SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ X ] Preliminary proxy statement [ ] Confidential, for use of the
[ ] Definitive proxy statement Commission Only (as permitted
[ ] Definitive additional materials by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Separate Account D
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO]
[DATE]
Dear GoldenSelect Contractowner:
Enclosed are proxy materials relating to a Special Meeting of
Contractowners of The Managed Global Account Division of Separate Account D of
Golden American Life Insurance Company, the investment company that serves as an
investment vehicle for your Golden American variable annuity contract. The
Special Meeting is scheduled for July 29, 1996.
Proposals 1 and 2: A Unified Fee Structure
At the Special Meeting, you will be asked to approve a new Management
Agreement with Directed Services, Inc. ("DSI") and an amended Portfolio
Management Agreement with Warburg, Pincus Counsellors, Inc. ("Warburg, Pincus"),
the Manager and Portfolio Manager, respectively, of The Managed Global Account.
These agreements would replace the way the Account currently pays its expenses
with a simple "unified" fee arrangement, which would lock in fees at the current
level provided under DSI's expense caps, and provide for lower fees as assets
increase. To accomplish this, DSI would assume responsibility for providing or
paying for all of the services necessary for the ordinary operation of The
Managed Global Account. In return, DSI would receive one fee at an annual rate
of 1.25% of the Account's average daily net assets. DSI's fee would drop to
1.05% for the Account's assets in excess of $500 million. These are the same
expense levels that are currently in place under an expense limitation
commitment from DSI that expires at the end of this year. This simplified fee
arrangement is reflected in the new Management Agreement and the amended
Portfolio Management Agreement with Warburg, Pincus, which are submitted for
your approval.
Proposals 3 and 4: Agreement to Acquire Golden American and DSI
by Equitable of Iowa Companies
Equitable of Iowa Companies has entered into an agreement to acquire
Golden American Life Insurance Company and DSI. The agreement is subject
to several conditions, including approval from certain state insurance
authorities and other approvals. Equitable of Iowa Companies is a New York
Stock Exchange listed company that owns Equitable Life Insurance
<PAGE>
Company of Iowa, USG Annuity & Life Company, Locust Street
Securities, Inc., and Equitable Investment Services, Inc. It had
assets of $10 billion as of March 31, 1996. It is intended that
Golden American and DSI would maintain their Delaware operations
and management. The acquisition would align Golden American and
DSI with a financially strong family of life insurance companies.
Contractowners of The Managed Global Account are asked
for certain approvals in connection with this prospective
acquisition. Upon the closing of the acquisition, the Management
Agreement under which DSI serves as Manager to The Managed Global
Account would terminate. Similarly, the Portfolio Management
Agreement with Warburg, Pincus may also terminate. Accordingly,
Contractowners are asked to approve at the Special Meeting (1) a
new Management Agreement between the Account and DSI, and (2) a
new Portfolio Management Agreement between the Account, DSI, and
Warburg, Pincus. The terms of the new Management Agreement and
new Portfolio Management Agreement are identical in all material
respects to the terms of the agreements described in Proposals 1
and 2.
We believe that the prospective acquisition by
Equitable of Iowa Companies will provide a financially strong
parent for Golden American and DSI that is committed to seeking
growth in the assets of the Account.
Proposal 5: Reorganization of the Managed Global Account
The Managed Global Account is organized as a segregated
asset account of Golden American that is registered with the SEC
as an open-end management investment company. Under this
structure, the Account directly holds and manages portfolio
securities and other assets, and contracts with DSI and Warburg,
Pincus for the management services that it needs. A
reorganization is proposed under which your interests in the
Account would be held by a segregated asset account of Golden
American that is registered with the SEC as a unit investment
trust, and which would invest in a separate mutual fund portfolio
- -- the Managed Global Series of The GCG Trust. Under this
structure, the Trust would hold and manage portfolio securities
and other assets, and would contract with DSI and Warburg, Pincus
for the management services that it needs. The segregated asset
account would simply hold shares of the Managed Global Series.
This reorganization would simplify the reports we send
to you by consolidating them with the report for other series of
the Trust. It would also permit the Managed Global Series to be
offered for different products, and therefore increase the growth
potential for the portfolio. The reorganization would not
increase costs for you.
<PAGE>
Board of Governors Recommends Approval
The Board of Governors of Account D has carefully
considered these proposals and recommends that you vote "FOR" the
proposals on the enclosed proxy card. I urge you to review the
enclosed proxy statement, to cast your vote, and to promptly
return the enclosed proxy card in the envelope provided.
Sincerely,
Terry L. Kendall
President, Separate Account D
of Golden American Life
Insurance Company
Enclosure
<PAGE>
THE MANAGED GLOBAL ACCOUNT DIVISION OF
SEPARATE ACCOUNT D OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
NOTICE OF SPECIAL MEETING OF CONTRACTOWNERS
July 29, 1996
To the Contractowners of Variable Annuity Contracts with
Accumulation Value in The Managed Global Account Division of
Separate Account D of Golden American Life Insurance Company:
A Special Meeting (the "Meeting") of the owners of the
variable annuity contracts (the "Contracts") with accumulation
value allocated to The Managed Global Account Division of
Separate Account D ("Account D") of Golden American Life
Insurance Company ("Golden American") will be held at 1001
Jefferson Street, Suite 400, Wilmington, Delaware 19801 on
July 29, 1996 at 10:00 a.m., local time, for the following
purposes:
I. To approve a new Management Agreement with Directed
Services, Inc. ("DSI");
II. If Proposal I is approved, to approve an amended
Portfolio Management Agreement with DSI and Warburg,
Pincus Counsellors, Inc. ("Warburg, Pincus");
III. To approve a new Management Agreement with DSI in the
same form as the agreement described in Proposal I, to
become effective following the acquisition of its
corporate parent;
IV. If Proposal III is approved, to approve a new Portfolio
Management Agreement with DSI and Warburg, Pincus in
the same form as the agreement described in Proposal
II, to become effective following the acquisition of
the corporate parent of DSI;
V. To approve the reorganization ("Reorganization") of
Account D from a separate account of Golden American
registered as a management investment company to a
separate account of Golden American registered as a
unit investment trust that invests in a separate mutual
fund; and
VI. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
<PAGE>
The matters referred to above are discussed in detail
in the Proxy Statement attached to this Notice. Contractowners
of record at the close of business on June 28, 1996 are entitled
to notice of, and to vote at, the Meeting and any adjournment
thereof.
You are cordially invited to attend the Meeting. All
Contractowners who do not expect to attend the Meeting are
requested to complete, date and sign the enclosed form of proxy
and return it promptly in the envelope provided for that purpose.
The enclosed proxy is solicited by the Board of Governors of
Account D.
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE UNNECESSARY
EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY, DATE AND SIGN IT, AND RETURN
IT PROMPTLY IN THE ENVELOPE PROVIDED, NO MATTER HOW LARGE OR
SMALL YOUR HOLDING MAY BE.
By Order of the Board of Governors,
Secretary
[date]
<PAGE>
THE MANAGED GLOBAL ACCOUNT DIVISION OF
SEPARATE ACCOUNT D OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
PROXY STATEMENT
Special Meeting of Contractowners
July 29, 1996
This Proxy Statement is furnished in connection with
the solicitation of proxies on behalf of the Board of Governors
of Separate Account D ("Account D") of Golden American Life
Insurance Company ("Golden American") for use at a Special
Meeting (the "Meeting") of the owners of the variable annuity
contracts with accumulation value allocated to The Managed Global
Account Division of Account D (the "Contracts") and issued by
Golden American. The Meeting will be held on July 29, 1996 at
10:00 a.m., local time, at 1001 Jefferson Street, Suite 400,
Wilmington, Delaware 19801 for the purposes set forth herein. At
the Meeting, Contractowners will be asked:
I. To approve a new Management Agreement with Directed
Services, Inc. ("DSI");
II. If Proposal I is approved, to approve an amended
Portfolio Management Agreement with DSI and Warburg,
Pincus Counsellors, Inc. ("Warburg, Pincus");
III. To approve a new Management Agreement with DSI in the
same form as the agreement described in Proposal I, to
become effective following the acquisition of its
corporate parent;
IV. If Proposal III is approved, to approve a new Portfolio
Management Agreement with DSI and Warburg, Pincus in
the same form as the agreement described in Proposal
II, to become effective following the acquisition of
the corporate parent of DSI;
V. To approve the reorganization ("Reorganization") of
Account D from a separate account of Golden American
registered as a management investment company to a
separate account of Golden American registered as a
unit investment trust that invests in a separate mutual
fund; and
VI. To transact such other business as may properly come
before the Meeting or any adjournments thereof.
The initial mailing of this Proxy Statement to
Contractowners will be on or about July __, 1996. The expense of
<PAGE>
proxy solicitation will be borne by Golden American, DSI, and/or
Equitable of Iowa Companies. In addition to solicitation of
proxies by mail, proxies may also be solicited by telephone,
telegraph or personal interview conducted by personnel of Golden
American or DSI, or by proxy solicitation firms retained by
Golden American or DSI.
If the enclosed proxy is executed and returned, it may
nevertheless be revoked at any time before its exercise by a
written revocation or a later proxy received by the Secretary of
Account D. The proxy will not be voted if the Contractowner is
present at the Meeting and elects to vote in person. However,
attendance at the Meeting alone will not serve to revoke the
proxy.
The persons named in the accompanying proxy will vote
as directed by the proxy, but in the absence of voting directions
in any proxy that is signed and returned, they intend to vote FOR
each proposal and may vote in their discretion with respect to
other matters not now known to the Board of Governors of Account
D that may be presented at the Meeting. Executed proxies marked
as abstentions will not be considered votes cast for or against
the proposals requiring approval of a specified percentage of
votes cast, but will be considered as negative votes on issues
requiring the affirmative vote of a specified portion of the
outstanding voting interests of Account D. Abstentions will also
be counted for quorum purposes.
As of June 28, 1996 (the "Record Date"), there were
______ votes entitled to be cast at the Meeting with respect to
Account D. Each Contractowner may cast one vote for every $1.00
of accumulation value in Account D, with fractional interests
counted.
Proposals I, II, III, IV, and V are voted upon
separately. Approval of Proposals I, II, III, and IV requires a
majority vote of the outstanding voting securities of The Managed
Global Account, the sole existing division of Account D, while
approval of Proposal V requires a majority vote of the voting
securities present and voting at the Meeting. A "majority vote
of the outstanding voting securities" means the lesser of:
(1) More than 50% of all votes entitled to vote on
Proposals I, II, III, and IV; or
(2) At least 67% of the votes which are present at the
Meeting, if holders of more than 50% of all votes
entitled to be cast in respect of Proposals I, II, III,
and IV are present in person or represented by proxy.
- 2 -
<PAGE>
If a sufficient number of votes is not represented at
the Meeting to approve any item, the Meeting may be adjourned for
the purpose of further proxy solicitation, or for any other
purpose. A vote may be taken on any one of the proposals in this
Proxy Statement prior to any adjournment if sufficient votes have
been received for approval. Unless otherwise instructed, proxies
will be voted in favor of any adjournment. At any subsequent
reconvening of the Meeting, proxies will (unless previously
revoked) be voted in the same manner as they would have been
voted at the Meeting.
PROPOSAL I
APPROVAL OF MANAGEMENT AGREEMENT WITH DSI
Background
DSI serves as Manager to The Managed Global Account
under the terms of a Management Agreement between Account D and
DSI dated October 2, 1992 (the "Current Management Agreement").
At a meeting held on June 10, 1996, the Board of Governors of
Account D, including those members of the Board who are not
parties to the agreement or interested persons of any such
parties, considered and approved for submission to Contractowners
a new Management Agreement (the "New Management Agreement") for
The Managed Global Account between Account D and DSI as Manager.
The New Management Agreement differs from the Current Management
Agreement in that DSI, in addition to its current
responsibilities as Manager, would provide or procure for The
Managed Global Account, at DSI's expense, the services reasonably
necessary for the operation of The Managed Global Account,
including custodial, portfolio accounting, auditing, ordinary
legal services, and other services necessary for the ordinary
operation of The Managed Global Account. DSI also would be
responsible for engaging and compensating any Portfolio Manager
of The Managed Global Account.
Thus, under the New Management Agreement, DSI would
bear the ordinary operational expenses of The Managed Global
Account that currently are borne directly by Account D. The fees
payable to DSI under the New Management Agreement are higher than
those payable to DSI under the Current Management Agreement;
however, because DSI will directly bear the expenses of The
Managed Global Account's ordinary operations, based upon current
asset levels, the New Management Agreement is not expected to
increase the expenses of The Managed Global Account. Further,
the New Management Agreement would result in a decrease in the
expenses that would be borne by Account D at current asset levels
in the absence of the Manager's expense limitation policy. See
"Effect on Expenses of Account D."
- 3 -
<PAGE>
The Current Management Agreement
The Current Management Agreement was last approved by
the Board of Governors of Account D at a meeting held September
21, 1995, and by Contractowners with value allocated to The
Managed Global Account at a meeting held on September 15, 1994
pursuant to the requirements of Section 15(a) of the Investment
Management Act of 1940 (the "1940 Act"), which requires
Contractowner approval of each investment advisory contract. The
Current Management Agreement provides that it will continue in
effect until October 2, 1996, and from year to year thereafter,
provided such continuance is approved annually by (i) holders of
a majority of the outstanding voting securities of The Managed
Global Account or by a majority of the Board of Governors, and
(ii) a majority of the members of he Board of Governors who are
not parties to the Current Management Agreement or "interested
persons" (as defined by the 1940 Act) of any such party.
As Manager under the Current Management Agreement, DSI
has overall responsibility, subject to the supervision of the
Board of Governors, for engaging Portfolio Managers for The
Managed Global Account, and for monitoring and evaluating the
management of the assets of The Managed Global Account and the
performance of the Portfolio Manager. Account D bears expenses
associated with securities custody, portfolio accounting, its
Board of Governors, and legal and auditing services.
For its services to The Managed Global Account, DSI
receives a monthly fee equal to an annual rate of 0.40% of the
first $500 million of The Managed Global Account's average daily
net assets and 0.30% of the amount over $500 million. For the
fiscal year ended December 31, 1995, Account D paid custodial
fees of $111,693 to Account D's custodian, Bankers Trust Company,
which is affiliated with DSI.
Pursuant to the Current Management Agreement, DSI will
not be subject to liability for, or subject to any damages,
expenses, or losses in connection with, any act or omission
connected with or arising out of any services rendered under the
Current Management Agreement, except by reason of wilful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of reckless disregard of its obligations
and duties under the Current Management Agreement.
Account D may terminate the Current Management
Agreement by majority vote of the entire Board of Governors, or
by a vote of a majority of the outstanding voting securities of
The Managed Global Account, upon 60 days' written notice given by
the Board of Governors. DSI may terminate the Current Management
Agreement without penalty upon 60 days' notice to Account D. In
- 4 -
<PAGE>
addition, the Current Management Agreement will terminate
automatically in the event of its "assignment," as that term is
defined in the 1940 Act.
The Managed Global Account and DSI have agreed to limit
expenses of The Managed Global Account, other than mortality and
expense risk charges, asset-based administrative charges, and
other contractual charges assessed on variable annuity contracts
having value allocated to The Managed Global Account, through
December 31, 1996 so that such expenses do not exceed 1.25% of
the first $500 million of average daily net assets and 1.05% of
the excess over $500 million on an annual basis.
The New Management Agreement
If the New Management Agreement is approved by a
majority vote of the outstanding securities of The Managed Global
Account, it will take effect on the earlier of August 30, 1996 or
the Closing Date of the Acquisition described in Proposal III,
and will continue in effect until two years from that date, and
will continue from year to year thereafter, subject to approval
annually by the Board of Governors of Account D or by a majority
vote of the voting securities of The Managed Global Account, and
also, in either event, approval by a majority of those members of
the Board of Governors who are not parties to the New Management
Agreement or interested persons of any such party at a meeting
called for the purpose of voting on such approval. The New
Management Agreement is attached hereto as Exhibit A.
The provisions of the New Management Agreement
regarding the management services to be provided by DSI are
substantially similar to DSI's responsibilities under the Current
Management Agreement. DSI would continue to be responsible for
analyzing and recommending for consideration by Account D's Board
of Governors Portfolio Managers to provide investment advice to
The Managed Global Account, for periodically monitoring and
evaluating the performance of the Portfolio Managers with respect
to the investment objective and policies of The Managed Global
Account, and, if appropriate, for analyzing and recommending for
consideration by the Board termination of a contract with a
Portfolio Manager. DSI would be responsible for monitoring the
Portfolio Managers for compliance with the investment policies
and restrictions of The Managed Global Account, and applicable
legal requirements. DSI would also continue to be responsible
for providing all supervisory and management services described
above under the section entitled "The Current Management
Agreement" of this Proposal I.
The New Management Agreement differs from the Current
Management Agreement in that DSI would be responsible for
- 5 -
<PAGE>
providing or procuring additional services for Account D. DSI
would have overall responsibility, subject to the supervision of
the Board of Governors, for providing administrative and other
services necessary for the ordinary operation of The Managed
Global Account other than investment advisory services. DSI
would be responsible for providing, at its own expense, the
services reasonably necessary for the operation of The Managed
Global Account, including custodial, administrative, portfolio
accounting, auditing, and ordinary legal services. DSI would
also bear the expenses of any of Account D's meetings of
Contractowners, the preparation and mailings of prospectuses and
reports of Account D to its Contractowners, the filing of reports
with regulatory bodies, the maintenance of Account D's existence
and qualification to do business, and the registration of
interests in Account D with federal and state securities or
insurance authorities. In addition, commencing with the date of
the New Management Agreement, DSI will be responsible for any
remaining unamortized organizational expenses of Account D.
