contracts on the basis of requests made by a majority
of participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund or Mutual Fund
Portfolio listed in the current prospectus for the Variable Account, or in
other securities or investment vehicles. AUL reserves the right to
eliminate or combine existing Investment Accounts if marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Transfers:
(a) Subject to the limitations of (d) through (g) below, the Participant may
direct AUL, in a form acceptable to AUL, to transfer the amounts credited
to an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's transfer direction at its Home Office.
(d) The minimum transfer from the Participant Account's share of any Investment
Option is the lesser of $500 or the Participant Account's entire share of
that Investment Option as of the close of business on the Valuation Date
that AUL receives that transfer direction at its Home Office. However, if
that transfer reduces the Participant Account's remaining share of that
Investment Option to less than $500, the entire remaining share shall also
be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the later of the Contract Date or the Contract Anniversary immediately
preceding the request for transfer. Notwithstanding the previous sentence,
if the Participant Account's share of the Fixed Interest Account is less
than $2,500 determined as of the later of the Contract Date or the Contract
Anniversary immediately preceding the request for transfer, the amount
transferrable from the Fixed Interest Account for that Contract Year is the
lesser of $500 or the Participant Account's entire share of the Fixed
Interest Account as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office. And if that transfer
reduces the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
BENEFITS AND LOANS
Annuity Options:
The last paragraph of this section is deleted and the following last paragraph
is substituted in lieu thereof:
If the total Account Value is less than $2,000, such value (minus any
outstanding loan balances of the Participant and any unpaid expense charges on
such loans) shall be paid in a lump sum to the annuitant rather than annuitized
under the annuity options provided in (a) through (f) above. Additionally, if
the proposed monthly annuity payment should fall below AUL's periodically
adjusted minimum monthly annuity payment, AUL reserves the right to make
payments on a less frequent basis (i.e., quarterly, semiannually, or annually),
so that the actual annuity payment is equal to or greater than the established
minimum level, or to pay the Account Value (minus any outstanding loan balances
of the Participant and any unpaid expense charges on such loans) in a single
sum.
Death Benefits:
(a) Upon receipt of written instructions from the Participant's beneficiary
(or, if applicable, the secondary beneficiary of the Participant) and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall apply
the Account Value (minus the Participant's outstanding loan balance, if
any, under the Contract and any unpaid expense charges due on such loans)
of the Participant Account for the purpose of providing a death benefit.
The death benefit shall be paid to the beneficiary last properly designated
in writing to AUL at its Home Office by the Participant, or, if there is no
designated beneficiary living on the date of the Participant's death, to
the Participant's estate. The Participant's beneficiary may also designate
a beneficiary. If any beneficiary dies while receiving payments and no
beneficiary is designated to receive any remaining payments, such remaining
payments shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be determined
as of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the following
provisions as elected by the Participant or the beneficiary if the
Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in (ii)
below on or before December 31 of the calendar year which
contains the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown in (a) through (f) above over a period not
to exceed the life or life expectancy of the beneficiary. If the
beneficiary is not the Participant's surviving spouse, the
annuity must begin on or before December 31 of the calendar year
immediately following the calendar year in which the Participant
died. If the beneficiary is the Participant's surviving spouse,
the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
- -p-12834.X.ADD.6-
<PAGE>
(2) If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be made
within 7 days of the date of valuation, as determined in (b) above,
except as AUL may be permitted to defer such payment of amounts
derived from the Variable Account in accordance with the provisions of
federal securities laws. Also, AUL reserves the right to defer the
payment of amounts withdrawn from the Fixed Interest Account for a
period of up to 6 months after AUL receives proper instructions at its
Home Office.
Withdrawal Benefits:
A Participant may direct AUL at its Home Office, in a form acceptable to AUL, to
withdraw all or a portion of the Withdrawal Value of his Participant Account,
subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under another
Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C)) may
be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary reduction
agreement (within the meaning of Code Section 402(g)(3)(C)) may be
withdrawn, provided that any distribution of such amounts shall not occur
until the Participant has either attained age 59 1/2, separated from
service, become totally disabled (as defined by the Internal Revenue
Service), or experienced a hardship (as defined by the Internal Revenue
Service). However, in the case of a hardship withdrawal, any gain credited
to such Contributions may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred directly by
AUL pursuant to Participant instructions to another tax-deferred annuity
funding vehicle under applicable Internal Revenue Service rules and
regulations shall be subject to application of the Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T
Q&A-2, the distributee of any eligible rollover distribution elects to have
the distribution paid directly to an eligible retirement plan (as defined
in Q&A-1 of that Section) and specifies the eligible retirement plan to
which the distribution is to be paid, then the distribution shall be paid
to that eligible retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's compliance
with the requirements above. Any withdrawal request shall include
certification as to the purpose of the withdrawal. The Participant assumes
full responsibility for determining whether the withdrawal is permitted
under applicable law. AUL may rely solely upon the representations of the
Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less
- -p-12834.X.ADD.7
<PAGE>
than $500, such remaining share shall also be withdrawn (except for
amounts prohibited from being distributed because paragraph (c) above is
not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied shall be determined, as of the close of business on the Valuation
Date that AUL receives a proper withdrawal request, in a form acceptable to
AUL, at its Home Office. If it is necessary to withdraw the entire Account
Value of a Participant Account to make a lump-sum cash payment, the amount
paid shall equal the Withdrawal Value. If it is not necessary to withdraw
the entire Account Value to make such payment, AUL shall reduce the Account
Value of the Participant Account by an amount sufficient to make the cash
payment requested and to cover the Withdrawal Charge. Notwithstanding the
previous sentence, in the first Contract Year in which a Participant
Account is established, the Participant may withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account (determined as of the later of the Contract Date or the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In the next succeeding Contract Year, the Participant
may also withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In any subsequent Contract Year, the Participant may
withdraw from that Participant Account up to 10% of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) without application
of the Withdrawal Charge. Also, where a Participant has outstanding loans
under the Contract, a partial withdrawal by a Participant from the Fixed
Interest Account shall be permitted only to the extent that the remaining
Withdrawal Value of the Participant Account held in the Fixed Interest
Account equals twice the total of the Participant's outstanding loans under
the Contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from the
appropriate Valuation Date as determined in Subsection (h) above, except as
AUL may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the federal
securities laws. AUL reserves the right to defer the payment of amounts
withdrawn from the Fixed Interest Account for a period of up to 6 months
after AUL receives the withdrawal request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account (other than amounts which are prohibited from being
distributed because Subsection (c) above is not met) which have been on
deposit for the longest period of time, as well as the interest credited
thereon, shall be withdrawn first.
VALUATIONS
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are
<PAGE>
received by AUL at its Home Office or (2) the end of the Valuation Period on
which the data required to establish the Participant Account and allocate such
amounts to the Participant Account and to Investment Options are received by AUL
at its Home Office. However, if the initial Contribution for a Participant is
allocated pursuant to paragraph (d) of "Contributions" on the next succeeding
Valuation Period, the unit value as of the end of that Valuation Period shall be
used. Such crediting shall be made separately for amounts allocated to each
Investment Account. The number of Accumulation Units in each Investment Account
credited to each Participant Account as of any Valuation Period shall be
determined by dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on the
applicable Valuation Period. The number of Accumulation Units thus determined
shall not be changed by any subsequent change in the dollar value of the
Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the current
Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Mutual Fund or Mutual Fund Portfolio during the current
Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share held
in the Investment Account determined as of the end of the immediately
preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized by the first paragraph of "Other Charges."
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
- -P-12834.X.ADD.5-
<PAGE>
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor, as defined under "Valuations."
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge per Contract Year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for as long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective, unless the Contractholder or
Participant is otherwise directed by AUL.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting rights
attributable to the shares of each Mutual Fund or Mutual Fund Portfolio
held in the Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting under
The Investment Company Act of l940 or other applicable laws. AUL shall
exercise these voting rights based on instructions received from persons
having the voting interest in corresponding Investment Accounts of the
Variable Account. However, if The Investment Company Act of l940 or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result AUL determines that it is permitted
to vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion, except
that if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
(non G&W) -P-12834.X.ADD.11
<PAGE>
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor, as defined under "Valuations."
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, or any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL shall deduct an administrative charge per Contract Year quarter equal to the
lesser of $3.00 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for as long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
MISCELLANEOUS
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective, unless the Contractholder or
Participant is otherwise directed by AUL.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting rights
attributable to the shares of each Mutual Fund or Mutual Fund Portfolio
held in the Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting under
The Investment Company Act of l940 or other applicable laws. AUL shall
exercise these voting rights based on instructions received from persons
having the voting interest in corresponding Investment Accounts of the
Variable Account. However, if The Investment Company Act of l940 or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result AUL determines that it is permitted
to vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion, except
that if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
(G&W) -P-12834.X.ADD.9-
<PAGE>
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
- -P-12834.X.ADD.10-
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
EFFECTIVE DATE: MAY 1, 1993
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding transfers
discussed in (c) below), to the Fixed Interest Account shall be credited to
the open interest pocket and shall earn interest at the Current Rate of
Interest in effect for that interest pocket. Such Contributions or
transferred amounts, during the time that the Current Rate of Interest
exceeds the Guaranteed Rate of Interest, shall earn interest at such
credited Current Rate of Interest for at least 1 year. After such 1-year
period, AUL reserves the right to declare, at any time, a new Current Rate
of Interest to be applied to funds held within that interest pocket. Any
such new Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
new amounts transferred to the Fixed Interest Account, the previous open
interest pocket shall close, and any such Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
(c) Any contribution to another AUL P-12833 contract which is allocated to the
Fixed Interest Account and which is transferred to this Contract (plus
gains and minus losses
P-12834.OT.ADD
<PAGE>
thereon) and allocated to the Fixed Interest Account, beginning with the
date of such transfer, shall be credited with the Current Rate of Interest
under this Contract which was in effect on the date the transferred
contribution was originally deposited into the Fixed Interest Account under
the previous AUL contract.
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a Mutual Fund as described in the prospectus for
the Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value of a Participant Account withdrawn under the Contract, where the
percentage varies by the number of full years measured from the date that
Participant Account is established, or from the date a Participant Account is
established under a previous AUL P-12833 contract from which amounts have been
transferred to this Participant Account, to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During
Account Years Percentage
1 6
2 5
3 4
4 3
5 2
6 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed
P-12834.OT.ADD.1
<PAGE>
against any amount withdrawn from a Participant Account, exceed 9% of total
Contributions allocated to that Participant Account.
Contributions:
(a) Contributions may vary in amount and frequency; however, a minimum
Contribution of at least $100,000 must be made for a Participant in order
to establish a Participant Account. Any additional Contributions made
within the 12-month period beginning on the date the initial Contribution
is credited to that Participant Account (hereinafter called a Certificate
Year) shall also be credited to that Participant Account. Any initial
Contribution made within a different Certificate Year shall also be subject
to the $100,000 minimum, and any Contributions made within that Certificate
Year shall be allocated to a separate Participant Account and shall be
evidenced by a separate Certificate issued to the Participant. AUL may
change the minimum Contribution acceptable under the Contract, but any such
change shall apply only to individuals who become Participants on or after
the date of the change.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the Contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the Contract. Where required under applicable law, AUL
will not substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment
P-12834.OT.ADD.2
<PAGE>
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this Contract at any time. Subject to any required
regulatory approvals, AUL reserves the right to transfer assets from any
Investment Account to another separate account of AUL or Investment
Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Transfers:
(g) Where a Participant has outstanding loans under the Contract, a transfer
from the Fixed Interest Account to the Variable Account shall be permitted
only to the extent that the remaining Withdrawal Value of the Participant
Account held in the Fixed Interest Account equals twice the total of the
Participant's outstanding loans under that Participant Account.
Withdrawal Benefits:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to be
paid, then the distribution shall be paid to that eligible retirement plan
in a direct rollover.
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge.
<PAGE>
Notwithstanding the previous sentence, in the first Contract year in which
a Participant Account is established, and in the next succeeding Contract
year, the Participant may withdraw from that Participant Account up to 10%
of the sum of the Account Value of that Participant Account, determined as
of the last Contract anniversary preceding the request for the withdrawal,
plus Contributions made during the applicable Contract year, without
application of any Withdrawal Charge In any subsequent Contract year, the
Participant may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account, determined as of the last
Contract anniversary preceding the request for the withdrawal, without
application of any Withdrawal Charge. Where amounts have been transferred
to the Contract from another AUL P-12833 contract, Contract years of
participation for purposes of this 10% free-out provision shall be
determined by using the date of the Participant's first contribution to the
Participant Account in the previous contract which was transferred. Also,
where a Participant has outstanding loans under the Contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of the
Participant Account held in the Fixed Interest Account equals twice the
total of the Participant's outstanding loans under that Participant
Account.
Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of the Account Value of a
Participant Account held in the Fixed Interest Account may borrow money
from AUL, using such Account Value held in the Fixed Interest Account as
the only security for the loan, by submitting a proper written request to
AUL at its Home Office. The minimum amount of any single loan is $2,000.
The maximum amount that may be borrowed at any time is an amount which,
when combined with the largest loan balance during the prior 12 months,
does not exceed the lesser of (l) 50% of the Withdrawal Value of the
Participant Account held in the Fixed Interest Account, or (2) $50,000. The
Withdrawal Value of the Participant Account held in the Fixed Interest
Account, which must be at least twice the amount of the outstanding loan
balance, shall serve as security for the loan, and shall continue to earn
interest. Payment by AUL of the loan amount may be delayed for up to 6
months.
(d) If a loan either remains unpaid at the end of its term, or if, at any time,
l02% of the total of all the Participant's loan balances under a
Participant Account equals the Withdrawal Value of that Participant Account
allocated to the Fixed Interest Account, then AUL shall deduct these
balances plus an expense charge equal to 2% of the outstanding loan
balances from the Participant Account's share of the Fixed Interest
Account. If a Participant has outstanding loans, then withdrawals or
transfers to the Variable Account shall be permitted only to the extent
that the Participant Account's remaining Withdrawal Value in the Fixed
Interest Account equals twice the total of any outstanding loans of the
Participant under that Participant Account. All loan balances plus the 2%
expense charge shall be paid or satisfied in full before any amount from
the Participant Account's share of the Fixed Interest Account is paid as a
full withdrawal, as a death benefit, upon annuitization, or as another
permitted distribution.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time. Any amounts that are allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the form
of Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
<PAGE>
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $0.00 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This
charge is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
<PAGE>
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations there
under should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote the
shares of a Mutual Fund in its own right, it may elect to do so. AUL will
vote shares of any Investment Account, if any, that it owns beneficially
in its own discretion, except that if a Mutual Fund offers its shares to
any insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its
own shares in the same proportion as the voting instructions that are
received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants,
or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
P-12834.OT.ADD.4
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the Contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the Contract. Where required under applicable law, AUL
will not substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
p-12834.add.1
<PAGE>
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Withdrawal Benefits:
(a) (6) Effective January 1, 1993, if, as provided in Internal Revenue
Code Regulation Section 1.403(b)-2T Q&A-2, the distributee of any
eligible rollover distribution elects to have the distribution paid
directly to an eligible retirement plan (as defined in Q&A-1 of that
Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to
that eligible retirement plan in a direct rollover.
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract year in which a Participant Account is established, and in the
next succeeding Contract year, the Participant may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account, determined as of the last Contract anniversary
preceding the request for the withdrawal, plus Contributions made during
the applicable Contract year, without application of any Withdrawal Charge.
In any subsequent Contract year, the Participant may withdraw from that
Participant Account up to 10% of the Account Value of that Participant
Account, determined as of the last Contract anniversary preceding the
request for the withdrawal, without application of any Withdrawal Charge.
Also, where a Participant has outstanding loans under the Contract, a
partial withdrawal by a Participant from the Fixed Interest Account shall
be permitted only to the extent that the
p-12834.add.2
<PAGE>
remaining Withdrawal Value of the Participant Account held in the Fixed
Interest Account equals twice the total of the Participant's outstanding
loans under that Participant Account.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
p-12834.add.3
<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund offers its
shares to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL will
vote its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
p-12834.add.4
<PAGE>
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
by: /s/ William R. Brown
Secretary
p-12834.add.5
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL from time to time by, or on
behalf of, Participants, including amounts transferred to this contract
from another AUL group annuity contract, which are credited to Participant
Accounts maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
p-12833.x.amd.1
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.20 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the
Participant, and ends on the day immediately preceding the next anniversary
of such date. Each Participant Account Year thereafter begins on such an
anniversary date and ends on the day immediately preceding the next
succeeding anniversary date. The Withdrawal Charge percentage is as
follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL Series III group
annuity contract GA XX,XXX, the initial Withdrawal Charge percentage under this
contract shall be equal to the Withdrawal Charge percentage applicable to the
Participant under the AUL Series I group annuity contract from which funds have
been transferred to such Series III contract, determined by AUL immediately
prior to the date of such transfer, rounded down to the next whole Withdrawal
Charge percentage if the Withdrawal Charge percentage under such Series I
contract is a fractional Withdrawal Charge percentage. However, the Withdrawal
Charge percentage under this paragraph shall never be greater than 8%. The
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 4%.
(However, if the applicable Series I contract Withdrawal Charge percentage is
less than 4%, it shall be rounded up to 4% in this contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.1 Amount of Contributions: (a) Contributions may vary in amount and
frequency; however, when made, they must be at least equal to a minimum
annual Contribution of $200 per Participant in any full Contract Year. AUL
may change the minimum annual Contribution acceptable under this contract,
but any such change shall apply only to individuals who become Participants
on or after the date of the change.
p-12833.x.amd.2
<PAGE>
3.2 How Contributions Are Handled:
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Participant in a form acceptable to AUL. If no Investment Option
election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with
the Investment Option election applicable to the immediately preceding
Contribution. The Participant may change an Investment Option election
with respect to future allocations to the applicable Participant
Account by giving new Investment Option elections to AUL at its Home
Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the contributing party unless the
contributing party consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and instructions
and, therefore, can properly allocate that Contribution to the
Participant Account or (ii) 25 days from the date that Contribution is
received by AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL first receives that
Contribution, AUL shall allocate that Contribution to the Investment
Option election identified in the Participant's annuity enrollment
form, which is generally the AUL American Money Market Investment
Account. If AUL subsequently receives the data required to establish
the Participant Account, instructions regarding the amount of the
Contribution for the Participant, and an Investment Option election,
AUL shall then transfer such amounts credited to the AUL American
Money Market Investment Account or other Investment Option identified
in the Participant's annuity enrollment form, plus gains or minus
losses thereon, to another Investment Option, if such election so
directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any
p-12833.x.amd.3
<PAGE>
Investment Account may purchase. AUL reserves the right to eliminate
the shares of any of the eligible Mutual Funds or Mutual Fund
Portfolios and to substitute shares of, or interests in, another
Portfolio of the AUL American Series Fund, Inc., another open-end,
registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
contract, if the shares of any or all eligible Mutual Funds or Mutual
Fund Portfolios are no longer available for investment or if further
investment in any or all eligible Mutual Funds or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares in the Variable Account or any
Investment Account without notice, Participant approval, or prior
approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of participants or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL, in a form acceptable to AUL, to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's transfer direction at its Home Office.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining
p-12833.x.amd.5
<PAGE>
share of that Investment Option to less than $500, the entire
remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (subject to Section 6.5 and minus any outstanding loan balances of
the Participant and any unpaid expense charges on such loans) shall be paid
in a lump sum to the annuitant rather than annuitized under the annuity
options provided in Section 4.2. Additionally, if the proposed monthly
annuity payment should fall below AUL's periodically adjusted minimum
monthly annuity payment, AUL reserves the right to make payments on a less
frequent basis (i.e., quarterly, semiannually, or annually), so that the
actual annuity payment is equal to or greater than the established minimum
level, or to pay the Account Value (subject to Section 6.5 and minus any
outstanding loan balances of the Participant and any unpaid expense charges
on such loans) in a single sum.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to Section
6.5, and minus the Participant's outstanding loan balance, if any,
under this contract and any unpaid expense charges due on such loans)
of the Participant Account for the purpose of providing a death
benefit. The death benefit shall be paid to the beneficiary last
properly designated in writing to AUL at its Home Office by the
Participant, or, if there is no designated beneficiary living on the
date of the Participant's death, to the Participant's estate. The
Participant's beneficiary may also designate a beneficiary. If any
beneficiary dies while receiving payments and no beneficiary is
designated to receive any remaining payments, such remaining payments
shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
p-12833.x.amd.6
<PAGE>
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in
(ii) below on or before December 31 of the calendar year
which contains the fifth anniversary of the date of the
Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of up to 6 months
after AUL receives proper instructions at its Home Office.
4.8 Withdrawal Benefits: A Participant may direct AUL at its Home Office, in a
form acceptable to AUL, to withdraw all or a portion of the Withdrawal
Value of his Participant Account, subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Participant instructions to another
tax-deferred annuity funding vehicle under applicable Internal Revenue
Service rules and regulations shall be subject to application of the
Withdrawal Charge.
p-12833.x.amd.7
<PAGE>
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request shall
include certification as to the purpose of the withdrawal. The
Participant assumes full responsibility for determining whether the
withdrawal is permitted under applicable law. AUL may rely solely upon
the representations of the Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be withdrawn
(except for amounts prohibited from being distributed because
Subsection (c) above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to this Section shall be determined, as of the close
of business on the Valuation Date that AUL receives a proper
withdrawal request, in a form acceptable to AUL, at its Home Office.
If it is necessary to withdraw the entire Account Value of a
Participant Account to make a lump-sum cash payment, the amount paid
shall equal the Withdrawal Value, minus any Section 6.5 charges. If it
is not necessary to withdraw the entire Account Value to make such
payment, AUL shall reduce the Account Value of the Participant Account
by an amount sufficient to make the cash payment requested and to
cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous sentence, in the first Contract Year in
which a Participant Account is established, the Participant may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Participant may also withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Participant may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge. Also, where
a Participant has outstanding loans under this contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant Account held in the Fixed Interest Account equals
twice the total of the Participant's outstanding loans under this
contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from
the appropriate Valuation Date as determined in Subsection (h) above,
except as AUL may be permitted to defer such payment of amounts
withdrawn from the Variable Account in accordance with appropriate
provisions of the federal securities laws. AUL reserves the right to
defer
p-12833.x.amd.8
<PAGE>
the payment of amounts withdrawn from the Fixed Interest Account for a
period of up to 6 months after AUL receives the withdrawal request at
its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because Subsection (c) above is not met) which
have been on deposit for the longest period of time, as well as the
interest credited thereon, shall be withdrawn first.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(b)(1) on the next succeeding Valuation Period, the unit value
as of the end of that Valuation Period shall be used. Such crediting shall
be made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
p-12833.x.amd.9
<PAGE>
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted
p-12833.x.amd.10
<PAGE>
to and received by AUL at its Home Office before becoming effective, unless
the Contractholder or Participant is otherwise directed by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund or Mutual Fund Portfolio shares as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
p-12833.x.amd.11
<PAGE>
By deleting Section 8.18 and by redesignating Section 8.19 as new Section 8.18.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By ____________________________________
Title__________________________________
Date __________________________________
p-12833.x.amd.12
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
<PAGE>
AMENDMENT
TO THE
MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Section 6.1 and by substituting the following Section
6.1 in lieu thereof:
6.1 Mortality Risk and Expense Risk Charges; Annual Variable Investment Plus
Factors: AUL shall deduct a daily mortality risk charge and a daily expense
risk charge equal to the daily equivalent of an annual combined charge of
1.25% against the average daily net assets of each Investment Account.
These charges shall be reflected in the Net Investment Factor as provided
in Section 5.4(c).
AUL shall multiply the portions (as delineated in the table below) of the
total month-end Account Value in the Variable Account of all Participants
in the contract by the monthly equivalent of the corresponding Annual
Variable Investment Plus Factors appearing in the table below. These
products shall be added together, and the sum shall be divided by the
total month-end Account Value in the Variable Account of all Participants
in the contract. This percentage shall be multiplied by the month-end
Account Value of each Participant in each Investment Account. The resulting
amount for each Investment Account shall be added to the Participant's
Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
CONTRACTHOLDER AUL
By ____________________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title _________________________________ President, & Chief Executive
Officer
Date: _________________________________
Attest
By: /s/ William R. Brown
Secretary
P-XXXXX.AMD.DAC
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA 73,243 (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
BANK ONE AS CUSTODIAN ON BEHALF OF ANY PERSON ELIGIBLE TO
PARTICIPATE IN AN IRC 403(b) TAX-DEFERRED ANNUITY WHO
BECOMES A PARTICIPANT UNDER THIS CONTRACT AND SUCH SUCCESSOR
CUSTODIAN AS MAY BE APPOINTED FROM TIME TO TIME (THE
CONTRACTHOLDER)
EFFECTIVE DATE: MAY 1, 1993
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections and Subsections of the
Contract, if any, and by inserting the following Sections and Subsections in
lieu thereof:
1.12 "Fixed Interest Account" means that fund of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding transfers
discussed in (c) below), to the Fixed Interest Account shall be
credited to the open interest pocket and shall earn interest at the
Current Rate of Interest in effect for that interest pocket. Such
Contributions or transferred amounts, during the time that the Current
Rate of Interest exceeds the Guaranteed Rate of Interest, shall earn
interest at such credited Current Rate of Interest for at least 1
year. After such 1-year period, AUL reserves the right to declare, at
any time, a new Current Rate of Interest to be applied to funds held
within that interest pocket. Any such new Current Rate of Interest
must remain in effect for that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions
or new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any such Contributions or
amounts transferred on or after the effective date of such change
shall be credited to a new open interest pocket and shall earn
interest at the new Current Rate of Interest in effect for such new
open interest pocket. Therefore, at any given time, various funds
credited to a Participant Account and allocated to the Fixed Interest
Account may be earning interest at different Current Rates of Interest
for different periods of time.
(c) Any contribution to another AUL P-12833 contract which is allocated to
the Fixed Interest Account and which is transferred to this contract
(plus gains and minus losses thereon) and allocated
P-12833.OT.AMD
<PAGE>
to the Fixed Interest Account, beginning with the date of such
transfer, shall be credited with the Current Rate of Interest under
this contract which was in effect on the date the transferred
contribution was originally deposited into the Fixed Interest Account
under the previous AUL contract.
1.15 "Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to
time as described in Section 3.3. Amounts allocated to any Investment
Account identified in Schedule A of the contract shall be invested in the
shares of the corresponding Mutual Fund Portfolio listed in the current
prospectus for the Variable Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL.
1.20 "Portfolio" means a series of a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value of a Participant Account withdrawn pursuant to Section
4.8, where the percentage varies by the number of full years measured from
the date that Participant Account is established, or from the date a
Participant Account is established under a previous AUL P-12833 contract
from which amounts have been transferred to this Participant Account, to
the date the Withdrawal Charge is determined. Such percentage is as
follows:
During
Account Years Percentage
1 6
2 5
3 4
4 3
5 2
6 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, a minimum
Contribution of at least $100,000 must be made for a Participant in
order to establish a Participant Account. Any additional Contributions
made within the 12-month period beginning on the date the initial
Contribution is credited to that Participant Account (hereinafter
called
P-12833.OT.AMD.1
<PAGE>
a Certificate Year) shall also be credited to that Participant
Account. Any initial Contribution made within a different Certificate
Year shall also be subject to the $100,000 minimum, and any Contri-
butions made within that Certificate Year shall be allocated to a
separate Participant Account and shall be evidenced by a separate
certificate issued to the Participant. AUL may change the minimum
Contribution acceptable under this contract, but any such change shall
apply only to individuals who become Participants on or after the date
of the change.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund,
Inc., of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
contract. Where required under applicable law, AUL will no substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.5 Limitations on Transfers:
(e) Where a Participant has outstanding loans under this contract, a
transfer from the Fixed Interest Account to the Variable Account shall
be permitted only to the extent that the remaining Withdrawal Value of
the Participant Account held in the Fixed Interest Account equals
twice the total of the Participant's outstanding loans under that
Participant Account.
4.8 Withdrawal Benefits:
(a)(6) Effective January 1, 1993, if, as provided in Internal Revenue Code
Regulation Section 1.403(b)-2T Q&A-2, the distributee of any eligible
rollover distribution elects to have the distribution paid directly to
an eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract Year in which a Participant Account is established, and in
the next succeeding Contract Year, the Participant may withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account, determined as of the last Contract
Anniversary preceding the request for the withdrawal, plus
Contributions made during the applicable Contract Year, without
application of any Withdrawal Charge. In any subsequent Contract Year,
the Participant may withdraw from that Participant Account up to 10%
of the Account Value of that Participant Account, determined as of the
last Contract Anniversary preceding the request for the withdrawal,
without application of any Withdrawal Charge. Where amounts have been
transferred to this contract from another AUL P-12833 contract,
Contract Years of participation for purposes of this 10% free-out
provision shall be determined by using the date of the Participant's
first contribution to the Participant Account in the previous contract
which was transferred. Also, where a Participant has outstanding loans
under this contract, a partial withdrawal by a Participant from the
Fixed Interest Account shall be permitted only to the extent that the
remaining Withdrawal Value of the Participant Account held in the
Fixed Interest Account equals twice the total of the Participant's
outstanding loans under that Participant Account.
4.9 Loans from the Fixed Interest Account:
(a) A Participant who has all or a portion of the Account Value of a
Participant Account held in the Fixed Interest Account may borrow
money from AUL, using such Account Value held in the Fixed Interest
Account as the only security for the loan, by submitting a proper
written request to AUL at its Home Office. The minimum amount of any
single loan is $2,000. The maximum amount that may be borrowed at any
time is an amount which, when combined with the largest loan balance
during the prior 12 months, does not exceed the lesser of (l) 50% of
the Withdrawal Value of the Participant Account held in the Fixed
Interest Account, or (2) $50,000. The Withdrawal Value of the
Participant Account held in the Fixed Interest Account, which must be
at least twice the amount of the outstanding loan balance, shall serve
as security for the loan, and shall continue to earn interest. Payment
by AUL of the loan amount may be delayed for up to 6 months.
(d) If a loan either remains unpaid at the end of its term, or if, at any
time, l02% of the total of all the Participant's loan balances under a
Participant Account equals the Withdrawal Value of that Participant
Account allocated to the Fixed Interest Account, then AUL shall deduct
these balances plus an expense charge equal to 2% of the outstanding
loan balances from the Participant Account's share of the Fixed
Interest Account. If a Participant has outstanding loans, then
withdrawals or transfers to the Variable Account shall be permitted
only to the extent that the Participant Account's remaining With-
drawal Value in the Fixed Interest Account equals twice the total of
any outstanding loans of the Participant under that Participant
Account. All loan balances plus the 2% expense charge shall be paid or
satisfied in full before any amount from the Participant Account's
share of the Fixed Interest Account is paid as a full withdrawal, as a
death benefit, upon annuitization, or as another permitted
distribution.
5.1 Time of Valuation: All assets of each Portfolio shall be valued as provided
in the prospectus for the applicable Mutual Fund as such prospectus may be
amended or supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account avail able under this contract shall
be established at $1.00 as of the date of the first deposit to such
Investment Account. The value of an Accumulation Unit in each Investment
Account as of any Valuation Period thereafter is equal to the dollar value
of one Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be deter mined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
P-12833.OT.AMD.3
<PAGE>
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account deter mined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Investment Management Charge: A Mutual Fund shall pay any investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus for
that Mutual Fund as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each
Portfolio reflects such investment advisory fee and other expenses which
are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $0.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, or 4.8, the
administrative charge attributable to the period of time which has elapsed
since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied
or withdrawn.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc. or any other Mutual Fund made available by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received
from persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if
the present interpretation thereof should change, and as a result AUL
deter mines that it is permitted to vote the shares of a Mutual Fund
in its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the applicable Mutual Fund
for determining shareholders eligible to vote at the meeting of that
Mutual Fund. If required by the Securities and Exchange Commission,
AUL reserves the right to determine in a different fashion the voting
rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
CONTRACTHOLDER AUL
By ______________________________ By ________________________________
Title ____________________________ Title______________________________
Date ____________________________ Date_______________________________
P-12833.OT.AMD.4
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund Portfolio listed below.
Investment Account Portfolio
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
P-12833.OT.AMD.5
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT
NUMBER (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective January 1, 1993:
If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T Q&A-2,
the distributee of any eligible rollover distribution elects to have the
distribution paid directly to an eligible retirement plan (as defined in Q&A-1
of that Section) and specifies the eligible retirement plan to which the
distribution is to be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
And by adding the following provision, effective January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph of the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL from time to time by, or on
behalf of, Participants, including amounts transferred to this contract
from another AUL group annuity contract, which are credited to Participant
Accounts maintained hereunder.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
P-12833.AMD.1
<PAGE>
1.20 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the Participant Account Year in which the withdrawal is made. The
first Participant Account Year begins on the date when AUL establishes a
Participant Account and credits the initial Contribution for the
Participant, and ends on the day immediately preceding the next anniversary
of such date. Each Participant Account Year thereafter begins on such an
anniversary date and ends on the day immediately preceding the next
succeeding anniversary date. The Withdrawal Charge percentage is as
follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, when made,
they must be at least equal to a minimum annual Contribution of $200
per Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change.
3.2 How Contributions Are Handled:
(b) (1) The initial Contribution for a Participant shall be credited
and allocated to the Participant Account no later than the close
of business on the second business day of AUL after the later of
(1) the business day that AUL receives the initial Contribution
at its Home Office, or (2) the business day that AUL receives, at
its Home Office, the data required to establish the Participant
Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the contributing party unless
the contributing party consents to AUL retaining that
Contribution until the earlier of (i) the date AUL receives such
data and instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
P-12833.AMD.2
<PAGE>
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election for
that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Option identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so
directs.
(c) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected by the
Participant in a form acceptable to AUL. If no investment allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the investment allocation
instruction applicable to the immediately preceding Contribution. The
Participant may change an investment allocation instruction with
respect to future allocations to the applicable Participant Account by
giving new investment allocation instructions to AUL at its Home
Office in a form acceptable to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment, or if further investment in any or
all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
contract. Where required under applicable law, AUL will not substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a
P-12833.AMD.3
<PAGE>
conversion between series or classes of contracts on the basis of
requests made by a majority of participants or as permitted by federal
law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL re serves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL, in a form acceptable to AUL, to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives the Participant's direction.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant
<PAGE>
Account's remaining share of the Fixed Interest Account to less than
$500, the entire remaining share shall also be transferred.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value (subject to Section 6.5 and minus any outstanding loan balances of
the Participant and any unpaid expense charges on such loans) shall be paid
in a lump sum to the annuitant rather than annuitized under the annuity
options provided in Section 4.2. Additionally, if the proposed monthly
annuity payment should fall below AUL's periodically adjusted minimum
monthly annuity payment, AUL reserves the right to make payments on a less
frequent basis (i.e., quarterly, semiannually, or annually), so that the
actual annuity payment is equal to or greater than the established minimum
level, or to pay the Account Value (subject to Section 6.5 and minus any
outstanding loan balances of the Participant and any unpaid expense charges
on such loans) in a single sum.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value (subject to Section
6.5, and minus the Participant's outstanding loan balance, if any,
under this contract and any unpaid expense charges due on such loans)
of the Participant Account for the purpose of providing a death
benefit. The death benefit shall be paid to the beneficiary last
properly designated in writing to AUL at its Home Office by the
Participant, or, if there is no designated beneficiary living on the
date of the Participant's death, to the Participant's estate. The
Participant's beneficiary may also designate a beneficiary. If any
beneficiary dies while receiving payments and no beneficiary is
designated to receive any remaining payments, such remaining payments
shall be made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the Valuation Date that AUL
receives a proper withdrawal request (or due proof of death, if
received later), in a form acceptable to AUL, at its Home Office.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or other method not provided in
(ii) below on or before December 31 of the calendar year
which contains the fifth anniversary of the date of the
Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
<PAGE>
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of up to 6 months
after AUL receives proper instructions at its Home Office.
4.8 Withdrawal Benefits: A Participant may direct AUL at its Home Office, in a
form acceptable to AUL, to withdraw all or a portion of the Withdrawal
Value of his Participant Account, subject to the following provisions:
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn.
(b) Amounts attributable to Contributions made other than pursuant to a
salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn.
(c) Amounts attributable to Contributions made pursuant to a salary
reduction agreement (within the meaning of Code Section 402(g)(3)(C))
may be withdrawn, provided that any distribution of such amounts shall
not occur until the Participant has either attained age 59 1/2,
separated from service, become totally disabled (as defined by the
Internal Revenue Service), or experienced a hardship (as defined by
the Internal Revenue Service). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Participant instructions to another
tax-deferred annuity funding vehicle under applicable Internal Revenue
Service rules and regulations shall be subject to application of the
Withdrawal Charge.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request shall
include certification as to the purpose of the withdrawal. The
Participant assumes full responsibility for determining whether the
withdrawal is permitted under applicable law. AUL may rely solely upon
the representations of the Participant made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share
<PAGE>
of the Investment Option. If a withdrawal reduces the Participant
Account's share of an Investment Option to less than $500, such
remaining share shall also be withdrawn (except for amounts prohibited
from being distributed because Subsection (c) above is not met).
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to this Section shall be determined, as of the close
of business on the Valuation Date that AUL receives a proper
withdrawal request, in a form acceptable to AUL, at its Home Office.
If it is necessary to withdraw the entire Account Value of a
Participant Account to make a lump- sum cash payment, the amount paid
shall equal the Withdrawal Value, minus any Section 6.5 charges. If it
is not necessary to withdraw the entire Account Value to make such
payment, AUL shall reduce the Account Value of the Participant Account
by an amount sufficient to make the cash payment requested and to
cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous sentence, in the first Contract Year in
which a Participant Account is established, the Participant may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Participant may also withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Participant may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge. Also, where
a Participant has outstanding loans under this contract, a partial
withdrawal by a Participant from the Fixed Interest Account shall be
permitted only to the extent that the remaining Withdrawal Value of
the Participant Account held in the Fixed Interest Account equals
twice the total of the Participant's outstanding loans under this
contract.
(i) AUL shall pay any cash lump sum to the Participant within 7 days from
the appropriate Valuation Date as determined in Subsection (h) above,
except as AUL may be permitted to defer such payment of amounts
withdrawn from the Variable Account in accordance with appropriate
provisions of the federal securities laws. AUL reserves the right to
defer the payment of amounts withdrawn from the Fixed Interest Account
for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because Subsection (c) above is not met) which
have been on deposit for the longest period of time, as well as the
interest credited thereon, shall be withdrawn first.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
<PAGE>
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant
Account in the form of Accumulation Units on the basis of the value of such
units in that Investment Account as of the later of (1) the end of the
Valuation Period on which such amounts are received by AUL at its Home
Office or (2) the end of the Valuation Period on which the data required to
establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its
Home Office. However, if the initial Contribution for a Participant is
allocated pursuant to Section 3.2(b)(1) on the next succeeding Valuation
Period, the unit value as of the end of that Valuation Period shall be
used. Such crediting shall be made separately for amounts allocated to each
Investment Account. The number of Accumulation Units in each Investment
Account credited to each Participant Account as of any Valuation Period
shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the
dollar value of one Accumulation Unit in that Investment Account as of the
close of business on the applicable Valuation Period. The number of
Accumulation Units thus determined shall not be changed by any subsequent
change in the dollar value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, or
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective, unless
the Contractholder or Participant is otherwise directed by AUL.
P-12833.AMD.10
<PAGE>
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund or Mutual Fund Portfolio shares as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
P-12833.AMD.6
<PAGE>
By deleting Section 8.18 and by redesignating Section 8.19 as new Section 8.18.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By_______________________________________
Title____________________________________
Date_____________________________________
(new business)
P-12833.AMD.7
<PAGE>
By deleting Section 8.18 and by redesignating Section 8.19 as new Section 8.18.
CONTRACTHOLDER
By_______________________________________
Title____________________________________
Date_____________________________________
AMERICAN UNITED LIFE INSURANCE COMPANY
By_______________________________________
Title____________________________________
Date_____________________________________
(existing business)
P-12833.AMD.11
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- -----------------------------------------------------------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-12833.AMD.12
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
PEOPLES BANK & TRUST COMPANY AS CUSTODIAN ON BEHALF OF ANY PERSON ELIGIBLE TO
PARTICIPATE IN AN IRC 403(b) TAX-DEFERRED ANNUITY WHO
BECOMES A PARTICIPANT UNDER THIS CONTRACT AND SUCH SUCCESSOR
CUSTODIAN AS MAY BE APPOINTED FROM TIME TO TIME (THE CONTRACTHOLDER)
The Effective Date of this Amendment is June 1, 1997.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation AUL American Tactical Asset Allocation
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Janus Aspen Series Flexible Income
Janus Aspen Series Worldwide Growth Janus Aspen Series Worldwide Growth
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology and PBHG Insurance Series Technology and
Communication Communication
SAFECO Resource Series Trust Equity SAFECO Resource Series Trust Equity
SAFECO Resource Series Trust Growth SAFECO Resource Series Trust Growth
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
CONTRACTHOLDER AUL
By_____________________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title__________________________________ President, & Chief Executive
Officer
Date: _________________________________
Attest
By: /s/ William R. Brown
Secretary
P-12833.A
- --------------------------------------------------------------------------------
EXHIBIT 4.6
TDA EMPLOYER SPONSORED/QUALIFIED CONV. MULTIPLE FUND VA CONTRACT, FORM P-14020
- --------------------------------------------------------------------------------
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
DATE OF ISSUE JULY 1, 1995
CONTRACT DATE JULY 1, 1995
FIRST CONTRACT ANNIVERSARY JULY 1, 1996
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
This contract is signed for AUL at its Home Office in Indianapolis, Indiana by
the parties identified below:
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
/s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
Employer-Sponsored TDA and Qualified Plan Multiple-Fund Group Variable Annuity
Nonparticipating
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-14020(SBR)(MBR)(NBR)conv
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
3.6--------Reallocation of Participant Accounts
3.7--------Transferred Amounts
ARTICLE 4 BENEFITS
4.1--------General Withdrawal Provisions
4.2--------"Benefit Responsive" Plan Benefits and Annuities
4.3--------Other Plan Benefits Payable in Cash
4.4--------Election of Annuity Options
4.5--------Annuity Options
4.6--------Guaranteed Rate of Interest
4.7--------Alternate Nonparticipating Retirement Annuity
4.8--------Minimum Payments
4.9--------Due Proof of Date of Birth and Survival
ARTTICLE 5 VALUATIONS
5.1--------Valuation of Mutual Fund or Mutual Fund Portfolio Assets
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Mutual Fund or Mutual Fund Portfolio Expenses
6.3--------Transfer Charge
6.4--------Other Charges
6.5--------Reduction or Waiver of Withdrawal Charge
P-14020(SBR)(MBR)(NBR)conv.1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Guaranteed Rate of Interest
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Withdrawal Charge
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 TERMINATION OF CONTRACT
8.1--------Right of Contractholder to Terminate
8.2--------Payment Due to Termination by Contractholder
8.3--------Right of AUL to Terminate
8.4--------Payment Due to Termination by AUL
ARTICLE 9 MISCELLANEOUS
9.1--------Ownership
9.2--------AUL's Annual Statement
9.3--------Certification of Plan Status
9.4--------Essential Data
9.5--------Reliance
9.6--------Misstatement of Essential Data
9.7--------Assignment by Contractholder
9.8--------Annuity Certificates
9.9--------Election, Notice, or Direction Requirements
9.10-------Quarterly Statement of Account Value
9.11-------Conformity with State Laws
9.12-------Reference to Federal Laws
9.13-------Sex and Number
9.14-------Facility of Payment
9.15-------Insulation from Liability
9.16-------Voting
9.17-------Acceptance of New Participants or Contributions
9.18-------Nonforfeitability and Nontransferability
9.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
SCHEDULE A
P-14020(SBR)(MBR)(NBR)conv.2
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's Code Section 401(a)
subaccounts' share of the Fixed Interest Account on that date; plus
(b) the balance of the Participant Account's Code Section 403(b)
subaccounts' share of the Fixed Interest Account on that date; plus
(c) the value of the Participant Account's Code Section 401(a)
subaccounts' Accumulation Units in each Investment Account on that
date; plus
(d) the value of the Participant Account's Code Section 403(b)
subaccounts' Accumulation Units in each Investment Account on that
date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which an
annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the
applicable sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL pursuant to the Contractholder's
Code Section 401(a) Plan or 403(b) Plan, including amounts transferred to
this contract from another AUL group annuity contract, which are credited
to a Participant Account maintained hereunder.
The following types of Code Section 403(b) Contributions shall be credited
to individual subaccounts under the Participant Account:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement shall not be
treated as an Elective Deferral if, under the salary reduction
agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial
eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement, or is made pursuant to a similar
arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
1.10 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time-to-time and as
credited to each interest pocket maintained within the Fixed Interest
Account. The Current Rates of Interest shall always be equal to or greater
than the Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable
provisions of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that portion of AUL's general asset account
in which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding amounts
transferred from another AUL contract), to the Fixed Interest Account
shall be credited to the open interest pocket and shall earn interest
at the Current Rate of Interest in effect for that interest pocket.
Such Contributions or transferred amounts, during the time that the
Current Rate of Interest exceeds the Guaranteed Rate of Interest,
shall earn interest at such credited Current Rate of Interest for at
least 1 year. After such 1-year period, AUL reserves the right to
declare, at any time, a new Current Rate of Interest to be applied to
funds held within that interest pocket. Any such new Current Rate of
Interest must remain in effect for that interest pocket for at least 1
year.
(b) If AUL changes the Current Rate of Interest for such new Contributions
or such new amounts transferred to the Fixed Interest Account, the
previous open interest pocket shall close, and any such Contributions
or amounts transferred on or after the effective date of such change
shall be credited to a new open interest pocket and shall earn
interest at the new Current Rate of Interest in effect for such new
open interest pocket. Therefore, at any given time, various funds
credited to a Participant Account and allocated to the Fixed Interest
Account may be earning interest at different Current Rates of Interest
for different periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
P-14020(SBR)(MBR)(NBR)conv.3
<PAGE>
1.14 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148. The telephone number is
1-800-634-1629.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
1.16 "Investment Liquidation Charge" means a charge assessed by AUL which is
determined by multiplying a percentage times that portion of the Withdrawal
Value of each Participant Account which is to be paid under Section
8.2(b)(1)(i) from the Fixed Interest Account.
The percentage shall be 6 times (X-Y) where:
X = the Current Rate of Interest being credited by AUL, as of the date
of payment, to new Contributions; and
Y = the average rate of interest being credited by AUL, as of the date
of payment, to each affected Participant Account.
If Y is greater than X, the Investment Liquidation Charge shall be
zero.
AUL's determination of the Investment Liquidation Charge shall be
conclusive.
1.17 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.18 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Participant" means any person reported to AUL by the Contractholder as
eligible for, and as participating in, a Plan, and for whom a Participant
Account is established.
1.20 "Participant Account" means an account established under this contract for
a Participant. Within each Participant Account, the Contractholder can
direct the establishment of one or more subaccounts as made available by
AUL. Contributions received by AUL shall be credited to Participant
Accounts and their subaccounts as AUL is directed in writing by the
Contractholder.
1.21 "Plan" includes the Plan Sponsor's Code Section 401(a) plan and its Code
Section 403(b) plan as they exist on the Contract Date, and any subsequent
amendment to them.
1.22 "Plan Sponsor" means ABC School.
1.23 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
P-14020(SBR)(MBR)(NBR)conv.4
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III (SBR,
MBR) group annuity contracts GA XX,XXX and GA XX,XXX, the initial With-
drawal Charge percentage under this contract shall be equal to the With-
drawal Charge percentage applicable to the Participant under the AUL Series
I (NBR) group annuity contracts GA XX,XXX and GA XX,XXX from which funds
have been transferred to such Series III (SBR,MBR) contracts, determined by
AUL immediately prior to the date of such transfer, rounded down to the
next whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I (NBR) contracts is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph
shall never be greater than 8%. The Withdrawal Charge percentage shall be
decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the applicable
Withdrawal Charge percentage under such Series I contracts is greater than
0% but less than 4%, it shall be rounded up to 4% in this contract.) This
4% Withdrawal Charge percentage shall be in effect during the next 6
consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR,MBR -- Series I)
(original GRA I NBR/GAA I NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.5
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III (NBR)
group annuity contracts GA XX,XXX and GA XX,XXX, the initial Withdrawal
Charge percentage under this contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under the AUL Series I
(NBR) group annuity contracts GA XX,XXX and GA XX,XXX from which funds have
been transferred to such Series III (NBR) contracts, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I (NBR) contracts is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph
shall never be greater than 8%. The Withdrawal Charge percentage shall be
decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the applicable
Withdrawal Charge percentage in such Series I contracts is greater than 0%
but less than 4%, it shall be rounded up to 4% in this contract.) This 4%
Withdrawal Charge percentage shall be in effect during the next 6
consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III NBR/GAA III NBR -- Series I)
(original GRA I NBR/GAA I NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III (SBR,
MBR) group annuity contracts GXX,XXX and GXX,XXX, the initial Withdrawal
Charge percentage under this contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under the AUL Series III
(with a Series I Withdrawal Charge scale) (NBR) group annuity contracts
GA XX,XXX and GA XX,XXX from which funds have been transferred to such
Series III (SBR,MBR) contracts, determined by AUL immediately prior to the
date of such transfer, rounded down to the next whole Withdrawal Charge
percentage if the Withdrawal Charge percentage under such Series III (with
a Series I Withdrawal Charge scale) (NBR) contracts is a fractional With-
drawal Charge percentage. However, the Withdrawal Charge percentage under
this paragraph shall never be greater than 8%. The Withdrawal Charge per-
centage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage in such Series III (with a Series I
Withdrawal Charge scale) (NBR) contracts is greater than 0% but less than
4%, it shall be rounded up to 4% in this contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Partici-
pant Account Years. Thereafter, the Withdrawal Charge percentage shall be
reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR, MBR -- Series I)
(original GRA III NBR/GAA III NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL Series III (with
a Series I Withdrawal Charge scale) (NBR) group annuity contracts GXX,XXX
and GXX,XXX, the initial Withdrawal Charge percentage under this contract
shall be equal to the Withdrawal Charge percentage applicable to the Parti-
cipant under such AUL Series III (with a Series I Withdrawal Charge scale)
(NBR) group annuity contracts, determined by AUL immediately prior to the
Contract Date of this contract, rounded down to the next whole Withdrawal
Charge percentage if the Withdrawal Charge percentage under such Series III
(with a Series I Withdrawal Charge scale) (NBR) contracts is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage
under this paragraph shall never be greater than 8%. The Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage under such Series III (with a
Series I Withdrawal Charge scale) (NBR) contracts is greater than 0% but
less than 4%, it shall be rounded up to 4% in this contract.) This 4%
Withdrawal Charge percentage shall be in effect during the next 6
consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA III NBR/GAA III NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII (SBR,MBR)
group annuity contract GXX,XXX and AUL GRA III (SBR,MBR) group annuity
contract GXX,XXX, the initial Withdrawal Charge percentage under this
contract shall be equal to the Withdrawal Charge percentage applicable to
the Participant under the AUL GRA VII (NBR) and GRA VI (NBR) group annuity
contracts GA XX,XXX and GA XX,XXX from which funds have been transferred to
such GRA VII (SBR,MBR) and GRA III (SBR,MBR) contracts, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such GRA VII (NBR) and GRA VI (NBR) contracts is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage
under this paragraph shall never be greater than 8%. The Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage under such GRA VII (NBR) and GRA VI
(NBR) contracts is greater than 0% but less than 4%, it shall be rounded up
to 4% in this contract.) This 4% Withdrawal Charge percentage shall be in
effect during the next 6 consecutive Participant Account Years. Thereafter,
the Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA VII SBR,MBR/GRA III SBR,MBR -- Series I)
(original GRA VII NBR/GRA VI NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII (NBR)
group annuity contract GXX,XXX and AUL GRA VI (NBR) group annuity contract
GXX,XXX, the initial Withdrawal Charge percentage under this contract shall
be equal to the Withdrawal Charge percentage applicable to the Participant
under such AUL GRA VII (NBR) and GRA VI (NBR) group annuity contracts,
determined by AUL immediately prior to the Contract Date of this contract,
rounded down to the next whole Withdrawal Charge percentage if the
Withdrawal Charge percentage under such GRA VII (NBR) and GRA VI (NBR)
contracts is a fractional Withdrawal Charge percentage. However, the
Withdrawal Charge percentage under this paragraph shall never be greater
than 8%. The Withdrawal Charge percentage shall be decreased by 1% for each
subsequent Participant Account Year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable Withdrawal Charge percentage under
such GRA VII (NBR) and GRA VI (NBR) contracts is greater than 0% but less
than 4%, it shall be rounded up to 4% in this contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive
Participant Account Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII (SBR,MBR)
group annuity contract GXX,XXX and AUL GRA III (SBR,MBR) group annuity
contract GXX,XXX, the initial Withdrawal Charge percentage under this
contract shall be equal to the Withdrawal Charge percentage applicable to
the Participant under the AUL GRA VII (NBR) and GRA VI (NBR) group annuity
contracts GA XX,XXX and GA XX,XXX from which funds have been transferred to
such GRA VII (SBR,MBR) and GRA III (SBR,MBR) contracts, determined by AUL
immediately prior to the date of such transfer, rounded down to 8% if the
Withdrawal Charge percentage under such GRA VII (NBR) and GRA VI (NBR)
contracts is greater than 8%. If the Withdrawal Charge percentage is
rounded down from 10% to 8%, the 8% Withdrawal Charge percentage shall be
in effect through that Participant Account Year and through the next 2
succeeding Participant Account Years. If the Withdrawal Charge percentage
is rounded down from 9% to 8%, the 8% Withdrawal Charge percentage shall be
in effect through that Participant Account Year and through the next
succeeding Participant Account Year. Thereafter, the Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA VII SBR,MBR/GRA III SBR,MBR -- Series
III)
(original GRA VII NBR/GRA VI NBR -- Series III)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII (NBR)
group annuity contract GXX,XXX and AUL GRA VI (NBR) group annuity contract
GXX,XXX, the initial Withdrawal Charge percentage under this contract shall
be equal to the Withdrawal Charge percentage applicable to the Participant
under such AUL GRA VII (NBR) and GRA VI (NBR) group annuity contracts,
determined by AUL immediately prior to the Contract Date of this contract,
rounded down to 8% if the Withdrawal Charge percentage under such GRA VII
(NBR) and GRA VI (NBR) contracts is greater than 8%. If the Withdrawal
Charge percentage is rounded down from 10% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next 2 succeeding Participant Account Years. If the Withdrawal
Charge percentage is rounded down from 9% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next succeeding Participant Account Year. Thereafter, the
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series III)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA VII (NBR)
group annuity contract GXX,XXX and AUL GRA VI (NBR) group annuity contract
GXX,XXX, the initial Withdrawal Charge percentage under this contract shall
be equal to the Withdrawal Charge percentage applicable to the Participant
under such AUL GRA VII (NBR) and GRA VI (NBR) group annuity contracts,
determined by AUL immediately prior to the Contract Date of this contract,
rounded down to the next whole Withdrawal Charge percentage if the
Withdrawal Charge percentage under such GRA VII (NBR) and GRA VI (NBR)
contracts is a fractional Withdrawal Charge percentage. However, the
Withdrawal Charge percentage under this paragraph shall never be greater
than 8%. The Withdrawal Charge percentage shall be decreased by 1% for each
subsequent Participant Account Year until the Withdrawal Charge percentage
equals 4%. (However, if the applicable Withdrawal Charge percentage under
such GRA VII (NBR) and GRA VI (NBR) contracts is greater than 0% but less
than 4%, it shall be rounded up to 4% in this contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive
Participant Account Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
Notwithstanding the above provisions of this Section, for any Participant
who also participates in AUL GAA III (SBR,MBR,NBR) group annuity contract
GXX,XXX, AUL MFVA (SBR,MBR,NBR) group annuity contract GXX,XXX, and AUL GRA
VIII (SBR,MBR,NBR) group annuity contract GXX,XXX, and who has had amounts
transferred from previous AUL group annuity contracts to such GAA III,
MFVA, and GRA VIII contracts, the Withdrawal Charge percentage is as
follows:
During Withdrawal Charge
Participant Account Years Percentage
1 8
2 8
3 8
4 7
5 6
6 5
7 4
8 3
9 2
10 1
Thereafter 0
Participant Account Years credited under previous AUL group annuity
contracts from which amounts have been transferred to this contract shall
be counted in determining Participant Account Years under this Section.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GAA III SBR,MBR,NBR -- Series III)
(transfer from original GRA VIII SBR,MBR,NBR -- Series III)
(transfer from original MFVA SBR,MBR,NBR -- Series III)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
Notwithstanding the above provisions of this Section, for any Participant
who also participates in AUL GAA III (SBR,MBR,NBR) group annuity contract
GXX,XXX, AUL MFVA (SBR,MBR,NBR) group annuity contract GXX,XXX, and AUL GRA
VIII (SBR,MBR,NBR) group annuity contract GXX,XXX, and who has had amounts
transferred from previous AUL group annuity contracts to such GAA III,
MFVA, and GRA VIII contracts, the Withdrawal Charge percentage is as
follows:
During Withdrawal Charge
Participant Account Years Percentage
1 8
2 7
3 6
4 5
5 4
6 4
7 4
8 4
9 4
10 4
Thereafter 0
Participant Account Years credited under previous AUL group annuity
contracts from which amounts have been transferred to this contract shall
be counted in determining Participant Account Years under this Section.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GAA III SBR,MBR,NBR -- Series I)
(transfer from original GRA VIII SBR,MBR,NBR -- Series I)
(transfer from original MFVA SBR,MBR,NBR -- Series I)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GAA III (SBR,MBR)
group annuity contract GXX,XXX and AUL GRA III (SBR,MBR) group annuity
contract GXX,XXX, the initial Withdrawal Charge percentage under this
contract shall be equal to the Withdrawal Charge percentage applicable to
the Participant under the AUL GAA III (NBR) and AUL GRA III (NBR) group
annuity contracts GA XX,XXX and GA XX,XXX from which funds have been
transferred to such GAA III (SBR,MBR) and GRA III (SBR,MBR) contracts,
determined by AUL immediately prior to the date of such transfer, rounded
down to 8% if the Withdrawal Charge percentage under such GAA III (NBR) and
GRA III (NBR) contracts is greater than 8%. If the Withdrawal Charge
percentage is rounded down from 10% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next 2 succeeding Participant Account Years. If the Withdrawal
Charge percentage is rounded down from 9% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next succeeding Participant Account Year. Thereafter, the
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR,MBR -- Series
III)
(original GRA III NBR/GAA III NBR -- Series III)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in AUL GRA III (NBR)
group annuity contract GXX,XXX and AUL GAA III (NBR) group annuity contract
GXX,XXX, the initial Withdrawal Charge percentage under this contract shall
be equal to the Withdrawal Charge percentage applicable to the Participant
under such AUL GRA III (NBR) and AUL GAA III (NBR) group annuity contracts,
determined by AUL immediately prior to the Contract Date of this contract,
rounded down to 8% if the Withdrawal Charge percentage under such GRA III
(NBR) and GAA III (NBR) contracts is greater than 8%. If the Withdrawal
Charge percentage is rounded down from 10% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next 2 succeeding Participant Account Years. If the Withdrawal
Charge percentage is rounded down from 9% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and
through the next succeeding Participant Account Year. Thereafter, the
Withdrawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA III NBR/GAA III NBR -- Series III)
P-14020(SBR)(MBR)(NBR)conv.6
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. AUL is not a party
to, nor bound by, a Plan, trust, custodial agreement, or other agreement,
or any amendment or modification to any of the same. AUL is not a fiduciary
under this contract or under any such Plan, trust, custodial agreement, or
other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-14020(SBR)(MBR)(NBR)conv.7
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $300 (for Code
Section 401(a) Contributions) and $200 (for Code Section 403(b)
Contributions) per Participant in any full Contract Year. AUL may
change the minimum annual Contribution acceptable under this con
tract, but any such change shall apply only to individuals who become
Participants on or after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the applicable Plan and by applicable provisions of
the Code and Regulations issued thereunder. It shall not be the
responsibility of AUL to determine the existence or amount of Excess
Contributions or gains or losses thereon, or that returns of Excess
Contributions or gains or losses thereon are permitted by the Plan and
by applicable provisions of the Code and Regulations. In withdrawing
and returning the identified amount, AUL may rely solely on such
written instructions and certification. Such a withdrawal and return
of Excess Contributions shall not be subject to Section 4.1.
3.2 How Contributions Are Handled:
(a) Contributions received at AUL's Home Office shall be identified by the
Contractholder and shall be credited to the appropriate subaccounts of
each of the Participant Accounts as directed by the Contractholder in
written allocation instructions. Code Section 403(b) Contributions
shall be identified as Elective Deferrals, Employee Mandatory
Contributions, or Employer Contributions.
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable by AUL by the Contractholder or by that person designated
in writing to AUL by the Contractholder. If no Investment Option
election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with
the Investment Option election applicable to the immediately preceding
Contribution. The Contractholder or such designated person may change
an Investment Option election with respect to future allocations to
the applicable Participant Account by giving new Investment Option
elections to AUL at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
(d) (1) For Code Section 401(a) Contributions: If the data required
to establish a Participant Account and instructions regarding the
amount of a Contribution for the Participant are not received by
AUL at its Home Office as of the date AUL receives that
Contribution, AUL shall allocate that Contribution to a suspense
account within AUL's general asset account, which shall earn
interest at rates equal to the Current Rates of Interest which
would have been earned had such Contributions been allocated to
the Fixed Interest Account on the date such Contribution was
allocated to the suspense account.
(2) For Code Section 403(b) Contributions:
If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election form for that Participant is not received,
by AUL at its Home Office as of the date AUL receives that
Contribution, AUL shall allocate that Contribution to the Investment
Option election identified in the Participant's annuity enrollment
form, which is the AUL American Money Market Investment Account.
(f) Under Subsections (d)(1) and (e), if AUL subsequently receives the
data required to establish the Participant Account, instructions
regarding the amount of the Contribution for the Participant, and an
Investment Option election form, AUL shall then transfer such amounts
allocated pursuant to those Subsections, plus gains or minus losses
thereon, to another Investment Option, if such election form so
directs.
(g) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all
P-14020(SBR)(MBR)(NBR)conv.8
<PAGE>
eligible Mutual Funds or Mutual Fund Portfolios are no longer
available for investment or if further investment in any or all
eligible Mutual Funds or Mutual Fund Portfolios becomes inappropriate
in view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) Daily transfer directions may be made with respect to any single
Participant Account.
(b) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(c) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
(d) Amounts which have been transferred to this contract, except for
amounts transferred from other AUL group annuity contracts, shall be
allocated pursuant to the provisions of Section 3.2.
(e) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
3.6 Reallocation of Participant Accounts: The Contractholder, in accordance
with Plan provisions, may direct AUL to reallocate all or a portion of the
Account Value of any Participant Account among other Participant Accounts.
The Contractholder shall certify that such reallocation is in accordance
with Plan provisions.
3.7 Transferred Amounts: If permitted under the Plan, AUL shall accept amounts
transferred from other contracts. Such transferred amounts shall be
credited as directed by the Contractholder to a separate rollover
subaccount established under the appropriate Participant Account. Amounts
transferred to a Code Section 403(b) Contribution rollover subaccount of a
Participant Account must be attributable to contributions made pursuant to
Code Section 403(b).
P-14020(SBR)(MBR)(NBR)conv.9
<PAGE>
ARTICLE 4 - BENEFITS
4.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, at any time prior to termination of the contract pursuant to
Article 8, the Contractholder may direct AUL to withdraw all or a portion
of a Participant Account pursuant to Sections 4.2 and 4.3 to provide Plan
benefits (other than Plan termination benefits). Such Contractholder
direction must be submitted to AUL at its Home Office in a form acceptable
to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Code Section 403(b) Contributions made other
than pursuant to a salary reduction agreement (within the meaning of
Code Section 402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Code Section 403(b) Contributions made
pursuant to a salary reduction agreement (within the meaning of Code
Section 402(g)(3)(C)) may be withdrawn to provide such benefits,
provided that the withdrawal is made to provide a loan or that any
distribution of such amount shall not occur until the Participant has
either attained age 59 1/2, separated from service, died, become
totally disabled (as defined by the Plan), or experienced a hardship
(as defined by the Plan). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another Code Section 403(b) tax-deferred annuity funding vehicle
under applicable IRS rules and regulations is not the provision of a
Plan benefit for purposes of Section 4.2, but instead is a Contract
termination as to that amount for that Participant; and any such
withdrawal shall be subject to application of the Withdrawal Charge
pursuant to Section 4.3. The Contractholder hereby grants to a
Participant the right to direct the withdrawal and direct transfer of
such Participant's voluntary Elective Deferrals (as determined by the
Contractholder) to another Code Section 403(b) tax-deferred annuity
funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. AUL may
rely solely upon the representations of the Contractholder made in the
withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire
P-14020(SBR)(MBR)(NBR)conv.10
<PAGE>
share of the Investment Option as of the close of business on the
Valuation Date that AUL receives that withdrawal request (or due proof
of death, if received later), in a form acceptable to AUL, at its Home
Office. If a withdrawal reduces the Participant Account's share of an
Investment Option to less than $500, such remaining share shall also
be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.4) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan
(other than Plan termination benefits) for retirement, death,
disability, termination of employment, hardships, loans, required
minimum distribution benefits pursuant to Code Section 401(a)(9)
and Regulations issued thereunder, or (for Code Section 403(b)
plans or profit-sharing plans) benefits upon attainment of age 59
1/2 or (for profit-sharing plans) after a fixed number of years
(as allowed by the Code and Regulations issued thereunder and by
applicable IRS rulings), provided that such benefit upon
attainment of age 59 1/2 or after a fixed number of years is a
taxable distribution paid to the Participant and not to any other
person or entity, including any substitute funding medium.
(SBR)
P-14020(SBR)(MBR)(NBR)conv.11
<PAGE>
share of the Investment Option as of the close of business on the
Valuation Date that AUL receives that withdrawal request (or due
proof of death, if received later), in a form acceptable to AUL,
at its Home Office. If a withdrawal reduces the Participant
Account's share of an Investment Option to less than $500, such
remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan; or
(3) providing the Participant has attained (1) age 55 and has 10
years of service with the employer identified in the Plan or (2)
age 62, a cash lump-sum payment to the Contractholder or to
whomever the Contractholder directs to pay benefits as provided
by the Plan (other than Plan termination benefits) for
retirement, disability, termination of employment, hardships,
loans, required minimum distribution benefits pursuant to Code
Section 401(a)(9) and Regulations issued thereunder, or (for
profit-sharing plans) benefits upon attainment of age 59 1/2 or
after a fixed number of years (as allowed by the Code and
Regulations issued thereunder and by applicable IRS rulings),
provided that such benefit upon attainment of age 59 1/2 or after
a fixed number of years is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(MBR)
P-14020(SBR)(MBR)(NBR)conv.13
<PAGE>
share of the Investment Option as of the close of business on the
Valuation Date that AUL receives that withdrawal request (or due
proof of death, if received later), in a form acceptable to AUL,
at its Home Office. If a withdrawal reduces the Participant
Account's share of an Investment Option to less than $500, such
remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits), or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan.
(NBR)
P-14020(SBR)(MBR)(NBR)conv.13
<PAGE>
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.4) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.4) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2). If it is necessary
to withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.4 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.4 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
(SBR)
(NBR)
P-14020(SBR)(MBR)(NBR)conv.14
<PAGE>
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.4) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.4) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2) and (3). If it is
necessary to withdraw the entire Account Value of a Participant Account to
make such payment, the amount paid shall equal the Withdrawal Value, minus
any Section 6.4 charges. If it is not necessary to withdraw the entire
Account Value to make such payment, AUL shall reduce the Account Value of
the Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.4 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
(MBR)
P-14020(SBR)(MBR)(NBR)conv.14
<PAGE>
Contractholder may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge.
4.4 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.2, AUL shall apply all or a portion of the Account
Value (subject to Section 6.4) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.1(h). Such
transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Contractholder request shall
include certification as to the purpose for the annuity, the election of
one of the following annuity options, notification of the Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any benefit
option requested. The amount of any annuity shall be computed from the
Table of Immediate Annuities then included in this contract, except as
provided under Section 4.7.
4.5 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option
to elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) of this Section, but shall be paid in a
lump sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
4.6 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.7 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.8 Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.9 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
P-14020(SBR)(MBR)(NBR)conv.15
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
P-14020(SBR)(MBR)(NBR)conv.16
<PAGE>
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is the daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-14020(SBR)(MBR)(NBR)conv.17
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.5(e). This charge would be
prorated among the Investment Options from which the amounts are
transferred in the same proportion that the amount transferred from the
Investment Option bears to the total amount transferred from all Investment
Options.
6.4 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.2 or 4.4
or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.5 Reduction or Waiver of Withdrawal Charge: AUL may reduce or waive the
amount of the Withdrawal Charge where the expenses associated with the
sale of this contract or the administrative costs associated with this
contract are reduced, or where this contract is sold to the directors or
employees of AUL or any of its affiliates, or to directors or any employees
of the AUL American Series Fund, Inc.
P-14020(SBR)(MBR)(NBR)conv.18
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Guaranteed Rate of Interest: AUL has the right at
any time, upon delivery of written notice to the Contractholder, to change
the Guaranteed Rate of Interest. Any such change shall apply only to
Participant Accounts established on or after the effective date of such
change, and shall apply for the duration of such affected Participant
Accounts. Any change in the Guaranteed Rate of Interest shall not result in
a rate less than that prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Withdrawal Charge: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the
Withdrawal Charge set out in Section 1.27. Any such change to the
Withdrawal Charge shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 9.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-14020(SBR)(MBR)(NBR)conv.19
<PAGE>
ARTICLE 8 - TERMINATION OF CONTRACT
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
8.2 Payment Due to Termination by Contractholder:
(a) As of the effective date of termination of this contract by the
Contractholder pursuant to Section 8.1, the Contractholder, together
with the Plan Sponsor, may elect to have a payment or payments made
under the payment option or one of the payment options set out below
to whomever the Contractholder directs. Such payment or payments shall
be in full settlement of this contract and in lieu of any other
payment under its terms. In order for such an election to be
effective, it must include the Contractholder's and the Plan Sponsor's
agreement to indemnify and hold AUL harmless from any and all losses,
claims, or demands that may later arise or be asserted against AUL in
connection with the making of such a payment or payments and, if Code
Section 403(b) funds are to be transferred to a substitute funding
medium, such election must contain the Contractholder's certification
that such substitute funding medium meets the requirements of Code
Section 403(b) and the Regulations issued thereunder. This
Contractholder's and Plan Sponsor's agreement must be received by AUL
at its Home Office prior to payment of any termination benefits
provided by this Section 8.2.
(b) Upon termination of this contract by the Contractholder:
(1) Payment options for Code Section 401(a) funds are as follows:
(i) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts attributable to Code Section 401(a)
funds, reduced by the Investment Liquidation Charge
applicable to the Fixed Interest Account, shall be
calculated as of the close of business on the effective date
of termination and shall be payable within 7 days from the
effective date of termination, except as AUL may be
permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(ii) If option (i) above is not elected, Code Section 401(a)
funds shall be paid out pursuant to the same provisions
listed in Subsection 8.2(b)(2) below for Code Section 403(b)
funds.
(2) Payment of Code Section 403(b) funds shall be made as follows:
(i) A single sum equal to that portion of the aggregate
Withdrawal Value of all Participant Accounts attributable to
Code Section 403(b) funds (and Code Section 401(a) funds, if
payable pursuant to Subsection (b)(1)(ii) above) and
consisting of all of the Accumulation Units of each
Investment Account credited to such Participant Accounts
shall be calculated as of the close of business on the
effective date of termination and shall be payable within 7
days from the effective date of termination, except as AUL
may be permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(ii) In addition to the amount payable pursuant to Section
8.2(b)(2)(i) above, commencing on the first Contract
Anniversary immediately succeeding the effective date of
termination, a portion of each Participant Account
(including Code Section 401(a) funds invested in the Fixed
Interest Account, if payable pursuant to Subsection
(b)(1)(ii) above) shall be paid in annual installments as
follows:
(A) As of the first Contract Anniversary immediately
succeeding the effective date of termination,
one-seventh of that portion of the Withdrawal Value of
each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance
in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be
payable.
(B) As of the second Contract Anniversary succeeding the
effective date of termination, one-sixth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(C) As of the third Contract Anniversary succeeding the
effective date of termination, one-fifth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(D) As of the fourth Contract Anniversary succeeding the
effective date of termination, one-fourth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(E) As of the fifth Contract Anniversary succeeding the
effective date of termination, one-third of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(F) As of the sixth Contract Anniversary succeeding the
effective date of termination, one-half of that portion
of the Withdrawal Value of each Participant Account
attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(G) As of the seventh Contract Anniversary succeeding the
effective date of termination, the entire remaining
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
The Current Rates of Interest being credited to other
contracts of this class shall be credited from the effective
date of termination until the final payment is made under
this Subsection (b)(2)(ii).
Until such time as the above-referenced election is implemented,
the terms of the contract shall remain applicable, except that
AUL shall have the right to refuse to accept further
Contributions.
8.3 Right of AUL to Terminate: AUL has the right, subject to applicable state
law, to terminate any Participant Account established under this contract
at any time during the Contract Year if the Account Value of such
Participant Account is less than $200 for the first Contract Year in which
a Contribution is made for the Participant, and $400 for any subsequent
Contract Year, and at least 6 months have elapsed since the last previous
Contribution to the contract. If AUL elects to terminate a Participant
Account in such event, such termination shall be effective on the date 6
months following the date that AUL gives notice to the Contractholder and
the Participant that the Participant Account is to be terminated, provided
that any Contributions made during such 6- month period are insufficient to
bring such Account Value up to the minimum level.
8.4 Payment Due to Termination by AUL: As of the effective date of termination
of a Participant Account by AUL pursuant to Section 8.3, AUL may elect to
have a payment made as set out below to the Contractholder. Any such
payment shall be in full settlement of the Participant Account under this
contract and in lieu of any other payment under its terms.
Upon termination of a Participant Account pursuant to Section 8.3, AUL may
elect to have a single sum equal to the Account Value of the Participant
Account calculated as of the close of business on the effective date of
termination and paid to the Contractholder within 7 days from such
effective date of termination.
P-14020(SBR)(MBR)(NBR)conv.20
<PAGE>
ARTICLE 9 - MISCELLANEOUS
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
No other person or entity shall have any right, title, or interest in this
contract or to any amount received or credited under it until such right,
title, interest, or amount is actually made available to them.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.3 Certification of Plan Status: The Contractholder certifies, upon acceptance
of this contract, that, in the Contractholder's opinion, the Code Section
401(a) Plan and the Code Section 403(b) Plan meet the requirements of Code
Sections 401(a) and 403(b), respectively. If the Contractholder or Plan
Sponsor attempts to obtain Internal Revenue Service approval of a Plan as a
qualified Code Section 401(a) plan and fails to initially secure such
qualification of the Plan, or fails to retain such qualification, each
Participant Account's share of each Investment Account shall be withdrawn
and transferred to the Fixed Interest Account, and no amounts attributable
to this contract shall subsequently be placed in any Investment Account
until the Plan is again qualified.
AUL does not make any guarantee regarding the federal, state, or local tax
status of this contract, any Participant Account established hereunder, or
any transaction involving this contract.
9.4 Essential Data: The Contractholder shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity
or other benefit in each instance. The Contractholder shall report to AUL
any person for whom a payment becomes due under a Plan and the nature and
amount of such payment before the date on which such payment becomes due or
as soon thereafter as is practicable.
9.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL
by the Contractholder as acting on its behalf, or by a Participant. AUL
need not inquire as to the accuracy or completeness thereof.
9.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
9.7 Assignment by Contractholder: The Contractholder may assign its interest in
Code Section 401(a) funds held in this contract, but any assignment must be
in writing, and AUL shall not be deemed to have knowledge of such
assignment unless the original or a duplicate is filed at the Home Office
of AUL. AUL shall not assume any responsibility for the validity of an
assignment.
9.8 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
9.9 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
9.10 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
9.11 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
9.12 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
9.13 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
9.14 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to the Contractholder or to any person or entity when
directed to do so in writing by the Contractholder. Any payment made by AUL
will fully discharge AUL to the extent of such payment.
9.15 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
9.16 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
9.17 Acceptance of New Participants or Contributions: AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time.
9.18 Nonforfeitability and Nontransferability: The entire Withdrawal Value of
the vested portion (as determined pursuant to the Code Section 403(b) Plan)
of Code Section 403(b) funds of a Participant Account under this contract
shall be nonforfeitable at all times. No sum payable under this contract
which is attributable to Code Section 403(b) funds with respect to a
Participant may be sold, assigned, discounted, or pledged as collateral for
a loan or as security for the performance of an obligation or for any other
purpose to any person or entity other than AUL. In addition, to the extent
permitted by law, no such sum shall in any way be subject to legal process
requiring the payment of any claim against the payee.
9.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the
third Thursday in February of each year at the hour of ten o'clock A.M.
Elections for directors shall be held at such annual meeting.
P-14020(SBR)(MBR)(NBR)conv.21
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
P-14020(SBR)(MBR)(NBR)conv.22
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder
by AUL. Amounts allocated to any Investment Account identified below shall
be invested in the shares of the corresponding Mutual Fund or Mutual Fund Port-
folio listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-14020(SBR)(MBR)(NBR)conv.23
<PAGE>
AMENDMENT
TO THE
MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Section 6.1 and by substituting the following Section
6.1 in lieu thereof:
6.1 Mortality Risk and Expense Risk Charges; Annual Variable Investment Plus
Factors: AUL shall deduct a daily mortality risk charge and a daily expense
risk charge equal to the daily equivalent of an annual combined charge of
1.25% against the average daily net assets of each Investment Account.
These charges shall be reflected in the Net Investment Factor as provided
in Section 5.4(c).
AUL shall multiply the portions (as delineated in the table below) of the
total month-end Account Value in the Variable Account of all Participants
in the contract by the monthly equivalent of the corresponding Annual
Variable Investment Plus Factors appearing in the table below. These
products shall be added together, and the sum shall be divided by the total
month-end Account Value in the Variable Account of all Participants in the
contract. This percentage shall be multiplied by the month-end Account
Value of each Participant in each Investment Account. The resulting amount
for each Investment Account shall be added to the Participant's Account
Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
CONTRACTHOLDER AUL
By _____________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title ___________________________ President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-XXXXX.AMD.DAC
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT
NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the Contractholder
agree that the Contract is hereby amended as follows:
By adding the following provision, effective as of the later of the Contract
Date or January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during a
calendar year under this contract, or under any other plans, contracts, or
arrangements maintained by his employer, in excess of the dollar limitation in
effect under Internal Revenue Code Section 402(g)(1) and any Regulations issued
thereunder for taxable years beginning in such calendar year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-14020.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA
AND
QUALIFIED PLAN MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
CONTRACTHOLDER AUL
By _____________________________________ By ________________________________________
Title __________________________________ Title ______________________________________
Date ___________________________________ Date ______________________________________
</TABLE>
P-14020.A
<PAGE>
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's Code Section
403(b) tax-deferred annuity Plan and its Code Section 401(a) qualified
retirement Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA AND QUALIFIED PLAN MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your Contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-13099(SBR)(MBR)(NBR)conv
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's Code Section 401(a) subaccounts'
share of the Fixed Interest Account on that date; plus
(b) the balance of the Participant Account's Code Section 403(b) subaccounts'
share of the Fixed Interest Account on that date; plus
(c) the value of the Participant Account's Code Section 401(a) subaccounts'
Accumulation Units in each Investment Account on that date; plus
(d) the value of the Participant Account's Code Section 403(b) subaccounts'
Accumulation Units in each Investment Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contract Anniversary" means the first day of the second Contract Year and each
subsequent Contract Year. Each Contract Anniversary after the First Contract
Anniversary identified in the Contract shall be the same day of the same month
as the day and month which is stated in the Contract for the First Contract
Anniversary.
"Contract Quarter" means each of the four successive intervals of three months,
the sum of which corresponds to a 12-month Contract Year.
"Contract Year" means, for the first such year, the period beginning with the
Contract Date and ending on the day immediately preceding the First Contract
Anniversary identified in the Contract, and for each succeeding Contract Year,
the period beginning with a Contract Anniversary and ending on the day
immediately preceding the next succeeding Contract Anniversary.
"Contributions" means amounts paid to AUL pursuant to the Contractholder's Code
Section 401(a) Plan or 403(b) Plan, including amounts transferred to the
Contract from another AUL group annuity contract,
P-13099(SBR)(MBR)(NBR)conv.1
<PAGE>
which are credited to a Participant Account. The following types of Code Section
403(b) Contributions are credited to individual subaccounts under the
Participant Account:
(a) "Elective Deferrals," which means, with respect to any taxable year, any
Contribution made under a salary reduction agreement. A Contribution made
under a salary reduction agreement shall not be treated as an Elective
Deferral if, under the salary reduction agreement, such Contribution is
made pursuant to a one-time irrevocable election made by the Participant at
the time of initial eligibility to participate in the agreement, or is made
pursuant to a similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made under a
salary reduction agreement pursuant to a one-time irrevocable election made
by the Participant at the time of initial eligibility to participate in the
agreement, or is made pursuant to a similar arrangement involving a
one-time irrevocable election specified in Regulations issued under the
Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder.
"Fixed Interest Account" means that portion of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding amounts
transferred from another AUL contract), to the Fixed Interest Account shall
be credited to the open interest pocket and shall earn interest at the
Current Rate of Interest in effect for that interest pocket. Such
Contributions or transferred amounts, during the time that the Current Rate
of Interest exceeds the Guaranteed Rate of Interest, shall earn interest at
such credited Current Rate of Interest for at least 1 year. After such
1-year period, AUL reserves the right to declare, at any time, a new
Current Rate of Interest to be applied to funds held within that interest
pocket. Any such new Current Rate of Interest must remain in effect for
that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
such new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any such Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148. The telephone number is
1-800-634-1629.
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments" below. Amounts allocated to any Investment Account identified in
Schedule A of the Contract shall be invested in the shares of the corresponding
Mutual Fund or Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
"Investment Liquidation Charge" means a charge assessed by AUL which is
determined by multiplying a percentage times that portion of the Withdrawal
Value of each Participant Account which is to be paid from the Fixed Interest
Account according to the "Contract Termination" provisions discussed below.
The percentage shall be 6 times (X-Y) where:
X = the Current Rate of Interest being credited by AUL, as of the date of
payment, to new Contributions; and
Y = the average rate of interest being credited by AUL, as of the date of
payment, to each affected Participant Account.
If Y is greater than X, the Investment Liquidation Charge shall be zero.
AUL's determination of the Investment Liquidation Charge shall be conclusive.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A.
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, a Plan, and for whom a Participant Account is
established.
"Participant Account" means an account established under the Contract for a
Participant. Within each Participant Account, the Contractholder can direct the
establishment of one or more subaccounts as made available by AUL. Contributions
received by AUL shall be credited to Participant Accounts and their subaccounts
as AUL is directed in writing by the Contractholder.
"Plan" includes the Plan Sponsor's Code Section 401(a) plan and its Code Section
403(b) plan as they exist on the Contract Date identified in the Contract, and
any subsequent amendment to them.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III (SBR,MBR) group annuity contracts issued to the Contractholder, the initial
Withdrawal Charge percentage under the Contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under the AUL Series I (NBR)
group annuity contracts from which funds have been transferred to such Series
III (SBR,MBR) contracts, determined by AUL immediately prior to the date of such
transfer, rounded down to the next whole Withdrawal Charge percentage if the
Withdrawal Charge percentage under such Series I (NBR) contracts is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage under
this paragraph shall never be greater than 8%. The Withdrawal Charge percentage
shall be decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the applicable Withdrawal
Charge percentage under such Series I contracts is greater than 0% but less than
4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal Charge
percentage shall be in effect during the next 6 consecutive Participant Account
Years. Thereafter, the Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR,MBR -- Series I)
(original GRA I NBR/GAA I NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.2
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III (NBR) group annuity contracts issued to the Contractholder, the initial
Withdrawal Charge percentage under the Contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under the AUL Series I (NBR)
group annuity contracts from which funds have been transferred to such Series
III (NBR) contracts, determined by AUL immediately prior to the date of such
transfer, rounded down to the next whole Withdrawal Charge percentage if the
Withdrawal Charge percentage under such Series I (NBR) contracts is a fractional
Withdrawal Charge percentage. However, the Withdrawal Charge percentage under
this paragraph shall never be greater than 8%. The Withdrawal Charge percentage
shall be decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the applicable Withdrawal
Charge percentage in such Series I contracts is greater than 0% but less than
4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal Charge
percentage shall be in effect during the next 6 consecutive Participant Account
Years. Thereafter, the Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III NBR/GAA III NBR -- Series I)
(original GRA I NBR/GAA I NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III (SBR,MBR) group annuity contracts issued to the Contractholder, the initial
Withdrawal Charge percentage under the Contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under the AUL Series III (with a
Series I Withdrawal Charge scale) (NBR) group annuity contracts from which funds
have been transferred to such Series III (SBR,MBR) contracts, determined by AUL
immediately prior to the date of such transfer, rounded down to the next whole
Withdrawal Charge percentage if the Withdrawal Charge percentage under such
Series III (with a Series I Withdrawal Charge scale) (NBR) contracts is a
fractional Withdrawal Charge percentage. However, the Withdrawal Charge
percentage under this paragraph shall never be greater than 8%. The Withdrawal
Charge percentage shall be decreased by 1% for each subsequent Participant
Account Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage in such Series III (with a Series I
Withdrawal Charge scale) (NBR) contracts is greater than 0% but less than 4%, it
shall be rounded up to 4% in the Contract.) This 4% Withdrawal Charge percentage
shall be in effect during the next 6 consecutive Participant Account Years.
Thereafter, the Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR, MBR -- Series I)
(original GRA III NBR/GAA III NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL Series
III (with a Series I Withdrawal Charge scale) (NBR) group annuity contracts
issued to the Contractholder, the initial Withdrawal Charge percentage under the
Contract shall be equal to the Withdrawal Charge percentage applicable to the
Participant under such AUL Series III (with a Series I Withdrawal Charge scale)
(NBR) group annuity contracts, determined by AUL immediately prior to the
Contract Date of the Contract, rounded down to the next whole Withdrawal Charge
percentage if the Withdrawal Charge percentage under such Series III (with a
Series I Withdrawal Charge scale) (NBR) contracts is a fractional Withdrawal
Charge percentage. However, the Withdrawal Charge percentage under this
paragraph shall never be greater than 8%. The Withdrawal Charge percentage shall
be decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 4%. (However, if the applicable Withdrawal
Charge percentage under such Series III (with a Series I Withdrawal Charge
scale) (NBR) contracts is greater than 0% but less than 4%, it shall be rounded
up to 4% in the Contract.) This 4% Withdrawal Charge percentage shall be in
effect during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA III NBR/GAA III NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA VII
(SBR,MBR) and GRA III (SBR,MBR) group annuity contracts issued to the
Contractholder, the initial Withdrawal Charge percentage under the Contract
shall be equal to the Withdrawal Charge percentage applicable to the Participant
under the AUL GRA VII (NBR) and GRA VI (NBR) group annuity contracts from which
funds have been transferred to such GRA VII (SBR,MBR) and GRA III (SBR,MBR)
contracts, determined by AUL immediately prior to the date of such transfer,
rounded down to the next whole Withdrawal Charge percentage if the Withdrawal
Charge percentage under such GRA VII (NBR) and GRA VI (NBR) contracts is a
fractional Withdrawal Charge percentage. However, the Withdrawal Charge
percentage under this paragraph shall never be greater than 8%. The Withdrawal
Charge percentage shall be decreased by 1% for each subsequent Participant
Account Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage under such GRA VII (NBR) and GRA VI
(NBR) contracts is greater than 0% but less than 4%, it shall be rounded up to
4% in the Contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA VII SBR,MBR/GRA III SBR,MBR -- Series I)
(original GRA VII NBR/GRA VI NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA VII
(NBR) and GRA VI (NBR) group annuity contracts issued to the Contractholder, the
initial Withdrawal Charge percentage under the Contract shall be equal to the
Withdrawal Charge percentage applicable to the Participant under such AUL GRA
VII (NBR) and GRA VI (NBR) group annuity contracts, determined by AUL
immediately prior to the Contract Date of the Contract, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage under
such GRA VII (NBR) and GRA VI (NBR) contracts is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Withdrawal Charge percentage
under such GRA VII (NBR) and GRA VI (NBR) contracts is greater than 0% but less
than 4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA VII
(SBR,MBR) and GRA III (SBR,MBR) group annuity contracts issued to the
Contractholder, the initial Withdrawal Charge percentage under the Contract
shall be equal to the Withdrawal Charge percentage applicable to the Participant
under the AUL GRA VII (NBR) and GRA VI (NBR) group annuity contracts from which
funds have been transferred to such GRA VII (SBR,MBR) and GRA III (SBR,MBR)
contracts, determined by AUL immediately prior to the date of such transfer,
rounded down to 8% if the Withdrawal Charge percentage under such GRA VII (NBR)
and GRA VI (NBR) contracts is greater than 8%. If the Withdrawal Charge
percentage is rounded down from 10% to 8%, the 8% Withdrawal Charge percentage
shall be in effect through that Participant Account Year and through the next 2
succeeding Participant Account Years. If the Withdrawal Charge percentage is
rounded down from 9% to 8%, the 8% Withdrawal Charge percentage shall be in
effect through that Participant Account Year and through the next succeeding
Participant Account Year. Thereafter, the Withdrawal Charge percentage shall be
decreased by 1% for each subsequent Participant Account Year until the
Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA VII SBR,MBR/GRA III SBR,MBR -- Series III)
(original GRA VII NBR/GRA VI NBR -- Series III)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA VII
(NBR) and GRA VI (NBR) group annuity contracts issued to the Contractholder, the
initial Withdrawal Charge percentage under the Contract shall be equal to the
Withdrawal Charge percentage applicable to the Participant under the AUL GRA VII
(NBR) and GRA VI (NBR) group annuity contracts, determined by AUL immediately
prior to the Contract Date of the Contract, rounded down to 8% if the Withdrawal
Charge percentage under such GRA VII (NBR) and GRA VI (NBR) contracts is greater
than 8%. If the Withdrawal Charge percentage is rounded down from 10% to 8%, the
8% Withdrawal Charge percentage shall be in effect through that Participant
Account Year and through the next 2 succeeding Participant Account Years. If the
Withdrawal Charge percentage is rounded down from 9% to 8%, the 8% Withdrawal
Charge percentage shall be in effect through that Participant Account Year and
through the next succeeding Participant Account Year. Thereafter, the Withdrawal
Charge percentage shall be decreased by 1% for each subsequent Participant
Account Year until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series III)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA VII
(NBR) and GRA VI (NBR) group annuity contracts issued to the Contractholder, the
initial Withdrawal Charge percentage under the Contract shall be equal to the
Withdrawal Charge percentage applicable to the Participant under such AUL GRA
VII (NBR) and GRA VI (NBR) group annuity contracts, determined by AUL
immediately prior to the Contract Date of the Contract, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage under
such GRA VII (NBR) and GRA VI (NBR) contracts is a fractional Withdrawal Charge
percentage. However, the Withdrawal Charge percentage under this paragraph shall
never be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Withdrawal Charge percentage
under such GRA VII (NBR) and GRA VI (NBR) contracts is greater than 0% but less
than 4%, it shall be rounded up to 4% in the Contract.) This 4% Withdrawal
Charge percentage shall be in effect during the next 6 consecutive Participant
Account Years. Thereafter, the Withdrawal Charge percentage shall be reduced to
0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA VII NBR/GRA VI NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GAA III
(SBR,MBR,NBR), MFVA (SBR,MBR,NBR), and GRA VIII (SBR,MBR,NBR) group annuity
contracts issued to the Contractholder, and who has had amounts transferred from
previous AUL group annuity contracts to such GAA III, MFVA, and GRA VIII
contracts, the Withdrawal Charge percentage under the Contract is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 8
2 8
3 8
4 7
5 6
6 5
7 4
8 3
9 2
10 1
Thereafter 0
Participant Account Years credited under previous AUL group annuity contracts
from which amounts have been transferred to the Contract shall be counted in
determining Participant Account Years under this definition.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GAA III SBR,MBR,NBR -- Series III)
(transfer from original GRA VIII SBR,MBR,NBR -- Series III)
(transfer from original MFVA SBR,MBR,NBR -- Series III)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GAA III
(SBR,MBR,NBR), MFVA (SBR,MBR,NBR), and GRA VIII (SBR,MBR,NBR) group annuity
contracts issued to the Contractholder, and who has had amounts transferred from
previous AUL group annuity contracts to such GAA III, MFVA, and GRA VIII
contracts, the Withdrawal Charge percentage under the Contract is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 8
2 7
3 6
4 5
5 4
6 4
7 4
8 4
9 4
10 4
Thereafter 0
Participant Account Years credited under previous AUL group annuity contracts
from which amounts have been transferred to the Contract shall be counted in
determining Participant Account Years under this definition.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GAA III SBR,MBR,NBR -- Series I)
(transfer from original GRA VIII SBR,MBR,NBR -- Series I)
(transfer from original MFVA SBR,MBR,NBR -- Series I)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GAA III
(SBR,MBR) and GRA III (SBR,MBR) group annuity contracts issued to the
Contractholder, the initial Withdrawal Charge percentage under the Contract
shall be equal to the Withdrawal Charge percentage applicable to the Participant
under the AUL GAA III (NBR) and AUL GRA III (NBR) group annuity contracts from
which funds have been transferred to such GAA III (SBR,MBR) and GRA III
(SBR,MBR) contracts, determined by AUL immediately prior to the date of such
transfer, rounded down to 8% if the Withdrawal Charge percentage under such GAA
III (NBR) and GRA III (NBR) contracts is greater than 8%. If the Withdrawal
Charge percentage is rounded down from 10% to 8%, the 8% Withdrawal Charge
percentage shall be in effect through that Participant Account Year and through
the next 2 succeeding Participant Account Years. If the Withdrawal Charge
percentage is rounded down from 9% to 8%, the 8% Withdrawal Charge percentage
shall be in effect through that Participant Account Year and through the next
succeeding Participant Account Year. Thereafter, the Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account Year
until the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from GRA III SBR,MBR/GAA III SBR,MBR -- Series III)
(original GRA III NBR/GAA III NBR -- Series III)
P-13099(SBR)(MBR)(NBR)conv.4
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed in "'Benefit Responsive' Plan Benefits and Annuities"
below, as provided by the Plan, where the percentage varies by the Participant
Account Year in which the withdrawal is made. The first Participant Account Year
begins on the date when AUL establishes a Participant Account and credits the
initial Contribution for the Participant, and ends on the day immediately
preceding the next anniversary of such date. Each Participant Account Year
thereafter begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge percentage
is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
However, for any Participant who also participates in the companion AUL GRA III
(NBR) and GAA III (NBR) group annuity contracts issued to the Contractholder,
the initial Withdrawal Charge percentage under the Contract shall be equal to
the Withdrawal Charge percentage applicable to the Participant under such AUL
GRA III (NBR) and AUL GAA III (NBR) group annuity contracts, determined by AUL
immediately prior to the Contract Date of the Contract, rounded down to 8% if
the Withdrawal Charge percentage under such GRA III (NBR) and GAA III (NBR)
contracts is greater than 8%. If the Withdrawal Charge percentage is rounded
down from 10% to 8%, the 8% Withdrawal Charge percentage shall be in effect
through that Participant Account Year and through the next 2 succeeding
Participant Account Years. If the Withdrawal Charge percentage is rounded down
from 9% to 8%, the 8% Withdrawal Charge percentage shall be in effect through
that Participant Account Year and through the next succeeding Participant
Account Year. Thereafter, the Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
(transfer from original GRA III NBR/GAA III NBR -- Series III)
P-13099(SBR)(MBR)(NBR)conv.4
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be at
least equal to a minimum annual Contribution of $300 (for Code Section
401(a) Contributions) and $200 (for Code Section 403(b) Contributions) per
Participant in any full Contract Year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
applicable Plan and by applicable provisions of the Code and Regulations
issued thereunder. It shall not be the responsibility of AUL to determine
the existence or amount of Excess Contributions or gains or losses thereon,
or that returns of Excess Contributions or gains or losses thereon are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL may
rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to the
"General Withdrawal Provisions" discussed below.
