<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 2000
- --------------------------------------------------------------------------------
FILE NO. 033-91914
811-7632
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 10 /X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 16 /X/
GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(Exact Name of Registrant)
GLENBROOK LIFE AND ANNUITY COMPANY
(Name of Depositor)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
GLENBROOK LIFE AND ANNUITY COMPANY
3100 SAUNDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-2400
(Name and Complete Address of Agent for Service)
COPIES TO:
RICHARD T. CHOI, ESQUIRE TERRY R. YOUNG, ESQUIRE
FREEDMAN, LEVY, KROLL & SIMONDS ALFS, INC.
1050 CONNECTICUT AVENUE, N.W. 3100 SAUNDERS ROAD
SUITE 825 NORTHBROOK, IL 60062
WASHINGTON, D.C. 20036-5366
Approximate date of proposed public offering: Continuous
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
(CHECK APPROPRIATE BOX)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/X/ on May 4, 2000 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on (date) pursuant to paragraph (a)(1) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Units of interest in the Glenbrook Life
and Annuity Company Variable Account under deferred variable annuity contracts.
<PAGE>
THE STI CLASSIC VARIABLE ANNUITY
GLENBROOK LIFE AND ANNUITY COMPANY
3100 SANDERS ROAD, NORTHBROOK, IL 60062
TELEPHONE NUMBER: 1-800-755-5275 PROSPECTUS DATED MAY 4, 2000
- --------------------------------------------------------------------------------
Glenbrook Life and Annuity Company ("GLENBROOK") is offering the STI Classic
Variable Annuity, an individual flexible premium deferred variable annuity
contract ("CONTRACT"). This prospectus contains information about the Contract
that you should know before investing. Please keep it for future reference.
The Contract currently offers 35 "INVESTMENT ALTERNATIVES". The investment
alternatives include 3 fixed account options ("FIXED ACCOUNT OPTIONS") and 32
variable sub-accounts ("VARIABLE SUB-ACCOUNTS") of the Glenbrook Life and
Annuity Company Variable Annuity Account ("VARIABLE ACCOUNT"). Each Variable
Sub-Account invests exclusively in shares of one of the portfolios
("PORTFOLIOS") of the following mutual funds ("FUNDS"):
<TABLE>
<S> <C>
- - AIM VARIABLE INSURANCE FUNDS
- - FEDERATED INSURANCE SERIES
- - FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- - FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
- - MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE TRUST-SM-
- - OPPENHEIMER VARIABLE ACCOUNT FUNDS
- - STI CLASSIC VARIABLE TRUST
</TABLE>
WE (Glenbrook) have filed a Statement of Additional Information, dated May 4,
2000, with the Securities and Exchange Commission ("SEC"). It contains more
information about the Contract and is incorporated herein by reference, which
means it is legally a part of this prospectus. Its table of contents appears on
page C-1 of this prospectus. For a free copy, please write or call us at the
address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THE SECURITIES DESCRIBED IN THIS PROSPECTUS, NOR
HAS IT PASSED ON THE ACCURACY OR THE ADEQUACY OF THIS
PROSPECTUS. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A
FEDERAL CRIME.
IMPORTANT THE CONTRACTS MAY BE DISTRIBUTED THROUGH BROKER-DEALERS THAT
NOTICES HAVE RELATIONSHIPS WITH BANKS OR OTHER FINANCIAL
INSTITUTIONS OR BY EMPLOYEES OF SUCH BANKS. HOWEVER, THE
CONTRACTS ARE NOT DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED
BY SUCH INSTITUTIONS OR ANY FEDERAL REGULATORY AGENCY.
INVESTMENT IN THE CONTRACTS INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THE CONTRACTS ARE NOT FDIC INSURED.