Under the proposed agreement, DSI would not bear the expenses of
brokerage fees or other transactional expenses for securities or
other assets, taxes (if any) paid by Account D, interest on
borrowing, fees and expenses of the independent members of the
Board of Governors, and extraordinary expenses, such as
litigation or indemnification expenses.
The New Management Agreement is different from the
Current Management Agreement in that, pursuant to its terms, many
of the expenses of The Managed Global Account's operations,
including custodial, administrative, portfolio accounting,
auditing, and ordinary legal expenses would be paid by DSI as the
Manager; whereas, under the Current Management Agreement, these
expenses are paid directly from the assets of Account D. In this
regard, Account D would be distinct from most registered open-end
investment companies because most registered open-end investment
companies pay these expenses directly from their own assets.
The circumstances under which Account D or DSI may
incur liability and the circumstances under which the New
Management Agreement would terminate are the same as for the
Current Management Agreement.
Under the New Management Agreement, the Trust would pay
DSI a monthly fee at an annual rate of 1.25% of the first $500
million of average daily net assets of The Managed Global
Account, and 1.05% on the amount of assets in excess of $500
million. For a comparison of these fees with those paid under
the Current Management Agreement, and a discussion of the effect
of the proposed arrangements on the expenses of The Managed
Global Account, see "Effect on Expenses of Account D," below.
- 6 -
<PAGE>
Effect on Expenses of Account D
As described above, DSI generally would be responsible
for providing all of the services necessary for the ordinary
operation of The Managed Global Account under the New Management
Agreement. Based upon current asset levels, the New Management
Agreement is not expected to increase the expenses of the Managed
Global Account, even though the fees payable to DSI under the New
Management Agreement are greater than the fees currently payable
to DSI under the Current Management Agreement. For the fiscal
year ended December 31, 1995, Account D paid DSI management fees
equal to $293,930 under the Current Management Agreement (before
expense reimbursements). For the same period, Account D would
have paid DSI management fees equal to $921,619, representing a
313% increase, if the New Management Agreement had been in
effect.
Table 1 below presents information to help analyze the
fees payable to DSI under the New Management Agreement. The
table sets forth information regarding the fees and expenses of
Account D under its current contractual arrangements and under
the proposed contractual arrangements. The proposed contractual
arrangements also reflect the fees payable to the Portfolio
Manager under the Portfolio Management Agreement that is proposed
in Proposal II. Under the New Management Agreement, these
Portfolio Management fees would become the responsibility of DSI
rather than Account D.
As previously noted, DSI has agreed to limit the
ordinary operating expenses of The Managed Global Account through
December 31, 1996. Prior to the current expense limitation
agreement, predecessor agreements were in effect that limited the
expenses of The Managed Global Account at levels equal to those
under the Current Management Agreement. Table 2 below presents
information to help analyze the fees payable to DSI under the New
Management Agreement in relation to the historic expense levels
of The Managed Global Account under the expense limitation that
has been in effect, as well as expense levels that The Managed
Global Account would have incurred in the absence of any expense
limitation. The Managed Global Account expenses in Table 2 are
presented as ratios of expenses to average net assets.
- 7 -
<PAGE>
TABLE 1. COMPARISON OF THE MANAGED GLOBAL ACCOUNT'S
EXPENSES UNDER THE CURRENT MANAGEMENT AGREEMENT
AND THE NEW MANAGEMENT AGREEMENT
Current Expense Current Expense Proposed
Structure With Structure Without Expense
Expense Limit** Expense Limit Structure***
Management Fee* $230,544 $293,930 $921,619
Portfolio Management Fee* 440,770 440,770 0
Costs of Other Expenses* 251,723 251,727 7,409
Total Expenses* $923,041 $986,427 $929,028
* Based on asset levels and financial statements as of
December 31, 1995.
** Under the Current Management Agreement, "Costs of Other
Expenses" are limited by The Managed Global Account's
current expense limitation agreement with DSI, under which
DSI reimbursed Account D $63,386 during Account D's fiscal
year ended December 31, 1995.
*** Presumes that the Account will not incur extraordinary
expenses.
TABLE 2. COMPARISON OF HISTORICAL EXPENSE RATIOS TO
ANTICIPATED EXPENSES UNDER THE NEW MANAGEMENT AGREEMENT
Historical Expense Ratios
Anticipated For the Period Ended 12/31
Expenses* 1995 1994 1993 1992**
Total Expenses
(Without Expense
Limitation) 1.26% 1.35% 1.40% 1.73% 1.84%
Total Expenses (After
Expense Limitation) n/a 1.25% 1.31% 1.69% 1.84%
_______________
* Assumes average net assets of $75,389,433; at December 31,
1995, net assets were $73,489,409.
** Annualized.
Table 2 above indicates that the proposed New
Management Agreement would maintain expenses of The Managed
Global Account at the level that is in effect under the current
expense limitation agreement.
After December 31, 1996, there can be no assurance that
DSI will renew the expense limitation agreement or enter into a
new expense limitation agreement. In the event that any expense
- 8 -
<PAGE>
limitation arrangements were to be discontinued, the expenses
that would be borne by Account D under current contractual
arrangements and at current asset and expense levels would exceed
the expenses that would be borne by Account D if the New
Management Agreement were effective. Under these circumstances,
approval of the New Management Agreement would, immediately after
effectiveness, result in a decrease in the expenses that would be
borne by Account D.
It is possible that service providers to Account D
could increase the costs of services provided to The Managed
Global Account or that it may become necessary to procure
additional services in the future for the ordinary operation of
The Managed Global Account. Under the Current Management
Agreement, this risk is borne by Account D. Under the New
Management Agreement, DSI, rather than Account D, will bear the
risk that expenses may increase. Alternatively, DSI may benefit
to the extent that it can negotiate more favorable terms from
service providers. It is possible that with increases in the
size of the assets of The Managed Global Account, the costs of
services necessary for the ordinary operation of The Managed
Global Account, as a percentage of net assets, could decrease by
virtue of economies of scale. Under the Current Management
Agreement, savings realized through economies of scale would
largely inure to the benefit of Account D. Under the New
Management Agreement, any savings realized through economies of
scale may inure to the benefit of DSI. However, the New
Management Agreement provides that, as The Managed Global Account
assets increase, the fee payable to DSI will decrease at a
certain level of assets, or "breakpoint." Accordingly, whether
any savings achieved through economies of scale will benefit DSI
or Account D under the New Management Agreement will depend on
whether such savings are lesser or greater than the reduction in
revenue to DSI caused by meeting the breakpoint at an increased
level of assets. To the extent that any savings realized through
economies of scale inure to the benefit of DSI, they will not
lower the expenses of Account D.
By combining all of the ordinary operating expenses
under one unified fee and engaging the Manager to provide or
procure all of the services needed for the ordinary operation of
The Managed Global Account, the New Management Agreement will
provide certainty in the ordinary expenses of The Managed Global
Account in the future. Thus, the New Management Agreement will
provide simplicity and predictability to the fee structure for
The Managed Global Account.
- 9 -
<PAGE>
The Manager
DSI, 1001 Jefferson Street, Suite 400, Wilmington,
Delaware 19801, is a New York corporation that is a wholly owned
indirect subsidiary of Bankers Trust Company, the indirect parent
corporation of Golden American. Bankers Trust Company is a New
York banking corporation with executive offices at 130 Liberty
Street, New York, New York 10006. As of December 31, 1995,
Bankers Trust New York Corporation, parent of Bankers Trust
Company, was the seventh largest bank holding company in the
United States with total assets of approximately $104 billion.
Bankers Trust Company conducts a variety of general banking and
trust activities and is a leading wholesale supplier of financial
services to the domestic and international markets.
DSI is a registered investment adviser and broker-
dealer and is a member of the National Association of Securities
Dealers, Inc. In addition to providing the services described
above as Manager to Account D, DSI acts as Manager to The GCG
Trust, and serves as the distributor of its shares without
remuneration. DSI also serves as distributor of the Contracts
and other variable insurance contracts issued by Golden American,
and may receive distribution fees in connection with distribution
of the Contracts.
See Exhibit B for a list of the directors and the
principal executive officer of DSI and a table setting forth the
other investment companies, or series thereof, with similar
investment objectives to those of The Managed Global Account for
which DSI serves as investment adviser, including the fees
payable to such investment companies or series and their
approximate net assets.
The Board of Governors' Recommendation
In approving the New Management Agreement, and in
deciding to recommend that Contractowners approve the New
Management Agreement, the Board of Governors, including the
members who are not interested persons of Account D or DSI,
considered several factors, including: (1) the compensation to
be paid by Account D to DSI under the New Management Agreement,
and the fairness and reasonableness of the compensation; (2) the
nature and the quality of the management services previously
rendered, and the management and other services expected to be
rendered in the future, by DSI; (3) DSI's background, prior
experience and performance, and its reputation within the
securities industry; (4) performance information regarding DSI;
and (5) management fees paid under the Current Management
Agreement.
- 10 -
<PAGE>
ACCORDINGLY, THE BOARD OF GOVERNORS (INCLUDING THE
MEMBERS OF THE BOARD OF GOVERNORS WHO ARE NOT PARTIES TO OR
INTERESTED PERSONS OF ANY PARTY TO THE NEW MANAGEMENT AGREEMENT)
RECOMMENDS THE APPROVAL OF THE NEW MANAGEMENT AGREEMENT.
If Contractowners do not approve Proposal I, the
current management and portfolio management arrangements for The
Managed Global Account will remain intact. If Contractowners
approve Proposal I but not Proposal II, Account D's Board of
Governors will consider what future action to take. Such action
may include entering into new portfolio management arrangements,
subject to approval by Contractowners, or the possible
resubmission of the Proposal to the Contractowners for
consideration at a later date.
PROPOSAL II
APPROVAL OF AMENDED PORTFOLIO MANAGEMENT
AGREEMENT WITH WARBURG, PINCUS
In connection with its approval of the New Management
Agreement, the Board of Governors of Account D, at a meeting held
on June 10, 1996, approved an amendment to Warburg, Pincus'
portfolio management agreement dated June 9, 1994 (the "Portfolio
Management Agreement") with DSI and Account D. It is proposed
that Warburg, Pincus furnish portfolio management services to The
Managed Global Account pursuant to an amended Portfolio
Management Agreement (the "Amended Portfolio Management
Agreement") with Account D and DSI, the terms of which are
identical to those of the Portfolio Management Agreement with DSI
and Account D, except for the source of payment (DSI rather than
Account D) and other changes necessary to conform to the
provisions of the New Management Agreement. Contractowners are
being asked to approve the Amended Portfolio Management Agreement
for The Managed Global Account, to take effect immediately
following the effective date of the New Management Agreement.
Approval of the Amended Portfolio Management Agreement is
contingent upon approval of the New Management Agreement. The
Amended Portfolio Management Agreement is attached hereto as
Exhibit C.
The Portfolio Management Agreement
The Portfolio Management Agreement was approved by
Account D's Board of Governors on June 9, 1994, and by
Contractowners at a meeting held on September 15, 1994 pursuant
to the requirements of Section 15(a) of the 1940 Act, which
requires Contractowner approval of each investment advisory
contract. The Portfolio Management Agreement provides that it
will continue in effect until June 9, 1997, and from year to year
- 11 -
<PAGE>
thereafter, provided such continuance is approved annually by (i)
holders of a majority of the outstanding voting securities of The
Managed Global Account or by a majority of the Board of
Governors, and (ii) majority of the members of the Board of
Governors who are not parties to the Portfolio Management
Agreement or interested persons of any such party.
Subject to the supervision of the Board of Governors
and DSI, Warburg, Pincus manages the day-to-day operations and
investment and reinvestment of The Managed Global Account's
assets, including the purchase, retention and disposition of the
investments, securities and cash, in accordance with The Managed
Global Account's investment objective and policies. For its
services as Portfolio Manager, Warburg, Pincus receives a monthly
fee equal to an annual rate of 0.60% of the first $500 million of
The Managed Global Account's average daily net assets, and 0.50%
of the amount over $500 million. During Account D's fiscal year
ended December 31, 1995, Account D paid Warburg, Pincus fees
equal to $440,770 for services provided by Warburg, Pincus as
Portfolio Manager of The Managed Global Account.
Under the Portfolio Management Agreement, Warburg,
Pincus will not be subject to liability for, or subject to any
damages, expenses, or losses in connection with, any act or
omission arising from its services thereunder, except by reason
of wilful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of reckless disregard of
its obligations and duties thereunder. The Portfolio Management
Agreement will terminate if it is assigned, and it may be
terminated without penalty by DSI or Warburg, Pincus at any time
upon 60 days' written notice to the other parties to the
agreement. Upon the vote of a majority of the Board of Governors
or a majority of the outstanding voting securities of The Managed
Global Account, Account D may terminate the Portfolio Management
Agreement without penalty at any time upon 60 days' written
notice to the other parties to the agreement.
The Amended Portfolio Management Agreement
As noted above, the terms of the Amended Portfolio
Management Agreement are identical to the terms of the Portfolio
Management Agreement, except for the source of payment and
certain conforming changes. For Warburg, Pincus' services as
Portfolio Manager under the Amended Portfolio Management
Agreement, DSI (and not Account D) will pay Warburg, Pincus a
monthly fee equal to an annual rate of 0.60% of the first $500
million of The Managed Global Account's average daily net assets,
and 0.50% of the amount over $500 million.
- 12 -
<PAGE>
The Portfolio Manager
Warburg, Pincus is a Delaware corporation whose
principal place of business is 466 Lexington Avenue, New York,
New York 10017. Warburg, Pincus is a professional investment
counselling firm which provides investment services to investment
companies, employee benefit plans, endowment funds, foundations,
other institutions, and individuals. As of February 29, 1996,
Warburg, Pincus managed approximately $14 billion of assets,
including approximately $7.7 billion of investment company
assets. Incorporated in 1970, Warburg, Pincus is a wholly owned
subsidiary of Warburg, Pincus Counsellors G.P., a New York
general partnership. E.M. Warburg, Pincus & Co., Inc. controls
Warburg, Pincus through its ownership of a class of voting
preferred stock of Warburg, Pincus. Warburg, Pincus Counsellors
G.P. has no business other than being a holding company of
Warburg, Pincus and its subsidiaries.
See Exhibit D for a list of the directors and the
principal executive officer of Warburg, Pincus and a table
setting forth the other investment companies, or series thereof,
with similar investment objectives to those of The Managed Global
Account for which Warburg, Pincus serves as investment adviser,
including the fees payable to such investment companies or series
and their approximate net assets.
The Board of Governors' Recommendation
In approving the Amended Portfolio Management
Agreement, and in deciding to recommend that Contractowners
approve the Amended Portfolio Management Agreement, the Board of
Governors, including the members who are not interested persons
of Account D, DSI or Warburg, Pincus, considered several factors,
including: (1) the compensation to be paid by DSI, and Account D
indirectly, under the Amended Portfolio Management Agreement, and
the fairness and reasonableness of the compensation; (2) the
nature and the quality of the portfolio management services
previously rendered and expected to be rendered in the future by
Warburg, Pincus; (3) the background, prior experience and
performance of Warburg, Pincus, and its reputation within the
securities industry; (4) performance information regarding
Warburg, Pincus; (5) fees paid under the Portfolio Management
Agreement; and (6) the existing working relationship among DSI
and Warburg, Pincus.
ACCORDINGLY, THE BOARD OF GOVERNORS (INCLUDING THE
MEMBERS OF THE BOARD OF GOVERNORS WHO ARE NOT PARTIES TO OR
INTERESTED PERSONS OF ANY PARTY TO THE AMENDED PORTFOLIO
MANAGEMENT AGREEMENT) RECOMMENDS THE APPROVAL OF The AMENDED
PORTFOLIO MANAGEMENT AGREEMENT.
- 13 -
<PAGE>
PROPOSAL III
APPROVAL OF MANAGEMENT AGREEMENT WITH DSI TO BECOME
EFFECTIVE FOLLOWING THE ACQUISITION OF DSI'S CORPORATE PARENT
Background
Under the terms of a stock purchase agreement dated May
3, 1996 between Equitable of Iowa Companies ("Equitable of Iowa")
and Whitewood Properties Corp. ("Whitewood"), Equitable of Iowa
has agreed, subject to certain conditions and regulatory
approvals, that it or an affiliate will acquire 100% ownership of
BT Variable, Inc., a wholly owned subsidiary of Whitewood (the
"Acquisition"). BT Variable, Inc. is the corporate parent of
Golden American and DSI. The total purchase price is $144
million in cash, which includes repayment of $51 million of debt
owed by BT Variable, Inc. to Bankers Trust Company. No specific
proportion of this consideration has been apportioned to the
value of DSI. The date on which the Acquisition will be
completed (the "Closing Date") currently is anticipated to be
August 30, 1996.
The proposed Acquisition will result in a change of
control of DSI, which may have the effect of terminating the
management and portfolio management agreements with Account D
that are in effect at the time of the Acquisition. However, DSI
has represented that no material changes in its management and
administration are contemplated following the Acquisition. After
the Closing Date of the Acquisition, DSI will continue to operate
from its offices at 1001 Jefferson Street, Suite 400, Wilmington,
Delaware 19801, with the same personnel functioning in the same
capacities as before the Acquisition. It is anticipated that the
same persons who presently are responsible for the management of
DSI will continue to direct DSI's management following
consummation of the Acquisition.
Section 15(f) of the 1940 Act provides that when a
change in control of an investment adviser of a registered
investment company occurs, the investment adviser or any of its
affiliated persons may receive any amount or benefit in
connection therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment
company as a result of the transaction relating to the change of
control, or any express or implied terms, conditions or
understandings applicable thereto.