(c) Contributions received at AUL's Home Office shall be identified by the
Contractholder and shall be credited to the appropriate subaccounts of each
of the Participant Accounts as directed by the Contractholder in written
allocation instructions. Code Section 403(b) Contributions shall be
identified as Elective Deferrals, Employee Mandatory Contributions, or
Employer Contributions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable by AUL by the Contractholder or by that person designated in
writing to AUL by the Contractholder. If no Investment Option election is
made with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment Option
election applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an Investment Option
election with respect to future allocations to the applicable Participant
Account by giving new Investment Option elections to AUL at its Home Office
in a form acceptable to AUL.
(e) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option elections regarding
the initial Contribution.
(f) (1) For Code Section 401(a) Contributions: If the data required to
establish a Participant Account and instructions regarding the amount
of a Contribution for the Participant are not received by AUL at its
Home Office as of the date AUL receives that Contribution, AUL shall
allocate that Contribution to a suspense account within AUL's general
asset account, which shall earn interest at rates equal to the Current
Rates of Interest which would have been earned had such Contributions
been allocated to the Fixed Interest Account on the date such
Contribution was allocated to the suspense account.
(2) For Code Section 403(b) Contributions: If the data required to
establish a Participant Account and instructions regarding the amount
of a Contribution for the Participant are not received by AUL at its
Home Office within 5 business days after AUL first receives that
Contribution, AUL shall return that Contribution to the Contractholder
unless the Contractholder consents to AUL retaining that Contribution
until the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that Contribution
to the Participant Account or (ii) 25 days from the date that
Contribution is received by AUL.
(g) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding the
amount of a Contribution for the Participant are received, but an
Investment Option election form for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution, AUL
shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is the AUL
American Money Market Investment Account.
(h) Under paragraphs (f)(1) and (g), if AUL subsequently receives the data
required to establish the Participant Account, instructions regarding the
amount of the Contribution for the Participant, and an Investment Option
election form, AUL shall then transfer such amounts allocated pursuant to
those paragraphs, plus gains or minus losses thereon, to another Investment
Option, if such election form so directs.
P-13099(SBR)(MBR)(NBR)conv.5
(i) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of business
on the later of (1) the Valuation Period in which AUL receives that
Contribution at its Home Office or (2) the Valuation Period in which AUL
receives, at its Home Office, the data required to establish the
Participant Account, instructions regarding the amount of that Contribution
for the Participant, and Investment Option elections.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible Mutual
Funds or Mutual Fund Portfolios and to substitute shares of, or interests
in, another Portfolio of the AUL American Series Fund, Inc., another
open-end, registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
Contract, if the shares of any or all eligible Mutual Funds or Mutual Fund
Portfolios are no longer available for investment or if further investment
in any or all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares attributable to the Contractholder's interest in the Variable
Account or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following the
filing or other procedures established by applicable state insurance
regulators. Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts on
the basis of requests made by a majority of other contractholders or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund or Mutual Fund
Portfolio listed in the current prospectus for the Variable Account, or in
other securities or investment vehicles. AUL reserves the right to
eliminate or combine existing Investment Accounts if marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
P-13099(SBR)(MBR)(NBR)conv.6
<PAGE>
Transfers:
(a) Subject to the limitations of (d) through (f) below, the Contractholder, or
that person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period. Any
transfer from an Investment Account shall be effective as of the close of
business on the Valuation Date that AUL receives such transfer direction.
(b) AUL shall make the transfer as requested within 3 days from the date a
proper request is received by AUL at its Home Office, except as AUL may be
permitted to defer such payment of amounts withdrawn from the Variable
Account in accordance with appropriate provisions of the federal securities
laws. AUL reserves the right to defer a transfer of amounts from the Fixed
Interest Account for a period of up to 6 months after AUL receives the
transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis.
(d) Daily transfer directions may be made with respect to any single
Participant Account.
(e) The minimum transfer from the Participant Account's share of any Investment
Option is the lesser of $500 or the Participant Account's entire share of
that Investment Option as of the close of business on the Valuation Date
that AUL receives that transfer direction at its Home Office. However, if
that transfer reduces the Participant Account's remaining share of that
Investment Option to less than $500, the entire remaining share shall also
be transferred.
(f) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the later of the Contract Date identified in the Contract or the Contract
Anniversary immediately preceding the request for transfer. Notwithstanding
the previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date identified in the Contract or the Contract Anniversary
immediately preceding the request for transfer, the amount transferrable
from the Fixed Interest Account for that Contract Year is the lesser of
$500 or the Participant Account's entire share of the Fixed Interest
Account. And if that transfer reduces the Participant Account's remaining
share of the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
(g) Notwithstanding any provision of the "Contribution" section discussed
above, amounts which have been transferred to a Participant Account under
the Contract from other group annuity contracts issued by AUL shall be
deposited in the Fixed Interest Account. Other amounts which have been
transferred to the Contract shall be allocated in accordance with the
provisions of the "Contribution" section.
(h) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge on
a transfer.
(i) The Contractholder, in accordance with Plan provisions, may direct AUL to
reallocate all or a portion of the Account Value of any Participant Account
among other Participant Accounts. The Contractholder shall certify that
such reallocation is in accordance with Plan provisions.
(j) If permitted under the Plan, AUL shall accept amounts transferred from
other contracts. Such transferred amounts shall be credited as directed by
the Contractholder to a separate rollover subaccount established under the
appropriate Participant Accounts. Amounts transferred to a Code Section
403(b) Contribution rollover subaccount of a Participant Account must be
attributable to contributions made pursuant to Code Section 403(b).
BENEFITS
General Withdrawal Provisions: Subject to the following provisions of this
section, at any time prior to termination of the contract pursuant to the
provisions of the "Contract Termination" section discussed below, the
Contractholder may direct AUL to withdraw all or a portion of a Participant
Account, pursuant to the "'Benefit Responsive' Plan Benefits and Annuities" and
"Other Plan Benefits Payable in Cash" sections discussed below, to provide Plan
benefits (other than Plan termination benefits). Such Contractholder direction
must be submitted to AUL at its Home Office in a form acceptable to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under another
Code Section 403(b) annuity contract may be withdrawn to provide such
benefits.
(b) Amounts attributable to Code Section 403(b) Contributions made other than
pursuant to a salary reduction agreement (within the meaning of Code
Section 402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Code Section 403(b) Contributions made pursuant to
a salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age 59
1/2, separated from service, died, become totally disabled (as defined by
the Plan), or experienced a hardship (as defined by the Plan). However, in
the case of a hardship withdrawal, any gain credited to such Contributions
may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred directly by
AUL pursuant to Contractholder or Participant instructions to another Code
Section 403(b) tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for purposes
of the section on "'Benefit Responsive' Plan Benefits and Annuities"
discussed below, but instead is a Contract termination as to that amount
for that Participant; and any such withdrawal shall be subject to
application of the Withdrawal Charge pursuant to the section on "Other Plan
Benefits Payable in Cash" discussed below. The Contractholder grants to a
Participant the right to direct the withdrawal and direct transfer of such
Participant's voluntary Elective Deferrals (as determined by the
Contractholder) to another Code Section 403(b) tax-deferred annuity funding
vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T
Q&A-2, the distributee of any eligible rollover distribution elects to have
the distribution paid directly to an eligible retirement plan (as defined
in Q&A-1 of that Section) and specifies the eligible retirement plan to
which the distribution is to be paid, then the distribution shall be paid
to that eligible retirement plan in a direct rollover.
<PAGE>
(f) AUL shall not be responsible for determining a Participant's compliance
with the requirements above. Any withdrawal request submitted by the
Contractholder shall include certification as to the purpose of the
withdrawal. The Contractholder assumes full responsibility for determining
whether any withdrawal is permitted under applicable law and under the
terms of a particular Plan. AUL may rely solely upon the representations of
the Contractholder made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to the sections on "'Benefit Responsive' Plan Benefits and
Annuities," "Other Plan Benefits Payable in Cash," and "Annuity Options"
discussed below shall be determined, as of the close of business on the
Valuation Date that AUL receives a proper withdrawal request (or due proof
of death, if received later), in a form acceptable to AUL, at its Home
Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever the
Contractholder directs within 3 days from the appropriate Valuation Date as
determined in paragraph (h) above, except as AUL may be permitted to defer
such payment of amounts withdrawn from the Variable Account in accordance
with appropriate provisions of the federal securities laws. AUL reserves
the right to defer the payment of amounts withdrawn from the Fixed Interest
Account for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be withdrawn first.
"Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided above in "General Withdrawal
Provisions," and subject to the provisions of paragraph (b) below for death
benefits, at any time prior to termination of the contract pursuant to the
provisions of the section on "Contract Termination" discussed below, the
Contractholder may direct AUL to withdraw all or a portion of the Account
Value (subject to the charges discussed in the last paragraph of the "Other
Charges" section discussed below) of a Participant Account for the purpose
of providing:
(1) an annuity in accordance with the "Annuity Options" shown below, as
directed by the Contractholder, for benefits as provided by the Plan
(other than Plan termination benefits); or
P-13099(SBR)(MBR)(NBR)conv.7
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9) and
Regulations issued thereunder, or (for Code Section 403(b) plans or
profit-sharing plans) benefits upon attainment of age 59 1/2 or (for
profit-sharing plans) after a fixed number of years (as allowed by the
Code and Regulations issued thereunder and by applicable IRS rulings),
provided that such benefit upon attainment of age 59 1/2 or after a
fixed number of years is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and Annuities."
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value, minus
any charges discussed below in the last paragraph of "Other Charges." If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the
(SBR)
P-13099(SBR)(MBR)(NBR)conv.8
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan;
or
(3) providing the Participant has attained (1) age 55 and has 10 years of
service with the employer identified in the Plan or (2) age 62, a cash
lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9) and
Regulations issued thereunder, or (for profit-sharing plans) benefits
upon attainment of age 59 1/2 or after a fixed number of years (as
allowed by the Code and Regulations issued thereunder and by
applicable IRS rulings), provided that such benefit upon attainment of
age 59 1/2 or after a fixed number of years is a taxable distribution
paid to the Participant and not to any other person or entity,
including any substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraphs (a)(2) and (3) of "'Benefit Responsive' Plan Benefits and
Annuities." If it is necessary to withdraw the entire Account Value of a
Participant Account to make such payment, the amount paid shall equal the
Withdrawal Value, minus any charges discussed below in the last paragraph of
"Other Charges." If it is not necessary to withdraw the entire Account Value to
make such payment, AUL shall reduce the Account Value of the
(MBR)
P-13099(SBR)(MBR)(NBR)conv.11
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and Annuities."
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value, minus
any charges discussed below in the last paragraph of "Other Charges." If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the
(NBR)
P-13099(SBR)(MBR)(NBR)conv.11
<PAGE>
Participant Account by an amount sufficient to make the cash payment requested
and to cover the Withdrawal Charge and any charges discussed below in the last
paragraph of "Other Charges."
Notwithstanding the previous paragraph, in the first Contract Year in which a
Participant Account is established, the Contractholder may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In the next succeeding Contract Year, the Contractholder may
also withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus Contributions made
during that Contract Year, without application of the Withdrawal Charge. In any
subsequent Contract Year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account (determined
as of the Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
Election of Annuity Options: At the written request of the Contractholder
pursuant to paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and
Annuities," AUL shall apply all or a portion of the Account Value (subject to
any charges discussed below in the last paragraph of "Other Charges") of a
Participant Account for the purpose of providing a fixed payment annuity under
the Plan. Upon receipt of a request for an annuity, AUL is hereby authorized by
the Contractholder to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date provided in
paragraph (h) of the "General Withdrawal Provisions" section discussed above.
Such transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Contractholder request shall
include certification as to the purpose for the annuity, the election of one of
the following annuity options, notification of the Annuity Commencement Date,
written designation of the contingent annuitant or beneficiary, and any election
forms needed in connection with any benefit option requested. The amount of any
annuity shall be computed from the Table of Immediate Annuities then included in
the Contract, except as provided below under "Alternate Nonparticipating
Retirement Annuity."
Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the annuitant's
monthly annuity shall be paid to the contingent annuitant named in the
election for as long as the contingent annuitant lives. An election of this
option is automatically cancelled if either the Participant or the
contingent annuitant dies before the Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable to
the annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the death of
the annuitant, the sum of the monthly payments previously received is less
than the amount applied to provide the annuity, monthly payments of the
same amount shall continue to the annuitant's beneficiary until the total
of the monthly payments received equals such amount.
<PAGE>
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option to
elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) of this section, but shall be paid in a lump
sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less frequent
basis or to pay the Account Value in a single sum.
Due Proof of Date of Birth and Survival: Before commencing payments under any
annuity, AUL may require proof of the date of birth of any annuitant and may
require due proof that any annuitant is living before the payment of each or any
installment under the option.
VALUATIONS
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated, as
allowed above under paragraph (e) of the section on "Contributions," on the next
succeeding Valuation Period, the unit value as of the end of that Valuation
Period shall be used. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, and any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of termination, the Contractholder, together with the Plan
sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) Payment options for Code Section 401(a) funds are as follows:
<PAGE>
(1) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts attributable to Code Section 401(a) funds,
reduced by the Investment Liquidation Charge applicable to the Fixed
Interest Account, shall be calculated as of the close of business on
the effective date of termination and shall be payable within 3 days
from the effective date of termination, except as AUL may be permitted
to defer such payment in accordance with appropriate provisions of the
federal securities laws.
(2) If option (1) above is not elected, Code Section 401(a) funds shall be
paid out pursuant to the same provisions listed in (b) below for Code
Section 403(b) funds.
(b) Payment of Code Section 403(b) funds shall be made as follows:
(1) A single sum equal to that portion of the aggregate Withdrawal Value
of all Participant Accounts attributable to Code Section 403(b) funds
(and Code Section 401(a) funds, if payable pursuant to (a)(2) above)
and consisting of all of the Accumulation Units of each Investment
Account credited to such Participant Accounts shall be calculated as
of the close of business on the effective date of termination and
shall be payable within 3 days from the effective date of termination,
except as AUL may be permitted to defer such payment in accordance
with appropriate provisions of the federal securities laws.
(2) In addition to the amount payable pursuant to (1) above, commencing on
the first Contract Anniversary immediately following the effective
date of termination, a portion of each Participant Account (including
Code Section 401(a) funds invested in the Fixed Interest Account, if
payable pursuant to (a)(2) above) shall be paid in annual installments
as follows:
(i) As of the first Contract Anniversary immediately following the
effective date of termination, one-seventh of that portion of the
Withdrawal Value of each Participant Account attributable to Code
Section 403(b) funds and consisting of the net dollar balance in
the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(ii) As of the second Contract Anniversary following the effective
date of termination, one-sixth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
(iii) As of the third Contract Anniversary following the effective
date of termination, one-fifth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
(iv) As of the fourth Contract Anniversary following the effective
date of termination, one-fourth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
(v) As of the fifth Contract Anniversary following the effective date
of
<PAGE>
termination, one-third of that portion of the Withdrawal Value of
each Participant Account attributable to Code Section 403(b)
funds and consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
(vi) As of the sixth Contract Anniversary following the effective date
of termination, one-half of that portion of the Withdrawal Value
of each Participant Account attributable to Code Section 403(b)
funds and consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
(vii) As of the seventh Contract Anniversary following the effective
date of termination, the entire remaining portion of the
Withdrawal Value of each Participant Account attributable to Code
Section 403(b) funds and consisting of the net dollar balance in
the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
The Current Rates of Interest being credited to other contracts with
the same form number as the Contract shall be credited from the
effective date of termination until the final payment is made
under (b) above.
Until such time as the above-referenced election is implemented, the terms of
the Contract remain applicable, except that AUL has the right to refuse to
accept further Contributions.
Termination by AUL:
(a) AUL has the right, subject to applicable state law, to terminate any
Participant Account established under the Contract at any time during the
Contract Year if the Account Value of such Participant Account is less than
$200 for the first Contract Year in which a Contribution is made for the
Participant, and $400 for any subsequent Contract Year, and at least 6
months have elapsed since the Contractholder's last previous Contribution
to the Contract. If AUL elects to terminate a Participant Account in such
event, such termination shall be effective on the date 6 months following
the date that AUL gives notice to the Contractholder and the Participant
that the Participant Account is to be terminated, provided that any
Contributions made during such 6- month period are insufficient to bring
such Account Value up to the minimum level.
(b) Upon termination of a Participant Account by AUL, AUL may elect to have a
single sum equal to the Account Value of the Participant Account calculated
as of the close of business on the effective date of termination and paid
to the Contractholder within 3 days from the effective date of termination.
Any such payment shall be in full settlement of the Participant Account
under the Contract and in lieu of any other payment under its terms.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity.
AUL is not obligated to make any payment or distribution except as specified in
the Contract.
Certification of Plan Status: The Contractholder certifies, upon acceptance of
the Contract, that, in the Contractholder's opinion, the Code Section 401(a)
Plan and the Code Section 403(b) Plan meet the requirements of Code Sections
401(a) and 403(b), respectively. AUL does not make any guarantee regarding the
federal, state, or local tax status of the Contract, any Participant Account
established thereunder, or any transaction involving the Contract.
Essential Data: The Contractholder must furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each Contract Quarter, AUL shall prepare a statement of the Account Value
of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to the
Contractholder or to any person or entity when directed to do so in writing by
the Contractholder. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual Fund
or Mutual Fund Portfolio held in the Investment Accounts at any regular and
special meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of a Mutual
Fund or Mutual Fund Portfolio in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund or Mutual
Fund Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required by
applicable law, AUL will vote its own shares in the same proportion as the
voting instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the number of
Mutual Fund or Mutual Fund Portfolio shares as to which voting instructions
may be given to AUL is determined by dividing the value of all of the
Accumulation Units of the corresponding Investment Account attributable to
the Contract on a particular date by the net asset value per share of that
Mutual Fund or Mutual Fund Portfolio as of the same date. Fractional votes
will be counted. The number of votes as to which voting instructions may be
given will be determined as of the date coincident with the date
established by the applicable Mutual Fund or Mutual Fund Portfolio for
determining shareholders eligible to vote at the meeting of that Mutual
Fund. If required by the Securities and Exchange Commission, AUL reserves
the right to determine in a different fashion the voting rights
attributable to the shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights will receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of the
vested portion (as determined pursuant to the Code Section 403(b) Plan) of Code
Section 403(b) funds of a Participant Account under the Contract is
nonforfeitable at all times. No sum payable under the Contract which is
attributable to Code Section 403(b) funds with respect to a Participant may be
sold, assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person or
entity other than AUL. In addition, to the extent permitted by law, no such sum
shall in any way be subject to legal process requiring the payment of any claim
against the payee.
Acceptance of New Contributions: AUL reserves the right to refuse to accept new
Contributions to the Contract at any time.
P-13099(SBR)(MBR)(NBR)conv.12
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By: /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 4.7
TDA EMPLOYER SPONSORED/QUALIFIED NEW MULTIPLE FUND VA CONTRACT, FORM P-14020
- --------------------------------------------------------------------------------
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
DATE OF ISSUE JULY 1, 1995
CONTRACT DATE JULY 1, 1995
FIRST CONTRACT ANNIVERSARY JULY 1, 1996
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
This contract is signed for AUL at its Home Office in Indianapolis, Indiana by
the parties identified below:
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
Employer-Sponsored TDA and Qualified Plan Multiple-Fund Group Variable Annuity
Nonparticipating
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-14020(SBR)(MBR)(NBR)
<PAGE>
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
DATE OF ISSUE JULY 1, 1995
CONTRACT DATE JULY 1, 1995
FIRST CONTRACT ANNIVERSARY JULY 1, 1996
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract. This contract is issued in consideration of the
application and of the payment of Contributions to AUL. All provisions and
conditions stated on this and subsequent pages are made a part of this contract.
This contract is signed for AUL at its Home Office in Indianapolis, Indiana by
the parties identified below:
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
Employer-Sponsored TDA and Qualified Plan Multiple-Fund Group Variable Annuity
Nonparticipating
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-14020 (Oklahoma) (SBR)(MBR)(NBR)
WARNING: Any person who knowingly, and with intent to injure, defraud or deceive
any insurer, makes any claim for the proceeds of an insurance policy containing
any false, incomplete or misleading information is guilty of a felony.
P-14020 (Oklahoma) (SBR)(MBR)(NBR)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
3.6--------Reallocation of Participant Accounts
3.7--------Transferred Amounts
ARTICLE 4 BENEFITS
4.1--------General Withdrawal Provisions
4.2--------"Benefit Responsive" Plan Benefits and Annuities
4.3--------Other Plan Benefits Payable in Cash
4.4--------Election of Annuity Options
4.5--------Annuity Options
4.6--------Guaranteed Rate of Interest
4.7--------Alternate Nonparticipating Retirement Annuity
4.8--------Minimum Payments
4.9--------Due Proof of Date of Birth and Survival
ARTICLE 5 VALUATIONS
5.1--------Valuation of Mutual Fund or Mutual Fund Portfolio Assets
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Mutual Fund or Mutual Fund Portfolio Expenses
6.3--------Transfer Charge
6.4--------Other Charges
6.5--------Reduction or Waiver of Withdrawal Charge
P-14020(SBR)(MBR)(NBR).1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Guaranteed Rate of Interest
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Withdrawal Charge
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 TERMINATION OF CONTRACT
8.1--------Right of Contractholder to Terminate
8.2--------Payment Due to Termination by Contractholder
8.3--------Right of AUL to Terminate
8.4--------Payment Due to Termination by AUL
ARTICLE 9 MISCELLANEOUS
9.1--------Ownership
9.2--------AUL's Annual Statement
9.3--------Certification of Plan Status
9.4--------Essential Data
9.5--------Reliance
9.6--------Misstatement of Essential Data
9.7--------Assignment by Contractholder
9.8--------Annuity Certificates
9.9--------Election, Notice, or Direction Requirements
9.10-------Quarterly Statement of Account Value
9.11-------Conformity with State Laws
9.12-------Reference to Federal Laws
9.13-------Sex and Number
9.14-------Facility of Payment
9.15-------Insulation from Liability
9.16-------Voting
9.17-------Acceptance of New Participants or Contributions
9.18-------Nonforfeitability and Nontransferability
9.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
SCHEDULE A
P-14020(SBR)(MBR)(NBR).2
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's Code Section 401(a)
subaccounts' share of the Fixed Interest Account on that date; plus
(b) the balance of the Participant Account's Code Section 403(b)
subaccounts' share of the Fixed Interest Account on that date; plus
(c) the value of the Participant Account's Code Section 401(a)
subaccounts' Accumulation Units in each Investment Account on that
date; plus
(d) the value of the Participant Account's Code Section 403(b)
subaccounts' Accumulation Units in each Investment Account on that
date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which an
annuity begins under this contract. However, for any Participant, this date
shall not be later than the required beginning date as defined in the
applicable sections of the Code and Regulations issued thereunder.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid to AUL pursuant to the Contractholder's
Code Section 401(a) Plan or 403(b) Plan, including amounts transferred to
this contract from another AUL group annuity contract, which are credited
to a Participant Account maintained hereunder.
The following types of Code Section 403(b) Contributions shall be credited
to individual subaccounts under the Participant Account:
(a) "Elective Deferrals," which means, with respect to any taxable year,
any Contribution made under a salary reduction agreement. A
Contribution made under a salary reduction agreement shall not be
treated as an Elective Deferral if, under the salary reduction
agreement, such Contribution is made pursuant to a one-time
irrevocable election made by the Participant at the time of initial
eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made
under a salary reduction agreement pursuant to a one-time irrevocable
election made by the Participant at the time of initial eligibility to
participate in the agreement, or is made pursuant to a similar
arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
1.10 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time-to-time and as credited to
each interest pocket maintained within the Fixed Interest Account. The Current
Rates of Interest shall always be equal to or greater than the Guaranteed Rate
of Interest.
1.11 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
1.12 "Fixed Interest Account" means that portion of AUL's general asset account
in which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding amounts
transferred from another AUL contract), to the Fixed Interest Account
shall be credited to the open interest pocket and shall earn interest
at the Current Rate of Interest in effect for that interest pocket.
Such Contributions or transferred amounts, during the time that the
Current Rate of Interest exceeds the Guaranteed Rate of Interest,
shall earn interest at such credited Current Rate of Interest for at
least 1 year. After such 1-year period, AUL reserves the right to
declare, at any time, a new Current Rate of Interest to be applied to
funds held within that interest pocket. Any such new Current Rate of
Interest must remain in effect for that interest pocket for at least 1
year.
(b) If AUL changes the Current Rate of Interest for such new Contributions
or such new amounts transferred to the Fixed Interest Account, the
previous open interest pocket shall close, and any such Contributions
or amounts transferred on or after the effective date of such change
shall be credited to a new open interest pocket and shall earn
interest at the new Current Rate of Interest in effect for such new
open interest pocket. Therefore, at any given time, various funds
credited to a Participant Account and allocated to the Fixed Interest
Account may be earning interest at different Current Rates of Interest
for different periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148. The telephone number is
1-800-634-1629.
1.15 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
1.16 "Investment Liquidation Charge" means a charge assessed by AUL which is
determined by multiplying a percentage times that portion of the Withdrawal
Value of each Participant Account which is to be paid under Section
8.2(b)(1)(i) from the Fixed Interest Account.
The percentage shall be 6 times (X-Y) where:
X = the Current Rate of Interest being credited by AUL, as of the date
of payment, to new Contributions; and
Y = the average rate of interest being credited by AUL, as of the date
of payment, to each affected Participant Account.
If Y is greater than X, the Investment Liquidation Charge shall be zero.
AUL's determination of the Investment Liquidation Charge shall be
conclusive.
1.17 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.18 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Participant" means any person reported to AUL by the Contractholder as
eligible for, and as participating in, a Plan, and for whom a Participant
Account is established.
1.20 "Participant Account" means an account established under this contract for
a Participant. Within each Participant Account, the Contractholder can
direct the establishment of one or more subaccounts as made available by
AUL. Contributions received by AUL shall be credited to Participant
Accounts and their subaccounts as AUL is directed in writing by the
Contractholder.
1.21 "Plan" includes the Plan Sponsor's Code Section 401(a) plan and its Code
Section 403(b) plan as they exist on the Contract Date, and any subsequent
amendment to them.
1.22 "Plan Sponsor" means ABC School.
1.23 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.24 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.25 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.26 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.27 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.2, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
1.28 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
P-14020(SBR)(MBR)(NBR).3
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. AUL is not a party
to, nor bound by, a Plan, trust, custodial agreement, or other agreement,
or any amendment or modification to any of the same. AUL is not a fiduciary
under this contract or under any such Plan, trust, custodial agreement, or
other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-14020(SBR)(MBR)(NBR).4
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $300 (for Code
Section 401(a) Contributions) and $200 (for Code Section 403(b)
Contributions) per Participant in any full Contract Year. AUL may
change the minimum annual Contribution acceptable under this contract,
but any such change shall apply only to individuals who become
Participants on or after the date of the change.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
or to whomever the Contractholder directs pursuant to the Plan upon
receipt by AUL at its Home Office of complete written instructions
from the Contractholder. Such written instructions must include the
amount to be withdrawn and returned, and certification that such
Contributions constitute Excess Contributions and that such returns
are permitted by the applicable Plan and by applicable provisions of
the Code and Regulations issued thereunder. It shall not be the
responsibility of AUL to determine the existence or amount of Excess
Contributions or gains or losses thereon, or that returns of Excess
Contributions or gains or losses thereon are permitted by the Plan and
by applicable provisions of the Code and Regulations. In withdrawing
and returning the identified amount, AUL may rely solely on such
written instructions and certification. Such a withdrawal and return
of Excess Contributions shall not be subject to Section 4.1.
3.2 How Contributions Are Handled:
(a) Contributions received at AUL's Home Office shall be identified by the
Contractholder and shall be credited to the appropriate subaccounts of
each of the Participant Accounts as directed by the Contractholder in
written allocation instructions. Code Section 403(b) Contributions
shall be identified as Elective Deferrals, Employee Mandatory
Contributions, or Employer Contributions.
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable by AUL by the Contractholder or by that person designated
in writing to AUL by the Contractholder. If no Investment Option
election is made with respect to a particular Contribution to any
Participant Account, AUL shall process such credits in accordance with
the Investment Option election applicable to the immediately preceding
Contribution. The Contractholder or such designated person may change
an Investment Option election with respect to future allocations to
the applicable Participant Account by giving new Investment Option
elections to AUL at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
<PAGE>
(d) (1) For Code Section 401(a) Contributions:
If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office as of the
date AUL receives that Contribution, AUL shall allocate that
Contribution to a suspense account within AUL's general asset
account, which shall earn interest at rates equal to the Current
Rates of Interest which would have been earned had such
Contributions been allocated to the Fixed Interest Account on the
date such Contribution was allocated to the suspense account.
(2) For Code Section 403(b) Contributions:
If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election form for that Participant is not received,
by AUL at its Home Office as of the date AUL receives that
Contribution, AUL shall allocate that Contribution to the Investment
Option election identified in the Participant's annuity enrollment
form, which is the AUL American Money Market Investment Account.
(f) Under Subsections (d)(1) and (e), if AUL subsequently receives the
data required to establish the Participant Account, instructions
regarding the amount of the Contribution for the Participant, and an
Investment Option election form, AUL shall then transfer such amounts
allocated pursuant to those Subsections, plus gains or minus losses
thereon, to another Investment Option, if such election form so
directs.
(g) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all
P-14020(SBR)(MBR)(NBR).5
<PAGE>
eligible Mutual Funds or Mutual Fund Portfolios are no longer
available for investment or if further investment in any or all
eligible Mutual Funds or Mutual Fund Portfolios becomes inappropriate
in view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
<PAGE>
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) Daily transfer directions may be made with respect to any single
Participant Account.
(b) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(c) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
(d) Notwithstanding any provisions of Section 3.2 to the contrary, amounts
which have been transferred to a Participant Account under this
contract from other group annuity contracts issued by AUL shall be
deposited in the Fixed Interest Account.
Amounts which have been transferred to this contract, except for
amounts transferred from other AUL group annuity contracts, shall be
allocated pursuant to the provisions of Section 3.2.
(e) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
3.6 Reallocation of Participant Accounts: The Contractholder, in accordance
with Plan provisions, may direct AUL to reallocate all or a portion of the
Account Value of any Participant Account among other Participant Accounts.
The Contractholder shall certify that such reallocation is in accordance
with Plan provisions.
<PAGE>
3.7 Transferred Amounts: If permitted under the Plan, AUL shall accept amounts
transferred from other contracts. Such transferred amounts shall be
credited as directed by the Contractholder to a separate rollover
subaccount established under the appropriate Participant Account. Amounts
transferred to a Code Section 403(b) Contribution rollover subaccount of a
Participant Account must be attributable to contributions made pursuant to
Code Section 403(b).
ARTICLE 4 - BENEFITS
4.1 General Withdrawal Provisions: Subject to the following provisions of this
Section, at any time prior to termination of the contract pursuant to
Article 8, the Contractholder may direct AUL to withdraw all or a portion
of a Participant Account pursuant to Sections 4.2 and 4.3 to provide Plan
benefits (other than Plan termination benefits). Such Contractholder
direction must be submitted to AUL at its Home Office in a form acceptable
to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under
another Code Section 403(b) annuity contract may be withdrawn to
provide such benefits.
(b) Amounts attributable to Code Section 403(b) Contributions made other
than pursuant to a salary reduction agreement (within the meaning of
Code Section 402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Code Section 403(b) Contributions made
pursuant to a salary reduction agreement (within the meaning of Code
Section 402(g)(3)(C)) may be withdrawn to provide such benefits,
provided that the withdrawal is made to provide a loan or that any
distribution of such amount shall not occur until the Participant has
either attained age 59 1/2, separated from service, died, become
totally disabled (as defined by the Plan), or experienced a hardship
(as defined by the Plan). However, in the case of a hardship
withdrawal, any gain credited to such Contributions may not be
withdrawn.
(d) Withdrawal of any amount from this contract which is transferred
directly by AUL pursuant to Contractholder or Participant instructions
to another Code Section 403(b) tax-deferred annuity funding vehicle
under applicable IRS rules and regulations is not the provision of a
Plan benefit for purposes of Section 4.2, but instead is a Contract
termination as to that amount for that Participant; and any such
withdrawal shall be subject to application of the Withdrawal Charge
pursuant to Section 4.3. The Contractholder hereby grants to a
Participant the right to direct the withdrawal and direct transfer of
such Participant's voluntary Elective Deferrals (as determined by the
Contractholder) to another Code Section 403(b) tax-deferred annuity
funding vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section
1.403(b)-2T Q&A-2, the distributee of any eligible rollover
distribution elects to have the distribution paid directly to an
eligible retirement plan (as defined in Q&A-1 of that Section) and
specifies the eligible retirement plan to which the distribution is to
be paid, then the distribution shall be paid to that eligible
retirement plan in a direct rollover.
<PAGE>
(f) AUL shall not be responsible for determining a Participant's
compliance with the requirements above. Any withdrawal request
submitted by the Contractholder shall include certification as to the
purpose of the withdrawal. The Contractholder assumes full
responsibility for determining whether any withdrawal is permitted
under applicable law and under the terms of a particular Plan. AUL may
rely solely upon the representations of the Contractholder made in the
withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.4) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan
(other than Plan termination benefits) for retirement, death,
disability, termination of employment, hardships, loans, required
minimum distribution benefits pursuant to Code Section 401(a)(9)
and Regulations issued thereunder, or (for Code Section 403(b)
plans or profit-sharing plans) benefits upon attainment of age 59
1/2 or (for profit-sharing plans) after a fixed number of years
(as allowed by the Code and Regulations issued thereunder and by
applicable IRS rulings), provided that such benefit upon
attainment of age 59 1/2 or after a fixed number of years is a
taxable distribution paid to the Participant and not to any other
person or entity, including any substitute funding medium.
P-14020(SBR)(MBR)(NBR).6
<PAGE>
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits); or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan; or
(3) providing the Participant has attained (1) age 55 and has 10
years of service with the employer identified in the Plan or (2)
age 62, a cash lump-sum payment to the Contractholder or to
whomever the Contractholder directs to pay benefits as provided
by the Plan (other than Plan termination benefits) for
retirement, disability, termination of employment, hardships,
loans, required minimum distribution benefits pursuant to Code
Section 401(a)(9) and Regulations issued thereunder, or (for
profit-sharing plans) benefits upon attainment of age 59 1/2 or
after a fixed number of years (as allowed by the Code and
Regulations issued thereunder and by applicable IRS rulings),
provided that such benefit upon attainment of age 59 1/2 or after
a fixed number of years is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(MBR)
P-14020(SBR)(MBR)(NBR).13
<PAGE>
(g) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.2, 4.3, or 4.4 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (h) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
4.2 "Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided in Section 4.1, and subject to the
provisions of Subsection (b) below for death benefits, at any time
prior to termination of the contract pursuant to the provisions of
Article 8, the Contractholder may direct AUL to withdraw all or a
portion of the Account Value (subject to Section 6.5) of a Participant
Account for the purpose of providing:
(1) an annuity in accordance with the Annuity Options shown in
Section 4.5, as directed by the Contractholder, for benefits as
provided by the Plan (other than Plan termination benefits), or
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the
Plan.
(NBR)
P-14020(SBR)(MBR)(NBR).13
<PAGE>
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.4) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.4) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2). If it is necessary
to withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.4 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.4 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
P-14020(SBR)(MBR)(NBR).14
<PAGE>
(b) Regarding death benefits specifically, notwithstanding the provisions
of Article 8, upon receipt at its Home Office of instructions in a
form acceptable to AUL from the Contractholder and of due proof of the
Participant's (and, if applicable, the beneficiary's) death during the
Accumulation Period, AUL shall apply the Account Value (subject to
Section 6.4) of the Participant Account for the purpose of providing a
death benefit under the Plan. The death benefit shall be paid to the
Participant's beneficiary according to the method of payment elected
by the beneficiary (unless such method of payment was previously
elected by the Participant). The Participant's beneficiary may also
designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below;
provided, however, that the entire Account Value (subject to
Section 6.4) must be paid to the beneficiary on or before
December 31 of the calendar year which contains the fifth
anniversary of the Participant's death, or
(2) as an annuity in accordance with the Annuity Options shown in
Section 4.5 over a period not to exceed the life or life
expectancy of the beneficiary. If the beneficiary is not the
Participant's surviving spouse, the annuity must begin on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died. If the beneficiary
is the Participant's surviving spouse, the annuity need not begin
before December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
4.3 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.1, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.2(a)(2) and (3). If it is
necessary to withdraw the entire Account Value of a Participant Account to
make such payment, the amount paid shall equal the Withdrawal Value, minus
any Section 6.4 charges. If it is not necessary to withdraw the entire
Account Value to make such payment, AUL shall reduce the Account Value of
the Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.4 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
(MBR)
P-14020(SBR)(MBR)(NBR).14
<PAGE>
Contractholder may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge.
4.4 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.2, AUL shall apply all or a portion of the Account
Value (subject to Section 6.4) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.1(h). Such
transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Contractholder request shall
include certification as to the purpose for the annuity, the election of
one of the following annuity options, notification of the Annuity
Commencement Date, written designation of the contingent annuitant or
beneficiary, and any election forms needed in connection with any benefit
option requested. The amount of any annuity shall be computed from the
Table of Immediate Annuities then included in this contract, except as
provided under Section 4.7.
4.5 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
<PAGE>
(f) Any other annuity options made available by AUL at the time the option
to elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) of this Section, but shall be paid in a
lump sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
4.6 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.7 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.8 Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.9 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
P-14020(SBR)(MBR)(NBR).15
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
P-14020(SBR)(MBR)(NBR).16
<PAGE>
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is the daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-14020(SBR)(MBR)(NBR).17
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.5(e). This charge would be
prorated among the Investment Options from which the amounts are
transferred in the same proportion that the amount transferred from the
Investment Option bears to the total amount transferred from all Investment
Options.
6.4 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.2 or 4.4
or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.5 Reduction or Waiver of Withdrawal Charge: AUL may reduce or waive the
amount of the Withdrawal Charge where the expenses associated with the sale
of this contract or the administrative costs associated with this contract
are reduced, or where this contract is sold to the directors or employees
of AUL or any of its affiliates, or to directors or any employees of the
AUL American Series Fund, Inc.
P-14020(SBR)(MBR)(NBR).18
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Guaranteed Rate of Interest: AUL has the right at
any time, upon delivery of written notice to the Contractholder, to change
the Guaranteed Rate of Interest. Any such change shall apply only to
Participant Accounts established on or after the effective date of such
change, and shall apply for the duration of such affected Participant
Accounts. Any change in the Guaranteed Rate of Interest shall not result in
a rate less than that prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Withdrawal Charge: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the
Withdrawal Charge set out in Section 1.27. Any such change to the
Withdrawal Charge shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the provisions
of Section 9.1, AUL reserves the right to amend this contract at any time,
without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to
comply with, or give the Contractholder or Participants the benefit of, any
provisions of federal or state laws, regulations, or rulings. Any such
amendment shall be stated in a written instrument and delivered to the
Contractholder.
P-14020(SBR)(MBR)(NBR).19
<PAGE>
ARTICLE 8 - TERMINATION OF CONTRACT
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
8.2 Payment Due to Termination by Contractholder:
(a) As of the effective date of termination of this contract by the
Contractholder pursuant to Section 8.1, the Contractholder, together
with the Plan Sponsor, may elect to have a payment or payments made
under the payment option or one of the payment options set out below
to whomever the Contractholder directs. Such payment or payments shall
be in full settlement of this contract and in lieu of any other
payment under its terms. In order for such an election to be
effective, it must include the Contractholder's and the Plan Sponsor's
agreement to indemnify and hold AUL harmless from any and all losses,
claims, or demands that may later arise or be asserted against AUL in
connection with the making of such a payment or payments and, if Code
Section 403(b) funds are to be transferred to a substitute funding
medium, such election must contain the Contractholder's certification
that such substitute funding medium meets the requirements of Code
Section 403(b) and the Regulations issued thereunder. This
Contractholder's and Plan Sponsor's agreement must be received by AUL
at its Home Office prior to payment of any termination benefits
provided by this Section 8.2.
(b) Upon termination of this contract by the Contractholder:
(1) Payment options for Code Section 401(a) funds are as follows:
(i) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts attributable to Code Section 401(a)
funds, reduced by the Investment Liquidation Charge
applicable to the Fixed Interest Account, shall be
calculated as of the close of business on the effective date
of termination and shall be payable within 7 days from the
effective date of termination, except as AUL may be
permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(ii) If option (i) above is not elected, Code Section 401(a)
funds shall be paid out pursuant to the same provisions
listed in Subsection 8.2(b)(2) below for Code Section 403(b)
funds.
(2) Payment of Code Section 403(b) funds shall be made as follows:
(i) A single sum equal to that portion of the aggregate
Withdrawal Value of all Participant Accounts attributable to
Code Section 403(b) funds (and Code Section 401(a) funds, if
payable pursuant to Subsection (b)(1)(ii) above) and
consisting of all of the Accumulation Units of each
Investment Account credited to such Participant Accounts
shall be calculated as of the close of business on the
effective date of termination and shall be payable within 7
days from the effective date of termination, except as AUL
may be permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(ii) In addition to the amount payable pursuant to Section
8.2(b)(2)(i) above, commencing on the first Contract
Anniversary immediately succeeding the effective date of
termination, a portion of each Participant Account
(including Code Section 401(a) funds invested in the Fixed
Interest Account, if payable pursuant to Subsection
(b)(1)(ii) above) shall be paid in annual installments as
follows:
(A) As of the first Contract Anniversary immediately
succeeding the effective date of termination,
one-seventh of that portion of the Withdrawal Value of
each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance
in the Fixed Interest Account credited to each such
Participant Account shall be calculated and shall be
payable.
(B) As of the second Contract Anniversary succeeding the
effective date of termination, one-sixth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(C) As of the third Contract Anniversary succeeding the
effective date of termination, one-fifth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(D) As of the fourth Contract Anniversary succeeding the
effective date of termination, one-fourth of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(E) As of the fifth Contract Anniversary succeeding the
effective date of termination, one-third of that
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
<PAGE>
(F) As of the sixth Contract Anniversary succeeding the
effective date of termination, one-half of that portion
of the Withdrawal Value of each Participant Account
attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(G) As of the seventh Contract Anniversary succeeding the
effective date of termination, the entire remaining
portion of the Withdrawal Value of each Participant
Account attributable to Code Section 403(b) funds and
consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
The Current Rates of Interest being credited to other
contracts of this class shall be credited from the effective
date of termination until the final payment is made under
this Subsection (b)(2)(ii).
Until such time as the above-referenced election is implemented, the
terms of the contract shall remain applicable, except that AUL shall
have the right to refuse to accept further Contributions.
8.3 Right of AUL to Terminate: AUL has the right, subject to applicable state
law, to terminate any Participant Account established under this contract
at any time during the Contract Year if the Account Value of such
Participant Account is less than $200 for the first Contract Year in which
a Contribution is made for the Participant, and $400 for any subsequent
Contract Year, and at least 6 months have elapsed since the last previous
Contribution to the contract. If AUL elects to terminate a Participant
Account in such event, such termination shall be effective on the date 6
months following the date that AUL gives notice to the Contractholder and
the Participant that the Participant Account is to be terminated, provided
that any Contributions made during such 6-month period are insufficient to
bring such Account Value up to the minimum level.
8.4 Payment Due to Termination by AUL: As of the effective date of termination
of a Participant Account by AUL pursuant to Section 8.3, AUL may elect to
have a payment made as set out below to the Contractholder. Any such
payment shall be in full settlement of the Participant Account under this
contract and in lieu of any other payment under its terms.
Upon termination of a Participant Account pursuant to Section 8.3, AUL may
elect to have a single sum equal to the Account Value of the Participant
Account calculated as of the close of business on the effective date of
termination and paid to the Contractholder within 7 days from such
effective date of termination.
P-14020(SBR)(MBR)(NBR).20
<PAGE>
ARTICLE 9 - MISCELLANEOUS
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
No other person or entity shall have any right, title, or interest in this
contract or to any amount received or credited under it until such right,
title, interest, or amount is actually made available to them.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.3 Certification of Plan Status: The Contractholder certifies, upon acceptance
of this contract, that, in the Contractholder's opinion, the Code Section
401(a) Plan and the Code Section 403(b) Plan meet the requirements of Code
Sections 401(a) and 403(b), respectively. If the Contractholder or Plan
Sponsor attempts to obtain Internal Revenue Service approval of a Plan as a
qualified Code Section 401(a) plan and fails to initially secure such
qualification of the Plan, or fails to retain such qualification, each
Participant Account's share of each Investment Account shall be withdrawn
and transferred to the Fixed Interest Account, and no amounts attributable
to this contract shall subsequently be placed in any Investment Account
until the Plan is again qualified.
AUL does not make any guarantee regarding the federal, state, or local tax
status of this contract, any Participant Account established hereunder, or
any transaction involving this contract.
9.4 Essential Data: The Contractholder shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity
or other benefit in each instance. The Contractholder shall report to AUL
any person for whom a payment becomes due under a Plan and the nature and
amount of such payment before the date on which such payment becomes due or
as soon thereafter as is practicable.
9.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL
by the Contractholder as acting on its behalf, or by a Participant. AUL
need not inquire as to the accuracy or completeness thereof.
9.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
<PAGE>
9.7 Assignment by Contractholder: The Contractholder may assign its interest in
Code Section 401(a) funds held in this contract, but any assignment must be
in writing, and AUL shall not be deemed to have knowledge of such
assignment unless the original or a duplicate is filed at the Home Office
of AUL. AUL shall not assume any responsibility for the validity of an
assignment.
9.8 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
9.9 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing, or in a form otherwise acceptable to AUL, and must be submitted to
and received by AUL at its Home Office before becoming effective.
9.10 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
9.11 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
9.12 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
9.13 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
9.14 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to the Contractholder or to any person or entity when
directed to do so in writing by the Contractholder. Any payment made by AUL
will fully discharge AUL to the extent of such payment.
9.15 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
9.16 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any
<PAGE>
regulations thereunder should be amended, or if the present
interpretation thereof should change, and as a result AUL determines
that it is permitted to vote the shares of a Mutual Fund or Mutual
Fund Portfolio in its own right, it may elect to do so. AUL will vote
shares of any Investment Account, if any, that it owns beneficially in
its own discretion, except that if a Mutual Fund or Mutual Fund
Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required
by applicable law, AUL will vote its own shares in the same proportion
as the voting instructions that are received in a timely manner for
contracts and Participant Accounts participating in the Investment
Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
9.17 Acceptance of New Participants or Contributions: AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time.
9.18 Nonforfeitability and Nontransferability: The entire Withdrawal Value of
the vested portion (as determined pursuant to the Code Section 403(b) Plan)
of Code Section 403(b) funds of a Participant Account under this contract
shall be nonforfeitable at all times. No sum payable under this contract
which is attributable to Code Section 403(b) funds with respect to a
Participant may be sold, assigned, discounted, or pledged as collateral for
a loan or as security for the performance of an obligation or for any other
purpose to any person or entity other than AUL. In addition, to the extent
permitted by law, no such sum shall in any way be subject to legal process
requiring the payment of any claim against the payee.
9.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the
third Thursday in February of each year at the hour of ten o'clock A.M.
Elections for directors shall be held at such annual meeting.
P-14020(SBR)(MBR)(NBR).21
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-14020(SBR)(MBR)(NBR).22
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology and PBHG Insurance Series Technology and
Communication Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-14020(SBR)(MBR)(NBR).23
<PAGE>
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's Code Section
403(b) tax-deferred annuity Plan and its Code Section 401(a) qualified
retirement Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA AND QUALIFIED PLAN MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your Contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-14021
<PAGE>
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's Code Section
403(b) tax-deferred annuity Plan and its Code Section 401(a) qualified
retirement Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
NOTICE OF 20 DAY RIGHT TO EXAMINE CONTRACT
Please read this certificate carefully. The Contractholder may return the
contract for any reason within twenty days after receiving it. If returned, the
contract shall be considered void from the beginning and any Contributions shall
be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA AND QUALIFIED PLAN MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your Contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
P-14021 (North Dakota)
<PAGE>
CONTRACT NUMBER GAXX,XXX
CONTRACTHOLDER ABC SCHOOL
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER 123-45-6789
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's Code Section
403(b) tax-deferred annuity Plan and its Code Section 401(a) qualified
retirement Plan, and that AUL has created an account in your name to receive
Contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction.
Any amendments to, or changes in, the Contract will be binding and conclusive on
each Participant and beneficiary.
This certificate is not itself the Contract, but is a certificate of
participation in the Contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
EMPLOYER-SPONSORED TDA AND QUALIFIED PLAN MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THE CONTRACT EXPLAINS THE
VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
If you have questions concerning your Contract, or wish to register a complaint,
you may reach AUL by calling 1-800-634-1629 or 1-800-338-9189.
WARNING: Any person who knowlingly, and with intent to injure, defraud or
deceive any insurer, makes any claim for the proceeds of an insurance policy
containing any false, incomplete or misleading information is guilty of a
felony.
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's Code Section 401(a) subaccounts'
share of the Fixed Interest Account on that date; plus
(b) the balance of the Participant Account's Code Section 403(b) subaccounts'
share of the Fixed Interest Account on that date; plus
(c) the value of the Participant Account's Code Section 401(a) subaccounts'
Accumulation Units in each Investment Account on that date; plus
(d) the value of the Participant Account's Code Section 403(b) subaccounts'
Accumulation Units in each Investment Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contract Anniversary" means the first day of the second Contract Year and each
subsequent Contract Year. Each Contract Anniversary after the First Contract
Anniversary identified in the Contract shall be the same day of the same month
as the day and month which is stated in the Contract for the First Contract
Anniversary.
"Contract Quarter" means each of the four successive intervals of three months,
the sum of which corresponds to a 12-month Contract Year.
"Contract Year" means, for the first such year, the period beginning with the
Contract Date and ending on the day immediately preceding the First Contract
Anniversary identified in the Contract, and for each succeeding Contract Year,
the period beginning with a Contract Anniversary and ending on the day
immediately preceding the next succeeding Contract Anniversary.
"Contributions" means amounts paid to AUL pursuant to the Contractholder's Code
Section 401(a) Plan or 403(b) Plan, including amounts transferred to the
Contract from another AUL group annuity contract, which are credited to a
Participant Account. The following types of Code Section 403(b) Contributions
are credited to individual subaccounts under the Participant Account:
<PAGE>
(a) "Elective Deferrals," which means, with respect to any taxable year, any
Contribution made under a salary reduction agreement. A Contribution made
under a salary reduction agreement shall not be treated as an Elective
Deferral if, under the salary reduction agreement, such Contribution is
made pursuant to a one-time irrevocable election made by the Participant at
the time of initial eligibility to participate in the agreement, or is made
pursuant to a similar arrangement involving a one-time irrevocable election
specified in Regulations issued under the Code.
(b) "Employee Mandatory Contributions," which means Contributions made under a
salary reduction agreement pursuant to a one-time irrevocable election made
by the Participant at the time of initial eligibility to participate in the
agreement, or is made pursuant to a similar arrangement involving a
one-time irrevocable election specified in Regulations issued under the
Code.
(c) "Employer Contributions," which means Contributions made by the
Participant's employer that are not made pursuant to (a) or (b) above.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder.
"Fixed Interest Account" means that portion of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding amounts
transferred from another AUL contract), to the Fixed Interest Account shall
be credited to the open interest pocket and shall earn interest at the
Current Rate of Interest in effect for that interest pocket. Such
Contributions or transferred amounts, during the time that the Current Rate
of Interest exceeds the Guaranteed Rate of Interest, shall earn interest at
such credited Current Rate of Interest for at least 1 year. After such
1-year period, AUL reserves the right to declare, at any time, a new
Current Rate of Interest to be applied to funds held within that interest
pocket. Any such new Current Rate of Interest must remain in effect for
that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions or
such new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any such Contributions or amounts
transferred on or after the effective date of such change shall be credited
to a new open interest pocket and shall earn interest at the new Current
Rate of Interest in effect for such new open interest pocket. Therefore, at
any given time, various funds credited to a Participant Account and
allocated to the Fixed Interest Account may be earning interest at
different Current Rates of Interest for different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148. The telephone number is
1-800-634-1629.
<PAGE>
"Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and identified
in Schedule A of the Contract. Schedule A of the Contract may be amended by AUL
from time to time as described in "Addition, Deletion, or Substitution of
Investments" below. Amounts allocated to any Investment Account identified in
Schedule A of the Contract shall be invested in the shares of the corresponding
Mutual Fund or Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
"Investment Liquidation Charge" means a charge assessed by AUL which is
determined by multiplying a percentage times that portion of the Withdrawal
Value of each Participant Account which is to be paid from the Fixed Interest
Account according to the "Contract Termination" provisions discussed below.
The percentage shall be 6 times (X-Y) where:
X = the Current Rate of Interest being credited by AUL, as of the date of
payment, to new Contributions; and
Y = the average rate of interest being credited by AUL, as of the date of
payment, to each affected Participant Account.
If Y is greater than X, the Investment Liquidation Charge shall be zero.
AUL's determination of the Investment Liquidation Charge shall be conclusive.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL, as listed in Schedule A.
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, a Plan, and for whom a Participant Account is
established.
"Participant Account" means an account established under the Contract for a
Participant. Within each Participant Account, the Contractholder can direct the
establishment of one or more subaccounts as made available by AUL. Contributions
received by AUL shall be credited to Participant Accounts and their subaccounts
as AUL is directed in writing by the Contractholder.
"Plan" includes the Plan Sponsor's Code Section 401(a) plan and its Code Section
403(b) plan as they exist on the Contract Date identified in the Contract, and
any subsequent amendment to them.
"Plan Sponsor" means ABC School.
"Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus for
that Mutual Fund, as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
P-14021.1
<PAGE>
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, other than withdrawals to provide
those benefits discussed below in "Benefit Responsive Plan Benefits and
Annuities," as provided by the Plan, where the percentage varies by the
Participant Account Year in which the withdrawal is made. The first Participant
Account Year begins on the date when AUL establishes a Participant Account and
credits the initial Contribution for the Participant and ends on the day
immediately preceding the next anniversary of such date. Each Participant
Account Year thereafter begins on such an anniversary date and ends on the day
immediately preceding the next succeeding anniversary date. The Withdrawal
Charge percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
(a) Contributions may vary in amount and frequency; however, they must be at
least equal to a minimum annual Contribution of $300 (for Code Section
401(a) Contributions) and $200 (for Code Section 403(b) Contributions) per
Participant in any full Contract Year.
(b) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
applicable Plan and by applicable provisions of the Code and Regulations
issued thereunder. It shall not be the responsibility of AUL to determine
the existence or amount of Excess Contributions or gains or losses thereon,
or that returns of Excess Contributions or gains or losses thereon are
permitted by the Plan and by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL may
rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to the
"General Withdrawal Provisions" discussed below.
(c) Contributions received at AUL's Home Office shall be identified by the
Contractholder and shall be credited to the appropriate subaccounts of each
of the Participant Accounts as directed by the Contractholder in written
allocation instructions. Code Section 403(b) Contributions shall be
identified as Elective Deferrals, Employee Mandatory Contributions, or
Employer Contributions.
<PAGE>
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable by AUL by the Contractholder or by that person designated in
writing to AUL by the Contractholder. If no Investment Option election is
made with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment Option
election applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an Investment Option
election with respect to future allocations to the applicable Participant
Account by giving new Investment Option elections to AUL at its Home Office
in a form acceptable to AUL.
(e) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option elections regarding
the initial Contribution.
(f) (1) For Code Section 401(a) Contributions: If the data required to
establish a Participant Account and instructions regarding the amount
of a Contribution for the Participant are not received by AUL at its
Home Office as of the date AUL receives that Contribution, AUL shall
allocate that Contribution to a suspense account within AUL's general
asset account, which shall earn interest at rates equal to the Current
Rates of Interest which would have been earned had such Contributions
been allocated to the Fixed Interest Account on the date such
Contribution was allocated to the suspense account.
(2) For Code Section 403(b) Contributions:
If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(g) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding the
amount of a Contribution for the Participant are received, but an
Investment Option election form for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution, AUL
shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is the AUL
American Money Market Investment Account.
(h) Under paragraphs (f)(1) and (g), if AUL subsequently receives the data
required to establish the Participant Account, instructions regarding the
amount of the Contribution for the Participant, and an Investment Option
election form, AUL shall then transfer such amounts allocated pursuant to
those paragraphs, plus gains or minus losses thereon, to another Investment
Option, if such election form so directs.
P-14021.2
<PAGE>
(i) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of business
on the later of (1) the Valuation Period in which AUL receives that
Contribution at its Home Office or (2) the Valuation Period in which AUL
receives, at its Home Office, the data required to establish the
Participant Account, instructions regarding the amount of that Contribution
for the Participant, and Investment Option elections.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible Mutual
Funds or Mutual Fund Portfolios and to substitute shares of, or interests
in, another Portfolio of the AUL American Series Fund, Inc., another
open-end, registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
Contract, if the shares of any or all eligible Mutual Funds or Mutual Fund
Portfolios are no longer available for investment or if further investment
in any or all eligible Mutual Funds or Mutual Fund Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
Contract. Where required under applicable law, AUL will not substitute any
shares attributable to the Contractholder's interest in the Variable
Account or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following the
filing or other procedures established by applicable state insurance
regulators. Nothing contained herein shall prevent the Variable Account
from purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts on
the basis of requests made by a majority of other contractholders or as
permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund or Mutual Fund
Portfolio listed in the current prospectus for the Variable Account, or in
other securities or investment vehicles. AUL reserves the right to
eliminate or combine existing Investment Accounts if marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
P-14021.3
<PAGE>
Transfers:
(a) Subject to the limitations of (d) through (f) below, the Contractholder, or
that person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period. Any
transfer from an Investment Account shall be effective as of the close of
business on the Valuation Date that AUL receives such transfer direction at
its Home Office.
(b) AUL shall make the transfer as requested within 7 days from the date a
proper request is received by AUL at its Home Office, except as AUL may be
permitted to defer such payment of amounts withdrawn from the Variable
Account in accordance with appropriate provisions of the federal securities
laws. AUL reserves the right to defer a transfer of amounts from the Fixed
Interest Account for a period of up to 6 months after AUL receives the
transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis.
(d) Daily transfer directions may be made with respect to any single
Participant Account.
(e) The minimum transfer from the Participant Account's share of any Investment
Option is the lesser of $500 or the Participant Account's entire share of
that Investment Option as of the close of business on the Valuation Date
that AUL receives that transfer direction at its Home Office. However, if
that transfer reduces the Participant Account's remaining share of that
Investment Option to less than $500, the entire remaining share shall also
be transferred.
(f) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the later of the Contract Date identified in the Contract or the Contract
Anniversary immediately preceding the request for transfer. Notwithstanding
the previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date identified in the Contract or the Contract Anniversary
immediately preceding the request for transfer, the amount transferrable
from the Fixed Interest Account for that Contract Year is the lesser of
$500 or the Participant Account's entire share of the Fixed Interest
Account as of the close of business on the Valuation Date that AUL receives
that transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest Account to
less than $500, the entire remaining share shall also be transferred.
(g) Notwithstanding any provision of the "Contribution" section discussed
above, amounts which have been transferred to a Participant Account under
the Contract from other group annuity contracts issued by AUL shall be
deposited in the Fixed Interest Account. Other amounts which have been
transferred to the Contract shall be allocated in accordance with the
provisions of the "Contribution" section.
(h) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge on
a transfer.
<PAGE>
(i) The Contractholder, in accordance with Plan provisions, may direct AUL to
reallocate all or a portion of the Account Value of any Participant Account
among other Participant Accounts. The Contractholder shall certify that
such reallocation is in accordance with Plan provisions.
(j) If permitted under the Plan, AUL shall accept amounts transferred from
other contracts. Such transferred amounts shall be credited as directed by
the Contractholder to a separate rollover subaccount established under the
appropriate Participant Accounts. Amounts transferred to a Code Section
403(b) Contribution rollover subaccount of a Participant Account must be
attributable to contributions made pursuant to Code Section 403(b).
BENEFITS
General Withdrawal Provisions: Subject to the following provisions of this
section, at any time prior to termination of the contract pursuant to the
provisions of the "Contract Termination" section discussed below, the
Contractholder may direct AUL to withdraw all or a portion of a Participant
Account, pursuant to the "'Benefit Responsive' Plan Benefits and Annuities" and
"Other Plan Benefits Payable in Cash" sections discussed below, to provide Plan
benefits (other than Plan termination benefits). Such Contractholder direction
must be submitted to AUL at its Home Office in a form acceptable to AUL.
(a) Amounts attributable to amounts held as of December 31, 1988 under another
Code Section 403(b) annuity contract may be withdrawn to provide such
benefits.
(b) Amounts attributable to Code Section 403(b) Contributions made other than
pursuant to a salary reduction agreement (within the meaning of Code
Section 402(g)(3)(C)) may be withdrawn to provide such benefits.
(c) Amounts attributable to Code Section 403(b) Contributions made pursuant to
a salary reduction agreement (within the meaning of Code Section
402(g)(3)(C)) may be withdrawn to provide such benefits, provided that the
withdrawal is made to provide a loan or that any distribution of such
amount shall not occur until the Participant has either attained age 59
1/2, separated from service, died, become totally disabled (as defined by
the Plan), or experienced a hardship (as defined by the Plan). However, in
the case of a hardship withdrawal, any gain credited to such Contributions
may not be withdrawn.
(d) Withdrawal of any amount from the Contract which is transferred directly by
AUL pursuant to Contractholder or Participant instructions to another Code
Section 403(b) tax-deferred annuity funding vehicle under applicable IRS
rules and regulations is not the provision of a Plan benefit for purposes
of the section on "'Benefit Responsive' Plan Benefits and Annuities"
discussed below, but instead is a Contract termination as to that amount
for that Participant; and any such withdrawal shall be subject to
application of the Withdrawal Charge pursuant to the section on "Other Plan
Benefits Payable in Cash" discussed below. The Contractholder grants to a
Participant the right to direct the withdrawal and direct transfer of such
Participant's voluntary Elective Deferrals (as determined by the
Contractholder) to another Code Section 403(b) tax-deferred annuity funding
vehicle.
(e) If, as provided in Internal Revenue Code Regulation Section 1.403(b)-2T
Q&A-2, the distributee of any eligible rollover distribution elects to have
the distribution paid directly to an eligible retirement plan (as defined
in Q&A-1 of that Section) and specifies the eligible retirement plan to
which the distribution is to be paid, then the distribution shall be paid
to that eligible retirement plan in a direct rollover.
<PAGE>
(f) AUL shall not be responsible for determining a Participant's compliance
with the requirements above. Any withdrawal request submitted by the
Contractholder shall include certification as to the purpose of the
withdrawal. The Contractholder assumes full responsibility for determining
whether any withdrawal is permitted under applicable law and under the
terms of a particular Plan. AUL may rely solely upon the representations of
the Contractholder made in the withdrawal request.
(g) Withdrawals from a Participant Account's share of any Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option as of the close of business
on the Valuation Date that AUL receives that withdrawal request (or due
proof of death, if received later) in a form acceptable to AUL, at its Home
Office. If a withdrawal reduces the Participant Account's share of an
Investment Option to less than $500, such remaining share shall also be
withdrawn.
(h) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to the sections on "'Benefit Responsive' Plan Benefits and
Annuities," "Other Plan Benefits Payable in Cash," and "Annuity Options"
discussed below shall be determined, as of the close of business on the
Valuation Date that AUL receives a proper withdrawal request (or due proof
of death, if received later), in a form acceptable to AUL, at its Home
Office.
(i) AUL shall pay any cash lump sum to the Contractholder or to whomever the
Contractholder directs within 7 days from the appropriate Valuation Date as
determined in paragraph (h) above, except as AUL may be permitted to defer
such payment of amounts withdrawn from the Variable Account in accordance
with appropriate provisions of the federal securities laws. AUL reserves
the right to defer the payment of amounts withdrawn from the Fixed Interest
Account for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(j) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be withdrawn first.
"Benefit Responsive" Plan Benefits and Annuities:
(a) Subject to the limitations provided above in "General Withdrawal
Provisions," and subject to the provisions of paragraph (b) below for death
benefits, at any time prior to termination of the contract pursuant to the
provisions of the section on "Contract Termination" discussed below, the
Contractholder may direct AUL to withdraw all or a portion of the Account
Value (subject to the charges discussed in the last paragraph of the "Other
Charges" section discussed below) of a Participant Account for the purpose
of providing:
(1) an annuity in accordance with the "Annuity Options" shown below, as
directed by the Contractholder, for benefits as provided by the Plan
(other than Plan termination benefits); or
P-14021.4
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9) and
Regulations issued thereunder, or (for Code Section 403(b) plans or
profit-sharing plans) benefits upon attainment of age 59 1/2 or (for
profit-sharing plans) after a fixed number of years (as allowed by the
Code and Regulations issued thereunder and by applicable IRS rulings),
provided that such benefit upon attainment of age 59 1/2 or after a
fixed number of years is a taxable distribution paid to the
Participant and not to any other person or entity, including any
substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and Annuities."
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value, minus
any charges discussed below in the last paragraph of "Other Charges." If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the
P-14021.5
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan;
or
(3) providing the Participant has attained (1) age 55 and has 10 years of
service with the employer identified in the Plan or (2) age 62, a cash
lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, disability,
termination of employment, hardships, loans, required minimum
distribution benefits pursuant to Code Section 401(a)(9) and
Regulations issued thereunder, or (for profit-sharing plans) benefits
upon attainment of age 59 1/2 or after a fixed number of years (as
allowed by the Code and Regulations issued thereunder and by
applicable IRS rulings), provided that such benefit upon attainment of
age 59 1/2 or after a fixed number of years is a taxable distribution
paid to the Participant and not to any other person or entity,
including any substitute funding medium.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraphs (a)(2) and (3) of "'Benefit Responsive' Plan Benefits and
Annuities." If it is necessary to withdraw the entire Account Value of a
Participant Account to make such payment, the amount paid shall equal the
Withdrawal Value, minus any charges discussed below in the last paragraph of
"Other Charges." If it is not necessary to withdraw the entire Account Value to
make such payment, AUL shall reduce the Account Value of the
(MBR)
P-14021.10
<PAGE>
(2) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan.
(b) Regarding death benefits specifically, notwithstanding the provisions of
the "Contract Termination" section discussed below, upon receipt at its
Home Office of instructions in a form acceptable to AUL from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall apply
the Account Value (subject to the charges discussed in the last paragraph
of the "Other Charges" section discussed below) of the Participant Account
for the purpose of providing a death benefit under the Plan. The death
benefit shall be paid to the Participant's beneficiary according to the
method of payment elected by the beneficiary (unless such method of payment
was previously elected by the Participant). The Participant's beneficiary
may also designate a beneficiary. The death benefit attributable to Code
Section 403(b) funds shall be payable:
(1) in a single sum or other method not provided in (2) below; provided,
however, that the entire Account Value (subject to the charges
discussed in the last paragraph of the "Other Charges" section
discussed below) must be paid to the beneficiary on or before December
31 of the calendar year which contains the fifth anniversary of the
Participant's death, or
(2) as an annuity in accordance with the "Annuity Options" shown below
over a period not to exceed the life or life expectancy of the
beneficiary. If the beneficiary is not the Participant's surviving
spouse, the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's surviving
spouse, the annuity need not begin before December 31 of the calendar
year in which the Participant would have attained age 70 1/2.
If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at least
as rapidly as prior to the Participant's death.
"Other Plan Benefits Payable in Cash": Subject to the limitations provided above
in "General Withdrawal Provisions," at any time prior to termination of the
contract pursuant to the provisions of the section on "Contract Termination"
discussed below, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the Contractholder
directs for the purpose of providing Plan benefits other than those provided
above in paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and Annuities."
If it is necessary to withdraw the entire Account Value of a Participant Account
to make such payment, the amount paid shall equal the Withdrawal Value, minus
any charges discussed below in the last paragraph of "Other Charges." If it is
not necessary to withdraw the entire Account Value to make such payment, AUL
shall reduce the Account Value of the
(NBR)
P-14021.10
<PAGE>
Participant Account by an amount sufficient to make the cash payment requested
and to cover the Withdrawal Charge and any charges discussed below in the last
paragraph of "Other Charges."
Notwithstanding the previous paragraph, in the first Contract Year in which a
Participant Account is established, the Contractholder may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of the
Withdrawal Charge. In the next succeeding Contract Year, the Contractholder may
also withdraw from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract Anniversary
immediately preceding the request for the withdrawal) plus Contributions made
during that Contract Year, without application of the Withdrawal Charge. In any
subsequent Contract Year, the Contractholder may withdraw from that Participant
Account up to 10% of the Account Value of that Participant Account (determined
as of the Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
Election of Annuity Options: At the written request of the Contractholder
pursuant to paragraph (a)(2) of "'Benefit Responsive' Plan Benefits and
Annuities," AUL shall apply all or a portion of the Account Value (subject to
any charges discussed below in the last paragraph of "Other Charges") of a
Participant Account for the purpose of providing a fixed payment annuity under
the Plan. Upon receipt of a request for an annuity, AUL is hereby authorized by
the Contractholder to value and transfer the Participant Account's share of the
Variable Account to the Fixed Interest Account as of the date provided in
paragraph (h) of the "General Withdrawal Provisions" section discussed above.
Such transferred amounts shall be held in the Fixed Interest Account until the
Participant's Annuity Commencement Date. The Contractholder request shall
include certification as to the purpose for the annuity, the election of one of
the following annuity options, notification of the Annuity Commencement Date,
written designation of the contingent annuitant or beneficiary, and any election
forms needed in connection with any benefit option requested. The amount of any
annuity shall be computed from the Table of Immediate Annuities then included in
the Contract, except as provided below under "Alternate Nonparticipating
Retirement Annuity."
Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the annuitant's
monthly annuity shall be paid to the contingent annuitant named in the
election for as long as the contingent annuitant lives. An election of this
option is automatically cancelled if either the Participant or the
contingent annuitant dies before the Annuity Commencement Date.
<PAGE>
(d) Installment Refund Life Annuity. The monthly annuity shall be payable to
the annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the death of
the annuitant, the sum of the monthly payments previously received is less
than the amount applied to provide the annuity, monthly payments of the
same amount shall continue to the annuitant's beneficiary until the total
of the monthly payments received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such fixed period.
(f) Any other annuity options made available by AUL at the time the option to
elect an annuity is exercised.
If the total Account Value is less than $2,000, such value shall not be
annuitized under options (a)-(f) of this section, but shall be paid in a lump
sum.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less frequent
basis or to pay the Account Value in a single sum.
Due Proof of Date of Birth and Survival: Before commencing payments under any
annuity, AUL may require proof of the date of birth of any annuitant and may
require due proof that any annuitant is living before the payment of each or any
installment under the option.
VALUATIONS
All assets of each Mutual Fund or Mutual Fund Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund or Mutual Fund
Portfolio as such prospectus may be amended or supplemented from time to time.
Any amounts allocated to any Investment Account on behalf of a Participant shall
be credited to his Participant Account in the form of Accumulation Units on the
basis of the value of such units in that Investment Account as of the later of
(1) the end of the Valuation Period on which such amounts are received by AUL at
its Home Office or (2) the end of the Valuation Period on which the data
required to establish the Participant Account and allocate such amounts to the
Participant Account and to Investment Options are received by AUL at its Home
Office. However, if the initial Contribution for a Participant is allocated, as
allowed above under paragraph (e) of the section on "Contributions," on the next
succeeding Valuation Period, the unit value as of the end of that Valuation
Period shall be used. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
<PAGE>
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, and any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of such termination, the Contractholder, together with the Plan
Sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) Payment options for Code Section 401(a) funds are as follows:
(1) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts attributable to Code Section 401(a) funds,
reduced by the Investment Liquidation Charge applicable to the Fixed
Interest Account, shall be calculated as of the close
P-14021.11
<PAGE>
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
A Mutual Fund or Mutual Fund Portfolio shall pay any investment advisory fee and
certain other expenses, which may include its ordinary operational and
organizational expenses, and any extraordinary expenses, as described in the
current prospectus for that Mutual Fund or Mutual Fund Portfolio as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Mutual Fund or Mutual Fund Portfolio share
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Mutual Fund or Mutual Fund Portfolio.
AUL reserves the right to deduct a charge for each transfer transaction or the
appropriate charges for federal, state, or local income taxes incurred by AUL
that are attributable to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
CONTRACT TERMINATION
Termination by Contractholder: The Contract will terminate if the Contractholder
gives written notice to AUL that the Contract is to be terminated. As of the
effective date of such termination, the Contractholder, together with the Plan
Sponsor, may elect to have a payment or payments made as set out below to
whomever the Contractholder directs. Such payment or payments shall be in full
settlement of the Contract and in lieu of any other payment under its terms.
Upon termination of the Contract by the Contractholder:
(a) Payment options for Code Section 401(a) funds are as follows:
<PAGE>
(1) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts attributable to Code Section 401(a) funds,
reduced by the Investment Liquidation Charge applicable to the Fixed
Interest Account, shall be calculated as of the close
(New Mexico)
P-14021.13
<PAGE>
of business on the effective date of termination and shall be payable
within 7 days from the effective date of termination, except as AUL
may be permitted to defer such payment in accordance with appropriate
provisions of the federal securities laws.
(2) If option (1) above is not elected, Code Section 401(a) funds shall be
paid out pursuant to the same provisions listed in (b) below for Code
Section 403(b) funds.
(b) Payment of Code Section 403(b) funds shall be made as follows:
(1) A single sum equal to that portion of the aggregate Withdrawal Value
of all Participant Accounts attributable to Code Section 403(b) funds
(and Code Section 401(a) funds, if payable pursuant to (a)(2) above)
and consisting of all of the Accumulation Units of each Investment
Account credited to such Participant Accounts shall be calculated as
of the close of business on the effective date of termination and
shall be payable within 7 days from the effective date of termination,
except as AUL may be permitted to defer such payment in accordance
with appropriate provisions of the federal securities laws.
(2) In addition to the amount payable pursuant to (1) above, commencing on
the first Contract Anniversary immediately following the effective
date of termination, a portion of each Participant Account (including
Code Section 401(a) funds invested in the Fixed Interest Account, if
payable pursuant to (a)(2) above) shall be paid in annual installments
as follows:
(i) As of the first Contract Anniversary immediately following the
effective date of termination, one-seventh of that portion of the
Withdrawal Value of each Participant Account attributable to Code
Section 403(b) funds and consisting of the net dollar balance in
the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
(ii) As of the second Contract Anniversary following the effective
date of termination, one-sixth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
(iii) As of the third Contract Anniversary following the effective
date of termination, one-fifth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
(iv) As of the fourth Contract Anniversary following the effective
date of termination, one-fourth of that portion of the Withdrawal
Value of each Participant Account attributable to Code Section
403(b) funds and consisting of the net dollar balance in the
Fixed Interest Account credited to each such Participant Account
shall be calculated and shall be payable.
<PAGE>
(v) As of the fifth Contract Anniversary following the effective date
of termination, one-third of that portion of the Withdrawal Value
of each Participant Account attributable to Code Section 403(b)
funds and consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
(vi) As of the sixth Contract Anniversary following the effective date
of termination, one-half of that portion of the Withdrawal Value
of each Participant Account attributable to Code Section 403(b)
funds and consisting of the net dollar balance in the Fixed
Interest Account credited to each such Participant Account shall
be calculated and shall be payable.
(vii) As of the seventh Contract Anniversary following the effective
date of termination, the entire remaining portion of the
Withdrawal Value of each Participant Account attributable to Code
Section 403(b) funds and consisting of the net dollar balance in
the Fixed Interest Account credited to each such Participant
Account shall be calculated and shall be payable.
The Current Rates of Interest being credited to other contracts with
the same form number as the Contract shall be credited from the
effective date of termination until the final payment is made under
(b) above.
Until such time as the above-referenced election is implemented, the terms of
the Contract remain applicable, except that AUL has the right to refuse to
accept further Contributions.
Termination by AUL:
(a) AUL has the right, subject to applicable state law, to terminate any
Participant Account established under the Contract at any time during the
Contract Year if the Account Value of such Participant Account is less than
$200 for the first Contract Year in which a Contribution is made for the
Participant, and $400 for any subsequent Contract Year, and at least 6
months have elapsed since the last previous Contribution to the Contract.
If AUL elects to terminate a Participant Account in such event, such
termination shall be effective on the date 6 months following the date that
AUL gives notice to the Contractholder and the Participant that the
Participant Account is to be terminated, provided that any Contributions
made during such 6- month period are insufficient to bring such Account
Value up to the minimum level.
(b) Upon termination of a Participant Account by AUL, AUL may elect to have a
single sum equal to the Account Value of the Participant Account calculated
as of the close of business on the effective date of termination and paid
to the Contractholder within 7 days from the effective date of termination.
Any such payment shall be in full settlement of the Participant Account
under the Contract and in lieu of any other payment under its terms.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity.
<PAGE>
AUL is not obligated to make any payment or distribution except as specified in
the Contract.
Certification of Plan Status: The Contractholder certifies, upon acceptance of
the Contract, that, in the Contractholder's opinion, the Code Section 401(a)
Plan and the Code Section 403(b) Plan meet the requirements of Code Sections
401(a) and 403(b), respectively. AUL does not make any guarantee regarding the
federal, state, or local tax status of the Contract, any Participant Account
established thereunder, or any transaction involving the Contract.
Essential Data: The Contractholder must furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in a
form otherwise acceptable to AUL, and must be submitted to and received by AUL
at its Home Office before becoming effective.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each Contract Quarter, AUL shall prepare a statement of the Account Value
of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to the
Contractholder or to any person or entity when directed to do so in writing by
the Contractholder. Any payment made by AUL will fully discharge AUL to the
extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual Fund
or Mutual Fund Portfolio held in the Investment Accounts at any
<PAGE>
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act of
l940 or other applicable laws. AUL shall exercise these voting rights based
on instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of a Mutual
Fund or Mutual Fund Portfolio in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund or Mutual
Fund Portfolio offers its shares to any insurance company separate account
that funds variable life insurance contracts or if otherwise required by
applicable law, AUL will vote its own shares in the same proportion as the
voting instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the number of
Mutual Fund or Mutual Fund Portfolio shares as to which voting instructions
may be given to AUL is determined by dividing the value of all of the
Accumulation Units of the corresponding Investment Account attributable to
the Contract on a particular date by the net asset value per share of that
Mutual Fund or Mutual Fund Portfolio as of the same date. Fractional votes
will be counted. The number of votes as to which voting instructions may be
given will be determined as of the date coincident with the date
established by the applicable Mutual Fund or Mutual Fund Portfolio for
determining shareholders eligible to vote at the meeting of that Mutual
Fund. If required by the Securities and Exchange Commission, AUL reserves
the right to determine in a different fashion the voting rights
attributable to the shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund or Mutual Fund Portfolio
shares.
(e) Every person or entity having such voting rights will receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund or Mutual
Fund Portfolio as may be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of the
vested portion (as determined pursuant to the Code Section 403(b) Plan) of Code
Section 403(b) funds of a Participant Account under the Contract is
nonforfeitable at all times. No sum payable under the Contract which is
attributable to Code Section 403(b) funds with respect to a Participant may be
sold, assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person or
entity other than AUL. In addition, to the extent permitted by law, no such sum
shall in any way be subject to legal process requiring the payment of any claim
against the payee.
Acceptance of New Contributions: AUL reserves the right to refuse to accept new
Contributions to the Contract at any time.
P-14021.14
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
(WASHINGTON STATE)
P-14021.15
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
AMENDMENT
TO THE
MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Section 6.1 and by substituting the following Section
6.1 in lieu thereof:
6.1 Mortality Risk and Expense Risk Charges; Annual Variable Investment Plus
Factors: AUL shall deduct a daily mortality risk charge and a daily expense
risk charge equal to the daily equivalent of an annual combined charge of
1.25% against the average daily net assets of each Investment Account.
These charges shall be reflected in the Net Investment Factor as provided
in Section 5.4(c).
AUL shall multiply the portions (as delineated in the table below) of the
total month-end Account Value in the Variable Account of all Participants
in the contract by the monthly equivalent of the corresponding Annual
Variable Investment Plus Factors appearing in the table below. These
products shall be added together, and the sum shall be divided by the total
month-end Account Value in the Variable Account of all Participants in the
contract. This percentage shall be multiplied by the month-end Account
Value of each Participant in each Investment Account. The resulting amount
for each Investment Account shall be added to the Participant's Account
Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
CONTRACTHOLDER AUL
By _______________________________ By: /s/ Jerry d. Semler
Chairman of the Board,
Title _____________________________ President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-XXXXX.AMD.DAC
<PAGE>
AMENDMENT
TO THE
GROUP ANNUITY CONTRACT
NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
THE CONTRACTHOLDER
Notwithstanding any other provisions of the Contract, AUL and the
Contractholder agree that the Contract is hereby amended as follows:
By adding the following provision, effective as of the later of the
Contract Date or January 1, 1996:
No Participant shall be permitted to have elective deferral contributions
(within the meaning of Internal Revenue Code Section 402(g)(3)) made during
a calendar year under this contract, or under any other plans, contracts,
or arrangements maintained by his employer, in excess of the dollar
limitation in effect under Internal Revenue Code Section 402(g)(1) and any
Regulations issued thereunder for taxable years beginning in such calendar
year.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
P-14020.AMD.SBJPA
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
EMPLOYER-SPONSORED TDA
AND
QUALIFIED PLAN MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the
Contract is hereby amended by deleting Schedule A and by substituting the
following Schedule A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder
by AUL. Amounts allocated to any Investment Account identified below shall
be invested in the shares of the corresponding Mutual Fund or Mutual Fund
Portfolio listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
CONTRACTHOLDER AUL
By______________________________ By_________________________________
Title __________________________ Title______________________________
Date ___________________________ Date_______________________________
P-14020.A
- --------------------------------------------------------------------------------
EXHIBIT 4.8
IRA NON-CUSTODIAL CONTRACT, FORM P-12566
- --------------------------------------------------------------------------------
CONTRACT NUMBER GA XX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1990
CONTRACT DATE January 1, 1990
FIRST CONTRACT ANNIVERSARY January 1, 1991
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
IRA Multiple Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12566
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
ARTICLE 4 BENEFITS
4.1--------Election of Annuity Options
4.2--------Annuity Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
P-12566.1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
ARTICLE 8 MISCELLANEOUS
8.1--------Ownership
8.2--------AUL's Annual Statement
8.3--------Tax Status
8.4--------Essential Data
8.5--------Reliance
8.6--------Misstatement of Essential Data
8.7--------Annuity Certificates
8.8--------Election, Notice, or Direction Requirements
8.9--------Quarterly Statement of Account Value
8.10-------Conformity with State Laws
8.11-------Reference to Federal Laws
8.12-------Sex and Number
8.13-------Facility of Payment
8.14-------Insulation from Liability
8.15-------Voting
8.16-------Acceptance of New Participants or Contributions
8.17-------Nonforfeitability and Nontransferability
8.18-------Termination
8.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12566.2
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date
on which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts
of increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which
an annuity begins under this contract. However, for any Participant, amounts
allocated to the Participant Account will be distributed or commence to be
distributed no later than the first day of April following the calendar year in
which such Participant attains age 70 1/2.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same day
of the same month as the day and month which is stated on the face page of this
contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning
with the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid in cash to AUL by the Contractholder
or by the Participant and credited to a Participant Account hereunder. The legal
title to, and ownership of, such amounts is vested solely in the Participant.
1.10 "Current Rates of Interest" means each of the annual effective rates
of interest as determined and declared by AUL from time-to-time and as credited
to each interest pocket maintained within the Fixed Interest Account. The
Current Rates of Interest shall always be equal to or greater than the
Guaranteed Rate of Interest.
1.11 "Elective Deferrals" means, with respect to any taxable year, any
Contribution made under a salary reduction agreement. A Contribution made under
a salary reduction agreement shall not be treated as an
P-12566.3 (rpl)
<PAGE>
Elective Deferral if, under such agreement, such Contribution is made pursuant
to a one-time irrevocable election made by the Participant at the time of
initial eligibility to participate in the agreement, or is made pursuant to a
similar arrangement involving a one-time irrevocable election specified in
Regulations issued under the Code. The Contractholder shall identify any
Elective Deferrals, which shall be allocated to an Elective Deferral subaccount
of the applicable Participant Account.
1.12 "Excess Contributions" means those Contributions made on behalf of a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
1.13 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
1.14 "Guaranteed Rate of Interest" means interest at an annual effective
rate of 4.00%.
1.15 "Home Office" means the principal office of AUL. The mailing address
is P. O. Box 6148, Indianapolis, Indiana 46206-6148.
1.16 "Investment Account" means each subaccount of the Variable Account,
which subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
P-12566.4 (rpl)
<PAGE>
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.17 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to provide
other Investment Options under this contract at any time.
1.18 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940.
1.19 "Participant" means any person reported to AUL by the Contractholder
as eligible for, and as participating in, this contract, and for whom a
Participant Account is established.
1.20 "Participant Account" means an account established under this contract
for a Participant. Contributions received by AUL shall be credited to
Participant Accounts as AUL is directed in writing.
1.21 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or supplemented
from time to time.
1.22 "Valuation Date" means any day when the Home Office of AUL and the New
York Stock Exchange are open and operational.
1.23 "Valuation Period" means the period beginning at the close of business
on a Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.24 "Variable Account" means a separate account established by AUL called
the AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.25 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the number of full years measured from the date a Participant Account
is established to the date the Withdrawal Charge is determined. Such percentage
is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
P-12566.5
<PAGE>
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
1.26 "Withdrawal Value" means a Participant's Account Value minus the
applicable Withdrawal Charge.
P-12566.6
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract is for the exclusive benefit of the
Participants and their beneficiaries. This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder. AUL
is not a party to, nor bound by, a plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not a
fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12566.7
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract is for the exclusive benefit of the
Participants and their beneficiaries. This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder. AUL
is not a party to a plan, trust, custodial agreement, or other agreement, or any
amendment or modification to any of the same. AUL is not a fiduciary under this
contract or under any such plan, trust, custodial agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12566.7 (MO)
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $300 per
Participant in any full Contract Year. AUL may change such minimum
annual Contribution. Such change shall apply only to individuals who
become Participants on or after the date of the change. This contract
will not terminate solely because a Contribution is not made for any
Contract Year.
(b) Except for amounts eligible for rollover treatment under Code Sections
402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3),
Contributions during a Participant's taxable year (which is presumed
to be a calendar year) may not exceed the amounts described below (as
adjusted by Code Section 408(a)):
(1) the lesser of $2,000 or 100% of compensation includible in the
Participant's gross income for such taxable year; or (2) the
lesser of $2,250 or 100% of compensation includible in the
Participant's gross income for such taxable year if a
Contribution is made on behalf of the Participant's non-employed
spouse (no more than $2,000 may be allocated to either the
Participant or his spouse); or (3) the lesser of $30,000 (or, if
greater, 25% of the dollar limitation in effect under Code
Section 415(b)(1)(A)) or 15% of compensation in the case of a
simplified employee pension (SEP, as described in Code Section
408(k)) Contribution.
(c) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Participant. Such written instructions must
include the amount to be withdrawn and returned, and certification
that such Contributions constitute Excess Contributions and that such
returns are permitted by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by applicable provisions of the Code and Regulations. In
withdrawing and returning the identified amount, AUL may rely solely
on such written instructions and certification. Such a withdrawal and
return of Excess Contributions shall not be subject to Section 4.8.
(d) Other refunds of Contributions shall be applied before the close of
the calendar year following the year of such refund toward the payment
of future Contributions or the purchase of additional benefits.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
P-12566.8 (rpl)
<PAGE>
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
Contractholder unless the Participant consents to AUL retaining the
initial Contribution until AUL receives the data and allocation
instructions for the Participant.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. The Participant
may change an allocation instruction with respect to future
allocations to his Participant Account by giving new written
allocation instructions to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Participant approval, or
prior approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
P-12566.9
<PAGE>
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate existing Investment Accounts if,
in its sole discretion, marketing, tax, or investment conditions so
warrant. AUL also reserves the right to provide other Investment
Options under this contract at any time.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company or any other form
permitted by law, it may be deregistered in the event such
registration is no longer required, or it may be combined with other
separate accounts of AUL or an affiliate thereof. AUL may take such
action as is necessary to comply with, or to obtain, exemptions from
the Securities and Exchange Commission with regard to the Variable
Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation
of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period.