</TABLE>
GLG679
1 - PROSPECTUS
<PAGE>
TABLE OF CONTENTS
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
- ----------------------------------------------------------------------------
OVERVIEW
- ----------------------------------------------------------------------------
Important Terms 3
- ----------------------------------------------------------------------------
The Contract At A Glance 4
- ----------------------------------------------------------------------------
How the Contract Works 6
- ----------------------------------------------------------------------------
Expense Table 7
- ----------------------------------------------------------------------------
Financial Information 12
- ----------------------------------------------------------------------------
CONTRACT FEATURES
- ----------------------------------------------------------------------------
The Contract 13
- ----------------------------------------------------------------------------
Purchases 14
- ----------------------------------------------------------------------------
Contract Value 15
- ----------------------------------------------------------------------------
Investment Alternatives 16
- ----------------------------------------------------------------------------
The Variable Sub-Accounts 16
- ----------------------------------------------------------------------------
The Fixed Account Options 18
- ----------------------------------------------------------------------------
Transfers 20
- ----------------------------------------------------------------------------
Expenses 22
- ----------------------------------------------------------------------------
Access To Your Money 24
- ----------------------------------------------------------------------------
Income Payments 25
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------
<CAPTION>
PAGE
<S> <C>
Death Benefits 27
- ----------------------------------------------------------------------------
OTHER INFORMATION
- ----------------------------------------------------------------------------
More Information: 29
- ----------------------------------------------------------------------------
Glenbrook 29
- ----------------------------------------------------------------------------
The Variable Account 29
- ----------------------------------------------------------------------------
The Portfolios 30
- ----------------------------------------------------------------------------
The Contract 30
- ----------------------------------------------------------------------------
Qualified Plans 31
- ----------------------------------------------------------------------------
Legal Matters 31
- ----------------------------------------------------------------------------
Year 2000 31
- ----------------------------------------------------------------------------
Taxes 31
- ----------------------------------------------------------------------------
Annual Reports and Other Documents 34
- ----------------------------------------------------------------------------
Performance Information 35
- ----------------------------------------------------------------------------
Experts 36
- ----------------------------------------------------------------------------
APPENDIX A -- ACCUMULATION UNIT VALUES A-1
- ----------------------------------------------------------------------------
APPENDIX B -- MARKET VALUE ADJUSTMENT B-1
- ----------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS C-1
- ----------------------------------------------------------------------------
</TABLE>
2 - PROSPECTUS
<PAGE>
IMPORTANT TERMS
- -------------------------------------------------------------------
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
<TABLE>
<CAPTION>
PAGE
<S> <C>
- ----------------------------------------------------------------------------
Accumulation Phase 6
- ----------------------------------------------------------------------------
Accumulation Unit 12
- ----------------------------------------------------------------------------
Accumulation Unit Value 12
- ----------------------------------------------------------------------------
Anniversary Values 28
- ----------------------------------------------------------------------------
Annuitant 13
- ----------------------------------------------------------------------------
Automatic Additions Program 14
- ----------------------------------------------------------------------------
Automatic Portfolio Rebalancing Program 21
- ----------------------------------------------------------------------------
Beneficiary 13
- ----------------------------------------------------------------------------
Cancellation Period 4
- ----------------------------------------------------------------------------
Contract 1
- ----------------------------------------------------------------------------
Contract Anniversary 5
- ----------------------------------------------------------------------------
Contract Owner ("You") 13
- ----------------------------------------------------------------------------
Contract Value 15
- ----------------------------------------------------------------------------
Contract Year 4
- ----------------------------------------------------------------------------
Death Benefit Anniversary 27
- ----------------------------------------------------------------------------
Dollar Cost Averaging Program 21
- ----------------------------------------------------------------------------
Due Proof of Death 27
- ----------------------------------------------------------------------------
Enhanced Death Benefit Rider 28
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
- ----------------------------------------------------------------------------
Fixed Account Options 18
- ----------------------------------------------------------------------------
Free Withdrawal Amount 23
- ----------------------------------------------------------------------------
Glenbrook ("We") 29
- ----------------------------------------------------------------------------
Guarantee Periods 18
- ----------------------------------------------------------------------------
Income Plan 25
- ----------------------------------------------------------------------------
Investment Alternatives 1
- ----------------------------------------------------------------------------
Issue Date 6
- ----------------------------------------------------------------------------
Market Value Adjustment 20
- ----------------------------------------------------------------------------
Payout Phase 6
- ----------------------------------------------------------------------------
Payout Start Date 25
- ----------------------------------------------------------------------------
Portfolios 30
- ----------------------------------------------------------------------------
SEC 1
- ----------------------------------------------------------------------------
Settlement Value 28
- ----------------------------------------------------------------------------
Systematic Withdrawal Program 25
- ----------------------------------------------------------------------------
Valuation Date 14
- ----------------------------------------------------------------------------
Variable Account 29
- ----------------------------------------------------------------------------
Variable Sub-Account 29
- ----------------------------------------------------------------------------
</TABLE>
3 - PROSPECTUS
<PAGE>
THE CONTRACT AT A GLANCE
- -------------------------------------------------------------------
The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
<TABLE>
<S> <C>
FLEXIBLE PAYMENTS You can purchase a Contract with as little as $3,000 ($2,000
for "QUALIFIED CONTRACTS," which are Contracts issued within
QUALIFIED PLANS). You can add to your Contract as often and
as much as you like, but each payment must be at least $50.