The term "unfair burden," as defined in the 1940 Act,
includes any arrangement during the two-year period after the
change in control whereby the investment adviser (or predecessor
or successor adviser), or any interested person of any such
- 14 -
<PAGE>
adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its
security holders (other than fees for bona fide investment
advisory or other services) or from any person in connection with
the purchase or sale of securities or any other property to,
from, or on behalf of the investment company (other than fees for
bona fide principal underwriting services). Based upon
representations from DSI, the Board of Governors believes that no
such compensation arrangements are contemplated in the
Acquisition or any other transactions described in this Proxy
Statement. Moreover, Equitable of Iowa has agreed that
subsequent to consummation of the Acquisition, it would conduct
its business, subject to applicable fiduciary duties, to ensure
that no "unfair burden" would be imposed on Account D by or as a
result of the Acquisition.
The second condition is that, during the three-year
period immediately following the Closing Date at least 75% of the
investment company's board must not be "interested persons" of
the investment adviser or predecessor investment adviser within
the meaning of the 1940 Act. The Board of Governors presently
consists of five members, two of whom are "interested persons" of
DSI. To facilitate compliance with this second condition, one of
"interested" members of the Board, John L. Murphy, has submitted
his resignation from the Board, effective upon the consummation
of the Acquisition. It is currently intended that thereafter,
the Board of Governors will consist of four members, three of
whom will not be "interested persons" of DSI or Account D. If
the Acquisition is not consummated, Mr. Murphy's resignation will
not become effective, and the Board of Governors will continue to
consist of five members.
There are a number of conditions precedent to the
closing of the proposed Acquisition. Such conditions include,
among other things, that all regulatory filings, applications and
notifications will have been duly and properly made or obtained.
If the conditions for the Acquisition are not met and the
Acquisition is not completed, Account D's management and
portfolio management agreements in effect at that time will
remain intact, at least until completion of the Reorganization
(if approved).
Information About Equitable of Iowa
Equitable of Iowa, 604 Locust Street, Des Moines, Iowa
50319, is a corporation organized under the laws of Iowa with
assets of approximately $10 billion as of March 31, 1996.
Equitable of Iowa is the holding company for Equitable Life
Insurance Company of Iowa ("Equitable Life"), USG Annuity & Life
Company ("USG"), Locust Street Securities, Inc., and Equitable
- 15 -
<PAGE>
Investment Services, Inc. Equitable Life is an Iowa domiciled
life insurance company, and USG is an Oklahoma domiciled life
insurance company. Equitable Life and USG offer individual
annuity and life insurance products in 49 states and the District
of Columbia.
Post-Acquisition Management Agreement
As noted above, the transactions contemplated by the
Acquisition may terminate Account D's management agreement with
DSI that is effective at the time the Acquisition is completed.
It is proposed that DSI continue to furnish management services
to The Managed Global Account following the Acquisition pursuant
to a management agreement whose terms are identical to the terms
of the New Management Agreement between Account D and DSI.
Approval of Proposal III will authorize Account D to enter into a
post-Acquisition management agreement with DSI on terms identical
to those of the New Management Agreement. The New Management
Agreement is attached as Exhibit A, and its terms are described
above under the captions "The New Management Agreement" and
"Effect on Expenses of Account D" in Proposal I.
The Board of Governors' Recommendation
In recommending that Contractowners approve a post-
Acquisition management agreement that is substantially identical
to the New Management Agreement, the Board of Governors,
including the members who are not interested persons of Account D
or DSI, considered several factors, including: (1) the fairness
and reasonableness of the compensation to be paid under the post-
Acquisition management agreement in relation to the services to
be provided thereunder by DSI; (2) the nature and quality of
management services previously rendered and expected to be
provided by DSI; (3) DSI's background, experience, performance,
and reputation within the securities industry; and (4) the
desirability of maintaining a consistent management program
(assuming the approval of Proposal I) for The Managed Global
Account following the Acquisition.
ACCORDINGLY, THE BOARD OF GOVERNORS (INCLUDING THE
MEMBERS OF THE BOARD OF GOVERNORS WHO ARE NOT PARTIES TO OR
INTERESTED PERSONS OF ANY PARTY TO THE AGREEMENT) RECOMMENDS THE
APPROVAL OF A MANAGEMENT AGREEMENT WITH DSI, IN THE SAME FORM AS
THE AGREEMENT DESCRIBED IN PROPOSAL I, TO BECOME EFFECTIVE
FOLLOWING THE ACQUISITION OF THE CORPORATE PARENT OF DSI.
If Contractowners do not approve Proposal III (and,
therefore, Proposal IV), or if they approve Proposal III but not
Proposal IV, the Board of Governors may enter into new management
and/or portfolio management arrangements following the
- 16 -
<PAGE>
Acquisition, subject to approval by Contractowners, or resubmit
the Proposal(s) to the Contractowners for consideration at a
later date. If Contractowners do not approve Proposal III,
Equitable of Iowa and Whitewood each have reserved the right to
determine whether to consummate the Acquisition.
PROPOSAL IV
APPROVAL OF PORTFOLIO MANAGEMENT AGREEMENT
WITH WARBURG, PINCUS TO BECOME EFFECTIVE FOLLOWING
THE ACQUISITION OF DSI'S CORPORATE PARENT
Warburg, Pincus' portfolio management agreement with
DSI and Account D may terminate upon completion of the
Acquisition. It is proposed that Warburg, Pincus continue to
furnish portfolio management services to The Managed Global
Account following the Acquisition pursuant to a portfolio
management agreement whose terms are identical to the terms of
the Amended Portfolio Management Agreement with Account D and
DSI. Approval of Proposal IV will authorize Account D to enter
into a post-Acquisition portfolio management agreement with DSI
and Warburg, Pincus on terms identical to those of the Amended
Portfolio Management Agreement. The Amended Portfolio Management
Agreement is attached as Exhibit C, and its terms are described
above in Proposal II. Approval of Proposal IV is contingent on
approval of Proposal III.
The Board of Governors' Recommendation
In recommending that Contractowners approve a post-
Acquisition portfolio management agreement that is substantially
identical to the Amended Portfolio Management Agreement,
including the members who are not interested persons of Account
D, DSI or Warburg, Pincus, considered several factors, including:
(1) the fairness and reasonableness of the compensation to be
paid under the post-Acquisition portfolio management agreement in
relation to the services to be provided thereunder by Warburg,
Pincus; (2) the nature and quality of portfolio management
services previously rendered and expected to be provided by
Warburg, Pincus; (3) Warburg, Pincus' background, experience,
performance, and reputation within the securities industry; (4)
the existing working relationship among DSI and Warburg, Pincus;
and (5) the desirability of maintaining a consistent portfolio
management program (assuming approval of Proposal II) for The
Managed Global Account following the Acquisition.
ACCORDINGLY, THE BOARD OF GOVERNORS (INCLUDING THE
MEMBERS OF THE BOARD OF GOVERNORS WHO ARE NOT PARTIES TO OR
INTERESTED PERSONS OF ANY PARTY TO THE AGREEMENT) RECOMMENDS THE
APPROVAL OF A PORTFOLIO MANAGEMENT AGREEMENT WITH WARBURG,
- 17 -
<PAGE>
PINCUS, IN THE SAME FORM AS THE AGREEMENT DESCRIBED IN PROPOSAL
II, TO BECOME EFFECTIVE FOLLOWING THE ACQUISITION OF THE
CORPORATE PARENT OF DSI.
PROPOSAL V
REORGANIZATION OF SEPARATE ACCOUNT D
Contractowners are being asked to approve the Agreement
and Plan of Reorganization (the "Plan") described below, which is
attached to the Proxy Statement as Exhibit E.
Description of the Parties
Account D is a separate account of Golden American that
is registered with the Securities and Exchange Commission (the
"SEC") as an open-end management investment company. Account D
currently contains only one Division - The Managed Global
Account. As part of an open-end management investment company,
The Managed Global Account invests directly in portfolio
securities and engages an investment adviser and portfolio
manager to manage its assets. The investment objective of The
Managed Global Account is high total investment return,
consistent with a prudent regard for capital preservation. The
Managed Global Account seeks to achieve this objective by
employing an asset allocation strategy involving shifts among a
wide range of investments and market sectors throughout the
world.
Under the Plan, The Managed Global Account would become
a Division of Separate Account B ("Account B") of Golden
American. Account B is a separate account of Golden American
that serves as a funding medium for variable annuity contracts
issued by Golden American. It is registered as a unit investment
trust with the SEC. A unit investment trust is different from an
open-end management investment company, in that it does not
conduct ongoing management of its assets, and invests only in
specified securities. Account B presently comprises fourteen
investment divisions, all of which invest in separate investment
series of a separate mutual fund - The GCG Trust (the "Trust").
The Trust is registered as an open-end management investment
company with the SEC. Each series has a distinct investment
objective and investment policies. The Trust sells shares of
certain of its series to Account B and to other separate accounts
of Golden American and other insurance companies to serve as the
investment medium for variable life insurance policies and
variable annuity contracts. The address of both Account B and
the Trust is 1001 Jefferson Street, Suite 400, Wilmington, DE
19801.
- 18 -
<PAGE>
Description of the Reorganization
Subject to the terms and conditions of the Plan, Golden
American, on behalf of Account D, intends to sell, assign, and
transfer all of Account D's cash, securities, and other
investments held or in transit, receivables for sold investments,
and dividends and interest receivables (collectively, the
"Assets") to Account B. The Assets will be held as the property
of a newly-created division of Account B (the "Division").
Simultaneously with the above transaction, Account B will
exchange the Assets for shares of the Managed Global Series (the
"Series"), a newly-created series of the Trust. Contractowners
will continue to have the same Contract unit values and numbers
of units in the Division as they had in The Managed Global
Account prior to the Reorganization.
Golden American will have the shares it receives from
the Series recorded and held on its records as assets of the
newly-created Division, so that Contractowners' interests in the
Division will then be equivalent to their former interests in The
Managed Global Account. Golden American will take all actions
necessary to ensure that these interests in the Division, as of
the closing date of the Reorganization, are properly recorded on
Contractowners' individual account records.
After the Reorganization, the Series will be available
as an investment option to Contractowners, in addition to the
currently existing series of the Trust, and may be offered to the
owners of other annuities or life insurance policies which are
supported by the Trust, which is a larger group of variable
contracts than the Contracts supported by Account D. Golden
American will allocate Contractowners' contributions under the
Contracts to the Division and to the other divisions of Account B
in accordance with Contractowners' instructions. Golden American
will invest assets so allocated to the Division in shares of the
Series. The value of the benefits derived from the allocation of
a Contractowner's contributions to the Division will vary
depending upon the investment experience of the Series.
General Effects and Purposes of the Reorganization
The Reorganization has been authorized by the Board of
Directors of Golden American on June 15, 1995, by the Board of
Governors of Account D on June 26, 1995, and by the Board of
Trustees of the Trust on December 20, 1994 based on each Board's
determination that the Reorganization is in the best interests of
each party to the Plan, and of the Contractowners. As discussed
in greater detail below, this determination is based, in part, on
the assumption that Contractowners will benefit from having
interests that currently are in Account D invested in what has
- 19 -
<PAGE>
the potential to be a single larger, more viable investment
vehicle (i.e., the Trust and the Series), rather than continuing
to be managed as a separate, smaller portfolio of assets
allocated to Account D.
Account D currently funds only variable annuity
contracts offered by Golden American. After the Reorganization,
the Division and Series also will be available to serve as a
funding medium for variable life insurance policies issued by
Golden American, and could be offered to fund insurance contracts
issued by other insurers.
It is anticipated that the proposed Reorganization will
benefit Contractowners by providing, among other benefits: (1) a
simpler structure to serve as the investment vehicle for the
Contracts so that all investment aspects associated with the
Contracts will take place in one entity - the Trust - and Owners
can look to the prospectus and annual and semi-annual reports of
the Trust for pertinent financial and other information, rather
than to separate prospectuses and reports for both the Trust and
Account D, and (2) the opportunity for the Series to offer its
shares as an investment vehicle for a broader array of variable
contracts, which could increase assets and offer increased
opportunities for investment and diversification of assets.
These potential benefits are created at no cost to any
Contractowner, as Golden American and DSI have undertaken to
assume all expenses relating to the Reorganization.
In practical economic terms, the interests of
Contractowners following the Reorganization will not differ in
any measurable way from their interests before the
Reorganization. The overall level of fees and charges borne by
Contractowners with an interest in Account D will be no greater
immediately after the Reorganization than immediately before it.
It is anticipated that the same Warburg, Pincus personnel will
provide portfolio management services to the Series after the
Reorganization, and the value of Contractowners' interests will
not be changed by the Reorganization. The Reorganization is not
expected to have any direct or indirect adverse tax consequences
for Contractowners or result in a charge for federal income
taxes. See "Tax Consequences of the Reorganization."
Effects on Investment Objectives, Policies and Restrictions
The investment objective, policies, and restrictions of
The Managed Global Account prior to the Reorganization will be
identical to the investment objective, policies, and restrictions
of the Series.
- 20 -
<PAGE>
Effects of the Reorganization on Voting Rights
It is anticipated that the Reorganization will have no
material effect on Contractowner voting rights. Contractowners
with value allocated to Account D currently have certain voting
rights, including the right to vote at meetings to elect members
of the Board of Governors, as held, to approve or disapprove of
investment management and portfolio management agreements, to
ratify the selection of independent auditors, and to vote on
other matters as required by the 1940 Act. The Amended Rules and
Regulations of Account D do not require annual election of the
Board of Governors. Contractowners with value allocated to
Account B have similar voting rights regarding matters affecting
the Trust and its series. Because the Trust is organized as a
business trust under Massachusetts law, it is not required to
elect trustees annually.
Under Contracts having value allocated to Account B and
the Trust, the number of votes attributable to a Contractowner in
each division of Account B is determined by dividing the
Contract's accumulation value in that division by the net asset
value of one share of the series in which the division invests.
Fractional votes also are counted. Contractowners having value
allocated to The Managed Global Account are entitled to one vote
for every $1.00 of accumulation value in The Managed Global
Account, with fractional interests counted.
Following the Reorganization, for so long as required
by the SEC, Contractowners will have the opportunity to instruct
Golden American with respect to the voting interest in Trust
shares attributable to their respective interests under the
Contracts on matters as to which they currently have voting
rights. A Contractowner will have the right to instruct Golden
American on the same basis as is currently used for
Contractowners having value allocated to Account B and the Trust.
Golden American will exercise the voting rights of each series of
the Trust held by Account B and attributable to the Contracts in
accordance with instructions timely received from Contractowners.
Voting interests of the Trust held by Account B which are not
attributable to Contractowners or for which instructions have not
been received will be voted in proportion to the instructions
timely received from Contractowners.
Following the Reorganization, voting rights exercised
by the Contractowners currently having value allocated to Account
D will consist of the right to instruct Golden American on the
exercise of voting interests in the Trust, rather than to vote
directly on matters submitted to Contractowners by Account D. It
is not anticipated that these differences, as a practical matter,
will diminish Contractowners' existing voting rights.
- 21 -
<PAGE>
Effect of the Reorganization on Management, Services and Expenses
Following the consummation of the Reorganization,
Account D will cease operations, and values under the Contracts
subsequently will be determined by the investment performance of
the Series. In this connection, the investment objective,
policies, and restrictions of the Series will be the same as The
Managed Global Account prior to the Reorganization.
As a series of the Trust, the Series will be governed
under the Trust's Amended and Restated Agreement and Declaration
of Trust in the same manner as the other series of the Trust.
Ultimate management responsibility for the Series is vested in
the Trust's Board of Trustees, which currently consists of the
same persons who serve on Account D's Board of Governors. It is
presently anticipated that four of the five persons currently
serving as members of Account D's Board of Governors and the
Trust's Board of Trustees will continue to serve on the Trust's
Board of Trustees following the Reorganization. Additionally,
the officers charged with the management of the Trust and Account
D are presently identical.
Bankers Trust Company currently serves as custodian of
the portfolio assets of The Managed Global Account. It furnishes
similar custodial services to the Trust. Ernst & Young provides
auditing services to the Accounts, as well as to the Trust. DSI
serves as the distributor of the Contracts and the shares of the
Trust. These service relationships are not expected to change as
a result of the Reorganization.
As discussed above, and subject to Contractowner
approval of Proposals I through IV above, it is anticipated that
Account D's management personnel and all of its current service
relationships will remain in place following the Reorganization.
In addition, DSI will serve as distributor of the Series' shares
at no expense to Contractowners.
The Reorganization will have no effect on the expenses
borne by Contractowners. If Contractowners approve the
management agreements discussed above in Proposals I and III,
fees paid to DSI as Manager of the Series will be identical to
those paid by Account D to DSI as Manager of The Managed Global
Account under the management agreement in effect at the time of
the Reorganization. All other expenses and charges associated
with Contracts currently funded through Account D are expected to
be the same immediately after the Reorganization. Moreover, DSI
will review expenses after the Reorganization to ensure that
Contractowners do not bear increased expenses as a direct result
of the Reorganization.
- 22 -
<PAGE>
Effect of the Transfer of Assets
It is not anticipated that the Reorganization will
require liquidation of any Assets of Account D. The only sales
of Assets of Account D will be those arising in the ordinary
course of business. Therefore, neither of the Accounts nor the
Trust will incur any extraordinary costs, such as brokerage
commissions, in effecting the transfer of Assets.
Tax Consequences of the Reorganization
If Contractowners approve the Reorganization, the
exchanges necessary to effect the Reorganization will occur
simultaneously and be coordinated with one another. Golden
American and the Trust believe that Contractowners will recognize
no gain or loss on the transfer of the Assets of Account D to the
Trust, and Contractowners will pay no tax as a result of the
transfer.
It is intended that the Series will qualify as a
regulated investment company. To so qualify, the Series must
meet certain diversification and other requirements under
Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). If it so qualifies, the Series will not be subject
to federal income tax or excise tax on any net income or any
capital gains to the extent they are distributed to shareholders.