Any transfer from an Investment Account shall be effective as of the
close of business on the Valuation Date that AUL receives the
Participant's direction, provided that AUL receives such direction by
4:00 p.m. E.S.T. on that Valuation Date. If such direction is received
after 4:00 p.m. E.S.T., such transfer shall be effective as of the
close of business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
P-12566.10
<PAGE>
3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge of not more
than $25 on a transfer. AUL reserves the right to change the maximum
limit on such transfer charge upon delivery of written notice to the
Contractholder. Any such change in the maximum limit shall apply only
to transfers by an individual who becomes a Participant on or after
the effective date of such change, and shall apply as long as that
individual remains a Participant.
P-12566.11 (PA)
<PAGE>
3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
P-12566.11
<PAGE>
ARTICLE 4 - BENEFITS
4.1 Election of Annuity Options: At the written request of the Participant,
AUL shall apply all or a portion of the Account Value (subject to Section 6.5)
of the Participant Account for the purpose of providing a fixed payment annuity.
Upon receipt of such request, AUL is hereby authorized by such Participant to
value and transfer the Participant Account's share of the Variable Account to
the Fixed Interest Account as of the date that AUL receives such written request
at its Home Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Participant
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options. The amount of the annuity
shall be computed from the Table of Immediate Annuities then included in this
contract, except as provided under Section 4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the monthly annuity shall be paid to the contingent annuitant named
in the election for as long as the contingent annuitant lives. An
election of this option is automatically cancelled if either the
Participant or the contingent annuitant dies before the Annuity
Commencement Date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. If the total Account Value is less than $2,000, such
value shall not be annuitized under options (a), (b), (c), (d), (e),
or (g) of this Section, but shall be paid in a lump sum.
P-12566.12
<PAGE>
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to Section 6.5) of his Participant Account may be applied under
(b) above as a 10 Year Certain and Life Annuity. AUL must receive written
notification of such Annuity Commencement Date, written designation of the
contingent annuitant or beneficiary, and any election forms needed in connection
with any annuity option provided in this Section.
Distributions shall be made in accordance with the requirements of Code Section
401(a)(9) and the Regulations issued thereunder. Under these requirements, in no
event shall any option elected provide annuity benefits to the Participant or to
the Participant and the contingent annuitant which would extend for a certain
period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date. Life expectancy for purposes of Code Section
401(a)(9) and the Regulations issued thereunder shall be computed using the
expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities are
based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected
shall be provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if such
rates produce a higher income than that provided under the Table of Immediate
Annuities provided in this contract.
4.5 Minimum Payments: If the monthly annuity is less than AUL's then
current established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments
under any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment of
each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated
P-12566.13
<PAGE>
to receive any remaining payments, such remaining payments shall be
made to the deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the beneficiary
if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over the life or
life expectancy of the beneficiary. If the beneficiary is
not the Participant's surviving spouse, the annuity must
begin on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's
surviving spouse, such spouse may elect to receive equal or
substantially equal payments over the life or life
expectancy of such spouse commencing at any date prior to
the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, or (2) December 31 of the calendar year in
which the Participant would have attained age 70 1/2. Such
spousal election must be made no later than the earlier of
December 31 of the calendar year containing the fifth
anniversary of the Participant's death or the date
distributions are required to begin pursuant to the
preceding sentence. The surviving spouse may accelerate
these payments at any time by increasing the frequency or
amount of such payments.
If the beneficiary is the Participant's surviving spouse,
such spouse may treat the Participant Account as his or her
own individual retirement arrangement (IRA). This election
will be deemed to have been made if such surviving spouse
makes a regular IRA Contribution under this contract,
makes a rollover to or from this contract, or fails to elect
any of the above three provisions.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
P-12566.14
<PAGE>
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Participant may withdraw up to 10% of the Account
Value of his Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to
P-12566.15 (rpl)
defer the payment of amounts withdrawn from the Fixed Interest Account
for a period of up to 6 months after AUL receives the withdrawal
request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
P-12566.16
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the Mutual Fund as such prospectus may be amended
or supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant Account
in the form of Accumulation Units on the basis of the value of such units in
that Investment Account as of the end of the Valuation Period on which such
amounts are received by AUL at its Home Office. Such crediting shall be made
separately for amounts allocated to each Investment Account. The number of
Accumulation Units in each Investment Account credited to each Participant
Account as of any Valuation Period shall be determined by dividing the amounts
allocated to that Investment Account for that Participant Account as of such
Valuation Period by the dollar value of one Accumulation Unit in that Investment
Account as of the close of business on the applicable Valuation Period. The
number of Accumulation Units thus determined shall not be changed by any
subsequent change in the dollar value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value of
an Accumulation Unit in each Investment Account as of any Valuation Period
thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
<PAGE>
P-12566.17
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
The value of each Participant Account's share of the Fixed Interest Account as
of any Valuation Date shall be equal to the current balance of the Participant
Account's share of the Fixed Interest Account on that date.
P-12566.18 (PA)
<PAGE>
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
P-12566.18
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.1, 4.7, or
4.8, the administrative charge attributable to the period of time which has
elapsed since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied or
withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Sections 3.4 and 3.5. This charge would be
prorated among the Investment Options from which the amounts are transferred in
the same proportion that the amount transferred from the Investment Option bears
to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12566.19
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn pursuant to Sections 4.1, 4.7, or
4.8, the administrative charge attributable to the period of time which has
elapsed since the first day of the Contract Quarter in which such application or
withdrawal of funds is made shall not be deducted from the amount applied or
withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Sections 3.4 and 3.5. This charge would be
prorated among the Investment Options from which the amounts are transferred in
the same proportion that the amount transferred from the Investment Option bears
to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12566.19 (g&w)
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for so long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. However, in no event shall any
portion of the annual charge for a Contract Year attributable to the Fixed
Interest Account subaccount of the Participant Account exceed the amount of the
Contributions allocated to such Fixed Interest Account subaccount for the
Participant during such Contract Year plus interest earned during such Contract
Year on amounts held in such Fixed Interest Account subaccount. If the entire
balance of a Participant Account is applied or withdrawn pursuant to Sections
4.1, 4.7, or 4.8, the administrative charge attributable to the period of time
which has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the amount
applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Sections 3.4 and 3.5. This charge would be
prorated among the Investment Options from which the amounts are transferred in
the same proportion that the amount transferred from the Investment Option bears
to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12566.19 (WA)
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first five Contract
Years, AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but any
such change shall apply only to Participant Accounts established on or after the
effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.25 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.25 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $15 per Contract Quarter until the year 2001.
Any increase in the administrative charge made by AUL for any Contract Quarter
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with the administration of
the contract and the operation of the Variable Account. Any such increase shall
not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: AUL reserves the right to
amend this contract at any time, without the consent of the Contractholder,
Participants, or any other person or entity, to make any change to any
provisions of the contract to comply with, or give the Contractholder or
Participants the benefit of, any provisions of federal or state laws,
regulations, or rulings. Any such amendment shall be stated in a written
instrument and delivered to the Contractholder.
P-12566.20
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely affect
the benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Portfolio, nor any of the other provisions and conditions of this
contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal,
state, or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled.
8.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to and received by AUL at its Home Office before
becoming effective.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
P-12566.21
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely affect
the benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Portfolio, nor any of the other provisions and conditions of this
contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal,
state, or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled. Any discovered underpayment by AUL resulting from
such omission or misstatement of essential data shall be made up immediately.
8.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to and received by AUL at its Home Office before
becoming effective.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
P-12566.21 (WA)
<PAGE>
8.10 Conformity with State Laws: Any benefit payable under this contract
shall not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
8.11 Reference to Federal Laws: Language in this contract referring to
federal tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval or
disapproval by the state in which the contract is issued.
8.12 Sex and Number: Whenever the context so requires, the plural includes
the singular, the singular the plural, and the masculine the feminine.
8.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment due
him, and no guardian has been appointed, AUL may make such payment to the person
or persons who have assumed the care and principal support of such Participant,
contingent annuitant, or beneficiary. Also, AUL may make payment directly to any
person or entity when directed to do so in writing by the Participant. Any
payment made by AUL will fully discharge AUL to the extent of such payment.
8.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may conduct.
8.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which
P-12566.22
<PAGE>
are received in a timely manner for all contracts and Participant
Accounts participating in that Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
8.16 Acceptance of New Participants or Contributions. AUL reserves the
right to refuse to accept new Participants or new Contributions to this contract
at any time.
8.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value
of a Participant Account under this contract shall be nonforfeitable at all
times. No sum payable under this contract with respect to a Participant may be
sold, assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person or
entity other than AUL. In addition, to the extent permitted by law, no such sum
shall in any way be subject to legal process requiring the payment of any claim
against the payee.
8.18 Termination: This contract shall automatically terminate as of the
date that there are no Participant Accounts maintained hereunder. However, upon
written notice to AUL, the Contractholder shall have the right to stop making
Contributions to the contract at any time. AUL shall have the right to refuse to
accept Contributions as of the last day of the second month following the date
that written notice to this effect is delivered to the Contractholder.
8.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the third
Thursday in February of each year at the hour of ten o'clock A.M. Elections for
directors shall be held at such annual meeting.
P-12566.23
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12566.24
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions from the Contractholder for your benefit pursuant
to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
Secretary
IRA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12567
2
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment Account on
that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid in cash to AUL by the Contractholder or by
the Participant and credited to a Participant Account. The legal title to, and
ownership of, such amounts is vested solely in the Participant.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time-to-time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Elective Deferrals" means, with respect to any taxable year, any Contribution
made under a salary reduction agreement. A Contribution made under a salary
reduction agreement shall not be treated as an Elective Deferral if, under such
agreement, such Contribution is made pursuant to a one-time irrevocable election
made by the Participant at the time of initial eligibility to participate in the
agreement, or is made pursuant to a similar arrangement involving a one-time
irrevocable election specified in Regulations issued under the Code. The
Contractholder shall identify any Elective Deferrals, which shall be allocated
to an Elective Deferral subaccount of the applicable Participant Account.
"Excess Contributions" means those Contributions made on behalf of a Participant
which exceed the limitations in effect under applicable provisions of the Code
and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
P-12567.rpl-1
5
<PAGE>
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time that the
Current Rate of Interest exceeds the Guaranteed Rate of Interest, shall
earn interest at such credited Current Rate of Interest for at least 1
year. After such 1-year period, AUL reserves the right to declare, at any
time, a new Current Rate of Interest to be applied to funds held within
that interest pocket. Any such new Current Rate of Interest must remain in
effect for that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or new
amounts transferred to the Fixed Interest Account, the previous open
interest pocket shall close, and any Contributions or amounts transferred
on or after the effective date of such change shall be credited to a new
open interest pocket and shall earn interest at the new Current Rate of
Interest in effect for such new open interest pocket. Therefore, at any
given time, various funds credited to a Participant Account and allocated
to the Fixed Interest Account may be earning interest at different Current
Rates of Interest for different periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts include the Equity Investment Account, the Bond Investment Account,
the Money Market Investment Account, and the Managed Investment Account, as the
case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested in
shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be invested
in shares of the AUL American Money Market Portfolio of the Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested in
shares of the AUL American Managed Portfolio of the Mutual Fund. The AUL
American Managed Portfolio of the Mutual Fund is a managed Portfolio which
invests in the same types of investments as the other Portfolios listed in
(a), (b), and (c) above.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
6
<PAGE>
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person reported to AUL by the Contractholder as eligible
for, and as participating in, the Contract, and for whom a Participant Account
is established.
"Participant Account" means an account established under the Contract for a
Participant. Contributions received by AUL shall be credited to Participant
Accounts as AUL is directed in writing.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
7
<PAGE>
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
- --------------
(a) Contributions may vary in amount and frequency; however, they must be at
least equal to a minimum annual Contribution of $300 per Participant in any
full contract year.
(b) Except for amounts eligible for rollover treatment under the Code,
Contributions during a Participant's taxable year (which is presumed to be
a calendar year) may not exceed the amounts described below (as adjusted by
Code Section 408(a)):
(1) the lesser of $2,000 or 100% of compensation includible in the
Participant's gross income for such taxable year; or (2) the lesser of
$2,250 or 100% of compensation includible in the Participant's gross
income for such taxable year if a Contribution is made on behalf of
the Participant's non-employed spouse (no more than $2,000 may be
allocated to either the Participant or his spouse); or (3) the lesser
of $30,000 (or, if greater, 25% of the dollar limitation in effect
under Code Section 415(b)(1)(A)) or 15% of compensation in the case of
a simplified employee pension (SEP) Contribution.
(c) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant upon
receipt by AUL at its Home Office of complete written instructions from the
Participant. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by
applicable provisions of the Code and Regulations issued thereunder. It
shall not be the responsibility of AUL to determine the existence or amount
of Excess Contributions or gains or losses thereon, or that returns of
Excess Contributions are permitted by applicable provisions of the Code and
Regulations. In withdrawing and returning the identified amount, AUL may
rely solely on such written instructions and certification. Such a
withdrawal and return of Excess Contributions shall not be subject to the
withdrawal benefits provisions of the Contract.
(d) Other refunds of Contributions shall be applied before the close of the
calendar year following the year of such refund toward the payment of
future Contributions or the purchase of additional benefits.
(e) When a Contribution is received at AUL's Home Office, it shall be credited
to Participant Accounts as AUL is directed in writing.
(f) The initial Contribution for a Participant shall be credited and allocated
to the Participant Account no later than the close of business on the
second business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the business
day that AUL receives, at its Home Office, the data required to establish
the Participant Account and allocation instructions regarding the initial
Contribution.
P-12567.rpl-4
8
<PAGE>
(g) All Contributions subsequent to the initial Contribution shall be credited
and allocated as of the close of business on the Valuation Period in which
AUL receives the Contribution at its Home Office, provided that the
Contribution is received by 4:00 p.m. E.S.T. If the Contribution is
received after 4:00 p.m. E.S.T., such Contribution shall be deemed to be
received, and shall be credited and allocated as of the close of business,
on the next succeeding Valuation Period.
(h) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or 33-1/3%, as
elected by the Participant in writing. If no allocation instruction is made
with respect to any Participant Account, AUL shall process such credits in
accordance with the allocation instruction applicable to the immediately
preceding Contribution. The Participant may change an allocation
instruction with respect to future allocations to his Participant Account
by giving new written allocation instructions to AUL.
Addition, Deletion, or Substitution of Investments:
- ---------------------------------------------------
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the Mutual Fund, of another open-end, registered investment company, or
other investment vehicle, for shares already purchased or to be purchased
in the future under the Contract.
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in a new Portfolio of the Mutual Fund, or in other
securities, investment vehicles, or shares of another diversified open-end
management investment company or series thereof. AUL reserves the right to
eliminate existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves the
right to provide other Investment Options under the Contract at any time.
(c) If deemed by AUL to be in the best interests of persons or entities having
voting rights under the Contract, the Variable Account may be operated as a
management investment company or any other form permitted by law, it may be
deregistered in the event such registration is no longer required, or it
may be combined with other separate accounts of AUL or an affiliate
thereof.
Transfers:
- ----------
(a) Subject to the limitations of (d) through (f) below, the Participant may
direct AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period. Any
transfer from an Investment Account shall be effective as of the close of
business on the Valuation Date that AUL receives the Participant's
direction, provided that AUL receives such direction by 4:00
9
<PAGE>
p.m. E.S.T. on that Valuation Date. If such direction is received after
4:00 p.m. E.S.T., such transfer shall be effective as of the close of
business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7 days
from the date a proper request is received by AUL at its Home Office,
except as AUL may be permitted to defer such payment of amounts withdrawn
from the Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of 6 months after AUL
receives the transfer request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment Account
shall be made on a first-in/first-out accounting basis.
(d) The Participant may not direct a transfer with regard to his Participant
Account's share of any Investment Option in an amount less than $500 or the
Participant Account's entire share, if less than $500. If such a transfer
reduces the Participant Account's remaining share of an Investment Option
to less than $500, the entire remaining share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined as of
the last contract anniversary preceding the request for transfer, or the
Participant Account's entire share of the Fixed Interest Account if such
share would be less than $500 after the transfer.
(f) AUL reserves the right to change the limitation on the minimum transfer, to
change the limit on remaining balances, to limit the number and frequency
of transfers, to suspend the transfer privilege, and to impose a charge on
a transfer.
BENEFITS
Annuity Options:
- ----------------
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge) of the
Participant Account for the purpose of providing a fixed payment annuity. Upon
receipt of such request, AUL is hereby authorized by such Participant to value
and transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date that AUL receives such written request at
its Home Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Participant
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant for as
long as the annuitant lives, and shall end with the last monthly payment
before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies before
receiving payments for the certain period (5, 10, 15, or 20 years, as
specified in the election), any remaining payments for the balance of the
certain period shall be paid to the annuitant's beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives. After the death of the annuitant, a
portion (all, 2/3, or 1/2, as specified in the election) of the monthly
annuity shall be paid to the contingent annuitant named in the election for
as long as the contingent annuitant lives. An election of this option is
automatically cancelled if either the Participant or the contingent
annuitant dies before the Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant. If, at the death of the
annuitant, the sum of the monthly payments previously received is less than
the amount applied to provide the annuity, monthly payments of the same
amount shall continue to the annuitant's beneficiary until the total of the
monthly payments received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant for a
fixed period of time (not less than 5 years nor more than 30 years, as
specified in the election). If, at the death of the annuitant, payments
have been made for less than the selected fixed period, monthly annuity
payments to the annuitant's beneficiary shall be continued during the
remainder of such fixed period.
(f) Lump Sum Payment. A lump sum payment shall be payable to the annuitant. If
the total Account Value is less than $2,000, such value shall not be
annuitized under options (a), (b), (c), (d), (e), or (g), but shall be paid
in a lump sum.
(g) Any other options mutually agreed upon between the Contractholder and AUL
shall be made available.
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge) of his Participant Account
may be applied under (b) above as a 10 Year Certain and Life Annuity. AUL must
receive written notification of such Annuity Commencement Date, written
designation of the contingent annuitant or beneficiary, and any election forms
needed in connection with any annuity option provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date.
If the monthly annuity is less than AUL's then current established minimum, AUL
reserves the right to make payments on a less frequent basis or to pay the
appropriate amount in a single sum.
10
<PAGE>
Death Benefits:
- ---------------
(a) Upon receipt of written instructions from the Participant's beneficiary
(or, if applicable, the secondary beneficiary of the Participant) and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall apply
the Account Value of the Participant Account for the purpose of providing a
death benefit. The death benefit shall be paid to the beneficiary last
properly designated in writing to AUL at its Home Office by the
Participant, or, if there is no designated beneficiary living on the date
of the Participant's death, to the Participant's estate. If any beneficiary
dies while receiving payments and no beneficiary is designated to receive
any remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be determined
as of the close of business on the later of (1) the Valuation Date that AUL
receives such written instructions at its Home Office, or (2) the Valuation
Date that AUL receives such due proof of death at its Home Office, provided
that such written instructions or due proof of death received on the later
of (1) or (2) above are(is) received by 4:00 p.m. E.S.T. If the written
instructions or due proof of death received on the later of (1) or (2)
above are(is) received after 4:00 p.m. E.S.T., such valuation shall be made
as of the close of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the following
provisions as elected by the Participant or the beneficiary if the
Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on or
before December 31 of the calendar year which contains the fifth
anniversary of the date of the Participant's death; or
(ii) The benefit shall be paid as an annuity in accordance with the
Annuity Options shown above over the life or life expectancy of
the beneficiary. If the beneficiary is not the Participant's
surviving spouse, the annuity must begin on or before December 31
of the calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, such spouse may elect to receive
equal or substantially equal payments over the life or life
expectancy of such spouse commencing at any date prior to the
later of (1) December 31 of the calendar year immediately
following the calendar year in which the Participant died, or (2)
December 31 of the calendar year in which the Participant would
have attained age 70 1/2. Such spousal election must be made no
later than the earlier of December 31 of the calendar year
containing the fifth anniversary of the Participant's death or
the date distributions are required to begin pursuant to the
preceding sentence. The surviving spouse may accelerate these
payments at any time by increasing the frequency or amount of
such payments.
(2) If a Participant dies on or after his Annuity Commencement Date, any
interest remaining under the Annuity Option selected shall be paid at
least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be made
within 7 days of the date of valuation, as determined in (b)
11
<PAGE>
above, except as AUL may be permitted to defer such payment of amounts
derived from the Variable Account in accordance with the provisions of
federal securities laws. Also, AUL reserves the right to defer the
payment of amounts withdrawn from the Fixed Interest Account for a
period of 6 months after AUL receives written instructions at its
Home Office.
Withdrawal Benefits:
- --------------------
(a) Except as stated below, a Participant, upon submitting a proper written
request to AUL at its Home Office, may direct AUL to withdraw all or a
portion of the Account Value (subject to the Withdrawal Charge) of his
Participant Account.
(b) Withdrawals from a Participant Account's share of an Investment Option may
not be made in an amount less than the smaller of $500 or the Participant
Account's entire share of the Investment Option. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than $500,
such remaining share shall also be withdrawn.
(c) A withdrawal request shall be effective as of the close of business on the
Valuation Date that AUL receives a proper written withdrawal request at its
Home Office, provided that AUL receives such request by 4:00 p.m. E.S.T. on
that Valuation Date. If such request is received after 4:00 p.m. E.S.T.,
such request shall be effective as of the close of business on the next
succeeding Valuation Date.
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any contract
year the Participant may withdraw up to 10% of the Account Value of his
Participant Account determined as of the last contract anniversary
preceding the request for the withdrawal without application of any
Withdrawal Charge, provided that 12 months have elapsed from the date that
the Participant's first Contribution is credited to his Participant Account
by AUL to the date of such withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such cash
lump sum will be paid within 7 days from the date that AUL receives the
withdrawal request at its Home Office, except as AUL may be permitted to
defer such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws. AUL
reserves the right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of up to 6 months after AUL receives the
withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
P-12567.rpl-9
<PAGE>
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of the
Fixed Interest Account which have been on deposit for the longest period of
time, as well as the interest credited thereon, shall be withdrawn first.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
MISCELLANEOUS
Ownership: The Contractholder is the owner of the Contract and may agree with
AUL to any change or amendment of it without the consent of any other person or
entity, except that no such change or amendment shall adversely affect the
benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to and received by AUL at its Home Office before becoming effective.
<PAGE>
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to any person or
entity when directed to do so in writing by the Participant. Any payment made by
AUL will fully discharge AUL to the extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
- -------
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of the
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of the Mutual Fund in its own right, it may elect to do so.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or the Mutual Fund as may
be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under the Contract shall be nonforfeitable at all times.
<PAGE>
No sum payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By adding the following to the face page of the Certificate:
The Contract is a SIMPLE IRA.
By deleting the definition of "Contributions" in the Participant's Certificate
under the Contract and by substituting the following definition in lieu thereof:
DEFINITIONS
"Contributions" means, subject to the restrictions of the following paragraph,
amounts paid in cash to AUL by the Contractholder or by the Participant,
including amounts transferred to the Contract from another SIMPLE IRA of the
Participant, which are credited to a Participant Account maintained under the
Contract. The legal title to, and ownership of, such amounts is vested solely in
the Participant.
The SIMPLE IRA will accept only cash Contributions made on behalf of the
Participant pursuant to the terms of a SIMPLE IRA Plan described in section
408(p) of the Internal Revenue Code. A rollover Contribution or a transfer of
assets from another SIMPLE IRA of the Participant will also be accepted. No
other Contributions will be accepted.
By deleting item (b) as it appears under the heading indicated below in the
Participant's Certificate under the Contract and by substituting the following
item (b) in lieu thereof, and by adding the following items (i) and (g) under
the headings indicated below:
CONTRIBUTIONS, INVESTMENTS AND TRANSFERS
Contributions:
(b) Except for amounts rolled over or transferred from another SIMPLE IRA of
the Participant, Contributions during a Participant's taxable year (which
is presumed to be a calendar year) may not exceed the amounts allowed by
Code Section 408(p) (as adjusted).
(i) If Contributions made on behalf of the Participant pursuant to a
SIMPLE IRA Plan maintained by the Participant's employer are received
directly by AUL from the employer, AUL will provide the employer with
the summary description required by section 408(1)(2) of the Internal
Revenue Code.
BENEFITS
Withdrawal Benefits:
(g) Prior to the expiration of the 2-year period beginning on the date the
Participant first participated in any SIMPLE IRA Plan maintained by the
Participant's employer, any rollover or transfer by the Participant of
funds from the SIMPLE IRA must be made to another SIMPLE IRA of the
Participant. Any distribution of funds to the Participant during this
2-year period may be subject to a 25-percent additional tax if the
Participant does not roll over the amount distributed into a SIMPLE IRA.
After the expiration of this 2-year period, the Participant may roll over
or transfer funds to any IRA of the Participant that is qualified under
section 408(a) or (b) of the Internal Revenue Code.
AUL
By /s/ William R. Brown
Secretary
P-12567.ADD.SIMP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
TDA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
Addition, Deletion, or Substitution of Investments:
- ---------------------------------------------------
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund, Inc.,
of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under the Contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
P.12567.ADD.1
<PAGE>
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
Withdrawal Benefits:
- --------------------
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the Participant
shall be paid the Withdrawal Value. If the Participant requests that a
specified percentage or dollar amount be paid to the Participant, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge.
Notwithstanding the previous sentence, in the first Contract year in
which a Participant Account is established, and in the next succeeding
Contract year, the Participant may withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account, determined as of the last Contract anniversary preceding the
request for the withdrawal, plus Contributions made during the
applicable Contract year, without application of any Withdrawal
Charge. In any subsequent Contract year, the Participant may withdraw
from that Participant Account up to 10% of the Account Value of that
Participant Account, determined as of the last Contract anniversary
preceding the request for the withdrawal, without application of any
Withdrawal Charge.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that In vestment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment
P.12567.ADD.2
<PAGE>
Factor, as defined below, for that Investment Account for the current Valuation
Period. The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be added.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for as long as
the Participant Account is in effect during the Accumulation Period.
P.12567.ADD.3
<PAGE>
This charge is to be prorated among each subaccount of the Participant Account
which corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
- -------
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received from
persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the
present interpretation thereof should change, and as a result AUL
determines that it is permitted to vote the shares of a Mutual Fund in
its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
by: /s/ William R. Brown
Secretary
P.12567.ADD.4
- --------------------------------------------------------------------------------
EXHIBIT 4.9
IRA CUSTODIAL CONTRACT, FORM P-12867
- --------------------------------------------------------------------------------
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman, President, and Chief Executive Officer
Attest /s/ William R. Brown
Secretary
AUL American Series Contract
IRA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
If you have questions concerning your AUL contract, or wish to register a
complaint, please call 1-800- 634-1629.
P-12867TX
1
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1992
CONTRACT DATE January 1, 1992
FIRST CONTRACT ANNIVERSARY January 1, 1993
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning, and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Jerry D. Semler
Chairman, President, and Chief Executive Officer
Attest /s/ William R. Brown
Secretary
AUL American Series Contract
IRA Multiple-Fund Group Variable Annuity
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12867
2
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1--------Entire Contract
2.2--------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1--------Amount of Contributions
3.2--------How Contributions Are Handled
3.3--------Addition, Deletion, or Substitution of Investments
3.4--------Transfers
3.5--------Limitations on Transfers
ARTICLE 4 BENEFITS
4.1--------Election of Annuity Options
4.2--------Annuity Options
4.3--------Guaranteed Rate of Interest
4.4--------Alternate Nonparticipating Retirement Annuity
4.5--------Minimum Payments
4.6--------Due Proof of Date of Birth and Survival
4.7--------Death Benefits
4.8--------Withdrawal Benefits
ARTICLE 5 VALUATIONS
5.1--------Time of Valuation
5.2--------Accumulation Units
5.3--------Value of Accumulation Units
5.4--------Determining the Net Investment Factor
5.5--------Determining the Value of Each Participant Account's Share
of any Investment Account
ARTICLE 6 OTHER CHARGES
6.1--------Mortality Risk and Expense Risk Charges
6.2--------Investment Management Charge
6.3--------Administrative Charge
6.4--------Transfer Charge
6.5--------Other Charges
6.6--------Reduction or Waiver of Certain Charges
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1--------Right of AUL to Change Interest Rates
7.2------- Right of AUL to Change Annuity Table
7.3--------Right of AUL to Change Charges
7.4--------Amendment of Contract to Conform with Law
3
<PAGE>
ARTICLE 8 MISCELLANEOUS
8.1--------Ownership
8.2--------AUL's Annual Statement
8.3--------Tax Status
8.4--------Essential Data
8.5--------Reliance
8.6--------Misstatement of Essential Data
8.7--------Annuity Certificates
8.8--------Election, Notice, or Direction Requirements
8.9--------Quarterly Statement of Account Value
8.10-------Conformity with State Laws
8.11-------Reference to Federal Laws
8.12-------Sex and Number
8.13-------Facility of Payment
8.14-------Insulation from Liability
8.15-------Voting
8.16-------Acceptance of New Participants or Contributions
8.17-------Nonforfeitability and Nontransferability
8.18-------Termination
8.19-------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12867.1
4
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed
Interest Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date
on which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts
of increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Annuity Commencement Date" means the first day of any month upon which
an annuity begins under this contract. However, for any Participant, amounts
allocated to the Participant Account will be distributed or commence to be
distributed no later than the first day of April following the calendar year in
which such Participant attains age 70 1/2.
1.5 "Code" means the Internal Revenue Code of l986, as amended.
1.6 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same day
of the same month as the day and month which is stated on the face page of this
contract for the First Contract Anniversary.
1.7 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.8 "Contract Year" means, for the first such year, the period beginning
with the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.9 "Contributions" means amounts paid in cash to AUL from time to time by,
or on behalf of, Participants, which are credited to Participant Accounts
hereunder. The legal title to, and ownership of, such amounts is vested solely
in the Participant. The contract is established for the exclusive benefit of the
Participant or his beneficiaries.
1.10 "Current Rates of Interest" means each of the annual effective rates
of interest as determined and declared by AUL from time to time and as credited
to each interest pocket maintained within the Fixed Interest Account. The
Current Rates of Interest shall always be equal to or greater than the
Guaranteed Rate of Interest.
1.11 "Excess Contributions" means those Contributions made by, or on behalf
of, a Participant which exceed the limitations in effect under applicable
provisions of the Code and Regulations issued thereunder.
5
<PAGE>
1.12 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed
Interest Account shall be credited to the open interest pocket
and shall earn interest at the Current Rate of Interest in effect
for that interest pocket. Such Contributions or transferred
amounts, during the time that the Current Rate of Interest
exceeds the Guaranteed Rate of Interest, shall earn interest at
such credited Current Rate of Interest for at least 1 year. After
such 1-year period, AUL reserves the right to declare, at any
time, a new Current Rate of Interest to be applied to funds held
within that interest pocket. Any such new Current Rate of
Interest must remain in effect for that interest pocket for at
least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions
or new amounts transferred to the Fixed Interest Account, the
previous open interest pocket shall close, and any Contributions
or amounts transferred on or after the effective date of such
change shall be credited to a new open interest pocket and shall
earn interest at the new Current Rate of Interest in effect for
such new open interest pocket. Therefore, at any given time,
various funds credited to a Participant Account and allocated to
the Fixed Interest Account may be earning interest at different
Current Rates of Interest for different periods of time.
1.13 "Guaranteed Rate of Interest" means interest at an annual effective
rate of 4.00%.
1.14 "Home Office" means the principal office of AUL. The mailing address
is P. O. Box 6148, Indianapolis, Indiana 46206-6148.
1.15 "Investment Account" means each subaccount of the Variable Account,
which subaccounts currently include the Equity Investment Account, the Bond
Investment Account, the Money Market Investment Account, and the Managed
Investment Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be
invested in shares of the AUL American Equity Portfolio of the
Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be
invested in shares of the AUL American Bond Portfolio of the
Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of
the Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be
invested in shares of the AUL American Managed Portfolio of the
Mutual Fund.
1.16 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to provide
other Investment Options under this contract at any time.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940.
1.18 "Participant" means any person enrolled in this contract who elects to
make Contributions or for
6
<PAGE>
whom Contributions are made, and for whom a Participant Account is established.
1.19 "Participant Account" means an account established under this contract
for a Participant. Contributions received by AUL shall be credited to
Participant Accounts as AUL is directed in writing.
1.20 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or supplemented
from time to time.
1.21 "Valuation Date" means any day when the Home Office of AUL and the New
York Stock Exchange are open and operational.
1.22 "Valuation Period" means the period beginning at the close of business
on a Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.23 "Variable Account" means a separate account established by AUL called
the AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value withdrawn pursuant to Section 4.8, where the percentage
varies by the number of full years measured from the date a Participant Account
is established to the date the Withdrawal Charge is determined. Such percentage
is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
1.25 "Withdrawal Value" means a Participant's Account Value minus the
applicable Withdrawal Charge.
P-12867.2
7
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract is for the exclusive benefit of the
Participants and their beneficiaries. This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder.
Unless there is a specific written agreement signed by a corporate officer of
AUL, AUL is not a party to, nor bound by, a plan, trust, custodial agreement, or
other agreement, or any amendment or modification to any of the same. AUL is not
a fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12867.3
8
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract. This contract is for the exclusive benefit of the
Participants and their beneficiaries. This contract and the application of the
Contractholder is the entire agreement between AUL and the Contractholder.
Unless there is a specific written agreement signed by a corporate officer of
AUL, AUL is not a party to a plan, trust, custodial agreement, or other
agreement, or any amendment or modification to any of the same. AUL is not a
fiduciary under this contract or under any such plan, trust, custodial
agreement, or other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate officer of
AUL.
P-12867.6 (MO)
9
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $300 per
Participant in any full Contract Year. AUL may change such minimum
annual Contribution acceptable under this contract, but any such
change shall apply only to individuals who become Participants on or
after the date of the change. This contract will not terminate solely
because a Contribution is not made for any Contract Year.
(b) Except for amounts eligible for rollover treatment under Code Sections
402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3),
Contributions during a Participant's taxable year (which is presumed
to be a calendar year) must be made in cash and may not exceed the
amounts described below (as adjusted by Code Section 408(a)):
(1) the lesser of $2,000 or 100% of compensation includible in the
Participant's gross income for such taxable year; or (2) the
lesser of $2,250 or 100% of compensation includible in the
Participant's gross income for such taxable year if a
Contribution is made on behalf of the Participant's non-employed
spouse (no more than $2,000 may be allocated to either the
Participant or his spouse); or (3) the lesser of $30,000 (or, if
greater, 25% of the dollar limitation in effect under Code
Section 415(b)(1)(A)) or 15% of compensation in the case of a
simplified employee pension (SEP, as described in Code Section
408(k)) Contribution.
(c) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Participant. Such written instructions must
include the amount to be withdrawn and returned, and certification
that such Contributions constitute Excess Contributions and that such
returns are permitted by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of Excess Contributions or
gains or losses thereon, or that returns of Excess Contributions are
permitted by applicable provisions of the Code and Regulations. In
withdrawing and returning the identified amount, AUL may rely solely
on such written instructions and certification. Such a withdrawal and
return of Excess Contributions shall not be subject to Section 4.8.
(d) Other refunds of Contributions shall be applied before the close of
the calendar year following the year of such refund toward the payment
of future Contributions or the purchase of additional benefits.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required
10
<PAGE>
to establish the Participant Account and allocation instructions
regarding the initial Contribution. If the data required to establish
the Participant Account and allocation instructions regarding the
initial Contribution are not received by AUL at its Home Office within
5 business days after AUL first receives the initial Contribution, AUL
shall return the initial Contribution to the contributing party unless
consent is given to AUL to retain the initial Contribution until AUL
receives the data and allocation instructions for the Participant.
Alternatively, if the data required to establish the Participant
Account and allocation instructions regarding the initial Contribution
are not received by AUL at its Home Office when AUL first receives the
initial Contribution, to the extent permitted by applicable law, AUL
may allocate the initial Contribution to the Money Market Investment
Account, and shall transfer such amounts credited to the Money Market
Investment Account according to the applicable allocation instructions
upon receipt of the data required to establish the Participant Account
and allocation instructions.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a Contribution
other than the initial Contribution, that amount shall be credited to
the Fixed Interest Account until such time as an appropriate
allocation instruction is received, at which time such amount shall be
withdrawn from the Fixed Interest Account and allocated pursuant to
such instructions. The Participant may change an allocation
instruction with respect to future allocations to his Participant
Account by giving new written allocation instructions to AUL at its
Home Office.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares in
the Variable Account or any Investment Account without notice,
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion
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between series or classes of contracts on the basis of requests made
by a majority of participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Participant may direct
AUL at its Home Office to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. For any transfer from an Investment Account,
Accumulation Units shall be valued as of the close of business on the
Valuation Date that AUL receives the Participant's direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T., such
transfer shall be effective as of the close of business on the next
succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
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3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer. (c) Amounts under this contract which have been transferred
from other group annuity contracts, whether issued by AUL or
otherwise, shall be allocated pursuant to the provisions of Section
3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
P-12867.7
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3.5 Limitations on Transfers:
(a) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge of not more
than $25 on a transfer. AUL reserves the right to change the maximum
limit on such transfer charge upon delivery of written notice to the
Contractholder. Any such change in the maximum limit shall apply only
to transfers by an individual who becomes a Participant on or after
the effective date of such change, and shall apply as long as that
individual remains a Participant.
P-12867.10 (PA)
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ARTICLE 4 - BENEFITS
4.1 Election of Annuity Options: At the written request of the Participant,
AUL shall apply all or a portion of the Account Value (subject to Section 6.5)
of the Participant Account for the purpose of providing a fixed payment annuity.
Upon receipt of such request, AUL is hereby authorized by such Participant to
value and transfer the Participant Account's share of the Variable Account to
the Fixed Interest Account as of the date that AUL receives such written request
at its Home Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Participant
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options. The amount of the annuity
shall be computed from the Table of Immediate Annuities then included in this
contract, except as provided under Section 4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
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If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to Section 6.5) of his Participant Account shall be applied under
(b) above as a 10 Year Certain and Life Annuity. AUL must receive written
notification of such Annuity Commencement Date, written designation of the
contingent annuitant or beneficiary, and any election forms needed in connection
with any annuity option provided in this Section.
Distributions shall be made in accordance with the requirement of Code Section
401(a)(9) and the Regulations issued thereunder. Under these requirements, in no
event shall any option elected provide annuity benefits to the Participant or to
the Participant and the contingent annuitant which would extend for a certain
period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date. Life expectancy for purposes of Code Section
401(a)(9) and the Regulations issued thereunder shall be computed using the
expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations. Any periodic payments made under Section 401(a)(9) shall be made at
intervals of no longer than one year. In addition, any such periodic 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.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities are
based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected
shall be provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if such
rates produce a higher income than that provided under the Table of Immediate
Annuities provided in this contract.
4.5 Minimum Payments: If the total Account Value is less than $2,000, such
value shall be paid in a lump sum to the annuitant rather than annuitized under
the annuity options provided in Section 4.2. Additionally, if the monthly
annuity is less than AUL's then current established minimum, AUL reserves the
right to make payments on a less frequent basis.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments
under any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment of
each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated to receive any
remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
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(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown in Section 4.2 over a period not
to exceed the life or life expectancy of the beneficiary. If
the beneficiary is not the Participant's surviving spouse,
the annuity must begin on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died. If the beneficiary is the
Participant's surviving spouse, such spouse may elect to
receive equal or substantially equal payments over the life
or life expectancy of such spouse commencing at any date
prior to the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, or (2) December 31 of the calendar year in
which the Participant would have attained age 70 1/2. Such
spousal election must be made no later than the earlier of
December 31 of the calendar year containing the fifth
anniversary of the Participant's death or the date
distributions are required to begin pursuant to the
preceding sentence. The surviving spouse may accelerate
these payments at any time by increasing the frequency or
amount of such payments.
If the beneficiary is the Participant's surviving spouse,
such spouse may treat the Participant Account as his or her
own individual retirement arrangement (IRA). This election
will be deemed to have been made if such surviving spouse
makes a regular IRA Contribution under this contract, makes
a rollover to or from this contract, or fails to elect any
of the above three provisions.
(iii) Distributions under this section are considered to have
begun if distributions are made on account of the individual
reaching his or her required beginning date or if prior to
the required beginning date distributions irrevocably
commence to an individual over a period permitted and in an
annuity form acceptable under section 1.401(a)(9) of the
Regulations.
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(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined above
in this Section, except as AUL may be permitted to defer such
payment of amounts derived from the Variable Account in
accordance with the provisions of federal securities laws. Also,
AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after
AUL receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in any
Contract Year the Participant may withdraw up to 10% of the Account
Value of his Participant Account determined as of the last Contract
Anniversary preceding the request for the withdrawal without
application of any Withdrawal Charge, provided that 12 months have
elapsed from the date that the Participant's first Contribution is
credited to his Participant Account by AUL to the date of such
withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts with drawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
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(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
P-12867.11
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ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the Mutual Fund as such prospectus may be amended
or supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant Account
in the form of Accumulation Units on the basis of the value of such units in
that Investment Account as of the end of the Valuation Period on which such
amounts are received by AUL at its Home Office. Such crediting shall be made
separately for amounts allocated to each Investment Account. The number of
Accumulation Units in each Investment Account credited to each Participant
Account as of any Valuation Period shall be determined by dividing the amounts
allocated to that Investment Account for that Participant Account as of such
Valuation Period by the dollar value of one Accumulation Unit in that Investment
Account as of the close of business on the applicable Valuation Period. The
number of Accumulation Units thus determined shall not be changed by any
subsequent change in the dollar value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value of
an Accumulation Unit in each Investment Account as of any Valuation Period
thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be determined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date.
P-12867.12
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5.5 Determining the Value of Each Participant Account's Share of any
Investment Account: The value of each Participant Account's share of any
Investment Account as of any Valuation Date shall be determined by multiplying
the Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation Unit
in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other than
a Valuation Date is equal to the value of its share of that Investment Account
as of the immediately preceding Valuation Date. The value of each Participant
Account's share of the Fixed Interest Account as of any Valuation Date shall be
equal to the current balance of the Participant Account's share of the Fixed
Interest Account on that date.
P-12867.17(PA)
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ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn before the last day of the Contract
Quarter pursuant to Sections 4.1, 4.7, or 4.8, the administrative charge
attributable to the period of time which has elapsed since the first day of the
Contract Quarter in which such application or withdrawal of funds is made shall
not be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the same
proportion that the amount transferred from the Investment Option bears to the
total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12867.18
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ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for so long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. However, in no event shall any
portion of the annual charge for a Contract Year attributable to the Fixed
Interest Account subaccount of the Participant Account exceed the amount of the
Contributions allocated to such Fixed Interest Account subaccount for the
Participant during such Contract Year plus interest earned during such Contract
Year on amounts held in such Fixed Interest Account subaccount. If the entire
balance of a Participant Account is applied or withdrawn before the last day of
the Contract Quarter pursuant to Sections 4.1, 4.7, or 4.8, the administrative
charge attributable to the period of time which has elapsed since the first day
of the Contract Quarter in which such application or withdrawal of funds is made
shall not be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the same
proportion that the amount transferred from the Investment Option bears to the
total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12867.18(WA)
23
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus as it may be
amended or supplemented from time to time. These expenses may vary from year to
year. The net asset value of each Portfolio reflects such investment advisory
fee and other expenses which are deducted from the assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period. This charge is to be prorated among each subaccount of the
Participant Account which corresponds to each Investment Option utilized under
this contract by that Participant Account. If the entire balance of a
Participant Account is applied or withdrawn before the last day of the Contract
Quarter pursuant to Sections 4.1, 4.7, or 4.8, the administrative charge
attributable to the period of time which has elapsed since the first day of the
Contract Quarter in which such application or withdrawal of funds is made shall
not be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge (not to
exceed $25) for each transfer transaction pursuant to Section 3.4. This charge
would be prorated among the Investment Options from which the amounts are
transferred in the same proportion that the amount transferred from the
Investment Option bears to the total amount transferred from all Investment
Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium
tax charge at the time annuity payments commence pursuant to Section 4.1 or such
other time that premium taxes are incurred by AUL. AUL also reserves the right
to deduct the appropriate charges for federal, state, or local income taxes
incurred by AUL that are attributable to the Variable Account and its Investment
Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the Mutual Fund.
P-12867.18(NJ)
24
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: AUL does not reserve the right to
change the Table of Immediate Annuities included in this contract.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.24 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.24 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $100 per Contract Quarter. Any increase in the
administrative charge made by AUL for any Contract Quarter shall be limited to
an amount which is designed to reimburse AUL for the expenses associated with
the administration of the contract and the operation of the Variable Account.
Any such increase shall not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the
provisions of Section 8.1, AUL reserves the right to amend this contract at any
time, without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to comply
with, or give the Contractholder or Participants the benefit of, any provisions
of federal or state laws, regulations, or rulings. Any such amendment shall be
stated in a written instrument and delivered to the Contractholder.
P-12867.19(NJ)
25
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time,
upon delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply for
the duration of such affected Participant Accounts. Any change in the Guaranteed
Rate of Interest shall not result in a rate less than that prescribed by
applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years,
AUL has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but any
such change shall apply only to Participant Accounts established on or after the
effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set out
in Sections 1.24 and 6.3. Any such change to the Withdrawal Charge set out in
Section 1.24 shall apply only to Participant Accounts established on or after
the effective date of such change, and shall apply for the duration of such
affected Participant Accounts. The administrative charge set out in Section 6.3
shall be limited to a maximum of $15 per Contract Quarter until the year 2001.
Any increase in the administrative charge made by AUL for any Contract Quarter
beginning after December 31, 2000 shall be limited to an amount which is
designed to reimburse AUL for the expenses associated with the administration of
the contract and the operation of the Variable Account. Any such increase shall
not be anticipated to be a source of profit for AUL.
7.4 Amendment of Contract to Conform with Law: Notwithstanding the
provisions of Section 8.1, AUL reserves the right to amend this contract at any
time, without the consent of the Contractholder, Participants, or any other
person or entity, to make any change to any provisions of the contract to comply
with, or give the Contractholder or Participants the benefit of, any provisions
of federal or state laws, regulations, or rulings. Any such amendment shall be
stated in a written instrument and delivered to the Contractholder.
P-12867.19
26
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely affect
the benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to any
insurance department, contractholder, regulatory body, or other person, nor
shall anything in such annual statement be deemed to control, determine, or
modify the valuation provided for in this contract, nor the values determined,
nor the market, book, or other value of any asset in any Investment Account or
Portfolio, nor any of the other provisions and conditions of this contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled.
8.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to, and received by, AUL at its Home Office before
becoming effective, unless the Participant is otherwise directed by AUL.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
8.10 Conformity with State Laws: Any benefit payable under this contract
shall not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
27
<PAGE>
ARTICLE 8 - MISCELLANEOUS
8.1 Ownership: The Contractholder is the owner of the contract and may
agree with AUL to any change or amendment of it without the consent of any other
person or entity, except that no such change or amendment shall adversely affect
the benefits to be provided by Contributions made prior to the effective date of
such change or amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
8.2 AUL's Annual Statement: No provision or condition of this contract
shall be deemed to control, determine, or modify any annual statement of AUL
made to any insurance department, contractholder, regulatory body, or other
person, nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the values
determined, nor the market, book, or other value of any asset in any Investment
Account or Portfolio, nor any of the other provisions and conditions of this
contract.
8.3 Tax Status: AUL does not make any guarantee regarding the federal,
state, or local tax status of this contract, any Participant Account established
hereunder, or any transaction involving this contract.
8.4 Essential Data: The Participant shall furnish to AUL whatever
information is necessary to establish the eligibility and amount of annuity or
other benefit in each instance.
8.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder, by any person or persons certified to AUL by
the Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
8.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled. Any discovered underpayment by AUL resulting from
such omission or misstatement of essential data shall be made up immediately.
8.7 Annuity Certificates: AUL shall issue to each person for whom an
annuity is purchased from AUL a certificate setting forth the amount and terms
of payment of the annuity.
8.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder or Participant making a request or
giving notice or direction, such request, notice, or direction must be in
writing and must be submitted to, and received by, AUL at its Home Office before
becoming effective, unless the Participant is otherwise directed by AUL.
8.9 Quarterly Statement of Account Value: As soon as reasonably possible
after the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
8.10 Conformity with State Laws: Any benefit payable under this contract
shall not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
28
<PAGE>
8.11 Reference to Federal Laws: Language in this contract referring to
federal tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval or
disapproval by the state in which the contract is issued.
8.12 Sex and Number: Whenever the context so requires, the plural includes
the singular, the singular the plural, and the masculine the feminine.
8.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment due
him, and no guardian has been appointed, AUL may make such payment to the person
or persons who have assumed the care and principal support of such Participant,
contingent annuitant, or beneficiary. Also, AUL may make payment directly to any
person or entity when directed to do so in writing by the Participant. Any
payment made by AUL will fully discharge AUL to the extent of such payment.
8.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may conduct.
8.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so. AUL will vote
shares of any Investment Account, if any, that it owns beneficially in
its own discretion, except that if the Mutual Fund offers its shares
to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL
will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting of the Mutual
Fund. If required by the Securities and Exchange Commission, AUL
reserves the right to determine in a different fashion the voting
rights attributable to the shares of the Mutual Fund.
29
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
8.16 Acceptance of New Participants or Contributions. AUL reserves the
right to refuse to accept new Participants or new Contributions to this contract
at any time. AUL shall have the right to refuse to accept Contributions as of
the last day of the second month following the date that written notice to this
effect is delivered to any contributing Participant or to any Participant for
whom Contributions are being made.
8.17 Nonforfeitability and Nontransferability: The entire Withdrawal Value
of a Participant Account under this contract shall be nonforfeitable at all
times. No sum payable under this contract with respect to a Participant may be
sold, assigned, discounted, or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose to any person or
entity other than AUL. In addition, to the extent permitted by law, no such sum
shall in any way be subject to legal process requiring the payment of any claim
against the payee.
8.18 Termination: This contract shall automatically terminate as of the
date that there are no Participant Accounts maintained hereunder.
8.19 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL (i.e., contractholders) shall be held at its principal place of
business on the third Thursday in February of each year at the hour of ten
o'clock A.M. Elections for directors shall be held at such annual meeting.
P-12867.20
30
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed
months) less the following number of months: [.6 multiplied by (Birth Year -
1915)] rounded to the nearest integer.
P-12867.21
31
<PAGE>
The following are the guaranteed annuity rates for the options offered by AUL.
They are based on the following assumptions:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Retirement value - $1000.00 Interest rate - 4% Load - 4% Participant - Female
Commission - 0% Contingent - Male (same age as participant) Age adjustment - 0
</TABLE>
<TABLE>
<CAPTION>
INSTALLMENT
AGE 5 YR C&L 15 YR C&L 20 YR C&L J&S(FULL) J&2/3S J&1/2S REFUND
<S> <C> <C> <C> <C> <C> <C> <C>
45 4.0004 3.9807 3.9616 3.7883 3.8571 3.8924 3.7984
46 4.0413 4.0192 3.9979 3.8194 3.8914 3.9284 3.8336
47 4.0844 4.0597 4.0358 3.8523 3.9275 3.9662 3.8706
48 4.1299 4.1020 4.0753 3.8869 3.9656 4.0062 3.9094
49 4.1777 4.1465 4.1176 3.9235 4.0058 4.0482 3.9501
50 4.2281 4.1931 4.1595 3.9620 4.0481 4.0926 3.9929
51 4.2813 4.2420 4.2044 4.0028 4.0928 4.1394 4.0377
52 4.3375 4.2933 4.2511 4.0458 4.1401 4.1889 4.0849
53 4.3969 4.3471 4.2997 4.0913 4.1900 4.2412 4.1345
54 4.4596 4.4035 4.3503 4.1395 4.2429 4.2965 4.1867
55 4.5259 4.4627 4.4029 4.1905 4.2988 4.3551 4.2416
56 4.5962 4.5248 4.4574 4.2446 4.3581 4.4172 4.2993
57 4.6707 4.5899 4.5139 4.3020 4.4210 4.4830 4.3602
58 4.7498 4.6582 4.5722 4.3630 4.4878 4.5529 4.4244
59 4.8338 4.7299 4.6323 4.4278 4.5588 4.6273 4.4921
60 4.9231 4.8049 4.6940 4.4968 4.6345 4.7065 4.5633
61 5.0181 4.8834 4.7572 4.5704 4.7150 4.7908 4.6387
62 5.1191 4.9654 4.8215 4.6488 4.8009 4.8808 4.7183
63 5.2267 5.0508 4.8868 4.7325 4.8925 4.9767 4.8020
64 5.3413 5.1395 4.9526 4.8218 4.9903 5.0790 4.8906
65 5.4635 5.2315 5.0186 4.9172 5.0947 5.1883 4.9844
66 5.5940 5.3266 5.0843 5.0193 5.2063 5.3052 5.0830
67 5.7334 5.4244 5.1492 5.1284 5.3258 5.4303 5.1875
68 5.8829 5.5249 5.2127 5.2454 5.4539 5.5646 5.2985
69 6.0434 5.6275 5.2744 5.3708 5.5916 5.7089 5.4156
70 6.2158 5.7317 5.3336 5.5055 5.7396 5.8643 5.5396
71 6.4011 5.8369 5.3897 5.6502 5.8991 6.0319 5.6720
72 6.6002 5.9422 5.4421 5.8058 6.0709 6.2127 5.8244
73 6.8139 6.0467 5.9404 5.9731 6.2561 6.4078 5.9594
74 7.0425 6.1493 5.5342 6.1532 6.4557 6.6183 6.1174
75 7.2868 6.2489 5.5735 6.3471 6.6707 6.8453 6.2830
Table-PA
</TABLE>
P-12867.22
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
If you have questions concerning your AUL contract, or wish to register a
complaint, please call 1-800-634-1629.
P-12868TX
2
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
The Contractholder may return the contract for any reason within ten days after
receiving it. If returned, the contract shall be considered void from the
beginning, and any contributions shall be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12868WA
3
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this Certificate carefully. The Participant may return the
Certificate for any reason within ten days after receiving it. If returned, the
Certificate shall be considered void from the beginning, and any contributions
shall be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12868UT
4
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
THIS CERTIFICATE IS SUBJECT TO NEW JERSEY INSURANCE LAWS AND REGULATIONS AS
ADMINISTERED BY THE NEW JERSEY DEPARTMENT OF INSURANCE.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12868NJ
5
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
The Contractholder may return the contract for any reason within ten days after
receiving it. If returned, the contract shall be considered void from the
beginning, and any contributions shall be refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12868PA
6
<PAGE>
CONTRACT NUMBER VXX,XXX
CONTRACTHOLDER ABC COMPANY
PARTICIPANT'S NAME JOHN DOE
SOCIAL SECURITY NUMBER ###-##-####
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into an IRA Multiple-Fund Group Variable
Annuity Contract (the Contract), and that AUL has created an account in your
name to receive Contributions for your benefit pursuant to the Contract.
All rights and benefits are determined in accordance with the provisions of the
Contract. The only parties to the contract are the Contractholder and AUL. All
rights and benefits are determined in accordance with the provisions of the
Contract.
Benefits under the Contract will be paid at the Participant's direction.
Any amendments to or changes in the Contract will be binding and conclusive on
each Participant and beneficiary.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
AUL American Series
IRA Multiple-Fund Group Variable Annuity Certificate
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12868
7
<PAGE>
SUMMARY OF CERTAIN CONTRACT PROVISIONS
WHICH AFFECT YOU
DEFINITIONS
"Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
"Accumulation Period" means the period of time commencing on the date on which a
Participant's initial Contribution is credited to the Participant Account and
terminating on the date when such Participant Account is closed.
"Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account during
the Accumulation Period.
"Annuity Commencement Date" means the first day of any month upon which an
annuity begins under the Contract. However, for any Participant, this date shall
not be later than the required beginning date as defined in the applicable
sections of the Code and Regulations issued thereunder.
"Code" means the Internal Revenue Code of l986, as amended.
"Contributions" means amounts paid in cash to AUL from time to time by, or on
behalf of, Participants, which are credited to Participant Accounts. The legal
title to, and ownership of, such amounts is vested solely in the Participant.
"Current Rates of Interest" means each of the annual effective rates of interest
as determined and declared by AUL from time to time and as credited to each
interest pocket maintained within the Fixed Interest Account. The Current Rates
of Interest shall always be equal to or greater than the Guaranteed Rate of
Interest.
"Excess Contributions" means those Contributions made by, or on behalf of, a
Participant which exceed the limitations in effect under applicable provisions
of the Code and Regulations issued thereunder.
"Fixed Interest Account" means that fund of AUL's general asset account in which
all or a portion of a Participant's Account Value may be held for accumulation
at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
8
<PAGE>
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any Contributions or amounts
transferred on or after the effective date of such change shall be
credited to a new open interest pocket and shall earn interest at the
new Current Rate of Interest in effect for such new open interest
pocket. Therefore, at any given time, various funds credited to a
Participant Account and allocated to the Fixed Interest Account may be
earning interest at different Current Rates of Interest for different
periods of time.
"Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
"Home Office" means the principal office of AUL. The mailing address is P. O.
Box 6148, Indianapolis, Indiana 46206-6148.
"Investment Account" means each subaccount of the Variable Account, which
subaccounts currently include the Equity Investment Account, the Bond Investment
Account, the Money Market Investment Account, and the Managed Investment
Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
The AUL American Managed Portfolio of the Mutual Fund is a managed
Portfolio which invests in the same types of investments as the other
Portfolios listed in (a), (b), and (c) above.
"Investment Option" means the Fixed Interest Account or any of the Investment
Accounts of the Variable Account. AUL reserves the right to provide other
Investment Options under the Contract at any time.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940.
"Participant" means any person enrolled in the Contract who elects to make
Contributions or for whom Contributions are made, and for whom a Participant
Account is established.
"Participant Account" means an account established under the Contract for a
Participant. Contributions received by AUL shall be credited to Participant
Accounts as AUL is directed in writing.
"Portfolio" means a series of the Mutual Fund as described in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
"Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
"Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
9
<PAGE>
"Variable Account" means a separate account established by AUL called the AUL
American Unit Trust, which is registered under The Investment Company Act of
l940 as a unit investment trust.
"Withdrawal Charge" means a charge taken by AUL equal to a percentage of the
Account Value withdrawn under the Contract, where the percentage varies by the
number of full years measured from the date a Participant Account is established
to the date the Withdrawal Charge is determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
"Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
Contributions:
- --------------
(a) Contributions may vary in amount and frequency; however, they must be
at least equal to a minimum annual Contribution of $300 per
Participant in any full contract year.
(b) Except for amounts eligible for rollover treatment under the Code,
Contributions during a Participant's taxable year (which is presumed
to be a calendar year) must be made in cash and may not exceed the
amounts described below (as adjusted by Code Section 408(a)):
(1) the lesser of $2,000 or 100% of compensation includible in the
Participant's gross income for such taxable year; or (2) the lesser of
$2,250 or 100% of compensation includible in the Participant's gross
income for such taxable year if a Contribution is made on behalf of
the Participant's non-employed spouse (no more than $2,000 may be
allocated to either the Participant or his spouse); or (3) the lesser
of $30,000 (or, if greater, 25% of the dollar limitation in effect
under Code Section 415(b)(1)(A)) or 15% of compensation in the case of
a simplified employee pension (SEP) Contribution.
(c) Excess Contributions (plus gains or minus losses thereon) shall be
withdrawn from a Participant Account and returned to the Participant
upon receipt by AUL at its Home Office of complete written
instructions from the Participant. Such written instructions must
include the amount to be withdrawn and returned, and certification
that such Contributions constitute Excess Contributions and that such
returns are permitted by applicable provisions of the Code and
Regulations issued thereunder. It shall not be the responsibility of
AUL to determine the existence or amount of
<PAGE>
Excess Contributions or gains or losses thereon, or that returns of
Excess Contributions are permitted by applicable provisions of the
Code and Regulations. In withdrawing and returning the identified
amount, AUL may rely solely on such written instructions and certifi-
cation. Such a withdrawal and return of Excess Contributions shall not
be subject to the withdrawal benefits provisions of the Contract.
(d) Other refunds of Contributions shall be applied before the close of
the calendar year following the year of such refund toward the payment
of future contributions or the purchase of additional benefits.
(e) When a Contribution is received at AUL's Home Office, it shall be
credited to Participant Accounts as directed in written allocation
instructions.
(f) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
contributing party unless consent is given to AUL to retain the
initial Contribution until AUL receives the data and allocation
instructions for the Participant. Alternatively, if the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office when AUL first receives the initial Contribution, to the extent
permitted by applicable law, AUL may allocate the initial Contribution
to the Money Market Investment Account, and shall transfer such
amounts credited to the Money Market Investment Account according to
the applicable allocation instructions upon receipt of the data
required to establish the Participant Account and allocation
instructions.
(g) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
(h) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%, as elected by the Participant in writing. If no allocation
instruction is made with respect to any Participant Account, AUL shall
process such credits in accordance with the allocation instruction
applicable to the immediately preceding Contribution. If there should
be no allocation instruction applicable to a portion of a Contribution
other than the initial Contribution, that amount shall be credited to
the Fixed Interest Account until such time as an appropriate
allocation instruction is received, at which time such amount shall be
withdrawn from the Fixed Interest Account and allocated pursuant to
such instructions. The Participant may change an allocation
instruction with respect to future allocations to his Participant
Account by giving new written allocation instructions to AUL at its
Home Office.
Addition, Deletion, or Substitution of Investments:
- ---------------------------------------------------
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the Contract.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) If deemed by AUL to be in the best interests of persons or entities
having voting rights under the Contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof.
Transfers:
- ----------
(a) Subject to the limitations of (d) through (g) below, the Participant
may direct AUL at its Home Office to transfer the amounts credited to
an Investment Option to any other Investment Option during the
Accumulation Period. For any transfer from an Investment Account,
Accumulation Units shall be valued as of the close of business on the
Valuation Date that AUL receives the Participant's direction, provided
that AUL receives such direction by 4:00 p.m. E.S.T. on that Valuation
Date. If such direction is received after 4:00 p.m. E.S.T., such
transfer shall be effective as of the close of business on the next
succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Participant within 7
days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
(d) The Participant may not direct a transfer with regard to his
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(e) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any contract year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last contract anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
<PAGE>
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge on a transfer.
BENEFITS
Annuity Options:
- ----------------
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge) of the
Participant Account for the purpose of providing a fixed payment annuity. Upon
receipt of such request, AUL is hereby authorized by such Participant to value
and transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date that AUL receives such written request at
its Home Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Participant
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
<PAGE>
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge) of his Participant Account
shall be applied under (b) above as a 10 Year Certain and Life Annuity. AUL must
receive written notification of such Annuity Commencement Date,
(f) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege,
and to impose a charge of not more than $25 on a transfer.
BENEFITS
Annuity Options:
- ----------------
At the written request of the Participant, AUL shall apply all or a portion of
the Account Value (subject to any appropriate premium tax charge) of the
Participant Account for the purpose of providing a fixed payment annuity. Upon
receipt of such request, AUL is hereby authorized by such Participant to value
and transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date that AUL receives such written request at
its Home Office. Such transferred amounts shall be held in the Fixed Interest
Account until the Participant's Annuity Commencement Date. The Participant
request shall include certification as to the purpose for the annuity and the
election of one of the following annuity options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the annuitant's monthly annuity shall be paid to the contingent
annuitant named in the election for as long as the contingent
annuitant lives. An election of this option is automatically cancelled
if either the Participant or the contingent annuitant dies before the
Annuity Commencement Date.
(d) Unit Refund Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives, and shall end with the
last monthly payment before the death of the annuitant. If, at the
death of the annuitant, the sum of the monthly payments previously
received is less than the amount applied to provide the annuity,
monthly payments of the same amount shall continue to the annuitant's
beneficiary until the total of the monthly payments received equals
such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Any other options made available by AUL at the time a Participant
exercises his option to elect an annuity.
If no annuity option election for a Participant has been received by AUL at its
Home Office at least 30 days prior to the Annuity Commencement Date, the Account
Value (subject to any appropriate premium tax charge) of his Participant Account
shall be applied under (b) above as a 10 Year Certain and Life Annuity. AUL must
receive written notification of such Annuity Commencement Date, written
designation of the contingent annuitant or beneficiary, and any election forms
needed in connection with any annuity option provided.
In no event shall any option elected provide annuity benefits to the Participant
or to the Participant and the contingent annuitant which would extend for a
certain period beyond the life expectancy of such Participant or the joint life
expectancy of such Participant and such contingent annuitant as determined on
the Annuity Commencement Date. If an option of periodic payments is elected, any
such payments shall be made at intervals of no longer than one year.
If the total Account Value is less than $2,000, such value shall be paid in a
lump sum to the annuitant rather than annuitized under the annuity options
provided in (a) through (f) above. Additionally, if the monthly annuity is less
than AUL's then current established minimum, AUL reserves the right to make
payments on a less frequent basis.
Death Benefits:
- ---------------
(a) Upon receipt of written instructions from the Participant's
beneficiary (or, if applicable, the secondary beneficiary of the
Participant) and of due proof of the Participant's (and, if
applicable, the beneficiary's) death during the Accumulation Period at
its Home Office, AUL shall apply the Account Value of the Participant
Account for the purpose of providing a death benefit. The death
benefit shall be paid to the beneficiary last properly designated in
writing to AUL at its Home Office by the Participant, or, if there is
no designated beneficiary living on the date of the Participant's
death, to the Participant's estate. If any beneficiary dies while
receiving payments and no beneficiary is designated to receive any
remaining payments, such remaining payments shall be made to the
deceased beneficiary's estate.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives such written instructions at its Home
Office, or (2) the Valuation Date that AUL receives such due proof of
death at its Home Office, provided that such written instructions or
due proof of death received on the later of (1) or (2) above are(is)
received by 4:00 p.m. E.S.T. If the written instructions or due proof
of death received on the later of (1) or (2) above are(is) received
after 4:00 p.m. E.S.T., such valuation shall be made as of the close
of business on the next succeeding Valuation Date.
(c) (1) The benefit shall be payable in accordance with one of the
following provisions as elected by the Participant or the
beneficiary if the Participant did not make an election:
(i) The entire Account Value to be applied shall be paid to the
beneficiary in a single sum or by another elected method on
or before December 31 of the calendar year which contains
the fifth anniversary of the date of the Participant's
death; or
<PAGE>
(ii) The benefit shall be paid as an annuity in accordance with
the Annuity Options shown above over a period not to exceed
the life or life expectancy of the beneficiary. If the
beneficiary is not the Participant's surviving spouse, the
annuity must begin on or before December 31 of the calendar
year immediately following the calendar year in which the
Participant died. If the beneficiary is the Participant's
surviving spouse, such spouse may elect to receive equal or
substantially equal payments over the life or life
expectancy of such spouse commencing at any date prior to
the later of (1) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, or (2) December 31 of the calendar year in
which the Participant would have attained age 70 1/2. Such
spousal election must be made no later than the earlier of
December 31 of the calendar year containing the fifth
anniversary of the Participant's death or the date
distributions are required to begin pursuant to the
preceding sentence. The surviving spouse may accelerate
these payments at any time by increasing the frequency or
amount of such payments.
(2) If a Participant dies on or after his Annuity Commencement Date,
any interest remaining under the Annuity Option selected shall be
paid at least as rapidly as prior to the Participant's death.
(3) If payment is to be made in a cash lump sum, payment shall be
made within 7 days of the date of valuation, as determined in (b)
above, except as AUL may be permitted to defer such payment of
amounts derived from the Variable Account in accordance with the
provisions of federal securities laws. Also, AUL reserves the
right to defer the payment of amounts withdrawn from the Fixed
Interest Account for a period of 6 months after AUL receives
written instructions at its Home Office.
Withdrawal Benefits:
- --------------------
(a) Except as stated below, a Participant, upon submitting a proper
written request to AUL at its Home Office, may direct AUL to withdraw
all or a portion of the Account Value (subject to the Withdrawal
Charge) of his Participant Account.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written withdrawal
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied shall be determined as of the
applicable Valuation Date determined in (c) above. If the entire
Account Value of a Participant Account is withdrawn, the Participant
shall be paid the Withdrawal Value. If the Participant requests that a
specified percentage or dollar amount be paid to the Participant, AUL
shall withdraw from the Participant Account an amount equal to the
dollar amount to be paid divided by the difference between 1 and the
decimal equivalent of the applicable Withdrawal Charge.
Notwithstanding the previous
<PAGE>
sentence, in any contract year the Participant may withdraw up to 10%
of the Account Value of his Participant Account determined as of the
last contract anniversary preceding the request for the withdrawal
without application of any Withdrawal Charge, provided that 12 months
have elapsed from the date that the Participant's first Contribution
is credited to his Participant Account by AUL to the date of such
withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Participant. Such
cash lump sum will be paid within 7 days from the date that AUL
receives the withdrawal request at its Home Office, except as AUL may
be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account (other than amounts which are prohibited
from being distributed because provision (a)(1) above is not met)
which have been on deposit for the longest period of time, as well as
the interest credited thereon, shall be withdrawn first.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the Mutual Fund as such prospectus may be amended or supplemented from time to
time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that Investment
Account for that Participant Account as of such Valuation Period by the dollar
value of one Accumulation Unit in that Investment Account as of the close of
business on the applicable Valuation Period. The number of Accumulation Units
thus determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
The value of an Accumulation Unit in each Investment Account was established at
$1.00 as of April 12, 1990. The value of an Accumulation Unit in each Investment
Account as of any Valuation Period thereafter is equal to the dollar value of
one Accumulation Unit in that Investment Account as of the immediately preceding
Valuation Period multiplied by the Net Investment Factor, as defined below, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or transfers
which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
<PAGE>
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
(not to exceed $100 per contract year quarter) is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under the Contract by that Participant Account.
AUL reserves the right to deduct a charge (not to exceed $25) for each transfer
transaction, to deduct the appropriate premium tax charge, or to deduct the
appropriate charges for federal, state, or local income taxes incurred by AUL
that are attributable to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract (except the Table of Immediate
Annuities) to comply with, or give the Contractholder or Participants the
benefit of, any provisions of federal or state laws, regulations, or rulings.
MISCELLANEOUS
Ownership
- ----------
The Contractholder is the owner of the Contract and may agree with AUL to any
change or amendment of it without the consent of any other person or entity,
except that no such change or amendment shall adversely affect the benefits to
be provided by Contributions made prior to the effective date of such change or
amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder, Participants, or any other person or entity, to make any
change to any provisions of the Contract to comply with, or give the
Contractholder or Participants the benefit of, any provisions of federal or
state laws, regulations, or rulings.
<PAGE>
MISCELLANEOUS
Ownership
- ---------
The Contractholder is the owner of the Contract and may agree with AUL to any
change or amendment of it without the consent of any other person or entity,
except that no such change or amendment shall adversely affect the benefits to
be provided by Contributions made prior to the effective date of such change or
amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account.
The Mutual Fund shall pay an investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus as it may be amended or supplemented from time to time.
These expenses may vary from year to year. The net asset value of each Portfolio
reflects such investment advisory fee and other expenses which are deducted from
the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account. However, in no event shall any portion of the annual charge
for a Contract Year attributable to the Fixed Interest Account subaccount of the
Participant Account exceed the amount of the Contributions allocated to such
Fixed Interest Account subaccount for the Participant during such Contract Year
plus interest earned during such Contract Year on amounts held in such Fixed
Interest Account subaccount.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
AUL reserves the right to amend the Contract at any time, without the consent of
the Contractholder,
<PAGE>
Participants, or any other person or entity, to make any change to any
provisions of the Contract to comply with, or give the Contractholder or
Participants the benefit of, any provisions of federal or state laws,
regulations, or rulings.
MISCELLANEOUS
Ownership
- ---------
The Contractholder is the owner of the Contract and may agree with AUL to any
change or amendment of it without the consent of any other person or entity,
except that no such change or amendment shall adversely affect the benefits to
be provided by Contributions made prior to the effective date of such change or
amendment unless the consent of all Participants is obtained.
AUL shall have no obligation to make any payment or distribution except as
specified in the Contract.
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, an equitable
adjustment shall be made as soon as possible so as to provide the annuity to
which that person is entitled.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to, and received by, AUL at its Home Office before becoming effective,
unless the Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to any person or
entity when directed to do so in writing by the Participant. Any payment made by
AUL will fully discharge AUL to the extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
- -------
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting rights
attributable to the shares of each Portfolio held in the Investment Accounts at
any regular and special meetings of the shareholders of the Mutual Fund on
matters requiring shareholder voting under The Investment Company Act of l940 or
other applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the present
interpretation thereof should change, and as a result AUL determines
<PAGE>
that it is permitted to vote the shares of the Mutual Fund in its own right, it
Tax Status: AUL does not make any guarantee regarding the federal, state, or
local tax status of the Contract, any Participant Account established
thereunder, or any transaction involving the Contract.
Essential Data: The Participant shall furnish to AUL whatever information is
necessary to establish the eligibility and amount of annuity or other benefit in
each instance.
Reliance: AUL shall be fully protected in relying on any information furnished
by the Contractholder, by any person or persons certified to AUL by the
Contractholder as acting on its behalf, or by a Participant. AUL need not
inquire as to the accuracy or completeness thereof.
Misstatement of Essential Data: If it has been found that any essential data
pertaining to any person has been omitted or misstated, including, but not
limited to, a misstatement as to the age of an annuitant, there shall be an
equitable adjustment so as to provide the annuity to which that person is
entitled. If this misstatement is revealed after periodic annuity payments have
begun, any underpayment will immediately be disbursed by AUL to the annuitant.
Any overpayments will be deducted from subsequent payments, until AUL recovers
the overpayment.
Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of payment
of the annuity.
Election, Notice, or Direction Requirements: Wherever in the Contract reference
is made to the Contractholder or Participant making a request or giving notice
or direction, such request, notice, or direction must be in writing and must be
submitted to, and received by, AUL at its Home Office before becoming effective,
unless the Participant is otherwise directed by AUL.
Quarterly Statement of Account Value: As soon as reasonably possible after the
end of each contract year quarter, AUL shall prepare a statement of the Account
Value of each Participant Account existing under the Contract.
Sex and Number: Whenever the context of this Certificate so requires, the plural
includes the singular, the singular the plural, and the masculine the feminine.
Facility of Payment: If any Participant, contingent annuitant, or beneficiary is
legally incapable of giving a valid receipt for any payment due him, and no
guardian has been appointed, AUL may make such payment to the person or persons
who have assumed the care and principal support of such Participant, contingent
annuitant, or beneficiary. Also, AUL may make payment directly to any person or
entity when directed to do so in writing by the Participant. Any payment made by
AUL will fully discharge AUL to the extent of such payment.
Insulation from Liability: The assets of the Variable Account are not chargeable
with liabilities arising out of any other business AUL may conduct.
Voting:
- -------
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of the
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940
<PAGE>
or other applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and as a
result AUL determines that it is permitted to vote the shares of the Mutual
Fund in its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if the Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote its own
shares in the same proportion as the voting instructions that are received
in a timely manner for contracts and Participant Accounts participating in
the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or the Mutual Fund as may
be required by applicable federal law.
Nonforfeitability and Nontransferability: The entire Withdrawal Value of a
Participant Account under the Contract shall be nonforfeitable at all times. No
sum payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person or entity
other than AUL. In addition, to the extent permitted by law, no such sum shall
in any way be subject to legal process requiring the payment of any claim
against the payee.
Acceptance of Contributions: AUL shall have the right to refuse to accept
Contributions as of the last day of the second month following the date that
written notice to this effect is delivered to any contributing Participant or to
any Participant for whom Contributions are being made.
P-12868.12
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
EXACT LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 4.0025 3.9934
46 4.0438 4.0335
47 4.0872 4.0756
48 4.1330 4.1199
49 4.1813 4.1665
50 4.2322 4.2156
51 4.2859 4.2672
52 4.3426 4.3216
53 4.4026 4.3789
54 4.4661 4.4394
55 4.5333 4.5032
56 4.6045 4.5705
57 4.6801 4.6416
58 4.7604 4.7167
59 4.8458 4.7961
60 4.9368 4.8801
61 5.0338 4.9689
62 5.1373 5.0629
63 5.2477 5.1624
64 5.3655 5.2677
65 5.4913 5.3789
66 5.6260 5.4965
67 5.7703 5.6207
68 5.9255 5.7518
69 6.0929 5.8901
70 6.2737 6.0357
71 6.4695 6.1887
72 6.6816 6.3489
73 6.9116 6.5160
74 7.1603 6.6894
75 7.4293 6.8682
83IAMF4-4
10YRPROJ
P-12868.13
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
MULTIPLE-FUND GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By deleting the first paragraph of "Other Charges" and by substituting the
following first paragraph in lieu thereof:
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. Additionally, AUL shall
multiply the portions (as delineated in the table below) of the total month-end
Account Value in the Variable Account of all Participants in the contract by the
monthly equivalent of the corresponding Annual Variable Investment Plus Factors
appearing in the table below. These products shall be added together, and the
sum shall be divided by the total month-end Account Value in the Variable
Account of all Participants in the contract. This percentage shall be multiplied
by the month-end Account Value of each Participant in each Investment Account.
The resulting amount for each Investment Account shall be added to the
Participant's Account Value for that Investment Account.
Contract's Month-End Account Value in Annual Variable Investment Plus Factor
Variable Account
First $500,000 0.00%
Next $500,000 0.25%
Next $2 million 0.35%
Next $2 million 0.40%
Next $1 million 0.50%
Over $6 million 0.75%
AUL
By /s/ William R. Brown
Secretary
AUL AMERICAN.ADD.VIP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
The Effective Date of this Addendum is the effective date of the corresponding
Amendment to the Contract.
Pursuant to this Addendum, the Participant's Certificate under the Contract is
hereby amended as follows:
By adding the following to the face page of the Certificate:
The Contract is a SIMPLE IRA.
By deleting the definition of "Contributions" in the Participant's Certificate
under the Contract and by substituting the following definition in lieu thereof:
DEFINITIONS
"Contributions" means, subject to the restrictions of the following paragraph,
amounts paid in cash to AUL from time to time by, or on behalf of, a
Participant, including amounts transferred to the Contract from another SIMPLE
IRA of the Participant, which are credited to his Participant Account maintained
under the Contract. The legal title to, and ownership of, such amounts is vested
solely in the Participant. The Contract is established for the exclusive benefit
of the Participant or his beneficiaries.
The SIMPLE IRA will accept only cash Contributions made on behalf of the
Participant pursuant to the terms of a SIMPLE IRA Plan described in section
408(p) of the Internal Revenue Code. A rollover Contribution or a transfer of
assets from another SIMPLE IRA of the Participant will also be accepted. No
other Contributions will be accepted.
By deleting item (b) as it appears under the heading indicated below in the
Participant's Certificate under the Contract and by substituting the following
item (b) in lieu thereof, and by adding the following items (i) and (g) under
the headings indicated below:
CONTRIBUTIONS, INVESTMENTS AND TRANSFERS
Contributions:
- --------------
(b) Except for amounts rolled over or transferred from another SIMPLE IRA of
the Participant, Contributions during a Participant's taxable year (which
is presumed to be a calendar year) may not exceed the amounts allowed by
Code Section 408(p) (as adjusted).
(i) If Contributions made on behalf of the Participant pursuant to a
SIMPLE IRA Plan maintained by the Participant's employer are received
directly by AUL from the employer, AUL will provide the employer with
the summary description required by section 408(1)(2) of the Internal
Revenue Code.
BENEFITS
Withdrawal Benefits:
(g) Prior to the expiration of the 2-year period beginning on the date the
Participant first participated in any SIMPLE IRA Plan maintained by the
Participant's employer, any rollover or transfer by the Participant of
funds from the SIMPLE IRA must be made to another SIMPLE IRA of the
Participant. Any distribution of funds to the Participant during this
2-year period may be subject to a 25-percent additional tax if the
Participant does not roll over the amount distributed into a SIMPLE IRA.
After the expiration of this 2-year period, the Participant may roll over
or transfer funds to any IRA of the Participant that is qualified under
section 408(a) or (b) of the Internal Revenue Code.
AUL
By: /s/ William R. Brown
Secretary
P-12868.ADD.SIMP
<PAGE>
ADDENDUM
TO THE
CERTIFICATE
ISSUED TO THE PARTICIPANT IN THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
Pursuant to this Addendum, the corresponding provisions of the Participant's
Certificate under the Contract are hereby deleted and the following provisions
are substituted in lieu thereof:
"Investment Account" means each subaccount of the Variable Account made
available to the Contractholder by AUL and identified in Schedule A of the
Contract. Schedule A of the Contract may be amended by AUL from time to time as
described in "Addition, Deletion, or Substitution of Investments." Amounts
allocated to any Investment Account identified in Schedule A of the Contract
shall be invested in the shares of the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account.
"Mutual Fund" means the AUL American Series Fund, Inc., a diversified, open-end
management investment company registered under The Investment Company Act of
l940, and any other such open-end management investment company made available
by AUL.
"Portfolio" means a series of a particular Mutual Fund as described in that
prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to make
additions to, deletions from, substitution for, or combinations of, the
securities that are held by the Variable Account or any Investment Account
or that the Variable Account or any Investment Account may purchase. AUL
reserves the right to eliminate the shares of any of the eligible
Portfolios and to substitute shares of, or interests in, another Portfolio
of the AUL American Series Fund, Inc., of another open-end, registered
investment company, or other investment vehicle, for shares already
purchased or to be purchased in the future under the Contract, if the
shares of any or all eligible Portfolios are no longer available for
investment, or if, in AUL's judgment, further investment in any or all
eligible Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law, AUL
will not substitute any shares in the Variable Account or any Investment
Account without notice, Participant approval, or prior approval of the
Securities and Exchange Commission or a state insurance commissioner, and
without following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
P-12868.ADD.1
<PAGE>
(b) AUL reserves the right to establish additional Investment Accounts, each of
which would invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the Variable Account, or in other securities or
investment vehicles. AUL reserves the right to eliminate or combine
existing Investment Accounts if, in its sole discretion, marketing, tax, or
investment conditions so warrant. AUL also reserves the right to provide
other Investment Options under the Contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer assets
from any Investment Account to another separate account of AUL or
Investment Account.
(c) In the event of any such substitution or change, AUL may, by appropriate
amendment, make such changes in the Contract as may be necessary or
appropriate to reflect such substitution or change. If deemed by AUL to be
in the best interests of persons or entities having voting rights under the
Contract, the Variable Account may be operated as a management investment
company under The Investment Company Act of 1940 or any other form
permitted by law, it may be deregistered in the event such registration is
no longer required under The Investment Company Act of 1940, or it may be
combined with other separate accounts of AUL or an affiliate thereof. AUL
may take such action as is necessary to comply with, or to obtain,
exemptions from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also may
combine one or more Investment Accounts and may establish a committee,
board, or other group to manage one or more aspects of the operation of the
Variable Account.
Withdrawal Benefits:
- --------------------
(d) The Account Value to be applied shall be determined as of the applicable
Valuation Date determined in (c) above. If the entire Account Value of a
Participant Account is withdrawn, the Participant shall be paid the
Withdrawal Value. If the Participant requests that a specified percentage
or dollar amount be paid to the Participant, AUL shall withdraw from the
Participant Account an amount equal to the dollar amount to be paid divided
by the difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract year in which a Participant Account is established, and in the
next succeeding Contract year, the Participant may withdraw from that
Participant Account up to 10% of the sum of the Account Value of that
Participant Account, determined as of the last Contract anniversary
preceding the request for the withdrawal, plus Contributions made during
the applicable Contract year, without application of any Withdrawal Charge.
In any subsequent Contract year, the Participant may withdraw from that
Participant Account up to 10% of the Account Value of that Participant
Account, determined as of the last Contract anniversary preceding the
request for the withdrawal, without application of any Withdrawal Charge.
VALUATIONS
All assets of each Portfolio shall be valued as provided in the prospectus for
the applicable Mutual Fund as such prospectus may be amended or supplemented
from time to time.
Any amounts that are allocated to any Investment Account on behalf of a
Participant shall be credited to his Participant Account in the form of
Accumulation Units on the basis of the value of such units in that Investment
Account as of the end of the Valuation Period on which such amounts are received
by AUL at its Home Office. Such crediting shall be made separately for amounts
allocated to each Investment Account. The number of Accumulation Units in each
Investment Account credited to each Participant Account as of any Valuation
Period shall be determined by dividing the amounts allocated to that
<PAGE>
Investment Account for that Participant Account as of such Valuation Period by
the dollar value of one Accumulation Unit in that Investment Account as of the
close of business on the applicable Valuation Period. The number of Accumulation
Units thus determined shall not be changed by any subsequent change in the
dollar value of the Accumulation Units.
The value of an Accumulation Unit in the AUL American Equity, Bond, Money
Market, and Managed Investment Accounts was established at $1.00 as of April 12,
1990. The value of an Accumulation Unit in any other Investment Account
available under the Contract shall be established at $1.00 as of the date of the
first deposit to such Investment Account. The value of an Accumulation Unit in
each Investment Account as of any Valuation Period thereafter is equal to the
dollar value of one Accumulation Unit in that Investment Account as of the
immediately preceding Valuation Period multiplied by the Net Investment Factor,
as defined below, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
The Net Investment Factor for each Investment Account for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) from that result,
where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if any,
paid by the Portfolio during the current Valuation Period, plus or
minus
(3) any credit or charge for any taxes paid or reserved for by AUL during
the current Valuation Period which are determined by AUL to be
attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment Account
determined as of the end of the immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges assessed
against the assets of the Investment Account for mortality and expense
risks, as authorized under "Other Charges" below.
The value of each Participant Account's share of any Investment Account as of
any Valuation Date shall be determined by multiplying the Participant Account's
aggregate Accumulation Units in that Investment Account as of such Valuation
Date by the dollar value of one Accumulation Unit in that Investment Account as
of such Valuation Date. The value of the Participant Account's share of any
Investment Account as of any date other than a Valuation Date is equal to the
value of its share of that Investment Account as of the immediately preceding
Valuation Date.
OTHER CHARGES
AUL shall deduct a daily mortality risk charge and a daily expense risk charge
equal to the daily equivalent of an annual combined charge of 1.25% against the
average daily net assets of each Investment Account. These charges shall be
reflected in the Net Investment Factor as defined above.
P-12868.ADD.2
<PAGE>
A Mutual Fund shall pay any investment advisory fee and certain other expenses,
which may include its operational and organizational expenses, as described in
the current prospectus for that Mutual Fund as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Portfolio reflects such investment advisory fee and other expenses
which are deducted from the assets of such Portfolio.
AUL shall deduct an administrative charge per Contract year quarter equal to the
lesser of $7.50 or 0.5% of the Account Value on the last day of each such
quarter from each Participant Account in existence on such day for so long as
the Participant Account is in effect during the Accumulation Period. This charge
is to be prorated among each subaccount of the Participant Account which
corresponds to each Investment Option utilized under the Contract by that
Participant Account.
AUL reserves the right to deduct a charge for each transfer transaction, to
deduct the appropriate premium tax charge, or to deduct the appropriate charges
for federal, state, or local income taxes incurred by AUL that are attributable
to the Variable Account and its Investment Accounts.
Voting:
- -------
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the Investment
Accounts at any regular and special meetings of the shareholders of a
Mutual Fund on matters requiring shareholder voting under The Investment
Company Act of l940 or other applicable laws. AUL shall exercise these
voting rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund in its own right, it may elect to do so. AUL
will vote shares of any Investment Account, if any, that it owns
beneficially in its own discretion, except that if a Mutual Fund offers its
shares to any insurance company separate account that funds variable life
insurance contracts or if otherwise required by applicable law, AUL will
vote its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under the Contract are the
Participants. Unless otherwise required by applicable law, the number of
Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value of all
of the Accumulation Units of the corresponding Investment Account
attributable to this contract on a particular date by the net asset value
per share of that Portfolio as of the same date. Fractional votes will be
counted. The number of votes as to which voting instructions may be given
will be determined as of the date coincident with the date established by
the applicable Mutual Fund for determining shareholders eligible to vote at
the meeting of that Mutual Fund. If required by the Securities and Exchange
Commission, AUL reserves the right to determine in a different fashion the
voting rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to the Contract for which no timely voting
instructions are received will be voted by AUL in the same proportion as
the voting instructions which are received in a timely manner for all
contracts and Participant Accounts participating in that Investment
Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as to the
instructions received or the authority of Contractholders, Participants, or
others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such reports
or prospectuses concerning the Variable Account or a Mutual Fund as may be
required by applicable federal law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES CONTRACT
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA 73,244 (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
BANK ONE AS CUSTODIAN ON BEHALF OF ANY PERSON ELIGIBLE TO
PARTICIPATE IN AN IRA 408 INDIVIDUAL RETIREMENT ANNUITY WHO
BECOMES A PARTICIPANT UNDER THIS CONTRACT AND SUCH SUCCESSOR
CUSTODIAN AS MAY BE APPOINTED FROM TIME TO TIME (THE
CONTRACTHOLDER)
EFFECTIVE DATE: MAY 1, 1993
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections and Subsections of the
Contract, if any, and by inserting the following Sections and Subsections in
lieu thereof:
1.12 "Fixed Interest Account" means that fund of AUL's general asset
account in which all or a portion of a Participant's Account Value may be held
for accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred (excluding transfers
discussed in (c) below), to the Fixed Interest Account shall be
credited to the open interest pocket and shall earn interest at the
Current Rate of Interest in effect for that interest pocket. Such
Contributions or transferred amounts, during the time that the Current
Rate of Interest exceeds the Guaranteed Rate of Interest, shall earn
interest at such credited Current Rate of Interest for at least 1
year. After such 1-year period, AUL reserves the right to declare, at
any time, a new Current Rate of Interest to be applied to funds held
within that interest pocket. Any such new Current Rate of Interest
must remain in effect for that interest pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for such new Contributions
or new amounts transferred to the Fixed Interest Account, the previous
open interest pocket shall close, and any such Contributions or
amounts transferred on or after the effective date of such change
shall be credited to a new open interest pocket and shall earn
interest at the new Current Rate of Interest in effect for such new
open interest pocket. Therefore, at any given time, various funds
credited to a Participant Account and allocated to the Fixed Interest
Account may be earning interest at different Current Rates of Interest
for different periods of time.
(c) Any contribution to another AUL P-12867 contract which is allocated to
the Fixed Interest Account and which is transferred to this contract
(plus gains and minus losses thereon) and allocated to the Fixed
Interest Account, beginning with the date of such transfer, shall be
credited with the
P-12867.OI.AMD
<PAGE>
Current Rate of Interest under this contract which was in effect on
the date the transferred contribution was originally deposited into
the Fixed Interest Account under the previous AUL contract.
1.15 "Investment Account" means each subaccount of the Variable Account
made available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to time as
described in Section 3.3. Amounts allocated to any Investment Account identified
in Schedule A of the contract shall be invested in the shares of the
corresponding Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
P-12867.OI.AMD
<PAGE>
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL.
1.20 "Portfolio" means a series of a particular Mutual Fund as described in
that prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
1.24 "Withdrawal Charge" means a charge taken by AUL equal to a percentage
of the Account Value of a Participant Account withdrawn pursuant to Section 4.8,
where the percentage varies by the number of full years measured from the date
that Participant Account is established, or from the date a Participant Account
is established under a previous AUL P-12867 contract from which amounts have
been transferred to this Participant Account, to the date the Withdrawal Charge
is determined. Such percentage is as follows:
During
Account Years Percentage
1 6
2 5
3 4
4 3
5 2
6 1
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
3.1 Amount of Contributions:
(a) Contributions may vary in amount and frequency; however, a minimum
Contribution of at least $100,000 must be made for a Participant in
order to establish a Participant Account. Any additional Contributions
made within the 12-month period beginning on the date the initial
Contribution is credited to that Participant Account (hereinafter
called a Certificate Year) shall also be credited to that Participant
Account. Any initial Contribution made within a different Certificate
Year shall also be subject
P-12867.OI.AMD.1
<PAGE>
to the $100,000 minimum, and any Contributions made within that
Certificate Year shall be allocated to a separate Participant Account
and shall be evidenced by a separate certificate issued to the
Participant. AUL may change the minimum Contribution acceptable under
this contract, but any such change shall apply only to individuals who
become Participants on or after the date of the change. This contract
will not terminate solely because a Contribution is not made for any
Contract Year.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund,
Inc., of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
contract. Where required under applicable law, AUL will no substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund Portfolio
listed in the current prospectus for the Variable Account, or in other
securities or investment vehicles. AUL reserves the right to eliminate
or combine existing Investment Accounts if, in its sole discretion,
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any
<PAGE>
Investment Account to another separate account of AUL or Investment
Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
4.8 Withdrawal Benefits:
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract Year in which a Participant Account is established, and in
the next succeeding Contract Year, the Participant may withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account, determined as of the last Contract
Anniversary preceding the request for the withdrawal, plus
Contributions made during the applicable Contract Year, without
application of any Withdrawal Charge. In any subsequent Contract Year,
the Participant may withdraw from that Participant Account up to 10%
of the Account Value of that Participant Account, determined as of the
last Contract Anniversary preceding the request for the withdrawal,
without application of any Withdrawal Charge. Where amounts have been
transferred to this contract from another AUL P-12867 contract,
Contract Years of participation for purposes of this 10% free-out
provision shall be determined by using the date of the Participant's
first contribution to the Participant Account in the previous contract
which was transferred.