- --------------------------------------------------------------------------------------------------------
RIGHT TO CANCEL You may cancel your Contract within 20 days of receipt or
any longer period your state may require ("CANCELLATION
PERIOD"). Upon cancellation, we will return your purchase
payments adjusted, to the extent applicable law permits, to
reflect the investment experience of any amounts allocated
to the Variable Account.
- --------------------------------------------------------------------------------------------------------
EXPENSES You will bear the following expenses:
- Total Variable Account annual fees equal to 1.35% of
average daily net assets (1.45% if you select the
ENHANCED DEATH BENEFIT RIDER)
- Annual contract maintenance charge of $30 (with certain
exceptions)
- Withdrawal charges ranging from 0% to 7% of payment
withdrawn (with certain exceptions)
- Transfer fee of $10 after 12th transfer in any CONTRACT
YEAR (fee currently waived)
- State premium tax (if your state imposes one)
In addition, each Portfolio pays expenses that you will bear
indirectly if you invest in a Variable Sub-Account.
- --------------------------------------------------------------------------------------------------------
INVESTMENT ALTERNATIVES The Contract offers 35 investment alternatives including:
- 3 Fixed Account Options (which credit interest at rates
we guarantee)
- 32 Variable Sub-Accounts investing in Portfolios offering
professional money management by these investment
advisers:
- A I M Advisors, Inc.
- Federated Investment Management Company
- Fidelity Management & Research Company
- Franklin Advisers, Inc.
- Massachusetts Financial Services
- OppenheimerFunds, Inc.
- SunTrust Bank
- Templeton Global Advisors Limited
- Trusco Capital Management, Inc.
To find out current rates being paid on the Fixed Account
Options or how the Variable Sub-Accounts have performed,
call us at 1-800-755-5275.
</TABLE>
4 - PROSPECTUS
<PAGE>
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------
SPECIAL SERVICES For your convenience, we offer these special services:
- AUTOMATIC PORTFOLIO REBALANCING PROGRAM
- AUTOMATIC ADDITIONS PROGRAM
- DOLLAR COST AVERAGING PROGRAM
- SYSTEMATIC WITHDRAWAL PROGRAM
- --------------------------------------------------------------------------------------------------------
INCOME PAYMENTS You can choose fixed income payments, variable income
payments, or a combination of the two. You can receive your
income payments in one of the following ways:
- life income with guaranteed payments
- a "joint and survivor" life income with guaranteed
payments
- guaranteed payments for a specified period (5 to 30
years)
- --------------------------------------------------------------------------------------------------------
DEATH BENEFITS If you die before the PAYOUT START DATE we will pay the
death benefit described in the Contract. We offer an
Enhanced Death Benefit Rider to owners of Contracts issued
on or after May 1, 1997.
- --------------------------------------------------------------------------------------------------------
TRANSFERS Before the Payout Start Date you may transfer your Contract
value ("CONTRACT VALUE") among the investment alternatives,
with certain restrictions. No minimum applies to the amount
you transfer.
We do not currently impose a fee upon transfers. However, we
reserve the right to charge $10 per transfer after the 12th
transfer in each "Contract Year," which we measure from the
date we issue your Contract or a Contract anniversary
("CONTRACT ANNIVERSARY").
- --------------------------------------------------------------------------------------------------------
WITHDRAWALS You may withdraw some or all of your Contract Value at
anytime during the Accumulation Phase. Full or partial
withdrawals are available under limited circumstances on or
after the Payout Start Date.
In general, you must withdraw at least $50 at a time. A 10%
federal tax penalty may apply if you withdraw before you are
59 1/2 years old. A withdrawal charge and MARKET VALUE
ADJUSTMENT also may apply.
</TABLE>
5 - PROSPECTUS
<PAGE>
HOW THE CONTRACT WORKS
- -------------------------------------------------------------------
The Contract basically works in two ways.