As a result, the allocation of premiums under the Contracts to
Account B for investment in shares of the Series, rather than to
The Managed Global Account for direct investment in securities to
be held by The Managed Global Account, will not result in any
increased federal income taxes being borne by Account B or by
Contractowners.
Account D is not subject to Subchapter M of the Code,
so the Series will be subject to requirements not currently
applicable to Account D. However, all of the series of the Trust
are subject to Subchapter M, and the possibility that the Series
may incur taxes by reason of a failure to meet the requirements
of Subchapter M is considered remote.
Exemptive Application
In connection with the Reorganization, Account D,
Account B, Golden American, DSI and the Trust (together, the
"Applicants") have filed an application for exemption (the
"Application") from certain provisions of the 1940 Act with the
SEC. In the Application, the Applicants request an order of the
SEC, to the extent necessary, to permit the Applicants to
undertake the transactions necessary to effect the
Reorganization.
- 23 -
<PAGE>
It is anticipated that the Reorganization will be
completed on ____________, 199_. However, receipt of the order
is a necessary precondition to the Reorganization, and the
Reorganization will not be completed until the order has been
issued. There can be no assurance that the SEC will issue the
requested order, but the Applicants believe that, on the basis of
prior SEC orders granted under similar circumstances, there is
reason to believe that the order will be granted.
First Meeting of Shareholders of the Series
Prior to the closing date of the Reorganization, the
first meeting of shareholders of the Series will be held to
consider and vote upon the matters described below. At that
point, Golden American, as depositor of Account B, will be the
only shareholder of the Series and, if Contractowners vote to
approve the Reorganization, will vote to approve the following:
(1) A management agreement on behalf of the Series; and
(2) A portfolio management agreement on behalf of the
Series.
These agreements will be identical to the management
agreement and the portfolio management agreement in effect at the
time of the Reorganization, except for the effective dates and
other nonmaterial matters. Thus, by approving the
Reorganization, Contractowners also will automatically approve
agreements that put into place the same management and advisory
arrangements for the Series as will be in place for The Managed
Global Account at the time of the Reorganization. In voting to
approve the Reorganization, Contractowners also will be deemed to
give authorization to Golden American, as the sole initial
shareholder of the Series, to consider such other matters and to
take such other actions that properly are submitted to
shareholders of the Series.
The Board of Governors' Recommendation
In approving the Plan and determining that the proposed
Reorganization is in the best interests of Contractowners, the
Board of Governors noted the following benefits expected to be
derived from the Reorganization: (1) a simpler structure to
serve as the investment vehicle for the Contracts so that all
investment aspects associated with the Contracts will take place
in one entity - the Trust - and Owners can look to the prospectus
and annual and semi-annual reports of the Trust for pertinent
financial and other information, rather than to separate
prospectuses and reports for both the Trust and Account D, and
(2) the opportunity for the Series to offer its shares as an
- 24 -
<PAGE>
investment vehicle for a broader array of variable contracts,
which could increase assets and offer increased opportunities for
investment and diversification of assets.
ACCORDINGLY, THE BOARD OF GOVERNORS (INCLUDING THE
MEMBERS OF THE BOARD OF GOVERNORS WHO ARE NOT INTERESTED PERSONS
OF ANY PARTY TO THE PLAN) RECOMMENDS THE APPROVAL OF THE PLAN AND
THE REORGANIZATION OF ACCOUNT D AS A DIVISION OF ACCOUNT B.
OTHER BUSINESS
The Board of Governors knows of no other business to be
brought before the Meeting. However, if any other matters
properly come before the Meeting, proxies will be voted in
accordance with the judgment of the proxy holders.
Additional Information Concerning Golden American
Golden American, 1001 Jefferson Street, Suite 400,
Wilmington, Delaware 19801, is a stock life insurance company
organized under the laws of the State of Delaware. It is
authorized to do business in the District of Columbia and all
states except New York. Golden American is the depositor of
Account B and the sponsoring insurance company for Account D. As
of December 31, 1995, Golden American had total assets of
approximately $1,197,688,000.
Account B and Account D
Account B was established on July 14, 1988, and may
invest in mutual funds, unit investment trusts, or other suitable
investment portfolios. Account D was established on April 18,
1990 and invests directly in securities in accordance with its
investment objective and policies. As a separate account under
Delaware insurance law, the portion of each Account's assets
equal to the reserves and other liabilities relating to the
Contracts shall not be chargeable with liabilities arising out of
any other business Golden American may conduct. Accordingly,
income, gains or losses, whether or not realized, from assets of
an Account are credited to or charged against the Account without
regard to Golden American's other income, gains or losses.
Although legally the assets of an Account are Golden American's
property, each Contractowner has a claim against an Account equal
to the amount accumulated in an Account attributable to such
Contractowner's Contract. As the issuer of the Contracts, the
obligations set forth therein (other than those of
Contractowners) are obligations of Golden American. Golden
American may retain in Account B assets that are in excess of the
reserves and other liabilities relating to the Contracts or
- 25 -
<PAGE>
certain other contracts, or may transfer the assets to its
General Account.
Account B will be used as a funding vehicle for the
Contracts and for other variable policies or contracts issued by
Golden American in the future. If the Reorganization is approved
by Contractowners, the Contracts will be amended or endorsed to
the extent necessary to give effect to the Reorganization and to
effect all other related changes described herein as appropriate.
In all other respects, the Contracts will remain unchanged.
Right to Instruct Voting of Trust Shares
In accordance with its view of present applicable law,
Golden American will vote the shares or other voting interests in
each series of the Trust held by Account B at regular and special
meetings of the shareholders of the Trust based on instructions
received from persons having the voting interest in corresponding
divisions of Account B. However, if the 1940 Act or any rules
thereunder should be amended, or if the present interpretation
thereof should change, and as a result Golden American determines
that it is permitted to vote the shares or other voting interests
in the Trust in its own right, it may elect to do so.
Disregard of Voting Instructions
Notwithstanding contrary Contractowner voting
instructions, Golden American may vote Trust shares in any manner
necessary to enable the Trust to (1) make or refrain from making
any change in the investments or investment policies for any
series of the Trust, if required by any insurance regulatory
authority; (2) refrain from making any change in the investment
policies or any investment manager, portfolio manager, or
principal underwriter of any series which may be initiated by
Contractowners or the Trust's Board of Trustees, provided Golden
American's disapproval of the change is reasonable and, in the
case of a change in investment policies or investment manager or
portfolio manager based on a good faith determination that such
change would be contrary to state law or otherwise inappropriate
in light of the series' investment objective and policies; or (3)
enter into or refrain from entering into any investment
management agreement, portfolio management agreement, or
underwriting contract, if required by any insurance regulatory
authority.
In the event that Golden American does disregard voting
instructions, a summary of the action and the reasons for such
action will be included in the next Semi-Annual Report to
Contractowners.
- 26 -
<PAGE>
Miscellaneous
There is no Contractowner who owns a Contract that
entitles the Contractowner to give voting instructions with
respect to 5% or more of the voting interests of The Managed
Global Account.
Reports to Contractowners
Account D will furnish, without charge, a copy of its
Annual Report dated December 31, 1995 to any Contractowner upon
request. Requests for such reports should be directed to Golden
American Life Insurance Company, Customer Service Center, at
1-800-366-0066.
Proposals for Future Contractowner Meetings
For so long as it remains registered as an investment
company, Account D does not intend to hold annual Contractowner
meetings, but meetings may be called by the Board of Governors
from time to time. Proposals of Contractowners that are intended
to be presented at a future Contractowner meeting must be
received by Account D by a reasonable time prior to Account D's
solicitation of proxies relating to such meeting.
THE BOARD OF GOVERNORS OF ACCOUNT D URGES YOU PROMPTLY TO DATE,
MARK YOUR PREFERENCE ON, SIGN AND MAIL THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE.
By Order of the Board of Governors
Secretary
Date
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit Name
A Form of New Management Agreement
B Other Information Regarding
Directed Services, Inc.
C Form of Amended Portfolio
Management Agreement
D Other Information Regarding
Warburg, Pincus Counsellors, Inc.
E Form of Agreement and Plan of
Reorganization
<PAGE>
EXHIBIT A
FORM OF NEW
MANAGEMENT AGREEMENT
Agreement made this ___ day of ____________, 1996 among
Golden American Life Insurance Company ("Golden American")
Separate Account D and Directed Services, Inc. ("Manager"), a New
York corporation (the "Agreement").
WHEREAS, Golden American has established a separate account
designated "Separate Account D" to segregate assets funding the
variable benefits provided by group and individual variable
annuity contracts ("Contracts") offered by Golden American; and
WHEREAS, the investment management-related aspects of
Separate Account D are governed by a group designated as the
Board of Governors of Separate Account D ("Board of Governors");
and
WHEREAS, premiums paid to purchase a Contract are allocated
to Separate Account D, which invests directly in securities and
other assets; and
WHEREAS, Separate Account D is an open-end management
investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, Separate Account D desires to avail itself of the
services of the Manager for the provision of advice with respect
to the selection and monitoring of the portfolio manager for
Separate Account D and for the provision of management,
administrative, and other services for Separate Account D; and
WHEREAS, the Manager is willing to render such services to
Separate Account D.
Therefore, in consideration of the premises, the promises
and mutual covenants herein contained, it is agreed between the
parties as follows:
1. Appointment. Separate Account D hereby appoints the
Manager, subject to the direction of the Board of Governors, for
the period and on the terms set forth in this Agreement, to
provide advisory, management, administrative and other services,
as described herein, with respect to Separate Account D. The
Manager accepts such appointment and agrees to render the
services herein set forth for the compensation herein provided.
2. Services of the Manager. The Manager represents and
warrants that it is registered as an investment adviser under the
Investment Advisers Act of 1940 and in all states where required,
and will maintain such registration for so long as required by
<PAGE>
applicable law. Subject to the general supervision of the Board
of Governors of Separate Account D, the Manager shall provide the
following advisory, management, administrative, and other
services with respect to Separate Account D, or, as applicable,
to each division thereof (individually and collectively "the
Separate Account").
(a) Provide general, overall advice and guidance with
respect to the Separate Account and provide advice and guidance
to the Separate Account's Governors, and oversee the management
of the investments of the Separate Account and the composition of
the Separate Account's portfolio of securities and investments,
including cash, and the purchase, retention and disposition
thereof, in accordance with the Separate Account's investment
objectives and policies as stated in the Separate Account's
current registration statement, which management shall be
provided by others selected by the Manager and approved by the
Board of Governors as provided below or directly by the Manager
as provided in Section 3 of this Agreement;
(b) Analyze and recommend for consideration by the
Board of Governors an investment advisory firm (however
organized) to provide investment advice to the Separate Account,
and, at the expense of the Manager, engage (which engagement may
also be by the Separate Account) such investment advisory firms
to render investment advice and manage the investments of the
Separate Account and the composition of the Separate Account's
portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, in accordance with
the Separate Account's investment objectives and policies as
stated in the Separate Account's current registration statement
(any such firm approved by the Board of Governors and engaged by
the Separate Account and/or the Manager is referred to herein as
a "Portfolio Manager");
(c) Periodically monitor and evaluate the performance
of each Portfolio Manager with respect to the investment
objectives and policies of the Separate Account;
(d) Monitor each Portfolio Manager for compliance with
the investment objective, policies and restrictions of the
Separate Account, the 1940 Act, Section 817(h) of the Internal
Revenue Code, and if applicable, regulations under such
provisions, and other applicable law;
(e) If appropriate, analyze and recommend for
consideration by the Board of Governors' termination of a
contract with a Portfolio Manager under which the Portfolio
Manager provides investment advisory services to the Separate
Account;
A-2
<PAGE>
(f) Supervise each Portfolio Manager with respect to
the services that such Portfolio Manager provides under a
portfolio management agreement ("Portfolio Management
Agreement"), although the Manager is not authorized, except as
provided in Section 3 of the Agreement, directly to make
determinations with respect to the investment of the Separate
Account's assets or the purchase or sale of portfolio securities
or other investments for the Separate Account;
(g) Provide all supervisory, management, and
administrative services reasonably necessary for the operation of
the Separate Account other than the investment advisory services
performed by each Portfolio Manager, including but not limited
to, (i) coordinating all matters relating to the operation of the
Separate Account, including any necessary coordination among the
Portfolio Manager, custodian, and portfolio accounting agent
(including pricing and valuation of the portfolios), accountants,
attorneys, and other parties performing services or operational
functions for the Separate Account, (ii) providing the Separate
Account, at the Manager's expense, with the services of a
sufficient number of persons competent to perform such
administrative and clerical functions as are necessary to ensure
compliance with federal securities laws and to provide effective
supervision and administration of the Separate Account; (iii)
maintaining or supervising the maintenance by third parties
selected by the Manager of such books and records of the Separate
Account as may be required by applicable federal or state law;
(iv) preparing or supervising the preparation by third parties
selected by the Manager of all federal, state, and local tax
returns and reports relating to the Separate Account required by
applicable law; (v) preparing and filing and arranging for the
distribution of proxy materials and periodic reports to
shareholders of the Separate Account as required by applicable
law; (vi) preparing and arranging for the filing of registration
statements and other documents with the Securities and Exchange
Commission (the "SEC") and other federal and state regulatory
authorities as may be required by applicable law; (vii) taking
such other action with respect to the Separate Account as may be
required by applicable law in connection with the Separate
Account including without limitation the rules and regulations of
the SEC and other regulatory agencies; and (viii) providing the
Separate Account, at the Manager's expense, with adequate
personnel, office space, communications facilities, and other
facilities necessary for operation of the Separate Account as
contemplated in this Agreement.
(h) Provide or procure on behalf of the Separate
Account, and at the expense of the Manager, the following
services for the Separate Account: (i) custodian services to
provide for the safekeeping of the Separate Account's assets;
(ii) portfolio accounting services to maintain the portfolio
accounting records for the Separate Account; and (iii) other
A-3
<PAGE>
services necessary for the ordinary operation of the Separate
Account. The Separate Account may, but is not required to, be a
party to any agreement with any third person contracted to
provide the services referred to in this Section 2(h).
(i) Render to the Board of Governors of Separate
Account D such periodic and special reports as the Board of
Governors may reasonably request; and
(j) Make available its officers and employees to the
Board of Governors and officers of Separate Account D for
consultation and discussions regarding the administration and
management of the Separate Account and services provided to the
Separate Account under this Agreement.
3. Investment Management Authority. In the event that a
Portfolio Management Agreement pertaining to the Separate Account
is terminated or if, at any time, no Portfolio Manager is engaged
to manage the assets of the Separate Account, the Manager,
subject to the supervision of the Board of Governors, will
provide a continuous investment program for the portfolio and
determine the composition of the assets for the portfolio,
including determination of the purchase, retention, or sale of
the securities, cash, and other investments contained in the
portfolio. The Manager will provide investment research and
conduct a continuous program of evaluation, investment, sales,
and reinvestment of the assets by determining the securities and
other investments that shall be purchased, entered into, sold,
closed, or exchanged for the Separate Account, when these
transactions should be executed, and what portion of the assets
of the Separate Account should be held in the various securities
and other investments in which it may invest, and the Manager is
hereby authorized to execute and perform such services on behalf
of the Separate Account. To the extent permitted by the
investment policies of the Separate Account, the Manager shall
make decisions for the Separate Account as to foreign currency
matters and make determinations as to, and execute and perform,
foreign currency exchange contracts on behalf of the Separate
Account. The Manager will provide the services under this
Agreement in accordance with the investment objective, policies,
and restrictions as stated in the Separate Account's Registration
Statement filed with the SEC, as amended. Furthermore:
(a) The Manager will (1) take all steps necessary to
manage the Separate Account so as to ensure compliance by the
Separate Account with the diversification requirements of Section
817(h) of the Internal Revenue Code and regulations issued
thereunder, and (2) use reasonable efforts to manage the Separate
Account so as to ensure compliance by the Separate Account with
any other rules and regulations pertaining to investment vehicles
underlying variable annuity or variable life insurance policies.
In managing the Separate Account in accordance with these
A-4
<PAGE>
requirements, the Manager shall be entitled to receive and act
upon advice of counsel to the Separate Account or counsel to the
Manager.
(b) The Manager will conform with the 1940 Act and all
rules and regulations thereunder, all other applicable federal
and state laws and regulations, with any applicable procedures.
adopted by the Board of Governors, and the provisions of the
Registration Statement of the Separate Account under the
Securities Act of 1933 and 1940 Act, as supplemented or amended.
(c) On occasions when the Manager deems the purchase
or sale of a security to be in the best interest of the Separate
Account as well as any other investment advisory clients, the
Manager may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased with those of its other
clients where such aggregation is not inconsistent with the
policies set forth in the Registration Statement. In such event,
allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager
in a manner that is fair and equitable in the judgment of the
Manager in the exercise of its fiduciary obligations to the
Separate Account and to such other clients.
(d) In connection with the purchase and sale of
securities of the Separate Account, the Manager will arrange for
the transmission to the custodian for the Separate Account on a
daily basis, of such confirmation, trade tickets, and other
documents and information, including, but not limited to, Cusip,
Sedol, or other numbers that identify securities to be purchased
or sold on behalf of the Separate Account, as may be reasonably
necessary to enable the custodian to perform its administrative
and recordkeeping responsibilities with respect to the Separate
Account. With respect to portfolio securities to be purchased or
sold through the Depository Trust Company, the Manager will
arrange for the automatic transmission of the confirmation of
such trades to the Depository Trust's custodian.