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund as such prospectus may
be amended or supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account avail able under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined in Section 5.4, for that Investment
Account for the current Valuation Period. The value of an Accumulation Unit for
each Investment Account shall be deter mined for each Valuation Period before
giving effect to any additions, withdrawals, or transfers. After such
determination, the additions, withdrawals, or transfers which are effective as
of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account deter mined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
P-12867.OI.AMD.2
<PAGE>
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Investment Management Charge: A Mutual Fund shall pay any investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus for that Mutual
Fund as it may be amended or supplemented from time to time. These expenses may
vary from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the assets of
such Portfolio.
By deleting the first sentence of Section 6.3 and by substituting the following
first sentence in lieu thereof:
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $0.00 or 0.5% of the Account Value on
the last day of each Contract Quarter from each Participant Account in existence
on such day for as long as the Participant Account is in effect during the
Accumulation Period.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc. or any
other Mutual Fund made available by AUL.
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received
from persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if
the present interpretation thereof should change, and as a result AUL
deter mines that it is permitted to vote the shares of a Mutual Fund
in its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the applicable Mutual Fund
for determining shareholders eligible to vote at the meeting of that
Mutual Fund. If required by the Securities and Exchange Commission,
AUL reserves the right to determine in a different fashion the voting
rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
CONTRACTHOLDER AUL
By _____________________________ By: __________________________________
Title __________________________ Title ________________________________
Date____________________________ Date _________________________________
P-12867.OI.AMD.3
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund Portfolio listed below.
Investment Account Portfolio
- ------------------ ---------
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
P-12867.OI.AMD.4
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is ____________________.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By adding the following to the face page of the Contract:
This contract is a SIMPLE IRA.
By deleting Section 1.9 and by substituting the following in lieu thereof:
1.9 "Contributions" means, subject to the restrictions of the following
paragraph, amounts paid in cash to AUL from time to time by, or on behalf of, a
Participant, including amounts transferred to this contract from another SIMPLE
IRA of the Participant, which are credited to his Participant Account maintained
hereunder. The legal title to, and ownership of, such amounts is vested solely
in the Participant. The contract is established for the exclusive benefit of the
Participant or his beneficiaries.
This SIMPLE IRA will accept only cash Contributions made on behalf of the
Participant pursuant to the terms of a SIMPLE IRA Plan described in section
408(p) of the Internal Revenue Code. A rollover Contribution or a transfer of
assets from another SIMPLE IRA of the Participant will also be accepted. No
other Contributions will be accepted.
By deleting Subsection 3.1(b) and by substituting the following Subsection
3.1(b) in lieu thereof, and by adding the following Subsection 3.1(e):
3.1 (b) Except for amounts rolled over or transferred from another
SIMPLE IRA of the Participant, Contributions during a
Participant's taxable year (which is presumed to be a calendar
year) may not exceed the amounts allowed by Code Section 408(p)
(as adjusted).
(e) If Contributions made on behalf of the Participant pursuant to a
SIMPLE IRA Plan maintained by the Participant's employer are
received directly by AUL from the employer, AUL will provide the
employer with the summary description required by section
408(1)(2) of the Internal Revenue Code.
By adding the following Subsection 4.8(g):
4.8 (g) Prior to the expiration of the 2-year period beginning on the
date the Participant first participated in any SIMPLE IRA Plan
maintained by the Participant's employer, any rollover or
transfer by the Participant of funds from this SIMPLE IRA must be
made to another SIMPLE IRA of the Participant. Any distribution
of funds to the Participant during this 2-year period may be
subject to a 25-percent additional tax if the Participant does
not roll over the amount distributed into a SIMPLE IRA. After the
expiration of this 2-year period, the Participant may roll over
or transfer funds to any IRA of the Participant that is qualified
under section 408(a) or (b) of the Internal Revenue Code.
CONTRACTHOLDER AUL
By ______________________________ By ______________________________
Title ___________________________ Title ____________________________
Date ____________________________ Date _____________________________
(Existing Business)
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is _______________________.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By adding the following to the face page of the Contract:
This contract is a SIMPLE IRA.
By deleting Section 1.9 and by substituting the following in lieu thereof:
1.9 "Contributions" means, subject to the restrictions of the following
paragraph, amounts paid in cash to AUL from time to time by, or on behalf of, a
Participant, including amounts transferred to this contract from another SIMPLE
IRA of the Participant, which are credited to his Participant Account maintained
hereunder. The legal title to, and ownership of, such amounts is vested solely
in the Participant. The contract is established for the exclusive benefit of the
Participant or his beneficiaries.
This SIMPLE IRA will accept only cash Contributions made on behalf of the
Participant pursuant to the terms of a SIMPLE IRA Plan described in section
408(p) of the Internal Revenue Code. A rollover Contribution or a transfer of
assets from another SIMPLE IRA of the Participant will also be accepted. No
other Contributions will be accepted.
By deleting Subsection 3.1(b) and by substituting the following in lieu thereof,
and by adding the following Subsection 3.1(e):
3.1 (b) Except for amounts rolled over or transferred from another SIMPLE IRA
of the Participant, Contributions during a Participant's taxable year
(which is presumed to be a calendar year) may not exceed the amounts
allowed by Code Section 408(p) (as adjusted).
(e) If Contributions made on behalf of the Participant pursuant to a SIMPLE IRA
Plan maintained by the Participant's employer are received directly by AUL
from the employer, AUL will provide the employer with the summary
description required by section 408(1)(2) of the Internal Revenue Code.
By adding the following Subsection 4.8(g):
4.8 (g) Prior to the expiration of the 2-year period beginning on the date the
Participant first participated in any SIMPLE IRA Plan maintained by the
Participant's employer, any rollover or transfer by the Participant of
funds from this SIMPLE IRA must be made to another SIMPLE IRA of the
Participant. Any distribution of funds to the Participant during this
2-year period may be subject to a 25-percent additional tax if the
Participant does not roll over the amount distributed into a SIMPLE IRA.
After the expiration of this 2-year period, the Participant may roll over
or transfer funds to any IRA of the Participant that is qualified under
section 408(a) or (b) of the Internal Revenue Code.
CONTRACTHOLDER AUL
By______________________________ By: /s/ Jerry D. Semler
Chairman of the Board,
Title __________________________ President, & Chief Executive Officer
Date ___________________________ Attest /s/ William R. Brown
Secretary
(New Business)
<PAGE>
AMENDMENT
TO THE
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GXX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting the corresponding Sections and Subsections of the
Contract, if any, and by inserting the following Sections and Subsections in
lieu thereof:
1.15 "Investment Account" means each subaccount of the Variable Account
made available to the Contractholder by AUL and identified in Schedule A of the
contract. Schedule A of the contract may be amended by AUL from time to time as
described in Section 3.3. Amounts allocated to any Investment Account identified
in Schedule A of the contract shall be invested in the shares of the
corresponding Mutual Fund Portfolio listed in the current prospectus for the
Variable Account.
1.17 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment Company
Act of l940, and any other such open-end management investment company made
available by AUL.
1.20 "Portfolio" means a series of a particular Mutual Fund as described in
that prospectus for that Mutual Fund, as such prospectus may be amended or
supplemented from time to time.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the AUL American Series Fund, Inc.,
of another open-end, registered investment company, or other
investment vehicle, for shares already purchased or to be purchased in
the future under the contract, if the shares of any or all eligible
Portfolios are no longer available for investment, or if, in AUL's
judgment, further investment in any or all eligible Portfolios becomes
inappropriate in view of the purposes of the Variable Account or the
contract. Where required under applicable law, AUL will not substitute
any shares in the Variable Account or any Investment Account without
notice, Participant approval, or prior approval of the Securities and
Exchange Commission or a state insurance commissioner, and without
following the filing or other procedures established by applicable
state insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
participants or as permitted by federal law. (b) AUL reserves the
right to establish additional Investment Accounts, each of which would
invest in the corresponding Mutual Fund Portfolio listed in the
current prospectus for the
P-12867.AMD1
1
<PAGE>
Variable Account, or in other securities or investment vehicles. AUL
reserves the right to eliminate or combine existing Investment
Accounts if, in its sole discretion, marketing, tax, or investment
conditions so warrant. AUL also reserves the right to provide other
Investment Options under this contract at any time. Subject to any
required regulatory approvals, AUL reserves the right to transfer
assets from any Investment Account to another separate account of AUL
or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
4.8 Withdrawal Benefits:
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Participant shall be paid the Withdrawal Value. If the
Participant requests that a specified percentage or dollar amount be
paid to the Participant, AUL shall withdraw from the Participant
Account an amount equal to the dollar amount to be paid divided by the
difference between 1 and the decimal equivalent of the applicable
Withdrawal Charge. Notwithstanding the previous sentence, in the first
Contract Year in which a Participant Account is established, and in
the next succeeding Contract Year, the Participant may withdraw from
that Participant Account up to 10% of the sum of the Account Value of
that Participant Account, determined as of the last Contract
Anniversary preceding the request for the withdrawal, plus
Contributions made during the applicable Contract Year, without
application of any Withdrawal Charge. In any subsequent Contract Year,
the Participant may withdraw from that Participant Account up to 10%
of the Account Value of that Participant Account, determined as of the
last Contract Anniversary preceding the request for the withdrawal,
without application of any Withdrawal Charge.
5.1 Time of Valuation: All assets of each Portfolio shall be valued as
provided in the prospectus for the applicable Mutual Fund as such prospectus may
be amended or supplemented from time to time.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the
AUL American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation Unit in
any other Investment Account available under this contract shall be established
at $1.00 as of the date of the first deposit to such Investment Account. The
value of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in that
Investment Account as of the immediately preceding Valuation Period multiplied
by the Net Investment Factor, as defined
P-12867.AMD2
2
<PAGE>
in Section 5.4, for that Investment Account for the current Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions, withdrawals,
or transfers which are effective as of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for
each Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily
mortality risk charge and a daily expense risk charge equal to the daily
equivalent of an annual combined charge of 1.25% against the average daily net
assets of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Investment Management Charge: A Mutual Fund shall pay any investment
advisory fee and certain other expenses, which may include its operational and
organizational expenses, as described in the current prospectus for that Mutual
Fund as it may be amended or supplemented from time to time. These expenses may
vary from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the assets of
such Portfolio.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the
amount of the Withdrawal Charge or the administrative charge discussed in
Section 6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where this
contract is sold to the directors or employees of AUL or any of its affiliates,
or to directors or any employees of the AUL American Series Fund, Inc. or any
other Mutual Fund made available by AUL.
P-12867.AMD3
3
<PAGE>
8.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of a Mutual Fund on matters requiring shareholder voting
under The Investment Company Act of l940 or other applicable laws. AUL
shall exercise these voting rights based on instructions received from
persons having the voting interest in corresponding Investment
Accounts of the Variable Account. However, if The Investment Company
Act of l940 or any regulations thereunder should be amended, or if the
present interpretation thereof should change, and as a result AUL
determines that it is permitted to vote the shares of a Mutual Fund in
its own right, it may elect to do so. AUL will vote shares of any
Investment Account, if any, that it owns beneficially in its own
discretion, except that if a Mutual Fund offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The persons having the voting interest under this contract are the
Participants. Unless otherwise required by applicable law, the number
of Mutual Fund shares of a particular Portfolio as to which voting
instructions may be given to AUL is determined by dividing the value
of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the applicable Mutual Fund for
determining shareholders eligible to vote at the meeting of that
Mutual Fund. If required by the Securities and Exchange Commission,
AUL reserves the right to determine in a different fashion the voting
rights attributable to the shares of a Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund as may be required by applicable federal law.
CONTRACTHOLDER AUL
By _____________________________ By _________________________________
Title __________________________ Title ______________________________
Date____________________________ Date _______________________________
4
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund Portfolio listed below.
The TCI Growth Investment Account is available as of April 1, 1994.
Investment Account Portfolio
- ------------------ ---------
AUL American Equity AUL American Equity
AUL American Bond AUL American Bond
AUL American Money Market AUL American Money Market
AUL American Managed AUL American Managed
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Index 500 Fidelity VIP II Index 500
TCI Growth TCI Growth
P-12867.AMD4
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
IRA MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
American Century VP Capital Appreciation American Century VP Capital Appreciation
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
CONTRACTHOLDER AUL
By___________________________________________ By ___________________________________________
Title _______________________________________ Title ________________________________________
Date ________________________________________ Date _________________________________________
</TABLE>
P-12867.A
- --------------------------------------------------------------------------------
EXHIBIT 4.10
DCP CONTRACT, FORM P-12518
- --------------------------------------------------------------------------------
CONTRACT NUMBER GA XX,XXX
CONTRACTHOLDER ABC Company
DATE OF ISSUE January 1, 1990
CONTRACT DATE January 1, 1990
FIRST CONTRACT ANNIVERSARY January 1, 1991
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
DCP Multiple-Fund Group Variable Annuity
Nonparticipating
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12518
<PAGE>
CONTRACT NUMBER GA XX,XXX
CONTRACTHOLDER TWO-LINE NAME
DATE OF ISSUE January 1, 1990
CONTRACT DATE January 1, 1990
FIRST CONTRACT ANNIVERSARY January 1, 1991
American United Life Insurance Company (AUL) shall provide all the rights and
benefits of this contract.
This contract is issued in consideration of the application and of the payment
of Contributions to AUL.
All provisions and conditions stated on this and subsequent pages are made a
part of this contract.
Signed for AUL at its Home Office in Indianapolis, Indiana.
NOTICE OF TEN DAY RIGHT TO EXAMINE CONTRACT
Please read this contract carefully. The Contractholder may return the contract
for any reason within ten days after receiving it. If returned, the contract
shall be considered void from the beginning and any Contributions shall be
refunded.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
AUL American Series Contract
DCP Multiple-Fund Group Variable Annuity
Nonparticipating
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE
INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE
5 OF THIS CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12518
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 CONTRACT AND AUTHORITY
2.1---------------Entire Contract
2.2---------------Authority
ARTICLE 3 CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1---------------Amount of Contributions
3.2---------------How Contributions Are Handled
3.3---------------Addition, Deletion, or Substitution of Investments
3.4---------------Transfers
3.5---------------Limitations on Transfers
ARTICLE 4 BENEFITS
4.1----------------Election of Annuity Options
4.2----------------Annuity Options
4.3----------------Guaranteed Rate of Interest
4.4----------------Alternate Nonparticipating Retirement Annuity
4.5----------------Minimum Payments
4.6----------------Due Proof of Date of Birth and Survival
4.7----------------Death Benefits
4.8----------------Withdrawal Benefits
ARTICLE 5 VALUATIONS
5.1----------------Time of Valuation
5.2----------------Accumulation Units
5.3----------------Value of Accumulation Units
5.4----------------Determining the Net Investment Factor
5.5----------------Determining the Value of Each Participant
Account's Share of Any Investment Account
ARTICLE 6 OTHER CHARGES
6.1----------------Mortality Risk and Expense Risk Charges
6.2----------------Investment Management Charge
6.3----------------Administrative Charge
6.4----------------Transfer Charge
6.5----------------Other Charges
6.6----------------Reduction or Waiver of Certain Charges
P-12518.1
<PAGE>
ARTICLE 7 RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1----------------Right of AUL to Change Interest Rates
7.2----------------Right of AUL to Change Annuity Table
7.3----------------Right of AUL to Change Charges
7.4----------------Amendment of Contract to Conform with Law
ARTICLE 8 TERMINATION OF CONTRACT
8.1----------------Right of Contractholder to Terminate
8.2----------------Payment Due to Termination by Contractholder
8.3----------------Right of AUL to Terminate
8.4----------------Payment Due to Termination by AUL
ARTICLE 9 MISCELLANEOUS
9.1----------------Ownership
9.2----------------AUL's Annual Statement
9.3----------------Certification of Plan Status
9.4----------------Essential Data
9.5----------------Reliance
9.6----------------Misstatement of Essential Data
9.7----------------Annuity Certificates
9.8----------------Election, Notice, or Direction Requirements
9.9----------------Quarterly Statement of Account Value
9.10---------------Conformity with State Laws
9.11---------------Reference to Federal Laws
9.12---------------Sex and Number
9.13---------------Facility of Payment
9.14---------------Insulation from Liability
9.15---------------Voting
9.16---------------Acceptance of New Participants or Contributions
9.17---------------Notice of Annual Meeting of Members
TABLE OF IMMEDIATE ANNUITIES
P-12518.2
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "Account Value" for any Participant Account on any given date means:
(a) the balance of the Participant Account's share of the Fixed Interest
Account on that date; plus
(b) the value of the Participant Account's share of each Investment
Account on that date.
1.2 "Accumulation Period" means the period of time commencing on the date on
which a Participant's initial Contribution is credited to the Participant
Account and terminating on the date when such Participant Account is
closed.
1.3 "Accumulation Unit" means a statistical device used to measure amounts of
increases to, decreases from, and accumulations in any Investment Account
during the Accumulation Period.
1.4 "Contract Anniversary" means the first day of each Contract Year. Each
Contract Anniversary after the First Contract Anniversary shall be the same
day of the same month as the day and month which is stated on the face page
of this contract for the First Contract Anniversary.
1.5 "Contract Quarter" means each of the four successive intervals of three
months, the sum of which corresponds to a 12-month Contract Year.
1.6 "Contract Year" means, for the first such year, the period beginning with
the Contract Date and ending on the day immediately preceding the First
Contract Anniversary, and for each succeeding Contract Year, the period
beginning with a Contract Anniversary and ending on the day immediately
preceding the next succeeding Contract Anniversary.
1.7 "Contributions" means amounts paid to AUL by the Contractholder and
credited to a Participant Account hereunder. "Excess Contributions" means
those Contributions made on behalf of a Participant which exceed the
limitations in effect under applicable provisions of the Internal Revenue
Code and Regulations issued thereunder.
1.8 "Current Rates of Interest" means each of the annual effective rates of
interest as determined and declared by AUL from time-to-time and as
credited to each interest pocket maintained within the Fixed Interest
Account. The Current Rates of Interest shall always be equal to or greater
than the Guaranteed Rate of Interest.
1.9 "Fixed Interest Account" means that fund of AUL's general asset account in
which all or a portion of a Participant's Account Value may be held for
accumulation at the Current Rates of Interest.
(a) Contributions allocated, or amounts transferred, to the Fixed Interest
Account shall be credited to the open interest pocket and shall earn
interest at the Current Rate of Interest in effect for that interest
pocket. Such Contributions or transferred amounts, during the time
that the Current Rate of Interest exceeds the Guaranteed Rate of
Interest, shall earn interest at such credited Current Rate of
Interest for at least 1 year. After such 1-year period, AUL reserves
the right to declare, at any time, a new Current Rate of Interest to
be applied to funds held within that interest pocket. Any such new
Current Rate of Interest must remain in effect for that interest
pocket for at least 1 year.
(b) If AUL changes the Current Rate of Interest for new Contributions or
new amounts transferred to the
P-12518.3
<PAGE>
Fixed Interest Account, the previous open interest pocket shall close,
and any Contributions or amounts transferred on or after the
effective date of such change shall be credited to a new open interest
pocket and shall earn interest at the new Current Rate of Interest in
effect for such new open interest pocket. Therefore, at any given
time, various funds credited to a Participant Account and allocated to
the Fixed Interest Account may be earning interest at different
Current Rates of Interest for different periods of time.
1.10 "Guaranteed Rate of Interest" means interest at an annual effective rate of
4.00%.
1.11 "Home Office" means the principal office of AUL. The mailing address is
P.O. Box 6148, Indianapolis, Indiana 46206-6148.
1.12 "Investment Account" means each subaccount of the Variable Account, which
subaccounts include the Equity Investment Account, the Bond Investment
Account, the Money Market Investment Account, and the Managed Investment
Account, as the case may be, where:
(a) Amounts allocated to the Equity Investment Account shall be invested
in shares of the AUL American Equity Portfolio of the Mutual Fund.
(b) Amounts allocated to the Bond Investment Account shall be invested in
shares of the AUL American Bond Portfolio of the Mutual Fund.
(c) Amounts allocated to the Money Market Investment Account shall be
invested in shares of the AUL American Money Market Portfolio of the
Mutual Fund.
(d) Amounts allocated to the Managed Investment Account shall be invested
in shares of the AUL American Managed Portfolio of the Mutual Fund.
1.13 "Investment Liquidation Charge" means a charge taken by AUL which is
determined by multiplying a percentage times that portion of the Withdrawal
Value allocated to the Fixed Interest Account which is to be paid under
Section 8.2. The percentage shall be 6 times (X-Y) where:
X = the Current Rate of Interest being credited by AUL, as of the
effective date of termination, to new Contributions to the Fixed
Interest Account; and
Y = the average rate of interest being credited by AUL, as of the
effective date of termination, to each affected Participant Account's
share of the Fixed Interest Account.
If Y is greater than X, the Investment Liquidation Charge shall be zero.
AUL's determination of the Investment Liquidation Charge shall be
conclusive.
1.14 "Investment Option" means the Fixed Interest Account or any of the
Investment Accounts of the Variable Account. AUL reserves the right to
provide other Investment Options under this contract at any time.
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940.
1.16 "Participant" means any person reported to AUL by the Contractholder as
eligible for, and as
P-12518.4
<PAGE>
participating in, the Plan, and for whom a Participant Account is
established.
1.17 "Participant Account" means an account established under this contract for
a Participant. Contributions received by AUL shall be credited to
Participant Accounts as directed by the Contractholder.
1.18 "Plan" means the Contractholder's plan of deferred compensation as it
exists on the Contract Date, and any subsequent amendment to it.
1.19 "Portfolio" means a series of the Mutual Fund as described in the
prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
1.20 "Valuation Date" means any day when the Home Office of AUL and the New York
Stock Exchange are open and operational.
1.21 "Valuation Period" means the period beginning at the close of business on a
Valuation Date and ending at the close of business on the next succeeding
Valuation Date.
1.22 "Variable Account" means a separate account established by AUL called the
AUL American Unit Trust, which is registered under The Investment Company
Act of l940 as a unit investment trust.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn pursuant to Sections 4.8 or 8.2, where the
percentage varies by the number of full years measured from the date a
Participant Account is established to the date the Withdrawal Charge is
determined. Such percentage is as follows:
During
Account Years Percentage
1-5 8
6-10 4
Thereafter 0
In no event will the cumulative total of all Withdrawal Charges, including those
previously assessed against any amount withdrawn from a Participant Account,
exceed 9% of total Contributions allocated to that Participant Account.
1.24 "Withdrawal Value" means a Participant's Account Value minus the applicable
Withdrawal Charge.
P-12518.5
<PAGE>
ARTICLE 2 - CONTRACT AND AUTHORITY
2.1 Entire Contract: This contract and the application of the Contractholder is
the entire agreement between AUL and the Contractholder. AUL is not a party
to, nor bound by, a Plan, trust, custodial agreement, or other agreement,
or any amendment or modification to any of the same. AUL is not a fiduciary
under this contract or under any such Plan, trust, custodial agreement, or
other agreement.
2.2 Authority: This contract cannot be modified or amended, nor can any
provision or condition be waived, except by a written agreement signed by a
corporate officer of AUL. Such authority may not be delegated to any other
person or entity, except by a written agreement signed by a corporate
officer of AUL.
P-12518.6
<PAGE>
ARTICLE 3 - CONTRIBUTIONS, INVESTMENTS, AND TRANSFERS
3.1 Amount of Contributions: Contributions may vary in amount and frequency;
however, they must be at least equal to a minimum annual Contribution of
$300 per Participant in any full Contract Year. AUL may change the minimum
annual Contribution acceptable under this contract, but any such change
shall apply only to individuals who become Participants on or after the
date of the change.
Excess Contributions (plus gains or minus losses thereon) shall be with-
drawn from a Participant Account and returned to the Contractholder or to
whomever the Contractholder directs pursuant to the Plan upon receipt by
AUL at its Home Office of complete written instructions from the
Contractholder. Such written instructions must include the amount to be
withdrawn and returned, and certification that such Contributions
constitute Excess Contributions and that such returns are permitted by the
Plan and by applicable provisions of the Internal Revenue Code and
Regulations issued thereunder. It shall not be the responsibility of AUL to
determine the existence or amount of Excess Contributions or gains or
losses thereon, or that returns of Excess Contributions are permitted by
the Plan and by applicable provisions of the Code and Regulations. In
withdrawing and returning the identified amount, AUL may rely solely on
such written instructions and certification. Such a withdrawal and return
of Excess Contributions shall not be subject to Section 4.8.
3.2 How Contributions Are Handled:
(a) When a Contribution is received at the Home Office, it shall be
credited to Participant Accounts as directed by the Contractholder in
written allocation instructions.
(b) The initial Contribution for a Participant shall be credited and
allocated to the Participant Account no later than the close of
business on the second business day of AUL after the later of (1) the
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account and allocation
instructions regarding the initial Contribution. If the data required
to establish the Participant Account and allocation instructions
regarding the initial Contribution are not received by AUL at its Home
Office within 5 business days after AUL first receives the initial
Contribution, AUL shall return the initial Contribution to the
Contractholder unless the Contractholder consents to AUL retaining the
initial Contribution until AUL receives the data and allocation
instructions for the Participant.
(c) All Contributions subsequent to the initial Contribution shall be
credited and allocated as of the close of business on the Valuation
Period in which AUL receives the Contribution at its Home Office,
provided that the Contribution is received by 4:00 p.m. E.S.T. If the
Contribution is received after 4:00 p.m. E.S.T., such Contribution
shall be deemed to be received, and shall be credited and allocated as
of the close of business, on the next succeeding Valuation Period.
P-12518.7
<PAGE>
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments of 10%, 25%, or
33-1/3%. If no allocation instruction is made with respect to any
Participant Account, AUL shall process such credits in accordance with
the allocation instruction applicable to the immediately preceding
Contribution. If there should be no Contractholder allocation
instruction applicable to a portion of a Contribution, that amount
shall be credited to the Fixed Interest Account until such time as an
appropriate Contractholder allocation instruction is received, except
as provided above for the initial Contribution. The Contractholder or
Participant may change an allocation instruction with respect to
future allocations to any Participant Account by giving new written
allocation instructions to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Portfolios and to substitute shares of, or
interests in, another Portfolio of the Mutual Fund, of another
open-end, registered investment company, or other investment vehicle,
for shares already purchased or to be purchased in the future under
the contract, if the shares of any or all eligible Portfolios are no
longer available for investment, or if, in AUL's judgment, further
investment in any or all eligible Portfolios becomes inappropriate in
view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in a new Portfolio of the Mutual Fund, or
in other securities, investment vehicles, or shares of another
diversified open-end management investment company or series thereof.
AUL reserves the right to eliminate existing Investment Accounts if,
in its sole discretion, marketing, tax, or investment conditions so
warrant. AUL also reserves the right to provide other Investment
Options under this contract at any time.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company or any other form
permitted by law, it may be deregistered in the event such
registration is no longer required, or it may be combined with other
separate accounts of AUL or an affiliate thereof. AUL may take such
action as is necessary to comply with, or to obtain, exemptions from
the Securities and Exchange Commission with regard to the Variable
Account. Subject to compliance with
P-12518.8
<PAGE>
applicable law, AUL also may combine one or more Investment Accounts
and may establish a committee, board, or other group to manage one or
more aspects of the operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated in writing to AUL by the Contractholder, may direct
AUL in writing to transfer the amounts credited to an Investment
Option to any other Investment Option during the Accumulation Period.
Any transfer from an Investment Account shall be effective as of the
close of business on the Valuation Date that AUL receives the
Contractholder's direction, provided that AUL receives such direction
by 4:00 p.m. E.S.T. on that Valuation Date. If such direction is
received after 4:00 p.m. E.S.T., such transfer shall be effective as
of the close of business on the next succeeding Valuation Date.
(b) AUL shall make the transfer as requested by the Contractholder within
7 days from the date a proper request is received by AUL at its Home
Office, except as AUL may be permitted to defer such payment of
amounts withdrawn from the Variable Account in accordance with
appropriate provisions of the federal securities laws. AUL reserves
the right to defer a transfer of amounts from the Fixed Interest
Account for a period of 6 months after AUL receives the transfer
request at its Home Office.
(c) All transfers from the Fixed Interest Account to any Investment
Account shall be made on a first-in/first-out accounting basis.
3.5 Limitations on Transfers:
(a) The Contractholder may not direct a transfer with regard to the
Participant Account's share of any Investment Option in an amount less
than $500 or the Participant Account's entire share, if less than
$500. If such a transfer reduces the Participant Account's remaining
share of an Investment Option to less than $500, the entire remaining
share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the last Contract Anniversary preceding the request for
transfer, or the Participant Account's entire share of the Fixed
Interest Account if such share would be less than $500 after the
transfer.
(c) Amounts under this contract which have been transferred from other
group annuity contracts, whether issued by AUL or otherwise, shall be
allocated pursuant to the provisions of Section 3.2.
(d) AUL reserves the right to change the limitation on the minimum
transfer, to change the limit on remaining balances, to limit the
number and frequency of transfers, to suspend the transfer privilege
provided in Sections 3.4 and 3.5, and to impose a charge on a
transfer.
P-12518.9
<PAGE>
ARTICLE 4 - BENEFITS
4.1 Election of Annuity Options: At the written request of the Contractholder,
AUL shall apply all or a portion of the Account Value (subject to Section
6.5) of a Participant Account for the purpose of providing a fixed payment
annuity under the Plan. Upon receipt of such request, AUL is hereby
authorized by the Contractholder to value and transfer the Participant
Account's share of the Variable Account to the Fixed Interest Account as of
the date that AUL receives such written request at its Home Office. Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the following annuity options.
The amount of the annuity shall be computed from the Table of Immediate
Annuities then included in this contract, except as provided under Section
4.4.
4.2 Annuity Options:
(a) Life Annuity. The monthly annuity shall be payable to the annuitant
for as long as the annuitant lives, and shall end with the last
monthly payment before the death of the annuitant.
(b) Certain and Life Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. If the annuitant dies
before receiving payments for the certain period (5, 10, 15, or 20
years, as specified in the election), any remaining payments for the
balance of the certain period shall be paid to the annuitant's
beneficiary.
(c) Survivorship Annuity. The monthly annuity shall be payable to the
annuitant for as long as the annuitant lives. After the death of the
annuitant, a portion (all, 2/3, or 1/2, as specified in the election)
of the monthly annuity shall be paid to the contingent annuitant named
in the election for as long as the contingent annuitant lives. An
election of this option is automatically cancelled if either the
Participant or the contingent annuitant dies before the annuity
commencement date.
(d) Installment Refund Life Annuity. The monthly annuity shall be payable
to the annuitant for as long as the annuitant lives, and shall end
with the last monthly payment before the death of the annuitant. If,
at the death of the annuitant, the sum of the monthly payments
previously received is less than the amount applied to provide the
annuity, monthly payments of the same amount shall continue to the
annuitant's beneficiary until the total of the monthly payments
received equals such amount.
(e) Fixed Period. The monthly annuity shall be payable to the annuitant
for a fixed period of time (not less than 5 years nor more than 30
years, as specified in the election). If, at the death of the
annuitant, payments have been made for less than the selected fixed
period, monthly annuity payments to the annuitant's beneficiary shall
be continued during the remainder of such fixed period.
(f) Lump Sum Payment. If the total Account Value is less than $2,000, such
value shall not be annuitized under options (a), (b), (c), (d), (e),
or (g) of this Section, but shall be paid in a lump sum.
P-12518.10
<PAGE>
(g) Any other options mutually agreed upon between the Contractholder and
AUL shall be made available.
If the annuity option selected is not included in the attached Table of
Immediate Annuities, the amount of monthly annuity shall be based on rates
determined in the same manner as those found in the Table.
If no annuity option election for a Participant has been received by AUL at
its Home Office at least 30 days prior to the annuity commencement date,
the Account Value (subject to Section 6.5) of his Participant Account shall
be applied under (b) above as a 10 Year Certain and Life Annuity. The
Contractholder shall notify AUL of such annuity commencement date, shall
designate the contingent annuitant or beneficiary, and shall provide AUL
with any election forms needed in connection with any annuity option
provided in this Section.
4.3 Guaranteed Rate of Interest: The retirement annuity options provided in
this Article and illustrated in the attached Table of Immediate Annuities
are based on a guaranteed interest rate of 4.00% compounded annually.
4.4 Alternate Nonparticipating Retirement Annuity: Any annuity elected shall be
provided at whatever current single premium nonparticipating immediate
annuity rates are available under this class of group annuity contract if
such rates produce a higher income than that provided under the Table of
Immediate Annuities provided in this contract.
4.5 Minimum Payments: If the monthly annuity is less than AUL's then current
established minimum, AUL reserves the right to make payments on a less
frequent basis or to pay the Account Value in a single sum.
4.6 Due Proof of Date of Birth and Survival: Before commencing payments under
any annuity, AUL may require proof of the date of birth of any annuitant
and may require due proof that any annuitant is living before the payment
of each or any installment under the option.
4.7 Death Benefits:
(a) Upon receipt of written instructions from the Contractholder and of
due proof of the Participant's (and, if applicable, the beneficiary's)
death during the Accumulation Period at its Home Office, AUL shall
apply the Account Value of the Participant Account for the purpose of
providing a death benefit under the Plan. The death benefit shall be
paid to the Contractholder or to whomever the Contractholder directs.
(b) The Account Value to be applied pursuant to (a) above shall be
determined as of the close of business on the later of (1) the
Valuation Date that AUL receives the Contractholder request at its
Home Office, or (2) the Valuation Date that AUL receives due proof of
death at its Home Office, provided that such request or due proof of
death received on the later of (1) or (2) above is received by 4:00
p.m. E.S.T. If the request or due proof of death received on the later
of (1) or (2) above is received after 4:00 p.m. E.S.T., such valuation
shall be made as of the close of business on the next succeeding
Valuation Date.
P-12518.11
<PAGE>
(c) This payment may be in one sum or in the form of a monthly annuity
under one of the options in Section 4.2. If payment is to be made in a
cash lump sum, payment shall be made within 7 days of the date of
valuation, as determined above in this Section, except as AUL may be
permitted to defer such payment of amounts derived from the Variable
Account in accordance with the provisions of federal securities laws.
Also, AUL reserves the right to defer the payment of amounts withdrawn
from the Fixed Interest Account for a period of 6 months after AUL
receives written instructions at its Home Office.
4.8 Withdrawal Benefits:
(a) The Contractholder, upon submitting a proper written request to AUL at
its Home Office, may direct AUL to withdraw all or a portion of the
Account Value (subject to the Withdrawal Charge) of any Participant
Account for any purpose permitted for the Plan under applicable law,
which may include providing benefits for retirement, disability,
unforeseeable emergencies, attainment of age 70-1/2, or termination,
other than Plan termination benefits, as set forth in the Plan. Any
withdrawal request submitted by the Contractholder pursuant to the
previous sentence shall include the certification as to the purpose of
the withdrawal. The Contractholder assumes full responsibility for
determining whether any withdrawal is permitted under applicable law
and under the terms of a particular Plan.
(b) Withdrawals from a Participant Account's share of an Investment Option
may not be made in an amount less than the smaller of $500 or the
Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(c) A withdrawal request shall be effective as of the close of business on
the Valuation Date that AUL receives a proper written Contractholder
request at its Home Office, provided that AUL receives such request by
4:00 p.m. E.S.T. on that Valuation Date. If such request is received
after 4:00 p.m. E.S.T., such request shall be effective as of the
close of business on the next succeeding Valuation Date.
(d) The Account Value to be applied pursuant to this Section shall be
determined as of the applicable Valuation Date determined in (c)
above. If the entire Account Value of a Participant Account is
withdrawn, the Contractholder or party named by the Contractholder
shall be paid the Withdrawal Value. If the Contractholder requests
that a specified percentage or dollar amount be paid to the
Contractholder or to a party named by the Contractholder, AUL shall
withdraw from the Participant Account an amount equal to the dollar
amount to be paid divided by the difference between 1 and the decimal
equivalent of the applicable Withdrawal Charge. Notwithstanding the
previous sentence, in any Contract Year the Contractholder may
withdraw up to 10% of the Account Value of a Participant Account
determined as of the last Contract Anniversary preceding the request
for the withdrawal without application of any Withdrawal Charge,
provided that 12 months have elapsed from the date that the
Participant's first Contribution is credited to his Participant
Account by AUL to the date of such withdrawal.
(e) AUL shall pay such amount in a cash lump sum to the Contractholder or
as otherwise directed by the Contractholder. Such cash lump sum will
be paid within 7 days from the date that AUL receives the withdrawal
request at its Home Office, except as AUL may be permitted to defer
such payment of amounts withdrawn from the Variable Account in
accordance with appropriate provisions of the federal securities laws.
AUL reserves the right to defer the payment of amounts withdrawn from
the Fixed Interest Account for a period of up to 6
P-12518.12
<PAGE>
months after AUL receives the withdrawal request at its Home Office.
(f) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(g) No withdrawals shall be permitted prior to the termination of this
contract except as provided in this Section 4.8.
P-12518.13
<PAGE>
ARTICLE 5 - VALUATIONS
5.1 Time of Valuation: All assets of each Portfolio shall be valued as provided
in the prospectus for the Mutual Fund as such prospectus may be amended or
supplemented from time to time.
5.2 Accumulation Units: Any amounts that are allocated to any Investment
Account on behalf of a Participant shall be credited to his Participant
Account in the form of Accumulation Units on the basis of the value of such
units in that Investment Account as of the end of the Valuation Period on
which such amounts are received by AUL at its Home Office. Such crediting
shall be made separately for amounts allocated to each Investment Account.
The number of Accumulation Units in each Investment Account credited to
each Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in each
Investment Account was established at $1.00 as of April 12, 1990. The value
of an Accumulation Unit in each Investment Account as of any Valuation
Period thereafter is equal to the dollar value of one Accumulation Unit in
that Investment Account as of the immediately preceding Valuation Period
multiplied by the Net Investment Factor, as defined in Section 5.4, for
that Investment Account for the current Valuation Period. The value of an
Accumulation Unit for each Investment Account shall be determined for each
Valuation Period before giving effect to any additions, withdrawals, or
transfers. After such determination, the additions, withdrawals, or
transfers which are effective as of that day shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(l) the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the current Valuation Period,
plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Portfolio during the current Valuation Period,
plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Portfolio share held in the Investment
Account determined as of the end of the immediately preceding
Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks.
P-12518.14
<PAGE>
5.5 Determining the Value of Each Participant Account's Share of any Investment
Account: The value of each Participant Account's share of any Investment
Account as of any Valuation Date shall be determined by multiplying the
Participant Account's aggregate Accumulation Units in that Investment
Account as of such Valuation Date by the dollar value of one Accumulation
Unit in that Investment Account as of such Valuation Date. The value of the
Participant Account's share of any Investment Account as of any date other
than a Valuation Date is equal to the value of its share of that Investment
Account as of the immediately preceding Valuation Date.
P-12518.15
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual charge of .85% and .40%, respectively, against the average
daily net assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for so long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn pursuant to
Sections 4.1, 4.7, 4.8, or 8.2, the administrative charge attributable to
the period of time which has elapsed since the first day of the Contract
Quarter in which such application or withdrawal of funds is made shall not
be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
P-12518.16
<PAGE>
ARTICLE 6 - OTHER CHARGES
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual charge of .85% and .40%, respectively, against the average
daily net assets of each Investment Account.
6.2 Investment Management Charge: The Mutual Fund shall pay an investment
advisory fee and certain other expenses, which may include its operational
and organizational expenses, as described in the current prospectus as it
may be amended or supplemented from time to time. These expenses may vary
from year to year. The net asset value of each Portfolio reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for so long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn pursuant to
Sections 4.1, 4.7, 4.8, or 8.2, the administrative charge attributable to
the period of time which has elapsed since the first day of the Contract
Quarter in which such application or withdrawal of funds is made shall not
be deducted from the amount applied or withdrawn.
6.4 Transfer Charge: AUL reserves the right to deduct a charge for each
transfer transaction pursuant to Section 3.4. This charge would be prorated
among the Investment Options from which the amounts are transferred in the
same proportion that the amount transferred from the Investment Option
bears to the total amount transferred from all Investment Options.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Section 4.1 or
such other time that premium taxes are incurred by AUL. AUL also reserves
the right to deduct the appropriate charges for federal, state, or local
income taxes incurred by AUL that are attributable to the Variable Account
and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the Mutual Fund.
P-12518.16 (g&w)
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.23 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.23 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $15 per Contract
Quarter until the year 2001. Any increase in the administrative charge made
by AUL for any Contract Quarter beginning after December 31, 2000 shall be
limited to an amount which is designed to reimburse AUL for the expenses
associated with the administration of the contract and the operation of the
Variable Account. Any such increase shall not be anticipated to be a source
of profit for AUL.
7.4 Amendment of Contract to Conform with Law: AUL reserves the right to amend
this contract at any time, without the consent of the Contractholder,
Participants, or any other person or entity, to make any change to any
provisions of the contract to comply with, or give the Contractholder or
Participants the benefit of, any provisions of federal or state laws,
regulations, or rulings. Any such amendment shall be stated in a written
instrument and delivered to the Contractholder.
P-12518.17
<PAGE>
ARTICLE 7 - RIGHT OF AUL TO CHANGE CERTAIN PROVISIONS
7.1 Right of AUL to Change Interest Rates: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the Guaranteed
Rate of Interest. Any such change shall apply only to Participant Accounts
established on or after the effective date of such change, and shall apply
for the duration of such affected Participant Accounts. Any change in the
Guaranteed Rate of Interest shall not result in a rate less than that
prescribed by applicable state law.
7.2 Right of AUL to Change Annuity Table: After the first 5 Contract Years, AUL
has the right at any time, upon delivery of written notice to the
Contractholder, to change any annuity table included in this contract, but
any such change shall apply only to Participant Accounts established on or
after the effective date of such change.
7.3 Right of AUL to Change Charges: AUL has the right at any time, upon
delivery of written notice to the Contractholder, to change the charges set
out in Sections 1.23 and 6.3. Any such change to the Withdrawal Charge set
out in Section 1.23 shall apply only to Participant Accounts established on
or after the effective date of such change, and shall apply for the
duration of such affected Participant Accounts. The administrative charge
set out in Section 6.3 shall be limited to a maximum of $15 per Contract
Quarter until the year 2001. Any increase in the administrative charge made
by AUL for any Contract Quarter beginning after December 31, 2000 shall be
limited to an amount which is designed to reimburse AUL for the expenses
associated with the administration of the contract and the operation of the
Variable Account. Any such increase shall not be anticipated to be a source
of profit for AUL. Such administrative charge shall in no event exceed
$50.00 for any Contract Quarter beginning after December 31, 2000.
7.4 Amendment of Contract to Conform with Law: AUL reserves the right to amend
this contract at any time, without the consent of the Contractholder,
Participants, or any other person or entity, to make any change to any
provisions of the contract to comply with, or give the Contractholder or
Participants the benefit of, any provisions of federal or state laws,
regulations, or rulings. Any such amendment shall be stated in a written
instrument and delivered to the Contractholder.
P-12518.17 (PA)
<PAGE>
ARTICLE 8 - TERMINATION OF CONTRACT
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office, provided that AUL
receives such notice by 4:00 p.m. E.S.T. on that Valuation Date. If such
notice is received after 4:00 p.m. E.S.T., such notice shall be effective
as of the close of business on the next succeeding Valuation Date. This
date shall be the effective date of termination.
8.2 Payment Due to Termination by Contractholder: As of the effective date of
termination of this contract by the Contractholder pursuant to Section 8.1,
the Contractholder may elect to have a payment or payments made to whomever
the Contractholder directs under either payment option (a) or (b) as set
out below. Such payment or payments shall be in full settlement of this
contract and in lieu of any other payment under its terms. In order for
such an election to be effective, it must include the Contractholder's
agreement to indemnify and hold AUL harmless from any and all losses,
claims, or demands that may later arise or be asserted against AUL in
connection with the making of such a payment or payments. This
Contractholder's agreement must be received by AUL at its Home Office prior
to payment of any termination benefits provided by this Section 8.2. The
available payment options are:
(a) A single sum equal to the aggregate Withdrawal Value of all
Participant Accounts, reduced by any applicable Investment Liquidation
Charge, shall be calculated as of the close of business on the
effective date of termination and be payable within 7 days from the
effective date of termination, except as AUL may be permitted to defer
such payment of amounts attributable to the Variable Account in
accordance with appropriate provisions of the federal securities laws.
AUL reserves the right to defer the payment of amounts attributable to
the Fixed Interest Account for a period of up to 6 months after the
effective date of termination.
(b) (1) A single sum equal to that portion of the aggregate
Withdrawal Value of all Participant Accounts consisting of all of
the Accumulation Units of each Investment Account credited to
such Participant Accounts shall be calculated as of the close of
business on the effective date of termination and be payable
within 7 days from the effective date of termination, except as
AUL may be permitted to defer such payment in accordance with
appropriate provisions of the federal securities laws.
(2) In addition to the amount payable pursuant to Section 8.2(b) (1)
above, an amount equal to that portion of the aggregate
Withdrawal Value of all Participant Accounts consisting of the
net dollar balance in the Fixed Interest Account credited to such
Participant Accounts, calculated as of the Contract Anniversary
immediately succeeding the effective date of termination, shall
be payable in six equal annual installments, with the first
installment due as of the Contract Anniversary immediately
succeeding the effective date of termination. Under this Section
8.2(b)(2), AUL shall credit to the funds remaining after each
annual installment is made interest at an annual effective rate
which shall be equal to the lesser of (a) the weighted average of
each of the various annual effective rates of interest being
credited to each segment of the total Account Value held under
this contract determined as of the Contract Anniversary
immediately succeeding the effective date of termination, or (b)
the interest rate/U.S. Government Security Treasury Constant
Maturity for three (3) years (set forth in the Federal Reserve
Statistical Release H- 15) as determined on the Valuation Date
coincident with or next following the Contract Anniversary
immediately succeeding the effective date of termination, and
shall pay out the amount of interest credited annually as of the
immediately succeeding Contract Anniversary upon which an
installment payment of principal is made.
Under this payment option, AUL shall cease to maintain individual
Participant Accounts as of the Contract Anniversary immediately
succeeding the effective date of termination.
Until such time as the above-referenced election is implemented,
the terms of the contract shall remain applicable, except that
AUL shall have the right to refuse to accept further
Contributions.
8.3 Right of AUL to Terminate: AUL has the right, subject to applicable state
law, to terminate any Participant Account established under this contract
at any time during the Contract Year if the Account Value of such
Participant Account is less than $300 for the first Contract Year in which
a Contribution is made for the Participant, and $500 for any subsequent
Contract Year, and at least 6 months have elapsed since the
Contractholder's last previous Contribution to the contract. If AUL elects
to terminate a Participant Account in such event, such termination shall be
effective on the date 6 months following the date that AUL gives notice to
the Contractholder and the Participant that the Participant Account is to
be terminated, provided that the Contractholder fails to make Contributions
during such 6-month period sufficient to bring such Account Value up to the
minimum level.
8.4 Payment Due to Termination by AUL: As of the effective date of termination
of a Participant Account by AUL pursuant to Section 8.3, AUL may elect to
have a payment made as set out below to the Contractholder. Any such
payment shall be in full settlement of the Participant Account under this
contract and in lieu of any other payment under its terms.
Upon termination of a Participant Account pursuant to Section 8.3, a single
sum equal to the Account Value of the Participant Account shall be
calculated as of the close of business on the effective date of termination
and be payable within 7 days from such effective date of termination.
P-12518.18
<PAGE>
ARTICLE 9 - MISCELLANEOUS
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. The value of all Contributions received under this
contract and the value of all property and rights purchased with, and all
income attributable to, such Contributions shall remain (until made
available to the Participant or other beneficiary) solely the property and
rights of the Contractholder (without being restricted to the provision of
benefits under the Plan), subject only to the claims of the
Contractholder's general creditors. No benefit or privilege under the
contract may be sold assigned, discounted, or pledged as collateral for a
loan, as security for the performance of an obligation, or for any other
purpose to any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Portfolio, nor any of the other provisions and
conditions of this contract.
9.3 Certification of Plan Status: The Contractholder certifies, upon acceptance
of this contract, that, in the Contractholder's opinion, the Plan is an
eligible deferred compensation plan which meets the requirements of Section
457 of the Internal Revenue Code of 1986, as amended. AUL does not make any
guarantee regarding the federal, state, or local tax status of this
contract, any Participant Account established hereunder, or any transaction
involving this contract.
9.4 Essential Data: The Contractholder shall furnish to AUL the name and age of
any person together with whatever information is necessary to establish the
eligibility and amount of annuity or other benefit in each instance. The
Contractholder shall report to AUL any person for whom a payment becomes
due under the Plan and the nature and amount of such payment before the
date on which such payment becomes due or as soon thereafter as is
practicable.
9.5 Reliance: AUL shall be fully protected in relying on any information
furnished by the Contractholder or by any person or persons certified to
AUL by the Contractholder as acting on its behalf. AUL need not inquire as
to the accuracy or completeness thereof.
9.6 Misstatement of Essential Data: If it has been found that any essential
data pertaining to any person has been omitted or misstated, including, but
not limited to, a misstatement as to the age of an annuitant, there shall
be an equitable adjustment so as to provide the annuity to which that
person is entitled.
9.7 Annuity Certificates: AUL shall issue to each person for whom an annuity is
purchased from AUL a certificate setting forth the amount and terms of
payment of the annuity.
P-12518.19
<PAGE>
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing and
must be submitted to and received by AUL at its Home Office before becoming
effective.
9.9 Quarterly Statement of Account Value: As soon as reasonably possible after
the end of each Contract Quarter, AUL shall prepare a statement of the
Account Value of each Participant Account existing under this contract.
9.10 Conformity with State Laws: Any benefit payable under this contract shall
not be less than the minimum benefit required by any statute of the state
in which the contract is delivered.
9.11 Reference to Federal Laws: Language in this contract referring to federal
tax, securities, or other statutes or rules shall not be deemed to
incorporate within the contract such statutes or rules. This language is
informational and instructional in nature, and is not subject to approval
or disapproval by the state in which the contract is issued.
9.12 Sex and Number: Whenever the context so requires, the plural includes the
singular, the singular the plural, and the masculine the feminine.
9.13 Facility of Payment: If any Participant, contingent annuitant, or
beneficiary is legally incapable of giving a valid receipt for any payment
due him, and no guardian has been appointed, AUL may make such payment to
the person or persons who have assumed the care and principal support of
such Participant, contingent annuitant, or beneficiary. Also, AUL may make
payment directly to any person or entity when directed to do so in writing
by the Contractholder. Any payment made by AUL will fully discharge AUL to
the extent of such payment.
9.14 Insulation from Liability: The assets of the Variable Account are not
chargeable with liabilities arising out of any other business AUL may
conduct.
9.15 Voting:
(a) AUL is the legal owner of the shares of the Mutual Fund held by the
Investment Accounts of the Variable Account. AUL shall exercise voting
rights attributable to the shares of each Portfolio held in the
Investment Accounts at any regular and special meetings of the
shareholders of the Mutual Fund on matters requiring shareholder
voting under The Investment Company Act of l940 or other applicable
laws. AUL shall exercise these voting rights based on instructions
received from persons having the voting interest in corresponding
Investment Accounts of the Variable Account. However, if The
Investment Company Act of l940 or any regulations thereunder should be
amended, or if the present interpretation thereof should change, and
as a result AUL determines that it is permitted to vote the shares of
the Mutual Fund in its own right, it may elect to do so.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund shares of a particular Portfolio as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date
coincident with the date established by the Mutual Fund for
determining shareholders eligible to vote at the meeting
P-12518.20
<PAGE>
of the Mutual Fund. If required by the Securities and Exchange
Commission, AUL reserves the right to determine in a different fashion
the voting rights attributable to the shares of the Mutual Fund.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or the Mutual
Fund as may be required by applicable federal law.
9.16 Acceptance of New Participants or Contributions. AUL reserves the right to
refuse to accept new Participants or new Contributions to this contract at
any time.
9.17 Notice of Annual Meeting of Members: The regular annual meeting of the
members of AUL shall be held at its principal place of business on the
third Thursday in February of each year at the hour of ten o'clock A.M.
Elections for directors shall be held at such annual meeting.
P-12518.21
<PAGE>
TABLE OF IMMEDIATE ANNUITIES
MONTHLY INCOME PER $1,000 OF ACCOUNT VALUE
ADJUSTED LIFE 10 YEAR CERTAIN
AGE ANNUITY AND LIFE ANNUITY
45 2.9690 2.9632
46 3.0190 3.0124
47 3.0715 3.0641
48 3.1269 3.1185
49 3.1852 3.1756
50 3.2466 3.2357
51 3.3115 3.2988
52 3.3800 3.3653
53 3.4525 3.4352
54 3.5291 3.5088
55 3.6104 3.5863
56 3.6966 3.6678
57 3.7881 3.7536
58 3.8850 3.8437
59 3.9877 3.9382
60 4.0964 4.0374
61 4.2115 4.1414
62 4.3334 4.2505
63 4.4626 4.3650
64 4.5994 4.4850
65 4.7442 4.6108
66 4.8977 4.7425
67 5.0608 4.8804
68 5.2347 5.0250
69 5.4213 5.1766
70 5.6229 5.3356
71 5.8412 5.5020
72 6.0778 5.6755
73 6.3336 5.8552
74 6.6097 6.0404
75 6.9084 6.2302
94GARF2-4
Adjusted Age = Actual Age at Settlement (in years and completed months) less the
following number of months: [.6 multiplied by (Birth Year - 1915)] rounded to
the nearest integer.
P-12518.22
<PAGE>
United Life Insurance Company(R)
One American Square
P O. Box 368
Indianapolis, Indiana 46206-0368
CONTRACT NUMBER: ____________________
CONTRACT HOLDER: _____________________
PARTICIPANT NAME: _____________________
SOCIAL SECURITY NUMBER:______________
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's deferred
compensation plan, and that AUL has created an account in your name to receive
contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction. AUL
may make payment directly to a participant or beneficiary on the
Contractholder's behalf.
Any amendments to or changes in the Contract will be binding and conclusive on
each participant and beneficiary.
All communications should be directed to the Contractholder.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
D.C.P. MULTIPLE FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12536 (DCPMFVA)
Conv (SBR)GW
<PAGE>
United Life Insurance Company(R)
One American Square
P O. Box 368
Indianapolis, Indiana 46206-0368
CONTRACT NUMBER: ____________________
CONTRACT HOLDER: _____________________
PARTICIPANT NAME: _____________________
SOCIAL SECURITY NUMBER:______________
American United Life Insurance Company (AUL) hereby certifies that the
Contractholder and AUL have entered into a Multiple-Fund Group Variable Annuity
Contract (the Contract) in connection with the Contractholder's deferred
compensation plan, and that AUL has created an account in your name to receive
contributions from the Contractholder for your benefit pursuant to the Contract.
The only parties to the Contract are the Contractholder and AUL. All rights and
benefits are determined in accordance with the provisions of the Contract.
Benefits under the Contract will be paid at the Contractholder's direction. AUL
may make payment directly to a participant or beneficiary on the
Contractholder's behalf.
Any amendments to or changes in the Contract will be binding and conclusive on
each participant and beneficiary.
All communications should be directed to the Contractholder.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ William R. Brown
Secretary
D.C.P. MULTIPLE FUND
GROUP VARIABLE ANNUITY CERTIFICATE
THE ASSETS HELD IN ANY INVESTMENT ACCOUNT FOR WHICH THE CONTRACT MAKES PROVISION
MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT PERFORMANCE
OF THE CORRESPONDING PORTFOLIO OF THE MUTUAL FUND IN WHICH THE INVESTMENT
ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS IS NOT GUARANTEED. ARTICLE 5 OF THE
CONTRACT EXPLAINS THE VALUATION OF SUCH ASSETS.
P-12536 (DCPMFVA)
Conv (SBR)GW
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(NBR).AMD which may be effective on the same
date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p12518(nbr).sbjpa.amd
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(BR).AMD which may be effective on the same
date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p12518(mbr).sbjpa.amd
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(BR).AMD which may be effective on the same
date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p12518(br)sbjpa.amd
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(NBR).II.AMD which may be effective on the
same date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p-12518(nbr).II.sbjpa.amd
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(BR).II.AMD which may be effective on the
same date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p12518(mbr).II.sbjpa.amd
<PAGE>
AMENDMENT
TO
AUL AMERICAN SERIES DCP MULTIPLE-FUND
GROUP VARIABLE ANNUITY CONTRACT NUMBER GAXX,XXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is .
The Contract is hereby amended as follows:
With regard to the following Section of the Contract, this Amendment supersedes
any amendment identified as P-12518(BR).II.AMD which may be effective on the
same date.
By deleting Section 9.1 of Article 9 and by substituting in lieu thereof the
following:
9.1 Ownership: The Contractholder is the owner of the contract and may agree
with AUL to any change or amendment of it without the consent of any other
person or entity. No other person or entity shall have any right, title, or
interest in this contract until such right, title, or interest is actually
made available to them. No benefit or privilege under the contract may be
sold, assigned, discounted, or pledged as collateral for a loan, as
security for the performance of an obligation, or for any other purpose to
any person or entity other than AUL.
AUL shall have no obligation to make any payment or distribution except as
specified in this contract.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
p-12518(br).II.sbjpa.amd
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXXX
(THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY
(AUL)
TO
ABC COMPANY
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is January 1, 1998.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 - 5 8%
6 - 10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment
Option election applicable to the immediately preceding
p-12518br.adm
<PAGE>
Contribution. The Contractholder or such designated person may change
an Investment Option election with respect to future allocations to
the applicable Participant Account by giving new Investment Option
elections to AUL at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution,
AUL shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is
generally the AUL American Money Market Investment Account. If AUL
subsequently receives a proper Investment Option election for the
Participant, AUL shall then transfer such amounts credited to the AUL
American Money Market Investment Account or other Investment Option
identified in the Participant's annuity enrollment form, plus gains or
minus losses thereon, to another Investment Option, if such election
so directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 3 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
3.5 Limitations on Transfers:
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(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.7, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.9(d). Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the annuity options listed in
Section 4.2. The amount of any annuity shall be computed from the Table of
Immediate Annuities then included in this contract, except as provided
under Section 4.4.
4.7 "Benefit Responsive" Plan Benefits and Annuities: Subject to the
limitations provided in Section 4.9, at any time prior to termination of
the contract pursuant to the provisions of Article 8, the Contractholder
may direct AUL to withdraw all or a portion of the Account Value (subject
to Section 6.5) of a Participant Account for the purpose of providing:
(a) an annuity in accordance with the Annuity Options shown in Section
4.2, as directed by the Contractholder, for benefits as provided by
the Plan (other than Plan termination benefits); or
(b) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, unforeseen emergencies, or required minimum
distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder.
4.8 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.9, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.7(b). If it is necessary to
withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the
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Account Value of that Participant Account (determined as of the later of
the Contract Date or the Contract Anniversary immediately preceding the
request for the withdrawal) plus Contributions made during that Contract
Year, without application of the Withdrawal Charge. In the next succeeding
Contract Year, the Contractholder may also withdraw from that Participant
Account up to 10% of the sum of the Account Value of that Participant
Account (determined as of the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In any
subsequent Contract Year, the Contractholder may withdraw from that
Participant Account up to 10% of the Account Value of that Participant
Account (determined as of the Contract Anniversary immediately preceding
the request for the withdrawal) without application of the Withdrawal
Charge.
4.9 Conditions for Payment of Benefits:
(a) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(b) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(c) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(d) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(e) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 3 days from the appropriate
Valuation Date as determined in Subsection (d) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) No withdrawals shall be permitted prior to the termination of this
contract except as provided in Sections 4.7 and 4.8.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
By adding the following first paragraph to Section 6.3:
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6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
This Amendment shall be null and void unless it is properly executed by the
Contractholder and received by AUL at its Home Office no later than
xxxxxxxxxxxx, xxxx, unless countersigned by AUL after such date.
CONTRACTHOLDER AUL
By ______________________________ By _________________________________
Title ___________________________ Title ______________________________
Date_____________________________ Date _______________________________
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA 73,101 (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
__________________________________
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph on the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.4 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.7 and by substituting the
following first sentence in lieu thereof:
1.7 "Contributions" means amounts paid to AUL by the Contractholder pursuant to
the Plan, including amounts transferred to this contract from another AUL
group annuity contract, which are credited to a Participant Account
maintained hereunder.
1.12 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
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1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.1 or 4.7, as provided by the
Plan, where the percentage varies by the Participant Account Year in which
the withdrawal is made. The first Participant Account Year begins on the
date when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 - 5 8%
6 - 10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(b) (1) The initial Contribution for a Participant shall be credited
and allocated to the Participant Account no later than the close
of business on the second business day of AUL after the later of
(1) the business day that AUL receives the initial Contribution
at its Home Office, or (2) the business day that AUL receives, at
its Home Office, the data required to establish the Participant
Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election
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for that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently receives
the data required to establish the Participant Account, instructions
regarding the amount of the Contribution for the Participant, and an
Investment Option election, AUL shall then transfer such amounts
credited to the AUL American Money Market Investment Account or other
Investment Option identified in the Participant's annuity enrollment
form, plus gains or minus losses thereon, to another Investment
Option, if such election so directs.
(c) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment or if further investment in any or all
eligible Mutual Fund or Mutual Fund Portfolios becomes inappropriate
in view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for
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other series or classes of contracts, or from effecting a conversion
between series or classes of contracts on the basis of requests made
by a majority of other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives such transfer direction.
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder,
at any time prior to termination of the contract pursuant to the provisions
of Article 8, AUL shall apply all or a portion of the Account Value
(subject to Section 6.5) of a Participant Account to provide a fixed
payment annuity under the Plan. Upon receipt of a request for an annuity,
AUL is hereby authorized by the Contractholder to value and transfer the
Participant Account's share of the Variable Account to the Fixed Interest
Account as of the date provided in Section 4.8(e). Such transferred amounts
shall be held in the Fixed Interest Account until such time as such amounts
are used to provide an annuity under the Plan. The Contractholder request
shall include certification as to the purpose for the annuity and the
election of one of the annuity options listed in Section 4.2. The amount of
any annuity shall be computed from the Table of Immediate Annuities then
included in this contract, except as provided under Section 4.4.
4.7 Death Benefits: At any time prior to termination of the contract pursuant
to the provisions of Article 8, the Contractholder may direct AUL to pay
death benefits as provided by the Plan (other than Plan termination
benefits), subject to the provisions of Subsections 4.8(b) through (g).
Upon receipt at AUL's Home Office of such written instructions from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall, as
directed by the Contractholder, withdraw all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account to provide an
annuity pursuant to Section 4.1 or to make a cash lump-sum payment to the
Contractholder or to whomever the Contractholder directs.
4.8 Withdrawal Benefits:
(a) Subject to the following provisions of this Section, at any time prior
to termination of the contract pursuant to the provisions of Article
8, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the
Contractholder directs for the purpose of providing Plan benefits
permitted under applicable law (other than Plan termination benefits
or death benefits provided in Section 4.7). Such Plan benefits may
include benefits for retirement, disability, termination of
employment, unforeseen emergencies, or required minimum distribution
benefits pursuant to Internal Revenue Code Section 401(a)(9) and
Regulations issued thereunder. If it is necessary to withdraw the
entire Account Value of a Participant Account to make such payment,
the amount paid shall equal the Withdrawal Value, minus any Section
6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5
charges.
Notwithstanding the previous paragraph, in the first Contract Year in
which a Participant Account is established, the Contractholder may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Contractholder may also withdraw
from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
(b) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(c) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(d) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(e) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(f) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (e) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(g) No withdrawals shall be permitted prior to the termination of this
contract except as provided in Sections 4.1, 4.7, and this Section
4.8.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(b)(1) on the next succeeding Valuation Period, the unit value
as of the end of that Valuation Period shall be used. Such crediting shall
be made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period.
The value of an Accumulation Unit for each Investment Account shall be
determined for each Valuation Period before giving effect to any additions,
withdrawals, or transfers. After such determination, the additions,
withdrawals, or transfers which are effective as of that day shall then be
made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25%
p12518(NBR).amd
<PAGE>
against the average daily net assets of each Investment Account. These
charges shall be reflected in the Net Investment Factor as provided in
Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
p12518(NBR).amd
<PAGE>
against the average daily net assets of each Investment Account. These
charges shall be reflected in the Net Investment Factor as provided in
Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
(G&W stand-alone)
p12518(NBR).amd
<PAGE>
against the average daily net assets of each Investment Account. These
charges shall be reflected in the Net Investment Factor as provided in
Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
(Corporate companion)
(G&W companion)
p12518(NBR).amd
<PAGE>
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in
a form otherwise acceptable to AUL, and must be submitted to and received
by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
p12518(NBR).amd
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By ___________________________________
Title ________________________________
Date _________________________________
(new business)
p12518(NBR).amd
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER
By ____________________________________
Title _________________________________
Date __________________________________
AMERICAN UNITED LIFE INSURANCE COMPANY
By ___________________________________
Title ________________________________
Date _________________________________
(existing business)
p12518(NBR).amd
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
p12518(NBR).amd
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph on the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.4 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.7 and by substituting the following
first sentence in lieu thereof:
1.7 "Contributions" means amounts paid to AUL by the Contractholder pursuant to
the Plan, including amounts transferred to this contract from another AUL
group annuity contract, which are credited to a Participant Account
maintained hereunder.
1.12 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract
12518br.adm
<PAGE>
shall be invested in the shares of the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable Account.
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 - 5 8%
6 - 10 4%
Thereafter 0%
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment
Option election applicable to the immediately preceding Contribution.
The Contractholder or such designated person may change an Investment
Option election with respect to future allocations to the applicable
Participant Account by giving new Investment Option elections to AUL
at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the
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<PAGE>
business day that AUL receives the initial Contribution at its Home
Office, or (2) the business day that AUL receives, at its Home Office,
the data required to establish the Participant Account, instructions
regarding the amount of the initial Contribution for the Participant,
and Investment Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution,
AUL shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is
generally the AUL American Money Market Investment Account. If AUL
subsequently receives a proper Investment Option election for the
Participant, AUL shall then transfer such amounts credited to the AUL
American Money Market Investment Account or other Investment Option
identified in the Participant's annuity enrollment form, plus gains or
minus losses thereon, to another Investment Option, if such election
so directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all eligible Mutual Funds or Mutual Fund Portfolios are no
longer available for investment or if further investment in any or all
eligible Mutual Fund or Mutual Fund Portfolios becomes inappropriate
in view of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 3 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
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<PAGE>
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.7, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.9(d). Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the annuity options listed in
Section 4.2. The amount of any annuity shall be computed from the Table of
Immediate Annuities then included in this contract, except as provided
under Section 4.4.
4.7 "Benefit Responsive" Plan Benefits and Annuities: Subject to the
limitations provided in Section 4.9, at any time prior to termination of
the contract pursuant to the provisions of Article 8, the Contractholder
may direct AUL to withdraw all or a portion of the Account Value (subject
to Section 6.5) of a Participant Account for the purpose of providing:
(a) an annuity in accordance with the Annuity Options shown in Section
4.2, as directed by the Contractholder, for benefits as provided by
the Plan (other than Plan termination benefits); or
(b) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, unforeseen emergencies, or required minimum
distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder.
4.8 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.9, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.7(b). If it is necessary to
withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant
(BR)
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<PAGE>
Date that AUL receives that transfer direction at its Home Office. And if
that transfer reduces the Participant Account's remaining share of the
Fixed Interest Account to less than $500, the entire remaining share shall
also be transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.7, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.9(d). Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the annuity options listed in
Section 4.2. The amount of any annuity shall be computed from the Table of
Immediate Annuities then included in this contract, except as provided
under Section 4.4.
4.7 "Benefit Responsive" Plan Benefits and Annuities: Subject to the
limitations provided in Section 4.9, at any time prior to termination of
the contract pursuant to the provisions of Article 8, the Contractholder
may direct AUL to withdraw all or a portion of the Account Value (subject
to Section 6.5) of a Participant Account for the purpose of providing:
(a) an annuity in accordance with the Annuity Options shown in Section
4.2, as directed by the Contractholder, for benefits as provided by
the Plan (other than Plan termination benefits); or
(b) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan
(other than plan termination benefits); or
(c) providing the Participant has attained (1) age 55 and has 10 years of
service with the employer identified in the Plan or (2) age 62, a cash
lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, disability,
termination of employment, unforeseen emergencies, or required minimum
distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder.
4.8 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.9, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.7(b) and (c). If it is
necessary to withdraw the entire Account Value of a Participant Account to
make such payment, the amount paid shall equal the Withdrawal Value, minus
any Section 6.5 charges. If it is not necessary to withdraw the entire
Account Value to make such payment, AUL shall reduce the Account Value of
the Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant
(MBR)
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<PAGE>
Account up to 10% of the sum of the Account Value of that Participant
Account (determined as of the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In any sub-
sequent Contract Year, the Contractholder may withdraw from that Partici-
pant Account up to 10% of the Account Value of that Participant Account
(determined as of the Contract Anniversary immediately preceding the
request for the withdrawal) without application of the Withdrawal Charge.
4.9 Conditions for Payment of Benefits:
(a) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(b) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(c) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(d) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(e) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 3 days from the appropriate
Valuation Date as determined in Subsection (d) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) No withdrawals shall be permitted prior to the termination of this
contract except as provided in Sections 4.7 and 4.8.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
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(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
(Corporate stand-alone/prior to 3/1/97)
12518br.adm
<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
(Corporate stand-alone/effective 3/1/97 or later)
12518br.adm
<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
(G&W stand-alone/prior to 3/1/97)
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<PAGE>
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
(G&W stand-alone/effective 3/1/97 or later)
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(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
(Stand-Alone/Select-like basis)
(G & W companion)
(Corporate companion)
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9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in
a form otherwise acceptable to AUL, and must be submitted to and received
by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
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<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By____________________________________
Title ________________________________
Date__________________________________
(new business)
12518br.adm
<PAGE>
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
CONTRACTHOLDER AUL
By __________________________________ By ________________________________
Title _______________________________ Title ______________________________
Date ________________________________ Date ______________________________
(existing business)
12518br.adm
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
12518br.adm
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC HOSPITAL
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is the date that it is signed by AUL.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended by deleting Schedule A and by substituting the following Schedule
A in lieu thereof:
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
<S> <C>
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
Calvert Capital Accumulation Calvert Capital Accumulation
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
CONTRACTHOLDER AUL
By ___________________________________ By_________________________________
Title ________________________________ Title______________________________
Date _________________________________ Date_______________________________
P-12518.A
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC COMPANY (THE CONTRACTHOLDER)
The Effective Date of this Amendment is.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph on the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.4 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.7 and by substituting the following
first sentence in lieu thereof:
1.7 "Contributions" means amounts paid to AUL by the Contractholder pursuant to
the Plan, including amounts transferred to this contract from another AUL
group annuity contract, which are credited to a Participant Account
maintained hereunder.
1.12 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
p-12518(NBR).II
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.1 or 4.7, as provided by the
Plan, where the percentage varies by the Participant Account Year in which
the withdrawal is made. The first Participant Account Year begins on the
date when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1 - 5 8%
6 - 10 4%
Thereafter 0%
However, for any Participant who also participates in AUL Series III group
annuity contract GA XX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series I group annuity contract from which
funds have been transferred to such Series III contract, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract
Withdrawal Charge percentage is less than 4%, it shall be rounded up to 4%
in this contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
p-12518(NBR).II
<PAGE>
(b) (1) The initial Contribution for a Participant shall be credited
and allocated to the Participant Account no later than the close
of business on the second business day of AUL after the later of
(1) the business day that AUL receives the initial Contribution
at its Home Office, or (2) the business day that AUL receives, at
its Home Office, the data required to establish the Participant
Account, instructions regarding the amount of the initial
Contribution for the Participant, and Investment Option election
instructions regarding the initial Contribution.
(2) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL
shall return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until
the earlier of (i) the date AUL receives such data and
instructions and, therefore, can properly allocate that
Contribution to the Participant Account or (ii) 25 days from the
date that Contribution is received by AUL.
(3) If the data required to establish a Participant Account,
including any annuity enrollment form required by AUL, and
instructions regarding the amount of a Contribution for the
Participant are received, but an Investment Option election for
that Participant is not received, by AUL at its Home Office as of
the date AUL receives that Contribution, AUL shall allocate that
Contribution to the Investment Option election identified in the
Participant's annuity enrollment form, which is generally the AUL
American Money Market Investment Account. If AUL subsequently
receives the data required to establish the Participant Account,
instructions regarding the amount of the Contribution for the
Participant, and an Investment Option election, AUL shall then
transfer such amounts credited to the AUL American Money Market
Investment Account or other Investment Option identified in the
Participant's annuity enrollment form, plus gains or minus losses
thereon, to another Investment Option, if such election so
directs.
(c) Contributions for a Participant subsequent to the initial Contribution
shall be credited and allocated to the Participant Account as of the
close of business on the later of (1) the Valuation Period in which
AUL receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
election instructions.
(d) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no investment allocation instruction
is made with respect to any Participant Account, AUL shall process
such credits in accordance with the investment allocation instruction
applicable to the immediately preceding Contribution. The
Contractholder or such designated person may change an investment
allocation instruction with respect to future allocations to the
applicable Participant Account by giving new investment allocation
instructions to AUL at its Home Office in a form acceptable to AUL.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any
p-12518(NBR).II
<PAGE>
Investment Account may purchase. AUL reserves the right to eliminate
the shares of any of the eligible Mutual Funds or Mutual Fund
Portfolios and to substitute shares of, or interests in, another
Portfolio of the AUL American Series Fund, Inc., another open-end,
registered investment company, or another investment vehicle, for
shares already purchased or to be purchased in the future under the
contract, if the shares of any or all eligible Mutual Funds or Mutual
Fund Portfolios are no longer available for investment or if further
investment in any or all eligible Mutual Fund or Mutual Fund
Portfolios becomes inappropriate in view of the purposes of the
Variable Account or the contract. Where required under applicable law,
AUL will not substitute any shares attributable to the Contract-
holder's interest in the Variable Account or any Investment Account
without notice, Contractholder or Participant approval, or prior
approval of the Securities and Exchange Commission or a state
insurance commissioner, and without following the filing or other
procedures established by applicable state insurance regulators.
Nothing contained herein shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts,
or from effecting a conversion between series or classes of contracts
on the basis of requests made by a majority of other contractholders
or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives such transfer direction.
p-12518(NBR).II
<PAGE>
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option. However, if that transfer
reduces the Participant Account's remaining share of that Investment
Option to less than $500, the entire remaining share shall also be
transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account. And
if that transfer reduces the Participant Account's remaining share of
the Fixed Interest Account to less than $500, the entire remaining
share shall also be transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder,
at any time prior to termination of the contract pursuant to the provisions
of Article 8, AUL shall apply all or a portion of the Account Value
(subject to Section 6.5) of a Participant Account to provide a fixed
payment annuity under the Plan. Upon receipt of a request for an annuity,
AUL is hereby authorized by the Contractholder to value and transfer the
Participant Account's share of the Variable Account to the Fixed Interest
Account as of the date provided in Section 4.8(e). Such transferred amounts
shall be held in the Fixed Interest Account until such time as such amounts
are used to provide an annuity under the Plan. The Contractholder request
shall include certification as to the purpose for the annuity and the
election of one of the annuity options listed in Section 4.2. The amount of
any annuity shall be computed from the Table of Immediate Annuities then
included in this contract, except as provided under Section 4.4.
4.7 Death Benefits: At any time prior to termination of the contract pursuant
to the provisions of Article 8, the Contractholder may direct AUL to pay
death benefits as provided by the Plan (other than Plan termination
benefits), subject to the provisions of Subsections 4.8(b) through (g).
Upon receipt at AUL's Home Office of such written instructions from the
Contractholder and of due proof of the Participant's (and, if applicable,
the beneficiary's) death during the Accumulation Period, AUL shall, as
directed by the Contractholder, withdraw all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account to provide an
annuity pursuant to Section 4.1 or to make a cash lump- sum payment to the
Contractholder or to whomever the Contractholder directs.
4.8 Withdrawal Benefits:
(a) Subject to the following provisions of this Section, at any time prior
to termination of the contract pursuant to the provisions of Article
8, the Contractholder may direct AUL to make a cash payment from a
Participant Account to the Contractholder or to whomever the
Contractholder directs for the purpose of providing Plan benefits
permitted under applicable law (other than Plan termination benefits
or death benefits provided in Section 4.7). Such Plan benefits may
include benefits for retirement, disability, termination of
employment, unforeseen emergencies, or required minimum distribution
benefits pursuant to Internal Revenue Code Section 401(a)(9) and
Regulations issued thereunder. If it is necessary to withdraw the
entire Account Value of a Participant Account to make such payment,
the amount paid shall equal the Withdrawal Value, minus any Section
6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5
charges.
Notwithstanding the previous paragraph, in the first Contract Year in
which a Participant Account is established, the Contractholder may
withdraw from that Participant Account up to 10% of the sum of the
Account Value of that Participant Account (determined as of the later
of the Contract Date or the Contract Anniversary immediately preceding
the request for the withdrawal) plus Contributions made during that
Contract Year, without application of the Withdrawal Charge. In the
next succeeding Contract Year, the Contractholder may also withdraw
from that Participant Account up to 10% of the sum of the Account
Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) plus
Contributions made during that Contract Year, without application of
the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from that Participant Account up to 10% of
the Account Value of that Participant Account (determined as of the
Contract Anniversary immediately preceding the request for the
withdrawal) without application of the Withdrawal Charge.
(b) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(c) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option. If a
withdrawal reduces the Participant Account's share of an Investment
Option to less than $500, such remaining share shall also be
withdrawn.
(d) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(e) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or, for death benefit requests, due proof
of death, if received later), in a form acceptable to AUL, at its Home
Office.
(f) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 7 days from the appropriate
Valuation Date as determined in Subsection (e) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(g) No withdrawals shall be permitted prior to the termination of this
contract except as provided in Sections 4.1, 4.7, and this Section
4.8.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(b)(1) on the next succeeding Valuation Period, the unit value
as of the end of that Valuation Period shall be used. Such crediting shall
be made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
p-12518(NBR).II
<PAGE>
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
(Corporate stand-alone)
p-12518(NBR).II
<PAGE>
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
(G&W stand-alone)
p-12518(NBR).II
<PAGE>
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 Administrative Charge:
AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
(Corporate companion)
(G&W companion)
p-12518(NBR).II
<PAGE>
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in
a form otherwise acceptable to AUL, and must be submitted to and received
by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. AUL
shall exercise voting rights attributable to the shares of each Mutual
Fund or Mutual Fund Portfolio held in the Investment Accounts at any
regular and special meetings of the shareholders of a Mutual Fund on
matters requiring shareholder voting under The Investment Company Act
of l940 or other applicable laws. AUL shall exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Investment Accounts of the Variable Account.
However, if The Investment Company Act of l940 or any regulations
thereunder should be amended, or if the present interpretation thereof
should change, and as a result AUL determines that it is permitted to
vote the shares of a Mutual Fund or Mutual Fund Portfolio in its own
right, it may elect to do so. AUL will vote shares of any Investment
Account, if any, that it owns beneficially in its own discretion,
except that if a Mutual Fund or Mutual Fund Portfolio offers its
shares to any insurance company separate account that funds variable
life insurance contracts or if otherwise required by applicable law,
AUL will vote its own shares in the same proportion as the voting
instructions that are received in a timely manner for contracts and
Participant Accounts participating in the Investment Account.
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission,
p-12518(NBR).II
<PAGE>
AUL reserves the right to determine in a different fashion the voting
rights attributable to the shares of a Mutual Fund or Mutual Fund
Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By ___________________________________
Title_________________________________
Date _________________________________
p-12518(NBR).II
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<CAPTION>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ------------------ ------------------------------------
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
p-12518(NBR).II
<PAGE>
AMENDMENT
TO THE
AUL AMERICAN SERIES
DCP MULTIPLE-FUND GROUP VARIABLE ANNUITY
CONTRACT NUMBER GA XX,XXX (THE CONTRACT)
ISSUED BY
AMERICAN UNITED LIFE INSURANCE COMPANY (AUL)
TO
ABC HOSPITAL
(THE CONTRACTHOLDER)
The Effective Date of this Amendment is January 1, 1994.
AUL and the Contractholder hereby agree, by signing below, that the Contract is
hereby amended as follows:
By deleting the last paragraph on the face page and by substituting the
following last paragraph in lieu thereof:
ACCUMULATION UNITS IN ANY INVESTMENT ACCOUNT FOR WHICH THIS CONTRACT MAKES
PROVISION MAY INCREASE OR DECREASE IN DOLLAR VALUE ACCORDING TO THE INVESTMENT
PERFORMANCE OF THE UNDERLYING ASSETS IN THE CORRESPONDING MUTUAL FUND OR MUTUAL
FUND PORTFOLIO IN WHICH THE INVESTMENT ACCOUNT INVESTS. THE VALUE OF SUCH ASSETS
AND ACCUMULATION UNITS IS NOT GUARANTEED. ARTICLE 5 OF THIS CONTRACT EXPLAINS
THE VALUATION OF SUCH ASSETS AND ACCUMULATION UNITS.
By deleting the corresponding Sections or Subsections of the Contract and by
substituting the following Sections or Subsections in lieu thereof, and by
making any required corresponding changes in the Table of Contents of the
Contract:
1.4 "Contract Anniversary" means the first day of the second Contract Year and
each subsequent Contract Year. Each Contract Anniversary after the First
Contract Anniversary shall be the same day of the same month as the day and
month which is stated on the face page of this contract for the First
Contract Anniversary.
By deleting the first sentence of Section 1.7 and by substituting the following
first sentence in lieu thereof:
1.7 "Contributions" means amounts paid to AUL by the Contractholder pursuant to
the Plan, including amounts transferred to this contract from another AUL
group annuity contract, which are credited to a Participant Account
maintained hereunder.
1.12 "Investment Account" means each subaccount of the Variable Account which is
maintained by AUL and made available to the Contractholder by AUL and
identified in Schedule A of the contract. Schedule A of the contract may be
amended by AUL from time to time as described in Section 3.3. Amounts
allocated to any Investment Account identified in Schedule A of the
contract shall be invested in the shares of the corresponding Mutual Fund
or Mutual Fund Portfolio listed in the current prospectus for the Variable
Account.
P-12518(BR).II.1
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL Series III group
annuity contract GA XX,XXX, the initial Withdrawal Charge percentage under
this contract shall be equal to the Withdrawal Charge percentage applicable
to the Participant under the AUL Series I group annuity contract from which
funds have been transferred to such Series III contract, determined by AUL
immediately prior to the date of such transfer, rounded down to the next
whole Withdrawal Charge percentage if the Withdrawal Charge percentage
under such Series I contract is a fractional Withdrawal Charge percentage.
However, the Withdrawal Charge percentage under this paragraph shall never
be greater than 8%. The Withdrawal Charge percentage shall be decreased by
1% for each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 4%. (However, if the applicable Series I contract
Withdrawal Charge percentage is less than 4%, it shall be rounded up to 4%
in this contract.) This 4% Withdrawal Charge percentage shall be in effect
during the next 6 consecutive Participant Account Years. Thereafter, the
Withdrawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(Old Contract DCP I)
P-12518(BR).II.2
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in companion AUL Series
III group annuity contract GA XX,XXX, the initial Withdrawal Charge
percentage under this contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the previous AUL Series
III group annuity contract (with a Series I Withdrawal Charge schedule)
from which funds have been transferred to such companion Series III
contract, determined by AUL immediately prior to the date of such transfer,
rounded down to the next whole Withdrawal Charge percentage if the With-
drawal Charge percentage under such previous Series III contract is a
fractional Withdrawal Charge percentage. However, the Withdrawal Charge
percentage under this paragraph shall never be greater than 8%. The With-
drawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 4%.
(However, if the applicable Withdrawal Charge percentage in such previous
Series III contract is less than 4%, it shall be rounded up to 4% in this
contract.) This 4% Withdrawal Charge percentage shall be in effect during
the next 6 consecutive Participant Account Years. Thereafter, the With-
drawal Charge percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(original DCP III -- Series I)
P-12518(BR).II.2
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open-end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in the companion AUL
Series III group annuity contract GA XX,XXX, the initial Withdrawal Charge
percentage under this contract shall be equal to the Withdrawal Charge
percentage applicable to the Participant under the previous AUL Series III
group annuity contract from which funds have been transferred to such
Series III companion contract, determined by AUL immediately prior to the
date of such transfer, rounded down to 8% if the Withdrawal Charge
percentage under such previous Series III contract is greater than 8%. If
the Withdrawal Charge percentage is rounded down from 10% to 8%, the 8%
Withdrawal Charge percentage shall be in effect through that Participant
Account Year and through the next 2 succeeding Participant Account Years.
If the Withdrawal Charge percentage is rounded down from 9% to 8%, the 8%
Withdrawal Charge percentage shall be in effect through that Participant
Account Year and through the next succeeding Participant Account Year.
Thereafter, the Withdrawal Charge percentage shall be decreased by 1% for
each subsequent Participant Account Year until the Withdrawal Charge
percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(original contract DCP III -- Series III)
P-12518(BR).II.2
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL GRA VIII (BR)
group annuity contract GA XX,XXX, and for whom funds have been transferred
to such GRA VIII (BR) contract from an AUL GRA VI (with a Series I With-
drawal Charge schedule) group annuity contract, the initial Withdrawal
Charge percentage under this contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under such GRA VI
contract, determined by AUL immediately prior to the date of such transfer,
rounded down to the next whole Withdrawal Charge percentage if the With-
drawal Charge percentage under such GRA VI contract is a fractional With-
drawal Charge percentage. However, the Withdrawal Charge percentage under
this paragraph shall never be greater than 8%. The Withdrawal Charge
percentage shall be decreased by 1% for each subsequent Participant Account
Year until the Withdrawal Charge percentage equals 4%. (However, if the
applicable Withdrawal Charge percentage in such GRA VI contract is less
than 4%, it shall be rounded up to 4% in this contract.) This 4% With-
drawal Charge percentage shall be in effect during the next 6 consecutive
Participant Account Years. Thereafter, the Withdrawal Charge percentage
shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(no previous DCP -- match with GRA VIII BR where transfer from previous GRA VI,
Series I)
P-12518(BR).II.2
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL GRA VIII (BR)
group annuity contract GA XX,XXX, and for whom funds have been transferred
to such GRA VIII (BR) contract from an AUL GRA VI (with a Series III
Withdrawal Charge schedule) group annuity contract, the initial Withdrawal
Charge percentage under this contract shall be equal to the Withdrawal
Charge percentage applicable to the Participant under such GRA VI contract,
determined by AUL immediately prior to the date of such transfer, rounded
down to 8% if the Withdrawal Charge percentage under such previous GRA VI
contract is greater than 8%. If the Withdrawal Charge percentage is rounded
down from 10% to 8%, the 8% Withdrawal Charge percentage shall be in effect
through that Participant Account Year and through the next 2 succeeding
Participant Account Years. If the Withdrawal Charge percentage is rounded
down from 9% to 8%, the 8% Withdrawal Charge percentage shall be in effect
through that Participant Account Year and through the next succeeding
Participant Account Year. Thereafter, the Withdrawal Charge percentage
shall be decreased by 1% for each subsequent Participant Account Year until
the Withdrawal Charge percentage equals 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(no previous DCP -- match with GRA VIII BR where transfer from previous GRA VI,
Series III)
P-12518(BR).II.2
<PAGE>
1.15 "Mutual Fund" means the AUL American Series Fund, Inc., a diversified,
open-end management investment company registered under The Investment
Company Act of l940, and any other such open- end management investment
company made available by AUL, as listed in Schedule A.
1.19 "Portfolio" (also known as a "Mutual Fund Portfolio") means a portfolio
established within a particular Mutual Fund as described in that prospectus
for that Mutual Fund, as such prospectus may be amended or supplemented
from time to time.
1.23 "Withdrawal Charge" means a charge taken by AUL equal to a percentage of
the Account Value withdrawn under this contract, other than withdrawals to
provide those benefits discussed in Section 4.7, as provided by the Plan,
where the percentage varies by the Participant Account Year in which the
withdrawal is made. The first Participant Account Year begins on the date
when AUL establishes a Participant Account and credits the initial
Contribution for the Participant, and ends on the day immediately preceding
the next anniversary of such date. Each Participant Account Year thereafter
begins on such an anniversary date and ends on the day immediately
preceding the next succeeding anniversary date. The Withdrawal Charge
percentage is as follows:
During Withdrawal Charge
Participant Account Years Percentage
1-5 8%
6-10 4%
Thereafter 0%
However, for any Participant who also participates in AUL GRA VIII (BR)
group annuity contract GA XX,XXX, and for whom funds have been transferred
to such GRA VIII (BR) contract from an AUL GRA I group annuity contract,
the initial Withdrawal Charge percentage under this contract shall be equal
to the Withdrawal Charge percentage applicable to the Participant under
such GRA I contract, determined by AUL immediately prior to the date of
such transfer, rounded down to the next whole Withdrawal Charge percentage
if the Withdrawal Charge percentage under such GRA I contract is a
fractional Withdrawal Charge percentage. However, the Withdrawal Charge
percentage under this paragraph shall never be greater than 8%. The With-
drawal Charge percentage shall be decreased by 1% for each subsequent
Participant Account Year until the Withdrawal Charge percentage equals 4%.
(However, if the applicable Withdrawal Charge percentage in such GRA I
contract is less than 4%, it shall be rounded up to 4% in this contract.)
This 4% Withdrawal Charge percentage shall be in effect during the next
6 consecutive Participant Account Years. Thereafter, the Withdrawal Charge
percentage shall be reduced to 0%.
In no event will the cumulative total of all Withdrawal Charges, including
those previously assessed against any amount withdrawn from a Participant
Account, exceed 9% of total Contributions allocated to that Participant
Account.
3.2 How Contributions are Handled:
(a) Contributions received at the Home Office shall be credited to the
appropriate subaccounts of each of the Participant Accounts as
directed by the Contractholder in written allocation instructions.
(no previous DCP -- match with GRA VIII BR where transfer from previous GRA I)
P-12518(BR).II.2
<PAGE>
(b) Within any one Participant Account, the amount so credited shall be
allocated to an Investment Option in increments elected in a form
acceptable to AUL by the Contractholder or by that person designated
to AUL by the Contractholder. If no Investment Option election is made
with respect to a particular Contribution to any Participant Account,
AUL shall process such credits in accordance with the Investment
Option election applicable to the immediately preceding Contribution.
The Contractholder or such designated person may change an Investment
Option election with respect to future allocations to the applicable
Participant Account by giving new Investment Option elections to AUL
at its Home Office in a form acceptable to AUL.
(c) The initial Contribution for a Participant shall be allocated to the
Participant Account no later than the close of business on the second
business day of AUL after the later of (1) the business day that AUL
receives the initial Contribution at its Home Office, or (2) the
business day that AUL receives, at its Home Office, the data required
to establish the Participant Account, instructions regarding the
amount of the initial Contribution for the Participant, and Investment
Option elections regarding the initial Contribution.
(d) If the data required to establish a Participant Account and
instructions regarding the amount of a Contribution for the
Participant are not received by AUL at its Home Office within 5
business days after AUL first receives that Contribution, AUL shall
return that Contribution to the Contractholder unless the
Contractholder consents to AUL retaining that Contribution until the
earlier of (i) the date AUL receives such data and instructions and,
therefore, can properly allocate that Contribution to the Participant
Account or (ii) 25 days from the date that Contribution is received by
AUL.
(e) If the data required to establish a Participant Account, including any
annuity enrollment form required by AUL, and instructions regarding
the amount of a Contribution for the Participant are received, but an
Investment Option election for that Participant is not received, by
AUL at its Home Office as of the date AUL receives that Contribution,
AUL shall allocate that Contribution to the Investment Option election
identified in the Participant's annuity enrollment form, which is
generally the AUL American Money Market Investment Account. If AUL
subsequently receives a proper Investment Option election for the
Participant, AUL shall then transfer such amounts credited to the AUL
American Money Market Investment Account or other Investment Option
identified in the Participant's annuity enrollment form, plus gains or
minus losses thereon, to another Investment Option, if such election
so directs.