First, the Contract can help you (we assume you are the CONTRACT OWNER) save for
retirement because you can invest in up to 35 investment alternatives and pay no
federal income taxes on any earnings until you withdraw them. You do this during
what we call the "ACCUMULATION PHASE" of the Contract. The Accumulation Phase
begins on the date we issue your Contract (we call that date the "ISSUE DATE")
and continues until the Payout Start Date, which is the date we apply your money
to provide income payments. During the Accumulation Phase, you may allocate your
purchase payments to any combination of the Variable Sub-Accounts and/or Fixed
Account Options. If you invest in any of the 3 Fixed Account Options, you will
earn a fixed rate of interest that we declare periodically. If you invest in any
of the Variable Sub-Accounts, your investment return will vary up or down
depending on the performance of the corresponding Portfolios.
Second, the Contract can help you plan for retirement because you can use it to
receive retirement income for life and/or for a pre-set number of years, by
selecting one of the income payment options (we call these "INCOME PLANS")
described on page 25. You receive income payments during what we call the
"PAYOUT PHASE" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. The amount of money you accumulate
under your Contract during the Accumulation Phase and apply to an Income Plan
will determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
ISSUE ACCUMULATION PHASE PAYOUT PAYOUT
DATE START PHASE
DATE
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
You buy You save for You elect to receive You can receive Or you can
a Contract retirement income income payments receive income
payments or receive for a set period payments for life
a lump sum payment
</TABLE>
As the Contract owner, you exercise all of the rights and privileges provided by
the Contract. If you die, any surviving Contract owner or, if there is none, the
BENEFICIARY will exercise the rights and privileges provided by the Contract.
SEE "The Contract." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract owner or, if there is none,
to your Beneficiary. SEE "Death Benefits."
Please call us at 1-800-755-5275 if you have any question about how the Contract
works.
6 - PROSPECTUS
<PAGE>
EXPENSE TABLE
- -------------------------------------------------------------------
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Portfolio expenses, please refer to the accompanying
prospectuses for the Portfolios.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments)*
<TABLE>
<CAPTION>
Number of Complete Years Since We Received Payment Being Withdrawn: 0 1 2 3 4 5 6 7+
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Applicable Charge: 7% 6% 5% 4% 3% 2% 1% 0%
- -----------------------------------------------------------------------------------------------------
Annual Contract Maintenance Charge $30.00**
- -----------------------------------------------------------------------------------------------------
Transfer Fee $10.00***
- -----------------------------------------------------------------------------------------------------
</TABLE>
*Each Contract Year, you may withdraw up to 10% of the Contract Value on the
date of the first withdrawal that Year WITHOUT incurring a withdrawal charge.
However, any applicable Market Value Adjustment determined as of the date of
withdrawal will apply.
**We will waive this charge in certain cases. See "Expenses."
***Applies solely to the thirteenth and subsequent transfers within a Contract
Year. We are currently waiving the transfer fee.
VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSET VALUE
DEDUCTED FROM EACH VARIABLE SUB-ACCOUNT)
<TABLE>
<S> <C>
Mortality and Expense Risk Charge 1.25%*
- ----------------------------------------------------------------------
Administrative Expense Charge 0.10%
- ----------------------------------------------------------------------
Total Variable Account Annual Expenses 1.35%
- ----------------------------------------------------------------------
</TABLE>
*If you select the Enhanced Death Benefit Rider (available to purchasers after
May 1, 1997), the Mortality and Expense Risk Charge will be equal to 1.35% of
your Contract's average daily net assets in the Variable Account.