(e) The Manager will assist the custodian or portfolio
accounting agent for the Separate Account in determining,
consistent with the procedures and policies stated in the
Registration Statement for the Separate Account, the value of any
portfolio securities or other assets of the Separate Account for
which the custodian or portfolio accounting agent seeks
assistance or review from the Manager. The Manager will monitor
on a daily basis the determination by the custodian or portfolio
accounting agent for the Separate Account of the value of
portfolio securities and other assets of the Separate Account and
the determination of not asset value of the Separate Account.
A-5
<PAGE>
(f) The Manager will make available to the Separate
Account, promptly upon request, all of the Separate Account's
investment records and ledgers as are necessary to assist the
Separate Account to comply with requirements of the 1940 Act and
the Investment Advisers Act of 1940, as well as other applicable
laws. The Manager will furnish to regulatory authorities having
the requisite authority any information or reports in connection
with such services which may be requested in order to ascertain
whether the operations of the Separate Account are being
conducted in a manner consistent with applicable laws and
regulations.
(g) The Manager will regularly report to the Board of
Governors on the investment program for the Separate Account and
the issuers and securities represented in the Separate Account's
portfolio, and will furnish the Board of Governors with respect
to the Separate Account such periodic and special reports as the
Portfolio Manager may reasonably request.
(h) The Manager will not disclose or use any records
or information obtained pursuant to this Agreement (excluding
investment research and investment advice) in any manner
whatsoever except as required to carry out its duties as
investment manager and administrator pursuant to this Section 3
or in the ordinary course of business in connection with placing
orders for the purchase and sale of securities, and will keep
confidential any information obtained pursuant to this Agreement,
and disclose such information only if the Board of Governors of
Separate Account D has authorized such disclosure, or if such
disclosure is expressly required by applicable federal or state
law or regulations or regulatory authorities having the requisite
authority.
(i) In rendering the services required under this
Section of this Agreement, the Manager may, from time to time,
employ or associate with itself such person or persons as it
believes necessary to assist it in carrying out its obligations
under this Agreement. The Manager shall be responsible for
making reasonable inquires and for reasonably ensuring that any
employee of the Manager, any person or firm that the Manager has
employed or with which it has associated, or any employee thereof
has not, to the best of the Manager's knowledge, in any material
connection with the handling of Separate Account assets:
(i) been convicted, in the last ten (10) years, of any
felony or misdemeanor arising out of conduct involving
embezzlement, fraudulent conversion, or
misappropriation of funds or securities, or involving
violations of Sections 1341, 1342, or 1343 of Title 18,
United States Code; or
A-6
<PAGE>
(ii) been found by any state regulatory authority, within
the last ten (10) years, to have violated or to have
acknowledged violation of any provision of any state
insurance law involving fraud, deceit, or knowing
misrepresentation; or
(iii) been found by any federal or state regulatory
authorities, within the last ten (10) years, to have
violated or to have acknowledge violation of any
provisions of federal or state securities laws
involving fraud, deceit, or knowing misrepresentation.
(j) In connection with its responsibilities under this
Section 3, the Manager is responsible for decisions to buy and
sell securities and other investments for the Separate Account's
portfolio, broker-dealer selection, and negotiation of brokerage
commission rates. The Manager's primary consideration in
effecting a security transaction will be to obtain the best
execution for the Separate Account, taking into account the
factors specified in the Prospectus and/or Statement of
Additional Information for the Separate Account, which include
price (including the applicable brokerage commission or dollar
spread), the size of the order, the nature of the market for the
security, the timing of the transaction, the reputation,
experience and financial stability of the broker-dealer involved,
the quality of the service, the difficulty of execution,
execution capabilities and operational facilities of the firms
involved, and the firm's risk in positioning a block of
securities. Accordingly, the price to the Separate Account in
any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified,
in the judgment of the Manager in the exercise of its fiduciary
obligations to the Separate Account, by other aspects of the
portfolio execution services offered. Subject to such policies
as the Board of Governors may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, the Manager
shall not be deemed to have acted unlawfully or to have breached
any duty created by this agreement or otherwise solely by reason
of its having caused the Separate Account to pay a broker-dealer
for effecting a portfolio investment transaction in excess of the
amount of commission another broker-dealer would have charged for
effecting that transaction, if the Manager or its affiliate
determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer, viewed in terms of
either that particular transaction or the Manager's or its
affiliate's overall responsibilities with respect to the Separate
Account and to their other clients as to which they exercise
investment discretion. To the extent consistent with these
standards and in accordance with Section 11(a) of the Securities
and Exchange Act of 1934 and Rule 11a2-2(T) thereunder, the
Manager is further authorized to allocate the orders placed by it
A-7
<PAGE>
on behalf of the Separate Account to the Manager if it is
registered as a broker-dealer with the SEC, to its affiliated
broker-dealer, or to such brokers and dealers who also provide
research or statistical material or other services to the
Separate Account, the Manager or an affiliate of the Manager.
Such allocation shall be in such amounts and proportions as the
Manager shall determine consistent with the above standards, and
the Manager will report on said allocation regularly to the Board
of Governors of Separate Account D indicating the broker-dealers
to which such allocations have been made and the basis therefor.
4. Conformity with Applicability Law. The Manager, in the
performance of its duties and obligations under this Agreement,
shall act in conformity with the Registration Statement of
Separate Account D and with the instructions and directions of
the Board of Governors of Separate Account D and will confirm to,
and comply with, the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
5. Exclusivity. The services of the Manager to Separate
Account D under this Agreement are not to be deemed exclusive,
and the Manager, or any affiliate thereof, shall be free to
render similar services to other investment companies and other
clients (whether or not their investment objectives and policies
are similar to those of any of the Separate Account) and to
engage in other activities, so long as its services hereunder are
not impaired thereby.
6. Documents. Separate Account has delivered properly
certified or authenticated copies of each of the following
documents to the Manager and will deliver to it all future
amendments and supplements thereto, if any:
(a) certified resolution of the Board of Governors of
Separate Account D authorizing the appointment of the Manager and
approving the form of this Agreement;
(b) the Registration Statement as filed with the SEC
and any amendments thereto; and
(c) exhibits, powers of attorney, certificates and any
and all other documents relating to or filed in connection with
the Registration Statement described above.
7. Records. The Manager agrees to maintain and to
preserve for the periods prescribed under the 1940 Act any such
records as are required to be maintained by the Manager with
respect to the Separate Account by the 1940 Act. The Manager
further agrees that all records which it maintains for the
Separate Account are the property of Separate Account D and it
will promptly surrender any of such records upon request.
A-8
<PAGE>
8. Expenses. During the term of this Agreement, the
Manager will pay all expenses incurred by it in connection with
its activities under this Agreement, except such expenses as are
assumed by the Separate Account under this Agreement and such
expenses as are assumed by a Portfolio Manager under its
Portfolio Management Agreement. The Manager further agrees to
pay all salaries, fees and expenses of any officer or trustee of
the Separate Account who is an officer, director or employee of
the Manager or any of its affiliates. The Manager shall be
responsible for all of the expenses of its operations and for the
following expenses:
(a) Expenses of all audits by the Separate Account's
independent public accountants;
(b) Expenses of the Separate Account's recordkeeping
and portfolio accounting services;
(c) Expenses of the Separate Account's custodial
services, including recordkeeping services provided by the
custodian;
(d) Expenses of obtaining quotations for calculating
the value of the Separate Account's net assets;
(e) Expenses of obtaining Separate Account Activity
Reports and Analyses of International Management reports (as
appropriate) for the Separate Account's net assets;
(f) Expenses of maintaining the Separate Account's tax
records;
(g) Costs and/or fees incident to meetings of the
Separate Account's shareholders, the preparation and mailings of
prospectuses and reports of the Separate Account to its
shareholders, the filing of reports with regulatory bodies, the
maintenance of the Separate Account's existence, and the
registration of shares with federal and state securities or
insurance authorities;
(h) The Separate Account's ordinary legal fees,
including the legal fees related to the registration and
continued qualification of the Separate Account's securities for
sale;
(i) The Separate Account's pro rata portion of the
fidelity bond required by Section 17(g) of the 1940 Act, or other
insurance premiums;
(j) Association membership dues; and
(k) Organizational and offering expenses and, if
A-9
<PAGE>
applicable, reimbursement (with interest) of underwriting
discounts and commissions. Commencing with the date of this
Agreement, the Manager is responsible for any remaining
unamortized organizational expenses of the Series as of the date
of this Agreement.
The Separate Account shall be responsible for the following
expenses:
(a) Salaries and other compensation of any of the
Separate Account's executive officers and employees, if any, who
are not officers, directors, stockholders, or employees of the
Manager or an affiliate of the Manager;
(b) Taxes levied against the Separate Account;
(c) Brokerage fees and commissions in connection with
the purchase and sale of portfolio securities for the Separate
Account;
(d) Costs, including the interest expense, of
borrowing money;
(e) Governor's fees and expenses to Governors who are
not officers, employees, or stockholders of the Manager, any
Portfolio Manager, or any affiliates of either; and
(f) Extraordinary expenses as may arise, including
extraordinary consulting expenses and extraordinary legal
expenses incurred in connection with litigation, proceedings,
other claims (unless the Manager is responsible for such expenses
under Section 10 of this Agreement or a Portfolio Manager is
responsible for such expenses under Section 15 of a Portfolio
Management Agreement), and the legal obligations of the Separate
Account to indemnify its members of the Board of Governors,
officers, employees, shareholders, contractholders, distributors,
and agents with respect thereto.
9. Compensation. For the services provided by the Manager
pursuant to this Agreement, the Separate Account will pay the
Manager a fee at an annual rate based upon the following
percentages of the average daily net assets of the Separate
Account: 1.25% of the first $500 million; and 1.05% of the
amount over $500 million. This fee shall be computed and accrued
daily and payable monthly.
10. Liability of the Manager. The Manager may rely on
information reasonably believed by it to be accurate and
reliable. Except as may otherwise be required by the 1940 Act or
the rules thereunder, neither the Manager nor its stockholders,
directors, employees, or agents shall be subject to and the
Separate Account will indemnify such persons from and against,
A-10
<PAGE>
any liability for, or any damages, expenses, or losses incurred
in connection with, any act or omission connected with or arising
out of any services rendered under this agreement, except by
reason of willful misfeasance, bad faith, or gross negligence in
the performance of the Manager's duties, or by reason of reckless
disregard of the Manager's obligations and duties under this
Agreement. Except as may otherwise be required by the 1940 Act
or the rules thereunder, neither the Manager nor its
stockholders, officers, directors, employees, or agents shall be
subject to, and the Separate Account will indemnify such persons
from and against, any liability for, or any damages, expenses, or
losses incurred in connection with, any act or omission by a
Portfolio Manager or any of the Separate Account Manager's
stockholders or partners, officers, directors, employees, or
agents connected with or arising out of any services rendered
under a Portfolio Management Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of the Manager's duties under this Agreement, or by
reason of reckless disregard of the Manager's obligations and
duties under this Agreement.
11. Continuation and Termination. This Agreement shall
become effective on the date first written above. Unless
terminated as provided herein, the Agreement shall continue in
full force and effect for two (2) years from the effective date
of this Agreement, and shall continue from year to year
thereafter with respect to each Separate Account so long as such
continuance is specifically approved at least annually (i) by the
vote of a majority of the Board of Governors of Separate Account
or (ii) by vote of a majority of the outstanding voting shares of
Separate Account D, and providing continuance is also approved by
the vote of a majority of the Board of Governors of Separate
Account D who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of Separate Account D or
the Manager, cast in person at a meeting called for the purpose
of voting on such approval. This Agreement may not be amended in
any material respect without a majority vote of the outstanding
voting shares (as defined in the 1940 Act).
However, any approval of this Agreement by the holders of a
majority of the outstanding shares (as defined in the 1940 Act)
of Separate Account D shall be effective to continue this
Agreement with respect to such Separate Account notwithstanding
(i) that this Agreement has not been approved by the holders of a
majority of the outstanding shares of any subaccount of Separate
Account D or (ii) that this Agreement has not been approved by
the vote of a majority of the outstanding shares of any other
division of Separate Account D, unless such approval shall be
required by any other applicable law or otherwise. This
Agreement may be terminated by Separate Account D at any time,
without the payment of any penalty, by vote of a majority of the
entire Board of Governors of Separate Account D or by a vote of a
A-11
<PAGE>
majority of the outstanding voting shares of Separate Account D,
or with respect to a subaccount of the Separate Account, by vote
of a majority of the outstanding voting shares of such subaccount
of the Separate Account, on sixty (60) days' written notice to
the Manager, or by the Manager at any time without the payment or
any penalty, on sixty (60) days' written notice to the Separate
Account. This Agreement will automatically and immediately
terminate in the event of its "assignment" (as described in the
1940 Act).
12. Use of Name. It is understood that the name or any
derivative thereof or logo associated with the name Directed
Services, Inc. is the valuable property of the Manager, and that
the Separate Account has the right to use such name (or
derivative or logo) only so long as this Agreement shall continue
with respect to such Separate Account. Upon termination of this
Agreement, the Separate Account shall forthwith cease to use such
name (or derivative or logo) and, in the case of the Separate
Account, shall promptly amend its Rules and Regulations of
Separate Account D to change its name (if such name is included
therein).
13. Notice. Notices of any kind to be given to the Manager
by the Separate Account shall be in writing and shall be duly
given if mailed or delivered to the Manager at 1001 Jefferson
Street, Suite 400, Wilmington, Delaware 19801, or at such other
address or to such individual as shall be specified by the
Manager to the Separate Account. Notices of any kind to be given
to the Separate Account by the Manager shall be in writing and
shall be duly given if mailed or delivered to 1001 Jefferson
Street, Suite 400, Wilmington, Delaware 19801, or at such other
address or to such individual as shall be specified by the
Separate Account to the Manager.
14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original.
15. Applicable Law.
(a) This Agreement shall be governed by the laws of
the State of Delaware, provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act, the
Investment Act of 1940, or any rules or order of the SEC
thereunder.
(b) If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby
and, to this extent, the provisions of this Agreement shall be
deemed to be severable.
A-12
<PAGE>
(c) The captions of this Agreement are included for
convenience only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
GOLDEN AMERICAN LIFE INSURANCE
COMPANY
By:
Attest
Title Title
DIRECTED SERVICES, INC.
By:
Attest
Title Title
A-13
<PAGE>
EXHIBIT B
OTHER INFORMATION REGARDING DIRECTED SERVICES, INC.
DSI's directors and principal executive officer and their
principal occupations are shown below. Unless otherwise
indicated, each individual's principal business address is 1001
Jefferson Street, Suite 400, Wilmington, Delaware 19801.
Name and
Position with DSI Principal Occupation
Paul Daniel Borge, Jr. Managing Director, Bankers
Director Trust Company; Director, Golden
American Life Insurance Company,
Whitewood Properties Corp. and BT
Variable, Inc.
Richard A. Marin Managing Director, Bankers
Director Trust Company; Director, Whitewood
Properties Corp., BT Variable,
Inc., and Golden American Life
Insurance Company.
Terry L. Kendall* Managing Director, Bankers
Director and Chief Trust Company; President,
Executive Officer Director, and Chief Executive
Officer, Golden American Life
Insurance Company; President,
Director, and Chief Executive
Officer, BT Variable, Inc.; and
Director, Whitewood Properties
Corp.
_______________
* Mr. Kendall is the President of Account D.
DSI does not act as investment adviser to any other
registered investment companies with investment objectives and
policies similar to those of The Managed Global Account.
<PAGE>
EXHIBIT C
FORM OF AMENDED
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this ___ day of __________________, 199_
among Separate Account D of Golden American Life Insurance
Company ("Golden American"), Directed Services, Inc. ("Manager"),
a New York corporation, and Warburg, Pincus Counsellors, Inc.
("Portfolio Manager"), a Delaware corporation.
WHEREAS, Golden American has established a separate
account designated "Separate Account D" with a division
designated "The Managed Global Account" (the "Separate Account")
to segregate assets funding the variable benefits provided by
group and individual deferred variable annuity contracts
("Contracts") offered by Golden American; and
WHEREAS, the investment management-related aspects of
the Separate Account are governed by a group designated as the
Board of Governors of the Separate Account ("Board of
Governors"); and
WHEREAS, premiums paid to purchase a Contract are allo-
cated to the Separate Account, which invests directly in
securities and other assets; and
WHEREAS, the Separate Account is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end, management investment company; and
WHEREAS, pursuant to a Management Agreement, effective
as of ___________, 199_, a copy of which has been provided to the
Portfolio Manager, the Separate Account has retained the Manager
to render advisory, management and administrative services to the
Separate Account; and
WHEREAS, the Separate Account and the Manager wish to
retain the Portfolio Manager to furnish investment advisory ser-
vices to the Separate Account, and the Portfolio Manager is
willing to furnish such services to the Separate Account and the
Manager;
NOW THEREFORE, in consideration of the premises and the
promises and mutual covenants herein contained, it is agreed
between the Separate Account, the Manager, and the Portfolio
Manager as follows:
1. Appointment. The Separate Account and the Manager
hereby appoint Warburg, Pincus Counsellors, Inc. to act as
Portfolio Manager to the Separate Account for the periods and on
the terms set forth in this Agreement. The Portfolio Manager
<PAGE>
accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided.