(f) Contributions for a Participant subsequent to the initial Contribution
shall be allocated to the Participant Account as of the close of
business on the later of (1) the Valuation Period in which AUL
receives that Contribution at its Home Office or (2) the Valuation
Period in which AUL receives, at its Home Office, the data required to
establish the Participant Account, instructions regarding the amount
of that Contribution for the Participant, and Investment Option
elections.
3.3 Addition, Deletion, or Substitution of Investments:
(a) AUL reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, substitution for, or combinations
of, the securities that are held by the Variable Account or any
Investment Account or that the Variable Account or any Investment
Account may purchase. AUL reserves the right to eliminate the shares
of any of the eligible Mutual Funds or Mutual Fund Portfolios and to
substitute shares of, or interests in, another Portfolio of the AUL
American Series Fund, Inc., another open-end, registered investment
company, or another investment vehicle, for shares already purchased
or to be purchased in the future under the contract, if the shares of
any or all
P-12518(BR).II.3
<PAGE>
eligible Mutual Funds or Mutual Fund Portfolios are no longer avail-
able for investment or if further investment in any or all eligible
Mutual Funds or Mutual Fund Portfolios becomes inappropriate in view
of the purposes of the Variable Account or the contract. Where
required under applicable law, AUL will not substitute any shares
attributable to the Contractholder's interest in the Variable Account
or any Investment Account without notice, Contractholder or
Participant approval, or prior approval of the Securities and Exchange
Commission or a state insurance commissioner, and without following
the filing or other procedures established by applicable state
insurance regulators. Nothing contained herein shall prevent the
Variable Account from purchasing other securities for other series or
classes of contracts, or from effecting a conversion between series or
classes of contracts on the basis of requests made by a majority of
other contractholders or as permitted by federal law.
(b) AUL reserves the right to establish additional Investment Accounts,
each of which would invest in the corresponding Mutual Fund or Mutual
Fund Portfolio listed in the current prospectus for the Variable
Account, or in other securities or investment vehicles. AUL reserves
the right to eliminate or combine existing Investment Accounts if
marketing, tax, or investment conditions so warrant. AUL also reserves
the right to provide other Investment Options under this contract at
any time. Subject to any required regulatory approvals, AUL reserves
the right to transfer assets from any Investment Account to another
separate account of AUL or Investment Account.
(c) In the event of any such substitution or change, AUL may, by
appropriate amendment, make such changes in this contract as may be
necessary or appropriate to reflect such substitution or change. If
deemed by AUL to be in the best interests of persons or entities
having voting rights under this contract, the Variable Account may be
operated as a management investment company under The Investment
Company Act of 1940 or any other form permitted by law, it may be
deregistered in the event such registration is no longer required
under The Investment Company Act of 1940, or it may be combined with
other separate accounts of AUL or an affiliate thereof. AUL may take
such action as is necessary to comply with, or to obtain, exemptions
from the Securities and Exchange Commission with regard to the
Variable Account. Subject to compliance with applicable law, AUL also
may combine one or more Investment Accounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Variable Account.
3.4 Transfers:
(a) Subject to the limitations of Section 3.5, the Contractholder, or that
person designated to AUL by the Contractholder, may direct AUL, in a
form acceptable to AUL, to transfer the amounts credited to an
Investment Option to any other Investment Option during the
Accumulation Period. Any transfer from an Investment Account shall be
effective as of the close of business on the Valuation Date that AUL
receives that transfer direction at its Home Office.
(b) AUL shall make the transfer as requested within 3 days from the date a
proper request is received by AUL at its Home Office, except as AUL
may be permitted to defer such payment of amounts withdrawn from the
Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer a transfer of
amounts from the Fixed Interest Account for a period of up to 6 months
after AUL receives the transfer request at its Home Office.
3.5 Limitations on Transfers:
(BR)
P-12518(BR).II.4
<PAGE>
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.7, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.9(d). Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the annuity options listed in
Section 4.2. The amount of any annuity shall be computed from the Table of
Immediate Annuities then included in this contract, except as provided
under Section 4.4.
4.7 "Benefit Responsive" Plan Benefits and Annuities: Subject to the
limitations provided in Section 4.9, at any time prior to termination of
the contract pursuant to the provisions of Article 8, the Contractholder
may direct AUL to withdraw all or a portion of the Account Value (subject
to Section 6.5) of a Participant Account for the purpose of providing:
(a) an annuity in accordance with the Annuity Options shown in Section
4.2, as directed by the Contractholder, for benefits as provided by
the Plan (other than Plan termination benefits); or
(b) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, death, disability,
termination of employment, unforeseen emergencies, or required minimum
distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder.
(BR)
P-12518(BR).II.5
<PAGE>
3.5 Limitations on Transfers:
(a) The minimum transfer from the Participant Account's share of any
Investment Option is the lesser of $500 or the Participant Account's
entire share of that Investment Option as of the close of business on
the Valuation Date that AUL receives that transfer direction at its
Home Office. However, if that transfer reduces the Participant
Account's remaining share of that Investment Option to less than $500,
the entire remaining share shall also be transferred.
(b) Amounts transferred from the Fixed Interest Account on behalf of a
Participant during any Contract Year shall not exceed 20% of the
Participant Account's share of the Fixed Interest Account determined
as of the later of the Contract Date or the Contract Anniversary
immediately preceding the request for transfer. Notwithstanding the
previous sentence, if the Participant Account's share of the Fixed
Interest Account is less than $2,500 determined as of the later of the
Contract Date or the Contract Anniversary immediately preceding the
request for transfer, the amount transferrable from the Fixed Interest
Account for that Contract Year is the lesser of $500 or the
Participant Account's entire share of the Fixed Interest Account as of
the close of business on the Valuation Date that AUL receives that
transfer direction at its Home Office. And if that transfer reduces
the Participant Account's remaining share of the Fixed Interest
Account to less than $500, the entire remaining share shall also be
transferred.
4.1 Election of Annuity Options: At the written request of the Contractholder
pursuant to Section 4.7, AUL shall apply all or a portion of the Account
Value (subject to Section 6.5) of a Participant Account for the purpose of
providing a fixed payment annuity under the Plan. Upon receipt of a request
for an annuity, AUL is hereby authorized by the Contractholder to value and
transfer the Participant Account's share of the Variable Account to the
Fixed Interest Account as of the date provided in Section 4.9(d). Such
transferred amounts shall be held in the Fixed Interest Account until such
time as such amounts are used to provide an annuity under the Plan. The
Contractholder request shall include certification as to the purpose for
the annuity and the election of one of the annuity options listed in
Section 4.2. The amount of any annuity shall be computed from the Table of
Immediate Annuities then included in this contract, except as provided
under Section 4.4.
4.7 "Benefit Responsive" Plan Benefits and Annuities: Subject to the
limitations provided in Section 4.9, at any time prior to termination of
the contract pursuant to the provisions of Article 8, the Contractholder
may direct AUL to withdraw all or a portion of the Account Value (subject
to Section 6.5) of a Participant Account for the purpose of providing:
(a) an annuity in accordance with the Annuity Options shown in Section
4.2, as directed by the Contractholder, for benefits as provided by
the Plan (other than Plan termination benefits); or
(b) a cash lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay death benefits as provided by the Plan
(other than plan termination benefits); or
(c) providing the Participant has attained (1) age 55 and has 10 years of
service with the employer identified in the Plan or (2) age 62, a cash
lump-sum payment to the Contractholder or to whomever the
Contractholder directs to pay benefits as provided by the Plan (other
than Plan termination benefits) for retirement, disability,
termination of employment, unforeseen emergencies, or required minimum
distribution benefits pursuant to Internal Revenue Code Section
401(a)(9) and Regulations issued thereunder.
4.8 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.9, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may
(MBR)
P-12518(BR).II.5
<PAGE>
direct AUL to make a cash payment from a Participant Account to the
Contractholder or to whomever the Contractholder directs for the purpose of
providing Plan benefits other than those provided in Section 4.7(b) and
(c). If it is necessary to withdraw the entire Account Value of a
Participant Account to make such payment, the amount paid shall equal the
Withdrawal Value, minus any Section 6.5 charges. If it is not necessary to
withdraw the entire Account Value to make such payment, AUL shall reduce
the Account Value of the Participant Account by an amount sufficient to
make the cash payment requested and to cover the Withdrawal Charge and any
Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge.
4.9 Conditions for Payment of Benefits:
(a) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(b) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(c) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(d) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(MBR)
P-12518(BR).II.6
<PAGE>
4.8 Other Plan Benefits Payable in Cash: Subject to the limitations provided in
Section 4.9, at any time prior to termination of the contract pursuant to
the provisions of Article 8, the Contractholder may direct AUL to make a
cash payment from a Participant Account to the Contractholder or to
whomever the Contractholder directs for the purpose of providing Plan
benefits other than those provided in Section 4.7(b). If it is necessary to
withdraw the entire Account Value of a Participant Account to make such
payment, the amount paid shall equal the Withdrawal Value, minus any
Section 6.5 charges. If it is not necessary to withdraw the entire Account
Value to make such payment, AUL shall reduce the Account Value of the
Participant Account by an amount sufficient to make the cash payment
requested and to cover the Withdrawal Charge and any Section 6.5 charges.
Notwithstanding the previous paragraph, in the first Contract Year in which
a Participant Account is established, the Contractholder may withdraw from
that Participant Account up to 10% of the sum of the Account Value of that
Participant Account (determined as of the later of the Contract Date or the
Contract Anniversary immediately preceding the request for the withdrawal)
plus Contributions made during that Contract Year, without application of
the Withdrawal Charge. In the next succeeding Contract Year, the
Contractholder may also withdraw from that Participant Account up to 10% of
the sum of the Account Value of that Participant Account (determined as of
the Contract Anniversary immediately preceding the request for the
withdrawal) plus Contributions made during that Contract Year, without
application of the Withdrawal Charge. In any subsequent Contract Year, the
Contractholder may withdraw from that Participant Account up to 10% of the
Account Value of that Participant Account (determined as of the Contract
Anniversary immediately preceding the request for the withdrawal) without
application of the Withdrawal Charge.
4.9 Conditions for Payment of Benefits:
(a) Any benefit request submitted by the Contractholder shall include
certification as to the purpose of the request for payment. The
Contractholder assumes full responsibility for determining whether any
benefit payment is permitted under applicable law and under the terms
of the Plan. AUL may rely solely upon the representations of the
Contractholder made in the benefit request.
(b) Withdrawals from a Participant Account's share of any Investment
Option may not be made in an amount less than the smaller of $500 or
the Participant Account's entire share of the Investment Option as of
the close of business on the Valuation Date that AUL receives that
withdrawal request (or due proof of death, if received later), in a
form acceptable to AUL, at its Home Office. If a withdrawal reduces
the Participant Account's share of an Investment Option to less than
$500, such remaining share shall also be withdrawn.
(c) Withdrawals from a Participant Account's share of the Fixed Interest
Account shall be made on a first-in/first-out basis so that all or a
portion of the amounts credited to the Participant Account's share of
the Fixed Interest Account which have been on deposit for the longest
period of time, as well as the interest credited thereon, shall be
withdrawn first.
(d) A withdrawal request shall be effective, and the Account Value to be
applied pursuant to Sections 4.1, 4.7, or 4.8 shall be determined, as
of the close of business on the Valuation Date that AUL receives a
proper withdrawal request (or due proof of death, if received later),
in a form acceptable to AUL, at its Home Office.
(e) AUL shall pay any cash lump sum to the Contractholder or to whomever
the Contractholder directs within 3 days from the appropriate
Valuation Date as determined in Subsection (d) above, except as AUL
may be permitted to defer such payment of amounts withdrawn from
P-12518(BR).II.6
<PAGE>
the Variable Account in accordance with appropriate provisions of the
federal securities laws. AUL reserves the right to defer the payment
of amounts withdrawn from the Fixed Interest Account for a period of
up to 6 months after AUL receives the withdrawal request at its Home
Office.
(f) No withdrawals shall be permitted prior to the termination of this
contract except as provided in Sections 4.7 and 4.8.
5.1 Valuation of Mutual Fund or Mutual Fund Portfolio Assets: All assets of
each Mutual Fund or Mutual Fund Portfolio shall be valued as provided in
the prospectus for the applicable Mutual Fund or Mutual Fund Portfolio as
such prospectus may be amended or supplemented from time to time.
5.2 Accumulation Units: Any amounts allocated to any Investment Account on
behalf of a Participant shall be credited to his Participant Account in the
form of Accumulation Units on the basis of the value of such units in that
Investment Account as of the later of (1) the end of the Valuation Period
on which such amounts are received by AUL at its Home Office or (2) the end
of the Valuation Period on which the data required to establish the
Participant Account and allocate such amounts to the Participant Account
and to Investment Options are received by AUL at its Home Office. However,
if the initial Contribution for a Participant is allocated pursuant to
Section 3.2(c) on the next succeeding Valuation Period, the unit value as
of the end of that Valuation Period shall be used. Such crediting shall be
made separately for amounts allocated to each Investment Account. The
number of Accumulation Units in each Investment Account credited to each
Participant Account as of any Valuation Period shall be determined by
dividing the amounts allocated to that Investment Account for that
Participant Account as of such Valuation Period by the dollar value of one
Accumulation Unit in that Investment Account as of the close of business on
the applicable Valuation Period. The number of Accumulation Units thus
determined shall not be changed by any subsequent change in the dollar
value of the Accumulation Units.
5.3 Value of Accumulation Units: The value of an Accumulation Unit in the AUL
American Equity, Bond, Money Market, and Managed Investment Accounts was
established at $1.00 as of April 12, 1990. The value of an Accumulation
Unit in any other Investment Account available under this contract shall be
established at $1.00 as of the date of the first deposit to such Investment
Account. The value of an Accumulation Unit in each Investment Account as of
any Valuation Period thereafter is equal to the dollar value of one
Accumulation Unit in that Investment Account as of the immediately
preceding Valuation Period multiplied by the Net Investment Factor, as
defined in Section 5.4, for that Investment Account for the current
Valuation Period. The value of an Accumulation Unit for each Investment
Account shall be determined for each Valuation Period before giving effect
to any additions, withdrawals, or transfers. After such determination, the
additions, withdrawals, or transfers which are effective as of that day
shall then be made.
5.4 Determining the Net Investment Factor: The Net Investment Factor for each
Investment Account for any Valuation Period is determined by dividing (a)
by (b), and then subtracting (c) from that result, where:
(a) is equal to:
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(G&W stand-alone)
P-12518(BR).II.7
<PAGE>
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $3.00 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
(G&W stand-alone)
P-12518(BR).II.8
<PAGE>
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
6.3 Administrative Charge: AUL shall deduct an administrative charge per
Contract Quarter equal to the lesser of $7.50 or 0.5% of the Account Value
on the last day of each Contract Quarter from each Participant Account in
existence on such day for as long as the Participant Account is in effect
during the Accumulation Period. This charge is to be prorated among each
subaccount of the Participant Account which corresponds to each Investment
Option utilized under this contract by that Participant Account. If the
entire balance of a Participant Account is applied or withdrawn before the
last day of the Contract Quarter pursuant to Sections 4.1, 4.7, 4.8, 8.2,
or 8.4, the administrative charge attributable to the period of time which
has elapsed since the first day of the Contract Quarter in which such
application or withdrawal of funds is made shall not be deducted from the
amount applied or withdrawn.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
(Corporate stand-alone)
P-12518(BR).II.8
<PAGE>
(1) the net asset value of a Mutual Fund or Mutual Fund Portfolio
share held in the Investment Account determined as of the end of
the current Valuation Period, plus
(2) the per share amount of any dividend or other distribution, if
any, paid by the Mutual Fund or Mutual Fund Portfolio during the
current Valuation Period, plus or minus
(3) any credit or charge for any taxes paid or reserved for by AUL
during the current Valuation Period which are determined by AUL
to be attributable to operation of the Investment Account;
(b) is the net asset value of a Mutual Fund or Mutual Fund Portfolio share
held in the Investment Account determined as of the end of the
immediately preceding Valuation Period; and
(c) is a daily charge factor determined by AUL to reflect the charges
assessed against the assets of the Investment Account for mortality
and expense risks, as authorized by Section 6.1.
6.1 Mortality Risk and Expense Risk Charges: AUL shall deduct a daily mortality
risk charge and a daily expense risk charge equal to the daily equivalent
of an annual combined charge of 1.25% against the average daily net assets
of each Investment Account. These charges shall be reflected in the Net
Investment Factor as provided in Section 5.4(c).
6.2 Mutual Fund or Mutual Fund Portfolio Expenses: A Mutual Fund or Mutual Fund
Portfolio shall pay any investment advisory fee and certain other expenses,
which may include its ordinary operational and organizational expenses, and
any extraordinary expenses, as described in the current prospectus for that
Mutual Fund or Mutual Fund Portfolio as it may be amended or supplemented
from time to time. These expenses may vary from year to year. The net asset
value of each Mutual Fund or Mutual Fund Portfolio share reflects such
investment advisory fee and other expenses which are deducted from the
assets of such Mutual Fund or Mutual Fund Portfolio.
By adding the following first paragraph to Section 6.3:
6.3 AUL hereby waives the administrative charge described hereafter in this
Section 6.3.
6.5 Other Charges: AUL reserves the right to deduct the appropriate premium tax
charge at the time annuity payments commence pursuant to Sections 4.1 and
4.7 or such other time that premium taxes are incurred by AUL. AUL also
reserves the right to deduct the appropriate charges for federal, state, or
local income taxes incurred by AUL that are attributable to the Variable
Account and its Investment Accounts.
(G&W Companion)
(Corporate Companion)
P-12518(BR).II.8
<PAGE>
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in
a form otherwise acceptable to AUL, and must be submitted to and received
by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(Corporate stand-alone)
(G&W stand-alone)
P-12518(BR).II.9
<PAGE>
6.6 Reduction or Waiver of Certain Charges: AUL may reduce or waive the amount
of the Withdrawal Charge or the administrative charge discussed in Section
6.3 where the expenses associated with the sale of this contract or the
administrative costs associated with this contract are reduced, or where
this contract is sold to the directors or employees of AUL or any of its
affiliates, or to directors or any employees of the AUL American Series
Fund, Inc.
By adding the following first paragraph to Section 7.3:
7.3 Right of AUL to Change Charges:
Because the administrative charge described in Section 6.3 has been waived
by AUL, the maximum administrative charge discussed hereafter in this
Section 7.3 shall be $0.00.
8.1 Right of Contractholder to Terminate: This contract shall terminate if the
Contractholder gives written notice to AUL that this contract is to be
terminated. In such event, the termination notice shall be effective as of
the close of business on the Valuation Date that AUL receives a proper
written Contractholder notice at its Home Office. This date shall be the
effective date of termination. This contract shall also terminate
automatically as of the date that there are no Participant Accounts
maintained hereunder.
9.2 AUL's Annual Statement: No provision or condition of this contract shall be
deemed to control, determine, or modify any annual statement of AUL made to
any insurance department, contractholder, regulatory body, or other person,
nor shall anything in such annual statement be deemed to control,
determine, or modify the valuation provided for in this contract, nor the
values determined, nor the market, book, or other value of any asset in any
Investment Account or Mutual Fund or Mutual Fund Portfolio, nor any of the
other provisions and conditions of this contract.
9.8 Election, Notice, or Direction Requirements: Wherever in this contract
reference is made to the Contractholder making a request or giving notice
or direction, such request, notice, or direction must be in writing, or in
a form otherwise acceptable to AUL, and must be submitted to and received
by AUL at its Home Office before becoming effective.
9.15 Voting:
(a) AUL is the legal owner of the shares of a Mutual Fund or Mutual Fund
Portfolio held by the Investment Accounts of the Variable Account. In
accordance with its view of present law, AUL shall exercise voting
rights attributable to the shares of each Mutual Fund or Mutual Fund
Portfolio held in the Investment Accounts at any regular and special
meetings of the shareholders of a Mutual Fund on matters requiring
shareholder voting under The Investment Company Act of l940 or other
applicable laws. AUL shall exercise these voting rights based on
instructions received from persons having the voting interest in
corresponding Investment Accounts of the Variable Account. However, if
The Investment Company Act of l940 or any regulations thereunder
should be amended, or if the present interpretation thereof should
change, and as a result AUL determines that it is permitted to vote
the shares of a Mutual Fund or Mutual Fund Portfolio in its own right,
it may elect to do so. AUL will vote shares of any Investment Account,
if any, that it owns beneficially in its own discretion, except that
if a Mutual Fund or Mutual Fund Portfolio offers its shares to any
insurance company separate account that funds variable life insurance
contracts or if otherwise required by applicable law, AUL will vote
its own shares in the same proportion as the voting instructions that
are received in a timely manner for contracts and Participant Accounts
participating in the Investment Account.
(G&W Companion)
(Corporate Companion)
P-12518(BR).II.9
<PAGE>
(b) The person having the voting interest under this contract is the
Contractholder. Unless otherwise required by applicable law, the
number of Mutual Fund or Mutual Fund Portfolio shares as to which
voting instructions may be given to AUL is determined by dividing the
value of all of the Accumulation Units of the corresponding Investment
Account attributable to this contract on a particular date by the net
asset value per share of that Mutual Fund or Mutual Fund Portfolio as
of the same date. Fractional votes will be counted. The number of
votes as to which voting instructions may be given will be determined
as of the date coincident with the date established by the applicable
Mutual Fund or Mutual Fund Portfolio for determining shareholders
eligible to vote at the meeting of that Mutual Fund. If required by
the Securities and Exchange Commission or under any contract with any
of the Mutual Funds made available by AUL, AUL reserves the right to
determine in a different fashion the voting rights attributable to the
shares of a Mutual Fund or Mutual Fund Portfolio.
(c) Voting rights attributable to this contract for which no timely voting
instructions are received will be voted by AUL in the same proportion
as the voting instructions which are received in a timely manner for
all contracts and Participant Accounts participating in that
Investment Account.
(d) Neither the Variable Account nor AUL is under any duty to inquire as
to the instructions received or the authority of Contractholders,
Participants, or others to instruct the voting of Mutual Fund or
Mutual Fund Portfolio shares.
(e) Every person or entity having such voting rights shall receive such
reports or prospectuses concerning the Variable Account or a Mutual
Fund or Mutual Fund Portfolio as may be required by applicable federal
law.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Jerry D. Semler
Chairman of the Board,
President, & Chief Executive Officer
Attest
By: /s/ William R. Brown
Secretary
CONTRACTHOLDER
By: ____________________________________
Title___________________________________
Date____________________________________
P-12518(BR).II.10
<PAGE>
SCHEDULE A
The following Investment Accounts are made available to the Contractholder by
AUL. Amounts allocated to any Investment Account identified below shall be
invested in the shares of the corresponding Mutual Fund or Mutual Fund Portfolio
listed below.
<TABLE>
<S> <C>
Investment Account Mutual Fund or Mutual Fund Portfolio
- ----------------- ------------------------------------
AUL American Bond AUL American Bond
AUL American Equity AUL American Equity
AUL American Managed AUL American Managed
AUL American Money Market AUL American Money Market
AUL American Tactical Asset Allocation Portfolio AUL American Tactical Asset Allocation Portfolio
Alger American Growth Alger American Growth
Calvert Social Mid-Cap Growth Calvert Social Mid-Cap Growth
Fidelity VIP Equity-Income Fidelity VIP Equity-Income
Fidelity VIP Growth Fidelity VIP Growth
Fidelity VIP High Income Fidelity VIP High Income
Fidelity VIP Overseas Fidelity VIP Overseas
Fidelity VIP II Asset Manager Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund Fidelity VIP II Contrafund
Fidelity VIP II Index 500 Fidelity VIP II Index 500
Janus Aspen Series Flexible Income Portfolio Janus Aspen Series Flexible Income Portfolio
Janus Aspen Series Worldwide Growth Portfolio Janus Aspen Series Worldwide Growth Portfolio
PBHG Insurance Series Growth II PBHG Insurance Series Growth II
PBHG Insurance Series Technology PBHG Insurance Series Technology
and Communication and Communication
SAFECO Resource Series Trust Equity Portfolio SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Growth Portfolio SAFECO Resource Series Trust Growth Portfolio
T. Rowe Price Equity-Income Portfolio T. Rowe Price Equity-Income Portfolio
</TABLE>
P-12518(BR).II.11
- --------------------------------------------------------------------------------
EXHIBIT 5.1
AUL AMERICAN SERIES ENROLLMENT FORM P-12464
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AUL American Series Enrollment
<S> <C> <C>
American United Life Insurance Company Contract # __________________
1. Participation Information: __ Male __ Female 9. Suitability Information:
All answers to be supplied by the Participant.
Name:_____________________________________ Occupation/Title:________________________________
Social Security Number:___________________ Annual Income (salary):__________________________
Date of Birth:____________________________ Other Income:____________________________________
Date of Employment: ______________________ Total Household Income:__________________________
Residence Address:________________________ Net Worth:_______________________________________
(Street) Liquid Net Worth: _______________________________
________________________ Approximate Tax Bracket ______%
(City) (State) (Zip) Filing Status: __ Single __ Married __ Head of Household
Daytime Phone: (___)______________________ Number of dependents: ________
Employer._________________________________ Name Relationship Age
Employer Address:_________________________ _________ _______________ _____
(Street) _________ _______________ _____
_________________________ _________ _______________ _____
(City) (State) (zip)
2. Is the participant/annuitant owner an associated 10. Investment Objective Income: (cheek one)
person of another NASD member? __ Yes __ No Capital Preservation ____ Income ______
3. Enrollment For: (Conservative) (Moderate)
__ Section 403(b) Tax Deferred Annuity (TDA)
__ Section 457 Deferred Compensation Total Return____ Capital Appreciation____
__ IRA __ Simple IRA (Moderate) (Aggressive)
__ SEP-IRA Investment Experience Number of years
(NOTE: If enrollment is for employer sponsored Stocks ________
TDA, use Employer Sponsored TDA Enrollment Bonds ________
Form.) Mutual Funds ________
4. Contribution Allocation Instructions: Other ________
In the event that: (a) AUL has all of the infor- __________________________________________________
mation necessary to establish my Participant Receipt is acknowledged of the current prospectus
account, (b) my Employer is not directing of the AUL American Series Fund, Inc., the AUL
investment of my contributions, and (c) AUL American Unit Trust and for any other Mutual Fund
has not received my Investment Option Election being purchased by the Unit Trust for my variable
Form, I hereby direct, by signing below, that AUL annuity account or variable insurance portfolio.
apply any contributions received on my behalf to Payment and values provided by the contract when
the AUL American Money Market Investment based on investment performance of the Unit Trust
Account. This election shall continue in effect are variable and are not guaranteed as to unit value.
until a properly completed Investment Option I understand the restrictions on distributions from
Election form is received by AUL. a 403(b) tax deferred annuity as set out in Section
403(b)(11) of the Internal Revenue Code and in the
5. Contribution Type: current AUL American Unit Trust Prospectus.
(The allocation contribution should address each
contribution type checked below. Check any that Under penalties of perjury, I hereby certify (1) that
apply): the Social Security or Taxpayer I.D. Number above
__ Periodic Contribution __ Transfer __ Rollover is correct and (2) that I am not subject to backup
withholding because (a) I have not been notified
6. Contribution Information: that I am subject to backup withholding as a
a. Initial Amount $__________ or________% result of a failure to report all interest or dividends,
b. Employer Frequency:_________________ or (b) the I.R.S. has notified me that I am no longer
c. Source of Rollover or Transfer._________ subject to backup withholding. [Cross out (2) if it is
not correct.] I agree that the above statements are
7. Does this annuity replace any existing insurance true and correct to the best of my knowledge and
or annuity? belief and are made a basis for my application.
__ Yes __ No The Internal Revenue Service does not require your
consent to any portions of this document other
If yes, submit any required replacement forms. than the certifications required to avoid backup
withholding.
8. Beneficiary for Death Benefit:
On Section 457 Deferred Compensation Plans: __ I request a current Statement of Additional
please see plan document regarding the appropriate Information for the AUL American Unit Trust
exclusive benefit rule. The plan document will and the AUL American Series Fund, Inc. and for
supersede any beneficiaries provided on this form. any other Mutual Fund being purchased by the Unit
Show relationships and show how divided if Trust for my variable annuity account.
multiple beneficiaries.
Primary : ______________________________________% _________________________________________________
(Beneficiary) (Relationship) Participant's Signature Date
_______________________________________% _________________________________________________
(Beneficiary) (Relationship) Registered Representative Signature Date
Secondary: _____________________________________% _________________________________________________
(Beneficiary) (Relationship) Print Registered Representative Name Number
_______________________________________% _________________________________________________
(Beneficiary) (Relationship) Broker/Dealer Approval Date
P-12464D White - AUL Broker/Dealer Yellow - Outside Broker/Dealer-Registered Rep Pink - AUL Home
Office Go/d - Participant Rev. 11/97
</TABLE>
- --------------------------------------------------------------------------------
EXHIBIT 5.2
EMPLOYER SPONSORED TDA ENROLLMENT FORM P-12477
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Employer Sponsored Tax Deferred Annuity AUL American Series Contract
Enrollment AUL.
American United Life insurance Company Contract # _________________
<S> <C>
1. Participation Information: __ Male __ Female 6. Suitability Information:
All answers to be supplied by the Participant.
Name:_______________________________________ Occupation/Title: ____________________________________
Social Security Number:_____________________ Annual Income (salary): ______________________________
Other Income: ________________________________________
Date of Birth:______________________________ Total Household Income:_______________________________
Net Worth:____________________________________________
Date of Employment__________________________ Liquid Net Worth:_____________________________________
Residence Address:__________________________ Approximate Tax Bracket _____%
(Street) Filing Status: __ Single __ Married __ Head of Household
__________________________ Number of dependents
(City) (State) (Zip) Name Relationship Age
Daytime Phone: (__ ) _________________ ____________ ___________ ___________
Employer____________________________________ ____________ ___________ ___________
____________ ___________ ___________
Employer Address:___________________________ 7. Investment Objective: (check one)
(Street) Capital Preservation Income
__________________________ (Conservative) (Moderate)
(City) (State) (Zip) Total Return Capital Appreciation
(Moderate) (Aggressive)
2. Is the participant/annuitant owner an Investment Experience Number of years
associated person of another NASD member? Stocks ______________
__ Yes __ No Bonds ______________
Mutual Funds ______________
3. Contribution Type: Other ______________
(The allocation contribution should address __________________________________________________________________
each contribution type checked below. Check Receipt Is acknowledged of the current prospectus AUL
any that apply): American Series Fund, Inc., the AUL American Unit
__Periodic Contribution__ Transfer__ Rollover Trust and for any other Mutual Fund being purchased
4. Contribution Allocation Instructions of the by the Unit Trust for my variable annuity account or variable
In the event that (a) AUL has all of the infor- insurance portfolio. Payment and values provided by
mation necessary to establish my Participant the contract when based on investment performance of the
account, (b) my Employer is not directing Unit Trust are variable and are not guaranteed as to unit value.
investment of my contributions, and (c) AUL I understand the restrictions on distributions from a 403(b)
has not received my Investment Option tax deferred annuity as set out in Section 403(b)(11) of the
Election Form, I hereby direct, by signing Internal Revenue Code and in the current AUL American Unit
below, that AUL apply any contributions Trust Prospectus.
received on my behalf to the AUL American Under penalties of perjury, I hereby certify 1) thee the Social
Money Marker Investment Account. This Security or Taxpayer I.D. Number above is correct and (2)
election shall continue in effect until a properly that I am not subject to backup withholding because a) I have
completed Investment Option Election form is not been notified that I subject to backup withholding as a result
received by AUL. of a failure to report all interest or dividends, or (b) the I.R.S.
5. Beneficiary for Death Benefit has notified me thee I am no longer subject to backup
Show relationships and show how divided if withholding. [Cross out (2) if it is not correct] I agree that the
multiple beneficiaries. Designation applies to above statements are true and correct to the best of my
all contribution categories provided. knowledge and belief and are made a basis for my application.
If not married or if you designate someone
other than your spouse, use form: P-13353A The Internal Revenue Service does not require your consent to
any portions of this document other than the certifications
required to avoid backup withholdings.
Primary_____________________________________ ____ I request a current Statement of Additional Information for
(Beneficiary) (Spouse) the AUL American Unit Trust and the AUL American
Series Fund, Inc. and for any other Mutual Fund being
Secondary:__________________________________% purchased by the Unit Trust for my variable annuity
(Beneficiary) (Relationship) account.
___________________________________% _______________________________________________
(Beneficiary) (Relationship) Participant's Signature Date
_______________________________________________
Registered Representative Signature Date
_______________________________________________
Print Registered Representative Name Number
_______________________________________________
Broker/Dealer Approval Date
P-12477G White-AUL Broker/Dealer Yellow -Outside Broker/Dealer-Registered Rep Pink-AUL Home Office
Gold-Participant Rev. 11/97
</TABLE>
- --------------------------------------------------------------------------------
EXHIBIT 5.3
AUL SELECT ANNUITY ENROLLMENT FORM P-14009
- --------------------------------------------------------------------------------
AUL Select Annuity Enrollment AUL(R)
<TABLE>
<CAPTION>
<S> <C>
American United Life Insurance Company Contract #_________________
1. Participation Information: __ Male __ Female 9. Suitability Information:
Name:___________________________________________ All answers to be supplied by the Participant.
Social Security Number: ________________________ Occupation/Title:______________________________________
Date of Birth:__________________________________ Annual Income (salary):________________________________
Date of Employment: _____________________ Other Income:__________________________________________
Residence Address:______________________________ Total Household Income:________________________________
(Street) Net Worth:_____________________________________________
___________________________ Liquid Net Worth:______________________________________
(City) (Stare) (Zip) Approximate Tax Bracket:_______%
Daytime Phone: (___)___________________________ Filing Status: __ Single __ Married __ Head of Household
Employer: _____________________________________ Number of dependents__________
Employer Address:______________________________ Name Relationship Age
(Street) _______________ ______________ _____
_____________________________ _______________ ______________ _____
(City) (Stare) (Zip) _______________ ______________ _____
2. Is the participant/annuitant owner an associated 10. Investment Objective (cheek one)
person of another NASD member? __ Yes __ No Capital Preservation___ Income___
3. Enrollment For (Conservative) (Moderate)
__ Section 403(b) Tax Deferred Annuity (TDA) Total Return___ Capital Appreciation ____
__ Section 457 Deferred Compensation (Moderate) (Aggressive)
__ Section 401(a) Investment Experience Number of years
__ AUL ONE Stocks _________
(NOTE: If enrollment is for employer sponsored Bonds _________
TDA, use Employer Sponsored TDA Enrollment Mutual Funds _________
Form.) Other _________
4. Contribution Allocation Instructions: ____________________________________________________
In the event than (a) AUL has all of the Receipt is acknowledged of the current prospectus of
information necessary to establish my the AUL American Series Fund, Inc., the AUL
Participant account (b) my Employer is American Unit Trust and for any other Mutual Fund
not directing investment of my contributions being purchased by the Unit Trust for my variable
and (c) AUL has not received my Investment annuity account or variable insurance portfolio.
Option Election Form I hereby direct by Payment and values provided by the contract when
signing below, that AUL apply any contri- based on investment performance of the Unit Trust
butions received on my behalf to the AUL are variable and are not guaranteed as to unit value. I
American Money Market Investment Account. understand the restrictions on distributions from
This election shall continue in effect until a a 403(b) tax deferred annuity as set out in Section
properly completed Investment Option Election 403(b)(11) of the Internal Revenue Code and in the
form is received by AUL. current AUL American Unit Trust Prospectus.
5. Contribution Type:
(The allocation contribution should address Under penalties of perjury I hereby certify (1) that the
each contribution type checked below. Check Social Security or Taxpayer I.D. Number above is
any that apply): correct and (2) that I am not subject to
__ Periodic Contribution __ Transfer __ Rollover backup withholding because (a) I have not been notified
6. Contribution Information: that I am subject to backup withholding as a result of a
a. Initial Amount $__________ or__________% failure to report all interest or dividends or (b) the I.R.S.
b. Employer Frequency.:__________________ has notified me that I am no longer subject to backup c.
c. Source of Rollover or Transfer____________ withholding. [Cross out (2) if it is not correct.] I agree
7. Does this annuity replace any existing that the above statements are true and correct to the best
insurance or annuity? of my knowledge and belief and are made a basis for
___ Yes ___ No my application.
If yes submit any required replacement forms. The Internal Revenue Service does not require your 8.
8. Beneficiary for Death Benefit consent to any portions of this document other than the
On Section 457 Deferred Compensation certifications required to avoid backup withholding
Plans: please see plan document regarding the
appropriate exclusive benefit rule The plan _____I request a current Statement of Additional
document will supersede any beneficiaries Information for the AUL American Unit Trust and the
provided on this form. Show relationships and AUL American Series Fund Inc. and for any other
show how divided if multiple beneficiaries Mutual Fund being purchased by the Unit Trust for my
variable annuity account.
Primary:__________________________________% ____________________________________________________________
(Beneficiary) (Relationship) Participant's Signature Date
__________________________________________% ____________________________________________________________
(Beneficiary) (Relationship) Registered Representative Signature Date
Secondary ________________________________% ____________________________________________________________
(Beneficiary) (Relationship) Print Registered Representative Name Number
__________________________________________% ____________________________________________________________
(Beneficiary) (Relationship) Broker/Dealer Approval Date
</TABLE>
P-14009A White-AUL Broker/Dealer Yellow - Outside Broker/Dealer-Registered Rep
Pink - AUL Home Office Gold - Participant Rev. 11/97
- --------------------------------------------------------------------------------
EXHIBIT 6.1
ARTICLES OF MERGER BETWEEN
AMERICAN CENTRAL LIFE INSURANCE COMPANY
AND UNITED MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
ARTICLES OF MERGER
OF
AMERICAN CENTRAL LIFE
INSURANCE COMPANY
INDIANAPOLIS, INDIANA
AND
UNITED MUTUAL LIFE
INSURANCE COMPANY
INDIANAPOLIS, INDIANA
<PAGE>
(This page was left blank intentionally)
<PAGE>
ARTICLES OF MERGER
IT IS HEREBY CERTIFIED by the American Central Life Insurance Company and the
United Mutual Life Insurance Company that the following Joint Agreement of
Merger between said corporations has been duly adopted and executed by them,
viz:
THIS JOINT AGREEMENT OF MERGER, made and entered into this 17th day of December,
A. D., 1936, at Indianapolis, Indiana, by and between the AMERICAN CENTRAL LIFE
INSURANCE COMPANY, a corporation duly organized, established, and existing under
and by virtue of the laws of the State of Indiana, as a capital stock life
insurance company (hereinafter designated as the "American Central"), and the
UNITED MUTUAL LIFE INSURANCE COMPANY, a corporation duly organized, established,
and existing under and by virtue of the laws of the State of Indiana, as a
mutual life insurance company (hereinafter designated as the "United Mutual"),
each with its principal office and place of business at Indianapolis, Indiana,
WITNESSETH THAT,
WHEREAS, The laws of the State of Indiana by Acts 1935, Chapter 162,
authorize and empower domestic insurance corporations to enter into joint
agreements of merger and provide the method and procedure for the approval,
adoption, and execution of such agreements and the approval of articles of
merger,
NOW THEREFORE, In consideration of the mutual promises, covenants, and
agreements herein contained and to effectuate a merger of the American Central
and the United Mutual pursuant to the approval and authorization of their
respective boards of directors, the stockholders of the American Central and the
members of the United Mutual and subject to the approval of the necessary
officials and departments of the State of Indiana, all as provided by law, IT IS
HEREBY MUTUALLY AGREED by and between the parties hereto as follows:
1. Merger Agreement and Name of Surviving Corporation:
The American Central Life Insurance Company shall merge into the United
Mutual Life Insurance Company, (which, with its name changed to "AMERICAN UNITED
LIFE INSURANCE COMPANY," shall be and is hereinafter designated as the
"Surviving Corporation"), under the present certificate of authority of the
United Mutual, except for such modification and changes as are specifically set
forth in this Joint Merger Agreement and restatement of its Articles of
Incorporation.
3
<PAGE>
2. Surrender of American Central Stock and Issuance of Participation
Certificates:
Immediately upon the issuance of the Certificate of Merger by the Secretary
of State, stock certificates evidencing ownership of at least eighty-five per
centum (85%) in amount of the capital stock of the American Central shall be
surrendered by Herbert M. Woollen and Harry R. Wilson, as Trustees for American
Central stockholders and owners of Participation Certificates, free and clear of
any pledge, lien or claim of any nature whatsoever to the Surviving Corporation
for cancellation; provided that surrender of a substantial part of the remaining
shares shall be completed within four (4) months from the effective date of said
merger; and provided that coincident with any such surrender and cancellation
and in exchange for said stock certificates and in consideration therefor, there
shall be issued by the Surviving Corporation to said Trustees for delivery to
each owner, in lieu of his certificates of stock in the American Central,
Participation Certificates, in the form hereinafter set forth, entitling him to
such fractional part of the amounts herein called "Conversion Proceeds" less
deductions herein set out as the number of his surrendered shares of stock bears
to 2,740, the total outstanding shares of stock in the American Central. In the
event any shares of American Central stock shall be acquired in accordance with
the provisions of Chapter III, Article V, Section 123 of the Indiana Insurance
Law, or by purchase, Participation Certificates shall be issued for such stock
so acquired or purchased and shall share in the regular distribution of
Conversion Proceeds. Such Participation Certificates shall be held by the
Surviving Corporation as Trustee for the remaining Participation Certificate
owners and the share thereof in the Conversion Proceeds shall be equitably
distributed by the said Trustee among the remaining Participation Certificate
owners. The Surviving Corporation may purchase Participation Certificates for
its own account. The Participation Certificates shall be registered on the books
of the Surviving Corporation and shall be transferable. They shall give the
owners and holders thereof no other or greater rights than stated in such
Certificates and this Agreement, and shall create no liability against the
Surviving Corporation except for Conversion Proceeds, as hereinafter defined,
when, if, and as determined in the manner herein provided.
3. Segregation of American Central Assets and Liabilities American Central
Fund
There shall be created, by proper segregation, designations, and entries
upon the books of the Surviving Corporation, a complete separation, listing, and
accounting of all assets, liabilities, and business of the American Central,
(except those assets taken over by the Surviving Corporation by agreement,) as
the same exist
4
<PAGE>
and are shown by the books and records in the accounting for the American
Central at the close of business on December 31, 1936, which, with all
accretions thereto and depletions therefrom, shall constitute and be known as
the "American Central Fund" and shall continue until all Participation
Certificates are retired as hereinafter provided.
4. Conversion Proceeds Determined Annually and Distributed:
The Conversion Proceeds above mentioned shall be determined in the
following manner: As of December 31, 1936, and annually thereafter until and
including December 31, 1956, a complete annual accounting of the business of the
American Central Fund shall be prepared in the form required for annual
statements to the Indiana Insurance Department.
A. In these statements there shall be credited to the American Central Fund
the following:
a. In the first accounting as of December 31, 1936, all assets received
from the American Central at book values. Subsequent accountings shall
start with the ledger assets at the date of the preceding accounting.
b. All income of any sort derived from business and assets of the
American Central Fund.
c. All profits on sales and maturities of ledger assets and gross
increase by adjustment in book value of ledger assets of the American
Central Fund.
d. Interest, rents and other income, including profits on sales or
maturities and increases by adjustments on that portion, if any, of
the general assets of the Surviving Corporation which is derived from
the business and assets of the American Central Fund, at the net rate
realized by the Surviving Corporation on all of its assets acquired
after this Merger, excluding those transferred from the American
Central and the United Mutual.
B. In said annual statements, there shall be charged as disbursements:
a. All disbursements specifically chargeable to the business and assets
of the American Central Fund. The expenses which cannot be
specifically allocated to the business of the American Central or the
Surviving Corporation, shall be pro-rated between the respective
businesses and assets on the basis hereinafter set forth, it being
expressly understood that no part of the acquisition expense of the
Surviving Corporation shall be charged to the American Central Fund.
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<PAGE>
b. All investment expenses and investment losses on account of assets of
the American Central Fund.
c. All payments made or credited to owners of Participation Certificates
and dissenting stockholders.
C. In preparing the statements of assets and liabilities, the following
principles shall be followed:
a. All assets received from the American Central with accretions and
substitutions less depletions, shall be included.
b. An amount equal to the value of the undivided part of the general
assets of the Surviving Corporation derived from income from the
business and assets of the American Central Fund shall be included.
c. All policy assets and liabilities and all other non-ledger assets and
liabilities shall be included as required by the Insurance Department
Annual Statement Blank unless otherwise specified herein. Disability
reserves shall be based upon the tables heretofore used by the
American Central.
From the statements prepared as provided herein, the gain or loss of the
Surviving Corporation on account of the business of the American Central shall
be determined. The amount thereof shall constitute the Conversion Proceeds. Any
such loss in excess of gains from other sources and of the existing Fluctuation
Fund as hereinafter provided shall be a first charge against the Conversion
Proceeds of the succeeding year or years until equalized. The determination of
Conversion Proceeds, as herein provided, shall be made annually as of December
31st, and after deducting the amounts provided in Sections 5, 6 and 7 hereof,
the remainder of said Conversion Proceeds shall within ninety (90) days
thereafter be distributed in cash annually for a period ending December 31,
1956, to the registered owners of the Participation Certificates. The Trustees
shall have access at all times to the books and records of the Surviving
Corporation for the purpose of determining the correctness of the accounting, or
for any other purposes. Any expense of any examinations or audits at the request
of the Trustees shall be paid by the Surviving Corporation and charged against
the American Central Fund.
5. Equalization of American Central Surplus as of December 31, 1935:
It is agreed that the capital and surplus of the American Central as of
December 31, 1935, and the surplus of the United Mutual constitute the surplus
of the Surviving Corporation. If necessary to equalize the surplus of the
American Central at the effective date hereof to the amount thereof as of
December 31,
6
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1935, there shall be deducted from the Conversion Proceeds each year beginning
with the accounting for the year 1937 an amount not in excess of ten per centum
(10%) of the Conversion Proceeds created by the operations of that year, which
amounts so deducted shall remain in the American Central Fund.
6. Provision for Fluctuations and Losses" Final Accounting December 31, 1956 -
Appraisal:
In order to provide for fluctuations in the value of investments and other
losses, there shall be deducted an amount equal to twenty per centum (20%) of
the remainder of the Conversion Proceeds after the deduction provided in Section
5 hereof has been made, beginning with the accounting for the year 1939, which
amounts so deducted shall remain in the American Central Fund and be carried as
a liability to be known as the "Fluctuation Fund," against which losses in
excess of gains from other sources may be charged, until December 31,1956,
provided that the maximum of said Fund shall not at any accounting exceed ten
per centum (10%) of the book value of the assets of the American Central Fund,
and provided further that the American Central Committee, as hereinafter
created, shall annually determine the extent to which the further maintenance of
this Fund is reasonably necessary. In the accounting as of December 31, 1956,
the reasonable, fair, normal, average market value of all assets in the American
Central Fund shall be determined by agreement between the American Central
Committee and the Surviving Corporation; or, in the event they are unable so to
agree, by disinterested parties employed by the American Central Committee with
the approval of the Surviving Corporation. In that accounting, the values so
fixed shall be used in determining the Conversion Proceeds payable to the
Participation Certificate owners, and the remainder of the Fluctuation Fund, if
any, shall be distributed as a part of the final accounting and payment. Any
part of the Fluctuation Fund which shall be distributed in accordance with this
agreement shall not be subject to the deduction provided for in Section 7 of
this agreement. Immediately thereupon the Participation Certificates shall be
surrendered for cancellation.
7. Allocation of Conversion Proceeds to Surviving Corporation:
In the accounting for each of the years 1937 and 1938 there shall be
deducted and credited to the surplus of the Surviving Corporation an amount
equal to ten per centum (10%) of the Conversion Proceeds as determined from the
operations during said year. For each of the years 1939 and thereafter such
deduction and credit shall be fifteen per centum (15%).
7
<PAGE>
8. Effective Date of Merger:
The "effective date" of the merger shall be the date of the issuance of the
Certificate of Merger by the Secretary of State, as provided by Chap. III, Art.
V, Sec. 118 of the Indiana Insurance Law.
9. Surviving Corporation Vested with Property and Responsible for Liabilities:
When such merger has been effected, as provided by Chap. III, Art. V, Sec.
125 of the Indiana Insurance Law, the Surviving Corporation shall thereupon and
thereafter possess and be vested with all the rights, privileges, immunities,
powers, and franchises of a public, as well as of a private nature of each of
the corporations, parties hereto; and all property, real, personal, and mixed,
and all debts due on whatever account and all choses in action and all and every
other interest, of or belonging to or due to each of them shall be deemed to be
transferred to and vested in the Surviving Corporation without further act or
deed; and the title to any real estate, or any interest therein, under the laws
of this State vested in either of the corporations, parties hereto, shall not
revert or be in any way impaired by reason of the merger, and the Surviving
Corporation shall thenceforth be responsible and liable for all the liabilities
and obligations of each of the corporations, parties hereto, in the same manner
and to the same extent as if the Surviving Corporation had itself incurred the
same or contracted therefor. The American Central, its directors, officers and
agents shall make all conveyances, assignments, and do or refrain from all other
acts and deeds deemed necessary, expedient or proper to effectuate the merger,
and to vest in the Surviving Corporation all of the American Central's right,
title and interest in and to said property, and to carry out the full intents
and purposes of the merger, and the Surviving Corporation shall have all rights
of action, legal and equitable possessed by each of the corporations, parties
hereto.
10. Taxes Paid by Owners of Participation Certificates:
The Participation Certificate owners shall pay all state and federal taxes
which may be imposed against said owners upon the portion of the Conversion
Proceeds paid to them; provided that should any state or federal law require
that the said taxes be paid by the Surviving Corporation prior to payment to the
Participation Certificate owners, the Surviving Corporation shall pay the same
and withold and deduct in the annual accounting the proper prorated amounts
thereof from the amounts payable to the various Participation Certificate
owners.
11. Disbursements and Income - Allocation and Pro-Rata Division:
Whenever, in this Joint Agreement of Merger, reference is made to a
pro-rata division of profits or losses on the undivided
8
<PAGE>
assets of the Surviving Corporation or income from those assets or disbursements
on their account or a division of the general income, expenses or disbursements
of the Surviving Corporation, the following principles shall govern:
A. The items which are derived from the undivided assets, if any, shall be
divided in proportion to the contributions on the one part of the American
Central and on the other part of the United Mutual and the Surviving Corporation
to such undivided assets of the Surviving Corporation.
B-1. The following disbursements of the Surviving Corporation as listed in
the annual statement are considered as specifically chargeable to the American
Central Fund and as such shall be charged as disbursements to that Fund, as
provided for in Section 4, Paragraph B(a) of this Agreement of Merger:
a. All payments of any kind to or for any policyholder, or his or her
beneficiary, on contracts of life insurance or on annuities written or
assumed by the American Central.
b. Amounts paid for claims on supplementary contracts issued or assumed
by the American Central.
c. Expenses of investigation and settlement of American Central policy
and contract claims, including legal expenses.
d. Renewal commissions and first year commissions to agents on life
insurance policies and annuity contracts written by them for the
American Central.
e. All taxes, licenses, and fees laid by any State or the Federal
Government and all other taxes on assets belonging to the American
Central Fund or paid to protect same, and taxes on annuity
considerations or insurance premiums on contracts or policies written
or assumed by the American Central.
f. All bills and accounts and similar obligations incurred by the
American Central prior to date of this merger.
g. Bank exchange on American Central items.
h. American Central agents' balances charged off.
i. Gross loss on sale or maturity of ledger assets of the American
Central Fund.
j. Gross decrease by adjustment in book value of ledger assets of the
American Central Fund.
k. Any other general disbursements clearly allocable to the business and
assets of the American Central Fund.
B-2. The following listed disbursements of the Surviving Corporation are to
be divided between the American Central Fund and the Surviving Corporation in
proportion to the amount of insurance
9
<PAGE>
remaining in force as of December 31st of the preceding year, originally written
or assumed on the one part by the American Central and on the other part by the
United Mutual and the Surviving Corporation:
a. The rent of the two home office buildings, (941 North Meridian Street
and 30 West Fall Creek Parkway). It is understood and agreed that the
building at 941 North Meridian Street will be disposed of by sale or
lease as soon as possible, and at that time the rent on this building
will be dropped from the disbursements.
b. Bureau and association dues and assessments, with the exception of
those of the National Fraternal Congress, M. I. B., Life Insurance
Sales Research Bureau, Association of Life Agency Officers and any
other association of which neither the American Central nor the United
Mutual is now a member, or in which membership would be clearly for
the benefit of the Surviving Corporation. Such excepted membership
costs shall be charged to the Surviving Corporation.
c. Books, newspapers and periodicals not clearly allocable.
d. Postage, express, telegraph, and telephone not clearly allocable.
e. General Office maintenance and expenses not clearly allocable.
f. Legislative expense not clearly allocable.
B-3. The following listed disbursements of the Surviving Corporation are to
be divided in proportion to the actual time devoted, use made, and expense
incurred in carrying out the business of the American Central Fund and the
Surviving Corporation respectively:
a. Salaries and all other compensation of officers, directors, trustees,
and home office employees.
b. Home office travel.
c. Legal expenses not incurred in connection with settlement of policy or
annuity claims.
d. Furniture and fixtures.
e. Printing and stationery.
f. Insurance except on real estate.
g. Investment expense.
h. Miscellaneous expense.
B-4. The division of any general disbursements of the Surviving
Corporation, other than those enumerated in this Section or which are not
clearly allocable to the business and assets of the American Central Fund or of
the Surviving Corporation, shall be made by the
10
<PAGE>
American Central Committee, hereinafter mentioned, in accordance with a survey
of the items of expense.
B-6. Payments to inactive employees, retired prior to the effective date of
or as a result of this merger shall be charged to the American Central Fund if
paid to former employees of the American Central or charged entirely to the
Surviving Corporation if paid to former employees of the United Mutual.
12. American Central Committee:
The by-laws of the Surviving Corporation shall create a Committee to be
known as the "American Central Committee," which shall consist of four (4)
members of the Board of Directors of the Surviving Corporation of whom two (2)
shall be named by the Trustees for the Participation Certificate owners and two
(2) shall be named by the Board of Directors of the Surviving Corporation; the
duties of such Committee shall be:
a. To operate, manage, control, direct, lease, sell, convert, and collect the
assets of the American Central Fund and to reinvest the proceeds thereof
available for reinvestment in such securities as will comply with the
Indiana Insurance Law.
b. To formulate and apply a just and accurate rule or formula for the
distribution of the income and disbursements and the profits and losses of
the American Central Fund where situations and conditions arise not covered
by the terms of this Agreement.
c. To supervise, manage, and control the insurance and reinsurance business of
the American Central Fund as the same exists at the date of the merger and
as the same continues thereafter until the expiration of the term provided
in this Agreement, provided that with respect to the agency field force of
the American Central, it is understood that in the acquisition of new
business the same shall be under the complete supervision, management and
control of the Surviving Corporation, except:
That such agency field force may have the privilege of writing new business
for the Surviving Corporation under the contracts with the American Central
in force on the effective date of the merger and that none of the members
of such agency field force shall be subject to dismissal, nor shall their
contracts be terminated by the Surviving Corporation, unless for willful
violation of the terms of the contract of employment or the rules and
regulations of the Surviving Corporation, or if it be found upon experience
that the acquisition
11
<PAGE>
cost of new business through them is unduly excessive and that proper
measures in accordance with the spirit of their contracts to reduce such
cost to a proper figure are not effective, unless with the approval of the
American Central Committee.
d. Each Committee Member shall have power to designate a suitable person to
act as substitute, provided, however, that not more than two (2)
substitutes shall be permitted at any one time; no action of the Committee
shall be valid unless it is by the unanimous act of all members or
substitutes therefor.
e. The Committee shall choose from its members its own Chairman and Secretary
who shall serve without compensation and neither of whom shall lose his
vote in Committee matters; upon request of the Committee the Secretary of
the Surviving Corporation may, however, act as secretary; Committee
meetings shall be held at the Home Office as frequently as practicable on
call of any two members; full and complete minutes of all Committee
meetings shall be kept, preserved, and reported to the Board of Directors
at each regular meeting thereof; full and complete records and books of
account reflecting truly and accurately all business transactions and the
state and condition of the American Central Fund shall be kept and
maintained and the minutes of the Committee and such books and records
shall be kept in the office of the Secretary of the Surviving Corporation
and shall be open at all times to inspection by the executive officers and
directors of the Surviving Corporation.
f. The Committee shall have no power or authority to waive, alter, change or
amend the provisions, terms and requirements of this Agreement, but all of
the provisions, terms, and requirements hereof shall be binding upon and
controlling over such Committee in all of its actions. If the Committee
cannot agree unanimously with respect to any matter in this Paragraph
hereafter enumerated no further action shall be taken with respect thereto
until the same shall, upon the request of any member thereof, be referred
to and acted upon by the Board of Directors or by the Executive Committee,
which shall promptly review the subject so to it referred and determine the
proper action to be taken with respect thereto, of which action immediate
notice shall be given to the Committee. If such failure to agree shall
occur within fifteen (15) days prior to a regular Board meeting, such
matter shall be referred to the Board; if at any other
12
<PAGE>
time, then such matter shall be referred to the Executive Committee; if
referred to the Executive Committee, the chief executive officer, if he so
desires, may have a period of fifteen (15) days within which to call a
special meeting of the Board to consider such matter. The matters which may
be thus referred to the Board are:
(1) Those matters defined in Paragraph (a) of this Section.
(2) Those matters defined in Paragraph (b) of this Section, so far as they
do not violate the terms of this Agreement.
(3) The administration and handling of the reinsurance in force on the
effective date of the merger and contracts and treaties therefor.
(4) Dealings and relations with the agency field force of the American
Central under contracts in force at the effective date of the merger.
g. Any such by-laws relating to the foregoing subject matter shall be
irrevocable while any Participation Certificates are outstanding.
13. Participation Certificates Form:
The Participation Certificates to be issued to stockholders of the American
Central shall be in the form following:
PARTICIPATION CERTIFICATE
No. _______________ ____Units
AMERICAN UNITED LIFE INSURANCE COMPANY
Indianapolis, Indiana
This certifies that _____________________________________ is the owner of
________________________________ Beneficial Units entitling him to participate
in any and all distributions from certain assets and proceeds therefrom,
designated as the American Central Fund in Articles of Merger executed by
American Central Life Insurance Company and United Mutual Life Insurance
Company, both of Indianapolis, Indiana, by which said corporations were merged
into American United Life Insurance Company, the issuer hereof. Said Articles of
Merger were filed in the office of the
Secretary of State of Indiana on the ____________ day of __________________,
1936, and were recorded in the office of the Recorder of Marion County,
Indiana, in Miscellaneous Record ____________________, page _______ By the
provisions of said Articles of Merger, all holders of shares of capital stock in
American Central Life Insurance Company are entitled to surrender for
cancellation the certificates evidencing said shares and to receive in lieu
thereof a Certificate or Certificates in the form hereof for such the American
Central Fund and the Surviving Corporation in proportion to the amount of
insurance
13
<PAGE>
outstanding 2,740 shares of said stock and the rights of the holder of this
certificate participate shall be in the proportion that the number of units
represented by this certificate bears to the total number (not in excess of
2,740) of shares for which certificates shall be issued.
For the sole protection and the enforcement of the rights of holders of
certificates, of which this Certificate is a part, there has been executed by
American United Life Insurance Company and by Herbert M. Woollen and Harry R.
Wilson, formerly President and Vice President, respectively, of American Central
Life Insurance Company, a written Trust Indenture dated the ____________ day of
_______________________, 1936. The aforesaid Articles of Merger and said Trust
Indenture are made parts of this Participation Certificate, and any holder
hereof is bound by all the terms and conditions of said documents and by the
provisions of the Indiana Insurance Law.
On the effective day of the said Articles of Merger, American United Life
Insurance Company became vested with all of the property and assets of American
Central Life Insurance Company and assumed liability to perform all of its
obligations. As a part of that merger said American United Life Insurance
Company agreed to issue said Participation Certificates in consideration of and
proportionately to the extent of the surrender to it of the shares of capital
stock above described.
The American Central Fund consists of all the assets and liabilities and
business delivered by American Central Life Insurance Company to American United
Life Insurance Company pursuant to said merger as shown by the books and records
of said former company at the close of business on December 31, 1936, with all
subsequent accretions thereto and depletions therefrom until and including the
year 1956.
Before March 31st of each year beginning with 1938 until all Participation
Certificates are retired there shall be determined the gain or loss, which
amount so determined shall constitute what is described in the Articles of
Merger as the Conversion Proceeds.
If necessary to equalize the surplus of the American Central Life Insurance
Company to the amount thereof as of December 31, 1935, an amount not in excess
of ten per centum (10%) of the Conversion Proceeds created by operations of each
respective preceding year shall, in 1938 and each year thereafter, be retained
in the American Central Fund.
Beginning with the accounting for December 31, 1939, and in each year thereafter
until December 31, 1956, there shall be deducted twenty per centum (20%) of the
amount remaining in the Conversion Proceeds after said deduction, which amount
so deducted shall remain in the American Central Fund and shall be known as the
"Fluctuation Fund," which shall serve to provide for fluctuations in the value
of investments and other losses and against which losses in excess of gains from
other sources may be charged, provided that the maximum amount in this
Fluctuation Fund shall at no time exceed ten per centum (10%) of the book value
of the assets in the American Central Fund. Such deductions for the Fluctuation
Fund shall continue so long only as may be reasonably necessary.
In each of the years 1938 and 1939, there shall be deducted and credited to the
surplus of American United Life Insurance Company ten per centum (10%) of the
Conversion Proceeds for distribution in that year; in the year 1940 and in each
year thereafter such deduction shall be fifteen per centum (15%).
The remainder of the Conversion Proceeds after the foregoing deductions and any
expense incurred in accordance with the Trust Agreement shall be distributed
annually at the times and in the manner provided in the Articles of Merger
pro-rata to holders of Participation Certificates.
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<PAGE>
On or before March 31st, 1957, by methods provided in the Articles of Merger,
there shall be determined the net amount, if any, to be distributed from the
American Central Fund as at the close of business on December 31, 1956, and the
same shall then be distributed pro-rata to Participation Certificate holders,
whereupon all further rights and claims of the owner of this certificate against
any property or assets of American United Life Insurance Company shall cease and
this Certificate and all other certificates shall be deemed fully satisfied and
shall be surrendered for cancellation.
The owner hereof shall have no claim against any of the property or assets of
American United Life Insurance Company except as is described in this
Certificate and in the Articles of Merger, nor is any liability created hereby
except as, and when funds are available as provided in said Articles of Merger
for distribution to the owners of Participation Certificates.
For a more complete description of the American Central Fund, methods of
creating such Fund, principles of debiting and crediting the same in the
determination of the Conversion Proceeds, and of the participation rights of the
holders of these Certificates, there should be examined the aforesaid Articles
of Merger and the Trust Indenture.
All distributions hereunder may be delivered to the person or persons registered
as the owner or owners hereof by valid remittance transmitted by United States
mail addressed to the owner or owners all as is shown by the registration books
of the Company. Or, before making any remittance, the Company may in its
discretion demand production and exhibit of this certificate and, on final
distribution, the surrender hereof.
IN WITNESS WHEREOF, American United Life Insurance Company by its authorized
officers, has hereunto affixed its signature attested by its corporate seal this
____________ day of ____________, 1936.
AMERICAN UNITED LIFE INSURANCE COMPANY
By___________________________
President
ATTEST:
_____________________________
Secretary
(Corporate Seal)
14. American Central Policyholders:
The policyholders of the American Central on the effective date of the merger
shall not participate in the profits of the Surviving Corporation or otherwise,
but their respective policies shall continue to remain non-participating,
provided that any policy issued by the American Central on the participating
basis shall continue to participate in the manner and to the extent provided in
the policy. The rights and obligations between the American Central
policyholders and the Surviving Corporation shall continue unchanged from those
existing between the American Central and said policy. holders prior to the
merger, without change, diminution, or enlargement.
15
<PAGE>
15. Restatement of Articles of Incorporation:
In order to give effect to the merger described herein, it is deemed necessary
and advisable to restate certain of the Articles of Incorporation of the
Surviving Corporation: Such Articles as are so restated and the restatements
thereof are as follows:
ARTICLE I
Sec. 1. NAME AND SEAL: The name of the Corporation shall be American United
Life Insurance Company.
The seal shall be a circular disk around the edge of which shall appear the
words, "American United Life Insurance Company," and in the center of which
shall appear the words "Seal" and "A Mutual Corporation."
ARTICLE II
Sec. 1. TERM OF CORPORATE EXISTENCE: The existence of the Surviving
Corporation shall be perpetual.
ARTICLE III
Sec. 1. MEMBERSHIP - CLASSES OF MEMBERS AND POLICYHOLDERS: The members and
policyholders of the American United Life Insurance Company shall consist of
voting members and non-voting policyholders.
a. VOTING MEMBERS: The voting members shall consist of the present members
of the United Mutual Life Insurance Company and those becoming members of the
American United Life Insurance Company subsequent to the effective date of the
merger.
b. NON-VOTING POLICYHOLDERS: The non-voting policyholders shall consist of
all policyholders of the American Central Life Insurance Company on the
effective date of the merger.
ARTICLE: IV
Sec. 1. BOARD OF DIRECTORS - NUMBER: The number of directors of the
American United Life Insurance Company shall be sixteen (16) and until the first
annual meeting and their successors are elected and qualified and vacancies
filled they shall consist of the following present directors of the United
Mutual Life Insurance Company and the following present directors of the
American Central Life Insurance Company, namely:
Go. A. Bangs Alva M. Lumpkin
Earl B. Barnes William R. O'Neal
Harry C. Byers Gwynn F. Patterson
Russell T. Byers James E. Watson
John W. Craig Harry R. Wilson
Leslie E. Crouch Richard S. Witte
Edward A. Horton Herbert M. Woollen
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<PAGE>
IN WITNESS WHEREOF, Said parties, respectively, in accordance with resolutions
of their respective Board of Directors, have caused these presents to be signed
in their names by their presidents and have affixed hereto their corporate seals
attested by their secretaries at the City of Indianapolis, Indiana, the day and
year first above written.
AMERICAN LIFE INSURANCE COMPANY
By /s/ Herbert M. Woollen
--------------------------------
President
ATTEST:
/s/ H. W. Buttolph
- --------------------
Secretary
(CORPORATE SEAL)
UNITED MUTUAL LIFE INSURANCE COMPANY
By /s/ Geo. A. Bangs
-------------------------------------
President
ATTEST:
/s/ W.A. Jenkins
- ----------------------
Secretary
(CORPORATE SEAL)
STATE OF INDIANA }
}ss:
COUNTY OF MARION }
On this 17 th day of December, 1936, before me appeared Geo. A. Bangs and W. A.
Jenkins, to me personally known, who, being by me duly sworn, did say that they
are the President and the Secretary, respectively, of the United Mutual Life
Insurance Company and that the seal affixed to said instrument is the corporate
seal of said corporation, and that said instrument was signed and sealed in
behalf of said corporation by authority of its Board of Directors, and said Go.
A. Bangs and W. A. Jenkins acknowledged said instrument to be the free act and
deed of said corporation.
Witness my hand and official seal this 17 th day of December, 1936.
/s/ Alma H. Irwin
- ----------------------------
Notary Public
My commission expires Jan. 15, 1939
- ---------------------------------------
17
<PAGE>
STATE OF INDIANA }
}ss:
COUNTY OF MARION }
On this 17th day of December,1936, before me appeared Herbert M. Woollen and H.
W. Buttolph, to me personally known, who, being by me duly sworn, did say that
they are the President and the Secretary, respectively, of the American Central
Life Insurance Company and that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
said Herbert M. Woollen and H. W. Buttolph acknowledged said instrument to be
the free act and deed of said corporation.
Witness my hand and official seal this 17 th day of December, 1936.
/s/ Helen L. Clark
- -------------------------
Notary Public
My commission expires: Feb. 23 1938
- -----------------------------------------
IT IS FURTHER CERTIFIED that the signatures appended to the foregoing Joint
Agreement of Merger are the respective signatures of the corporations, parties
thereto, and that the manner of adoption of said Joint Agreement of Merger and
the vote by which adopted by each of said corporations is as follows:
(1) That at a duly called regular meeting of the Board of Directors of the
United Mutual Life Insurance Company, held at its home office on the 15th day of
August, 1936, at which a quorum was present, said Board did unanimously adopt a
resolution approving the Joint Agreement of Merger above set forth; that said
resolution directed that said agreement be submitted to a vote of all of the
members of said corporation entitled to vote in respect thereof at a special
meeting of said members, which was by said resolution called to be held at the
home office of said corporation at 941 N. Meridian Street, Indianapolis,
Indiana, on the 6th day of October, 1936, at the hour of 10:00 o'clock A. M.,
and did further direct that notice of said special meeting be given by the
secretary of the corporation to all members of record in the manner provided by
law; that in compliance with said resolution said secretary did, on the 5th day
of September, 1936, mail a printed notice of the place, day, hour and purposes
of said special meeting to each mem-
18
<PAGE>
ber entitled to vote, at his address as it appeared upon the records of the
corporation; that said special members' meeting was duly held at the place, day
and hour in said notice stated and that there were present and entitled to vote
13 members in person and 27,289 members represented by proxy; that said members
so present in person and represented by proxy constituted a quorum for the
transaction of business under the by-laws of the corporation; that a resolution
approving said Joint Agreement of Merger was duly adopted by said members, and
that the affirmative vote by which said resolution was so adopted was 27,302
votes in favor of and none against its adoption, whereupon said Joint Agreement
of Merger was duly adopted by the corporation; that on the 7th day of October,
1936, and within five days after the adoption of the said Joint Agreement of
Merger as above stated, the secretary of the corporation did mail a printed
notice of the adoption of said Joint Agreement of Merger to each member of
record of the corporation who was not present in person or represented by proxy
at said special meeting of members, and the corporation did on the 8th day of
October, 1936, file with the Indiana Insurance Department an affidavit, signed
by the President and the Secretary, that such notice was given; that no member
or members have, in the manner provided by law or otherwise, objected to the
adoption of said Joint Agreement of Merger or filed a petition with the Indiana
Insurance Department for a hearing thereon; that at a duly called adjourned
regular meeting of the Board of Directors held at the corporation's home office
on the 11th day of December, 1936, at which a quorum was present, said Board did
again consider and by a unanimous vote adopted a resolution reapproving said
Joint Agreement of Merger in all things and authorizing its execution by the
proper officers of the corporation as provided by law; that said adjourned
regular meeting of the Board of Directors was held as soon as practicable after
the expiration of a period of thirty days after the adoption of said Joint
Agreement of Merger by the American Central Life Insurance Company, which
corporation was the last, in point of time, to adopt it.
(2) That at a duly called special meeting of the Board of Directors of the
American Central Life Insurance Company held at its home office on the 31st day
of August, 1936, at which a quorum was present, said Board did unanimously adopt
a resolution approving the above set forth Joint Agreement of Merger; that said
resolution directed that said agreement be submitted to a vote of all of the
shareholders of said corporation entitled to vote in respect thereof at a
special meeting of said shareholders, which was by said resolution called to be
held at the home office of said corporation at 30 West Fall Creek Parkway,
Indianapolis, Indiana, on the 10th day of November, 1936, at the hour of 10:00
o'clock A. M., and did
19
<PAGE>
further direct that notice of said special meeting be given by the secretary of
the corporation to all shareholders of record in the manner provided by law;
that in compliance with said resolution said secretary did, on the 7th day of
October, 1936, deliver or mail a written notice of the place, day, hour and
purposes of said special meeting to each shareholder entitled to vote, at his
address as it appeared upon the records of the corporation; that the said
special meeting was duly held at the place, day and hour in said notice stated
and that there were present in person or represented by proxy 2,619 1/2 shares
of the total 2,740 outstanding shares of capital stock; that said shareholders
so present in person and by proxy constituted a quorum for the transaction of
business under the by-laws of the corporation and more than two-thirds of all
its outstanding capital stock; that a resolution approving said Joint Agreement
of Merger was duly adopted by said shareholders, and that the affirmative vote
by which said resolution was so adopted was 2,619 1/2 votes in favor of and none
against its adoption, whereupon said Joint Agreement of Merger was duly adopted
by the corporation; that on the 10th day of November, 1936, and being within
five days after the adoption of said Joint Agreement of Merger as above stated,
the secretary of the corporation did mail a written notice of the adoption of
said Joint Agreement of Merger to each shareholder of record of the corporation
who was not present in person or represented by proxy at said special meeting of
shareholders, and the corporation did on the 11th day of November, 1936, file
with the Indiana Insurance Department an affidavit, signed by the President and
the Secretary, that such notice was given; that no shareholder has, in the
manner provided by law or otherwise, objected to the adoption of said Joint
Agreement of Merger or demanded payment of the value of his share or shares of
stock; that at a duly called special meeting of the Board of Directors held at
the corporation's home office on the 11th day of December, 1936, at which a
quorum was present, said Board did again consider and by a unanimous vote
adopted a resolution reapproving said Joint Agreement of Merger in all things
and authorizing its execution by the proper officers of the corporation as
provided by law; that said special meeting of the Board of Directors was held as
soon as practicable after the expiration of a period of thirty day after the
adoption of said Joint Agreement of Merger by the shareholders of and by said
corporation.
(3) That pursuant to authorization by their respective Boards of Directors
as hereinbefore stated, said corporations did on the 17 th day of December,
1936, duly execute said Joint Agreement of Merger.
20
<PAGE>
IN WITNESS WHEREOF, said corporations, respectively, have caused these
presents to be signed in such multiple copies as shall be required in their
names by their presidents and have affixed hereto their corporate seals attested
by their secretaries at the city of Indianapolis, Indiana, this 17th day of
December, 1936.
AMERICAN CENTRAL LIFE INSURANCE COMPANY
By /s/ Herbert M. Woollen
---------------------------------------
President
ATTEST:
/s/ H. W. Buttolph
- ---------------------------
Secretary
(CORPORATE SEAL)
UNITED MUTUAL LIFE INSURANCE COMPANY
By /s/ Geo. A. Bangs
----------------------------------------
President
ATTEST:
/s/ W.A. Jenkins
- ---------------------------
Secretary
(CORPORATE SEAL)
STATE OF INDIANA }
}ss:
COUNTY OF MARION }
On this 17 th day of December, 1936, before me appeared Herbert M. Woollen and
H. W. Buttolph, to me personally known, who, being by me duly sworn, did say
that they are the President and the Secretary, respectively, of the American
Central Life Insurance Company and that the seal affixed to said instrument is
the corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
said Herbert M. Woollen and H. W. Buttolph acknowledged said instrument to be
the free act and deed of said corporation.
Witness my hand and official seal this 17 th day of December, 1936.
/s/ Helen L. Clark
- -----------------------------
Notary Public
My commission expires: Feb. 26, 1938
- -------------------------------------------
21
<PAGE>
STATE OF INDIANA }
}ss:
COUNTY OF MARION }
On this 17th day of December, 1936, before me appeared Go. A. Bangs and W.
A. Jenkins, to me personally known, who, being by me duly sworn, did say that
they are the President and the Secretary, respectively, of the United Mutual
Life Insurance Company and that the seal affixed to said instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation by authority of its Board of Directors, and
said Go A. Bangs and W. A. Jenkins acknowledged said instrument to be the free
act and deed of said corporation.
Witness my hand and official seal this 17th day of December, 1936.
/s/ Alma H. Irwin
- -----------------------
Notary Public
My commission expires: January 15, 1939
- -----------------------------------------
22
- --------------------------------------------------------------------------------
EXHIBIT 6.2
CERTIFICATION OF THE INDIANA SECRETARY OF STATE
AS TO THE FILING OF THE ARTICLES OF MERGER BETWEEN
AMERICAN CENTRAL LIFE INSURANCE COMPANY AND
UNITED MUTUAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
August G. Mueller, Secretary of State
To Whom These Presents Come, Greeting:
WHEREAS, there have been presented to me at this office Articles of Merger in
forty-eight copies whereby AMERICAN CENTRAL LIFE INSURANCE COMPANY,
non-surviving corporation, is merged into the UNITED MUTUAL LIFE INSURANCE
COMPANY, surviving corporation, showing no capital stock, hereinafter designated
as the AMERICAN UNITED LIFE INSURANCE COMPANY.
Said Articles of Merger having been prepared and signed in accordance with "An
Act Concerning Insurance and Declaring an Emergency", approved March 8, 1935.
WHEREAS, upon due examination, I find that they conform to law:
NOW, THEREFORE, I hereby certify that I have this day endorsed my approval upon
the forty-eight copies of Articles so presented, and, having received the fees
required by law, in the sum of $6.50, have filed one copy of the Articles in
this office and returned forty-seven copies bearing the endorsement of my
approval to the surviving corporation. I further certify that said American
Central Life Insurance Company is duly merged into said United Mutual Life
Insurance Company and that the name of the latter is duly changed to AMERICAN
UNITED LIFE INSURANCE COMPANY, and that Section 125 of said Act, approved March
8, 1935, provides that all property, assets and rights of every nature and
wherever situated owned by the non-surviving corporation are transferred and
vested in the surviving corporation.
In Witness Whereof, I have hereunto set my hand and affixed the seal of the
State of Indiana at the City of Indianapolis, this 31st day of December, 1936
[SEAL]
at the hour of 5:00 o'clock P.M.
/s/ August G. Mueller
---------------------
Secretary of State
By: /s/ Joseph O. Hoffman
-------------------------
Deputy
- --------------------------------------------------------------------------------
EXHIBIT 6.3
BY-LAWS OF AMERICAN UNITED LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
INSURANCE COMPANY
CODE OF BY-LAWS
OF
AMERICAN UNITED LIFE INSURANCE COMPANY (R)
ARTICLE I
CORPORATE SEAL AND PRINCIPAL OFFICE
Section 1. Corporate Seal. The corporate seal shall be circular in form
with the words "American United Life Insurance Company (R) " around the top of
its periphery and the words "Seal" and "A Mutual Corporation" through its
center.
Section 2. Principal Office. The principal office and place of business
shall be at One American Square, City of Indianapolis, County of Marion and
State of Indiana.
ARTICLE II
MEMBERSHIP
Section 1. Classes of Members. As provided in the articles of
incorporation, the members of the corporation shall be divided into two classes:
(a) voting members, and (b) non-voting policyholders. The members of each class
shall have such rights, privileges, duties and liabilities, with respect to the
regulation and management of the affairs of the corporation, as are provided in
these By-laws or in the articles of incorporation.
Section 2. Voting Members. The voting members of the corporation shall
consist of those policyholders
(a) who hold insurance certificates issued by the Insurance Department of the
Supreme Lodge Knights of Pythias and
(b) who hold policies issued or assumed by the former American Life Insurance
Company of Detroit, Michigan, and by the former Mutual Savings Life
Insurance Company of St. Louis. Missouri, which were assumed by this
corporation, and
(c) who hold policies of insurance or annuity contracts issued by the
corporation under its present name or under the name United Mutual Life
Insurance Company.
Each voting member continues to be a member of the corporation so long as any
policy or annuity contract, which entitles him to voting membership, remains in
full force and effect.
Section 3. Non-Voting Policyholders. The non-voting policyholders of the
corporation shall consist of those persons (a) who were policyholders in the
American Central Life Insurance Company when that corporation was merged into
this corporation, or (b) who prior to that merger were policyholders in the
American Central Life Insurance Company and subsequently were reinstated as
policyholders. Nothing contained in this Section 3, however, shall disqualify a
policyholder who qualifies as a voting member according to the provisions of
Section 2 of Article II.
<PAGE>
ARTICLE III
MEETINGS OF
MEMBERS
Section 1. Annual Meeting. The regular annual meeting of the members of
this corporation shall be held at its principal place of business on the third
Thursday in February of each year at ten a.m. Elections for directors shall be
held at the annual meeting.
Section 2. Special Meetings. Special meetings of the members of the
corporation may be called by the chief executive officer of the corporation, by
the board of directors or by not less than twenty-five percent of the voting
members.
Section 3. Notice of Meetings. Thirty day written notice stating the place,
day and hour of any meetings of members shall be delivered or mailed by the
secretary of the corporation or by the officer or persons calling the meeting to
each member entitled to vote at such meeting at such address as appears upon the
records of the corporation. In the case of special meetings or when otherwise
required by law, the purpose or purposes for which the meeting is called shall
also be stated. With respect to annual meetings of members, notice need not be
given to any member in whose policy of insurance or annuity contract there is a
statement of the time and place of the meeting.
If less than a quorum of voting members attend in person or by proxy, a
majority of the voting members who are present in person or by proxy may
adjourn, without notice other than by announcement at the meeting, until the
number of members required to form a quorum shall attend. No annual meeting of
members may be adjourned to a date later than five months after the close of the
fiscal year of the corporation. At any adjourned meeting at which a quorum is
present, any business may be transacted which might have been transacted at the
original meeting.
Section 4. Waiver of Notice. Notice of any meeting of members may be waived
in writing by any member if the waiver sets forth in reasonable detail the time
and place of the meeting and its purpose. Attendance at any meeting in person or
by proxy shall constitute a waiver of notice of such meeting.
Section 5. Voting Rights. Except as hereinafter provided, each voting
member of the corporation shall have the right to cast one vote on each matter
submitted to a vote of the members, regardless of the number of policies or
amount of insurance standing in his name with the corporation.
<PAGE>
Section 6. Voting by Proxy. A member entitled to vote at a meeting of
members may vote either in person or by proxy executed in writing by the member
or the member's duly authorized attorney-in- fact. No proxy shall be voted at
any meeting of members unless the proxy is filed with the secretary of the
meeting at or before the meeting.
Section 7. Quorum. To constitute a quorum at any meeting of members, there
must be at least ten percent of the voting members represented in person or by
proxy. A majority vote of any such quorum shall be necessary for the transaction
of any business at the meeting unless a greater vote is required by law or the
articles of incorporation.
ARTICLE IV
BOARD OF
DIRECTORS
Section 1. Duties and Qualifications. The business and affairs of the
corporation shall be managed by a board of directors. Each director shall be a
voting member of the corporation, and the policy of insurance or annuity
contract entitling each director to membership in the corporation shall be free
of liens to secure any debt to the corporation. Each director shall be a citizen
of the U.S. or the Dominion of Canada, and at least one director shall be a
resident of the State of Indiana. No person shall be eligible for election as a
director who has reached, or will reach, his seventieth birthday in the year of
election, and is retired from his business or profession.
Section 2. Number and Terms of Office. The board of directors shall consist
of sixteen members who are elected by the voting members at annual meetings to
serve for terms of three years, and until their successors are elected and
qualified. The board of directors shall be divided into three classes, two of
which consist of five directors and one of which consists of six directors. I he
teens of office of all directors in a particular class shall be identical;
however, the terms of office of each class of directors shall be staggered so
that in every three year period a different class shall be elected at each
succeeding annual meeting of members.
Section 3. Limitation as to Employee or Retired Employee Directors. No more
than five fulltime employees of the corporation or retired employees of the
corporation receiving a pension or other retirement benefits from the
corporation shall be eligible to serve at one time as directors.
Section 4. Vacancies. Any vacancy in the board of directors caused by
death, resignation or disqualification shall be filled by a majority vote of the
remaining members of the board of directors for the unexpired term of the
director whose place is filled. Any vacancy on the board of directors occasioned
by an
<PAGE>
increase in the number of directors shall be filled by a majority vote of the
existing directors for a term ending with the next annual meeting of members of
the corporation.
Section 5. Oath of Office. Each director of the corporation, when elected,
shall take and subscribe to an oath that he will insofar as the duty devolves
upon him, faithfully, honestly and diligently administer the affairs of the
corporation and that he will not knowingly violate or willingly permit violation
of any laws applicable to the corporation.
Section 6. Annual Meetings. Unless otherwise unanimously agreed upon, the
board of directors shall meet each year, immediately following the annual
meeting of members, at the place where the meeting of members was held. This
meeting shall be held for the purpose of organization, election of officers of
the corporation and consideration of any other business which may be brought
before the meeting. No notice shall be necessary for the holding of any annual
meeting of the board of directors.
Section 7. Other Meetings. Meetings of the board of directors, other than
the annual meeting, shall be held regularly once each quarter during the second,
third and fourth quarters of each calendar year, in accordance with a duly
adopted resolution or motion of the board of directors. Special meetings may be
called by the chief executive officer of the corporation, the chairman of the
board or any seven directors, upon five days' notice. The time and general
purposes of any such meeting must be specified and given to each director either
personally or by mail or telegram. No notice shall be necessary for any regular
meeting, and notice of any special meeting may be waived in writing or by
telegram. Attendance at any such meeting shall constitute waiver of notice of
such meeting. All meetings of the board of directors shall be held at the
principal office or at such other place as may be unanimously designated by the
board of directors.
Section 8. Quorum. A majority of the whole board of directors shall be
necessary to constitute a quorum for the transaction of any business except the
filling of vacancies. The act of a majority of the directors present at a
meeting at which a quorum is present shall be the act of the board of directors
unless a greater number is required by law, the articles of incorporation or
these By-laws. If a quorum is not present, a majority of the directors present
may adjourn the meeting from time to time without further notice.
Section 9. Honorary Directors. Any person who has served as the chief
executive officer of the corporation may be elected an honorary member of the
board of directors and shall be privileged to attend all meetings of directors,
but shall have no right to vote.
ARTICLE V
COMMITTEES
Section 1. Standing Committees. The standing committees of the corporation
shall be the following: executive committee, finance committee, and audit
committee. The board of directors may from time to time create other standing
committees as deemed desirable by amending these By-laws.
Section 2. Members of Standing Committees. At its annual meeting, the board
of directors shall designate the members of each standing committee and shall,
except as otherwise provided in these Bylaws, name the chairman thereof. The
members shall serve for a term of one year and until their successors are chosen
and qualified unless sooner removed. The chief executive officer of the
corporation shall be an ex- officio member, with full voting power, of each
standing committee except the Audit Committee. Subject to any limitation imposed
by these By-laws, the board of directors shall have the power at any time to
increase or decrease the number of members of any standing committee, to appoint
or remove members from any standing committee and to fill vacancies on any such
committee.
At any meeting of a standing committee, a designated director may act in the
place of an absent member of such committee with full Voting rights. Each
designated director shall be selected in the following manner: The chief
executive officer shall contact a member or members of the board in alphabetical
order according to the member's last name until he obtains agreement of the
necessary number of directors to attend the standing committee meeting. After
the first selection under this section, contact shall commence with the name
alphabetically following that of the director agreeing to serve.
Section 3. Meetings of Standing Committees. Meetings of each standing
committee may be called by its chairman or by the chief executive officer of the
corporation. Each committee shall hold its meetings in accordance with the rules
of procedure and at locations designated by the majority of the committee
members. Except as otherwise provided by these By-laws, each committee shall
select a secretary, who shall not be required to be a member of the committee,
to record the minutes of all its meetings.
Section 4. Special Committees. Special committees may be designated by a
resolution adopted by a majority of the directors present at any board meeting
at which a quorum is present. Except as otherwise provided in the resolution,
members of each special committee shall be members of the corporation, and the
chief executive officer of the corporation shall appoint the committee members.
Any special committee member may be removed by the person or persons authorized
to appoint such member whenever in their
<PAGE>
judgment the best interests of the corporation shall be served by such removal.
Any special committee shall have only the responsibilities for which it was
created. It shall have no power to act except as specifically conferred upon it
by action of the board of directors. Upon completion of its duties, the special
committee shall be discharged. Each member of a special committee shall serve
the committee until it is discharged unless the member is removed from the
committee or ceases to qualify as a member. Committee vacancies shall be filled
by appointments made in the same manner as provided in the case of the original
appointments.
<PAGE>
ARTICLE VI
COMPOSITION AND DUTIES OF STANDING COMMITTEES
Section 1. Executive Committee. he executive committee shall consist of the
chairman of the board and not less shall three nor more than seven other members
of the board of directors. No member of the committee shall Continue as SUCH
after he ceases to be a member of the board of directors. The chairman of the
board shall be chairman of the committee and a vice-chairman may be designated
by the committee. The committee shall select a secretary from among its members
to keep accurate minutes of all meetings. The minutes shall be presented for
approval to the next regular meeting of the board of directors.
During the intervals between meetings of the board of directors and subject to
such limitations as may be imposed by law. the articles of incorporation or
these By-laws, the executive committee shall have and may exercise all the
authority of the board of directors in the management of the corporation.
However, no action shall be taken which will conflict with the expressed
policies of the board of directors.
Section 2. Finance Committee. The finance committee shall consist of the
chief executive officer, not less than three other members of the board of
directors and not more than two officers of the corporation who are not members
of the board of directors. The secretary of the committee shall keep accurate
minutes of all meetings which shall he presented for approval to the next
regular meeting of the board of directors.
Except as otherwise provided in these By-laws, and subject to law and to the
general control of the board of directors, the finance committee shall
supervise, pass upon and authorize the investment of all funds of the
corporation. It shall have the power to purchase and sell or otherwise acquire
or dispose of real estate, bonds, mortgages, securities or other investments, to
authorize and direct conveyances of real estate and interests therein and
thereunder, including the execution of deeds, leases, releases, discharges and
other related documents, and to direct all other things necessary or incidental
to the authorization, acquisition, supervision, control and disposition of all
the investments of the corporation. I he finance committee shall also perform
such other duties as these By-laws or the board of directors may prescribe.
Section 3. Audit Committee. The audit committee shall consist of three
members of the board of directors. All members of the audit committee shall he
independent directors.
The audit committee shall, prior to the annual meeting, recommend selection of
independent certified public accountants for the fiscal year to the board of
directors. The audit committee shall engage the independent auditors selected by
the voting members, be responsible for establishing the independent audit and
review the results of the independent audit prior to presentation to the board
of directors. The audit committee
<PAGE>
shall also be responsible for establishing the scope of the internal audit
function, reviewing internal controls and following tip on deficiencies noted.
The audit committee will confer with internal auditing, auditors and other
consultants as deemed necessary on significant audit findings and shall report
and make recommendations to the board of directors as necessary.
ARTICLE VII
OFFICERS
Section 1. Number and Qualification. The officers of the corporation shall
consist of a chairman of the board of directors, a president, a chief executive
officer, one or more senior vice presidents and one or more additional vice
presidents, a general counsel, a medical director, a secretary, a treasurer, a
controller, an actuary, and such other officers as the board of directors may
elect in accordance with the provisions of this article. The board of directors
may elect or appoint other assistant or subordinate officers, as it deems
desirable, to have the authority to perform the duties prescribed. The chairman
of the board, the president, and the chief executive officer shall be chosen
from among the directors of the corporation, and if any one of such officers
ceases to he a director he shall cease to hold such office as soon as his
successor is elected and qualified. More shall one office. may be held by the
same person, except the duties of the president and secretary shall not be
performed by the same person.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the board of directors at its annual meeting If
tile election of officers is not held at the annual meeting, the election shall
be held as soon thereafter as is convenient. New offices may be created and
filled at any meeting of the board of directors. Each officer shall hold office
until his successor is duly elected and qualified.
Section 3. Vacancies. Whenever any vacancies occur in any of the offices of
the corporation by reason of death, resignation, disqualification, removal or
otherwise, the office may be filled by the board of directors at a regular or
special meeting I he newly elected officer shall hold office until the next
annual meeting of the board of directors and until his successor is duly elected
and qualified.
Section 4. Removal. Any officer of the corporation elected or appointed by
the board of directors may be removed by the hoard of directors whenever, in its
judgment, the best interest of the corporation would be served. Such removal
shall be without prejudice to any contract rights of the officer so removed.
Section 5. Salaries of Officers and Employees. 'I he salaries of the
chairman of the board, the president, the chief executive officer, all vice
presidents (except regional vice presidents), the secretary, the treasurer, the
controller, medical director, general counsel, actuary, anti of all employees
receiving compensation of $75,000 a year or more, shall be approved by the board
of directors.
<PAGE>
ARTICLE VIII
DUTIES OF OFFICERS
Section 1. Chairman of the Board. The chairman of the board of directors
shall preside at all meetings of members and at all meetings of directors. He
shall be entitled to vote upon questions and motions submitted to vote of the
board of directors only when his vote is required to break a tie. He shall
perform such duties as these By-laws or the board of directors prescribe.
Section 2. President. The president shall have power to perform the duties
prescribed by the board of directors, the chairman of the board, or these
By-laws. Section 3. Vice Presidents. The vice presidents shall have the powers
to perform the duties prescribed by the board of directors, the chief executive
officer of the corporation, or these By-laws.
Section 4. General Counsel. The general counsel shall be the chief
consulting officer of the corporation on all legal matters. He shall, subject to
the control of the board of directors and executive committee, have control of
all legal matters pertaining to the business of the corporation and shall
perform such other duties as these By-laws or the board of directors prescribe.