2. Portfolio Management Duties. Subject to the
supervision of the Separate Account's Board of Governors and the
Manager, the Portfolio Manager will provide a continuous
investment program for the Separate Account's portfolio and
determine the composition of the assets of the Separate Account's
portfolio, including determination of the purchase, retention, or
sale of the securities, cash, and other investments contained in
the portfolio. The Portfolio Manager will provide investment
research and conduct a continuous program of evaluation, invest-
ment, sales, and reinvestment of the Separate Account's assets by
determining the securities and other investments that shall be
purchased, entered into, sold, closed, or exchanged for the
Separate Account, when these transactions should be executed, and
what portion of the assets of the Separate Account should be held
in the various securities and other investments in which it may
invest, and the Portfolio Manager is hereby authorized to execute
and perform such services on behalf of the Separate Account. To
the extent permitted by the investment policies of the Separate
Account, the Portfolio Manager shall make decisions for the
Separate Account as to foreign currency matters and make determi-
nations as to and execute and perform foreign currency exchange
contracts on behalf of the Separate Account. The Portfolio
Manager will provide the services under this Agreement in accor-
dance with the Separate Account's investment objective or objec-
tives, policies, and restrictions as stated in the Separate
Account's Registration Statement filed with the Securities and
Exchange Commission ("SEC"), as amended, copies of which shall be
sent to the Portfolio Manager by the Manager. The Portfolio
Manager further agrees as follows:
(a) The Portfolio Manager will (1) manage the Separate
Account so as to ensure compliance by the Separate Account with
the diversification requirements of Section 817(h) of the
Internal Revenue Code and regulations issued thereunder, and (2)
use reasonable efforts to manage the Separate Account so as to
ensure compliance by the Separate Account with any other rules
and regulations pertaining to investment vehicles for variable
annuity or variable life insurance policies. The Manager or the
Separate Account will notify the Portfolio Manager of any
pertinent changes, modifications to, or interpretations of
Section 817(h) of the Internal Revenue Code and regulations
issued thereunder and will notify the Portfolio Manager of any
other rules and regulations pertaining to investment vehicles for
variable annuity or variable life insurance policies.
(b) The Portfolio Manager will conform with the 1940
Act and all rules and regulations thereunder, all other appli-
cable federal and state laws and regulations, with any applicable
procedures adopted by the Separate Account's Board of Governors
C-2
<PAGE>
of which the Portfolio Manager has been sent a copy, and the
provisions of the Registration Statement of the Separate Account
under the Securities Act of 1933 (the "1933 Act") and the 1940
Act, as supplemented or amended, of which the Portfolio Manager
has received a copy. The Manager or the Separate Account will
notify the Portfolio Manager of pertinent provisions of
applicable state insurance law with which the Portfolio Manager
must comply under this Paragraph 2(b).
(c) On occasions when the Portfolio Manager deems the
purchase or sale of a security to be in the best interest of the
Separate Account as well as of other investment advisory clients
of the Portfolio Manager or any of its affiliates, the Portfolio
Manager may, to the extent permitted by applicable laws and regu-
lations, but shall not be obligated to, aggregate the securities
to be so sold or purchased with those of its other clients where
such aggregation is not inconsistent with the policies set forth
in the Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Portfolio Manager in a
manner that is fair and equitable in the judgment of the
Portfolio Manager in the exercise of its fiduciary obligations to
the Separate Account and to such other clients, subject to review
by the Manager and the Board of Governors.
(d) In connection with the purchase and sale of
securities for the Separate Account, the Portfolio Manager will
arrange for the transmission to the custodian and portfolio
accounting agent for the Separate Account on a daily basis, such
confirmation, trade tickets, and other documents and information,
including, but not limited to, Cusip, Sedol, or other numbers
that identify securities to be purchased or sold on behalf of the
Separate Account, as may be reasonably necessary to enable the
custodian and portfolio accounting agent to perform its
administrative and recordkeeping responsibilities with respect to
the Separate Account. With respect to portfolio securities to be
purchased or sold through the Depository Trust Company, the
Portfolio Manager will arrange for the automatic transmission of
the confirmation of such trades to the Separate Account's
custodian and portfolio accounting agent.
(e) The Portfolio Manager will monitor on a daily
basis the determination by the portfolio accounting agent for the
Separate Account of the valuation of portfolio securities and
other investments of the Separate Account. The Portfolio Manager
will assist the portfolio accounting agent for the Separate
Account in determining or confirming, consistent with the
procedures and policies stated in the Registration Statement for
the Separate Account, the value of any portfolio securities or
other assets of the Separate Account for which the portfolio
accounting agent seeks assistance from or identifies for review
by the Portfolio Manager.
C-3
<PAGE>
(f) The Portfolio Manager will make available to the
Separate Account and the Manager, promptly upon request, all of
the Separate Account's investment records and ledgers maintained
by the Portfolio Manager (which shall not include the records and
ledgers maintained by the portfolio accounting agent for the
Separate Account) as are necessary to assist the Separate Account
and the Manager to comply with requirements of the 1940 Act and
the Investment Advisers Act of 1940 (the "Advisers Act"), as well
as other applicable laws. The Portfolio Manager will furnish to
regulatory authorities having the requisite authority any infor-
mation or reports in connection with such services which may be
requested in order to ascertain whether the operations of the
Separate Account are being conducted in a manner consistent with
applicable laws and regulations.
(g) The Portfolio Manager will provide reports to the
Separate Account's Board of Governors for consideration at meet-
ings of the Board on the investment program for the Separate
Account and the issuers and securities represented in the
Separate Account's portfolio, and will furnish the Separate
Account's Board of Governors with respect to the Separate Account
such periodic and special reports as the Board and the Manager
may reasonably request.
(h) In rendering the services required under this
Agreement, the Portfolio Manager may, from time to time, employ
or associate with itself such person or persons as it believes
necessary to assist it in carrying out its obligations under this
Agreement. However, the Portfolio Manager may not retain as
subadviser any company that would be an "investment adviser," as
that term is defined in the 1940 Act, to the Separate Account
unless the contract with such company is approved by a majority
of the Separate Account's Board of Governors and a majority of
Governors who are not parties to any agreement or contract with
such company and who are not "interested persons," as defined in
the 1940 Act, of the Separate Account, the Manager, or the
Portfolio Manager, or any such company that is retained as
subadviser, and is approved by the vote of a majority of the
outstanding voting securities of the Separate Account to the
extent required by the 1940 Act. The Portfolio Manager shall be
responsible for making reasonable inquiries and for reasonably
ensuring that any employee of the Portfolio Manager, any subad-
viser that the Portfolio Manager has employed or with which it
has associated with respect to the Separate Account, or any
employee thereof has not, to the best of the Portfolio Manager's
knowledge, in any material connection with the handling of
Separate Account assets:
(i) been convicted, in the last ten (10) years, of
any felony or misdemeanor arising out of conduct
involving embezzlement, fraudulent conversion,
or misappropriation of funds or securities,
C-4
<PAGE>
involving violations of Sections 1341, 1342, or
1343 of Title 18, United States Code, or
involving the purchase or sale of any security;
or
(ii) been found by any state regulatory authority,
within the last ten (10) years, to have violated
or to have acknowledged violation of any provi-
sion of any state insurance law involving fraud,
deceit, or knowing misrepresentation; or
(iii) been found by any federal or state regulatory
authorities, within the last ten (10) years, to
have violated or to have acknowledged violation
of any provision of federal or state securities
laws involving fraud, deceit, or knowing misre-
presentation.
3. Broker-Dealer Selection. The Portfolio Manager is
responsible for decisions to buy and sell securities and other
investments for the Separate Account's portfolio, broker-dealer
selection, and negotiation of brokerage commission rates. The
Portfolio Manager's primary consideration in effecting a security
transaction will be to obtain the best execution for the Separate
Account, taking into account the factors specified in the pro-
spectus and/or statement of additional information for the
Separate Account, which include price (including the applicable
brokerage commission or dollar spread), the size of the order,
the nature of the market for the security, the timing of the
transaction, the reputation, the experience and financial
stability of the broker-dealer involved, the quality of the
service, the difficulty of execution, and the execution capabili-
ties and operational facilities of the firm involved, and the
firm's risk in positioning a block of securities. Accordingly,
the price to the Separate Account in any transaction may be less
favorable than that available from another broker-dealer if the
difference is reasonably justified, in the judgment of the
Portfolio Manager in the exercise of its fiduciary obligations to
the Separate Account, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of
Governors may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, the Portfolio Manager shall not
be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its
having caused the Separate Account to pay a broker-dealer for
effecting a portfolio investment transaction in excess of the
amount of commission another broker-dealer would have charged for
effecting that transaction, if the Portfolio Manager or its
affiliate determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and
research services provided by such broker-dealer, viewed in terms
of either that particular transaction or the Portfolio Manager's
C-5
<PAGE>
or its affiliate's overall responsibilities with respect to the
Separate Account and to their other clients as to which they
exercise investment discretion. To the extent consistent with
these standards, the Portfolio Manager is further authorized to
allocate the orders placed by it on behalf of the Separate
Account to the Portfolio Manager if it is registered as a broker-
dealer with the SEC, to its affiliated broker-dealer, or to such
brokers and dealers who also provide research or statistical
material, or other services to the Separate Account, the
Portfolio Manager, or an affiliate of the Portfolio Manager.
Such allocation shall be in such amounts and proportions as the
Portfolio Manager shall determine consistent with the above
standards, and the Portfolio Manager will report on said alloca-
tion regularly to the Board of Governors of the Separate Account
indicating the broker-dealers to which such allocations have been
made and the basis therefor.
4. Disclosure about Portfolio Manager. The Portfolio
Manager has reviewed the Registration Statement for the Separate
Account filed with the Securities and Exchange Commission that
contains disclosure about the Portfolio Manager, and represents
and warrants that, with respect to the disclosure about the
Portfolio Manager or information relating, directly or indir-
ectly, to the Portfolio Manager, such Registration Statement
contains, as of the date hereof, no untrue statement of any
material fact and does not omit any statement of a material fact
which was required to be stated therein or necessary to make the
statements contained therein not misleading. The Portfolio
Manager further represents and warrants that it is a duly
registered investment adviser under the Advisers Act and a duly
registered investment adviser in all states in which the
Portfolio Manager is required to be registered.
5. Expenses. During the term of this Agreement, the
Portfolio Manager will pay all expenses incurred by it and its
staff and for their activities in connection with its portfolio
management duties under this Agreement. The Manager or the
Separate Account shall be responsible for all the expenses of the
Separate Account operations including, but not limited to:
(a) Expenses of all audits by the Separate Account's
independent public accountants;
(b) Expenses of the Separate Account's recordkeeping
and portfolio accounting services;
(c) Expenses of the Separate Account's custodial
services including recordkeeping services provided by the
custodian;
(d) Expenses of obtaining quotations for calculating
the value of the Separate Account's net assets;
C-6
<PAGE>
(e) Expenses of obtaining Separate Account Activity
Reports and Analyses of International Management Reports (as
appropriate) for each Separate Account;
(f) Expenses of maintaining the Separate Account's tax
records;
(g) Salaries and other compensation of any of the
Separate Account's executive officers and employees, if any, who
are not officers, directors, stockholders, or employees of the
Portfolio Manager or an affiliate of the Portfolio Manager;
(h) Taxes levied against the Separate Account;
(i) Brokerage fees and commissions in connection with
the purchase and sale of portfolio securities for the Separate
Account;
(j) Costs, including the interest expense, of
borrowing money;
(k) Costs and/or fees incident to meetings of the
Separate Account's shareholders, the preparation and mailings of
prospectuses and reports of the Separate Account to its share-
holders, the filing of reports with regulatory bodies, the
maintenance of the Separate Account's existence, and the
registration of securities with federal and state securities or
insurance authorities;
(l) The Separate Account's legal fees, including the
legal fees related to the registration and continued qualifica-
tion of the Separate Account's securities for sale;
(m) Fees and expenses to Members of the Board of
Governors who are not officers, employees, or stockholders of the
Portfolio Manager or any affiliate thereof;
(n) The Separate Account's pro rata portion of the
fidelity bond required by Section 17(g) of the 1940 Act, or other
insurance premiums;
(o) Association membership dues;
(p) Extraordinary expenses of the Separate Account as
may arise including expenses incurred in connection with litiga-
tion, proceedings, and other claims (unless the Portfolio Manager
is responsible for such expenses under Section 14 of this
Agreement), and the legal obligations of the Separate Account to
indemnify its Governors, officers, employees, shareholders,
distributors, and agents with respect thereto; and
(q) Organizational and offering expenses.
C-7
<PAGE>
6. Compensation. For the services provided, the
Manager will pay the Portfolio Manager a fee, payable monthly,
equal to an annual rate based upon the following percentages of
the average daily net assets of the Separate Account: 0.60% of
the first $500 million; and 0.50% of the amount over $500
million.
7. Seed Money. The Manager agrees that the Portfolio
Manager shall not be responsible for providing money for the
initial capitalization of the Separate Account.
8. Compliance.
(a) The Portfolio Manager agrees that it shall
immediately notify the Manager and the Separate Account in the
event (1) that the SEC has censured the Portfolio Manager; placed
limitations upon its activities, functions or operations;
suspended or revoked its registration as an investment adviser;
or has commenced proceedings or an investigation that may result
in any of these actions, (2) upon having a reasonable basis for
believing that the Separate Account has ceased to comply with the
diversification provisions of Section 817(h) of the Internal
Revenue Code or the Regulations thereunder. The Portfolio
Manager further agrees to notify the Manager and the Separate
Account immediately of any material fact known to the Portfolio
Manager respecting or relating to the Portfolio Manager that is
not contained in the Registration Statement or prospectus for the
Separate Account, or any amendment or supplement thereto, or of
any statement contained therein that becomes untrue in any
material respect.
(b) The Manager agrees that it shall immediately
notify the Portfolio Manager in the event (1) that the SEC has
censured the Manager or the Separate Account; placed limitations
upon either of their activities, functions, or operations; sus-
pended or revoked the Manager's registration as an investment
adviser; or has commenced proceedings or an investigation that
may result in any of these actions, (2) upon having a reasonable
basis for believing that the Separate Account has ceased to
comply with the diversification provisions of Section 817(h) of
the Internal Revenue Code or the Regulations thereunder.
9. Books and Records. In compliance with the require-
ments of Rule 31a-3 under the 1940 Act, the Portfolio Manager
hereby agrees that all records which it maintains for the
Separate Account are the property of the Separate Account and
further agrees to surrender promptly to the Separate Account any
of such records upon the Separate Account's or the Manager's
request, although the Portfolio Manager may, at its own expense,
make and retain a copy of such records. The Portfolio Manager
further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by
C-8
<PAGE>
Rule 31a-l under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period
specified in the Rule.
10. Cooperation. Each party to this Agreement agrees
to cooperate with each other party and with all appropriate
governmental authorities having the requisite jurisdiction
(including, but not limited to, the SEC and state insurance regu-
lators) in connection with any investigation or inquiry relating
to this Agreement or the Separate Account.
11. Representations respecting Portfolio Manager.
The Manager and the Separate Account agree that neither the
Separate Account, the Manager, nor affiliated persons of the
Separate Account or the Manager shall give any information or
make any representations or statements in connection with the
sale of securities of the Separate Account concerning the
Portfolio Manager or the Separate Account other than the
information or representations contained in the Registration
Statement, prospectus, or statement of additional information for
the Separate Account securities, as they may be amended or sup-
plemented from time to time, or in reports or proxy statements
for the Separate Account, or in sales literature or other promo-
tional material approved in advance by the Portfolio Manager,
except with the prior permission of the Portfolio Manager. The
parties agree that in the event that the Manager or an affiliated
person of the Manager sends sales literature or other promotional
material to the Portfolio Manager for its approval and the
Portfolio Manager has not commented within 30 days, the Manager
and its affiliated persons may use and distribute such sales
literature or other promotional material, although, in such
event, the Portfolio Manager shall not be deemed to have approved
of the contents of such sales literature or other promotional
material.
12. Control. Notwithstanding any other provision of
the Agreement, it is understood and agreed that the Separate
Account shall at all times retain the ultimate responsibility for
and control of all functions performed pursuant to this Agreement
and reserves the right to direct, approve, or disapprove any
action hereunder taken on its behalf by the Portfolio Manager.
13. Services Not Exclusive. It is understood that the
services of the Portfolio Manager are not exclusive, and nothing
in this Agreement shall prevent the Portfolio Manager (or its
affiliates) from providing similar services to other clients,
including investment companies (whether or not their investment
objectives and policies are similar to those of the Separate
Account) or from engaging in other activities.
14. Liability. Except as may otherwise be required by
the 1940 Act or the rules thereunder or other applicable law, the
C-9
<PAGE>
Separate Account and the Manager agree that the Portfolio
Manager, any affiliated person of the Portfolio Manager, and each
person, if any, who, within the meaning of Section 15 of the 1933
Act controls the Portfolio Manager shall not be liable for, or
subject to any damages, expenses, or losses in connection with,
any act or omission connected with or arising out of any services
rendered under this Agreement, except by reason of willful mis-
feasance, bad faith, or gross negligence in the performance of
the Portfolio Manager's duties, or by reason of reckless disre-
gard of the Portfolio Manager's obligations and duties under this
Agreement.
15. Indemnification.
(a) The Manager agrees to indemnify and hold harmless
the Portfolio Manager, any affiliated person of the Portfolio
Manager, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls ("controlling person") the
Portfolio Manager (all of such persons being referred to as
"Portfolio Manager Indemnified Persons") against any and all
losses, claims, damages, liabilities, or litigation (including
legal and other expenses) to which a Portfolio Manager
Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, the Internal Revenue Code, under any
other statute, at common law or otherwise, arising out of the
Manager's responsibilities to the Separate Account which (1) may
be based upon any misfeasance, malfeasance, or nonfeasance by the
Manager, any of its employees or representatives or any affiliate
of or any person acting on behalf of the Manager, or (2) may be
based upon any untrue statement or alleged untrue statement of a
material fact supplied by, or which is the responsibility of, the
Manager and contained in the Registration Statement or prospectus
covering securities issued by the Separate Account, or any
amendment thereof or any supplement thereto, or the omission or
alleged omission to state therein a material fact known or which
should have been known to the Manager and was required to be
stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reli-
ance upon information furnished to the Manager or the Separate
Account or to any affiliated person of the Manager by a Portfolio
Manager Indemnified Person; provided however, that in no case
shall the indemnity in favor of the Portfolio Manager Indemnified
Person be deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard
of obligations and duties under this Agreement.
(b) Notwithstanding Section 14 of this Agreement, the
Portfolio Manager agrees to indemnify and hold harmless the
Manager, any affiliated person of the Manager, and each person,
if any, who, within the meaning of Section 15 of the 1933 Act,
C-10
<PAGE>
controls ("controlling person") the Manager (all of such persons
being referred to as "Manager Indemnified Persons") against any
and all losses, claims, damages, liabilities, or litigation
(including legal and other expenses) to which a Manager
Indemnified Person may become subject under the 1933 Act, 1940
Act, the Advisers Act, the Internal Revenue Code, under any other
statute, at common law or otherwise, arising out of the Portfolio
Manager's responsibilities as Portfolio Manager of the Separate
Account which (1) may be based upon any misfeasance, malfeasance,
or nonfeasance by the Portfolio Manager, any of its employees or
representatives, or any affiliate of or any person acting on
behalf of the Portfolio Manager, (2) may be based upon a failure
to comply with Section 2, Paragraph (a) of this Agreement, or (3)
may be based upon any untrue statement or alleged untrue state-
ment of a material fact contained in the Registration Statement
or prospectus covering the securities issued by the Separate
Account, or any amendment or supplement thereto, or the omission
or alleged omission to state therein a material fact known or
which should have been known to the Portfolio Manager and was
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 Manager, the
Separate Account, or any affiliated person of the Manager or
Separate Account by the Portfolio Manager or any affiliated
person of the Portfolio Manager; provided, however, that in no
case shall the indemnity in favor of a Manager Indemnified Person
be deemed to protect such person against any liability to which
any such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of
its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph
(a) of this Section 15 with respect to any claim made against a
Portfolio Manager Indemnified Person unless such Portfolio
Manager Indemnified Person shall have notified the Manager in
writing within a reasonable time after the summons, notice, or
other first legal process or notice giving information of the
nature of the claim shall have been served upon such Portfolio
Manager Indemnified Person (or after such Portfolio Manager
Indemnified Person shall have received notice of such service on
any designated agent), but failure to notify the Manager of any
such claim shall not relieve the Manager from any liability which
it may have to the Portfolio Manager Indemnified Person against
whom such action is brought otherwise than on account of this
Section 15. In case any such action is brought against the
Portfolio Manager Indemnified Person, the Manager will be
entitled to participate, at its own expense, in the defense
thereof or, after notice to the Portfolio Manager Indemnified
Person, to assume the defense thereof, with counsel satisfactory
to the Portfolio Manager Indemnified Person. If the Manager
assumes the defense of any such action and the selection of
C-11
<PAGE>
counsel by the Manager to represent both the Manager and the
Portfolio Manager Indemnified Person would result in a conflict
of interests and therefore, would not, in the reasonable judgment
of the Portfolio Manager Indemnified Person, adequately represent
the interests of the Portfolio Manager Indemnified Person, the
Manager will, at its own expense, assume the defense with counsel
to the Manager and, also at its own expense, with separate
counsel to the Portfolio Manager Indemnified Person, which
counsel shall be satisfactory to the Manager and to the Portfolio
Manager Indemnified Person. The Portfolio Manager Indemnified
Person shall bear the fees and expenses of any additional counsel
retained by it, and the Manager shall not be liable to the
Portfolio Manager Indemnified Person under this Agreement for any
legal or other expenses subsequently incurred by the Portfolio
Manager Indemnified Person independently in connection with the
defense thereof other than reasonable costs of investigation.
The Manager shall not have the right to compromise on or settle
the litigation without the prior written consent of the Portfolio
Manager Indemnified Person if the compromise or settlement
results, or may result in a finding of wrongdoing on the part of
the Portfolio Manager Indemnified Person.
(d) The Portfolio Manager shall not be liable under
Paragraph (b) of this Section 15 with respect to any claim made
against a Manager Indemnified Person unless such Manager
Indemnified Person shall have notified the Portfolio Manager in
writing within a reasonable time after the summons, notice, or
other first legal process or notice giving information of the
nature of the claim shall have been served upon such Manager
Indemnified Person (or after such Manager Indemnified Person
shall have received notice of such service on any designated
agent), but failure to notify the Portfolio Manager of any such
claim shall not relieve the Portfolio Manager from any liability
which it may have to the Manager Indemnified Person against whom
such action is brought otherwise than on account of this
Section 15. In case any such action is brought against the
Manager Indemnified Person, the Portfolio Manager will be
entitled to participate, at its own expense, in the defense
thereof or, after notice to the Manager Indemnified Person, to
assume the defense thereof, with counsel satisfactory to the
Manager Indemnified Person. If the Portfolio Manager assumes the
defense of any such action and the selection of counsel by the
Portfolio Manager to represent both the Portfolio Manager and the
Manager Indemnified Person would result in a conflict of inter-
ests and therefore, would not, in the reasonable judgment of the
Manager Indemnified Person, adequately represent the interests of
the Manager Indemnified Person, the Portfolio Manager will, at
its own expense, assume the defense with counsel to the Portfolio
Manager and, also at its own expense, with separate counsel to
the Manager Indemnified Person which counsel shall be satisfac-
tory to the Portfolio Manager and to the Manager Indemnified
Person. The Manager Indemnified Person shall bear the fees and
C-12
<PAGE>
expenses of any additional counsel retained by it, and the
Portfolio Manager shall not be liable to the Manager Indemnified
Person under this Agreement for any legal or other expenses
subsequently incurred by the Manager Indemnified Person
independently in connection with the defense thereof other than
reasonable costs of investigation. The Portfolio Manager shall
not have the right to compromise on or settle the litigation
without the prior written consent of the Manager Indemnified
Person if the compromise or settlement results, or may result in
a finding of wrongdoing on the part of the Manager Indemnified
Person.
16. Duration and Termination. This Agreement shall
become effective on the date first indicated above. Unless
terminated as provided herein, the Agreement shall remain in full
force and effect for two (2) years from the date first indicated
above and continue on an annual basis thereafter with respect to
each Separate Account unless terminated as provided in this
Section; provided that such annual continuance is specifically
approved each year by (a) the vote of a majority of the entire
Board of Governors of the Separate Account, or by the vote of a
majority of the outstanding voting securities (as defined in the
1940 Act) of each Separate Account, and (b) the vote of a
majority of those members of the Board of Governors who are not
parties to this Agreement or interested persons (as such term is
defined in the 1940 Act) of any such party to this Agreement cast
in person at a meeting called for the purpose of voting on such
approval. The Portfolio Manager shall not provide any services
for such Separate Account or receive any fees on account of such
Separate Account with respect to which this Agreement is not
approved as described in the preceding sentence. However, any
approval of this Agreement by the holders of a majority of the
outstanding securities (as defined in the 1940 Act) of a
subaccount of the Separate Account shall be effective to continue
this Agreement with respect to such subaccount of the Separate
Account notwithstanding (i) that this Agreement has not been
approved by the holders of a majority of the outstanding
securities of any other Separate Account or (ii) that this
agreement has not been approved by the vote of a majority of the
outstanding securities of the Separate Account, unless such
approval shall be required by any other applicable law or
otherwise. Notwithstanding the foregoing, this Agreement may be
terminated: (a) by the Manager at any time without penalty, upon
sixty (60) days' written notice to the Portfolio Manager and the
Separate Account, (b) at any time without payment of any penalty
by the Separate Account, upon the vote of a majority of the
Separate Account's Board of Governors or a majority of the
outstanding voting securities of the Separate Account, upon sixty
(60) days' written notice to the Manager and the Portfolio
Manager, or (c) by the Portfolio Manager at any time without
penalty, upon sixty (60) days' written notice to the Manager and
the Separate Account. In the event of termination for any
C-13
<PAGE>
reason, all records of the Separate Account for which the
Agreement is terminated shall promptly be returned to the Manager
or the Separate Account, free from any claim or retention of
rights in such record by the Portfolio Manager, although the
Portfolio Manager may, at its own expense, make and retain a copy
of such records. The Agreement shall automatically terminate in
the event of its assignment (as such term is described in the
1940 Act). In the event this Agreement is terminated or is not
approved in the manner described above, the Sections or
Paragraphs numbered 2(f), 9, 10, 11, 14, 15, and 18 of this
Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. Amendments. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a
majority of the outstanding voting securities of the Separate
Account, in the case of an amendment that is material to such
security holders, and (ii) the Board of Governors of the Separate
Account, including a majority of the members of the Board of
Governors of the Separate Account who are not interested persons
of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, if such
approval is required by applicable law.
18. Consent to Jurisdiction and Notices.
(a) Each party hereto: (i) consents to the subject
matter and in personam jurisdiction and venue in the United
States District Court for the Southern District of New York; (ii)
waives the right to contest the subject matter and in personam
jurisdiction and venue in the United States District Court for
the Southern District of New York on any ground; and (iii) agrees
that service of process upon it can be made by certified or
registered mail, return receipt requested, to its address
referred to in paragraph (b) of this Section 18 and agrees
promptly to notify the other party hereto of any change of such
address and agrees that service to such address shall be deemed
to constitute sufficient service of process under both the
federal and state rules of civil procedure wherever the case is
filed. In the event it is determined that the United States
District Court for the Southern District of New York should lack
subject matter jurisdiction for any reason, the parties consent
to the subject matter and in personam jurisdiction and venue in a
New York State court of competent jurisdiction in the Borough of
Manhattan.
(b) All notices hereunder shall be given in writing
and sent by (i) certified or registered mail, return receipt
C-14
<PAGE>
requested, postage prepaid, (ii) national (or international)
prepaid overnight (or two nights) delivery service, (iii)
telecopy or other facsimile transmission with appropriate
answerback received (followed by hard copies to be sent by
national (or international) prepaid overnight (or two nights)
delivery service) or (iv) personal delivery with receipt
acknowledged in writing, as follows:
If to the Separate Account:
Golden American Life Insurance Company
Separate Account D
Attention: Marilyn Talman, Esquire
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
Telephone: (302) 576-3516
Facsimile: (302) 576-3520
If to the Manager:
Directed Services, Inc.
Attention: Marilyn Talman, Esquire
1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
Telephone: (302) 576-3516
Facsimile: (302) 576-3520
If to the Portfolio Manager:
Warburg, Pincus Counsellors, Inc.
Attention: Eugene Podsiadlo
466 Lexington Avenue
New York, NY 10017-3147
Telephone: (212) 878-0600
Facsimile: (212) 878-9351
All notices shall be deemed given when actually received or
refused by the party to whom the same is directed (except to the
extent sent by certified or registered mail, return receipt
requested, postage prepaid, in which event such notice shall be
deemed given three (3) days after the date of mailing). Each
party may designate a change of address or supplemental
addressee(s) by notice to the other parties.
19. Use of Name.
(a) It is understood that the name "Directed Services,
Inc." or any derivative thereof or logo associated with that name
is the valuable property of the Manager and/or its affiliates,
and that the Portfolio Manager has the right to use such name (or
derivative or logo) only with the approval of the Manager and
only so long as the Manager is Manager to the Separate Account
C-15
<PAGE>
and/or the Separate Account. Upon termination of the Management
Agreement between the Separate Account and the Manager, the
Portfolio Manager shall forthwith cease to use such name (or
derivative or logo).
(b) It is understood that the name "Warburg, Pincus
Counsellors, Inc." or any derivative thereof or logo associated
with that name is the valuable property of the Portfolio Manager
and its affiliates and that the Separate Account has the right to
use such name (or derivative or logo) in offering materials of
the Separate Account with the approval of the Portfolio Manager
and for so long as the Portfolio Manager is a portfolio manager
to the Separate Account. Upon termination of this Agreement
between the Separate Account, the Manager, and the Portfolio
Manager, the Separate Account shall forthwith cease to use such
name (or derivative or logo).
20. Miscellaneous.
(a) This Agreement shall be governed by the laws of
the State of New York, provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act, the
Advisers Act or rules or orders of the SEC thereunder. The term
"affiliate" or "affiliated person" as used in this Agreement
shall mean "affiliated person" as defined in Section 2(a)(3) of
the 1940 Act.
(b) The captions of this Agreement are included for
convenience only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
(c) To the extent permitted under Section 16 of this
Agreement, this Agreement may only be assigned by any party with
the prior written consent of the other parties.
(d) If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby,
and to this extent, the provisions of this Agreement shall be
deemed to be severable.
(e) Nothing herein shall be construed as constituting
the Portfolio Manager as an agent of the Manager, or constituting
the Manager as an agent of the Portfolio Manager.
C-16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the day and year first above
written.
SEPARATE ACCOUNT D OF GOLDEN AMERICAN
LIFE INSURANCE COMPANY
__________________________ By:________________________________
Attest:
__________________________ ___________________________________
Title: Title:
DIRECTED SERVICES, INC.
__________________________ By:________________________________
Attest:
__________________________ ___________________________________
Title: Title:
WARBURG, PINCUS COUNSELLORS, INC.
_________________________ By:_________________________________
Attest:
__________________________ ___________________________________
Title: Title:
C-17
<PAGE>
EXHIBIT D
OTHER INFORMATION REGARDING WARBURG, PINCUS COUNSELLORS, INC.
Warburg, Pincus' directors and principal officer and their
principal occupations are shown below. The business address of
each such person is 466 Lexington Avenue, New York, New York
10017.
Name and Position
with Warburg, Pincus Principal Occupation
Lionel I. Pincus Chief Executive Officer and
Chief Executive Officer Director of Warburg, Pincus and its
and Director affiliates.
John L. Firth Chairman of the Board of Directors
Chairman of the Board of of Warburg, Pincus and its
Directors affiliates.
John L. Vogelstein Director of Warburg, Pincus and its
Director affiliates.
Warburg, Pincus also serves as adviser to other investment
companies. The following table lists the other investment
companies, or series thereof, with an investment objective
comparable to that of the Series for which Warburg, Pincus serves
as adviser, the approximate net assets of each investment company
at June 11, 1996, and the annual advisory fee charged by Warburg,
Pincus (as a percentage of average daily net assets):
Net Assets
Name of Fund (in $000's) Advisory Fee
Warburg, Pincus $3,330,496 1.00%
International Equity Fund
Warburg, Pincus $ 746,426 .80%
Institutional Fund, Inc.
-- International Equity
Portfolio
Warburg, Pincus Trust -- $ 233,646 1.00%
International Equity
Portfolio
Sierra Trust Funds -- $ 152,438 .50%
International Growth
Fund
<PAGE>
The Sierra Variable Trust -- $ 55,375 .50%
International Growth
Fund
From time to time, Warburg, Pincus waives some or all of its
advisory fees, which waivers are not reflected in the above
table.
D-2
<PAGE>
EXHIBIT E
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the
"Agreement"), entered into this ____ day of _______, 1996, by and
among Golden American Life Insurance Company ("Golden American"),
a stock life insurance company organized and existing under the
laws of the State of Delaware, on its own behalf and on behalf of
Separate Account B of Golden American Life Insurance Company
("Account B"), a separate account of Golden American; Separate
Account D of Golden American Life Insurance Company ("Account
D"), a separate account of Golden American, (collectively,
Account B and Account D are referred to as the "Accounts"); and
The GCG Trust (the "Trust"), a business trust organized and
existing under the laws of the Commonwealth of Massachusetts.
WHEREAS, the Trust is a series-type mutual fund
currently consisting of fourteen operational series, and is
registered with the Securities and Exchange SEC (the "SEC") as an
open-end, diversified management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust may in the future add or delete
series from time to time;
WHEREAS, Account B is registered with the SEC as a unit
investment trust under the 1940 Act and presently comprises
thirteen divisions, each of which invests in a corresponding
operational series of the Trust;
WHEREAS, divisions may be added to or deleted from
Account B;
WHEREAS, Account D is registered with the SEC as an
open-end, non-diversified management investment company under the
1940 Act and consists of one division, The Managed Global
Account, which seeks high total investment return, consistent
with a prudent regard for capital preservation, by investing in a
wide range of equity and debt securities and money market
instruments of both domestic and foreign issuers;
WHEREAS, the Managed Global Account of Account D is
governed by a board designated as a Board of Governors who
oversee the Managed Global Account pursuant to the Rules and
Regulations of Separate Account D;
WHEREAS, the Accounts currently serve as funding and
investment vehicles for immediate variable annuity and deferred
variable annuity contracts (the "Contracts") issued by Golden
American under which Contractowners are permitted to allocate
their net premium or premiums among the divisions of the
Accounts;
<PAGE>
WHEREAS, based upon a recommendation from Golden
American and management of Account D, the Board of Governors of
Account D has determined that Account D should be registered
under the 1940 Act as a unit investment trust rather than as an
open-end non-diversified management investment company;
WHEREAS, the Board of Governors of Account D and Golden
American have approved the reorganization (the "Reorganization")
of Account D into a newly-created division (the "Division") of
Account B, which Division will invest in shares of a
corresponding newly-created series (the "Series") of the Trust;
WHEREAS, the Board of Governors of Account D has
further determined that after such Reorganization, the separate
registration of Account D as an investment company with the SEC
shall be terminated;
WHEREAS, following the Reorganization, the Series will
act as the investment vehicle for the Division and may in the
future, to the extent permitted by the 1940 Act, serve as an
investment vehicle for divisions of separate accounts funding
variable life insurance policies or other insurance products
issued by Golden American and other insurance companies;
WHEREAS, the Board of Directors of Golden American, the
Board of Governors of Account D, and the Board of Trustees of the
Trust have each considered and approved the actions contemplated
by this Agreement; and
WHEREAS, this Agreement is conditioned upon approval of
the Reorganization by a majority vote of the Contractowners of
The Managed Global Account of Account D present at a meeting
called for that purpose, or any adjournments thereof, at which a
quorum is present.