Section 5. Medical Director The medical director shall he the chief
underwriting officer of the corporation on all medical matters. He shall,
subject to the control of the board of directors and executive committee, have
control of all medical matters pertaining to applications for new insurance or
reinstatetment of old insurance, appointment and supervision of medical
examiners, and other medical matters pertaining to the corporation's
underwriting operations. He shall perform other duties as these By-laws or the
board of directors prescribe.
Section 6. Secretary. The secretary shall attend all meetings of members
and meetings of the board of directors and shall be responsible for a true anti
complete record of the proceedings of such meetings. He shall serve notice of
all corporate meetings in accordance with these By-laws, have custody of the
books (except books of account), records and corporate seal of the corporation,
affix the corporate seal to all papers and documents requiring a seal, and
perform other duties as these By-laws or the board of directors prescribe.
Section 7. Treasurer. The treasurer shall be the custodian of all funds,
notes, securities, and instruments of title and valuables belonging to and in
the possession of the corporation. He shall deposit, or
<PAGE>
cause to be deposited, all funds of the corporation not required to be on hand
in the operation of the business, in banks or depositories designated by the
board of directors. He shall disburse the funds of the corporation as
authorized, and take proper vouchers for such disbursements. He shall furnish
the board of directors a statement of the financial condition of the corporation
at or before each annual meeting and perform other duties as these By-laws or
the board of directors prescribe.
Section 8. Controller. The controller shall be responsible for keeping
current and complete records of account, showing accurately the financial
condition of the corporation. He shall assemble budget information and keep
budgetary control of disbursements of the corporation, and perform other duties
as these By-laws or the board of directors prescribe.
Section 9. Actuary. The actuary shall be the chief consulting officer on
all matters relating to the pricing and designing of insurance contracts issued
by the corporation. He shall, subject to the controls of the board of directors
and executive committee, have control of matters pertaining to premium rates,
dividends, policy values, reserve basis, and benefits provided in the insurance
contracts issued by the corporation. He shall perform such other duties as these
By-laws or the board of directors prescribe.
Section 10. Assistant Officers. Assistant officers that the board of
directors may elect or appoint shall have duties specified by the board of
directors. In the absence of such specification, duties shall be specified by
the officer whom the person was appointed to assist.
Section 11. Chief Executive Officer. The chief executive officer of the
corporation shall be the chairman of the board or the president, as determined
by the board of directors Subject to the general control of the corporation by
the board of directors and the executive committee, the chief executive officer
shall supervise, direct anti control the business and affairs of the corporation
and shall discharge all the unusual functions and duties of his office. Except
as otherwise provided in these By-laws he shall appoint, and at his discretion,
remove employees of the corporation, fix and at times change their compensation,
designate their titles and determine their duties. He shall appoint temporary or
permanent committees of officers and employees as he deems necessary for the
control and supervision of the business. He shall have general supervision and
direction of all of the other officers of the corporation and the employees of
all departments. He shall keep the board of directors and executive committee
fully informed as to the activities of the corporation, and shall prepare and
submit to each annual meeting of members a report on the business of the
corporation for the preceding year and a statement of its current financial
condition. He shall perform such other duties as these By-laws or the board of
directors prescribe.
<PAGE>
ARTICLE IX
INDEMNIFICATION
Section 1. Indemnification of Directors and Officers. The corporation shall
indemnify any director or officer or former director or officer against expenses
actually and reasonably incurred by him (and for which he is not covered by
insurance) in connection with the defense of any action, suit or proceeding
(unless such action, suit or proceeding is settled) in which he is made a party
by reason of being or having been such director or officer, except in relation
to matters as to which he shall be adjudged in such action, suit or proceeding,
to be liable for negligence or misconduct in the performance of his duties. The
corporation may also reimburse any director or officer or former director or
officer for the reasonable costs of settlement of any such action, suit or
proceeding, if it shall be found by a majority of the directors not involved in
the matter in controversy (whether or not a quorum) that it was to the interest
of the corporation that such settlement be made and that such director or
officer was not guilty of negligence or misconduct. Such rights of
indemnification and reimbursement shall not be exclusive of any other rights to
which such director or officer may be entitled under any By-law, agreement, vote
of members or otherwise.
ARTICLE X
MISCELLANEOUS
Section 1. Fiscal Year. I he fiscal year of the corporation begins on the
first day of January of each year and ends on the thirty-first day of December
of the same year.
Section 2. Execution of Instruments. Except as may otherwise be provided by
resolution of the board of directors or executive committee, all contracts,
bills of sale, deeds, mortgages, leases, and other similar instruments, as well
as all policies of insurance and annuity contracts of the corporation, shall be
signed by the chairman of the board or by the president. The secretary, or an
assistant secretary, shall affix the corporate seal and attest the same.
Section 3. Checks. All checks, drafts, notes and other instruments calling
for the payment of money by or to the corporation shall be executed or endorsed
by the officers who the board of directors or executive committee shall specify
by resolution.
Section 4. Bonds and Insurance. All officers, employees and other persons
who have control of or access to the moneys, securities or properties of the
company shall be bonded with adequate surety. Fire, casualty and other insurance
shall also be carried for the protection of the company, its personnel and
property.
<PAGE>
The sufficiency of sureties on all bonds, the contingencies insured against in
such bonds and insurance policies and the amount thereof shall be in compliance
with the requirements of law. A report showing the status of such bonds and
hazard insurance shall be submitted to the board of directors at each annual
meeting.
ARTICLE XI
AMENDMENTS
Section 1. Amendments to By-laws. The power to make, alter, amend or repeal
all or any part of these By-laws is vested in the board of directors, and the
affirmative vote of a majority of all the members of the board of directors
shall be necessary to effect any such change in these By-laws.
I hereby certify that the foregoing is a true copy of the By-laws of American
United Life Insurance Company (R) and that same are in full force and effect
this ___________________ day of _____________________, 19 _.
___________________________
Secretary
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EXHIBIT 8.1
FORM OF PARTICIPATION AGREEMENT WITH ALGER AMERICAN FUND
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FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 14th day of March, 1995, by and between
American United Life Insurance Company(R) (the "Company"), a life insurance
company domiciled in Indiana, on its behalf and on behalf of the segregated
asset accounts of the Company (the "Separate Accounts"); Alger American Fund
(the "Fund"), a Massachusetts business trust; and Fred Alger & Company,
Incorporated (the "Distributor"), a Delaware corporation.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act") and the Fund is authorized to
issue separate classes of shares of beneficial interests ("shares"), each
representing an interest in a separate portfolio of assets known as a "series"
and each series has its own investment objective, policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of its series
to separate accounts of insurance companies that fund variable life insurance
policies and variable annuity contracts ("Variable Contracts") and to serve as
an investment medium for Variable Contracts offered by insurance companies that
have entered into participation agreements substantially similar to this
agreement ("Participating Insurance Companies"), and the Fund is currently
comprised of six separate series, and other series may be established in the
future; and
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2
WHEREAS, the Fund has obtained an order from the SEC, granting
Participating insurance Companies, separate accounts funding Variable Contracts
of Participating Insurance Companies, and the Fund exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and
paragraph (b)(15) of each of Rules 6e-2 and 6e-3(T) under the 1940 Act, to the
extent necessary to permit shares of the Fund to be sold to and held by separate
accounts funding variable annuity contracts or scheduled or flexible premium
variable life insurance contracts of both affiliated and unaffiliated life
insurance companies (the "Shared Funding Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company wishes to purchase shares of one or more of the Fund's
series on behalf of its Separate Accounts to serve as an investment medium for
Variable Contracts funded by the Separate Accounts, and the Distributor is
authorized to sell shares of the Fund's series;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants hereinafter set forth, the parties hereby agree as follows:
<PAGE>
3
ARTICLE I. Sale of Fund Shares
1.1. The Distributor agrees to sell to the Company those shares of the
series offered and made available by the Fund and identified on Exhibit A
("Series") that the Company orders on behalf of its Separate Accounts, and
agrees to execute such orders on each day on which the Fund calculates its net
asset value pursuant to rules of the SEC ("business day") at the net asset value
next computed after receipt and acceptance by the Fund or its designee of the
order for the shares of the Fund.
1.2. The Fund agrees to make available on each business day shares of the
Series for purchase at the applicable net asset value per share by the Company
on behalf of its Separate Accounts; provided, however, that the Trustees of the
Fund may refuse to sell shares of any Series to any person, or suspend or
terminate the offering of shares of any Series, if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of the Trustees'
fiduciary duties under applicable law, necessary in the best interests of the
shareholders of any Series.
1.3. The Fund and the Distributor agree that shares of the Series of the
Fund will be sold only to Participating Insurance Companies, their separate
accounts, and other persons consistent with each Series being adequately
diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and the regulations thereunder. No shares of any Series will be
sold directly to the general public.
<PAGE>
4
1.4. The Fund and the Distributor will not sell shares of the Series to any
insurance company or separate account unless an agreement containing provisions
substantially the same as this Agreement is in effect to govern such sales.
1.5. Upon receipt of a request for redemption in proper form from the
Company, the Fund agrees to redeem in cash any full or fractional shares of the
Series held by the Company, ordinarily executing such requests on each business
day at the net asset value next computed after receipt and acceptance by the
Fund or its designee of the request for redemption, except that the Fund
reserves the right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any rules thereunder. Such redemptions shall
ordinarily be paid in federal funds or by any other method mutually agreed upon
by the parties hereto by the next business day following receipt by the Fund or
its designee of notice of the order for redemption; however the Fund reserves
the right to postpone payment upon redemption consistent with Section 22(e) of
the Act and any Rules thereunder.
1.6. For purposes of Sections 1.1 and 1.5, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Separate Account, and receipt by such designee shall constitute receipt by the
Fund; provided that the Company receives the order by the close of business of
the New York Stock Exchange. The Company will use its best efforts to ensure
that the Fund receives notice of such order by 9:30 a.m. New York City time on
the next following business day.
<PAGE>
5
1.7. The Company shall pay for shares of the Series on the business day
next following the day that the Company receives an order to purchase shares of
the Series, except with respect to shares of any Series of the Fund ("Acquired
Series") ordered by the Company for a Separate Account or any subaccount thereof
in connection with an exchange or transfer from another Separate Account or
another subdivision of a Separate Account under the Variable Contracts, Company
shall pay for shares of the Acquired Series on the later of (1) the next
business day after an order to purchase the shares is made in accordance with
Section 1.1 hereof, or (2) on the same business day that the Separate Account
or subdivision from which the exchange or transfer is being made receives
payment from the investment company portfolio in which it invests, but in no
event later than seven days after the purchase order is received by the Company.
Payment shall be in federal funds transmitted by wire or by any other method
mutually agreed upon by the parties hereto.
1.8. Issuance and transfer of shares of the Series will be by book entry
only unless otherwise agreed by the Fund. Stock certificates will not be issued
to the Company or the Separate Accounts unless otherwise agreed by the Fund.
Fund and Distributor agree that shares ordered from the Fund will be recorded as
specified in such orders in an appropriate title for the Separate Accounts or
the appropriate subaccounts of the Separate Accounts.
1.9. The Fund shall promptly furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income dividends or
capital gain distributions payable on the shares of the Series. The Company
hereby elects to reinvest in the Series all such dividends and distributions as
are payable on a Series' shares and to receive such
<PAGE>
6
dividends and distributions in additional shares of that Series. The Company
reserves the right to revoke this election in writing and to receive all such
dividends and distributions in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.
1.10. The Fund shall instruct its recordkeeping agent to advise the Company
on each business day of the net asset value per share for each Series as soon as
reasonably practical after the net asset value per share is calculated, which is
normally 6:30 p.m. New York City time and shall use its best efforts to make
such net asset value per share available by 9:00 p.m. New York City time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that it is an insurance company
duly organized and in good standing under Indiana law and that it is taxed as an
insurance company under Subchapter L of the Code.
2.2. The Company represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Indiana Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under Indiana law.
<PAGE>
7
2.3. The Company represents and warrants that the Variable Contracts issued
by the Company or interests in the Separate Accounts under such Variable
Contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 ("1933 Act") or, alternatively (2) are not registered
because they are properly exempt from registration under the 1933 Act or will be
offered exclusively in transactions that are properly exempt from registration
under the 1933 Act.
2.4. The Company represents and warrants that each of the Separate
Accounts: (1) has been registered as a unit investment trust in accordance with
the provisions of the 1940 Act or, alternatively (2) has not been registered in
proper reliance upon an exclusion from registration under the 1940 Act.
2.5. The Company represents that it believes, in good faith, that the
Variable Contracts issued by the Company are currently treated as annuity
contracts or life insurance policies (which may include modified endowment
contracts), whichever is appropriate, under applicable provisions of the Code.
2.6. The Company represents and warrants that any of its Separate Accounts
that fund variable life insurance contracts and that are registered with the SEC
as investment companies, rely on the exemptions provided by Rule 6e-2 or Rule
6e-3(T), or any successor thereto under the 1940 Act.
<PAGE>
8
2.7. The Fund represents and warrants that it is a business trust duly
organized and in good standing under the laws of Massachusetts.
2.8. The Fund represents and warrants that the shares of the Series are
duly authorized for issuance in accordance with applicable law and that the Fund
is registered as an open-end management investment company under the 1940 Act.
2.9. The Fund represents that it believes, in good faith, (i) that the
Series currently comply with the diversification provisions of Section 817(h) of
the Code and the regulations issued thereunder relating to the diversification
requirements for variable life insurance policies and variable annuity contracts
and (ii) that each Series has complied with such provisions since its
commencement of operations.
2. 10. The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
ARTICLE III. General Duties
3.1. The Fund shall take all such actions as are necessary under applicable
federal and state law to permit the sale of the shares of each Series to the
Separate Accounts, including maintaining its registration as an investment
company under the 1940 Act, and registering the shares of the Series sold to the
Separate Accounts under the 1933 Act for so long as required by applicable law.
The Fund shall amend its Registration Statement filed with the SEC under
<PAGE>
9
the 1933 Act and the 1940 Act from time to time as required in order to permit
the continuous offering of the shares of the Series. The Fund shall register and
qualify the shares of the Series for sale in accordance with the laws of the
various states to the extent deemed necessary by the Fund or the Distributor.
3.2. The Fund shall make every effort to maintain qualification of each
Series as a Regulated Investment Company under Subchapter M of the Code (or any
successor or similar provision) and shall notify the Company immediately upon
having a reasonable basis for believing that a Series has ceased to so qualify
or that it might not so qualify in the future.
3.3. The Fund will invest assets of the Series in such a manner to permit
the Series to be used for investment by Separate Accounts of life insurance
companys funding variable annuity or life insurance contracts, whichever is
appropriate, under the Code and the regulations thereunder (or any successor
provisions). Without limiting the scope of the foregoing, the Fund shall make
every effort to enable each Series to comply with the diversification provisions
of Section 817(h) of the Code and the regulations issued thereunder relating to
the diversification requirements for variable life insurance policies and
variable annuity contracts and any prospective amendments or other modifications
to Section 817 or regulations thereunder, and shall notify the Company
immediately upon having a reasonable basis for believing that any Series has
ceased or might cease to comply.
3.4. Fund agrees to use its best efforts to ensure that each Series of the
Fund shall be managed consistent with its investment objective or objectives,
investment policies, and invest-
<PAGE>
10
ment restrictions as described in the Fund's prospectus and registration
statement, as amended or modified from time to time.
3.5. The Company shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Company, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the Variable
Contracts to the extent required under the 1933 Act, and obtaining all necessary
approvals to offer the Variable Contracts from state insurance commissioners.
3.6. The Company shall make every effort to maintain the treatment of the
Variable Contracts issued by the Company as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code and
shall notify the Fund and the Distributor immediately upon having a reasonable
basis for believing that such Variable Contracts have ceased to be so treated or
that they might not be so treated in the future. In the event that a change in
the Code or in the regulations thereunder or in an interpretation thereof makes
it unreasonable for the Company to continue to treat Variable Contracts as
annuity contracts or life insurance policies, whichever is appropriate, then the
Company shall, as soon as may be practical under the circumstances, notify the
Fund and the Distributor of its intent or plans with respect to such affected
annuity contracts or life insurance policies.
3.7. The Company shall require that any persons who offer and sell the
Variable Contracts issued by the Company do so in accordance with applicable
provisions of the 1933
<PAGE>
11
Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law
respecting the offering of variable life insurance policies and variable annuity
contracts.
3.8. The Distributor shall sell and distribute the shares of the Series of
the Fund in accordance with the applicable provisions of the 1933 Act, the 1934
Act, the 1940 Act, the NASD Rules of Fair Practice, and state law.
3.9. A majority of the Board of Trustees of the Fund shall consist of
persons who are not "interested persons" of the Fund ("disinterested Trustees"),
as defined by Section 2(a)(19) of the 1940 Act, except that if this provision of
this Section 3.9 is not met by reason of the death, disqualification, or bona
fide resignation of any Trustee or Trustees, then the operation of this
provision shall be suspended (a) for a period of 45 days if the vacancy or
vacancies may be filled by the Fund's Board; (b) for a period of 60 days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
3.10. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
<PAGE>
12
3.11. The Company shall, at least annually, submit to the Board of Trustees
of the Fund such reports, materials or data as the Trustees may reasonably
request so that the Trustees may carry out the obligations imposed upon them by
the Shared Funding Exemptive Order, and said reports, materials and data shall
be submitted more frequently if deemed appropriate by the Board of Trustees.
ARTICLE IV. Potential Conflicts
4.1. The Fund's Board of Trustees shall monitor the Fund for the existence
of any material irreconcilable conflict (1) between the interests of owners of
variable annuity contracts and variable life insurance policies, and (2) between
the interests of owners of Variable Contracts ("Variable Contract Owners")
issued by different Participating Insurance Companies that invest in the Fund.
An irreconcilable material conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of the Fund or any
Series are being managed; or (e) a decision by a Participating Insurance Company
to disregard the voting instructions of Variable Contract Owners.
4.2. The Company agrees that it shall be responsible for reporting any
potential or existing conflicts to the Fund's Board of Trustees. The Company
will be responsible for
<PAGE>
13
assisting the Board of Trustees of the Fund in carrying out its responsibilities
under this Agreement, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the Board whenever Variable
Contract Owner voting instructions are disregarded. The Company shall carry out
its responsibility under this Section 4.2 with a view only to the interests of
the Variable Contract Owners.
4.3. The Company agrees that in the event that it is determined by a
majority of the Board of Trustees of the Fund or a majority of the Fund's
disinterested Trustees that a material irreconcilable conflict exists, the
Company shall, in cooperation with other Participating Insurance Companies whose
Variable Contract owners are affected, at its own expense and to the extent
reasonably practicable (as determined by a majority of the disinterested
Trustees of the Board of the Fund), take whatever steps are necessary to
eliminate the irreconcilable material conflict, including: (1) withdrawing the
assets allocable to some or all of the Separate Accounts from the Fund or any
Series and reinvesting such assets in a different investment medium, which may
include another series of the Fund, or submitting the question of whether such
segregation should be implemented to a vote of all affected Variable Contract
Owners and, as appropriate, segregating the assets of any appropriate group
(i.e., Contract Owners of Variable Contracts issued by one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected Variable Contract Owners the option of making such a change; and (2)
establishing a new registered management investment company or managed separate
account. If a material irreconcilable conflict arises because of the Company's
decision to disregard Variable Contract Owners' voting instructions and that
<PAGE>
14
decision represents a minority position or would preclude a majority vote, the
Company shall be required, at the Fund's election, to withdraw the Separate
Accounts' investment in the Fund, and no charge or penalty will be imposed as a
result of such withdrawal. The Fund shall neither be required to bear the costs
of remedial actions taken to remedy a material irreconcilable conflict nor shall
it be requested to pay a higher investment advisory fee for the sole purpose of
covering such costs. In addition, no Variable Contract Owner shall be required
directly or indirectly to bear the direct or indirect costs of remedial actions
taken to remedy a material irreconcilable conflict. A majority of the
disinterested members of the Board of Trustees of the Fund shall determine
whether any proposed action adequately remedies any material irreconcilable
conflict, but in no event will the Fund be required to establish a new funding
medium for any Variable Contract. A new funding medium for any Variable Contract
need not be established by the Company pursuant to this Section 4.3, if an offer
to do so has been declined by vote of a majority of Variable Contract Owners who
would be adversely affected by the irreconcilable material conflict. All reports
received by the Fund's Board of Trustees of potential or existing conflicts, and
all Board action with regard to determining the existence of a conflict,
notifying Participating Insurance Companies and the Fund's investment adviser of
a conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board of Trustees of
the Fund or other appropriate records, and such minutes or other records shall
be made available to the SEC upon request. The Company and the Fund shall carry
out their responsibilities under this Section 4.3 with a view only to the
interests of the Variable Contract Owners.
<PAGE>
15
4.4. The Board of Trustees of the Fund shall promptly notify the Company in
writing of its determination of the existence of an irreconcilable material
conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements; Voting
5.1. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by the
Company as required to be distributed to such Variable Contract Owners under
applicable federal or state law.
5.2. The Distributor shall provide the Company with as many copies of the
current prospectus of the Fund as the Company may reasonably request. If
requested by the Company in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type or
in camera-ready copy) and other assistance as is reasonably necessary in order
for the Company to print together in one document the current prospectus for the
Variable Contracts issued by the Company and the current prospectus for the
Fund. The Fund shall bear the expense of printing copies of its current
prospectus that will be distributed to existing Variable Contract Owners, and
the Company shall bear the expense of printing copies of the Fund's prospectus
that are used in connection with offering the Variable Contracts issued by the
Company.
5.3. The Fund and the Distributor shall provide (1) at the Fund's expense,
one copy of the Fund's current Statement of Additional Information ("SAI") to
the Company and to any owner of a Variable Contract issued by the Company who
requests such SAI, (2) at the Com-
<PAGE>
16
pany's expense, such additional copies of the Fund's current SAI as the Company
shall reasonably request and that the Company shall require in accordance with
applicable law in connection with offering the Variable Contracts issued by the
Company.
5.4. The Fund, at its expense, shall provide the Company with copies of its
proxy material, periodic reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Company.
The Fund, at the Company's expense, shall provide the Company with copies of its
periodic reports to shareholders and other communications to shareholders in
such quantity as the Company shall reasonably request for use in connection with
offering the Variable Contracts issued by the Company. If requested by the
Company in lieu thereof, the Fund shall provide such documentation (including a
final copy of the Fund's proxy materials, periodic reports to shareholders and
other communications to shareholders, as set in type or in camera-ready copy)
and other assistance as reasonably necessary in order for the Company to print
such shareholder communications for distribution to owners of Variable Contracts
issued by the Company.
5.5. For so long as the SEC interprets the 1940 Act to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act ("Registered Separate
Accounts"), the Company shall vote shares of each Series of the Fund held in
Registered Separate Accounts or subaccounts thereof, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Company (or its designated agent) from owners of Variable Contracts funded by
such
<PAGE>
17
Registered Separate Accounts or subaccounts thereof having a voting interest in
the Series. The Company shall vote shares of a Series of the Fund held in
Registered Separate Accounts or subaccounts thereof that are attributable to the
Variable Contracts as to which no timely instructions are received, as well as
shares held in such Registered Separate Accounts or subaccounts thereof that are
not attributable to the Variable Contracts and owned beneficially by the Company
(resulting from charges against the Variable Contracts or otherwise), in the
same proportion as the votes cast by owners of the Variable Contracts funded by
that Separate Account or subaccount thereof having a voting interest in the
Series from whom instructions have been timely received. The Company shall vote
shares of each Series of the Fund held in its general account or in any Separate
Account that is not registered under the 1940 Act, if any, in its discretion or
in the same proportion as the votes cast with respect to shares of the Series
held in all Registered Separate Accounts of the Company or subaccounts thereof,
in the aggregate. The Company agrees to take steps so that each Registered
Separate Account or subaccount thereof investing in the Fund calculates voting
privileges in a reasonable manner which will be communicated to the Company by
the Fund and that such manner will be consistent with other registered variable
annuity or variable life insurance separate accounts investing in the Fund.
5.6. To the extent applicable, the Fund shall disclose in its prospectus,
in substance, that: (1) shares of the Series of the Fund are offered to
affiliated or unaffiliated insurance company separate accounts which fund both
annuity and life insurance contracts, (2) due to differences in tax treatment or
other considerations, the interests of various Variable Contract Owners
participating in the Fund or a Series might at some time be in irreconcilable
conflict,
<PAGE>
18
and (3) the Board of Trustees of the Fund will monitor for any material
irreconcilable conflicts and determine what action, if any, should be taken.
ARTICLE VI. Sales Material and Information
6.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund (or any Series thereof) or its investment adviser or the
Distributor is named, and no such sales literature or other promotional material
shall be used without the prior approval of the Fund and the Distributor or the
designee of either. The Fund and the Distributor shall use their best efforts to
provide such approval or, if approval is not given, then to provide comments
suggesting appropriate changes to any piece of sales literature or other
promotional material within two (2) business days of receipt of such materials.
6.2. The Company agrees that neither it nor any of its affiliates shall
give any information or make any representations or statements on behalf of the
Fund or concerning the Fund other than the information or representations
contained in the Registration Statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee
and/or by the Distributor or its designee, except with the prior permission of
the Fund or its designee and/or the Distributor or its designee.
<PAGE>
19
6.3. The Fund or the Distributor or the designee of either shall furnish to
the Company or its designee, each piece of sales literature or other promotional
material in which the Company or its Separate Accounts are named, and no such
material shall be used without the prior approval of the Company or its
designee.
6.4. The Fund and the Distributor agree that each and the affiliates of
each shall not give any information or make any representations on behalf of the
Company or concerning the Company, the Separate Accounts, or the Variable
Contracts issued by the Company, other than the information or representations
contained in a registration statement or prospectus for such Variable Contracts,
as such registration statement and prospectus may be amended or supplemented
from time to time, or in reports for the Separate Accounts or prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by the Company or its designee, except with
the prior permission of the Company.
6.5. The Fund will provide to the Company at least one complete copy of all
prospectuses, Statements of Additional Information, reports, proxy statements
and other voting solicitation materials, and all amendments and supplements to
any of the above, that relate to the Fund or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
6.6. The Company will provide to the Fund at least one complete copy of all
prospectuses (which shall include an offering memorandum if the Variable
Contracts issued by the
<PAGE>
20
Company or interests therein are not registered under the 1933 Act), Statements
of Additional Information, reports, solicitations for voting instructions, and
all amendments or supplements to any of the above, that relate to the Variable
Contracts issued by the Company or the Separate Accounts promptly after the
filing of such document with the SEC or other regulatory authority.
6.7. For purposes of this Article VI, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, computerized media, or other public
media), sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees.
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.l (a). The Company agrees to indemnify and hold harmless the Fund, each
of its Trustees and officers and the Distributor and each of the Directors and
officers of the
<PAGE>
21
Distributor (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation expenses (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
litigation expenses:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus (which shall include an offering memorandum) for the Variable
Contracts issued by the Company or sales literature for such Variable
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Fund for use in the registration statement or prospectus for the
Variable Contracts issued by the Company or in sales literature (or any
amendment or supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or representation (other than
statements or representations (1) contained in the registration statement,
prospectus or sales literature of the Fund not supplied by the Company or
persons under its control, or (2) contained in the registration statement,
prospectus, SAI, or sales literature for the Variable Contracts made in
reliance upon and in conformity with information furnished to the Company
by or on behalf of the Fund or the Distributor) or wrongful conduct of the
Company or persons under the control thereof with respect to the sale or
distribution of the Variable Contracts issued by the Company or the Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature of the Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required
to be stated
<PAGE>
22
therein or necessary to make the statements therein not misleading if such
a statement or omission was made in reliance upon information furnished to
the Fund by or on behalf of the Company; or
(iv) arise out of or result from the material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or
result from any other material breach of this Agreement by the Company;
except to the extent provided in Sections 7.1(b) and 7.1(c) hereof
7.l(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations or
duties under this Agreement or to the Fund.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Company in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the
<PAGE>
23
defense thereof, with counsel satisfactory to the Indemnified Party named in the
action. After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
7.1(d). The Indemnified Parties shall promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares hereunder or the Variable Contracts
issued by the Company or the operation of the Fund provided that such litigation
or proceedings relate to or affect the interests of the Company.
7.2. Indemnification By the Distributor
7.2(a). The Distributor agrees to indemnify and hold harmless the Company
and each of its directors and officers and the Separate Accounts (collectively,
the "Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Distributor) or litigation expenses (including legal
and other expenses) to which the Indemnified Parties may become subject under
any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or litigation expenses:
<PAGE>
24
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or
prospectus or sales literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished to the Distributor or the Fund or the designee of either by or on
behalf of the Company for use in the registration statement or prospectus
for the Fund or in sales literature (or any amendment or supplement to any
of the foregoing) or otherwise for use in connection with the sale of the
Variable Contracts issued by the Company or Fund shares; or
(ii) arise out of or as a result of any statement or representation (other than
statements or representations (1) contained in the registration statement,
prospectus or sales literature for the Variable Contracts not supplied by
the Distributor or persons under the control thereof, or (2) contained in
the registration statement, prospectus, SAI, or sales literature for the
Fund made in reliance upon and in conformity with information furnished to
the Fund by or on behalf of the Company) or wrongful conduct of the Fund or
Distributor or persons under their control with respect to the sale or
distribution of the Variable Contracts or the Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature covering the Variable Contracts issued by the Company, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information furnished
to the Company by the Distributor or by or on behalf of the Fund; or
(iv) arise out of or result from the material breach of any representation
and/or warranty made by the Distributor or the Fund in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Distributor or the Fund, including but not limited to, compliance with
the diversification requirements of Section 817(h) of the Code and
qualification of each Series of the Fund as a Regulated Investment Company
under Subchapter M of the Code;
<PAGE>
25
except to the extent provided in Sections 7.2(b) and 7.2(c) hereof.
7.2(b). The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations and
duties under this Agreement or to the Company or the Separate Accounts.
7.2(c). The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Distributor in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Party shall have received notice of such service on any designated agent),
but failure to notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
Indemnification Provision. In case any such action is brought against an
Indemnified Party, the Distributor will be entitled to participate, at its own
expense, in the defense thereof. The Distributor also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Distributor to such party of the
Distributor's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Distributor will not be liable to such party under this Agree-
<PAGE>
26
meet for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.2(d). The Company shall promptly notify the Distributor of the
commencement of any litigation or proceedings against any Indemnified Party in
connection with the issuance or sale of the Fund shares hereunder or the
Variable Contracts issued by the Company or the operation of the Separate
Accounts provided that such litigation or proceedings relate to or affect the
interests of the Fund or the Distributor.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Indiana.
8.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
<PAGE>
27
ARTICLE IX. Termination
9.1. This Agreement shall terminate:
(a) at the option of any party upon 90 days advance written notice to
the other parties, unless a shorter time is agreed to by the parties to
this Agreement; or
(b) at the option of the Company if shares of the Series are not
reasonably available to meet the requirements of the Variable Contracts
issued by the Company, as determined by the Company, and upon written
notice by the Company to the other parties to this Agreement; or,
(c) at the option of the Fund or the Distributor upon institution of
formal proceedings against the Company by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body if the Fund
or the Distributor shall determine, in its sole judgment exercised in good
faith, that the Company has suffered a material adverse change in its
business, operations, financial condition, or prospects since the date of
this Agreement or is the subject of material adverse publicity; or
(d) at the option of the Company upon institution of formal
proceedings against the Fund or the Distributor by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body
if the Company shall determine, in its sole judgment exercised in good
faith, that the Fund or the Distributor has suffered a material adverse
change in its business, operations, financial condition, or prospects since
the date of this Agreement or is the subject of material adverse publicity;
or
<PAGE>
28
(e) upon requisite vote of the Variable Contract Owners having an
interest in the Separate Accounts (or any subaccounts thereof) to
substitute the shares of another investment company or series thereof for
the corresponding shares of the Fund or a Series in accordance with the
terms of the Variable Contracts for which those shares had been selected to
serve as the underlying investment media; or
(f) in the event any of the shares of a Series are not registered,
issued or sold in accordance with applicable state and/or federal law, or
such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Company; or
(g) at the option of any party to the Agreement upon a determination
by a majority of the Trustees of the Fund, or a majority of its
disinterested Trustees, that an irreconcilable material conflict exists; or
(h) at the option of the Company if the Fund or a Series fails to meet
the diversification requirements specified in Section 3.2 or 3.3 hereof; or
(i) at the option of the Fund or the Distributor if the Variable
Contracts issued by the Company cease to qualify as annuity contracts or
life insurance contracts, as applicable, under the Code or if the Variable
Contracts are not registered, issued or sold in accordance with applicable
state and/or federal law; or
(j) at the option of the Company upon any substitution of the shares
of another investment company or series thereof for shares of the Fund or a
Series in accordance with the terms of the Contracts, provided that the
Company has given at least 45 days prior written notice to the Fund or
Distributor of the date of the substitution.
<PAGE>
29
(k) at the option of the Company upon a material breach of this
Agreement or of any representation or warranty herein by the Fund or the
Distributor, or at the option of the Fund or the Distributor upon a
material breach of this Agreement or of any representation or warranty
herein by the Company.
9.2. Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 9.l(c) and (d) hereof. The Company shall
give 45 days prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
9.1(e) hereof.
9.3. Under the terms of the Variable Contracts, the Company reserves the
right, subject to compliance with the law as then in effect, to make
substitutions for the securities that are held by a Separate Account of Company
under certain circumstances. The parties acknowledge that Company has the right
to substitute other securities for the shares of the Fund or a Series already
purchased or to be purchased in the future if the shares of the Fund or any or
all of the Series should no longer be available for investment, or if, in the
judgment of Company management, further investment in shares of the Fund or any
or all of the Series thereof should become inappropriate in view of the purposes
of the Contracts. Company will provide 45 days written notice to the Fund or to
the Distributor prior to effecting any such substitution.
<PAGE>
30
9.4. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund: The Alger American Fund
75 Maiden Lane
New York, New York 10038
Attn: Gregory Duch
If to the Distributor: Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, New Jersey 07302
Attn: Gregory Duch
If to the Company: American United Life Insurance Company(R)
One American Square
Indianapolis, Indiana 46206
Attn: Richard A. Wacker
ARTICLE XI.
11. 1. The Fund and the Company agree that if and to the extent Rule 6e-2
or 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in final
form, to the extent appli-
<PAGE>
31
cable, the Fund and the Company shall each take such steps as may be necessary
to comply with such Rule as amended or adopted in final form.
11.2. A copy of the Fund's Agreement and Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and notice is hereby
given that the Agreement has been executed on behalf of the Fund by a Trustee of
the Fund in his or her capacity as Trustee and not individually. The obligations
of this Agreement shall only be binding upon the assets and property of the Fund
and shall not be binding upon any Trustee, officer or shareholder of the Fund
individually.
11.3. It is understood that the name "American United Life Insurance
Company(R)", "AUL", or any derivative thereof or logo associated with that name
is the valuable property of the Company and its affiliates, and that the Company
has the right to use such name (or derivative or logo) only so long as this
Agreement is in effect. Upon termination of this Agreement the Company shall
forthwith cease to use such name (or derivative or logo).
11.4. It is understood that the name "Alger", or any derivative thereof or
logo associated with that name is the valuable property of the Distributor and
its affiliates, and that the Company has the right to use such name (or
derivative or logo) only so long as this Agreement is in effect. Upon
termination of this Agreement the Company shall forthwith cease to use such name
(or derivative or logo).
<PAGE>
32
11.5. The Fund and the Distributor agree to treat as the property of the
Company any list or compilation of names, addresses, and other information
relating to the owners of the Variable Contracts or prospects for the sale of
the Variable Contracts acquired in the course of performing under this Agreement
and agree not to use such information for any purpose without the prior written
consent of the Company.
11.6. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
11.7. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.8. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
11.9. This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement. For
purposes of this provision, the term "assigned" shall include a change in
control of a party to the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
<PAGE>
33
executed as of the day and year first above written.
THE ALGER AMERICAN FUND
ATTEST: __________________ BY: __________________
Name: Nanci Staple Name: Gregory Duch
Tile: Secretary Title: Treasurer
FRED ALGER & COMPANY, INCORPORATED
ATTEST: __________________ BY: __________________
Name: Nanci Staple Name: Gregory Duch
Tile: Secretary Title: Treasurer
AMERICAN UNITED LIFE INSURANCE COMPANY(R)
ATTEST: __________________ BY:___________________r.
Name: Richard A. Wacker Name: James H. Akins, Jr.
Tile: Associate General Counsel Title: Vice President
Pension Contracts
<PAGE>
34
Exhibit A
List of Series Currently available to American United Life Insurance
Company(R):
Alger American Growth Portfolio
- --------------------------------------------------------------------------------
EXHIBIT 8.2
FORM OF PARTICIPATION AGREEMENT WITH AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
FUND PARTICIPATION AGREEMENT
American United Life Insurance Company (the "Company") and TCI Portfolios,
Inc. ("TCIP") and its investment adviser, Investors Research Corporation
("Investors Research") hereby agree to an arrangement whereby shares of TCI
Growth (the "Fund") shall be made available to serve as underlying investment
media for Individual and Group Annuity Contracts ("Contracts") to be offered to
the public by the Company, subject to the following provisions:
1. Establishment of Account; Availability of Fund.
The Company represents that it has established or will establish one or
more separate accounts (an "Account") under state insurance law, each of which
is or will be registered as a unit investment trust under the Investment Company
Act of 1940 (the "1940 Act"), to serve as an investment vehicle for the
Contracts. The Contracts provide for the allocation of net amounts received by
the Company to separate series of an Account for investment in the shares of a
specified investment company selected from among those companies available
through an Account to act as underlying investment media. Selection of a
particular series of an Account is made by the Contract owner, who may change
such selection from time to time in accordance with the terms of the applicable
Contract.
2. Marketing and Promotion.
The Company agrees to make every reasonable effort to market its Contracts.
It will not give disproportionately unequal emphasis and promotion to shares of
the Fund as compared to other underlying investments of an Account. In addition,
the Company shall not
<PAGE>
2
impose any fee, condition, rule or regulation for the use by a Contract owner of
the Fund as an investment option that operates to the specific prejudice of the
Fund vis-a-vis the other investment options offered by the Company to Contract
owners. In marketing and administering its Contracts, the Company will comply
with all applicable state and Federal laws.
3. Pricing Information; Orders; Settlement.
(a) TCIP will make Fund shares available to be purchased by the Company on
behalf of an Account at the net asset value applicable to each order. Fund
shares shall be purchased and redeemed in such quantity and at such time
determined by the Company to be necessary to meet the requirements of those
Contracts for which the Fund serves as underlying investment media.
(b) TCIP will provide to the Company closing net asset value, dividend and
capital gain information at the close of trading each day that the New York
Stock Exchange (the "Exchange") is open (each such day, a "business day"). The
Company will send directly to TCIP or its specified agent orders to purchase
and/or redeem Fund shares by 10:00 a.m. Eastern Time the following business day.
Payment for net purchases will be wired by the Company to a custodial account
designated by TCIP to coincide with the order for shares of the Fund.
(c) TCIP hereby appoints the Company as its agent for the limited purpose
of accepting purchase and redemption orders for Fund shares from Contract
owners. Orders from Contract owners received by the Company acting as agent for
TCIP prior to the close of the Exchange on any given business day will be
executed by TCIP at the net asset value determined as of the close of the
Exchange on such business day. Any orders received by the
<PAGE>
3
Company acting as agent on such day but after the close of the Exchange will be
executed by TCIP at the net asset value determined as of the close of the
Exchange on the next business day following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be paid in cash
and will be wired by TCIP from the TCIP custodial account to an account
designated by the Company. Payment for net redemptions will ordinarily be wired
one business day after the order for the redemptions has been sent by the
Company to TCIP or its specified agent.
4. Compliance.
(a) In managing and administering TCIP,. TCIP and Investors Research will
comply in all material respects with all applicable state and Federal securities
laws.
(b) TCIP and Investors Research shall use their respective best efforts to
ensure that the Fund qualifies and continues to qualify as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code (or any
successor or similar provision).
(c) TCIP and Investors Research shall use their respective best efforts to
ensure that the Fund complies and maintains compliance with the diversification
provisions of Section 817(h) of the Internal Revenue Code and the regulations
issued thereunder relating to the diversification requirements for variable
annuity contracts, and with any prospective amendments or other modifications to
Section 817 or regulations thereunder.
(d) Unless it notifies the Company with reasonable promptness that it does
not intend to do so, TCIP shall take all steps necessary to adhere to any
requirements under tax or insurance law or otherwise that pertain to the Fund by
virtue of serving as an investment media for the Contracts for which notice is
provided to TCIP by the Company.
(e) Investors Research shall notify the Company with reasonable promptness
after
<PAGE>
4
having a reasonable basis for believing that the Fund has ceased to comply or
likely will cease to comply with any of the requirements described or referenced
in Section 4(a), (b), (c), or (d) of this Agreement.
(f) TCIP and Investors Research represent and warrant that as of the date
of this Agreement the shares of the Fund are duly authorized for issuance in
accordance with applicable law, that the shares of the Fund are registered with
the Securities and Exchange Commission ("SEC") as securities under the
Securities Act of 1933 (the "1933 Act") and that TCIP is registered as an
open-end management investment company under the 1940 Act.
5. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses incident
to the performance by TCIP under this Agreement shall be paid by Investors
Research or TCIP, including the cost of registration of TCIP's shares with the
SEC and in states where required.
(b) TCIP shall provide to the Company its proxy materials, periodic fund
reports to shareholders and other materials that are required by law to be sent
to Contract owners. In addition, TCIP shall provide the Company with a
sufficient quantity of its prospectuses to be used in connection with the
offerings and transactions contemplated by this Agreement. The cost of preparing
and printing such materials shall be paid by Investors Research or TCIP, and the
cost of distributing such materials shall be paid by the Company; provided,
however, that at any time TCIP reasonably deems the usage of such materials to
be excessive, it may request that the Company pay the cost of printing
(including press time and paper) of any additional copies of such materials
requested by the Company.
6. Representations.
The Company and its agents shall not, without the written consent of TCIP,
make
<PAGE>
5
representations concerning TCIP or its shares except those contained in the then
current prospectuses, registration statement and in the then current printed
sales literature of TCIP.
7. Administration of Accounts.
(a) Administrative services to purchasers of Contracts shall be the
responsibility of the Company and shall not be the responsibility of TCIP or
Investors Research. TCIP and Investors Research recognize the Company as the
sole shareholder of TCIP shares issued under this Agreement. TCIP and Investors
Research further recognize that they will derive a substantial savings in
administrative expense, such as significant reductions in postage expense and
shareholder communications and recordkeeping, by virtue of having a sole
shareholder rather than multiple shareholders. In consideration of the
administrative savings resulting from such arrangement, Investors Research
agrees to pay to the Company an amount equal to 15 basis points (0.15%) per
annum of the average aggregate amount invested by the Company under this
Agreement, commencing with the month in which the average aggregate investment
by the Company (on behalf of the Contract owners) in the Fund exceeds $10
million. No payment obligation shall arise until the Company's average aggregate
investment in the Fund reaches $10 million, and such payment obligation, once
commenced, shall be suspended with respect to any month during which the
Company's average aggregate investment in the Fund drops below $10 million.
(b) Investors Research has advised the Company that it customarily pays,
out of its management fee, another affiliated corporation for the type of
administrative services to be provided by the Company to the Contract holders.
The parties agree that Investors Research's payments to the Company, like
Investors Research's payments to its affiliated corporation, are for
administrative services only and do not constitute payment in any manner for
investment
<PAGE>
6
advisory services or for costs of distribution.
(c) For the purposes of computing the payment to the Company contemplated
by this Section 7, the average aggregate amount invested by the Company over a
one month period shall be computed by totaling the Company's aggregate
investment (share net asset value multiplied by total number of shares held by
the Company) on each business day during the month and dividing by the total
number of business days during such month.
(d) Investors Research will calculate the payment contemplated by this
Section 7 at the end of each calendar quarter and will make such payment to the
Company within 30 days thereafter. The check for such payment will be
accompanied by a statement showing the calculation of the monthly amounts
payable by Investors Research and such other supporting data as may be
reasonably requested by the Company.
8. Termination.
This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company or TCIP upon 90 days' advance
written notice to the other;
(b) at the option of the Company if shares of the Fund are not available
for any reason or if the Company shall reasonably determine in good faith that
further investment in shares of the Fund is inappropriate in view of the
purposes of the Contracts, provided that reasonable advance notice of election
to terminate shall be furnished by the Company;
(c) at the option of either the Company or TCIP, upon institution of formal
proceedings against the broker-dealer or broker-dealers underwriting the
Contracts, the Account, the Company, Investors Research or TCIP by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or any other
regulatory body;
<PAGE>
7
(d) at the option of TCIP, if TCIP shall reasonably determine in good faith
that the Company is not offering shares of the Fund in conformity with the terms
of this Agreement;
(e) upon termination of the Management Agreement between TCIP and Investors
Research, notice of which shall be promptly furnished to the Company; provided,
however, that this subsection (e) shall not apply if contemporaneously with such
termination a new contract of substantially similar terms is entered into
between TCIP and Investors Research;
(f) upon the requisite vote of Contract owners having an interest in the
Fund to substitute for Fund shares the shares of another investment company in
accordance with the terms of Contracts for which Fund shares had been selected
to serve as an underlying investment medium; provided, however, that the Company
shall give 60 days' written notice to TCIP of any proposed vote to replace the
Fund's shares;
(g) upon assignment of this Agreement, unless made with the written consent
of all other parties hereto;
(h) if TCIP's shares are not registered, issued or sold in conformance with
Federal or applicable state law or such law precludes the use of Fund shares as
the underlying investment medium of Contracts issued or to be issued by the
Company, provided that prompt notice shall be given by either party should such
situation occur;
(i) at the option of the Company by written notice to the other parties in
the event that the Fund ceases to qualify as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code or in the event that the Fund
fails to meet the diversification requirements specified in Section 4(c) of this
Agreement, or if the Company reasonably believes in good faith that the fund may
fail to so qualify as a Regulated Investment Company or may fail to meet such
diversification requirements; or
<PAGE>
8
(j) at the option of any party in the event that a majority of the Board of
TCIP determines that a material irreconcilable conflict exists as provided in
Section 14 of this Agreement.
9. Continuation of Agreement.
Termination as the result of any cause listed in Section 8 shall not affect
TCIP's obligation maintain an account in the name of the Company on behalf of
those Contract owners who selected the Fund as an investment option prior to the
termination of this Agreement; provided, however, TCIP shall have no
administrative services payment obligation to the Company after such
termination.
10. Substitution.
The Company has advised TCIP and Investors Research, and TCIP and Investors
Research understand that the Contracts provide that the Company reserves the
night to substitute the shares of another investment company or series thereof
for the shares of TCIP if such shares are no longer available for investment, or
if, in the judgment of the Company's management, further investment in the
shares of the Fund would be inappropriate in view of the purposes of the
Contracts. The Company hereby represents that all determinations of
appropriateness will be reasonably made in good faith.
11. Advertising Materials; Filed Documents.
(a) Advertising and literature with respect to TCIP prepared by the Company
or its agents for use in marketing its Contracts will be submitted to TCIP for
review before such material is submitted to the SEC or NASD for review.
(b) TCIP will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
annual and semi-
<PAGE>
9
annual reports, proxy statements and all amendments or supplements to any of the
above that relate to the Fund promptly after the filing of such document with
the SEC or other regulatory authorities. The Company will provide to TCIP at
least one complete copy of all registration statements, prospectuses, statements
of additional information, annual and semi-annual reports, proxy statements, and
all amendments or supplements to any of the above that relate to an Account
promptly after the filing of such document with the SEC or other regulatory
authority.
12. Proxy Voting.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in Section 14(a) below) participating in the Fund calculate voting
privileges in a consistent manner. TCIP and Investors Research agree to advise
the Company if either shall be notified by a Participating Company of a change
in the calculation of voting privileges.
(b) The Company will distribute to Contract owners all proxy material
furnished by TCIP and will vote shares in accordance with instructions received
from such Contract owners. The Company shall vote TCIP shares for which no
instructions have been received in the same proportion as shares for which such
instructions have been received. The Company and its agents shall not oppose or
interfere with the solicitation of proxies for TCIP shares held for Contract
owners.
13. Indemnification.
(a) The Company agrees to indemnify and hold harmless TCIP and each of its
<PAGE>
10
directors, officers, employees, agents and each person, if any, who controls
TCIP or its investment adviser within the meaning of the 1933 Act against any
losses, claims, damages or liabilities to which TCIP or any such director,
officer, employee, agent, or controlling person may become subject, under the
1933 Act or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof (i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, prospectus or sales literature of the Company or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or as a result of conduct, statements or
representations (other than statements or representations contained in the
registration statement, as amended, the prospectuses or sales literature of
TCIP) of the Company or its agents, with respect to the sale and distribution of
Contracts for which the shares of the Fund are the underlying investment, or
(ii) result from a breach of material provision of this Agreement. The Company
will reimburse any legal or other expenses reasonably incurred by TCIP or any
such director, officer, employee, agent, investment adviser, or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
prospectus or sales literature in conformity with written materials furnished to
the Company by TCIP or Investors Research specifically for use therein.
(b) Investors Research agrees to indemnify and hold harmless the Account,
<PAGE>
11
Company and each of its directors, officers, employees, agents and each person,
if any, who controls the Company within the meaning of the 1933 Act against any
losses, claims, damages or liabilities to which the Account, the Company or any
such director, officer, employee, agent or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof (i) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales literature of the
Fund or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) result from a breach of a material provision of this
Agreement. Investors Research will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, employee,
agent, or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that Investors
Research will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement, prospectuses or sales literature in conformity with
written materials furnished to TCIP by the Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of notice of
the commencement of action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party hereunder, notify the
indemnifying party of the commencement thereof, but the omission so to notify
the indemnifying party will not relieve it from any liability which it may have
to any indemnified party otherwise than under this
<PAGE>
12
Section 13. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish to, assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 13 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
14. Potential Conflicts.
(a) The Company has received a copy of an application for exemptive relief,
as amended, filed by TCIP on December 21, 1987, with the SEC and the order
issued by the SEC in response thereto (the "Shared Funding Exemptive Order").
The Company has reviewed the conditions to the requested relief set forth in
such application for exemptive relief. As set forth in such application, the
Board of Directors of TCIP (the "Board") will monitor TCIP for the existence of
any material irreconcilable conflict between the interests of the
contractholders of all separate accounts ("Participating Companies") investing
in TCIP. An irreconcilable material conflict may arise for a variety of reasons,
including: (i) an action by any state insurance regulatory authority; (ii) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar actions by insurance, tax or securities
regulatory authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of any portfolio
are being managed; (v) a difference in voting instructions given by variable
annuity contractholders and variable life insurance
<PAGE>
13
contractholders; or (vi) a decision by an insurer to disregard the voting
instructions of contractholders. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
(b) The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order by providing the Board
with all information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by the Company to
inform the Board whenever contractholder voting instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contractholder investments in the Fund, the Board shall give prompt notice to
all Participating Companies. If the Board determines that the Company is
responsible for causing or creating said conflict, the Company shall at its sole
cost and expense, and to the extent reasonably practicable (as determined by a
majority of the disinterested Board members), take such action as is necessary
to remedy or eliminate the irreconcilable material conflict. Such necessary
action may include but shall not be limited to:
(i) withdrawing the assets allocable to the Account from the Fund and
reinvesting such assets in a different investment medium or submitting
the question of whether such segregation should be implemented to a
vote of all affected contractholders and as appropriate, segregating
the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of one or
more Participating Companies) that votes in favor of such segregation,
or offering to the affected contractholders the option of making such
a change; and/or
(ii) establishing a new registered management investment company or
<PAGE>
14
managed separate account.
(d) If a material irreconcilable conflict arises as a result of a decision
by the Company to disregard its contractholder voting instructions and said
decision represents a minority position or would preclude a majority vote by all
of its contractholders having an interest in TCIP, the Company at its sole cost,
may be required, at the Board's election, to withdraw the Account's investment
in TCIP and terminate this Agreement; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
(e) For the purpose of this Section 14, a majority of the disinterested
Board members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will TCIP be
required to establish a new funding medium for any Contract. The Company shall
not be required by this Section 14 to establish a new funding medium for any
Contract if an offer to do so has been declined by vote of a majority of the
Contract owners materially adversely affected by the irreconcilable material
conflict.
15. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision hereof,
may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be given
or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party
<PAGE>
15
or parties to whom they are directed at the following addresses, or at such
other addresses as may be designated by notice from such party to all other
parties.
To the Company: American United Life Insurance Company
One American Square
Indianapolis, Indiana 42606-0368
Attention: Richard A. Wacker
To TCI or Investors Research:
TCI Portfolios, Inc.
4500 Main Street
Kansas City, Missouri 64111
Attention: Patrick A. Looby
Any notice, demand or other communication given in a manner prescribed in this
subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted successors
and assigns
(d) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement and
understandings relating to the subject matter hereof.
<PAGE>
16
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers as of this 1st day of March 1994.
AMERICAN UNITED LIFE INSURANCE
COMPANY
By: ____________________________
Name: James H. Akins, Jr.
Title: Vice President
INVESTORS RESEARCH CORPORATION
By: ____________________________
Name: William M. Lyons
Title: Executive Vice President
TCI PORTFOLIOS, INC.
By: ____________________________
Name: Patrick A. Looby
Title: Vice President
AMENDMENT NO. 1 TO
FUND PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO FUND PARTICIPATION AGREEMENT is made and entered
into as of the 31st day of August, 1994, by and among AMERICAN UNITED LIFE
INSURANCE COMPANY (the "Company"), TCI PORTFOLIOS,INC. ("TCIP") and its invest-
ment adviser, INVESTORS RESEARCH CORPORATION ("Investors Research"). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in
the Agreement (defined below).
WITNESSETH
WHEREAS, the Company, TCIP and Investors Research are parties to a Fund
Participation Agreement (the "Agreement") dated as of March 1, 1994, whereby
shares of TCI Growth, a series of mutual fund shares registered under the
Investment Company Act of 1940 and issued by TCIP, were made available by TCIP
to serve as underlying investment media for individual and group annuity
contracts to be issued through one or more separate accounts established by the
Company under state law; and
WHEREAS, the Company, TCIP and Investors Research now desire to modify the
Agreement so that shares of TCI International (another series of registered
mutual fund shares issued by TCIP) may be made available to the Company to serve
as underlying investment media for such contracts.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises expressed herein, the parties agree as follows:
1. From the date hereof pursuant to the terms of the Agreement, as
amended from time to time, shares of TCI International shall be made
available to serve as underlying investment media for the Contracts.
2. The Company represents that it has established the All American
Individual Separate Account and the All American Group Separate
Account (the "Accounts") as separate accounts under Indiana Insurance
Law to serve as investment vehicles for the Contracts. The Accounts
are registered as unit investment trusts under the Investment Company
Act of 1940 to serve as investment vehicles for the Contracts.
3. All references to "Account" under the Agreement shall be deemed to
refer to the Accounts under this First Amendment.
4. From and after the date hereof, unless the context otherwise requires,
all references in the Agreement to the term "Fund" shall be deemed to
include TCI International.
5. In the event that there is any conflict between the terms of this
Amendment No. 1 and the Agreement, it is the intention of the parties
hereto that the terms of this Amendment No. 1 shall
<PAGE>
2
control, and the Agreement shall be interpreted on that basis. To the
extent that the provisions of the Agreement have not been amended by
this Amendment No. 1, the parties hereto hereby confirm and ratify the
Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of
the date first above written.
AMERICAN UNITED LIFE INSURANCE COMPANY
By: ___________________________________
Name: James H. Akins, Jr.
Title: Vice President Pensions
Contracts to Compliance
INVESTORS RESEARCH CORPORATION
By: ___________________________________
William M. Lyons
Executive Vice President
TCI PORTFOLIOS, INC.
By: ___________________________________
William M. Lyons
Executive Vice President
AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT is made and entered
into as of the 16th day of September 1997, by and among AMERICAN UNITED LIFE
INSURANCE COMPANY (the "Company"), AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.,
formerly known as TCI Portfolios, Inc. (the "Issuer"), and its investment
adviser, AMERICAN CENTURY INVESTMENT MANAGEMENT, INC., formerly known as
Investors Research Corporation (the "Adviser"). Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Agreement (as
defined below).
WHEREAS, the Company, the Issuer and the Adviser are parties to a Fund
Participation Agreement, dated as of March 1, 1994 and amended as of August 31,
1994 (the "Agreement"), whereby shares of VP Capital Appreciation, formerly
known as TCI Growth, and shares of VP International, formerly known as TCI
International, each of which is a series of mutual fund shares registered under
the Investment Company Act of 1940, as amended, and issued by the Issuer
(collectively, the "Funds"), were made available by the Issuer to serve as
underlying investment media for individual and group annuity contracts to be
issued through one or more separate accounts established by the Company under
state law; and
WHEREAS, the Company offers or will offer to the public certain individual
and group variable life insurance contracts (the "Variable Life Contracts"); and
WHEREAS, the Company, the Issuer and the Adviser now desire to modify the
Agreement so that shares of the Funds may be made available to the Company to
serve as underlying investment media for the Variable Life Contracts in addition
to the annuity contracts.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises expressed herein, the parties hereto hereby agree as follows:
1. The Company represents that it has established or will establish one
or more separate accounts (each a "Variable Life Account") under state
insurance law, each of which is or will be registered as a unit
investment trust under the 1940 Act, to serve as investment vehicles
for the Variable Life Contracts.
2. From and after the date hereof, pursuant to the terms of the Agreement
as amended from time to time, shares of the Funds shall be made
available to serve as underlying investment media for the Variable
Life Contracts in addition to the annuity contracts.
3. From and after the date hereof, unless the context otherwise requires,
(a) references in the Agreement to the term "Account" shall be deemed
to include the Variable Life Accounts and (b) references in the
Agreement to the term "Contracts" shall be deemed to include the
Variable Life Contracts.
<PAGE>
2
4. In the event that there is any conflict between the terms of this
Amendment No. 2 and the Agreement, it is the intention of the parties
hereto that the terms of this Amendment No. 2 shall control, and the
Agreement shall be interpreted on that basis. To the extent that the
provisions of the Agreement have not been amended by this Amendment
No. 2, the parties hereto hereby confirm and ratify the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2
as of the date first above written,
AMERICAN UNITED LIFE INSURANCE COMPANY
By: ______________________________________
Name: Richard A. Wacker
Title: Associate General Counsel
AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
By: ______________________________________
William M. Lyons
Executive Vice President
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
By: ______________________________________
William M. Lyons
Executive Vice President
- --------------------------------------------------------------------------------
EXHIBIT 8.3
FORM OF PARTICIPATION AGREEMENT WITH CALVERT VARIABLE SERIES
- --------------------------------------------------------------------------------
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 29th day of March, 1995, by and between
American United Life Insurance Company (R) (the "Company"), a life insurance
company domiciled in Indiana, on its behalf and on behalf of the segregated
asset accounts of the Company (the "Separate Accounts"); Acacia Capital
Corporation (the "Fund"), a Maryland corporation; Calvert Distributors, Inc.
("Distributor") and Calvert Asset Management Corporation ("Adviser"), a Maryland
corporation.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act") and the Fund is authorized to issue
separate classes of shares of beneficial interests ("shares"), each representing
an interest in a separate portfolio of assets known as a "series" and each
series has its own investment objective, policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of its series
to separate accounts of insurance companies that fund variable life insurance
policies and variable annuity contracts ("Variable Contracts") and to serve as
an investment medium for Variable Contracts offered by insurance companies that
have entered into participation agreements substantially similar to this
agreement ("Participating Insurance Companies"), and the Fund offers its shares
in one or more series; and
<PAGE>
2
WHEREAS, the Fund has obtained an order from the SEC, granting
Participating Insurance Companies, separate accounts funding Variable Contracts
of Participating Insurance Companies, and the Fund exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and
paragraph (b)(15) of each of Rules 6e-2 and 6e-3(T) under the 1940 Act, to the
extent necessary to permit such persons to rely on the exemptive relief provided
under paragraph (b)(15) of Rules 6e-2 and 6e-3(T), even though shares of the
Fund may be offered to and held by separate accounts funding variable annuity
contracts or scheduled or flexible premium variable life insurance contracts of
both affiliated and unaffiliated life insurance companies (the "Shared Funding
Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, the Adviser is registered as an Investment Adviser with the SEC
under the Investment Advisers Act of 1940 and with all of the states where
registration is required; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company wishes to purchase shares of one or more of the Fund's
series on behalf of its Separate Accounts to serve as an investment medium for
Variable Contracts funded
<PAGE>
3
by the Separate Accounts, and the Distributor is authorized to sell shares of
the Fund's series;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1. Sale of Fund Shares
1.1. The Distributor agrees to sell to the Company those shares of the
series offered and made available by the Fund and identified on Exhibit A
("Series") that the Company orders on behalf of its Separate Accounts, and
agrees to execute such orders on each day on which the Fund calculates its net
asset value pursuant to rules of the SEC ("business day") at the net asset value
next computed after receipt and acceptance by the Fund or its designee of the
order for the shares of the Fund.
1.2. The Fund agrees to make available on each business day shares of the
Series for purchase at the applicable net asset value per share by the Company
on behalf of its Separate Accounts; provided, however, that the
Directors/Trustees of the Fund may refuse to sell shares of any Series to any
person, or suspend or terminate the offering of shares of any Series, if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Directors/Trustees, acting in good faith and
<PAGE>
4
in light of the Directors/Trustees' fiduciary duties under applicable law,
necessary in the best interests of the shareholders of any Series.
1.3. The Fund and the Distributor agree that shares of the Series of the
Fund will be sold only to Participating Insurance Companies, their separate
accounts, and other persons consistent with each Series being adequately
diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and the regulations thereunder. No shares of any Series will be
sold directly to the general public.
1.4. The Fund and the Distributor will not sell shares of the Series to any
insurance company or separate account unless an agreement containing provisions
substantially the same as this Agreement is in effect to govern such sales.
1.5. Upon receipt of a request for redemption in proper form from the
Company, the Fund agrees to redeem in cash any full or fractional shares of the
Series held by the Company, ordinarily executing such requests on each business
day at the net asset value next computed after receipt and acceptance by the
Fund or its designee of the request for redemption, except that the Fund
reserves the right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any rules thereunder. Such redemptions shall be paid
in federal funds ordinarily on the next business day following receipt by the
Fund or its designee of the order for redemption; however the
<PAGE>
5
Fund reserves the right to postpone payment upon redemption consistent with
Section 22(e) of the Act and any Rules thereunder.
1.6. For purposes of Sections 1.1 and 1.5, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Separate Account, and receipt by such designee shall constitute receipt by the
Fund; provided that the Company receives the order by 4:00 p.m. New York City
time and the Fund receives notice of such order by 9:30 a.m. New York City time
on the next following business day.
1.7. The Company shall pay for shares of the Series on the business day
next following the day that the Company places an order to purchase shares of
the Series, except with respect to shares of any Series of the Fund ("Acquired
Series") ordered by the Company for a Separate Account or any subaccount thereof
in connection with an exchange or transfer from another Separate Account or
another subdivision of a Separate Account under the Variable Contracts, Company
shall pay for shares of the Acquired Series on the latter of (1) the next
business day after an order to purchase the shares is made in accordance with
Section 1.1 hereof, or (2) on the same business day that the Separate Account or
subdivision from which the exchange or transfer is being made receives payment
from the investment company portfolio in which it invests. Payment shall be in
federal funds transmitted by wire or by any other method mutually agreed upon by
the parties hereto.
<PAGE>
6
1.8. Issuance and transfer of shares of the Series will be by book entry
only unless otherwise agreed by the Fund. Stock certificates will not be issued
to the Company or the Separate Accounts unless otherwise agreed by the Fund.
Fund and Distributor agree that shares ordered from the Fund will be recorded
properly in an appropriate title for the Separate Accounts or the appropriate
subaccounts of the Separate Accounts.
1.9. The Fund shall promptly furnish same-day notice (by wire or telephone,
followed by written confirmation) to the Company of any income dividends or
capital gain distributions payable on the shares of the Series. The Company
hereby elects to reinvest in the Series all such dividends and distributions as
are payable on a Series' shares and to receive such dividends and distributions
in additional shares of that Series. The Company reserves the right to revoke
this election in writing and to receive all such dividends and distributions in
cash. The Fund shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.10. The Fund shall instruct its recordkeeping agent to advise the Company
on each business day of the net asset value per share for each Series as soon as
reasonably practical after the net asset value per share is calculated, which is
normally 6:30 p.m., New York City time, and shall use its best efforts to make
such net asset value per share available by 7:00 p.m. New York City time.
<PAGE>
7
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that it is an insurance company
duly organized and in good standing under Indiana law and that it is taxed as an
insurance company under Subchapter L of the Code.
2.2. The Company represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Indiana Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under Indiana law.
2.3. The Company represents and warrants that the Variable Contracts issued
by the Company or interests in the Separate Accounts under such Variable
Contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 ("1933 Act") or, alternatively (2) are not registered
because they are properly exempt from registration under the 1933 Act or will be
offered exclusively in transactions that are properly exempt from registration
under the 1933 Act.
2.4. The Company represents and warrants that each of the Separate Accounts
(1) has been registered as a unit investment trust in accordance with the
provisions of the 1940 Act or, alternatively (2) has not been registered in
proper reliance upon an exclusion from registration under the 1940 Act.
<PAGE>
8
2.5. The Company represents that it believes, in good faith, that the
Variable Contracts issued by the Company are currently treated as annuity
contracts or life insurance policies (which may include modified endowment
contracts), whichever is appropriate, under applicable provisions of the Code.
2.6. The Company represents and warrants that any of its Separate Accounts
that fund variable life insurance contracts and that are registered with the SEC
as investment companies, rely on the exemptions provided by Rule 6e-2 or Rule
6e-3(T), or any successor thereto, under the 1940 Act.
2.7. The Fund represents and warrants that it is duly organized as a
corporation under the laws of Maryland, and is in good standing under applicable
law.
2.8. The Fund represents and warrants that the shares of the Series are
duly authorized for issuance in accordance with applicable law and that the Fund
is registered as an open-end management investment company under the 1940 Act.
2.9. The Fund represents that it believes, in good faith, that the Series
currently comply with the diversification provisions of Section 817(h) of the
Code and the regulations issued thereunder relating to the diversification
requirements for variable life insurance policies and variable annuity
contracts, and that each Series has complied with such provisions since its
commencement of operations.
<PAGE>
9
2.10. The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
ARTICLE III. General Duties
3.1. The Fund and Adviser shall take all such actions as are necessary to
permit the sale of the shares of each Series to the Separate Accounts, including
maintaining its registration as an investment company under the 1940 Act, and
registering the shares of the Series sold to the Separate Accounts under the
1933 Act for so long as required by applicable law. The Fund and Adviser shall
amend its Registration Statement filed with the SEC under the 1933 Act and the
1940 Act from time to time as required in order to effect the continuous
offering of the shares of the Series. The Fund and Adviser shall register and
qualify the shares of the Fund for sale in accordance with the laws of the
various states to the extent deemed necessary by the Fund or the Distributor.
The Fund and Distributor shall take all steps necessary to sell shares of the
Fund in compliance with all applicable federal and state securities laws.
3.2. The Fund and Adviser shall make every effort to maintain qualification
of each Series as a Regulated Investment Company under Subchapter M of the Code
(or any successor or similar provision) and shall notify the Company immediately
upon
<PAGE>
10
having a reasonable basis for believing that a Series has ceased to so qualify
or that it might not so qualify in the future.
3.3. The Fund and Adviser shall make every effort to enable each Series to
comply with the requirements of Section 817, including the diversification
provisions of Section 817(h) of the Code and the regulations issued thereunder
relating to the diversification requirements for variable life insurance
policies and variable annuity contracts, and any prospective amendments or other
modifications to Section 817 or regulations thereunder, and shall notify the
Company immediately upon having a reasonable basis for believing that any Series
has ceased or might cease to comply.
3.4. Fund and Adviser agree that each Series of the Fund shall be managed
consistent with its investment objective or objectives, investment policies, and
investment restrictions as described in the Fund's prospectus and registration
statement, as amended or modified from time to time.
3.5. The Company shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Company, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the Variable
Contracts to the extent required under the
<PAGE>
11
1933 Act, and obtaining all necessary approvals to offer the Variable Contracts
from state insurance commissioners.
3.6. The Company shall make every reasonable effort to maintain the
treatment of the Variable Contracts issued by the Company as annuity contracts
or life insurance policies, whichever is appropriate, under applicable
provisions of the Code, and shall notify the Fund and the Distributor
immediately upon having a reasonable basis for believing that such Variable
Contracts have ceased to be so treated or that they might not be so treated in
the future.
3.7. The Company shall require that any persons who offer and sell the
Variable Contracts issued by the Company do so in accordance with applicable
provisions of the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair
Practice, and state law respecting the offering of variable life insurance
policies and variable annuity contracts.
3.8. The Distributor shall sell and distribute the shares of the Series of
the Fund in accordance with the applicable provisions of the 1933 Act, the 1934
Act, the 1940 Act, the NASD Rules of Fair Practice, and state law.
3.9. A majority of the Board of Directors/Trustees of the Fund shall
consist of persons who are not "interested persons" of the Fund ("disinterested
Directors/Trustees"),
<PAGE>
12
as defined by Section 2(a)(19) of the 1940 Act, except that if this provision of
this Section 3.9 is not met by reason of the death, disqualification, or bona
fide resignation of any Director/Trustee or Directors/Trustees, then the
operation of this provision shall be suspended (a) for a period of 45 days if
the vacancy or vacancies may be filled by the Fund's Board; (b) for a period of
60 days if a vote of shareholders is required to fill the vacancy or vacancies;
or (c) for such longer period as the SEC may prescribe by order upon
application.
3.10. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
3.11. The Company shall, at least annually, submit to the Board of
Directors/Trustees of the Fund such reports, materials or data as the
Directors/Trustees may reasonably request so that the Directors/Trustees may
carry out the obligations imposed upon them by the Shared Funding Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Board of Directors/Trustees.
<PAGE>
13
ARTICLE IV. Potential Conflicts
4.1. The Fund's Board of Directors/Trustees shall monitor the Fund for the
existence of any material irreconcilable conflict (1) between the interests of
owners of variable annuity contracts and variable life insurance policies, and
(2) between the interests of owners of Variable Contracts ("Variable Contract
Owners") issued by different Participating Insurance Companies that invest in
the Fund. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of the Fund or any
Series are being managed; or (e) a decision by a Participating Insurance Company
to disregard the voting instructions of Variable Contract Owners.
4.2. The Company agrees that it shall be responsible for reporting any
potential or existing conflicts to the Fund's Board of Directors/Trustees. The
Company will be responsible for assisting the Board of Directors/Trustees of the
Fund in carrying out its responsibilities under this Agreement, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Variable
<PAGE>
14
Contract Owner voting instructions are disregarded. The Company shall carry out
its responsibility under this Section 4.2 with a view only to the interests
of the Variable Contract Owners.
4.3. The Company agrees that in the event that it is determined by a
majority of the Board of Directors/Trustees of the Fund or a majority of the
Fund's disinterested Directors/Trustees that a material irreconcilable conflict
exists, the Company shall, in cooperation with other Participating Insurance
Companies whose Variable Contract owners are affected, at its own expense and to
the extent reasonably practicable (as determined by a majority of the
disinterested Directors/Trustees of the Board of the Fund), take whatever steps
are necessary to eliminate the irreconcilable material conflict, including: (1)
withdrawing the assets allocable to some or all of the Separate Accounts from
the Fund or any Series and reinvesting such assets in a different investment
medium, which may include another series of the Fund, or submitting the question
of whether such segregation should be implemented to a vote of all affected
Variable Contract Owners and, as appropriate, segregating the assets of any
appropriate group (i.e., Contract Owners of Variable Contracts issued by one or
more Participating Insurance Companies) that votes in favor of such segregation,
or offering to the affected Variable Contract Owners the option of making such a
change; and (2) establishing a new registered management investment company or
managed separate account. If a material irreconcilable conflict arises because
of the Company's decision to disregard Variable Contract Owners' voting
instructions and that decision represents a minority
<PAGE>
15
position or would preclude a majority vote, the Company shall be required, at
the Fund's election, to withdraw the Separate Accounts' investment in the Fund,
and no charge or penalty will be imposed as a result of such withdrawal. The
Fund shall neither be required to bear the costs of remedial actions taken to
remedy a material irreconcilable conflict nor shall it be requested to pay a
higher investment advisory fee for the sole purpose of covering such costs. In
addition, no Variable Contract Owner shall be required directly or indirectly to
bear the direct or indirect costs of remedial actions taken to remedy a material
irreconcilable conflict. A majority of the disinterested members of the Board of
Directors/Trustees of the Fund shall determine whether any proposed action
adequately remedies any material irreconcilable conflict, but in no event will
the Fund be required to establish a new funding medium for any Variable
Contract. A new funding medium for any Variable Contract need not be established
by the Company pursuant to this Section 4.3, if an offer to do so has been
declined by vote of a majority of Variable Contract Owners who would be
materially and adversely affected by the irreconcilable material conflict. All
reports received by the Fund's Board of Directors/Trustees of potential or
existing conflicts, and all Board action with regard to determining the
existence of a conflict, notifying Participating Insurance Companies and the
Fund's investment adviser of a conflict, and determining whether any proposed
action adequately remedies a conflict, shall be properly recorded in the minutes
of the Board of Directors/Trustees of the Fund or other appropriate records, and
such minutes or other records shall be made available to the SEC upon request.
The Company and the Fund
<PAGE>
16
shall carry out their responsibilities under this Section 4.3 with a view only
to the interests of the Variable Contract Owners.
4.4. The Board of Directors/Trustees of the Fund shall promptly notify the
Company in writing of its determination of the existence of an irreconcilable
material conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements, Voting
5.1. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by the
Company as required to be distributed to such Variable Contract Owners under
applicable federal or state law.
5.2. The Distributor shall provide the Company with as many copies of the
current prospectus of the Fund as the Company may reasonably request. If
requested by the Company in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type or
in camera-ready copy as defined by the Fund) and other assistance as is
reasonably necessary in order for the Company to print together in one document
the current prospectus for the Variable Contracts issued by the Company and the
current prospectus for the Fund. The Fund or Adviser shall
<PAGE>
17
bear the expense of printing copies of its current prospectus that will be
distributed to existing Variable Contract Owners, and the Company shall bear the
expense of printing copies of the Fund's prospectus that are used in connection
with offering the Variable Contracts issued by the Company.
5.3. The Fund and the Distributor shall provide (1) at the Fund's expense,
one copy of the Fund's current Statement of Additional Information ("SAI") to
the Company and to any owner of a Variable Contract issued by the Company who
requests such SAI, (2) at the Company's expense, such additional copies of the
Fund's current SAI as the Company shall reasonably request.
5.4. The Fund, at its expense, shall provide the Company with copies of its
proxy material, periodic reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Company.
The Fund, at the Company's expense, shall provide the Company with copies of its
periodic reports to shareholders and other communications to shareholders in
such quantity as the Company shall reasonably request for use in connection with
offering the Variable Contracts issued by the Company. If requested by the
Company in lieu thereof, the Fund shall provide such documentation (including a
final copy of the Fund's proxy materials, periodic reports to shareholders and
other communications to shareholders, as set in type or in camera-ready copy as
defined by the Fund) and other assistance as reasonably necessary
<PAGE>
18
in order for the Company to print such shareholder communications for
distribution to owners of Variable Contracts issued by the Company.
5.5. For so long as the SEC interprets the 1940 Act to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act ("Registered Separate
Accounts"), the Company shall vote shares of each Series of the Fund held in
Registered Separate Accounts or subaccounts thereof, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Company (or its designated agent) from owners of Variable Contracts funded by
such Registered Separate Accounts or subaccounts thereof having a voting
interest in the Series. The Company shall vote shares of a Series of the Fund
held in Registered Separate Accounts or subaccounts thereof that are
attributable to the Variable Contracts as to which no timely instructions are
received, as well as shares held in such Registered Separate Accounts or
subaccounts thereof that are not attributable to the Variable Contracts and
owned beneficially by the Company (resulting from charges against the Variable
Contracts or otherwise), in the same proportion as the votes cast by owners of
the Variable Contracts funded by that Separate Account or subaccount thereof
having a voting interest in the Series from whom instructions have been timely
received. The Company shall vote shares of each Series of the Fund held in its
general account or in any Separate Account that is not registered under the 1940
Act, if any, in its discretion or in the same proportion as the votes cast with
respect to shares of the Series held in all Registered Separate Accounts of the
<PAGE>
19
Company or subaccounts thereof, in the aggregate. In the event that the Shared
Funding Exemptive Order requires all Participating Insurance Companies to
calculate voting privileges in substantially the same manner, the Company agrees
to take steps so that each Registered Separate Account or subaccount thereof
investing in the Fund calculates voting privileges substantially in the manner
established by the Fund, provided that such manner is reasonable and
communicated to the Company by the Fund.
5.6. To the extent applicable, the Fund shall disclose in its prospectus,
in substance, that: (1) shares of the Series of the Fund are offered to
affiliated or unaffiliated insurance company separate accounts which fund both
annuity and life insurance contracts, (2) due to differences in tax treatment or
other considerations, the interests of various Variable Contract Owners
participating in the Fund or a Series might at some time be in irreconcilable
conflict, and (3) the Board of Directors/Trustees of the Fund will monitor for
any material irreconcilable conflicts and determine what action, if any, should
be taken.
ARTICLE VI. Sales Material and Information
6.1. The Company agrees that neither it nor any of its affiliates shall
give any information or make any representations or statements on behalf of the
Fund or concerning the Fund other than the information or representations
contained in the Registration Statement or prospectus for the Fund shares, as
such registration statement
<PAGE>
20
and prospectus may be amended or supplemented from time to time, or in reports
or proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund or its designee and/or by the Distributor or its
designee, except with the prior permission of the Fund or its designee and/or
the Distributor or its designee. The Parties agree that total return information
of the Fund and its Series derived from the prospectus or Registration Statement
of the Fund or from reports provided by the Fund or the Adviser, Distributor to
the Company may be used by the Company in connection with the sale of the
Variable Contracts without prior approval of the Fund or the Distributor, or
their designees, and the Company shall be responsible for using such information
in conformity with the information it is provided.
6.2. Neither the Fund nor the Distributor nor the designee of either shall
use any sales literature or other promotional material in which the Company or
its Separate Accounts are named without the prior approval of the Company or its
designee.
6.3. The Fund and the Distributor agree that each and the affiliates of
each shall not give any information or make any representations on behalf of the
Company or concerning the Company, the Separate Accounts, or the Variable
Contracts issued by the Company, other than the information or representations
contained in a registration statement or prospectus for such Variable Contracts,
as such registration statement and prospectus may be amended or supplemented
from time to time, or in reports for the Separate Accounts or prepared for
distribution to owners of such Variable Contracts, or
<PAGE>
21
in sales literature or other promotional material approved by the Company or its
designee, except with the prior permission of the Company.
6.4. The Fund will provide to the Company at least one complete copy of all
prospectuses, Statements of Additional Information, reports, proxy statements
and other voting solicitation materials, and all amendments and supplements to
any of the above, that relate to the Fund or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
6.5. The Company will provide to the Fund at least one complete copy of all
prospectuses (which shall include an offering memorandum if the Variable
Contracts issued by the Company or interests therein are not registered under
the 1933 Act), Statements of Additional Information, reports, solicitations for
voting instructions, and all amendments or supplements to any of the above, that
relate to the Variable Contracts issued by the Company or the Separate Accounts
promptly after the filing of such document with the SEC or other regulatory
authority.
6.6. For purposes of this Article VI, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, computerized media, or other public
media), sales literature (i.e., any written
<PAGE>
22
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees.
ARTICLE VII. Administration of Accounts
7.1 Services to Owners of Variable Contracts shall be the responsibility of
the Company and shall not be the responsibility of the Fund or the Distributor.
These services include, but are not limited to:
(a) providing information periodically to Contract Owners showing their
interests in the Separate Accounts or subaccounts thereof that invest
in the Fund or in any Series thereof;
(b) addressing inquiries from Contract Owners relating to investing,
exchanging or transferring, or redeeming interests under the Variable
Contracts and the Separate Accounts or subaccounts or any Series
thereof funding such Variable Contracts, which inquiries may relate to
the Fund or a Series thereof;
(c) providing explanations to Owners regarding Fund investment objectives
and policies and other information about the Fund and its Series,
including the performance of the Series;
(d) forwarding shareholder communications from the Fund, including but not
limited to shareholder reports containing annual and semi-annual
financial statements of the Fund to Contract Owners;
(e) delivering the Fund prospectus and supplements thereto to Owners
whenever necessary under the Securities Act of 1933;
<PAGE>
23
(f) delivering any notices of shareholder meetings and proxy statements
accompanying such notices in connection with general and special
meetings of shareholders of the Fund under which Contract Owners may
have voting rights, and helping tabulate the voting of Owners
tendering voting instructions to the Company.
7.2 The Fund and the Distributor recognize the Company as the sole
shareholder of Fund shares issued under this Agreement and further recognize
that Distributor, Adviser, and/or the Fund will derive a substantial savings in
administrative expense because the Company will provide the services described
above, thus allowing the Fund significant reductions in postage expense and
shareholder communications and recordkeeping, by virtue of having a sole
shareholder rather than multiple shareholders. In consideration of the
administrative savings resulting from such arrangement, the Company shall be
paid an amount equal to 0 basis points (0.00%) per annum of the average
aggregate amount invested by the Company under this Agreement until $5 million
has been invested, and then an amount equal to 7.5 basis points (0.075%) per
annum of the average aggregate amount invested by the Company under this
Agreement until $10 million has been invested, and then an amount equal to 10
basis points (0.10%) per annum of the average aggregate amount invested by the
Company under this Agreement.
7.3 For purposes of computing the payment to the Company contemplated by
this Section VII, the average aggregate amount invested by Company over a one
month period shall be computed by totaling the Company's aggregate investment
(share net asset value multiplied by total number of shares held by the Company)
on each business
<PAGE>
24
day during the month and dividing by the total number of business days during
such month.
7.4 The payment contemplated by this Section VII shall be calculated by the
Fund, or the Distributor at the end of each calendar quarter and will be paid by
the Distributor to the Company within ten (10) business days thereafter. Payment
will be accompanied by a statement showing the calculation of the monthly amount
payable by the Distributor and such other supporting data as may be reasonably
requested by the Company.
ARTICLE VIII. Indemnification
8. 1. Indemnification By the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund, each of
its Directors/Trustees and officers, the Adviser, and the Distributor and each
of the Directors/Trustees of the Adviser and the Distributor (collectively, the
"Indemnified Parties" for purposes of this Section 8. 1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation expenses (including legal and
other expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or litigation expenses:
<PAGE>
25
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus (which shall include an offering memorandum) for the
Variable Contracts issued by the Company or sales literature for such
Variable Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or on behalf
of the Fund: (1) for use in the registration statement or prospectus
for the Variable Contracts issued by the Company or in sales
literature (or any amendment or supplement to any of the foregoing) or
otherwise, (2) was contained in sales literature or other promotional
material that has been approved by the Fund or its designee or by the
Distributor or its designee for use in connection with the sale of
such Variable Contracts or Fund shares, or (3) or otherwise in
connection with the sale of the Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or representation (other
than statements or representations (1) contained in the registration
statement, prospectus or sales literature of the Fund not supplied by
the Company or persons under its control, (2) contained in the
registration statement, prospectus, SAI, or sales literature for the
Variable Contracts made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Fund or
the Distributor, or (3) in sales literature or other promotional
material that has been approved by the Fund or its designee or the
Distributor or its designee) or wrongful conduct of the Company or
persons under the control thereof with respect to the sale or
distribution of the Variable Contracts issued by the Company or the
Fund shares; or
(iii arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise out of or result from the material breach of any representation
and/or warranty made by the Company in this Agreement or
<PAGE>
26
arise out of or result from any other material breach of this Agree-
ment by the Company;
except to the extent provided in Sections 8. 1 (b) and 8. 1 (c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations or
duties under this Agreement or to the Fund.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Company in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnified Party named in the action. After notice
from the Company to such party of the Company's election to assume the defense
thereof, the
<PAGE>
27
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.1(d). The Indemnified Parties shall promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares thereunder or the Variable Contracts
issued by the Company or the operation of the Fund.
8.2. Indemnification By the Adviser/Distributor
8.2(a). The Adviser and Distributor jointly and severally agree to
indemnify and hold harmless the Company and each of its directors and officers
and the Separate Accounts (collectively, the "Indemnified Parties" for purposes
of this Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Distributor) or litigation expenses (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
litigation expenses:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
<PAGE>
28
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor,
Adviser or the Fund or the designee of either by or on behalf of the
Company: (1) for use in the registration statement or prospectus for
the Fund or in sales literature (or any amendment or supplement to any
of the foregoing) or otherwise, (2) was contained in sales literature
or other promotional material that has been approved by the Company or
its designee for use in connection with the sale of the Variable
Contracts or Fund shares, or (3) or otherwise for use in connection
with the sale of the Variable Contracts issued by the Company or Fund
shares; or
(ii) arise out of or as a result of any statement or representation (other
than statements or representations (1) contained in the registration
statement, prospectus or sales literature for the Variable Contracts
not supplied by the Distributor, Adviser, or persons under the control
thereof, (2) contained in the registration statement, prospectus, SAI,
or sales literature for the Fund made in reliance upon and in
conformity with information furnished to the Fund by or on behalf of
the Company, or (3) in sales literature or other promotional material
that has been approved by the Company or its designee) or wrongful
conduct of the Fund, Adviser or Distributor or persons under their
control with respect to the sale or distribution of the Variable
Contracts or the Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or
sales literature covering the Variable Contracts issued by the
Company, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by the Distributor,
Adviser, or by or on behalf of the Fund; or
(iv) arise out of or result from the material breach of any representation
and/or warranty made by the Distributor, Adviser, or the Fund in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Distributor, Adviser, or the Fund, including but
not limited to, compliance with the diversification requirements of
Section 817(h) of the Code and qualification of each Series of the
Fund as a Regulated Investment Company under Subchapter M of the Code;
<PAGE>
29
except to the extent provided in Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations and
duties under this Agreement or to the Company or the Separate Accounts.
8.2(c). The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Distributor in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Party shall have received notice of such service on any designated agent),
but failure to notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
Indemnification Provision. In case any such action is brought against an
Indemnified Party, the Distributor will be entitled to participate, at its own
expense, in the defense thereof The Distributor also shall be entitled to assume
the defense thereof, with counsel satisfactory to the Indemnified Party named in
the action. After notice from the Distributor to such party of the Distributor's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by
<PAGE>
30
it, and the Distributor will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.2(d). The Company shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Fund shares
hereunder or the Variable Contracts issued by the Company or the operation of
the Separate Accounts provided that such litigation or proceedings relate to or
affect the interests of the Fund or the Distributor.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Indiana.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
<PAGE>
31
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party upon 90 days advance written notice to the
other parties, unless a shorter time is agreed to by the parties to
this Agreement; or
(b) at the option of the Company if shares of the Series are not
reasonably available to meet the requirements of the Variable
Contracts issued by the Company, as determined by the Company, and
upon written notice by the Company to the other parties to this
Agreement; or,
(c) at the option of the Fund, Adviser, or the Distributor upon
institution of formal proceedings against the Company by the NASD, the
SEC, or any state securities or insurance department or any other
regulatory body if the Fund, Adviser, or the Distributor shall
determine, in their sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its business,
operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(d) at the option of the Company upon institution of formal proceedings
against the Fund, Adviser, or the Distributor by the NASD, the SEC, or
any state securities or insurance department or any other regulatory
body if the Company shall determine, in its sole judgment exercised in
good faith, that the Fund, Adviser, or the Distributor has suffered a
material adverse change in its business, operations, financial
<PAGE>
32
condition, or prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(e) upon requisite vote of the Variable Contract Owners having an interest
in the Separate Accounts (or any subaccounts thereof) to substitute
the shares of another investment company or series thereof for the
corresponding shares of the Fund or a Series in accordance with the
terms of the Variable Contracts for which those shares had been
selected to serve as the underlying investment media; or
(f) in the event any of the shares of a Series are not registered, issued
or sold in accordance with applicable state and/or federal law, or
such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Company;
or
(g) by any party to the Agreement upon a determination by a majority of
the Directors/Trustees of the Fund, or a majority of its disinterested
Directors/Trustees, that an irreconcilable material conflict exists;
or
(h) at the option of the Company if the Fund or a Series fails to meet the
diversification requirements specified in Section 3.2 or 3.3 hereof;
or
(i) at the option of the Fund or the Distributor if the Variable Contracts
issued by the Company cease to qualify as annuity contracts or life
insurance contracts, as applicable, under the Code or if the Variable
Contracts are not registered, issued or sold in accordance with
applicable state and/or federal law; or
(j) at the option of the Company upon any substitution of the shares of
another investment company or series thereof for shares of the Fund or
a Series of the
<PAGE>
33
Fund in accordance with the terms of the Contracts, provided that the
Company has given at least 30 days prior written notice to the Fund or
Distributor of the date of the substitution.
(k) at the option of the Company upon a material breach of this Agreement
or of any representation or warranty herein by the Fund, Adviser, or
the Distributor, or at the option of the Fund. Adviser, or the
Distributor upon a material breach of this Agreement or of any
representation or warranty herein by the Company.
10.2.Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 10.1(c) and (d) hereof. The Company shall
give 30 days prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
10.1(e) hereof.
10.3. Under the terms of the Variable Contracts, the Company reserves the
right, subject to compliance with the law as then in effect, to make
substitutions for the securities that are held by a Separate Account of Company
under certain circumstances. The parties acknowledge that Company has the right
to substitute other securities for the shares of the Fund or a Series thereof
already purchased or to be purchased in the future if the shares of the Fund or
any or all of the Series of the Fund should no longer be available for
investment, or if, in the judgment of Company management, further investment in
shares of the Fund or any or all of the Series thereof should become
<PAGE>
34
inappropriate in view of the purposes of the Contracts. Company will provide 30
days written notice to the Fund or to the Distributor prior to effecting any
such substitution.
10.4. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
Calvert Group
4550 Montgomery Ave., Suite 100ON
Bethesda, MD 20814
Attn: Legal Department
If to the Adviser:
Calvert Group
4550 Montgomery Ave., Suite IOOON
Bethesda, MD 20814
Attn: Legal Department
<PAGE>
35
If to the Distributor:
Calvert Group
4550 Montgomery Ave., Suite 100ON
Bethesda, MD 20814
Attn: Legal Department
If to the Company:
American United Life Insurance Company
One American Square
P.O. Box 368
Indianapolis, Indiana 46206-0368
Attn: Richard A. Wacker Associate General Counsel
ARTICLE XII. Miscellaneous
12.1. The Fund and the Company agree that if and to the extent Rule 6e-2 or
6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in final form,
to the extent applicable, the Fund and the Company shall each take such steps as
may be necessary to comply with such Rule as amended or adopted in final form.
12.2. It is understood that the name "American United Life Insurance
Company," "AUL" or any derivative thereof or logo associated with that name is
the valuable property of the Distributor and its affiliates, and that the
Company has the right to use such name (or derivative or logo) only so long as
this Agreement is in effect. Upon
<PAGE>
36
termination of this Agreement the Company shall forthwith cease to use such name
(or derivative or logo).
12.3. It is understood that the name "Calvert" or any derivative thereof or
logo associated with that name is the valuable property of the Distributor and
its affiliates, and that the Company has the right to use such name (or
derivative or logo) only so long as this Agreement is in effect. Upon
termination of this Agreement the Company shall forthwith cease to use such name
(or derivative or logo).
12.4. The parties agree that the names, addresses, and other information
relating to the owners of the Variable Contracts or prospects for the sale of
the Variable Contracts are the exclusive property of Company and may not be used
by the Fund, Adviser, or Distributor without the written consent of the Company.
12.5. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.6. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
<PAGE>
37
12.7. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.8. This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement. For
purposes of this provision, assignment shall be as defined in the Investment
Company Act of 1940 and the rules thereunder.
<PAGE>
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Acacia Capital Corporation
ATTEST:___________________________ By: _________________________
Name: Name: William M. Tartikoff
Title: Title: General Counsel
Calvert Asset Management
Corporation
ATTEST: __________________________ By: _________________________
Name: Name: William M. Tartikoff
Title: Title: General Counsel
Calvert Distributors Inc.