NOW THEREFORE, in consideration of the mutual promises
made herein, the parties hereto agree as follows:
ARTICLE I
CLOSING DATE
SECTION 1.01. The reorganization contemplated by this
Agreement shall be effective on __________, 1996, or at such
other date as may be mutually agreed upon by all parties to this
Agreement (the "Closing Date"). The time on the Closing Date as
of which the reorganization is consummated is referred to
hereinafter as the "Effective Time."
SECTION 1.02. The parties agree to use their best
efforts to obtain all regulatory and Contractowner approvals and
perform all other acts necessary or desirable to complete the
reorganization as of the Closing Date.
E-2
<PAGE>
ARTICLE II
REORGANIZATION TRANSACTIONS
SECTION 2.01. As of the Effective Time, Golden
American, on behalf of Account D, will sell, assign, and transfer
all cash, securities, and other investments held or in transit,
receivables for sold investments, and dividends and interest
receivables ("portfolio assets") of Account D to Account B, the
portfolio assets to be held as the property of the Division.
SECTION 2.02. Simultaneously with the transactions
described in Section 2.01, Account B will transfer all of the
portfolio assets of Account D to the Trust, to be held as the
property of the Series.
SECTION 2.03. In exchange for the portfolio assets of
the Accounts, the Trust will issue shares of the Series and will
assume any unsatisfied liability incurred by Account D before the
close of trading on the business day preceding the Closing Date.
The number of shares of the Series to be issued in the exchange
shall be determined by dividing the value of the net assets of
Account D to be transferred, as of the close of trading on the
business day preceding the Closing Date, by the initial per share
value of the shares of the Series, which shall be determined by
the officers of the Trust or otherwise.
SECTION 2.04. As of the Effective Time, Account D
shall be combined into the Division of Account B.
SECTION 2.05. As of the Effective Time, Golden
American shall cause the shares it receives from the Trust
pursuant to Section 2.03 above to be duly and validly recorded
and held on its records as assets of the Division, such that
Contractowners' interests in the Division after the Closing Date
will then be equivalent to their former interests in Account D.
Golden American shall take all action necessary to ensure that
such interests in the Division, immediately following the
Effective Time, are duly and validly recorded on Contractowners'
individual account records.
SECTION 2.06. The Series shares to be issued hereunder
shall be issued in open account form by book entry without the
issuance of certificates. Each Series share that is issued
pursuant to Section 2.03 above will be deemed to have been issued
for a consideration equal to the initial per share value of the
Series.
SECTION 2.07. If, at any time after the Closing Date,
Account B, Account D, the Trust, or Golden American shall
determine that any further conveyance, assignment, documentation,
or action is necessary or desirable to complete the
reorganization contemplated by this Agreement or confirm full
E-3
<PAGE>
title to the assets transferred, the appropriate party or parties
shall execute and deliver all such instruments and take all such
actions.
SECTION 2.08. Following the Closing Date, Account D
will no longer be charged for management and portfolio management
services, and, with respect to Contracts issued prior to the
Effective Time, no management or other expenses shall be charged
against the Series of a type or in an amount which could not have
been charged against the Accounts, had the Reorganization not
occurred unless such expenses are reimbursed with respect to such
Contracts by Golden American. Such reimbursement shall not be
required to apply to any extraordinary expenses or to any federal
income tax if the Trust fails to qualify as a "regulated
investment company" under the applicable provisions of the
Internal Revenue Code, as amended from time to time, or to any
charge for Golden American federal income taxes or deferred
acquisition cost taxes attributable to the Contracts, for which
Golden American had reserved the right to charge against the
Accounts.
SECTION 2.09. Following the Closing Date, Account D
shall file with the SEC an application under Section 8(f) of the
1940 Act to deregister as an individual investment company.
ARTICLE III
WARRANTIES AND CONDITIONS
SECTION 3.01. Account D, the Trust, and Golden
American, on its own behalf and on behalf of Account B, as
appropriate, make the following representations and warranties,
which shall survive the Closing Date:
(a) There are no suits, actions, or proceedings
pending or threatened against any party to this Agreement which,
to its knowledge, if adversely determined, would materially and
adversely affect its financial condition, the conduct of its
business or its ability to carry out its obligations hereunder;
(b) There are no investigations or administrative
proceedings by the SEC or by any insurance or securities
regulatory body of any state, territory, or the District of
Columbia pending against any party to this Agreement which, to
its knowledge, would lead to any suit, action, or proceeding that
would materially and adversely affect its financial condition,
the conduct of its business, or its ability to carry out its
obligations hereunder;
(c) Should any party to this Agreement become aware,
prior to the Effective Time, of any suit, action, or proceeding,
of the types described in paragraphs (a) or (b) above, instituted
E-4
<PAGE>
or commenced against it, such party shall immediately notify and
advise all other parties to this Agreement;
(d) Immediately prior to the Effective Time, Golden
American shall have valid and unencumbered title to the portfolio
assets of Account D, except with respect to those assets for
which payment has not yet been made; and
(e) Each party shall make available all information
concerning itself which may be required in any application,
registration statement or other filing with a governmental body
to be made by the Trust, by Golden American, by Account B, or by
Account D or by any or all of them in connection with any of the
transactions contemplated by this Agreement and shall join in all
such applications or filings, subject to reasonable approval by
their counsel. Each party represents and warrants that all of
such information so furnished shall be correct in all material
respects and that it shall not omit any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading.
SECTION 3.02. The obligations of the parties hereunder
shall be subject to satisfaction of each of the following
conditions:
(a) The representations contained herein shall be true
as of and at the Effective Time with the same effect as though
made at such time, and such parties shall have performed all
obligations required by this Agreement to be performed by each of
them prior to such time;
(b) The SEC shall not have issued an unfavorable
advisory report under Section 25(b) of the 1940 Act nor
instituted any proceedings seeking to enjoin consummation of the
Reorganization contemplated hereby;
(c) The appropriate parties shall have received orders
from the SEC providing such exemptions and approvals as they and
their counsel reasonably deem necessary, including from Sections
17(a) and 17(d) of the 1940 Act and Rule 17d-1 thereunder, and
shall have made all necessary filings, if any, with, and received
all necessary approvals from, state securities or insurance
authorities;
(d) Golden American and Account B shall have filed
with the SEC one or more post-effective amendments to their
registration statements under the Securities Act of 1933 (the
"1933 Act") and the 1940 Act as are necessary or desirable in
connection with the reorganization contemplated by this
Agreement; the Trust shall have filed with the SEC one or more
post-effective amendments to its registration statement under the
1933 Act and the 1940 Act as may be necessary or desirable to
E-5
<PAGE>
effect the purposes of the reorganization; and the registration
statements for the Trust, Account B, and Golden American under
the 1933 Act and the 1940 Act reflecting the Reorganization shall
have been declared effective or shall have gone effective as of
the Closing Date;
(e) At a Contractowners' meeting called for such
purposes (or any adjournments thereof), a majority of the
outstanding voting securities of Account D present at such
meeting shall have voted in favor of approving this Agreement and
the Reorganization contemplated hereby, and Contractowners shall
have authorized Golden American to vote the Series shares held by
it to:
(1) approve an investment management agreement
between the Trust, on behalf of the Series, and Directed
Services, Inc. ("DSI") with substantially the same terms as the
corresponding agreement in use by Account D as of the Closing
Date, subject to appropriate modifications to reflect the
different parties, the different management structure of the
Trust, and such other modifications as the Trust and DSI may
reasonably deem appropriate;
(2) approve a portfolio management agreement
between the Trust, on behalf of the Series, DSI, and Warburg,
Pincus Counsellors, Inc. ("Warburg, Pincus") with substantially
the same terms as the corresponding agreement in use by Account D
as of the Closing Date, subject to appropriate modifications to
reflect the different parties, the different management structure
of the Trust, and such other modifications as the Trust, DSI, and
Warburg, Pincus may reasonably deem appropriate; and
(3) consider such other matters that properly are
submitted to shareholders;
(f) The Board of Trustees of the Trust shall have
taken the following action at a meeting duly called for such
purposes:
(1) approve this Agreement and adopt it as a
valid obligation of the Trust and legally binding upon it;
(2) approve an investment management agreement,
or an amendment thereto, between DSI and the Trust, with
substantially the same terms as the corresponding agreement in
use by Account D as of the Closing Date, subject to appropriate
modifications to reflect the different parties, the different
management structure of the Trust, and such other modifications
as the Trust and DSI may reasonably deem appropriate;
E-6
<PAGE>
(3) approve a portfolio management agreement, or
an amendment thereto, with substantially the same terms as the
corresponding agreement in use by Account D as of the Closing
Date, subject to appropriate modifications to reflect the
different parties, the different management structure of the
Trust, and such other modifications as the Trust, DSI, and
Warburg, Pincus may reasonably deem appropriate;
(4) approve investment objectives, policies, and
restrictions for the Series that are substantially identical to
the investment objectives, policies, and restrictions of The
Managed Global Account of Account D as in effect immediately
prior to the Reorganization (which may include changes approved
at the Contractowners' meetings referred to above); and
(5) authorize the issuance by the Trust of shares
of the Series at their initial per share value on the Closing
Date in exchange for the portfolio assets of Account D, as
contemplated by this Agreement;
(g) Golden American and the Accounts shall have
received an opinion or opinions of counsel to the Trust in form
and substance reasonably satisfactory to them to the effect that,
as of the Closing Date:
(1) the Trust has been duly organized, is
existing in good standing and is authorized to issue shares of
the Series for the purposes contemplated by this Agreement and is
duly registered as an investment company under the 1940 Act;
(2) the shares of the Series to be issued
pursuant to the terms of this Agreement have been duly authorized
and, when issued and delivered as provided herein, will be
validly issued, fully paid and non-assessable by the Trust;
(3) all corporate and other proceedings required
to be taken by or on the part of the Trust to authorize and carry
out this Agreement and effect the Reorganization have been duly
and properly taken;
(4) this Agreement is a valid obligation of the
Trust and legally binding upon it in accordance with its terms;
(h) The Trust and the Accounts shall have received an
opinion or opinions from counsel to Golden American (who may be
the same as counsel to the Trust) in form and substance
reasonably satisfactory to them to the effect that, as of the
Closing Date:
(1) Golden American, Account B, and Account D are
validly organized and in good standing under the laws of the
State of Delaware and are fully empowered and qualified to carry
E-7
<PAGE>
out their business in all jurisdictions where they do so,
including to enter into this Agreement and effect the
transactions contemplated hereby;
(2) all corporate and other proceedings necessary
and required to be taken by or on the part of Account B, Account
D, and Golden American to authorize and carry out this Agreement
and to effect the Reorganization have been duly and properly
taken; and
(3) this Agreement is a valid obligation of
Account B, Account D, and Golden American and legally binding
upon them in accordance with its terms;
(i) Each party shall have furnished, as reasonably
requested by any other party, other legal opinions, officers'
certificates, incumbency certificates, certified copies of board
and committee resolutions, good standing certificates,
certificates of custodians, and other closing documentation as
may be appropriate for a transaction of this type.
ARTICLE IV
COSTS
SECTION 4.01. Golden American or DSI shall bear all
expenses in connection with effecting the Reorganization
contemplated by this Agreement, including, without limitation,
any expenses in connection with actions taken pursuant to Section
2.07 herein, preparation and filing of registration statements
and applications and amendments on behalf of any and all parties
hereto, organizational expenses of the Series, and all legal,
accounting, and data processing services necessary to effect the
Reorganization.
ARTICLE V
TERMINATION
SECTION 5.01. This Agreement may be terminated and the
Reorganization abandoned at any time prior to the Effective Time,
notwithstanding approval by Contractowners:
(a) by mutual consent of the parties hereto;
(b) by any of the parties if any condition set forth
in Section 3.02 has not been fulfilled by the other parties; or
(c) by any of the parties if the Reorganization does
not occur as of _________, 199_, and no subsequent date can be
mutually agreed upon.
E-8
<PAGE>
SECTION 5.02. At any time prior to the Effective Time,
any of the terms or conditions of this Agreement may be waived by
the party or parties entitled to the benefit thereof if such
waiver will not have a material adverse effect on the interests
of Contractowners.
ARTICLE VI
GENERAL
SECTION 6.01. The Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, as of the day and year first above
written, each of the parties has caused this Agreement to be
executed on its behalf by its President or a Vice President or
Chairman and attested by its Secretary or Assistant Secretary,
all thereunto duly authorized.
ATTEST: GOLDEN AMERICAN LIFE INSURANCE
COMPANY
_________________________ By: ___________________________
Title: Name:
Title:
ATTEST: SEPARATE ACCOUNT D OF GOLDEN
AMERICAN LIFE INSURANCE COMPANY
_________________________ By: ___________________________
Title: Name:
Title:
ATTEST: THE GCG TRUST
_________________________ By: ___________________________
Title: Name:
Title:
E-9
<PAGE>
THE MANAGED GLOBAL ACCOUNT DIVISION OF
SEPARATE ACCOUNT D OF
GOLDEN AMERICAN LIFE INSURANCE COMPANY
PROXY CARD
THIS PROXY IS SOLICITED BY THE BOARD OF GOVERNORS of
Separate Account D ("Account D") of Golden American Life
Insurance Company ("Golden American") for use at the Special
Meeting (the "Meeting") of Contractowners to be held on July 29,
1996 at 10:00 a.m., local time, at 1001 Jefferson Street, Suite
400, Wilmington, Delaware 19801.
The undersigned, revoking previous proxies, hereby
appoints ________, ________, and _______, and each of them, with
full power of substitution, as proxies of the undersigned to vote
at the above-stated Meeting, and at all adjournments thereof, all
interests in The Managed Global Account that are held of record
by the undersigned on the record date of the Meeting, upon the
following matters and upon any other matter which may come before
the Meeting, in their discretion:
(1) To approve a new Management Agreement with Directed
Services, Inc. ("DSI");
[ ] For [ ] Against [ ] Abstain
(2) If Proposal I is approved, to approve an amended
Portfolio Management Agreement with DSI and Warburg, Pincus
Counsellors, Inc. ("Warburg, Pincus");
[ ] For [ ] Against [ ] Abstain
(3) To approve a new Management Agreement with DSI in the
same form as the agreement described in Proposal I, to become
effective following the acquisition of its corporate parent of
DSI;
[ ] For [ ] Against [ ] Abstain
<PAGE>
(4) If Proposal III is approved, to approve a new
Portfolio Management Agreement with DSI and Warburg, Pincus in
the form as the agreement described in Proposal II, to become
effective following the acquisition of the corporate parent of
DSI;
[ ] For [ ] Against [ ] Abstain
(5) To approve the reorganization ("Reorganization") of
Account D from a separate account of Golden American registered
as a management investment company to a separate account of
Golden American registered as a unit investment trust that
invests in a separate mutual fund; and
[ ] For [ ] Against [ ] Abstain
(6) To consider any other business that may properly come
before the Meeting and any adjournments thereof.
Every properly signed proxy will be voted in the manner specified
thereon and, in the absence of specification, will be treated as
GRANTING authority to vote FOR Proposals 1, 2, 3, 4, and 5 above.
PLEASE SIGN, DATE AND RETURN PROMPTLY
Receipt of Notice of Special Meeting and
Proxy Statement is hereby acknowledged.
Sign here exactly as name(s)
appears on account.
Dated: , 1996
IMPORTANT:Joint owners must EACH sign. When signing as attorney,
trustee, executor, administrator, guardian or corporate officer,
please give your FULL title.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA 100
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 7,073,705
<SHARES-COMMON-PRIOR> 9,225,615
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 409,418
<NUMBER-OF-SHARES-REDEEMED> (2,561,328)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.09
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 0.61
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.66
<EXPENSE-RATIO> 2.27
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA 80
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 107,728
<SHARES-COMMON-PRIOR> 205,564
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 66,593
<NUMBER-OF-SHARES-REDEEMED> (164,429)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.13
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 0.62
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.72
<EXPENSE-RATIO> 2.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA Plus-7% Solution
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 209,010
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 209,355
<NUMBER-OF-SHARES-REDEEMED> (345)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.24
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.26
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.49
<EXPENSE-RATIO> 2.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA Plus-Anual Ratchet
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 27,456
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 29,267
<NUMBER-OF-SHARES-REDEEMED> (1,811)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.28
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.26
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.53
<EXPENSE-RATIO> 2.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA Plus-Standard
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 26,725
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,964
<NUMBER-OF-SHARES-REDEEMED> (17,239)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.32
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 0.27
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.58
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>
<NAME> GCG Trust Special Acct D DVA Series 100
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 67,478,262
<INVESTMENTS-AT-VALUE> 70,981,052
<RECEIVABLES> 1,456,907
<ASSETS-OTHER> 351,688
<OTHER-ITEMS-ASSETS> 88,167
<TOTAL-ASSETS> 72,877,814
<PAYABLE-FOR-SECURITIES> 334,419
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 168,288
<TOTAL-LIABILITIES> 502,707
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 56,983
<SHARES-COMMON-PRIOR> 69,795
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,375,107
<DIVIDEND-INCOME> 1,207,385
<INTEREST-INCOME> 92,139
<OTHER-INCOME> 0
<EXPENSES-NET> 1,662,922
<NET-INVESTMENT-INCOME> (363,398)
<REALIZED-GAINS-CURRENT> (4,171,926)
<APPREC-INCREASE-CURRENT> 8,120,321
<NET-CHANGE-FROM-OPS> 3,584,997
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 27,026
<NUMBER-OF-SHARES-REDEEMED> (39,838)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,833,448)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 734,700
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,726,308
<AVERAGE-NET-ASSETS> 73,449,163
<PER-SHARE-NAV-BEGIN> 9.03
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> 0.61
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.56
<EXPENSE-RATIO> 2.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