ATTEST:___________________________ By:__________________________
Name: Name: William M. Tartikoff
Title: Title: General Counsel
American United Life Insurance
Company(R)
ATTEST:___________________________ By:__________________________
Name: Name: Brian Sweeney
Title: Title: V.P. Pension Marketing
<PAGE>
39
EXHIBIT A
The following series of Acacia Capital Corporation are "Series" for purposes of
Section
1.1 of the Agreement:
Calvert Capital Accumulation Portfolio
- --------------------------------------------------------------------------------
EXHIBIT 8.4
FORM OF PARTICIPATION AGREEMENT WITH FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND,
FIDELITY DISTRIBUTORS CORPORATION
and
AMERICAN UNITED LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1st day of May, 1993 by and
among AMERICAN UNITED LIFE INSURANCE COMPANY, (hereinafter the "Company"), an
Indiana corporation, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (each such account hereinafter referred to as the "Account"), and
the VARIABLE INSURANCE PRODUCTS FUND, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (hereinafter the "Fund") and
FIDELITY DISTRIBUTORS CORPORATION (hereinafter the "Underwriter"), a
Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and the
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated October 15, 1985 (File No. 812-6102), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and
<PAGE>
2
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable stare securities law; and, to the extent required by
law,
WHEREAS, the Company has, to the extent required by law, registered or will
register interests in each Account funding certain variable annuity contracts
under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established under the provisions of Indian law, on the date shown
for such Account on Schedule A hereto, to set aside and invest assets
attributable to attributable to the aforesaid variable annuity contracts; and
WHEREAS, the Company has registered or will register, as required by law,
certain of the Accounts as unit investment trusts under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (hereinafter the " 1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid variable annuity contracts and
the Underwriter is authorized to sell such shares to unit investment trusts such
as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to sell to the Company those shares of the Fund
which each Account orders, executing such orders on a daily basis at the net
asset value next computed after receipt by the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section 1.1, the Company shall
be the designee of the Fund for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Fund; provided that the
Fund receives notice of such order by 9.00 am. Boston time on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.
<PAGE>
3
1.2. The Fund agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by the Company and its Accounts on
those days on which the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use reasonable efforts
to calculate such net asset value on each day which the New York Stock Exchange
is open for trading. Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any Portfolio if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws necessary in
the best interests of the shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, II, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of the Fund held by the Company, executing such requests on
a daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. For purposes of this Section 1.5,
the Company shall be the designee of the Fund for receipt of requests for
redemption from each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of such request for
redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of each Portfolio
offered by the then current prospectus of the Fund in accordance with the
provisions of such prospectus. The Company agrees that all net amounts available
under the variable annuity contracts with the form number(s) which are listed on
Schedule A attached hereto and incorporated herein by this reference, as such
Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available or contemplated as
a funding vehicle for the Contracts prior to the date of this Agreement and the
Company so informs the Fund and Underwriter prior to their signing this
Agreement (a list of such funds appearing on Schedule C to this Agreement); or
(d) the Fund or Underwriter consents to the use of such other investment
company.
<PAGE>
4
1.7. The Company shall pay for Fund shares on the next Business Day after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of the federal funds
so wired, such funds shall cease to be the responsibility of the Company and
shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Fund's shares. The Company hereby elects to receive
all such income dividends and capital gain distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. The Company reserves
the right to revoke this election and to receive all such income dividends and
capital gain distributions in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that interests in the Separate
Account funding the Contracts are or will be registered under the 1933 Act if
required by law; that the Contracts will be issued and sold in compliance in all
material respects with all applicable Federal and State laws and that the sale
of the Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that it is
an insurance company duly organized and in good standing under applicable law
and that it has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under Section 27-1-5-1 of
the Indiana Insurance Code and has registered or, prior to any issuance or sale
of the Contracts, will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts, if required by law.
2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Indiana and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as
<PAGE>
5
required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.4. The Company represents that the Contracts are currently treated as
annuity contracts under applicable provisions of the Code and that it will make
every effort to maintain such treatment and that it will notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.5. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. The Fund has adopted a "no
fee" or "defensive" Rule 12b-1 Plan under which it makes no payments for
distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a board of
trustees, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Indiana and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the laws of the State of Indiana to the extent required to perform this
Agreement.
2.7. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Indiana and all applicable state and
federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does and will
comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is and shall
remain duly registered as an investment adviser in all material respects under
all applicable federal and
<PAGE>
6
stare securities laws and that the Adviser shad perform its obligations for the
Fund in compliance in all material respects with the laws of the State of
Indiana and any applicable state and federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, trustees, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund, in an amount not less than
the minimum coverage as required currently by Rule 17g-1 of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
includes coverage for larceny and embezzlement is issued by a reputable bonding
company. The Company agrees to make all reasonable efforts to see that this bond
or another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company (at the Company's expense)
with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus as set
in type at the Fund's expense) and other assistance as is reasonably necessary
in order for the Company once each year (or more frequently if the prospectus
for the Fund is amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at the
Company's expense).
3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners or Participants under Contracts.
3.4. If and to the extent required by law the Company shall:
<PAGE>
7
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received
from contract owners; and
(iii) vote Fund shares for which no instructions have been received in
the same proportion as Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund or its investment adviser or the Underwriter is named, at least
ten Business Days prior to its use. No such material shall be used if the Fund
or its designee reasonably objects to such use within ten Business Days after
receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee or
by the Underwriter, except with the permission of the Fund or the Underwriter or
the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company and/or its separate
account(s), is named at least ten Business Days
<PAGE>
8
prior to its use. No such material shall be used if the Company or its designee
reasonably objects to such use within ten Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports' proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Underwriter shall pay no fee or other compensation to the
Company under this agreement, except that if the Fund or any Portfolio adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then the Underwriter may make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in writing and such
payments will be made out of existing fees otherwise payable
<PAGE>
9
to the Underwriter, past profits of the Underwriter or other resources available
to the Underwriter. No such payments shall be made directly by the Fund.
Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent necessary in accordance with applicable state laws
prior to their sale. The Fund shall bear the expenses for the cost of
registration and qualification of the Fund's shares, preparation and filing of
the Fund's prospectus and registration statement, proxy materials and reports,
setting the prospectus in type, setting in type and printing the proxy materials
and reports to shareholders (including the costs of printing a prospectus that
constitutes an annual report), the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer
of the Fund's shares.
5.3. The Company shall bear the expenses of printing and distributing the
Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify the
Fund so as to achieve compliance with the grace period afforded by Regulation
817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall
<PAGE>
10
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
<PAGE>
11
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination, provided, however, that such withdrawal and
termination shall be Limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-9 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1 (a). The Company agrees to indemnify and hold harmless the Fund and
each trustee of the Board and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.l) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses). to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Registration Statement or prospectus for the Contracts or
contained in the Contracts or sales Literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material
<PAGE>
12
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement
to indemnify shall not apply as to any indemnified Parry such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information fur-
nished to the Company by or on behalf of the Fund for use in the
Registration Statement or prospectus for the Contracts or in the
Contracts or sales Literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts
or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales Literature of the
Fund not supplied by the Company, or persons under its control)
or wrongful conduct of the Company or persons under its control,
with respect to the sale or distribution of the Contracts or Fund
Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement,
prospectus, or sales Literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to mace the statements therein not misleading if such a
statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as Limited by and in
accordance with the provisions of Sections 8.1(b) and 8.1(c)
hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to
<PAGE>
13
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Company shall be entitled
to participate, at its own expense, in the defense of such action. The Company
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Company to such party of
the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be Liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts or the operations of
the Fund and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement,
<PAGE>
14
prospectus sides literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of
the Fund, Adviser or Underwriter or persons under their control,
with respect to the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement,
prospectus, or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter or the
Fund in this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as limited
by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses
<PAGE>
15
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By the Fund
8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the
gross negligence, bad faith or willful misconduct of the Board or any member
thereof, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification
requirements specified in Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
<PAGE>
16
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company, or
<PAGE>
17
(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund
may fail to so qualify; or
(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company and/or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter
has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity;
or
(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however any termination under this Section 10.1 (h)
shall be effective forty five (45) days after the notice
specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) pursuant
to the terms of the Contracts. Upon request, the
<PAGE>
18
Company will promptly furnish to the Fund and the Underwriter the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Fund and the Underwriter) to the effect that any redemption pursuant to clause
(ii) above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
90 days notice of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
American United Life Insurance Company
One American Square, P.O. Box 368
Indianapolis, IN 46206-0368
Attention: Dusty Akins
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
<PAGE>
19
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at, law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Underwriter, if such assignee is duly licensed and registered
to perform the obligations of the Underwriter under this Agreement.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement prepared under statutory
accounting principles) and annual report (prepared under
accounting practices prescribed by the Insurance Department of
the State of Indiana), as soon as practical and in any event
within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory), as soon as
practical and in any event within 45 days after the end of each
quarterly period:
<PAGE>
20
(c) any financial statement, proxy statement, notice or report of the
Company sent to policyholders, as soon as practical after the
delivery thereof to policyholders;
(d) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulator, as soon as practical
after the filing, thereof;
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or special
audit made by them of the books of the Company, as soon as
practical after the receipt thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
AMERICAN UNITED LIFE INSURANCE COMPANY
By its authorized officer,
By:_______________________
Title: V.P. Pension Contracts and Compliance
Date:_____________________
VARIABLE INSURANCE PRODUCTS FUND
By its authorized officer,
By:_______________________
Title:____________________
Date:_____________________
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By:_______________________
Title:____________________
Date:_____________________
<PAGE>
21
Schedule A
----------
Separate Accounts and Associated Contracts
------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Name of Separate Account
and Date Established by the Contracts Funded by the
Executive Committee of AUL Separate Account
- -----------------------------------------------------------------------------------------
1.AUL American Unit Trust DCP Multiple-Fund Group Variable Annuity (P-12518)
Separate Account TDA Multiple-Fund Group Variable Annuity (P-12511)
(Established 8/17/89) TDA Multiple-Fund Group Variable Annuity (P-12511,WA)
TDA Multiple-Fund Group Variable Annuity (P-12833)
TDA Multiple-Fund Group Variable Annuity (P-12833SPL)
IRA Multiple-Fund Group Variable Annuity(P-12366)
IRA Multiple-Fund Group Variable Annuity (P-12867)
Employer-Sponsored TDA Multiple-Fund Group Variable
Annuity (P-12621)
Employer-Sponsored TDA Multiple-Fund Group Variable
Annuity [P-12621(BR)]
Employer-Sponsored TDA and Qualified Plan Multiple-
Fund Group Variable Annuity [P-13098(BR)]
2. Group Retirement Annuity Separate Accounts Group Retirement Annuity
Separate Account I (GRA VIII)[P-12947(BR)]
(Established 12-17-92)
3.Group Retirement Annuity Separate Accounts Group Retirement Annuity
Separate Account II (GRA IV) (P-11710)
(established 4/15/93) Separate Accounts Group Retirement Annuity
(GRA V) (P-11736)
Separate Accounts Group Retirement Annuity
(GRA VI) (P-12390)
Separate Accounts Group Retirement Annuity
(GRA VI & IX) ((BR) (P-12390(BR))
</TABLE>
<PAGE>
22
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund
for the shareholder meeting to facilitate the establishment of
tabulation procedures. At this time the Underwriter will inform
the Company of the Record, Mailing and Meeting dates. This will
be done verbally approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform a "tape
run", or other activity, which will generate the names, addresses
and number of units which are attributed to each
Contractowner/policyholder (the "Customer") as of the Record
Date. Allowance should be made for account adjustments made after
this date that could affect the status of the Customers' accounts
as of the Record Date.
Note: The number of proxy statements is determined by the
activities described in Step #2. The Company will use its best
efforts to call in the number of Customers to Fidelity, as soon
as possible, but no later than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the
Company either before or together with the Customers' receipt of
a proxy statement. Underwriter will provide at least one copy of
the last Annual Report to the Company.
4. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at
its expense, shall produce and personalize the Voting Instruction
Cards. The Legal Department of the Underwriter or its affiliate
("Fidelity legal") must approve the Card before it is printed.
Allow approximately 2-4 business days for printing information on
the Cards. Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed
by the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
<PAGE>
23
5. During this time, Fidelity Legal will develop, produce, and the
Fund will pay for the Notice of Proxy and the Proxy Statement
(one document). Printed and folded notices and statements will be
sent to Company for insertion into envelopes (envelopes and
return envelopes are provided and paid for by the Insurance
Company). Contents of envelope sent to Customers by Company will
include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to
the company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to vote
as quickly as possible and that their vote is important. One
copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed
and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company
approximately 3-5 business days before mail date. Individual in
charge at Company reviews and approves the contents of the
mailing package to ensure correctness and completeness. Copy of
this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to
the Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually
takes place in another department or another vendor depending on
process used. An often used procedure is to sort Cards on arrival
by proposal into vote categories of all yes, no, or mixed
replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal
procedure and has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account
registration which was printed on the Card.
Note: For Example, If the account registration is under "Bertram
C. Jones, Trustee," then that is the exact legal name to be
printed on the Card and is the signature needed on the Card.
<PAGE>
24
10. If Cards are mutilated, or for any reason are illegible or are
not signed properly, they are sent back to Customer with an
explanatory letter, a new Card and return envelope. The mutilated
or illegible Card is disregarded and considered to be not
received for purposes of vote tabulation. Any Cards that have
"kicked out" (e.g. mutilated, illegible) of the procedure are
"hand verified," i.e., examined as to why they did not complete
the system. Any questions on those Cards are usually remedied
individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into
categories depending upon their vote; an estimate of how the vote
is progressing may then be calculated. If the initial estimates
and the actual vote do not coincide, then an internal audit of
that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Fund receives
the tabulations stated in terms of a percentage and the number of
shares.) Fidelity Legal must review and approve tabulation
format.
13. Final tabulation in shares is verbally given by the Company to
Fidelity Legal on the morning of the meeting not later than 10:00
a.m. Boston time. Fidelity Legal may request an earlier deadline
if required to calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will
be required from the Company as well as an original copy of the
final vote. Fidelity Legal will provide a standard form for each
Certification.
15. The Company will be required to box and archive the Cards
received from the Customers. In the event that any vote is
challenged or if otherwise necessary for legal, regulatory, or
accounting purposes, Fidelity Legal will be permitted reasonable
access to such Cards.
l6. All approvals and "signing-off" may be done orally, but must
always be followed up in writing.
<PAGE>
25
SCHEDULE C
Other investment companies currently available or contemplated under
variable annuities issued by the Company:
All Portfolios currently offered by (a) Scudder Variable Life Investment
Fund, (b) Twentieth Century Investors, Inc., (c) Dreyfus Investment Fund, (d)
Dreyfus Life and Annuity Index Fund, Inc., (e) Dreyfus Socially Responsible
Growth Fund, Inc.
AMENDMENT NO. 1
Amendment to the Participation Agreement among Variable Insurance Products Fund
(the Fund), Fidelity Distributors Corporation (the Underwriter) and American
United Life Insurance Company (the Company) dated May l, 1993 (the Agreement).
WHEREAS each of the parties desire to expand the Accounts of the Company which
invest in shares of the Fund. The Fund, Underwriter and the Company hereby agree
to amend Schedule A of the Agreement by inserting the following in its entirety:
Name of Separate Account and
Date Established by Contracts Funded Executive
Committee of Board of Directors By Separate Account
All of the Separate Accounts listed in Schedule A of the original Participation
Agreement between the parties hereto as well as the ALL American Individual
Separate Account, which was established by AUL on April 14, 1994 for the purpose
of providing a funding medium for the Individual Flexible Premium Deferred
Variable Annuity (Contract LA-28) and the Individual One Year Flexible Premium
Deferred Variable Annuity (Contract LA-27).
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
executed in its name and on its behalf by its duly authorized representative as
of 8/31,1994.
AMERICAN UNITED LIFE INSURANCE
COMPANY
By its authorized officer,
By: _________________________________________
Title: V.P. Pension Contracts and Compliance
Date: ________________________________
VARIABLE INSURANCE PRODUCTS FUND
By its authorized officer,
By: _________________________________________
Title: Senior Vice President
Date: ________________________________
FIDELITY DISTRIBUTORS CORPORATION
By: _________________________________________
Title: President
Date:_________________________________
- --------------------------------------------------------------------------------
EXHIBIT 8.5
FORM OF PARTICIPATION AGREEMENT WITH
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDII
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND II,
FIDELITY DISTRIBUTORS CORPORATION
and
AMERICAN UNITED LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1st day of May, 1993 by and
among AMERICAN UNITED LIFE INSURANCE COMPANY, (hereinafter the "Company"), an
Indiana corporation, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (each such account hereinafter referred to as the "Account"), and
the VARIABLE INSURANCE PRODUCTS FUND, an unincorporated business trust organized
under the laws of the Commonwealth of Massachusetts (hereinafter the "Fund") and
FIDELITY DISTRIBUTORS CORPORATION (hereinafter the "Underwriter"), a
Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and the
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated September 17, 1986 (File No. 812-6422), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and
<PAGE>
2
WHEREAS, the Fund is registered as an open-ended management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and
WHEREAS, the Company has, to the extent required by law, registered or will
register interests in each Account funding certain variable annuity contracts
under the 1933 Act if required by law; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established under the provisions of Indiana law, on the date
shown for such Account on Schedule A hereto, to set aside and invest assets
attributable to attributable to the aforesaid variable annuity contracts; and
WHEREAS, the Company has registered or will register, as required by law,
certain of the Accounts as unit investment trusts under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (hereinafter the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid variable annuity contracts and
the Underwriter is authorized to sell such shares to unit investment trusts such
as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to sell to the Company those shares of the Fund
which each Account orders, executing such orders on a daily basis at the net
asset value next computed after receipt of the Fund or its designee of the order
for the shares of the Fund. For purposes of this Section 1.1, the Company shall
be the designee of the Fund for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Fund; provided that the
Fund receives notice of such order by 9:00 a.m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
<PAGE>
3
1.2. The Fund agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by the Company and its Accounts on
those days on which the Fund calculates its net asset value pursuant to rules of
the Securities and Exchange Commission and the Fund shall use reasonable efforts
to calculate such net asset value on each day which the New York Stock Exchange
is open for trading. Notwithstanding the foregoing, the Board of Trustees of the
Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any
person, or suspend or terminate the offering of shares of any Portfolio if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any full
or fractional shares of the Fund held by the Company, executing such requests on
a daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption. For purposes of this Section 1.5,
the Company shall be the designee of the Fund for receipt of requests for
redemption from each Account and receipt by such designee shall constitute
receipt by the Fund; provided that the Fund receives notice of such request for
redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of each Portfolio
offered by the then current prospectus of the Fund in accordance with the
provisions of such prospectus. The Company agrees that all net amounts available
under the variable annuity contracts with the form number(s) which are listed on
Schedule A attached hereto and incorporated herein by this reference, as such
Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available or contemplated as
a funding vehicle for the Contracts prior to the date of this Agreement and the
Company so informs the Fund and Underwriter prior to their signing this
Agreement (a list of such funds appearing on Schedule C to this Agreement); or
(d) the Fund or Underwriter consents to the use of such other investment
company.
<PAGE>
4
1.7. The Company shall pay for Fund shares on the next Business Day after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of the federal funds
so wired, such funds shall cease to be the responsibility of the Company and
shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Fund's shares. The Company hereby elects to receive
all such income dividends and capital gain distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. The Company reserves
the right to revoke this election and to receive all such income dividends and
capital main distributions in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 7 p.m. Boston time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that interests in the Separate
Account funding the Contracts are or will be registered under the 1933 Act if
required by law; that the Contracts will be issued and sold in compliance in all
material respects with all applicable Federal and State laws and that the sale
of the Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that it is
an insurance company duly organized and in good standing under applicable law
and that it has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under Section 27-1-5-1 of
the Indiana Insurance Code and has registered or, prior to any issuance or sale
of the Contracts, will register each Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts, if required by law.
2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Indiana and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as
<PAGE>
5
required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.4. The Company represents that the Contracts are currently treated as
annuity contracts under applicable provisions of the Code and that it will make
every effort to maintain such treatment and that it will notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing that the
Contracts have ceased to be so treated or that they might not be so treated in
the future.
2.5. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. The Fund has adopted a "no
fee" or "defensive" Rule 12b-1 Plan under which it makes no payments for
distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a board of
trustees, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Indiana and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the laws of the State of Indiana to the extent required to perform this
Agreement.
2.7. The Underwriter represents and warrants that it is a member in good
standing, of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Indiana and all applicable state and
federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and validly existing
under the laws of the Commonwealth of Massachusetts and that it does and will
comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is and shall
remain duly registered as an investment adviser in all material respects under
all applicable federal and
<PAGE>
6
state securities laws and that the Advise shall perform its obligations for the
Fund in compliance in all material respects with the laws of the State of
Indiana and any applicable state or federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, trustees, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and Shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage for the benefit of the Fund, in an amount not less than
the minimum coverage as required currently by Rule 17g-1 of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
includes coverage for larceny and embezzlement is issued by a reputable bonding
company. The Company agrees to make all reasonable efforts to see that this bond
or another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company (at the Company's expense)
with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus as set
in type at the Fund's expense) and other assistance as is reasonably necessary
in order for the Company once each year (or more frequently if the prospectus
for the Fund is amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at the
Company's expense).
3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners or Participants under Contracts.
3.4. If and to the extent required by law the Company shall:
<PAGE>
7
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the Commission may promulgate with respect thereto.
ARTICLE IV. Sale Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund or its investment adviser or the Underwriter is named, at least
ten Business Days prior to its use. No such material shall be used if the Fund
or its designee reasonably objects to such use within ten Business Days after
receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee or
by the Underwriter, except with the permission of the Fund or the Underwriter or
the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company and/or its separate
account(s), is named at least ten Business Days
<PAGE>
8
prior to its use. No such material shall be used if the Company or its designee
reasonably objects to such use within ten Business Days after receipt of such
material.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales Literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund and Underwriter shall pay no fee or other compensation to the
Company under this agreement, except that if the Fund or any Portfolio adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then the Underwriter may make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in writing and such
payments will be made out of existing fees otherwise payable
<PAGE>
9
to the Underwriter, past profits of the Underwriter or other resource available
to the Underwriter. No such payments shall be made directly by the Fund.
Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent necessary in accordance with applicable state laws
prior to their sale. The Fund shall bear the expenses for the cost of
registration and qualification of the Fund's shares, preparation and filing of
the Fund's prospectus and registration statement, proxy materials and reports,
setting the prospectus in type, setting, in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of printing and distributing the
Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify the
Fund so as to achieve compliance with the grace period afforded by Regulation
817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall
<PAGE>
10
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
<PAGE>
11
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination, provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund and each
trustee of the Board and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all losses, claims,
damages, liabilities (including amounts paid in the Company) or litigation
(including legal and other settlement with the written consent of expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration
Statement or prospectus for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material
<PAGE>
12
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the Registration Statement or
prospectus for the Contracts or in the Contracts or sales literature
(or any amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied by
the Company, or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, or
sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of
Sections 8.l(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party as such may arise from such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Parties duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Fund,
whichever is applicable.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to
<PAGE>
13
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Company shall be
entitled to participate, at its own expense, in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Company to
such party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning, of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts or the operations of
the Fund and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or prospectus or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the Registration
Statement or prospectus for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement,
<PAGE>
14
prospectus or sales Literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of the
Fund, Adviser or Underwriter or persons under their control, with
respect to the sale or distribution of the Contracts or Fund shares;
or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, or
sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
to the Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement (including
a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements specified in Article VI
of this Agreement); or
(v) arise out of or result from any material breach of any representation
and warranty made by the Underwriter or the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Underwriter; as limited by and in accordance with the
provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing, within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses
<PAGE>
15
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By the Fund
8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement (including
a failure to comply with the diversification requirements specified in
Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any representation
and/or warranty made by the Fund in this Agreement or arise out of or
result from any other material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
<PAGE>
16
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1993, 1934,
and 1940 acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty (60) days advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in accordance
with applicable state and/or federal law or such law precludes the use
of such shares as the underlying investment media of the Contracts
issued or to be issued by the Company; or
<PAGE>
17
(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code or under any successor or similar provision,
or if the Company reasonably believes that the Fund may fail to so
qualify; or
(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements specified in
Article VI hereof; or
(f) termination by either the Fund or the Underwriter by written notice to
the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company and/or its affiliated companies has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or
(h) termination by the Fund or the Underwriter by written notice to the
Company, if the Company gives the Fund and the Underwriter the written
notice specified in Section 1.6(b) hereof and at the time such notice
was given there was no notice of termination outstanding under any
other provision. of this Agreement; provided, however any termination
under this Section 10.1(h) shall be effective forty five (45) days
after the notice specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) pursuant
to the terms of the Contracts. Upon request, the
<PAGE>
18
Company will promptly furnish to the Fund and the Underwriter the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory to the
Fund and the Underwriter) to the effect that any redemption pursuant to clause
(ii) above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
90 days notice of its intention to do so.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
92 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
American United Life Insurance Company
One American Square, P.O. Box 368
Indianapolis, IN 46206-0368
Attention: Dusty Akins
If to the Underwriter:
92 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
<PAGE>
19
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.
12.7. The rights, remedies and obligations contained in this Agreement are,
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may not
be sent of all parties without the prior written consent of all parties hereto;
provided, however, that the Underwriter may assign this Agreement or any rights
or obligations hereunder to any affiliate of or company under common control
with the Underwriter, if such assignee is duly licensed and registered to
perform the obligations of the Underwriter under this Agreement.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement prepared under statutory accounting
principles and annual report (prepared under accounting practices
prescribed by the Insurance Department of the State of Indiana), as
soon as practical and in any event within 90 days after the end of
each fiscal year;
(b) the Company's quarterly statements (statutory), as soon as practical
and in any event within 45 days after the end of each quarterly
period;
<PAGE>
20
(c) any financial statement, proxy statement, notice or report of the
Company sent to policyholders, as soon as practical after the delivery
thereof to policyholders;
(d) any registration statement (without exhibits) and financial reports of
the Company filed with the Securities and Exchange Commission or any
state insurance regulator, as soon as practical after the filing
thereof;
(e) any other report submitted to the Company by independent accountants
in connection with any annual, interim or special audit made by them
of the books of the Company, as soon as practical after the receipt
thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
AMERICAN UNITED LIFE INSURANCE COMPANY
By its authorized officer,
By: _______________________
Title: V.P. Pension Contracts and Compliance
Date: _____________________
VARIABLE INSURANCE PRODUCTS FUND II
By its authorized officer,
By:________________________
Title:
Date:______________________
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By:________________________
Title:
Date:______________________
<PAGE>
21
<TABLE>
Schedule A
----------
Separate Accounts and Associated Contracts
------------------------------------------
<CAPTION>
<S> <C>
Name of Separate Account
and Date Established by the Contracts Funded by the
Executive Committee of AUL Separate Account
- -----------------------------------------------------------------------------------------
1.AUL American Unit Trust DCP Multiple-Fund Group Variable Annuity (P-12518)
Separate Account TDA Multiple-Fund Group Variable Annuity (P-12511)
(Established 8/17/89) TDA Multiple-Fund Group Variable Annuity (P-12511,WA)
TDA Multiple-Fund Group Variable Annuity (P-12833)
TDA Multiple-Fund Group Variable Annuity (P-12833SPL)
IRA Multiple-Fund Group Variable Annuity(P-12366)
IRA Multiple-Fund Group Variable Annuity (P-12867)
Employer-Sponsored TDA Multiple-Fund Group Variable
Annuity (P-12621)
Employer-Sponsored TDA Multiple-Fund Group Variable
Annuity [P-12621(BR)]
Employer-Sponsored TDA and Qualified Plan Multiple-
Fund Group Variable Annuity [P-13098(BR)]
2. Group Retirement Annuity Separate Accounts Group Retirement Annuity
Separate Account I (GRA VIII)[P-12947(BR)]
(Established 12-17-92)
3.Group Retirement Annuity Separate Accounts Group Retirement Annuity
Separate Account II (GRA IV) (P-11710)
(established 4/15/93) Separate Accounts Group Retirement Annuity
(GRA V) (P-11736)
Separate Accounts Group Retirement Annuity
(GRA VI) (P-12390)
Separate Accounts Group Retirement Annuity
(GRA VI & IX) ((BR) (P-12390(BR))
</TABLE>
<PAGE>
22
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities
for the handling of proxies relating to the Fund by the Underwriter, the Fund
and the Company. The defined terms herein shall have the meanings assigned in
the Participation Agreement except that the term "Company" shall also include
the department or third party assigned by the Insurance Company to perform the
steps delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund for
the shareholder meeting to facilitate the establishment of tabulation
procedures. At this time the Underwriter will inform the Company of
the Record, Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform a "tape
run", or other activity, which will generate the names, addresses and
number of units which are attributed to each
contractowner/policyholder (the "Customer") as of the Record Date.
Allowance should be made for account adjustments made after this date
that could affect the status of the Customers' accounts as of the
Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide at least one copy of the last
Annual Report to the Company.
4. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at its
expense, shall produce and personalize the Voting Instruction Cards.
The Legal Department of the Underwriter or its affiliate ("Fidelity
Legal") must approve the Card before it is printed. Allow
approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed
by the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
<PAGE>
23
5. During this time, Fidelity legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Company for insertion into envelopes (envelopes and return envelopes
are provided and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company)
addressed to the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is
a small, single sheet of paper that requests
Customers to vote as quickly as possible and that
their vote is important. One copy will be supplied
by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company
reviews and approves the contents of the mailing package to ensure
correctness and completeness. Copy of this approval sent to Fidelity
Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort Cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
Note: Postmarks are not generally needed. A need for postmark infor-
mation would be due to an insurance company's internal procedure and
has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, If the account registration is under "Bertrarn C.
Jones, Trustee," then that is the exact legal name to be printed on
the Card and is the signature needed on the Card.
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24
10. If cards are mutilated, or for any reason illegible or are not signed
properly, they are sent back to Customer with an explanatory letter, a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be not received for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated,
illegible) of the procedure are "hand verified" i.e., examined as to
why they did not complete the system. Any questions on those Cards are
usually remedied individually.
11. There are various control procedures used to ensure proper tabulation
of votes and accuracy of that tabulation. The most prevalent is to
sort the Cards as they first arrive into categories depending upon
their vote; an estimate and the actual vote do not coincide, then an
internal audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Fund receives the
tabulations stated in terms of a percentage and the number of shares.)
Fidelity Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to
Fidelity Legal on the morning of the meeting not later than 10:00 a.m.
Boston time. Fidelity Legal may request an earlier deadline if
required to calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final
vote. Fidelity Legal will provide a standard form for each
Certification.
15. The Company will be required to box and archive the Cards received
from the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes,
Fidelity Legal will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
<PAGE>
25
SCHEDULE C
Other investment companies currently available or contemplated under variable
annuities issued by the Company:
All Portfolios currently offered by (a) Scudder Variable Life Investment Fund,
(b) Twentieth Century Investors, Inc., (c) Dreyfus Investment Fund, (d) Dreyfus
Life and Annuity Index Fund, Inc., (e) Dreyfus Socially Responsible Growth Fund,
Inc.
AMENDMENT NO. 1
Amendment to the Participation Agreement among Variable Insurance Products
Fund II (the Fund), Fidelity Distributors Corporation (the Underwriter) and
American United Life Insurance Company (the Company) dated May 1, 1993 (the
Agreement).
WHEREAS each of the parties desire to expand the Accounts of the Company
which invest in shares of the Fund. The Fund, Underwriter and the Company hereby
agree to amend Schedule A of the Agreement by inserting the following in its
entirety:
Name of Separate Account and
Date Established by Contracts Funded
Executive Committee of Board of Directors By Separate Account
- --------------------------------------------------------------------------------
All of the Separate Accounts listed in Schedule A of the original
Participation Agreement between the parties hereto as well as the AUL American
Individual Separate Account, which was established by AUL on April 14, 1994 for
the purpose of providing a funding medium for the Individual Flexible Premium
Deferred Variable Annuity (Contract LA-28) and the Individual One Year Flexible
Premium Deferred Variable Annuity (Contract LA-27).
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed in its name and on its behalf by its duly authorized representative
as of 8/31, 1994.
AMERICAN UNITED LIFE INSURANCE
COMPANY
By its authorized officer,
By:_______________________________________
Title: V.P. Pension Contracts & Compliance
Date:_____________________________________
VARIABLE INSURANCE PRODUCTS
FUND II
By its authorized officer,
By:_______________________________________
Title: Senior Vice President
Date: ____________________________________
FIDELITY DISTRIBUTORS
CORPORATION
By its authorized officer,
By:_______________________________________
Title: President
Date: ____________________________________
- --------------------------------------------------------------------------------
EXHIBIT 8.6
FORM OF PARTICIPATION AGREEMENT WITH JANUS ASPEN SERIES
- --------------------------------------------------------------------------------
JANUS ASPEN SERIES
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 25th day of February, 1997, between JANUS
ASPEN SERIES, an open-end management investment company organized as a Delaware
business trust (the "Trust"), JANUS CAPITAL CORPORATION (the "Adviser"), a
Colorado corporation and the investment adviser to the Trust, and AMERICAN
UNITED LIFE INSURANCE COMPANY, a life insurance company organized under the laws
of the State of Indiana (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A, as may be
amended from time to time (the "Accounts").
WITNESSETH:
WHEREAS, the Trust has registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and has registered the offer
and sale of its shares under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Portfolios"); and
WHEREAS, the Trust has received an order from the Securities and Exchange
Commission granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Trust to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Exemptive Order"); and
WHEREAS, the Company has registered or will register (unless registration
is not required under applicable law) certain variable life insurance policies
and/or variable annuity contracts under the 1933 Act (the "Contracts"); and
WHEREAS, the Company has registered or will register (unless registration
is not required under applicable law) each Account as a unit investment trust
under the 1940 Act; and
<PAGE>
2
WHEREAS, the Adviser is registered with the Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Company desires to utilize shares of one or more Portfolios as
an investment vehicle of the Accounts;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Trust and the Adviser shall make shares of the Trust's Portfolios
available to the Accounts at the net asset value next computed after receipt of
such purchase order by the Trust (or its agent), as established in accordance
with the provisions of the then current prospectus of the Trust. Shares of a
particular Portfolio of the Trust shall be ordered in such quantities and at
such times as determined by the Company to be necessary to meet the requirements
of the Contracts. The Trustees of the Trust (the "Trustees") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Trustees
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.
1.2 The Trust will redeem any full or fractional shares of any Portfolio
when requested by the Company on behalf of an Account at the net asset value
next computed after receipt by the Trust (or its agent) of the request for
redemption. Such redemptions shall ordinarily be paid in federal funds or by any
other method mutually agreed upon by the parties hereto by the next Business Day
(as defined below) following receipt by the Trust (or its agent) of notice of
the order for redemption; however, the Fund reserves the right to postpone
payment upon redemption consistent with Section 22(e) of the 1940 Act and any
rules thereunder.
1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments under
the Contracts. Receipt by the Company shall constitute receipt by the Trust
provided that i) such orders are received by the Company in good order prior to
the time the net asset value of each Portfolio is priced in accordance with its
prospectus and ii) the Trust receives notice of such orders by 11: 00 a.m. New
York time on the next following Business Day. "Business Day" shall mean any day
on which the New York Stock Exchange is open for trading and on which the Trust
calculates its net asset value pursuant to the rules of the Securities and
Exchange Commission.
<PAGE>
3
1.4 Purchase orders that are transmitted to the Trust in accordance with
Section 1.3 shall be paid for no later than 12:00 noon New York time on the same
Business Day that the Trust receives notice of the order. Payments shall be made
in federal funds transmitted by wire.
1.5 Issuance and transfer of the Trust's shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Shares
ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6 The Trust shall furnish same-day notice to the Company of any income
dividends or capital gain distributions payable on the Trust's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of
that Portfolio. The Company reserves the right to revoke this election in
writing and to receive all such dividends and distributions in cash. The Trust
shall notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.7 The Trust shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6 p.m. New York time.
1.8 The Trust and the Adviser agree that the Trust's shares will be sold
only to Participating Insurance Companies and their separate accounts and to
certain qualified pension and retirement plans to the extent permitted by the
Exemptive Order consistent with each Portfolio being adequately diversified
pursuant to Section 817(h) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder. No shares of any Portfolio will be sold
directly to the general public. The Company agrees that Trust shares will be
used only for the purposes of funding the Contracts and Accounts listed in
Schedule A, as amended from time to time. The Trust and the Adviser will not
sell shares of the Portfolios to any insurance company or separate account
unless an agreement containing provisions required by the Exemptive Order is in
effect and governs such sales.
1.9 The Trust and the Adviser agree that all Participating Insurance
Companies shall have the obligations and responsibilities regarding pass-through
voting and conflicts of interest corresponding to those contained in Section 2.8
and Article IV of this Agreement.
1.10 Price Errors.
(1) In the event adjustments are required to correct any material error in
the computation of the net asset value of the Trust's shares, the
Trust or the Adviser shall notify the Company as soon as practicable
after discovering the need for those adjustments which result in a
reimbursement to an Account in accordance with the Trust's or the
Adviser's then current
<PAGE>
4
policies on reimbursement, which the Trust or the Adviser represents
are reasonable and consistent with applicable standards. Notification
may be made via facsimile or via direct or indirect systems access.
Any such notification shall be promptly followed by a letter written
on the Trust's or the Adviser's letterhead stating for each day for
which an error occurred the incorrect price, the correct price, and,
to the extent communicated to the Trust's shareholders, the reason for
the price change.
(2) If an adjustment is to be made in accordance with subsection (1) above
to correct an error which has caused an Account to receive an amount
different than that to which it is entitled, the Trust or the Adviser
shall make all necessary adjustments to the number of shares owned in
the Account and distribute to the Account the amount of such
underpayment for credit to the Contract owners. Upon the furnishing of
an accounting to the Trust or the Adviser by the Company, the Trust or
the Adviser will immediately reimburse to the Company all reasonable
expenses incurred by the Company, including the expense of any
organization that the Company has retained to provide administration
or recordkeeping services under this Agreement, to adjust all Accounts
and accounts of Contract owners affected by such error.
ARTICLE II
Obligations of the Parties
2.1 The Trust and the Adviser shall prepare and be responsible for filing
with the Securities and Exchange Commission and any state regulators requiring
such filing all shareholder reports, notices, proxy materials (or similar
materials such as voting instruction solicitation materials), prospectuses and
statements of additional information of the Trust. The Trust shall bear the
costs of registration and qualification of its shares, preparation and filing of
the documents listed in this Section 2.1 and all taxes to which an issuer is
subject on the issuance and transfer of its shares.
2.2 At the option of the Company, the Trust shall either (a) provide the
Company (at the Company's expense) with as many copies of the Trust's current
prospectus, annual report, semi-annual report and other shareholder
communications, including any amendments or supplements to any of the foregoing,
as the Company shall reasonably request; or (b) provide the Company with a
camera ready copy of such documents in a form suitable for printing. The Trust
shall provide the Company with a copy of its statement of additional information
in a form suitable for duplication by the Company. The Trust (at its expense)
shall provide the Company with copies of any Trust-sponsored proxy materials in
such quantity as the Company shall reasonably require for distribution to
Contract owners.
<PAGE>
5
2.3 The Company shall bear the costs of printing and distributing the
Trust's prospectus, statement of additional information, shareholder reports and
other shareholder communications to owners of and applicants for policies for
which the Trust is serving or is to serve as an investment vehicle. The Company
shall bear the costs of distributing proxy materials (or similar materials such
as voting solicitation instructions) to Contract owners. The Company assumes
sole responsibility for ensuring that such materials are delivered to Contract
owners in accordance with applicable federal and state securities laws.
2.4
(a) The Company agrees and acknowledges that the Adviser is the sole owner
of the name and mark "Janus" and that all use of any designation
comprised in whole or part of Janus (a "Janus Mark") under this
Agreement shall inure to the benefit of the Adviser. Except as
provided in Section 2.5, the Company shall not use any Janus Mark on
its own behalf or on behalf of the Accounts or Contracts in any
registration statement, advertisement, sales literature or other
materials relating to the Accounts or Contracts without the prior
written consent of the Adviser. Upon termination of this Agreement for
any reason, the Company shall cease all use of any Janus Mark(s) as
soon as reasonably practicable.
(b) The Trust and the Adviser agree and acknowledge that the names
"American United Life Insurance Company(R)", "AUL", or any derivative
thereof or logo associated with those names ("AUL Mark") is the
valuable property of the Company and its affiliates, and that the
Trust shall not use any AUL Mark without the prior written consent of
the Company. Upon termination of this Agreement for any reason, the
Trust and the Adviser shall cease all use of any AUL Mark as soon as
reasonably practicable.
2.5 The Company shall furnish, or cause to be furnished, to the Trust or
its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or the Adviser is named prior to the filing of
such document with the Securities and Exchange Commission. The Company shall
furnish, or shall cause to be furnished, to the Trust or its designee, each
piece of sales literature or other promotional material in which the Trust or
the Adviser is named, at least ten Business Days prior to its use. No such
material shall be used if the Trust or its designee reasonably objects to such
use within ten Business Days after receipt of such material.
2.6 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust or the Adviser in
connection with the sale of the Contracts other than information or
representations contained in and accurately derived from the registration
statement or prospectus for the Trust shares (as such registration statement and
prospectus may be amended or supplemented from time to time), reports of the
Trust, Trust-sponsored proxy statements, or in sales literature or other
promotional material approved by the Trust or its designee, except as required
by legal process or regulatory authorities or with the written permission of the
Trust or its designee. The Trust or its designee shall use their best
<PAGE>
6
efforts to provide such approval or, if approval is not given, then to provide
comments suggesting appropriate changes to such information or representations
as set forth in Section 2.5 above.
2.7 The Trust and the Adviser shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, the Accounts or the Contracts other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Contracts (as such registration statement and prospectus may
be amended or supplemented from time to time), or in materials approved by the
Company for distribution including sales literature or other promotional
materials, except as required by legal process or regulatory authorities or with
the written permission of the Company.
2.8 If, and to the extent required by the Exemptive Order or that the
Securities and Exchange Commission interprets the 1940 Act to require
pass-through voting privileges for variable Contract owners, the Company will
provide pass-through voting privileges to those owners of Contracts subject to
the pass-through voting requirements whose cash values are invested, through the
Accounts, in shares of the Trust. The Trust shall require all Participating
Insurance Companies to calculate voting privileges in the same manner and the
Company shall be responsible for assuring that the Accounts calculate voting
privileges in the manner established by the Trust. With respect to each Account,
the Company will vote shares of the Trust held by the Account and for which no
timely voting instructions from Contract owners are received as well as shares
it owns that are held by that Account, in the same proportion as those shares
for which voting instructions are received. The Company and its agents will in
no way recommend or oppose or interfere with the solicitation of proxies for
Trust shares held by Contract owners without the prior written consent of the
Trust, which consent may be withheld in the Trust's sole discretion.
2.9 The Company shall notify the Trust of any applicable state insurance
laws that restrict the Portfolios' investments or otherwise affect the operation
of the Trust and shall notify the Trust of any changes in such laws.
ARTICLE III
Representations and Warranties
3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of the State of Indiana and
that it has legally and validly established each Account as a segregated asset
account under such law on the date set forth in Schedule A.
3.2 The Company represents and warrants that each Account (1) has been
registered or, prior to any issuance or sale of the Contracts, will be
registered as a unit investment trust in accordance with the provisions of the
1940 Act or, alternatively (2) has not been registered in proper reliance upon
an exclusion from registration under the 1940 Act.
<PAGE>
7
3.3 The Company represents and warrants that the Contracts or interests in
the Accounts (1) are or, prior to issuance, will be registered as securities
under the 1933 Act or, alternatively (2) are not registered because they are
properly exempt from registration under the 1933 Act or will be offered
exclusively in transactions that are properly exempt from registration under the
1933 Act. The Company further represents and warrants that the Contracts will be
issued and sold in compliance in all material respects with all applicable
federal and state laws; and the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements.
3.4 The Trust and the Adviser represent and warrant that the Trust is duly
organized and validly existing under the laws of the State of Delaware.
3.5 The Trust and the Adviser represent and warrant that the Trust shares
offered and sold pursuant to this Agreement are duly authorized for issuance in
accordance with applicable law and will be registered under the 1933 Act and the
Trust shall be registered under the 1940 Act prior to any issuance or sale of
such shares. The Trust shall amend its registration statement under the 1933 Act
and the 1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Trust shall register and qualify its shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust.
3.6 The Trust and the Adviser will invest assets of the Portfolios in such
a manner to permit the Portfolios to be used for investment by separate accounts
of life insurance companies funding variable annuity and variable life insurance
contracts, whichever is appropriate, under the Code and the regulations
thereunder. Without limiting the scope of the foregoing, the Trust and the
Adviser represent and warrant that the investments of each Portfolio will comply
with the diversification requirements set forth in Section 817(h) of the Code,
and the rules and regulations thereunder and each Portfolio has complied with
such requirements since each Portfolio's commencement of operations.
3.7 The Trust and the Adviser shall maintain qualification of each
Portfolio as a Regulated Investment Company under Subchapter M of the Code (or
any successor or similar provisions) and shall notify the Company immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.
3.8 The Trust and the Adviser agree to use their best efforts to ensure
that each Portfolio of the Trust shall be managed consistent with its investment
objective or objectives,
<PAGE>
8
investment policies, and investment restrictions as described in the Trust's
prospectus and registration statement, as amended or modified from time to time.
ARTICLE IV
Potential Conflicts
4.1 The parties acknowledge that the Trust's shares may be made available
for investment to other Participating Insurance Companies. In such event, the
Trustees will monitor the Trust for the existence of any material irreconcilable
conflict between the interests of the contract owners of all Participating
Insurance Companies. An irreconcilable material conflict may arise for a variety
of reasons, including: (a) an action by any state insurance regulatory
authority; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or judicial decision in
any relevant proceeding; (d) the manner in which the investments of any
Portfolio are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
The Trustees shall promptly inform the Company if they determine that an
irreconcilable material conflict exists and the implications thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
4.3 If it is determined by a majority of the Trustees, or a majority of its
disinterested Trustees, that a material irreconcilable conflict exists that
affects the interests of Contract owners, the Company shall, in cooperation with
other Participating Insurance Companies whose contract owners are also affected,
at its expense and to the extent reasonably practicable (as determined by the
Trustees) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Trust or any Portfolio
and reinvesting such assets in a different investment medium, including (but not
limited to) another Portfolio of the Trust, or submitting the question of
whether or not such segregation should be implemented to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any appropriate
group (i.e., annuity contract owners, life insurance contract owners, or
variable contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected Contract owners
the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account.
<PAGE>
9
4.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that this provision is being implemented. Until the end of such six (6)
month period, the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust.
4.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Trust and terminate this Agreement with respect to
such Account within six (6) months after the Trustees inform the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees. Until the
end of such six (6) month period, the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of the
Trust.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority
of the disinterested Trustees shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company be required to establish a new funding medium for the Contracts if
an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Trustees determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
4.7 The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon them by the Exemptive
Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Trustees.
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Exemptive Order) on terms and conditions materially different
from those contained in the Exemptive Order, then the Trust
<PAGE>
10
and/or the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable.
ARTICLE V
Indemnification
5.1 Indemnification By the Company. The Company agrees to indemnify and
hold harmless the Trust, the Adviser, and each of their Trustees, Directors,
officers, employees and agents and each person, if any, who controls the Trust
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in a registration statement
or prospectus for the Contracts or in the Contracts themselves or in
sales literature generated or approved by the Company on behalf of the
Contracts or Accounts (or any amendment or supplement to any of the
foregoing) (collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and was accurately
derived from written information furnished to the Company by or on
behalf of the Trust for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from
Trust Documents as defined in Section 5.2(a)) or wrongful conduct of
the Company or persons under its control, with respect to the sale or
acquisition of the Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Trust Documents as defined
in Section 5.2(a) or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was
made in reliance upon and accurately derived from written information
furnished to the Trust by or on behalf of the Company; or
<PAGE>
11
(d) arise out of or result from any failure by the Company to provide the
services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company.
5.2 Indemnification By the Adviser. The Adviser agrees to indemnify and
hold harmless the Company and each of its directors, officers, employees and
agents and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act, and the Accounts (collectively, the "Indemnified
Parties" for purposes of this Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Adviser) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration
statement or prospectus or sales literature for the Trust prepared by
the Trust or the Adviser (or any amendment or supplement thereto),
(collectively, "Trust Documents" for the purposes of this Article V),
or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that
this indemnity shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and was accurately derived from written information
furnished to the Trust or the Adviser by or on behalf of the Company
for use in Trust Documents or otherwise for use in connection with the
sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations (other than
statements or representations contained in and accurately derived from
Company Documents) or wrongful conduct of the Trust or persons under
its control, with respect to the sale or acquisition of the Contracts
or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company
by or on behalf of the Trust; or
(d) arise out of or result from any failure by the Trust to provide the
services or furnish the materials required under the terms of this
Agreement; or
<PAGE>
12
(e) arise out of or result from any material breach of any representation
and/or warranty made by the Trust in this Agreement or arise out of or
result from any other material breach of this Agreement by the Trust,
including but not limited to, compliance with the diversification
requirements of Section 817(h) of the Code and qualification of each
Portfolio of the Trust as a regulated investment company under
Subchapter M of the Code.
5.3 Neither the Company nor the Adviser shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any Losses incurred or assessed against an Indemnified Party that arise from
such Indemnified Party's willful misfeasance, bad faith or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
5.4 Neither the Company nor the Adviser shall be liable under the
indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
to any claim made against an Indemnified Party unless such Indemnified Party
shall have notified the other party in writing within a reasonable time after
the summons, or other first written notification, giving information of the
nature of the claim shall have been served upon or otherwise received by such
Indemnified Party (or after such Indemnified Party shall have received notice of
service upon or other notification to any designated agent), but failure to
notify the party against whom indemnification is sought of any such claim shall
not relieve that party from any liability which it may have to the Indemnified
Party in the absence of Sections 5.1 and 5.2.
5.5 In case any such action is brought against the Indemnified Parties, the
indemnifying party shall be entitled to participate, at its own expense, in the
defense of such action. The indemnifying party also shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to the party named in
the action. After notice from the indemnifying party to the Indemnified Party of
an election to assume such defense, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the indemnifying
party will not be liable to the Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
ARTICLE VI
Termination
6.1 This Agreement may be terminated as follows:
(a) by any party for any reason by ninety (90) days advance written notice
delivered to the other parties;
<PAGE>
13
(b) at the option of the Company if shares of the Trust are not reasonably
available to meet the requirements of the Contracts, as determined by
the Company, and upon written notice by the Company to the other
parties to this Agreement;
(c) at the option of the Company upon institution of formal proceedings
against the Trust or the Adviser by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body if the
Company shall determine, in its sole judgment exercised in good
faith, that the Trust or the Adviser has suffered a material adverse
change in its business, operations, financial condition, or prospects
since the date of this Agreement or is the subject of material adverse
publicity;
(d) at the option of the Trust or the Adviser upon institution of formal
proceedings against the Company by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body if
the Trust or Adviser shall determine, in its sole judgment exercised
in good faith, that the Company has suffered a material adverse change
in its business, operations, financial condition, or prospects since
the date of this Agreement or is the subject of material adverse
publicity;
(e) at the option of any party to the Agreement upon a determination by a
majority of the Trustees of the Trust, or a majority of disinterested
Trustees, that an irreconcilable material conflict exists;
(f) at the option of the Company if the Trust fails to meet the
diversification requirements under Subchapter M or Section 817(h) of
the Code as provided in this Agreement;
(g) at the option of the Company upon a material breach of this Agreement
or of any representation or warranty herein by the Trust of the
Adviser, or at the option of the Trust or the Adviser upon a material
breach of this Agreement or any representation or warranty herein by
the Company.
6.2 Notwithstanding any termination of this Agreement, the Trust shall, at
the option of the Company, continue to make available additional shares of the
Trust (or any Portfolio) pursuant to the terms and conditions of this Agreement
for all Contracts in effect on the effective date of termination of this
Agreement, provided that the Company continues to pay the costs set forth in
Section 2.3.
6.3 The provisions of Article V shall survive the termination of this
Agreement, and the provisions of Article IV and Section 2.8 shall survive the
termination of this Agreement as long as shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
<PAGE>
14
ARTICLE VII
Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Trust:
Janus Aspen Series
100 Fillmore Street
Denver, Colorado 80206
Attention: David C. Tucker, Esq. General Counsel
If to the Company:
American United Life Insurance Company
One American Square
Indianapolis, Indiana 46206
Attention: Richard A. Wacker Associate General Counsel
ARTICLE VIII
Miscellaneous
8.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
8.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of State of Colorado.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
<PAGE>
15
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc., and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
8.8 The parties to this Agreement acknowledge and agree that this Agreement
shall not be exclusive in any respect.
8.9 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other party.
8. 10 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
8.11 The Trust and the Adviser agree to treat as the property of the
Company any list or compilation of names, addresses, and other information
relating to the owners of the Contracts or prospects for the sale of Contracts
acquired in the course of performing under this Agreement and agree not to use
such information for any purpose without the prior consent of the Company, or
except as required by applicable law.
<PAGE>
16
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Participation Agreement as of the date and year first above
written.
JANUS ASPEN SERIES
By: __________________________
Name: Deborah E. Bielicke
Title: Assistant Vice President
JANUS CAPITAL CORPORATION
By:___________________________
Name: Stephen L. Stieneker
Title: Vice President of Compliance
AMERICAN UNITED LIFE INSURANCE
COMPANY
By:___________________________
Name: Richard A. Wacker
Title: Associate General Counsel
<PAGE>
17
Schedule A
Separate Accounts and Associated Contracts
Name of Separate Account and Date Contracts Funded
Established by the AUL Exec. Comm. By Separate Account
AUL American Unit Trust (established 8/17/89) Registered 401, 403(b), 457,
408 contracts
Group Retirement Annuity Separate Account I Qualified 401 contracts
(established 8/17/89)
Group Retirement Annuity Separate Account II Qualified 401 contracts
(established 8/17/89)
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EXHIBIT 8.7
FORM OF PARTICIPATION AGREEMENT WITH PGHG FUNDS, INC.
- --------------------------------------------------------------------------------
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 3rd day of April, 1995, by and between American
United Life Insurance Company& (the "Company"), a life insurance company
domiciled in Indiana, on its behalf and on behalf of the segregated asset
accounts of the Company (the "Separate Accounts"); The PBHG Funds, Inc. (the
"Fund"), a Maryland corporation; SEI Financial Services Company ("Distributor"),
a Delaware corporation; and Pilgrim Baxter & Associates, Ltd. ("Adviser"), a
Limited Partnership.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act") and the Fund is authorized to issue
separate classes of shares of beneficial interests ("shares"), each representing
an interest in a separate portfolio of assets known as a "series" and each
series has its own investment objective, policies, and limitations; and
WHEREAS, Distributor is registered as a broker-dealer with the SEC under
the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD");
and
<PAGE>
2
WHEREAS, Adviser is registered as an Investment Adviser with the SEC under
the Investment Advisers Act of 1940 and with all of the states where such
registration is required; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company wishes to purchase shares of one or more of the Fund's
series on behalf of its Separate Accounts to serve as an investment medium for
Variable Contracts funded by the Separate Accounts, and Distributor is
authorized to sell shares of the Fund's series;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1. Sale of Fund Shares
1.1. Distributor agrees to sell to the Company those shares of the series
offered and made available by the Fund and identified on Exhibit B ("Series")
that the Company orders on behalf of its Separate Accounts, and agrees to
execute such orders on each day on which the Fund calculates its net asset value
pursuant to rules of the SEC ("business day") at the net asset value next
computed after receipt and acceptance by the Fund or its designee of the order
for the shares of the Fund.
<PAGE>
3
1.2. The Fund agrees to make available on each business day shares of the
Series for purchase at the applicable net asset value per share by the Company
on behalf of its Separate Accounts; provided, however, that the
Directors/Trustees of the Fund may refuse to sell shares of any Series to any
person, or suspend or terminate the offering of shares of any Series, if such
action is required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Directors/Trustees, acting in good faith and
in light of the Directors/Trustees' fiduciary duties under applicable law,
necessary in the best interests of the shareholders of any Series.
1.3. Upon receipt of a request for redemption in proper form from the
Company, the Fund agrees to redeem in cash any full or fractional shares of the
Series held by the Company, ordinarily executing such requests on each business
day at the net asset value next computed after receipt and acceptance by the
Fund or its designee of the request for redemption, except that the Fund
reserves the right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any rules thereunder. Such redemptions shall be paid
in federal funds ordinarily on the next business day following receipt by the
Fund or its designee of the order for redemption; however the Fund reserves the
right to postpone payment upon redemption consistent with Section 22(e) of the
Act and any Rules thereunder.
1.4. For purposes of Sections 1.1 and 1.3, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Separate Account, and
<PAGE>
4
receipt by such designee shall constitute receipt by the Fund; provided that the
Company receives the order by 4:00 p.m. New York City time and the Fund receives
notice of such order by 8:30 a.m. New York City time on the next following
business day.
1.5. The Company shall pay for shares of the Series on the business day
next following the day that the Company places an order to purchase shares of
the Series, except with respect to shares of any Series of the Fund ("Acquired
Series") ordered by the Company for a Separate Account or any subaccount thereof
in connection with an exchange or transfer from another Separate Account or
another subdivision of a Separate Account under the Variable Contracts, Company
shall pay for shares of the Acquired Series on the latter of (1) the next
business day after an order to purchase the shares is made in accordance with
Section 1.1 hereof, or (2) on the same business day that the Separate Account or
subdivision from which the exchange or transfer is being made receives payment
from the investment company portfolio in which it invests. Payment shall be in
federal funds transmitted by wire or by any other method mutually agreed upon by
the parties hereto.
1.6. Issuance and transfer of shares of the Series will be by book entry
only unless otherwise agreed by the Fund. Stock certificates will not be issued
to the Company or the Separate Accounts unless otherwise agreed by the Fund.
Fund and Distributor agree that shares ordered from the Fund will be recorded
properly in an
<PAGE>
5
appropriate title for the Separate Accounts or the appropriate subaccounts of
the Separate Accounts.
1.7. The Fund shall promptly furnish same-day notice (by wire or telephone,
followed by written confirmation) to the Company of any income dividends or
capital gain distributions payable on the shares of the Series. The Company
hereby elects to reinvest in the Series all such dividends and distributions as
are payable on a Series' shares and to receive such dividends and distributions
in additional shares of that Series. The Company reserves the right to revoke
this election in writing and to receive all such dividends and distributions in
cash. The Fund shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.8. The Fund shall instruct its recordkeeping agent to advise the Company
on each business day of the net asset value per share for each Series as soon as
reasonably practical after the net asset value per share is calculated, which is
normally 6:30 p.m. New York City time, and shall use its best efforts to make
such net asset value per share available by 7:00 p.m. New York City time.
<PAGE>
6
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that it is an insurance company
duly organized and in good standing under Indiana law and that it is taxed as an
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended ("Code").
2.2. The Company represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Indiana Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under Indiana law.
2.3. The Company represents and warrants that the Variable Contracts issued
by the Company or interests in the Separate Accounts under such Variable
Contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 ("1933 Act") or, alternatively (2) are not registered
because they are properly exempt from registration under the 1933 Act or will be
offered exclusively in transactions that are properly exempt from registration
under the 1933 Act.
2.4. The Company represents and warrants that each of the Separate
Accounts:
<PAGE>
7
(1) has been registered as a unit investment trust in accordance with the
provisions of the 1940 Act or, alternatively (2) has not been registered in
proper reliance upon an exclusion from registration under the 1940 Act.
2.5. The Company represents that it believes, in good faith, that the
Variable Contracts issued by the Company are currently treated as annuity
contracts or life insurance policies (which may include modified endowment
contracts), whichever is appropriate, under applicable provisions of the Code.
2.6. The Fund represents and warrants that it is duly organized as a
corporation under the laws of the State of Maryland, and is in good standing
under applicable law.
2.7. The Fund represents and warrants that the shares of the Series are
duly authorized for issuance in accordance with applicable law and that the Fund
is registered as an open-end management investment company under the 1940 Act.
2.8. Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
<PAGE>
8
ARTICLE Ill. General Duties
3.1. The Fund and Distributor shall take all such actions as are necessary
to permit the sale of the shares of each Series to the Separate Accounts,
including maintaining the Fund's registration as an investment company under the
1940 Act, and registering the shares of the Series sold to the Separate Accounts
under the 1933 Act for so long as required by applicable law. The Fund and
Distributor shall amend the Fund's registration statement filed with the SEC
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of the shares of the Series. The Fund and
Distributor shall register and qualify the shares of the Fund for sale in
accordance with the laws of the various states to the extent deemed necessary by
the Fund or Distributor. The Fund and Distributor shall take all steps necessary
to sell shares of the Fund in compliance with all applicable federal and state
securities laws.
3.2. The Fund and Adviser shall make every effort to maintain qualification
of each Series as a Regulated Investment Company under Subchapter M of the Code
(or any successor or similar provision) and shall notify the Company immediately
upon having a reasonable basis for believing that a Series has ceased to so
qualify or that it might not so qualify in the future.
3.3. The Fund and Adviser agree that each Series of the Fund shall be
managed consistent with its investment objective or objectives, investment
policies, and
<PAGE>
9
investment restrictions as described in the Fund's prospectus and registration
statement, as amended or modified from time to time.
3.4. The Company shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Company, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the Variable
Contracts to the extent required under the 1933 Act, and obtaining all necessary
approvals to offer the Variable Contracts from state insurance commissioners.
3.5. The Company shall require that any persons who offer and sell the
Variable Contracts issued by the Company do so in accordance with applicable
provisions of the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair
Practice, and state law respecting the offering of variable life insurance
policies and variable annuity contracts.
3.6. Distributor shall sell and distribute the shares of the Series of the
Fund in accordance with the applicable provisions of the 1933 Act, the 1934 Act,
the 1940 Act, the NASD Rules of Fair Practice, and state law.
<PAGE>
10
3.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
ARTICLE IV. Prospectuses and Proxy Statements, Voting
4.1. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by the
Company as required to be distributed to such Variable Contract Owners under
applicable federal or state law.
4.2. Distributor shall provide the Company with as many copies of the
current prospectus of the Fund as the Company may reasonably request. If
requested by the Company in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type or
in camera-ready copy) and other assistance as is reasonably necessary in order
for the Company to print together in one document the current prospectus for the
Variable Contracts issued by the Company and the current prospectus for the
Fund. The Fund shall bear the expense of printing copies of its current
prospectus that will be distributed to existing Variable Contract Owners,
<PAGE>
11
and the Company shall bear the expense of printing copies of the Fund's
prospectus that are used in connection with offering the Variable Contracts
issued by the Company.
4.3. The Fund and Distributor shall provide (1) at the Fund's expense, one
copy of the Fund's current Statement of Additional Information ("SAI") to the
Company and to any owner of a Variable Contract issued by the Company who
requests such SAI, (2) at the Company's expense, such additional copies of the
Fund's current SAI as the Company shall reasonably request and that the Company
shall require in accordance with applicable law in connection with offering the
Variable Contracts issued by the Company.
4.4. The Fund, at its expense, shall provide the Company with copies of its
proxy material, periodic reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Company.
The Fund, at the Company's expense, shall provide the Company with copies of its
periodic reports to shareholders and other communications to shareholders in
such quantity as the Company shall reasonably request for use in connection with
offering the Variable Contracts issued by the Company. If requested by the
Company in lieu thereof, the Fund shall provide such documentation (including a
final copy of the Fund's proxy materials, periodic reports to shareholders and
other communications to shareholders, as set in type or in camera-ready copy)
and other assistance as reasonably necessary in order for the
<PAGE>
12
Company to print such shareholder communications for distribution to owners of
Variable Contracts issued by the Company.
4.5. For so long as the SEC interprets the 1940 Act to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act ("Registered Separate
Accounts"), the Company shall vote shares of each Series of the Fund held in
Registered Separate Accounts or subaccounts thereof, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Company (or its designated agent) from owners of Variable Contracts funded by
such Registered Separate Accounts or subaccounts thereof having a voting
interest in the Series. The Company shall vote shares of a Series of the Fund
held in Registered Separate Accounts or subaccounts thereof that are
attributable to the Variable Contracts as to which no timely instructions are
received, as well as shares held in such Registered Separate Accounts or
subaccounts thereof that are not attributable to the Variable Contracts and
owned beneficially by the Company (resulting from charges against the Variable
Contracts or otherwise), in the same proportion as the votes cast by owners of
the Variable Contracts funded by that Separate Account or subaccount thereof
having a voting interest in the Series from whom instructions have been timely
received. The Company shall vote shares of each Series of the Fund held in its
general account or in any Separate Account that is not registered under the 1940
Act, if any, in its discretion or in the same proportion as the votes cast
<PAGE>
13
with respect to shares of the Series held in all Registered Separate Accounts of
the Company or subaccounts thereof, in the aggregate.
ARTICLE V. Sales Material and Information
5.1. The Company agrees that neither it nor any of its affiliates shall
give any information or make any representations or statements on behalf of the
Fund or concerning the Fund other than the information or representations
contained in the Registration Statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee
and/or by Distributor or its designee, except with the prior permission of the
Fund or its designee and/or Distributor or its designee. The Parties agree that
total return information of the Fund and its Series derived from the prospectus
or Registration Statement of the Fund or from reports provided by the Fund or
Distributor to the Company may be used by the Company in connection with the
sale of the Variable Contracts without prior approval of the Fund or
Distributor, or their designees, and the Company shall be responsible for using
such information in conformity with the information provided to it.
<PAGE>
14
5.2. The Fund or Distributor or the designee of either shall furnish to the
Company or its designee, each piece of sales literature or other promotional
material in which the Company or its Separate Accounts are named, and no such
material shall be used without the prior approval of the Company or its
designee.
5.3. The Fund and Distributor agree that each and the affiliates of each
shall not give any information or make any representations on behalf of the
Company or concerning the Company, the Separate Accounts, or the Variable
Contracts issued by the Company, other than the information or representations
contained in a registration statement or prospectus for such Variable Contracts,
as such registration statement and prospectus may be amended or supplemented
from time to time, or in reports for the Separate Accounts or prepared for
distribution to owners of such Variable Contracts, or in sales literature or
other promotional material approved by the Company or its designee, except with
the prior permission of the Company.
5.4. The Fund will provide to the Company at least one complete copy of all
prospectuses, Statements of Additional Information, reports, proxy statements
and other voting solicitation materials, and all amendments and supplements to
any of the above, that relate to the Fund or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
<PAGE>
15
5.5. The Company will provide to the Fund at least one complete copy of all
prospectuses (which shall include an offering memorandum if the Variable
Contracts issued by the Company or interests therein are not registered under
the 1933 Act), Statements of Additional Information, reports, solicitations for
voting instructions, and all amendments or supplements to any of the above, that
relate to the Variable Contracts issued by the Company or the Separate Accounts
promptly after the filing of such document with the SEC or other regulatory
authority.
5.6. For purposes of this Article V, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, computerized media, or other public
media), sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees.
<PAGE>
16
ARTICLE VI. Administration of Accounts
6.1 Services to Owners of Variable Contracts shall be the responsibility of
the Company and shall not be the responsibility of the Fund or Distributor.
These services include, but are not limited to:
(a) providing information periodically to Contract Owners showing their
interests in the Separate Accounts or subaccounts thereof that invest
in the Fund or in any Series thereof,
(b) addressing inquiries from Contract Owners relating to investing,
exchanging or transferring, or redeeming interests under the Variable
Contracts and the Separate Accounts or subaccounts or any Series
thereof funding such Variable Contracts, which inquiries may relate to
the Fund or a Series thereof;
(c) providing explanations to Owners regarding Fund investment objectives
and policies and other information about the Fund and its Series,
including the performance of the Series;
(d) forwarding shareholder communications from the Fund, including but not
limited to shareholder reports containing annual and semi-annual
financial statements of the Fund to Contract Owners;
(e) delivering the Fund prospectus and supplements thereto to Owners
whenever necessary under the Securities Act of 1933;
(f) delivering any notices of shareholder meetings and proxy statements
accompanying such notices in connection with general and special
meetings of shareholders of the Fund under which Contract Owners may
have voting rights, and helping tabulate the voting of Owners
tendering voting instructions to the Company.
6.2 The Fund and Adviser recognize the Company as the sole shareholder of
Fund shares issued under this Agreement and further recognize that Adviser
and/or the Fund will derive a substantial savings in administrative expense
because the Company will provide the services described above, thus allowing the
Fund significant reductions in
<PAGE>
17
postage expense and shareholder communications and recordkeeping, by virtue of
having a sole shareholder rather than multiple shareholders. In consideration of
the administrative savings resulting from such arrangement, the Company shall be
paid an amount equal to 15 basis points (0.15%) per annum of the average
aggregate amount invested by the Company under this Agreement.
6.3 For purposes of computing the payment to the Company contemplated by
this Section VI, the average aggregate amount invested by Company over a one
month period shall be computed by totaling the Company's aggregate investment
(share net asset value multiplied by total number of shares held by the Company)
on each business day during the month and dividing by the total number of
business days during such month.
6.4 The payment contemplated by this Section VI shall be calculated by
Adviser at the end of each calendar month and will be paid by Adviser to the
Company within ten (10) business days thereafter. Payment will be accompanied by
a statement showing the calculation of the monthly amount payable by Adviser and
such other supporting data as may be reasonably requested by the Company.
<PAGE>
18
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless the Fund, each of
its Directors/Trustees and officers, Adviser, and Distributor and each of the
Directors/Trustees of Adviser and Distributor (collectively, the "Indemnified
Parties" for purposes of this Section 7.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or litigation expenses (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or litigation expenses:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus (which shall include an offering memorandum) for the
Variable Contracts issued by the Company or sales literature for such
Variable Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or on behalf
of the Fund: (1) for use in the registration statement or prospectus
for the Variable Contracts issued by the Company or in sales
literature (or any amendment or supplement to any of the foregoing) or
otherwise, (2) was contained in sales literature or other promotional
material that has been approved by the Fund or its designee or by
Distributor or its designee for use in connection with the sale of
such Variable Contracts or Fund shares, or (3) otherwise in connection
with the sale of the Variable Contracts or Fund shares; or
<PAGE>
19
(ii) arise Out Of Or result from the material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company;
except to the extent provided in Sections 7.1(b) and 7.1(c) hereof.
7.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations or
duties under this Agreement or to the Fund.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Company in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against an Indemnified Party, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the Indemnified Party named in the action. After notice
from the
<PAGE>
20
Company to such party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.1(d). The Indemnified Parties shall promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares thereunder or the Variable Contracts
issued by the Company or the operation of the Fund.
7.2. Indemnification By Distributor
7.2(a). Distributor agrees to indemnify and hold harmless the Company and
each of its directors and officers and the Separate Accounts (collectively, the
"Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of Distributor) or litigation expenses (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement
or prospectus or sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
<PAGE>
21
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to Distributor or
the Fund or the designee of either by or on behalf of the Company: (1)
for use in the registration statement or prospectus for the Fund or in
sales literature (or any amendment or supplement to any of the
foregoing) or otherwise, (2) was contained in sales literature or
other promotional material that has been approved by the Company or
its designee for use in connection with the sale of the Variable
Contracts or Fund shares, or (3) or otherwise for use in connection
with the sale of the Variable Contracts issued by the Company or Fund
shares; or
(ii) arise out of or result from the material breach of any representation
and/or warranty made by Distributor, Adviser, or the Fund in this
Agreement or arise out of or result from any other material breach of
this Agreement by Distributor, Adviser, or the Fund, including but not
limited to, compliance with the diversification requirements of
Section 817(h) of the Code and qualification of each Series of the
Fund as a Regulated Investment Company under Subchapter M of the Code;
except to the extent provided in Sections 7.2(b) and 7.2(c) hereof.
7.2(b). Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations and
duties under this Agreement or to the Company or the Separate Accounts.
7.2(c). Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have
<PAGE>
22
notified Distributor in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Party shall have
received notice of such service on any designated agent), but failure to notify
Distributor of any such claim shall not relieve Distributor from any liability
which it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this Indemnification Provision. In case any such
action is brought against an Indemnified Party, Distributor will be entitled to
participate, at its own expense, in the defense thereof. Distributor also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
Indemnified Party named in the action. After notice from Distributor to such
party of Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and Distributor will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
7.2(d). The Company shall promptly notify Distributor of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issuance or sale of the Fund shares hereunder or the
Variable Contracts issued by the Company or the operation of the Separate
Accounts provided that such litigation or proceedings relate to or affect the
interests of the Fund or Distributor.
<PAGE>
23
ARTICLE VIII. Applicable Law
8.l. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Maryland.
8.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1. This Agreement shall terminate:
(a) at the option of any party upon 90 days advance written notice to the
other parties, unless a shorter time is agreed to by the parties to
this Agreement; or
(b) at the option of the Company if shares of the Series are not
reasonably available to meet the requirements of the Variable
Contracts issued by the Company, as determined by the Company, and
upon written notice by the Company to the other parties to this
Agreement; or,
(c) at the option of the Fund, Adviser, or Distributor upon institution of
formal proceedings against the Company by the NASD, the SEC, or any
state securities
<PAGE>
24
or insurance department or any other regulatory body if the Fund,
Adviser, or Distributor shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, financial condition, or
prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(d) at the option of the Company upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body
if the Company shall determine, in its sole judgment exercised in good
faith, that the Fund, Adviser, or Distributor has suffered a material
adverse change in its business, operations, financial condition, or
prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(e) upon requisite vote of the Variable Contract Owners having an interest
in the Separate Accounts (or any subaccounts thereof) to substitute
the shares of another investment company or series thereof for the
corresponding shares of the Fund or a Series in accordance with the
terms of the Variable Contracts for which those shares had been
selected to serve as the underlying investment media; or
(f) in the event any of the shares of a Series are not registered, issued
or sold in accordance with applicable state and/or federal law, or
such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Company;
or
(g) at the option of the Company if the Fund or a Series fails to meet the
requirements specified in Section 3.2 hereof; or
<PAGE>
25
(h) at the option of the Fund or Distributor if the Variable Contracts
issued by the Company cease to qualify as annuity contracts or life
insurance contracts, as applicable, under the Code or if the Variable
Contracts are not registered, issued or sold in accordance with
applicable state and/or federal law; or
(i) at the option of the Company upon any substitution of the shares of
another investment company or series thereof for shares of the Fund or
a Series of the Fund in accordance with the terms of the Contracts,
provided that the Company has given at least 30 days prior written
notice to the Fund or Distributor of the date of the substitution.
(j) at the option of the Company upon a material breach of this Agreement
or of any representation or warranty herein by the Fund, Adviser, or
Distributor, or at the option of the Fund, Adviser, or Distributor
upon a material breach of this Agreement or of any representation or
warranty herein by the Company.
9.2. Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 9.1(c) and (d) hereof The Company shall
give 30 days prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
9.1(e) hereof.
<PAGE>
26
9.3. Under the terms of the Variable Contracts, the Company reserves the
right, subject to compliance with the law as then in effect, to make
substitutions for the securities that are held by a Separate Account of the
Company under certain circumstances. The parties acknowledge that the Company
has the right to substitute other securities for the shares of the Fund or a
Series thereof already purchased or to be purchased in the future if the shares
of the Fund or any or all of the Series of the Fund should no longer be
available for investment, or if, in the judgment of the Company's management,
further investment in shares of the Fund or any or all of the Series thereof
should become inappropriate in view of the purposes of the Contracts. The
Company will provide 30 days written notice to the Fund or to Distributor prior
to effecting any such substitution.
9.4. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
<PAGE>
27
If to the Fund: Anthony Fischer
SEI Financial Services Company
680 Swedesford Road
Wayne, PA 19087
If to the Transfer Agent: Michael Melles
Supervised Service Company
811 Main
Kansas City, MO 64105
If to Adviser: Michael Harrington
Pilgrim Baxter & Associates, Ltd.
1255 Drummers Lane, Suite 300
Wayne, PA 19087
If to Distributor: Anthony Fischer
SEI Financial Services Company
680 Swedesford Road
Wayne, PA 19087
If to the Company: Richard A. Wacker
Associate General Counsel
American United Life Insurance
Company
One American Square
Indianapolis, IN 46282
ARTICLE XI. Miscellaneous
11.1. It is understood that the name "American United Life Insurance
Company", "AUL:' or any derivative thereof or logo associated with that name is
the valuable property of Distributor and its affiliates, and that the Company
has the right to use such name (or derivative or logo) only so long as this
Agreement is in effect. Upon
<PAGE>
28
termination of this Agreement the Company shall forthwith cease to use such name
(or derivative or logo).
11.2. It is understood that the name "The PBHG Funds, Inc.", "PBHG",
"Pilgrim Baxter & Associates" or any derivative thereof or logo associated with
that name is the valuable property of Distributor and its affiliates and
Adviser, and that the Company has the right to use such name (or derivative or
logo) only so long as this Agreement is in effect. Upon termination of this
Agreement the Company shall forthwith cease to use such name (or derivative or
logo).
11.3. The parties agree that the names, addresses, and other information
relating to the owners of the Variable Contracts or prospects for the sale of
the Variable Contracts are the exclusive property of Company and may not be used
by the Fund, Adviser, or Distributor without the written consent of the Company.
11.4. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
11.5. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
<PAGE>
29
11.6. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
11.7. This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement. For
purposes of this provision, assignment shall be as defined in the Investment
Company Act of 1940 and the rules thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
The PBHG Funds, Inc.
ATTEST: _______________________ By: _______________________
Name: Name: David G. Lee
Title: Title: President
Pilgrim Baxter & Associates, Inc.
ATTEST: _______________________ By: _______________________
Name: Name: Michael J. Harrington
Title: Title: Mutual Funds Coordinator
SEI Financial Services Company
<PAGE>
30
ATTEST: _______________________ By: ______________________
Name: Name: David G. Lee
Title: Title: President
American United Life Insurance
Company(R)
ATTEST: ______________________ By: _______________________
Name: Richard A. Wacker Name: Brian M. Sweeney
Title: Associate General Counsel Title: V.P., Pension Mktg.
AMENDMENT NO. 1
TO
FUND PARTICIPATION AGREEMENT
This AMENDMENT NO. 1 is made as of the day of February, 1997, by and among
American United Life Insurance Company (R) (the "Company"), a life insurance
company domiciled in Indiana, on its behalf and on behalf of the segregated
asset accounts of the Company; The PBHG Funds, Inc. (the "Fund"), a Maryland
corporation; SEI Financial Services Company (the "Distributor"), a Delaware
corporation; and Pilgrim Baxter & Associates, Ltd. (the "Adviser"), a Delaware
corporation.
WITNESSETH
WHEREAS, the Company, the Fund, the Distributor, and the Adviser have
entered into a Participation Agreement dated April 3, 1995 relating to the
purchase and sale of shares of certain series of the Fund (the "Participation
Agreement"); and,
WHEREAS, the Company, the Fund, the Distributor and the Adviser desire to
amend the Participation Agreement to allow for the purchase of shares of
additional series of the Fund.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereby agree as follows:
1. Exhibit B to the Participation Agreement is hereby amended and
replaced by the Exhibit B that is attached hereto.
2. All other provisions of the Participation Agreement shall remain
unchanged.
3. This Amendment may be executed in two or more counterparts, each of
which when taken together shall constitute one and the same
instrument.
<PAGE>
1
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
THE PBHG FUNDS, INC.
ATTEST: ___________________ By: __________________
Name: John M. Zerr Name: Brian F. Bereznak
Title: Vice President Title: Vice President
PILGRIM BAXTER &
ASSOCIATES, LTD.
ATTEST: ___________________ By: __________________
Name: John M. Zerr Name: Gary L. Pilgrim
Title: General Counsel & Secretary Title: President
SEI FINANCIAL
SERVICES COMPANY
ATTEST: ___________________ By: __________________
Name: William R. White Name: David Gene
Title: Account Director Title: Senior Vice President
AMERICAN UNITED LIFE
INSURANCE COMPANY(R)
ATTEST: ___________________ By: __________________
Name: Brian Sweeney Name: Richard A. Wacker
Title: Vice President Title: Associate General
Counsel
<PAGE>
2
EXHIBIT B
Name of Portfolios
PBHG Growth Fund
PBHG Emerging Growth Fund
- --------------------------------------------------------------------------------
EXHIBIT 8.8
FORM OF PARTICIPATION AGREEMENT WITH SAFECO RESOURCE SERIES TRUST
- --------------------------------------------------------------------------------
FUND PARTICIPATION AGREEMENT
American United Life (the "Company"), SAFECO Resource Series Trust, an
unincorporated business trust organized under the laws of the state of Delaware
(the "Trust"), and its investment adviser, SAFECO Asset Management Company, a
Washington corporation ("SAM"), hereby agree to an arrangement whereby shares of
the series funds comprising the Trust (the "Portfolios") shall be made available
to serve as underlying investment media for variable annuity and/or variable
life insurance contracts ("Variable Contracts") to be issued by the Company,
subject to the following provisions:
1. Establishment of Accounts: Availability of Portfolios.
(a) The Company represents that it has established variable annuity accounts
and variable life accounts (the "Accounts"), each of which is a separate
account under the insurance laws of the state of the Company's domicile,
and has registered each of the Accounts as a unit investment trust under
the Investment Company Act of 1940 (the " 1940 Act"), unless such Account
is exempt from registration, to serve as an investment vehicle for the
Variable Contracts. Each Variable Contract provides for the allocation of
net amounts received by the Company to an Account for investment in the
shares of one or more specified open-end investment companies available
through that Account as underlying investment media. Selection of a
particular underlying investment and changes in such selection from time to
time may be made by the person covered under the Variable Contract
("Participant") or Variable Contract owner, as applicable under the
particular Variable Contract.
(b) The Trust and SAM represent and warrant that the investments of the
Portfolios will at all times be adequately diversified within the meaning
of Section 817(h) of the Internal Revenue Service Code of 1986, as amended
(the "Code"), and the regulations promulgated thereunder (the
"Regulations"), and that at all times while this Agreement is in effect (1)
all beneficial interests in the Portfolios will be owned by one or more
insurance companies or qualified plans (through trustees), or by any other
party permitted under Section 1.817-5(f)(3) of the Regulations, and (11) no
shares of any Portfolio will be sold to the general public.
(c) SAM represents and warrants that it is registered as an investment adviser
with the Securities and Exchange Commission ("SEC").
<PAGE>
2
2. Marketing and Promotion.
(a) The Company agrees to make every reasonable effort to market its Variable
Contracts, whether directly or through its affiliates. In marketing and
administering the Variable Contracts, the Company and its affiliates will
comply with all applicable State and Federal laws.
(b) SAM agrees to provide the Company with monthly and/or quarterly performance
information with respect to the Portfolios, and such other information as
the parties deem appropriate for the promotion of the Portfolios, within
five business days of the end of each month for monthly information and
within ten days of the end of each calendar quarter for quarterly
information.
3. Pricing Information; Orders; Settlement.
(a) SAM will make shares of the Portfolios available to be purchased by the
Company, and will accept redemption orders from the Company, on behalf of
each Account, at the net asset value applicable to each order on each day
on which the Trust calculates its net asset value pursuant to the rules of
the SEC. Portfolio shares shall be purchased and redeemed in such quantity
and at such time determined by the Company to be necessary to meet the
requirements of those Variable Contracts for which the Portfolios serve as
underlying investment media.
(b) SAM will provide to the Company closing net asset value, dividend and
capital gain information at the close of trading each day that the New York
Stock Exchange (the "Exchange") is open (each such day, a "business day").
The Company hereby elects to reinvest in the Portfolios all dividends and
distributions payable on a Portfolio's shares and to receive such dividends
and distributions in additional shares of such Portfolio. The Company
reserves the right to revoke this election in writing and to receive all
such dividends and distributions in cash.
(c) The Company will send via facsimile transmission to SAM, or to such other
agent as the Trust may specify, orders to purchase and/or redeem Portfolio
shares. Orders from Variable Contract owners or Participants received by
the Company which are sent by the Company prior to the close of the
Exchange on any given business day via facsimile transmission to SAM or
such other agent as the Trust may specify by 8:00 a.m., Pacific Time, the
following business day will be executed by SAM or such agent at the net
asset value determined as of the close of the Exchange on such prior
business
<PAGE>
3
day. Any orders received by the Company after the close of the Exchange on
such prior business day (or not meeting the foregoing sentence's require-
ments) will be deemed to be received by the Company on the following
business day, and will be executed by SAM at the net asset value determined
as of the close of the Exchange on the next business day following the day
such order was received. Payment for net purchases will be wired by the
Company to a custodial account designated by the Trust to coincide with the
order for shares of the Portfolios.
(d) Payments for net redemptions of shares of the Portfolios will be wired from
the Trust's custodial account to an account designated by the Company. Such
redemptions shall ordinarily be paid in federal funds or by any other
method mutually agreed upon by the parties hereto by the next business day
following receipt by the Trust (or its agent) of notice of the order of
redemption.
(e) Each party has the right to rely on information or confirmations provided
by the other party (or by any affiliate of the other party), including
Portfolio net asset values provided to the Company by SAM or an affiliate
of SAM, and shall not be liable in the event that an error is a result of
any misinformation supplied by the other party or any such affiliate. If a
mistake is caused in supplying such information or confirmations, which
results in a reconciliation with incorrect information, the amount required
to make a Variable Contract owner's or a Participant's account whole shall
be borne by the party providing the incorrect information.
(f) SAM shall advise the Company on each business day of the net asset value
per share for each Portfolio as soon as reasonably practical after the net
asset value per share is calculated, which is normally by 6 p.m. Eastern
Standard time and shall use its best efforts to make such net asset value
per share available by 9:00 p.m. Eastern Standard time.
(g) Price Errors.
(1) In the event adjustments are required to correct any error in the
computation of the net asset value of a Portfolio's shares, SAM or the
Trust shall notify the Company as soon as practicable after
discovering the need for those adjustments which result in a
reimbursement to an Account in accordance with SAM's or the Trust's
then current policies on reimbursement, which SAM or the Trust, as
appropriate, represents are reasonable and consistent with applicable
standards. Notification may be made via facsimile or via direct or
indirect systems access. Any such notification shall be
<PAGE>
4
promptly followed by a letter written on SAM's or the Trust's letter-
head stating for each day for which an error occurred the incorrect
price, the correct price, and, to the extent communicated to the
Trust's shareholders, the reason for the price change.
(2) If an adjustment is to be made in accordance with subsection (1) above
to correct an error which has caused an Account to receive an amount
different than that to which it is entitled, SAM or the Trust shall
make all necessary adjustments to the number of shares owned in the
Account and distribute to the Account the amount of such underpayment
for credit to the Contract owners. Upon the furnishing of an
accounting to SAM or the Trust by the Company, SAM or the Trust will
immediately reimburse to the Company all reasonable expenses incurred
by the Company, or any organization that the Company has retained to
provide administration or recordkeeping services under this Agreement
to adjust all Accounts and accounts of Contract owners affected by
such error.
4. Expenses.
(a) Except as otherwise provided in this Agreement, all expenses incident to
the performance by the Trust or SAM under this Agreement shall be paid by
SAM, including the cost of registration of the Trust and shares of its
Portfolios with the Securities and Exchange Commission (the "SEC") and in
states where required.
(b) SAM shall distribute to the Company proxy material with respect to the
Trust, periodic reports to shareholders and other material that are
required by law to be sent to Variable Contract owners. In addition, SAM
shall provide the Company with a sufficient quantity of prospectuses for
the Trust to be used in connection with the offerings and transactions
contemplated by this Agreement. Subject to subsection (c) below, the cost
of preparing and printing such materials shall be paid by SAM or its
affiliates, and the cost of distributing such materials shall be paid by
the Company. However, if the Trust makes changes to its prospectus for its
own benefit or the benefit of someone other than the Company resulting in
the need to print and distribute one or more supplements to Variable
Contract holders, all costs associated with printing and distributing any
such supplement shall be borne by SAM.
(c) In lieu of SAM providing printed copies of prospectuses and periodic fund
reports to shareholders, the Company shall have the right to request that
SAM provide a copy of such materials in an electronic or camera-ready
format, which the Company may use to have such materials printed together
with similar materials of other Account
<PAGE>
5
funding media that the Company or any distributor will distribute to exis-
ting or prospective Variable Contract owners or Participants.
(d) SAM and the Trust shall provide (1) at the Trust's expense, one copy of the
Trust's current Statement of Additional Information ("SAI") to the
Company and to any owner of a Contract issued by the Company who requests
such SAI; (2) at the Company's expense, such additional copies of the
Trust's current SAI as the Company shall reasonably request and that the
Company shall require in accordance with applicable law in connection with
offering the Variable Contracts issued by the Company.
(e) The Trust currently does not make and does not intend to make any payments
to finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act
or otherwise, although it may make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to Rule
12b-1, the Trust undertakes to have its board of trustees, a majority of
whom are not interested persons of the Trust, formulate and approve any
plan under Rule 12b-1 to finance distribution expenses.
5. Representations.
(a) The Company agrees that it and its agents shall not, without the written
consent of SAM, make representations concerning the Trust or the Portfolio
shares except those contained in the then current prospectuses, statement
of additional information and in current printed sales literature of the
Trust previously approved, or provided to the Company, by SAM.
(b) The Company represents and warrants that interests in certain Variable
Contracts are or will be registered under the Securities Act of 1933 ("
1933 Act") or are exempt from registration thereunder, that the Variable
Contracts will be issued and sold in compliance in all material respects
with all applicable federal and state laws and that the sale of the
Variable Contracts shall comply in all material respects with state
insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good
standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale. thereof as a
segregated asset account and that each Account is or will be registered as
a unit investment trust or will be exempt from registration as such in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Variable Contracts.
<PAGE>
6
(c) The Company represents that the Variable Contracts are currently treated as
annuity and/or life insurance contracts under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that
it will notify SAM and the Trust immediately upon having a reasonable basis
for believing that the Variable Contracts have ceased to be so treated or
that they might not be so treated in the future.
(d) The Company represents and warrants that its directors, officers, and
employees, if any, dealing with the money and/or securities of the Accounts
are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Accounts in an amount not
less than $2 million. The aforesaid bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding company.
(e) SAM and the Trust make no representation as to whether any aspect of the
Trust's operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states.
(f) SAM represents that shares of the Portfolios will be sold and distributed
in accordance with all applicable federal and state securities laws,
including without limitation, the 1933 Act, the Securities Exchange Act of
1934, and the 1940 Act.
(g) The Trust represents that it is currently qualified as a regulated
investment company under Subchapter M of the Code and SAM and the Trust
represent that they will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provision) and that SAM or
the Trust will notify the Company immediately upon having a reasonable
basis for believing that a Portfolio has ceased to so qualify or might not
so qualify in the future. The Trust and SAM acknowledge that any failure of
the Trust to qualify as a regulated investment company under Subchapter M
of the Code would constitute a breach of their representations and
warranties under Item 1 (b) of this Agreement.
(h) The Trust and SAM represent and warrant that the shares of the Portfolios
sold pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with the laws of the
State of Washington and all applicable federal and state securities laws
and that the Portfolios are and shall remain registered under the 1940 Act.
The Trust shall amend the registration statement for such shares under the
1933 Act and 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall also register and
qualify its shares
<PAGE>
7
for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Trust or SAM.
(i) The Trust represents that it is lawfully organized and validly existing
under the laws of its state of domicile, that the shares of the Portfolios
are duly authorized for issuance in accordance with applicable law, and
that it is and will comply in all material respects with the 1940 Act.
(j) SAM represents and warrants that it is duly organized under the laws of its
state of domicile, and is and shall remain duly registered in all material
respects under any applicable federal and state securities laws, and
further that it shall perform its obligations for the Trust and the
Portfolios in compliance in all material respects with applicable federal
and state securities laws.
(k) The Trust and SAM represent and warrant that all of their respective
directors, officers, and employees dealing with the money and/or securities
of the Trust are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Trust and its
Portfolios in an amount not less than the minimal coverage as required
currently by Rule 17g-(1) of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage
for larceny and embezzlement and shall be issued by a reputable bonding
company.
(1) The Trust and SAM agree to use their best efforts to ensure that each
Portfolio of the Trust will be managed consistent with its investment
objective or objectives, investment policies, and investment restrictions
as described in the Trust's prospectus and registration statement, as
modified from time to time.
6. Administration of Accounts.
(a) Administrative services to Variable Contract owners and Participants shall
be the responsibility of the Company and shall not be the responsibility of
the Trust or SAM. SAM recognizes the Company as the sole shareholder of
fund shares issued under this Agreement. From time to time, SAM may pay
amounts from its past profits to the Company for providing certain
administrative services for the Trust or its Portfolios, or for providing
Variable Contract owners with other services that relate to the Trust.
These services may include, among other things, sub-accounting services,
answering inquiries of Variable Contract owners regarding the Portfolios,
transmitting, on behalf of the Trust, proxy statements, annual reports,
updated prospectus and other communications to
<PAGE>
8
Variable Contract owners regarding the Trust and its Portfolios and such
other related services as the Trust or a Variable Contract holder may
request. In consideration of the savings resulting from such arrangement,
and to compensate the Company for these services, SAM agrees to pay to the
Company an amount equal to 25 basis points (0.25%) per annum of the
average aggregate amount invested by the Company in the Portfolios under
this Agreement. Payment of such amounts by SAM will not increase the fees
paid by the Trust, the Portfolios or their shareholders.
(b) The parties agree that SAM's payments to the Company are for administrative
services only and do not constitute payment in any manner for investment
advisory services or for costs of distribution.
(c) For the purposes of computing the amount of the administrative fee
contemplated by this Section 6, the average aggregate amount invested by
the Company over a one month period shall be computed by adding the
Company's aggregate investment (share net asset value multiplied by total
number of shares held by the Company) on the first day of each month to the
Company's aggregate investment on the last day of each month and dividing
by two.
(d) SAM will calculate the amount of the administrative fee at the end of each
calendar quarter and payment of such fee will be made to the Company within
30 days thereafter. The check for the administrative services will be
accompanied by a statement showing the calculation of the monthly amounts
payable by SAM and such other supporting data as may be reasonably
requested by the Company.
7. Termination.
(a) This agreement shall terminate as to the sale and issuance of new Variable
Contracts:
(i) at the option of either the Company or the Trust, upon 60 days advance
written notice to the other;
(ii) at the option of the Company, upon written notice to the Trust if
shares of the Portfolios are not available for any reason to meet the
requirements of Variable Contracts as determined by the Company;
<PAGE>
9
(iii) at the option of either the Company or the Trust, immediately upon
institution of formal proceedings against the broker-dealer or
broker-dealers serving as distributor for the Variable Contracts, the
Accounts, the Company, the Trust, or SAM by the National Association
of Securities Dealers, Inc. (the "NASD"), the SEC or any other
regulatory body having jurisdiction over the operations of such
entities. Further, each of SAM, the Trust, and the Company shall
promptly notify the other parties hereto of the institution of any
such formal proceedings;
(iv) upon substitution of shares of the Portfolios with the shares of
another investment company in accordance with the terms of the
applicable Variable Contracts. The Company will give 60 days written
notice to SAM of any pending substitution to replace the Portfolio's
shares;
(v) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(vi) if the shares of the Portfolios are not registered, issued or sold in
conformance with Federal law or such law precludes the use of the
Portfolios' shares as underlying investment media for Variable
Contracts issued or to be issued by the Company. Prompt notice shall
be given by either party should such situation occur;
(vii) at the option of any party to the Agreement upon a determination by a
majority of the Trustees of the Trust, or a majority of disinterested
Trustees, that an irreconcilable material conflict exists;
(viii) at the option of the Company if the Trust or a Portfolio falls to
meet the requirements under the Code specified in Section 1 (b)
hereof,
(ix) at the option of the Company upon a material breach of this agreement
or of any representation or warranty herein by SAM or the Trust, or at
the option of the Trust or SAM upon a material breach of this
Agreement or of any representation or warranty herein by the Company.
(b) If the need for substitution of the shares of another investment company,
pursuant to Section 26(b) of the 1940 Act, arises out of the failure of the
Portfolio shares to be registered, issued or sold in conformance with
federal law, or such law precludes the use of shares of the Portfolios as
underlying investment media for Variable Contracts issued or to be issued
by the Company, the expenses of obtaining such order shall be
<PAGE>
10
reimbursed by SAM. SAM shall cooperate with the Company in connection with such
application.
8. Continuation of Agreement. Termination as the result of any cause listed
in Section 7 shall not affect the obligation of the Trust to furnish shares of
the Portfolios to Variable Contracts then in force for which such shares serve
or may serve as the underlying media unless such further sale of shares of the
Portfolios is proscribed by law or the SEC or other regulatory body.
9. Advertising, Materials, Filed Documents.
(a) Advertising and sales literature with respect to the Portfolios prepared by
the Company or its agents for use in marketing its Variable Contracts will
be submitted to SAM for review before such material is submitted to any
regulatory body for review, and in no event less than 10 days prior to its
use. The Company shall not use any such material if SAM or the Trust
objects to such use within 10 days after receipt.
(b) SAM or the Trust shall furnish to the Company or its designee each piece of
sales literature or other promotional material in which the Company or its
Accounts are named, and no such material shall be used without the prior
approval of the Company or its designee. SAM and the Trust agree that each
and the affiliate's of each shall not give any information or make any
representation on behalf of the Company or concerning the Company, the
Accounts, or the Variable Contracts issued by the Company, other than the
information or representations contained in a registration statement or
prospectus for such contracts, as such registration statement may be
amended or supplemented from time to time, or in reports for the Separate
Accounts or prepared for distribution to owners of such contracts, or in
sales literature or other promotional material approved by the Company or
its designee, except with the prior permission of the Company.
(c) SAM will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semiannual reports, proxy statements and all
amendments or supplements to any of the above that relate to the Trust and
its Portfolios promptly after the filing of such document with the SEC or
other regulatory authorities. The Trust's prospectus shall state that the
statement of additional information for the Trust is available from the
Trust or its designated agent and shall be provided free of charge to the
Company and to any Variable Contract owner or Participant who requests a
copy.
<PAGE>
11
(d) The Company will provide to SAM at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, and all
amendments or supplements to any of the above that relate to each Account
promptly after the filing of such document with the SEC or other regulatory
authority.
10. Proxy Voting.
(a) The Company shall provide pass-through voting privileges on shares of the
Portfolios to all owners and Participants of Variable Contracts funded by
Accounts that are registered as investment companies with the SEC to the
extent the SEC continues to interpret the 1940 Act as requiring such
privileges. If shares are held in any other Account not required to be
registered under the 1940 Act, those shares will be voted in the Company's
sole discretion.
(b) The Company will distribute to Variable Contract owners and Participants,
as provided for in paragraph 10(a) above, all proxy material furnished by
SAM and will vote shares of the Portfolios in accordance with instructions
received from Variable Contract owners and Participants. The Company, with
respect to each Variable Contract and each Account, shall vote Portfolio
shares for which no instructions have been received in the same proportion
as shares for which such instructions have been received. The Company
agrees that it and its affiliates shall not oppose or interfere with the
solicitation of proxies for Portfolio shares held for such Variable
Contract owners and Participants.
11. Indemnification
(a) The Company agrees to indemnify and hold harmless the Trust and its
Portfolios, SAM, and each of their respective directors, officers,
employees, agents and each person, if any, who controls the Trust, its
underwriter or investment adviser within the meaning of the Securities Act
of 1933 (the "1933 Act") against any losses, claims, damages or
liabilities to which the Trust, the Portfolios, SAM, or any such director,
officer employee, agent, or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) Any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectus or sales
literature of the Company, or arising
<PAGE>
12
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements or representations therein not misleading (other
than statements or representations contained in the prospectuses or
sales literature of the Trust), provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement or prospectus in conformity with written materials furnished
to the Company by the Trust, the Portfolios or SAM specifically for
use either therein or otherwise in connection with the sale of the
Variable Contracts or Trust shares;
(ii) Any untrue statement or alleged untrue statement of a material fact
contained in sales literature pertaining to the Company, the Accounts
or the Variable Contracts which has been prepared by SAM or the
underwriter for the Trust if such statement was made in reliance upon
written information furnished by the Company specifically for use
therein; or
(iii) The breach by the Company of any representation or warranty in this
Agreement.
The Company will reimburse any legal or other expenses reasonably incurred by
the indemnified parties in connection with investigating or defending any such
loss, claim, damage, liability or action. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) The Company shall not be liable under this Section I I with respect to any
losses, claims, damages or liabilities (or actions in respect thereof)
incurred or assessed against any such indemnified party to the extent such
may arise from such party's willful misfeasance, bad faith, or negligence
in the performance of such party's duties or by reason of such party's
reckless disregard of obligations or duties under this Agreement.
(c) The Trust and SAM agree, jointly and severally, to indemnify and hold
harmless the Company and its directors, officers, employees, the
distributor for the Variable Contracts, the Company's agents and each
person, if any, who controls the Company within the meaning of the 1933
Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer, employee, distributor, agent or
controlling person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
<PAGE>
13
(i) Any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, prospectuses or sales
literature of the Trust, or the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
however, that neither SAM, the Trust nor any Portfolio will be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon a Registration Statement or
prospectuses which are in conformity with written materials furnished
to the Trust or SAM by the Company specifically for use therein;
(ii) Any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, prospectus, periodic report or
sales literature covering the Variable Contracts issued by the
Company, or any amendment thereof or supplement thereto, if such
statement was made in reliance upon written information furnished by
SAM or by or on behalf of the Trust specifically for use therein; or
(iii) The breach of any representation or warranty in this Agreement by SAM
or the Trust, including but not limited to a finding or claim that the
Portfolios are not adequately diversified within the meaning of
Section 817(h) of the Code and/or that while this Agreement is in
effect, all beneficial interests will be owned by one or more
insurance companies or by any other party permitted under Section
1.817-5(f)(3) of the Regulations promulgated under the Code.
SAM will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, employee, distributor, agent, or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in addition
to any liability which SAM or the Trust may otherwise have.
(d) Neither SAM, the Trust nor any Portfolio will be liable under this Section
11 to the Company or other parties covered under Section 11 (c) with
respect to any losses, claims, damages or liabilities (or actions in
respect thereof) incurred or assessed against any such party (including the
Company) as such may arise from such party's willful misfeasance, bad
faith, or negligence in the performance of such party's duties or by reason
of such party's reckless disregard of obligations or duties under this
Agreement.
(e) Promptly after receipt by an indemnified party hereunder of notice of the
commencement of action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party of the
<PAGE>
14
commencement of such action; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 11. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement of such action, the indemnifying
party will be entitled to participate in such action and, to the extent
that it may wish to, assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 11 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
12. Potential Conflicts
(a) The Company has received a copy of an application for exemptive relief, as
amended, filed by Trust and certain affiliates on December 20, 1995 with
the SEC and the order issued by the SEC on January 17, 1996, in response
thereto (the "Shared Funding Exemptive Order"). The Company has reviewed
the conditions to the requested relief set forth in such application for
exemptive relief. As set forth in such application, the Board of Trustees
of the Trust (the "Board") will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the Variable
Contract holders of all separate accounts ("Participating Companies")
investing in the Portfolios. An irreconcilable material conflict may arise
for a variety of reasons, including (i) a state insurance regulatory
action; (ii) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax
or securities regulatory authorities; (iii) an administrative or judicial
decision in any relevant proceeding; (iv) the manner in which the
investments of a Portfolio are being managed; (v) a difference among voting
instructions given by Variable Contract Owners/Participants; or (vi) a
decision by a Participating Company to disregard the voting instructions of
Variable Contract owners or Participants. The Board shall promptly inform
the Company if it determines that an irreconcilable material conflict
exists and the implications of such conflict.
(b) The Company will report any potential or existing conflicts of which it
becomes aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by
providing the Board with all information reasonably necessary for the Board
to consider any issues raised. This
<PAGE>
15
assistance shall include, but is not limited to, an obligation by the
Company (i) to inform the Board whenever the voting instructions of
Variable Contract owners or Participants are disregarded, and (ii) to
submit to the Board such reports, materials or data as the Board may
reasonably request so that the Board may fully carry out the obligations
imposed upon it by the Shared Funding Order, and such reports, materials
and data shall be submitted more frequently if deemed appropriate by the
Board. The Company will carry out its responsibility under this subsection
(b) with a view only to the interests of the Variable Contract owners and
Participants.
(c) If a majority of the Board, or a majority of the disinterested trustees of
the Board ("Independent Trustees"), determine that a material
irreconcilable conflict exists with regard to Variable Contract owner or
Participant investments in the Portfolios, the Board shall give prompt
notice to all Participating Companies. If the Trust or SAM is responsible
for causing or creating such conflict, SAM shall at its sole cost and
expense, and to the extent reasonably practicable (as determined by a
majority of the Independent Trustees), take such action as is necessary to
remedy or eliminate the irreconcilable material conflict. If a majority of
the Board or a majority of the Independent Trustees determine that the
Company is responsible for causing or creating such conflict, the Company
shall at its sole cost and expense, and to the extent reasonably
practicable (as determined by a majority of the Independent Trustees),
take whatever steps are necessary to remedy or eliminate the irreconcilable
material conflict. Such necessary action may include but shall not be
limited to:
(i) withdrawing the assets allocable to the Accounts from the Portfolios
and reinvesting those assets in a different investment medium or
submitting the question of whether such segregation should be
implemented to a vote of all affected Variable Contract owners and
Participants, and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance
contract owners, or Variable Contract owners of one or more
Participating Companies) that votes in favor of such segregation, or
offering to the affected Variable Contract owners or Participants the
option of making such a change; and/or
(ii) establishing a new registered management investment company or managed
separate account.
(d) If a material irreconcilable conflict arises as a result of a decision by
the Company to disregard the voting instructions of its Variable Contract
owners or Participants, and that decision represents a minority position or
would preclude a
<PAGE>
16
majority vote, the Company at its sole cost, may be required, to withdraw
an Account's investment in the affected Portfolio and no charge or penalty
will be imposed by SAM or the Trust as a result of such withdrawal;
provided, however, that such withdrawal and termination shall be limited to
the extent required to remedy the foregoing material irreconcilable
conflict as determined by a majority of the Independent Trustees. The
Company's responsibility under this subsection (d) shall be carried out
with a view only to the interests of the Variable Contract owners and
Participants. In addition, no Variable Contract owner shall be required to
bear, directly or indirectly, the costs of remedial actions taken to remedy
a material irreconcilable conflict.
(e) For the purpose of this Section 12, a majority of the Independent Trustees
shall determine whether or not any proposed action adequately remedies any
irreconcilable material conflict, but in no event will the Trust or SAM be
required to establish a new funding medium for any Variable Contract. The
Company shall not be required by this Section 12 to establish a new funding
medium for any Variable Contract if an offer to do so has been declined by
vote of a majority of the Variable Contract owners or Participants
materially affected by the irreconcilable material conflict.
(f) All reports received by the Board regarding potential or existing
conflicts, and all action of the Board with respect to determining the
existence of a conflict, notifying Participating Companies of a conflict,
and determining whether any proposed action adequately remedies a conflict,
will be properly recorded in the minutes or other appropriate records of
the Trust.
13. Miscellaneous.
(a) Amendment and Waiver. Neither this Agreement, nor any provision hereof, may
be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all parties hereto.
(b) Notices. All notices and other communications hereunder shall be given or
made in writing and shall be delivered personally, or sent by telex,
telecopier or registered or certified mail, postage prepaid, return receipt
requested, to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.
<PAGE>
17
To the Company: American United Life Insurance
Company
One American Square
Indianapolis, IN 46282
Attention: General Counsel
To SAM: SAFECO Asset Management Co.
4333 Brooklyn Avenue NE
Seattle, Washington 98105
Attention: Institutional Division
To the Trust: SAFECO Resource Series Trust
4333 Brooklyn Avenue NE
Seattle, Washington 98105
Attention: Controller
Any notice, demand or other communication given in a manner prescribed in this
subsection (b) shall be deemed to have been delivered on receipt.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors
and assigns.
(d) Counterparts. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement, and any party
hereto may execute this Agreement by signing any such counterpart.
(e) Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
(f) Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes all prior agreements
and understandings relating to the subject matter hereof.
(g) Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Washington.
<PAGE>
18
(h) Cooperation. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities having jurisdiction (including,
without limitation, the SEC, the NASD, and state insurance regulators) and
shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or
the transactions contemplated hereby.
(i) SEC Rules. The Trust and the Company agree that if and to the extent Rule
6e-2 or 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in
final form, to the extent applicable the Portfolios and the Company shall
each take such steps as may be necessary to comply with such Rules as
amended or adopted in final form.
(j) Name. The Trust and SAM agree and understand that the names "American
United Life Insurance Company", "AUL", or any derivative thereof or logo
associated with those names (an "AUL Mark") is the valuable property of the
Company and its affiliates, and that the Trust and/or SAM shall not use any
AUL Mark without the prior written consent of the Company. Upon termination
of this Agreement for any reason, the Trust and/or SAM shall cease all use
of any AUL Mark as soon as reasonably practicable.
(k) Customers. The Trust and SAM agree to treat as the property of the Company
any list or compilation of names, addresses, and other information relating
to the owners of the Variable Contracts or prospects for the sale of
Variable Contracts acquired in the course of performing under this
Agreement and agree not to use such information for any purpose without the
prior consent of the Company.
(1) Captions. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
(m) Assignment. This Agreement may not be assigned by any party to the
Agreement except with the written consent of the other parties to the
Agreement. For purposes of this provision, the term "assigned" shall
include a change in control of a party to the Agreement.
14. Limitation on Liability of Trustees. This Agreement has been executed on
behalf of the Trust by the undersigned officer of the Trust in his/her
capacity as an officer of the Trust. The obligations of this Agreement that
pertain to the Trust shall be binding only upon the assets and property of
the Trust and shall not be binding upon any individual
<PAGE>
19
trustee, officer or shareholder of the Trust or its Portfolios. This
provision shall not affect the obligations or liabilities of SAM under this
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers as of this 24th day of February, 1997.
SAFECO RESOURCE SERIES TRUST
By /s/ Neal A. Fuller
- --------------------------------------
Name: Neal A. Fuller
Title: Vice President and Controller
SAFECO ASSET MANAGEMENT COMPANY
By /s/ Leslie Eggerling
- --------------------------------------
Name: Leslie Eggerling
Title: Vice President
AMERICAN UNITED LIFE INSURANCE COMPANY
By /s/ Brian Sweeney
- --------------------------------------
Name Brian Sweeney
Title: Vice President Marketing
- --------------------------------------------------------------------------------
EXHIBIT 8.9
FORM OF PARTICIPATION AGREEMENT WITH T. ROWE PRICE EQUITY SERIES, INC.
- --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
Among
AMERICAN UNITED LIFE INSURANCE COMPANY,
T. ROWE PRICE INVESTMENT SERVICES, INC.,
and
T. ROWE PRICE EQUITY SERIES, INC.,
THIS AGREEMENT, effective as of the 3rd day of April, 1995 by and among
American United Life (hereinafter, the "Company"), an Indiana life insurance
company, on its own behalf and on behalf of each segregated asset account of the
Company set forth on Schedule A hereto as may be amended from time to time
(each account hereinafter referred to as the "Account"), and the T. Rowe Price
Equity Series Inc. (the "Fund"), a corporation organized under the laws of
Maryland, and T. Rowe Price Investment Services, Inc. (hereinafter the
"Underwriter"), a Maryland corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is or will be available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Fund will obtain an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment. Company
Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T) (b)(15) thereunder, if and to the extent necessary to permit shares of
the Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, T. Rowe Price Associates, Inc. (the "Adviser"), which serves as
investment adviser to the Fund, is duly registered as an investment adviser
under the federal Investment Advisers Act of 1940, as amended, and any
applicable state securities laws; and
<PAGE>
2
WHEREAS, the Company has issued or will issue certain variable life
insurance and variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts; and
WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (hereinafter the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. (hereinafter "NASD");
and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Underwriter agrees to sell to the Company those shares of the
Designated Portfolios which the Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios available
for purchase at the applicable net asset value per share by the Company and the
Account on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission, and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees or Directors of the Fund (hereinafter the "Board") may refuse
to sell shares of any Designated Portfolio to any person, or suspend or
terminate the offering of shares of any Designated Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Designated Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts. No shares
of any Designated Portfolios will be sold to the general public. The Fund and
the Underwriter will not sell Fund shares to any insurance company or separate
account unless an agreement containing provisions substantially the same as
Articles I, III and VII of this Agreement is in effect to govern such sales.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, ordinarily
executing such requests on a daily basis at the net asset value next computed
after receipt by the Fund or its designee of the request for redemption, except
that the Fund reserves the right to suspend the right of redemption or postpone
the date of payment or satisfaction upon redemption consistent with Section
22(e) of the 1940 Act and any rules thereunder, and in accordance with the
procedures and policies of the Fund as described in the then current prospectus.
<PAGE>
3
Subject to the foregoing, the Fund ordinarily expects to pay redemption proceeds
in cash on the next Business Day after an order to redeem Fund shares is made in
accordance with the provisions of Section 1.5 hereof. Payment shall be in
federal funds transmitted by wire by 3:00 p.m. Baltimore time.
1.5 For purposes of Sections 1.1 and 1.4, the Company shall be the designee
of the Fund for receipt of purchase and redemption orders from the Account, and
receipt by such designee shall constitute receipt by the Fund; provided that the
Company receives the order by 4:00 p.m. Baltimore time and the Fund receives
notice of such order by 9:30 a.m. Baltimore time on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value pursuant
to the rules of the SEC.
1.6 The Company agrees to purchase and redeem the shares of the Designated
Portfolios offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus.
1.7 The Company shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions of
Section 1.5 hereof. Payment shall be in federal funds transmitted by wire by
3:00 p.m. Baltimore time. If payment in federal funds for any purchase is not
received or is received by the Fund after 3:00 p.m. Baltimore time on such
Business Day, the Company shall promptly, upon the Fund's request, reimburse the
Fund for any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowing or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request. For purposes
of Section 2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be properly recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Designated Portfolios' shares. The Company hereby
elects to receive all such income, dividends, and capital gain distributions as
are payable on Designated Portfolio shares in additional shares of that
Portfolio. The Company reserves the right to revoke this election and to receive
all such income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10 The Fund shall make the net asset value per share for each Designated
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Baltimore time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Baltimore time.
1.11 The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies, provided,
however, that (a) such other investment company, or series thereof, has
investment objectives or policies that are substantially different from the
investment objectives and policies of the Fund; or (b) the Company gives the
Fund and the Underwriter 45 days written notice of its intention to make such
other investment company available as a funding vehicle for the Contracts; or
(c) such other investment
<PAGE>
4
company was available as a funding vehicle for the Contracts prior to the date
of this Agreement and the Company so informs the Fund and Underwriter prior to
their signing this Agreement; or (d) the Fund or Underwriter consents to the use
of such other investment company, such consent not to be unreasonably withhold.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that the Contracts (a) are or,
prior to issuance, will be registered under the 1933 Act or, alternatively (b)
are not registered because they are properly exempt from registration under the
1933 Act or will be offered exclusively in transactions that are properly exempt
from registration under the 1933 Act. The Company further represents and
warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities
and insurance laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated
asset account under Indiana insurance laws, and that it (a) has registered or,
prior to any issuance or sale of the Contracts, will register the Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts, or alternatively (b) has
not registered the Account in proper reliance upon an exclusion from
registration under the 1940 Act. The Company shall register and qualify the
contracts or interests therein as securities in accordance with the laws of the
various states only if and to the extent deemed advisable by the Company.
2.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for issuance
and sold in compliance with the laws of the State of Indiana and all applicable
federal and state securities laws and that the Fund is and shall remain
registered under the 1940 Act. The Fund shall amend the Registration Statement
for its shares under the 1933 Act and the 1940 Act from time to time as required
in order to effect the continuous offering of its shares. The Fund shall
register and qualify the shares for sale in accordance with the laws of the
various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have
the Board of Directors or Trustees of the Fund (the "Board"), a majority of whom
are not interested persons of the Fund, formulate and approve any plan pursuant
to Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees and expenses are and shall at all times remain in compliance with the laws
of the State of Indiana to the extent required to perform this Agreement.
2.5 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will
<PAGE>
5
sell and distribute the Fund shares in accordance with the laws of the State of
Indiana and any applicable state and federal securities laws.
2.7 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund in compliance in
all material respects with the laws of the State of Indiana and any applicable
state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.9 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities
employed or controlled by the Company dealing with the money and/or securities
of the Account are covered by a blanket fidelity bond or similar coverage for
the benefit of the Account, in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a reputable
bonding company. The Company agrees to hold for the benefit of the Fund and to
pay to the Fund any amounts lost from larceny, embezzlement or other events
covered by the aforesaid bond to the extent such amounts properly belong to the
Fund pursuant to the terms of this Agreement. The Company agrees to make all
reasonable efforts to see that this bond or another bond containing these
provisions is always in effect, and agrees to notify the Fund and the
Underwriter in the event that such coverage no longer applies.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus (describing only the Designated Portfolios listed on
Schedule A) as the Company may reasonably request. The Company shall bear the
expense of printing copies of its current prospectus that will be distributed to
existing Contract owners, and the Company shall bear the expense of printing
copies of the Fund's prospectus that are used in connection with offering the
Contracts issued by the Company. If requested by the Company in lieu thereof,
the Fund shall provide such documentation (including a final copy of the new
prospectus on diskette at the Fund's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is amended) to have the prospectus for the
Contracts and the Fund's prospectus printed together in one document (such
printing to be at the Company's expense).
3.2 The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available from the Company, and
the Underwriter (or the Fund), at its expense, shall provide copies of such SAI
free of charge to the Company for itself and for any owner of a Contract who
requests such SAI.
3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
<PAGE>
6
3.4 The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received
from Contract owners; and
(iii) vote Fund shares for which no instructions have been received in
the same proportion as Fund shares of such portfolio for which
instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law.
3.5 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt and provide
in writing.
3.6 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material
that the Company develops or uses and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named, at least ten
Business Days prior to its use. No such material shall be used if the Fund or
its designee reasonably object to such use within ten Business Days after
receipt of such material. The Fund or its designee reserves the night to
reasonably object to the continued use of any such sales literature or other
promotional material in which the Fund (or a Designated Portfolio thereof) or
the Adviser or the Underwriter is named, and no such material shall be used if
the Fund or its designee so object.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus or SAI for the Fund
shares, as such registration statement and prospectus or SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause to
be furnished, to the Company, each piece of sales literature or other
promotional material that it develops or uses and in which
<PAGE>
7
the Company, and/or its Account, is named at least ten Business Days prior to
its use. No such material shall be used if the Company reasonably objects to
such use within ten Business Days after receipt of such material. The Company
reserves the right to reasonably object to the continued use of any such sales
literature or other promotional material in which the Company and/or its Account
is named, and no such material shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract Owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no- action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, contemporaneously with the
filing of such document(s) with the SEC or other regulatory authorities.
4.7 The Fund will provide the Company with as much notice as is reasonably
practicable of any proxy solicitation for any Designated Portfolio, and of any
material change in the Fund's registration statement, particularly any change
resulting in a change to the registration statement or prospectus for any
Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract Owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
4.8 For purposes of this Article IV, the phrase "sales literature and other
promotional materials" includes, but is not limited to, any of the following
that refer to the Fund or any affiliate of the Fund: advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, reports, market
letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Funds.
<PAGE>
8
ARTICLE V. Fees and Expenses
5.1 The Fund and the Underwriter shall pay no fee or other compensation to
the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing, and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter, or other resources
available to the Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.
5.3 The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification and Qualification
6.1 The Fund will invest its assets in such a manner as to ensure that the
Contracts will be treated as annuity or life insurance contracts, whichever is
appropriate, under the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations issued thereunder (or any successor provisions). Without
limiting the scope of the foregoing, each Designated Portfolio has complied and
will continue to comply with Section 817(h) of the Code and Treasury Regulation
Sec. 1.817-5, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts, and any amendments or other modifications or successor provisions to
such Section or Regulations. In the event of a breach of this Article VI by the
Fund, it will take all reasonable steps (a) to notify the Company of such breach
and (b) to adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Regulation 817.5.
6.2 The Fund represents that it is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and that it will make every
effort to maintain such qualification (under Subchapter M or any successor or
similar provisions) and that it will notify the Company immediately upon having
a reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
6.3 The Company represents that the Contracts are currently, and at the
time of issuance shall be, treated as life insurance or annuity insurance
contracts, under applicable provisions of the Code, and that it will make every
effort to maintain such treatment, and that it will notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing the
Contracts have ceased to be so treated or that they might not be so treated in
the future. The Company agrees that any prospectus offering a contract that is a
"modified endowment contract" as that term is defined in Section 7702A of
<PAGE>
9
the Code (or any successor or similar provision), shall identify such contract
as a modified endowment contract.
ARTICLE VII. Potential Conflicts
The following provisions shall apply only upon issuance of the Mixed and Shared
Funding Order and the sale of shares of the Fund to variable life insurance
separate accounts.
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to each Account provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
<PAGE>
10
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account within six months after the Board informs the Company in writing
that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Until the
end of the foregoing six month period, the Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contract if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.7 If and to the extent the Shared Funding Exemption Order or any
amendment thereto contains terms and conditions different from Sections 3.4,
3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Fund and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with the Shared Funding Exemptive Order, and Sections
3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical to
such Sections are contained in the Shared Funding Exemptive Order or any
amendment thereto. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6c-3 is adopted, to provide exemptive relief from any provision
of the 1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 3.5, 7.1., 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
ARTICLE VIII. Indemnification
8.1 Indemnification By the Company
8.1(a). The Company agrees to indemnify and hold harmless the Fund and the
Underwriter and each of its directors and officers, and each person, if any, who
controls the Fund or Underwriter within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in
<PAGE>
11
respect thereof) or settlements are related to the current or prior sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
Registration Statement, prospectus (which shall include an
offering memorandum, if any), or SAI for the Contracts or
contained in the Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the Registration Statement,
prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus, SAI, or sales literature of
the Fund not supplied by the Company or persons under its
control) or wrongful conduct of the Company or persons under its
authorization or control, with respect to the sale or
distribution of the Contracts or Fund Shares, or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement,
prospectus, SAI, or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of
this Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the qualification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company, as limited by and in
accordance with the provisions of Sections 8-1(b) and 8.1(c)
hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
<PAGE>
12
8.1(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against an
Indemnified Party, the Company shall be entitled to participate, at its own
expense, in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2 Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of it directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the current or prior sale or acquisition of the Fund's shares or
the Contracts; and
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement or prospectus or SAI or sales literature
of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the
Registration Statement, prospectus or SAI for the Fund or in
sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus, SAI or sales literature for
the Contracts not supplied by the Underwriter or persons under
its control) or wrongful conduct of the
<PAGE>
13
Fund or Underwriter or persons under their control, with respect
to the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement,
prospectus, SAI or sales literature covering the Contracts, or
any amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Fund or the Underwriter
to provide the services and furnish the materials under the terms
of this Agreement (including a failure of the Fund, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
<PAGE>
14
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3 Indemnification By the Fund
8.3(a). The Fund agrees to indemnify and hold harmless the Company and each
of its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Fund) or litigation (including legal and other expenses)
to which the Indemnified Parties may be required to pay or may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, expenses, damages, liabilities or expenses (or actions in
respect thereof) or settlements, are related to the operations of the Fund and:
(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
expense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
<PAGE>
15
8.3(d). The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceeding against it or any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of Maryland.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1 This Agreement shall continue in full force and effect until the first
to occur of
(a) termination by any party, for any reason with respect to some or
all Designated Portfolios, by three (3) months advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter based upon the Company's determination that shares of
the Fund are not reasonably available to meet the requirements of
the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Underwriter in the event any of the Portfolio's shares are not
registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares
as the underlying investment media of the Contracts issued or to
be issued by the Company; or
(d) termination by the Fund or Underwriter in the event that formal
administrative proceedings are instituted against the Company by
the NASD, the SEC, the Insurance Commissioner or like official of
any state or any other regulatory body regarding the Company's
duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of the
Fund shares; provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse
effect upon the ability of the Company to perform its obligations
under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body; provided,
however, that the Company determines in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund
or Underwriter to perform its obligations under this Agreement;
or
<PAGE>
16
(f) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio in the event
that such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M or fails to comply with the Section
817(h) diversification requirements specified in Article VI
hereof, or if the Company reasonably believes that such Portfolio
may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof, or
(h) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, financial condition,
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or
(i) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund, Adviser, or the
Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or
(j) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.11 (b) hereof and at
the time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however, any termination under this Section 10.1(j)
shall be effective forty-five days after the notice specified in
Section 1.11 (b) was given; or
(k) termination by the Company upon any substitution of the shares of
another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of
the Contracts, provided that the Company has given at least 45
days prior written notice to the Fund and Underwriter of the date
of substitution; or
(1) termination by any party in the event that the Fund's Board of
Directors determines that a material irreconcilable conflict
exists as provided in Article VII.
10.2 Notwithstanding any termination of this Agreement, the Fund and the
Underwriter shall, at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
the owners of the Existing Contracts may be permitted to reallocate investments
in the Fund, redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.2 shall not apply to any terminations under Article
VII and the effect of such Article VII terminations shall be governed by Article
VII of this Agreement. The parties further agree that this Section 10.2 shall
not apply to any terminations under Section 10.1(g) of this Agreement.
<PAGE>
17
10.3 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) as permitted
by an order of the SEC pursuant to Section 26(b) of the 1940 Act, or (iv) as
permitted under the terms of the Contract. Upon request, the Company will
promptly furnish to the Fund and the Underwriter reasonable assurance that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 45 days notice of its intention to do so.
10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins, Esq.
If to the Company:
American United Life Insurance Company
One American Square
Indianapolis, Indiana 46204
Attention: Richard A. Wacker, Esq.
If to Underwriter:
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Terrie Westren
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Fund must look solely to the property of
the Fund, and in the case of a series company, the respective Designated
Portfolios listed on Schedule A hereto as though each such Designated Portfolio
had separately contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents or shareholders of the Fund assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information
<PAGE>
18
reasonably identified as confidential in writing by any other party hereto and,
except as permitted by this Agreement, shall not disclose, disseminate or
utilize such names and addresses and other confidential information without the
express written consent of the affected party until such time as such
information has come into the public domain.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Indiana Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner consistent with the
Iowa variable annuity laws and regulations and any other applicable law or
regulations.
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies, and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto.
12.9 The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any) filed
with any state or federal regulatory body or otherwise made
available to the public, as soon as practical and in any event
within 90 days after the end of each fiscal year; and
(b) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulatory, as soon as
practical after the filing thereof.
<PAGE>
19
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the date specified below.
COMPANY: AMERICAN UNITED LIFE INSURANCE COMPANY
By its authorized officer
By:
-----------------------------------
Title: Vice President
Date: April 6, 1995
FUND: T. Rowe Price Equity Series, Inc.
By its authorized officer
By:
Title: Vice President
Date: April 5, 1995
UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By:
Title: Vice President
Date: April 5, 1995
<PAGE>
SCHEDULE A
<TABLE>
<S> <C> <C>
Name of Separate Account and
Date Established by the Contracts Funded by
Executive Committee of AUL the Separate Account Designated Portfolios
1. AUL American Unit Trust Separate DCP Multiple-Fund Group Variable Annuity (P-12518) T. Rowe Price Equity
Account (established 8/17/89) TDA Multiple-Fund Group Variable Annuity (P-1 251 1) Series, Inc.
TDA Multiple-Fund Group Variable Annuity (P-12511,WA) ----------
TDA Multiple-Fund Group Variable Annuity (P-12833) T. Rowe Price Equity
TDA Multiple-Fund Group Variable Annuity (P-12833SPL) Income Portfolio
IRA Multiple-Fund Group Variable Annuity (P-12566)
IRA Multiple-Fund Group Variable Annuity (P-12867)
Employer-Sponsored TDA Multiple-Fund Group
Variable Annuity (P-12621)
Employer-Sponsored TDA Multiple-Fund Group
Variable Annuity [(P-12621(BR)]
Employer-Sponsored TDA and Qualified Plan Multiple-Fund
Group Variable Annuity [P-13098(BR)]
2. Group Retirement Annuity Separate Separate Accounts Group Retirement T. Rowe Price Equity
Account II (established 12/17/92) Annuity (GRA VIII) [P-12947(BR)] Series, Inc.
----------
T. Rowe Price Equity
Income Portfolio
3. Group Retirement Annuity Separate Separate Accounts Group Retirement Annuity T. Rowe Price Equity
Account I (established 4/15/93) (GRA IV) (P-11710) Series, Inc.
Separate Accounts Group Retirement Annuity ----------
(GRA V) (P-11736) T. Rowe Price Equity
Separate Accounts Group Retirement Annuity Income Portfolio
(GRA VI) (P-12390)
Separate Accounts Group Retirement Annuity
(GRA VI & IX)(BR) [P-12390(BR)]
Separate Accounts Group Deposit Annuity Contract
4. AUL American Individual Unit Trust Individual Flexible Premium Deferred Variable Annuity T. Rowe Price Equity
Separate Account (established 4/14/94) (LA-27) Series, Inc.
Individual One Year Flexible Premium Deferred ----------
Variable Annuity (LA-27) T. Rowe Price Equity
Income Portfolio
</TABLE>
- --------------------------------------------------------------------------------
EXHIBIT 9
OPINION AND CONSENT OF SENIOR COUNSEL OF AUL
- --------------------------------------------------------------------------------
American United Life Insurance Company
One American Square
P. O. Box: 368
Indianapolis, Indiana 46206-0368
Telephone {317)263- 1877
December 19, 1989
American United Life Insurance Company
One American Square
Indianapolis, Indiana 46204
Dear Sirs:
In my capacity as Senior Counsel to American United Life Insurance Company
("AUL"), I supervised the establishment of AUL American Unit Trust on August 17,
1989, by resolution of the Executive Committee of the Board of Directors of AUL
as the separate account for assets applicable to variable annuity contracts,
pursuant to the provisions of Section 27-1-5-1 Class l(c) of the Indiana
Insurance Code. Moreover, I have been associated with the preparation of the
Registration Statement on Form N-4 ("Registration Statement") filed by AUL and
AUL American Unit Trust with the Securities and Exchange Commission (File No.
33-31375) under the Securities Act of 1933, as amended, for the registration of
Group Variable Annuity Contract; to be issued with respect to AUL American Unit
Trust.
I have made such examination of the law and examined such corporate records and
such other documents that, in my judgment, are necessary and appropriate to
enable me to render the following opinion that:
1. AUL has been duly organized under the laws of the State of Indiana and is a
validly existing corporation.
2. AUL American Unit Trust has been duly created and validly exists as a
separate account pursuant to Indiana law.
3. The portion of the assets held in AUL American Unit Trust equal to the
reserves and other liabilities under the Group Variable Annuity Contracts
is not chargeable with liabilities arising out of any other business AUL
may conduct.
4. The Group Variable Annuity Contracts have been duly authorized by AUL and,
when issued as contemplated by the Registration Statement, will constitute
legal, validly issued and binding obligations of AUL, except as limited by
bankruptcy and other laws generally affecting the rights of creditors.
<PAGE>
American United Life Insurance Company
December 19, 1989
Page Two
I hereby consent to the filing of this opinion as an exhibit of the Registration
Statement.
Very truly yours,
/s/ Richard A. Wacker
Richard A. Wacker
Senior Counsel
RAW/cf
- --------------------------------------------------------------------------------
EXHIBIT 10.1
CONSENT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
Board of Directors
American United Life Insurance Company(R)
Indianapolis, Indiana
We consent to the inclusion in Post-Effective Amendment No. 15 to the
Registration Statement of the AUL American Unit Trust (the "Trust") on Form N-4
(File No. 33-31375) of:
(1) Our report dated February 2, 1998, on our audits of the financial
statements of the Trust; and
(2) Our report dated February 27, 1998, on our audits of the financial
statements of American United Life Insurance Company.
We also consent to the reference to our Firm under the caption "Independent
Accountants.
/s/ Coopers & Lybrand L.L.P.
Indianapolis, Indiana
April 24, 1998
- --------------------------------------------------------------------------------
EXHIBIT 10.2
CONSENT OF DECHERT PRICE & RHOADS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
3400 Centre Square West LAW OFFICE OF 477 Madison Avenue
1500 Market Street New York, NY 10022
Philadelphia, PA 19102 DECHERT PRICE & RHOADS (212) 326-3500
(215) 981-2000 1500 K STREET, N.W.
WASHINGTON, DC 20005 TEN POST OFFICE SQUARE,
214 CARNEGIE CENTER TELEPHONE: (202) 626-3300 SOUTH
PRINCETON, NJ 08540 Telex 897 122 Bardep Wash BOSTON, MA 02109
(609)520-3200 Telecopier: (202) 626-3334 (617) 728-7100
TWENTY NORTH MARKET SQUARE 52 BEDFORD SQUARE
HARRISBURG, PA 17101 LONDON WC1B 3EX,
(717) 237-2000 ENGLAND
(01) 631-3383
250 AVENUE LOUIE
1050 BRUSSELS, BELGIUM
(02) 647-565
</TABLE>
December 22, 1989
Board of Directors
American United Life Insurance Company
One American Square
Indianapolis, Indiana 46204
Re: AUL American Unit Trust, SEC File No. 33-31375
Dear Sirs:
We hereby consent to the reference to our firm under the caption "Legal Matters"
in the Prospectus comprising a part of the above referenced Registration
Statement.
Very truly yours,
/s/ Dechert Price & Rhoads
Dechert Price & Rhoads
- --------------------------------------------------------------------------------
EXHIBIT 10.3
POWERS OF ATTORNEY
- --------------------------------------------------------------------------------
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 8/4/97
--------------------------------
/s/ Steven C. Beering, M.D.
--------------------------------
Steven C. Beering, M.D.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ Arthur L. Bryant
--------------------------------
Arthur L. Bryant
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ James M. Cornelius
--------------------------------
James M. Cornelius
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ James E. Dora
--------------------------------
James E. Dora
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ Otto N. Frenzel III
--------------------------------
Otto N. Frenzel III
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 8/4/97
--------------------------------
/s/ David W. Goodrich
--------------------------------
David W. Goodrich
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ William P. Johnson
--------------------------------
William P. Johnson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 8/1/97
--------------------------------
/s/ James T. Morris
--------------------------------
James T. Morris
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ James W. Murphy
--------------------------------
James W. Murphy
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/25/97
--------------------------------
/s/ R. Stephen Radcliffe
--------------------------------
R. Stephen Radcliffe
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 8/4/97
--------------------------------
/s/ Thomas E. Reilly, Jr.
--------------------------------
Thomas E. Reilly, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 8/4/97
--------------------------------
/s/ William R. Riggs
--------------------------------
William R. Riggs
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 9/29/97
--------------------------------
/s/ John C. Scully
--------------------------------
John C. Scully
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/25/97
--------------------------------
/s/ Jerry D. Semler
--------------------------------
Jerry D. Semler
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ Yvonne H. Shaheen
--------------------------------
Yvonne H. Shaheen
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes
and appoints Richard A. Wacker and William R. Brown, and each of them his true
and lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution for him in his name, place and stead to sign any and all
Registration Statements (including Registration Statements or any Amendments
thereto arising from any reorganization of a Separate Account with any other
Separate Account) applicable to Separate Accounts established for funding
variable annuity and variable life contracts of American United Life Insurance
Company(R) and any Amendments or supplements thereto, and to file the same, with
all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Dated: 7/28/97
--------------------------------
/s/ Frank D. Walker
--------------------------------
Frank D. Walker
- --------------------------------------------------------------------------------
EXHIBIT 11
ANNUAL REPORT TO SECURITY HOLDERS
- --------------------------------------------------------------------------------
A Message
From
The Chairman of the Board
and President of
AUL American Series Fund, Inc.
To Participants in AUL American Unit Trust
The U.S. economy continued to surprise investors with its performance during
1997. The current seven year expansion has been unique in that economic growth
has remained moderate while inflationary pressures have been subdued. The
inflation rate actually declined during 1997, allowing the Federal Reserve to
hold monetary policy steady during the last nine months of the year. Other
positive economic factors during the year included lower interest rates, higher
productivity and improved corporate profit margins.
Equity investors were richly rewarded during the past year with the Dow Jones
Industrial Average and the S&P 500 (commonly quoted equity indices) both
achieving double digit returns. During 1997, equity investors reacted positively
to the combination of slow growth and moderate inflation. However, the
volatility of returns increased dramatically during the second half of the year
as investors became fearful that corporations would experience a decline in
profit growth during 1998. Severe weakness in Asia and Latin America was another
principal catalyst causing increased volatility.
Bond yields moved higher in the first quarter of 1997 in reaction to the Federal
Reserve Bank's 25 basis point increase in the Federal Funds rate target but
declined over the remainder of the year. Moderate inflation, a declining federal
deficit, and turmoil in the Asian markets caused the Federal Reserve Bank to
withhold any further intervention, despite strong economic growth and low
unemployment. As a result, bond returns, especially for bonds with longer
maturities, were competitive with common stocks in the last six months of 1997
although they still trailed well behind equity returns for the entire year.
At the present time, most economists are expecting economic growth to decelerate
in 1998 as a result of weaker domestic demand and momentum lost from foreign
trade. Slower growth does have some positive aspects. However, equity investors
remain focused on the possibility of weaker corporate profits.
Equity investors have now experienced three years of phenomenal equity returns,
returns which are substantially higher than the long-term averages. The major
stock indices could still post further gains during 1998, but the opportunity to
dramatically outperform the long-term averages becomes extremely limited. Good
bond performance will depend on declining interest rates, continued moderate
inflation and bonds being viewed as an "alternative investment" for equity
investors.
/s/ James W. Murphy
Chairman of the Board of Directors and President
Indianapolis, Indiana
January 20, 1998
1
<PAGE>
(This page is intentionally blank.)
2
<PAGE>
Report of Independent Accountants
The Contract Owners of
AUL American Unit Trust and
Board of Directors of
American United Life Insurance Company
We have audited the accompanying statements of net assets of AUL American Unit
Trust as of December 31, 1997, and the related statements of operations and
changes in net assets for each of the two years in the period then ended. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the custodians. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AUL American Unit Trust as of
December 31, 1997, and the results of its operations and changes in net assets
for each of the two years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Indianapolis, Indiana
February 2, 1998
3
<PAGE>
(This Page is intentionally blank.)
4
<PAGE>
AUL American Unit Trust
STATEMENTS OF NET ASSETS
December 31, 1997
<TABLE>
<CAPTION>
Series Fund Fidelity
-------------------------------------------------------------------- ------------
Equity Money Market Bond Managed Tactical Asset High Income
----------- ------------ ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at value $33,955,106 $ 7,349,731 $ 8,490,917 $23,765,300 $ 111 $13,541,887
----------- ------------ ------------ ----------- -------------- ------------
Net Assets ......... $33,955,106 $ 7,349,731 $ 8,490,917 $23,765,300 $ 111 $13,541,887
=========== =========== ============ =========== ============== ============
Units
outstanding ........ 12,586,036 5,765,433 4,937,428 10,816,324 100 8,053,332
=========== =========== ============ =========== ============== ============
Accumulation
Unit Value ......... $ 2.70 $ 1.27 $ 1.72 $ 2.20 $ 1.11 $ 1.68
=========== =========== ============ =========== ============== ============
</TABLE>
the accompanying notes are an integral part of the financial statements.
5
<PAGE>
AUL American Unit Trust
STATEMENTS OF NET ASSETS (continued)
December 31, 1997
<TABLE>
<CAPTION>
Fidelity
---------------------------------------------------------------------------------
Growth Overseas Asset Manager Index 500 Equity-Income Contrafund
----------- ----------- ------------- ----------- -------------- -----------
<S> ................... <C> <C> <C> <C> <C> <C>
Assets:
Investments at value .. $55,118,978 $14,204,012 $50,292,210 $42,003,492 $12,177,905 $16,668,206
----------- ----------- ----------- ----------- ----------- -----------
Net
Assets ............... $55,118,978 $14,204,012 $50,292,210 $42,003,492 $12,177,905 $16,668,206
=========== =========== =========== =========== =========== ===========
Units
outstanding ........... 26,493,376 9,308,550 30,831,927 18,374,733 6,959,675 8,965,623
=========== =========== =========== =========== =========== ===========
Accumulation Unit Value $ 2.08 $ 1.53 $ 1.63 $ 2.29 $ 1.75 $ 1.86
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
AUL American Unit Trust
STATEMENTS OF NET ASSETS (continued)
<TABLE>
<CAPTION>
December 31, 1997
American
Century Alger Calvert T.RowePrice PBHG
------------ ----------- ------------- ------------- -----------------------------
VP Capital American Capital Equity Technology &
Appreciation Growth Accumulation Income Growth II Communications
------------ ----------- ------------ ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at value ... $ 2,309,700 $19,116,058 $ 1,755,044 $21,526,126 $ 62,345 $ 104,911
----------- ----------- ----------- ----------- -------- ---------
Net
Assets ............... $ 2,309,700 $19,116,058 $ 1,755,044 $21,526,126 $ 62,345 $ 104,911
=========== =========== =========== =========== ======== ==========
Units
outstanding ........... 1,970,129 10,920,405 1,070,537 11,646,682 58,505 101,585
=========== =========== =========== =========== ======== ==========
Accumulation Unit Value $ 1.17 $ 1.75 $ 1.64 $ 1.85 $ 1.07 $ 1.03
=========== =========== =========== =========== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
AUL American Unit Trust
STATEMENTS OF NET ASSETS (continued)
December 31, 1997
Janus Safeco
------------------------- -----------------------
Worldwide Flexible
Growth Income Equity Growth
---------- ---------- ---------- ----------
Assets:
Investments at value .. $2,427,800 $ 313,657 $ 216,123 $1,505,305
---------- ---------- ---------- ----------
Net Assets ............ $2,427,800 $ 313,657 $ 216,123 $1,505,305
========== ========== ========== ==========
Units
outstanding ........... 2,126,372 289,354 186,090 1,069,115
========== ========== ========== ==========
Accumulation Unit Value $ 1.14 $ 1.08 $ 1.16 $ 1.41
========== ========== ========== ==========
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
for the years ended December 31, 1997 and 1996
<CAPTION>
Series Fund
--------------------------------------------------------------------------------------------
Equity Money Market Bond
----------------------------- -------------------------------- -----------------------------
1997 1996 1997 1996 1997 1996
------------- -------------- ---------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Dividend income ............ $ 788,183 $ 342,380 $ 286,404 $ 196,825 $ 579,827 $ 400,603
Mortality & expense
charges ................... 355,069 241,613 73,604 52,481 104,776 81,206
------------ ------------ ------------ ------------ ------------ ------------
Net Investment Income
(Loss) .................... 433,114 100,767 212,800 144,344 475,051 319,397
------------ ------------ ------------ ------------ ------------ ------------
Gain (Loss) on Investments:
Net realized gain (loss) ... 1,929,622 757,430 -- -- 100,116 (29,008)
Net change in
unrealized gain (loss) .... 4,385,719 2,298,293 -- -- (88,037) (194,208)
------------ ------------ ------------ ------------ ------------ ------------
Net Gain (Loss) ............ 6,315,341 3,055,723 -- -- 12,079 (223,216)
------------ ------------ ------------ ------------ ------------ ------------
Increase (Decrease)
in Net Assets from
Operations ................ 6,748,455 3,156,490 212,800 144,344 487,130 96,181
------------ ------------ ------------ ------------ ------------ ------------
Contract Owner Transactions:
Proceeds from units sold ... 9,972,396 5,750,853 33,320,250 19,881,137 2,747,432 2,965,354
Cost of units redeemed ..... (5,083,812) (3,302,017) (31,019,567) (17,646,620) (2,070,656) (1,514,837)
------------ ------------ ------------ ------------ ------------ ------------
Increase ................... 4,888,584 2,448,836 2,300,683 2,234,517 676,776 1,450,517
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 11,637,039 5,605,326 2,513,483 2,378,861 1,163,906 1,546,698
Net Assets, beginning ...... 22,318,067 16,712,742 4,836,248 2,457,387 7,327,011 5,780,313
------------ ------------ ------------ ------------ ------------ ------------
Net Assets, ending ......... $ 33,955,106 $ 22,318,068 $ 7,349,731 $4,836,248 $ 8,490,917 $ 7,327,011
============ ============ ============ ============ ============ ============
Units sold ................. 4,078,308 2,955,925 26,576,977 16,432,700 1,664,142 1,883,899
Units redeemed ............. (2,081,627) (1,698,792) (24,742,816) (14,567,921) (1,261,885) (962,211)
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 1,996,681 1,257,133 1,834,161 1,864,779 402,257 921,688
Units outstanding, beginning 10,589,355 9,332,222 3,931,272 2,066,493 4,535,171 3,613,483
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, ending .. 12,586,036 10,589,355 5,765,433 3,931,272 4,937,428 4,535,171
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
Series Fund Fidelity
----------------------------------------------------- -----------------------------
Managed Tactical Asset High Income
----------------------------- ----------------------- -----------------------------
1997 1996 1997(1) 1997 1996
------------ ------------- ---------- ------------ ------------
<S> ............................... <C> <C> <C> <C> <C>
Operations:
Dividend income ................... $ 1,251,403 $ 601,614 $ 8 $ 796,755 $ 559,290
Mortality & expense
charges .......................... 265,574 210,007 -- 146,800 97,295
------------ ------------ ----- ------------ ------------
Net Investment Income (Loss)....... 985,829 391,607 8 649,955 461,995
------------ ------------ ----- ------------ ------------
Gain (Loss) on Investments:
Net realized gain (loss) .......... 671,399 231,999 -- 516,248 147,051
Net change in
unrealized gain (loss) ........... 2,073,656 1,074,348 3 596,160 304,521
------------ ------------ ----- ------------ ------------
Net Gain (Loss) ................... 2,745,055 1,306,347 3 1,112,408 451,572
------------ ------------ ----- ------------ ------------
Increase (Decrease)
in Net Assets from
Operations ........................ 3,730,884 1,697,954 11 1,762,363 913,567
------------ ------------ ----- ------------ ------------
Contract Owner Transactions:
Proceeds from units sold .......... 4,647,229 3,787,607 100 5,631,914 4,302,859
Cost of units redeemed ............ (3,155,198) (2,327,899 -- (3,515,487) (1,616,681)
------------ ------------ ----- ------------ ------------
Increase .......................... 1,492,031 1,459,708 100 2,116,427 2,686,178
------------ ------------ ----- ------------ ------------
Net increase ...................... 5,222,915 3,157,662 111 3,878,790 3,599,745
Net Assets, beginning ............. 18,542,385 15,384,723 -- 9,663,097 6,063,352
------------ ------------ ----- ------------ ------------
Net Assets, ending ................ $ 23,765,300 $ 18,542,385 $ 111 $ 13,541,887 $ 9,663,097
============ ============ ===== ============ ============
Units sold ........................ 2,298,195 2,192,882 100 3,595,859 3,144,988
Units redeemed .................. (1,569,057) (1,347,716) -- (2,221,754) (1,185,689)
------------ ------------ ----- ------------ ------------
Net increase ...................... 729,138 845,166 100 1,374,105 1,959,299
Units outstanding, beginning ...... 10,087,186 9,242,020 -- 6,679,227 4,719,928
------------ ------------ ----- ------------ ------------
Units outstanding, ending ......... 10,816,324 10,087,186 100 8,053,332 6,679,227
============ ============ ===== ============ ============
</TABLE>
(1) for the Period from May 1, 1997 to December 31, 1997.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
Fidelity
--------------------------------------------------------------------------------------------
Growth Overseas Asset Manager
---------------------------- ----------------------------- ----------------------------
1997 1996 1997 1996 1997 1996
------------ ------------ ------------- ------------ ------------ ------------
<S> ........................ <C> <C> <C> <C> <C> <C>
Operations:
Dividend income ............ $ 1,439,710 $ 1,686,076 $ 1,001,817 $ 195,920 $ 4,572,177 $ 1,858,564
Mortality & expense
charges ................... 590,413 384,618 171,253 119,355 549,366 396,998
------------ ------------ ------------ ------------ ------------ ------------
Net Investment Income (Loss) 849,297 1,301,458 830,564 76,565 4,022,811 1,461,566
------------ ------------ ------------ ------------ ------------ ------------
Gain (Loss) on Investments:
Net realized gain (loss) ... 2,345,762 2,576,639 1,428,939 588,813 1,075,838 304,397
Net change in
unrealized gain (loss) .... 5,881,034 (241,271) (992,681) 428,901 2,515,095 2,252,257
------------ ------------ ------------ ------------ ------------ ------------
Net Gain (Loss) ............ 8,226,796 2,335,368 436,258 1,017,714 3,590,933 2,556,654
------------ ------------ ------------ ------------ ------------ ------------
Increase (Decrease)
in Net Assets from
Operations ................. 9,076,093 3,636,826 1,266,822 1,094,279 7,613,744 4,018,220
------------ ------------ ------------ ------------ ------------ ------------
Contract Owner Transactions:
Proceeds from units sold ... 17,758,368 20,256,098 16,550,480 8,171,841 11,799,650 9,564,824
Cost of units redeemed ..... (10,186,999) (7,954,526) (15,021,536) (5,759,471) (5,887,440) (4,541,090)
------------ ------------ ------------ ------------ ------------ ------------
Increase ................... 7,571,369 12,301,572 1,528,944 2,412,370 5,912,210 5,023,734
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 16,647,462 15,938,398 2,795,766 3,506,649 13,525,954 9,041,954
Net Assets, beginning ...... 38,471,516 22,533,118 11,408,246 7,901,597 36,766,256 27,724,302
------------ ------------ ------------ ------------ ------------ ------------
Net Assets, ending ......... $ 55,118,978 $ 38,471,516 $ 14,204,012 $ 11,408,246 $ 50,292,210 $ 36,766,256
============ ============ ============ ============ ============ ============
Units sold ................. 9,328,133 12,526,388 10,859,725 6,289,170 7,892,511 7,528,818
Units redeem ............... (5,394,827) (4,932,924) (9,796,364) (4,429,500) (3,928,662) (3,592,303)
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 3,933,306 7,593,464 1,063,361 1,859,670 3,963,849 3,936,515
Units outstanding, beginning 22,560,070 14,966,606 8,245,189 6,385,519 26,868,078 22,931,563
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, ending .. 26,493,376 22,560,070 9,308,550 8,245,189 30,831,927 26,868,078
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
Fidelity
---------------------------------------------------------------------------------------------
Index 500 Equity-Income Contrafund
---------------------------- ---------------------------- -----------------------------
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ -------------
<S> ........................ <C> <C> <C> <C> <C> <C>
Operations:
Dividend income ............ $ 653,527 $ 270,229 $ 626,460 $ 57,407 $ 231,987 $ 11,446
Mortality & expense
charges ................... 372,156 134,447 109,686 41,210 148,730 45,564
------------ ------------ ------------ ------------ ------------ -------------
Net Investment Income
(Loss) ..................... 281,371 135,782 516,774 16,197 83,257 (34,118)
------------ ------------ ------------ ------------ ------------ -------------
Gain (Loss) on Investments:
Net realized gain (loss) ... 3,803,606 1,142,520 198,968 51,857 480,270 169,050
Net change in
unrealized gain (loss) .... 3,223,254 903,193 1,255,124 366,426 1,791,596 624,118
------------ ------------ ------------ ------------ ------------ -------------
Net Gain (Loss) ............ 7,026,860 2,045,713 1,454,092 418,283 2,271,866 793,168
------------ ------------ ------------ ------------ ------------ -------------
Increase (Decrease)
in Net Assets from
Operations ................. 7,308,231 2,181,495 1,970,866 434,480 2,355,123 759,050
------------ ------------ ------------ ------------ ------------ -------------
Contract Owner Transactions:
Proceeds from units sold ... 33,188,691 13,729,783 5,754,994 5,379,426 9,337,115 6,820,829
Cost of units redeemed ..... (15,658,881) (4,462,861) (1,406,108) (887,971) (2,083,657) (1,395,994)
------------ ------------ ------------ ------------ ------------ -------------
Increase ................... 17,529,810 9,266,922 4,348,886 4,491,455 7,253,458 5,424,835
------------ ------------ ------------ ------------ ------------ -------------
Net increase ............... 24,838,041 11,448,417 6,319,752 4,925,935 9,608,581 6,183,885
Net Assets, beginning ...... 17,165,451 5,717,034 5,858,153 932,218 7,059,625 875,740
------------ ------------ ------------ ------------ ------------ -------------
Net Assets, ending ......... $ 42,003,492 $ 17,165,451 $ 12,177,905 $ 5,858,153 $ 16,668,206 $ 7,059,625
============ ============ ============
Units sold ................. 16,153,810 8,642,574 3,613,383 4,163,357 5,555,376 4,955,599
Units redeemed ............. (7,620,276) (2,778,057) (897,167) (682,030) (1,245,928) (991,402)
------------ ------------ ------------ ------------ ------------ -------------
Net increase ............... 8,533,534 5,864,517 2,716,216 3,481,327 4,309,448 3,964,197
Units outstanding, beginning 9,841,199 3,976,682 4,243,459 762,132 4,656,175 691,978
------------ ------------ ------------ ------------ ------------ -------------
Units outstanding, ending .. 18,374,733 9,841,199 6,959,675 4,243,459 8,965,623 4,656,175
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
American Century Alger Calvert
------------------------------ ------------------------------- -------------------------------
VP Cap. Apprec. American Growth Capital Accumulation
------------------------------ ------------------------------- -------------------------------
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> ......................... <C> <C> <C> <C> <C> <C>
Operations:
Dividend income ............. $ 44,992 $ 158,096 $ 123,940 $ 118,973 $ 181,799 $ 1,665
Mortality & expense
charges .................... 27,094 20,98 182,029 66,741 17,649 8,227
------------ ------------ ------------ ------------ ------------ ------------
Net Investment Income
(Loss) ..................... 17,898 137,115 (58,089) 52,232 164,150 (6,562)
------------ ------------ ------------ ------------ ------------ ------------
Gain (Loss) on Investments:
Net realized gain (loss) .... (242,024) 50,578 1,909,253 104,611 254,824 24,160
Net change in
unrealized gain (loss) ...... 82,323 (299,498) 917,221 441,596 (154,179) 21,786
------------ ------------ ------------ ------------ ------------ ------------
Net Gain (Loss) ............. (159,701) (248,920) 2,826,474 546,207 100,645 45,946
------------ ------------ ------------ ------------ ------------ ------------
Increase (Decrease)
in Net Assets from
Operations .................. (141,803) (111,805) 2,768,385 598,439 264,795 39,384
------------ ------------ ------------ ------------ ------------ ------------
Contract Owner Transactions:
Proceeds from units sold .... 1,386,304 1,647,386 17,980,961 11,464,782 4,105,208 8,157,650
Cost of units redeemed ...... (1,124,243) (315,880) (11,040,785) (3,951,097) (3,917,872) (6,984,043)
------------ ------------ ------------ ------------ ------------ ------------
Increase ................... 262,061 1,331,506 6,940,176 7,513,685 187,336 1,173,607
------------ ------------ ------------ ------------ ------------ ------------
Net increase ................ 120,258 1,219,701 9,708,561 8,112,124 452,131 1,212,991
Net Assets, beginning ....... 2,189,442 969,741 9,407,497 1,295,373 1,302,913 89,922
------------ ------------ ------------ ------------ ------------ ------------
Net Assets, ending .......... $ 2,309,700 $ 2,189,442 $ 19,116,058 $ 9,407,497 $ 1,755,044 $ 1,302,913
============ ============ ============ ============ ============ ============
Units sold .................. 1,148,628 1,282,104 11,056,170 8,577,306 2,790,936 6,165,865
Units redeemed .............. (964,353) (244,029) (6,810,757) (2,931,153) (2,690,839) (5,266,458)
------------ ------------ ------------ ------------ ------------ ------------
Net increase ................ 184,275 1,038,075 4,245,413 5,646,153 100,097 899,407
Units outstanding, beginning 1,785,854 747,779 6,674,992 1,028,839 970,440 71,033
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, ending ... 1,970,129 1,785,854 10,920,405 6,674,992 1,070,537 970,440
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
T. Rowe Price PBHG Janus
---------------------------- --------------------------- ----------------------------
Equity-Income Growth II Technical Worldwide Flexible
& Comm. Growth Income
---------------------------- ------------ ------------ ------------ ------------
1997 1996 1997(1) 1997(1) 1997(1) 1997(1)
------------ ------------ ------------ ------------ ------------ ------------
<S> ........................ <C> <C> <C> <C> <C> <C>
Operations:
Dividend income ............ $ 972,267 $ 129,361 $ -- $ -- $ 5,662 $ 7,720
Mortality & expense
charges ................... 169,670 35,102 286 414 8,550 744
------------ ------------ ------------ ------------ ------------ ------------
Net Investment Income
(Loss) ..................... 802,597 94,259 (286) (414) (2,888) 6,976
------------ ------------ ------------ ------------ ------------ ------------
Gain (Loss) on Investments:
Net realized gain (loss) ... 433,615 100,208 (340) 463 2,701 2,900
Net change in
unrealized gain (loss) ..... 1,951,034 339,665 (1,874) (13,550) (10,837) (3,837)
------------ ------------ ------------ ------------ ------------ ------------
Net Gain (Loss) ............ 2,384,649 439,873 (2,214) (13,087) (8,136) (937)
------------ ------------ ------------ ------------ ------------ ------------
Increase (Decrease)
in Net Assets from
Operations ................. 3,187,246 534,132 (2,500) (13,501) (11,024) 6,039
------------ ------------ ------------ ------------ ------------ ------------
Contract Owner Transactions:
Proceeds from units sold ... 13,767,571 6,412,176 86,468 118,430 2,560,652 410,273
Cost of units redeemed ..... (1,614,233) (1,238,837) (21,623) (18) (121,828) (102,655)
------------ ------------ ------------ ------------ ------------ ------------
Increase ................... 12,153,338 5,173,339 64,845 118,412 2,438,824 307,618
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 15,340,584 5,707,471 62,345 104,911 2,427,800 313,657
Net Assets, beginning ...... 6,185,542 478,071 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net Assets, ending ......... $ 21,526,126 $ 6,185,542 $ 62,345 $ 104,911 $ 2,427,800 $ 313,657
============ ============ ============ ============= ============ ============
Units sold ................. 8,362,667 4,786,484 77,370 101,623 2,234,612 385,932
Units redeemed ............. (975,139) (916,062) (18,865) (38) (108,240) (96,578)
------------ ------------ ------------ ------------ ------------ ------------
Net increase ............... 7,387,528 3,870,422 58,505 101,585 2,126,372 289,354
Units outstanding, beginning 4,259,154 388,732 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Units outstanding, ending .. 11,646,682 4,259,154 58,505 101,585 2,126,372 289,354
============ ============ ============ ============= ============ ============
</TABLE>
(1) for the Period from May 1, 1997 to December 31, 1997.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
<TABLE>
AUL American Unit Trust
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
for the years ended December 31, 1997 and 1996
Safeco
--------------------------
Equity Growth
----------- -----------
<S> <C> <C>
1997(1) 1997(1)
Operations:
Dividend income ............ $ 15,690 $ 242,103
Mortality & expense
charges ................... 673 4,985
----------- -----------
Net Investment Income
Loss) ..................... 15,017 237,118
----------- -----------
Gain (Loss) on Investments:
Net realized gain (loss) ... (127) 49,644
Net change in
unrealized gain (loss) .... (10,581) (180,480)
----------- -----------
Net Gain (Loss) ............ (10,708) (130,836)
----------- -----------
Increase (Decrease)
in Net Assets from
Operations ................ 4,309 106,282
----------- -----------
Contract Owner Transactions:
Proceeds from units sold ... 212,703 2,041,581
Cost of units redeemed ..... (889) (642,558)
----------- -----------
Increase ................... 211,814 1,399,023
----------- -----------
Net increase ............... 216,123 1,505,305
Net Assets, beginning ...... -- --
----------- -----------
Net Assets, ending ......... $ 216,123 $ 1,505,305
=========== ===========
Units sold ................. 186,896 1,550,299
Units redeemed ............. (806) (481,184)
----------- -----------
Net increase ............... 186,090 1,069,115
Units outstanding, beginning -- --
----------- -----------
Units outstanding, ending .. 186,090 1,069,115
=========== ===========
</TABLE>
(1) for the Period from May 1, 1997 to December 31, 1997.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
(This page is intentionally blank.)
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
The AUL American Unit Trust (Variable Account) was established by American
United Life Insurance Company (AUL) on August 17, 1989, under procedures
established by Indiana law and is registered as a unit investment trust under
the Investment Company Act of 1940, as amended. The Variable Account is a
segregated investment account of AUL and invests exclusively in shares of mutual
fund portfolios offered by the AUL American Series Fund, Inc. (Series Fund),
Fidelity Investments Variable Insurance Products Fund and Variable Insurance
Products Fund II (Fidelity), American Century Variable Portfolios, Inc.
(American Century), Acacia Capital Corporation (Calvert), T. Rowe Price Equity
Series, Inc. (T. Rowe Price), PBHG Insurance Series Fund, Inc. (PBHG), Janus
Aspen Series (Janus), and Safeco Resource Series Trust (Safeco).
Security Valuation, Transactions and Related Investment Income
The market value of investments is based on the closing bid prices at December
31, 1997. Investment transactions are accounted for on the trade date and
dividend income is recorded on the ex-dividend date.
Mortality and Expense Risks Charges
AUL deducts a daily charge as compensation for the mortality and expense risks
assumed by AUL. The charge is equal on an annual basis to 1.25% of the average
daily net assets of each investment account. AUL guarantees that the mortality
and expense charge shall not increase. The charges incurred during the years
ended December 31, 1997 and 1996, were $3,299,521 and $1,935,845, respectively.
Taxes
Operations of the Variable Account are part of, and are taxed with, the
operations of AUL, which is taxed as a "life insurance company" under the
Internal Revenue Code. Under current law, investment income, including realized
and unrealized capital gains of the investment accounts, is not taxed to AUL to
the extent it is applied to increase reserves under the contracts. The Variable
Account has not been charged for federal and state income taxes since none have
been imposed.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the reporting period. Actual results could differ from those estimates.
2. Account Charges
AUL may assess a premium tax charge based on premium taxes incurred. Premium
taxes currently range between 0% and 3.5%, but are subject to change by
governmental entities. AUL deducts an annual administrative charge from each
participant's account which may not exceed the lesser of 0.5% of the
participant's account value or $7.50 per quarter. The charge is assessed every
quarter on a participant account if it is in effect on the quarterly contract
anniversary, and the charge is assessed only during the accumulation period. The
charges incurred during the years ended December 31, 1997 and 1996, were
$306,474 and $156,705, respectively. AUL may assess a withdrawal charge on
withdrawals that exceed 10% of the participant's account value as of the last
contract anniversary preceding the request for the withdrawal. However, the
contract owner has a right to a full refund of the contributions made under a
contract for any reason within ten days of original contract purchase. The
amount of the withdrawal charge depends upon the number of account years the
participant's account has been in existence, as follows:
Account Year Withdrawal Charge
1 - 5 8%
6 - 10 4%
11 or more 0%
The aggregate withdrawal charges will not exceed 9% of the contributions made
by or on behalf of a participant under a contract. The charges incurred during
the years ended December 31, 1997 and 1996, were $199,277 and $164,250,
respectively.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
3. Accumulation Unit Value
The change in the Accumulation Unit Value per unit for the year ended December
31, 1997, or from inception of operation, May 1, 1997, through December 31,
1997, is:
12/31/97 12/31/96 Change
--------- -------- -------
Series Fund:
Equity $ 2.696745 $ 2.107103 28.0%
Money Market 1.274444 1.229861 3.6%
Bond 1.719983 1.614937 6.5%
Managed 2.194762 1.837513 19.4%
Fidelity:
High Income 1.680960 1.446567 16.2%
Growth 2.079525 1.705274 21.9%
Overseas 1.524164 1.383489 10.2%
Asset Manager 1.630253 1.368222 19.2%
Index 500 2.284968 1.743597 31.0%
Equity-Income 1.746514 1.380472 26.5%
Contrafund 1.858720 1.516110 22.6%
American Century:
VP Capital
Appreciation 1.170649 1.225326 4.5%
Alger:
American Growth 1.750190 1.409348 24.2%
Calvert:
Capital Accumulation 1.638970 1.342590 22.1%
T. Rowe Price:
Equity Income 1.847792 1.452068 27.3%
12/31/97 5/1/97 Change
--------- ---------- ----------
Series Fund:
Tactical Asset $ 1.110125 $ 0.982323 13.0%
PBHG:
Growth II 1.066050 1.000000 6.6%
Technology &
Communications 1.032340 1.000000 3.2%
Janus:
Worldwide Growth 1.141625 1.009977 13.0%
Flexible Income 1.083840 0.996134 8.8%
Safeco:
Equity 1.160728 0.983650 18.0%
Growth 1.407808 0.934137 50.7%
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4. Cost of Investments
The cost of Investments at December 31, 1997, is:
Series Fund:
Equity $ 25,679,798
Money Market 7,349,731
Bond 8,568,459
Managed 19,726,300
Tactical Asset 108
Fidelity:
High Income 12,145,069
Growth 46,243,970
Overseas 14,324,559
Asset Manager 42,930,321
Index 500 37,053,469
Equity-Income 10,524,539
Contrafund 14,249,523
American Century:
VP Capital
Appreciation 2,440,947
Alger:
American Growth 17,764,282
Calvert:
Capital
Accumulation $ 1,890,794
T. Rowe Price:
Equity Income 19,222,727
PBHG:
Growth II 64,219
Technology &
Communications 118,460
Janus:
Worldwide Growth 2,438,637
Flexible Income 317,493
Safeco:
Equity 266,704
Growth 1,685,785
5. Net Assets
Net Assets at December 31, 1997, are:
<TABLE>
<CAPTION>
Series Fund Fidelity
------------------------------------------------------------------------- ------------
Equity Money Market Bond Managed Tactical High Income
Asset
------------ ------------ ------------ ------------ ---------- ------------
<S> ............................... <C> <C> <C> <C> <C> <C>
Proceeds from units sold ......... $ 33,744,283 $ 62,846,304 $ 12,415,383 $ 24,678,320 $ 100 $ 16,469,854
Cost of units redeemed ............ (13,052,100) (55,950,493) (5,187,784) (8,877,164) -- (6,307,081)
Net investment income (loss) ...... 1,694,295 453,920 1,333,027 2,814,761 8 1,379,071
Net realized gain (loss) .......... 3,293,320 -- 7,833 1,110,383 -- 603,225
Unrealized gain (loss) ........... 8,275,308 -- (77,542) 4,039,000 3 1,396,818
------------ ------------ ------------ ------------ --------- ------------
$ 33,955,106 $ 7,349,731 $ 8,490,917 $ 23,765,300 $ 111 $ 13,541,887
============ ============ ============ ============ ========= ============
</TABLE>
<TABLE>
<CAPTION>
Fidelity
----------------------------------------------------------------------------------------------
Growth Overseas Asset Mgr. Index 500 Equity-Inc. Contrafund
------------ ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from units sold ... $ 62,834,314 $ 35,566,301 $ 53,512,060 $ 52,826,740 $ 12,030,080 $ 17,060,560
Cost of units redeemed ..... (24,817,049) (24,218,248) (17,501,851) (21,358,726) (2,299,406) (3,517,855)
Net investment income (loss) 2,112,167 830,176 5,873,016 413,029 536,101 57,169
Net realized gain (loss) ... 6,114,538 2,146,330 1,047,096 5,172,426 257,764 649,649
Unrealized gain (loss)...... 8,875,008 (120,547) 7,361,889 4,950,023 1,653,366 2,418,683
------------ ------------ ------------ ------------ ------------ ------------
$ 55,118,978 $ 14,204,012 $ 50,292,210 $ 42,003,492 $ 12,177,905 $ 16,668,206
============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
5. Net Assets (continued)
<TABLE>
<CAPTION>
American
Century Alger Calvert T.RowePrice PBHG
------------- ------------ ------------ ------------ ------------------------------
VP Capital American Capital Technical &
Appreciation Growth Accumulation Equity Inc. Growth II Communications
------------- ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from units sold ... $ 4,000,036 $ 30,851,046 $ 12,364,085 $ 20,645,739 $ 86,468 $ 118,430
Cost of units redeemed ..... (1,545,589) (15,090,054) (10,914,743) (2,864,132) (21,623) (18)
Net investment income (loss) 148,100 (8,240) 162,157 899,986 (286) (414)
Net realized gain (loss) ... (161,600) 2,011,530 279,295 541,134 (340) 463
Unrealized gain (loss) ..... (131,247) 1,351,776 (135,750) 2,303,399 (1,874) (13,550)
----------- ------------ ------------ ------------ ------------ ------------
$ 2,309,700 $ 19,116,058 $ 1,755,044 $ 21,526,126 $ 62,345 $ 104,911
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Janus Safeco
-------------------------- ----------------------------
Worldwide Flexible
Growth Income Equity Growth
------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
Proceeds from units sold ... $ 2,560,652 $ 410,273 $ 212,703 $ 2,041,581
Cost of units redeemed ..... (121,828) (102,655) (889) (642,558)
Net investment income (loss) (2,888) 6,976 15,017 237,118
Net realized gain (loss) ... 2,701 2,900 (127) 49,644
Unrealized gain (loss) ..... (10,837) (3,837) (10,581) (180,480)
$ 2,427,800 $ 313,657 $ 216,123 $ 1,505,305
</TABLE>
20
- --------------------------------------------------------------------------------
EXHIBIT 13
COMPUTATION OF PERFORMANCE QUOTATIONS
- --------------------------------------------------------------------------------
These Performance Computations do not reflect a calculation of current
performance. These figures are only intended to demonstrate the method by which
performance is calculated. These computations were originally filed as Exhibit
13 in Post Effective Amendment No.13, which was filed by the Registrant with the
Securities and Exchange Commission on April 26, 1996.
1. Current Yield for the Money Market Investment Account:
As stated in the Statement of Additional Information, current yield for the
Money Market Investment Account will be based on the seven day period
ending December 31, 1995, and is computed by determining the net change in
the value of a hypothetical investment (exclusive of capital charges) of a
pre-existing account having a balance of one Accumulation Unit at the
beginning of the period [.00122658], subtracting a hypothetical charge
reflecting deductions from contractowner accounts [.00026033], and dividing
the difference by the value of the account at the beginning of the base
period [$1.188087] to obtain the base period return [.0008132822], and then
multiplying the base period return by (365/7) with the resulting yield
figure carried to at least the nearest hundredth of one percent [.000813 x
365/7] = .04240 or 4.24%.
2. Effective Yield for the Money Market Investment Account is based on the
seven day period ending December 31, 1995, carried to at least the nearest
hundredth of one percent, computed by determining the net change, exclusive
of capital charges, in the value of a hypothetical pre-existing account
having a balance of one Accumulation Unit at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from contractowner
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding "1," raising the sum to a
power equal to 365 divided by 7, and subtracting "1" from the result,
pursuant to the following formula:
Effective Yield = [(Base Period Return + 1)365/7] -1
Effective Yield = [(.000813 + 1)365/7] -1
Effective Yield = [(1.000813)365/7] -1
Effective Yield = 1.043301 - 1 = .04330 or 4.33%
3. Yield Calculations
(a) For the Equity Investment Account:
For the year ending December 31, 1995, yield is based on a 30 day period
ending December 31, 1995, and is computed by dividing the net investment
income per Accumulation Unit earned during the period by the maximum
offering price per unit on December 31, 1995, according to the following
formula:
Yield = 2[(a-b/cd +1)6 -1]
where "a" = net investment income earned during the period attributable to
shares owned by the Investment Account; "b" = expenses accrued for the
period (net of reimbursements); "c" = the average daily number of
Accumulation Units outstanding during the period; and "d" = the maximum
offering price per Accumulation Unit on December 31, 1995.
For the Equity Investment Account:
According to the formula stated above, where:
"a" = $25,531.11 "b" = $17,815.77 "c" = 9,342,629.100 and "d" = $1.790413
Yield = 2[(7,715.34/16,727,164.59 + 1)6 -1]
Yield = 2[(1.00046124613)6 -1]
Yield = 2[.00277066999] = 0.00554133997 or 0.55%
(b) For the Bond Investment Account:
According to the formula stated in 3(a) above, where:
"a" = $27,197.09 "b" = $5,794.67 "c" = 3,515,703.320 and "d" = $1.599503
Yield = 2[(21,402.42/5,623,378.01 + 1)6 -1]
Yield = 2[(1.00380597155)6 -1]
Yield = 2[.02305421635] = 0.46108 or 4.61%
(c) For the Managed Investment Account:
According to the formula stated in 3(a) above, where:
"a" = $43,174.00 "b" = $16,203.12 "c" = 9,204,223.110 and "d" = $1.664334
Yield = 2[(26,970.88/15,318,901.47 + 1)6 -1]
Yield = 2[(1.00176062755)6 -1]
Yield = 2[.01061037175] = .021221 or 2.12%
<PAGE>
2
4. Quotations of average annual total return for an Investment Account will
be expressed in terms of the compounded rate of return of a hypothetical
investment in the Investment Account for periods of one, five, and ten years, or
since the Fund's inception, if less. The average annual total return for an
Investment Account will be calculated pursuant to the following formula: P (1 +
T)**n = ERV (where P = a hypothetical initial payment of $1,000, T = the total
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period.) All total
return figures reflect the deduction of a proportional share of Investment
Account expenses on an annual basis, and assume that all dividends and
distributions are reinvested when paid. For the Investment Accounts that have
not been in existence for the time periods indicated, the average annual total
return represents hypothetical returns that the Investment Accounts that invest
in the corresponding Mutual Fund Portfolios would have achieved had they
invested in such Portfolios for the periods indicated. For the periods that a
particular Investment Account has been in existence (see "Inception Date of
Investment Account") then the performance is actual performance and not
hypothetical in nature.
FOR THE YEAR ENDING DECEMBER 31, 1995
(a) For the AUL American Equity Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,082; and n = 1
ERV = $1,000(1 + T)**1
T = 0.0820 or 8.20%
(b) For the AUL American Bond Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,067; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.0669 or 6.69%
(c) For the AUL American Money Market Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $954; and n = 1
ERV = $1,000 (1 + T)**1
T = -0.0464 or (4.64%)
(d) For the AUL American Managed Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,079; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0791 or 7.91%
(e) For the Alger American Growth Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,235; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2353 or 23.53%
(f) For the Calvert Capital Accumulation Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,264; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2639 or 26.39%
(g) For the Invesco Dynamics Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,244; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.2443 or 24.43%
(h) For the PBHG Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,362; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.3618 or 36.18%
(i) For the TCI Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,188; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.1875 or 18.75%
(j) For the T. Rowe Price Equity Income Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,221; and n = 1
ERV =$1,000 (1 + T)**1
T = 0.2207 or 22.07%
<PAGE>
3
(k) For the Twentieth Century Select Investors Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,113; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1133 or 11.33%
(l) For the Twentieth Century Ultra Investors Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,249; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2493 or 24.93%
(m) For the Twentieth Century International Equity Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,014; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0135 or 1.35%
(n) For the Vanguard Explorer Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,147; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.1467 or 14.67%
(o) For the Vanguard Short Term Federal Bond Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,010; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0105 or 1.05%
(p) For the VIP Equity-Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,224; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.2236 or 22.36%
(q) For the VIP Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,226; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.2262 or 22.62%
(r) For the VIP High Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,093; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.0925 or 9.25%
(s) For the VIP Overseas Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $994; and n = 1
ERV = $1,000 (1 + T)**1
T = -0.0065 or (0.65%)
(t) For the VIP II Asset Manger Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,059; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0594 or 5.94%
(u) For the VIP II Contrafund Investment Account, the data is not available
due to the fund's inception date occuring after the beginning of the time period
under consideration.
(v) For the VIP II Index 500 Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,243; and n = 1
ERV = $1,000 (1 +T)**1
T = 0.2427 or 24.27%
<PAGE>
4
FOR THE PERIOD FROM INCEPTION THROUGH DECEMBER 31, 1995
(a) For the AUL American Equity Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,691, and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0962 or 9.62%
(b) For the AUL American Bond Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,511; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0748 or 7.48%
(c) For the AUL American Money Market Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,122; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0204 or 2.04%
(d) For the AUL American Managed Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,572; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0823 or 8.23%
(e) For the Alger American Growth Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $2,920; and n = 6.9785
ERV = $1,000 (1 + T)**6.9785
T = 0.1660 or 16.60%
(f) For the Calvert Capital Accumulation Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,430; and n = 4.4597
ERV = $1,000 (1 + T)**4.4597
T = 0.0835 or 8.35%
(g) For the Invesco Dynamics Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $3,452; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1319 or 13.19%
(h) For the PBHG Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $6,391; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.2038 or 20.38%
(i) For the TCI Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,378; and n = 8.1139
ERV = $1,000 (1 + T)**8.1139
T = 0.1127 or 11.27%
(j) For the T. Rowe Price Equity-Income Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,158; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1582 or 15.82%
(k) For the Twentieth Century Select Investors Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $2,510; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.0964 or 9.64%
(l) For the Twentieth Century Ultra Investors Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $5,025; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1752 or 17.52%
(m) For the Twentieth Century International Equity Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,481; and n = 4.6452
ERV = $1,000 (1 + T)**4.6452
T = 0.0882 or 8.82%
(n) For the Vanguard Explorer Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,228; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.0834 or 8.34%
<PAGE>
5
(o) For the Vanguard Short Term Federal Bond Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,538; and n = 8.0000
ERV = $1,000 (1 + T)**8.0000
T = 0.0553 or 5.53%
(p) For the VIP Equity-Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,635; and n = 9.2285
ERV = $1,000 (1 + T)**9.2285
T = 0.1107 or 11.07%
(q) For the VIP Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $3,009; and n = 9.2285
ERV = $1,000 (1 + T)**9.2285
T = 0.1268 or 12.68%
(r) For the VIP High Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,438; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.0932 or 9.32%
(s) For the VIP Overseas Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,571; and n = 8.9274
ERV = $1,000 (1 + T)**8.9274
T = 0.0519 or 5.19%
(t) For the VIP II Asset Manager Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,722; and n = 6.3167
ERV = $1,000 (1 + T)**6.3167
T = 0.0898 or 8.98%
(u) For the VIP II Contrafund Investment Account, the data is not available
due to the fund's inception date occuring after the beginning of the time period
under consideration.
(v) For the VIP II Index 500 Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,412; and n = 3.3468
ERV = $1,000 (1 + T)**3.3468
T = 0.1085 or 10.85%
5. Quotations of average annual total return for an Investment Accountant
will be expressed in terms of the compounded rate of return of a hypothetical
investment in the Investment Account for periods of one, five, and ten years, or
since the Fund's inception, if less. The average annual total return for an
Investment Account will be calculated pursuant to the following formula: P (1
+T)n = ERV (where P = a hypothetical initial payment of $1,000, T = the total
return, n = the number of years, and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period, but not
including the surrender charge, which is a maximum of 8%.) All total return
figures reflect the deduction of a proportional share of Investment Account
expenses on an annual basis, and assume that all dividends and distributions are
reinvested when paid. For the Investment Accounts that have not been in
existence for the time periods indicated, the average annual total return
represents hypothetical returns that the Investment Accounts that invest in the
corresponding Mutual Fund Portfolios would have achieved had they invested in
such Portfolios for the periods indicated. For the periods that a particular
Investment Account has been in existence (see "Inception Date of Investment
Account") then the performance is actual performance and not hypothetical in
nature.
FOR THE YEAR ENDING DECEMBER 31, 1995
(a) For the AUL American Equity Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,180; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1797 or 17.97%
(b) For the AUL American Bond Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,163; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1632 or 16.32%
<PAGE>
6
(c) For the AUL American Money Market Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,040; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0397 or 3.97%
(d) For the AUL American Managed Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,177; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1765 or 17.65%
(e) For the Alger American Growth Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,347; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3468 or 34.68%
(f) For the Calvert Capital Accumulation Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,378; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3779 or 37.79%
(g) For the Invesco Dynamics Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,357; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3566 or 35.66%
(h) For the PBHG Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,485; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.4846 or 48.46%
(i) For the TCI Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,295; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2947 or 29.47%
(j) For the T. Rowe Price Equity-Income Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,331; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3308 or 33.08%
(k) For the Twentieth Century Select Investors Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,214; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2137 or 21.37%
(l) For the Twentieth Century Ultra Investors Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,362; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3620 or 36.20%
(m) For the Twentieth Century International Equity Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,105; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1049 or 10.49%
(n) For the Vanguard Explorer Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,250; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2501 or 25.01%
(o) For the Vanguard Short Term Federal Bond Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,102; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1017 or 10.17%
(p) For the VIP Equity-Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,334; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3340 or 33.40%
<PAGE>
7
(q) For the VIP Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,337; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3368 or 33.68%
(r) For the VIP High Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,191; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1910 or 19.10%
(s) For the VIP Overseas Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,083; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.0831 or 8.31%
(t) For the VIP II Asset Manager Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,155; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.1550 or 15.50%
(u) For the VIP II Contrafund Investment Account, the data is not available
due to the fund's inception date occuring after the beginning of the time period
under consideration.
(v) For the VIP II Index 500 Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,355; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.3548 or 35.48%
FOR THE PERIOD FROM INCEPTION THROUGH DECEMBER 31, 1995
(a) For the AUL American Equity Investment Account, according to the
formula expressed above, where;
P = $1,000; ERV = $1,792; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.1074 or 10.74%
(b) For the AUL American Bond Investment Account, according to the formula
expressed above; where:
P = $1,000; ERV = $1,601; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0858 or 8.58%
(c) For the AUL American Money Market Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,190; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0308 or 3.08%
(d) For the AUL American Managed Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,666; and n = 5.7194
ERV = $1,000 (1 + T)**5.7194
T = 0.0933 or 9.33%
(e) For the Alger American Growth Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $3,107; and n = 6.9785
ERV = $1,000 (1 + T)**6.9785
T = 0.1764 or 17.64%
(f) For the Calvert Capital Accumulation Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,577; and n = 4.4597
ERV = $1,000 (1 + T)**4.4597
T = 0.1076 or 10.76%
(g) For the Invesco Dynamics Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $3,704; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1399 or 13.99%
<PAGE>
8
(h) For the PBHG Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $6,862; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.2124 or 21.24%
(i) For the TCI Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,541; and n = 8.1139
ERV = $1,000 (1 + T)**8.1139
T = 0.1218 or 12.18%
(j) For the T. Rowe Price Equity-Income Investment Account, according to
the formula expressed above, where:
P = $1,000; ERV = $1,218; and n = 1
ERV = $1,000 (1 + T)**1
T = 0.2183 or 21.83%
(k) For the Twentieth Century Select Investors Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $2,694; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1042 or 10.42%
(l) For the Twentieth Century Ultra Investors Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $5,396; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1836 or 18.36%
(m) For the Twentieth Century International Equity Investment Account,
according to the formula expressed above, where:
P = $1,000; ERV = $1,635; and n = 4.6452
ERV = $1,000 (1 + T)**4.6452
T = 0.1117 or 11.17%
(n) For the Vanguard Explorer Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,391; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.0911 or 9.11%
(o) For the Vanguard Short Term Federal Bond Investment Account, according
to the formula expressed above, where:
P = $1,000; ERV = $1,641; and n = 8.0000
ERV = $1,000 (1 + T)**8.0000
T = 0.0639 or 6.39%
(p) For the VIP Equity-Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,825; and n = 9.2285
ERV = $1,000 (1 + T)**9.2285
T = 0.1191 or 11.91%
(q) For the VIP Growth Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $3,225; and n = 9.2285
ERV = $1,000 (1 + T)**9.2285
T = 0.1353 or 13.53%
(r) For the VIP High Income Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $2,617; and n = 10
ERV = $1,000 (1 + T)**10
T = 0.1010 or 10.10%
(s) For the VIP Overseas Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,681; and n = 8.9274
ERV = $1,000 (1 + T)**8.9274
T = 0.0599 or 5.99%
(t) For the VIP II Asset Manger Investment Account, according to the
formula expressed above, where:
P = $1,000; ERV = $1,828; and n = 6.3167
ERV = $1,000 (1 + T)**6.3167
T = 0.1002 or 10.02%
(u) For the VIP II Contrafund Investment Account, the data is not available
due to the fund's inception date occuring after the beginning of the time period
under consideration.
(v) For the VIP II Index 500 Investment Account, according to the formula
expressed above, where:
P = $1,000; ERV = $1,551; and n = 3.3468
ERV = $1,000 (1 + T)**3.3468
T = 0.1402 or 14.02%
<TABLE> <S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 15
<NAME> T. ROWE PRICE EQUITY INCOME
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
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<NUMBER-OF-SHARES-REDEEMED> (975,139)
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</TABLE>
<TABLE> <S> <C>
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<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 10
<NAME> FIDELITY EQUITY-INCOME
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<S> <C>
<PERIOD-TYPE> YEAR
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 6
<NAME> FIDELITY GROWTH
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
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<OVERDISTRIBUTION-GAINS> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 5
<NAME> FIDELITY HIGH INCOME
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 7
<NAME> FIDELITY OVERSEAS
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 8
<NAME> FIDELITY ASSET MANAGER
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 11
<NAME> FIDELITY CONTRAFUND
<MULTIPLIER> 1
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 9
<NAME> FIDELITY INDEX 500
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<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000856341
<NAME> AUL AMERICAN UNIT TRUST
<SERIES>
<NUMBER> 16
<NAME> AUL AMERICAN TACTICAL ASSET ALLOCATION PORTFOLIO
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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