7 - PROSPECTUS
<PAGE>
PORTFOLIO ANNUAL EXPENSES (After Voluntary Reductions and Reimbursements)
(as a percentage of Portfolio average daily net assets)(1)
<TABLE>
<CAPTION>
Rule Total Portfolio
Management 12b-1 Other Annual
Portfolio Fees Fees Expenses Expenses
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Balanced Fund (2) 0.65% N/A 0.56% 1.21%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund 0.62% N/A 0.11% 0.73%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 0.63% N/A 0.10% 0.73%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund 0.61% N/A 0.16% 0.77%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. High Yield Fund (2) 0.35% N/A 0.79% 1.14%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 0.61% N/A 0.15% 0.76%
- --------------------------------------------------------------------------------------------------------------------------------
Federated Prime Money Fund II (2) 0.50% N/A 0.23% 0.73%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund-Registered Trademark-
Portfolio (3,4) 0.58% N/A 0.09% 0.67%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio (3,4) 0.48% N/A 0.09% 0.57%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio (3,4) 0.58% N/A 0.08% 0.66%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio (3) 0.58% N/A 0.11% 0.69%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio (3,5) 0.24% N/A 0.10% 0.34%
- --------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio (3,4) 0.73% N/A 0.18% 0.91%
- --------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Series (6) 0.75% N/A 0.09% 0.84%
- --------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income Series (6) 0.75% N/A 0.13% 0.88%
- --------------------------------------------------------------------------------------------------------------------------------
MFS Research Series (6) 0.75% N/A 0.11% 0.86%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Fund/VA 0.66% N/A 0.01% 0.67%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA 0.68% N/A 0.02% 0.70%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA 0.67% N/A 0.02% 0.69%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Income Fund/VA 0.73% N/A 0.05% 0.78%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Multiple Strategies Fund/VA 0.72% N/A 0.01% 0.73%
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA 0.74% N/A 0.04% 0.78%
- --------------------------------------------------------------------------------------------------------------------------------
STI Capital Appreciation Fund (2) 0.94% N/A 0.21% 1.15%
- --------------------------------------------------------------------------------------------------------------------------------
STI Growth and Income Fund (7) 0.90% N/A 0.30% 1.20%
- --------------------------------------------------------------------------------------------------------------------------------
STI International Equity Fund (2) 0.86% N/A 0.74% 1.60%
- --------------------------------------------------------------------------------------------------------------------------------
STI Investment Grade Bond Fund (2) 0.30% N/A 0.45% 0.75%
- --------------------------------------------------------------------------------------------------------------------------------
STI Mid-Cap Equity Fund (2) 0.80% N/A 0.35% 1.15%
- --------------------------------------------------------------------------------------------------------------------------------
STI Quality Growth Stock Fund (7) 1.00% N/A 0.30% 1.30%
- --------------------------------------------------------------------------------------------------------------------------------
STI Small Cap Value Equity Fund (2) 0.52% N/A 0.68% 1.20%
- --------------------------------------------------------------------------------------------------------------------------------
STI Value Income Stock Fund (2) 0.79% N/A 0.16% 0.95%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Global Income Securities Fund -- Class 2
(8,10,11) 0.60% 0.25% 0.05% 0.90%
- --------------------------------------------------------------------------------------------------------------------------------
Templeton Growth Securities Fund -- Class 2 (9,10,11) 0.83% 0.25% 0.05% 1.13%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8 - PROSPECTUS
<PAGE>
(1) The figures shown in the table are for the year ended December 31, 1999.
(2) Absent voluntary reductions and reimbursements for certain Portfolios,
"Management Fees," "Rule 12b-1 Fees," "Other Expenses," and "Total Portfolio
Annual Expenses" as a percent of average net assets of the portfolios would
have been as follows:
<TABLE>
<CAPTION>
Rule Total Portfolio
Management 12b-1 Other Annual
Portfolio Fees Fees Expenses Expenses
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Balanced Fund 0.75% N/A 0.56% 1.31%
- --------------------------------------------------------------------------------------------------------------------------------
AIM V.I. High Yield Fund 0.63% N/A 0.79% 1.42%
- --------------------------------------------------------------------------------------------------------------------------------
Federated Prime Money Fund II 0.50% N/A 0.48% 0.98%
- --------------------------------------------------------------------------------------------------------------------------------
STI Capital Appreciation Fund 1.15% N/A 0.21% 1.36%
- --------------------------------------------------------------------------------------------------------------------------------
STI International Equity Fund 1.25% N/A 0.74% 1.99%
- --------------------------------------------------------------------------------------------------------------------------------
STI Investment Grade Bond Fund 0.74% N/A 0.45% 1.19%
- --------------------------------------------------------------------------------------------------------------------------------
STI Mid-Cap Equity Fund 1.15% N/A 0.35% 1.50%
- --------------------------------------------------------------------------------------------------------------------------------
STI Small Cap Value Equity Fund 1.15% N/A 0.68% 1.83%
- --------------------------------------------------------------------------------------------------------------------------------
STI Value Income Stock Fund 0.80% N/A 0.16% 0.96%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Portfolios' Advisors may discontinue all or part of these voluntary
reductions and reimbursements at any time.
(3) Initial Class. "Total Annual Portfolio Expenses" reflect offset and other
arrangements that reduce expenses.
(4) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds,
or Fidelity Management & Research Company ("FMR") on behalf of certain
funds, custodian, credits realized as a result of uninvested cash balances
were used to reduce a portion of each applicable fund's expenses. With these
reductions, the "Total Portfolio Annual Expenses" presented in the table
would have been 0.65% for Contrafund-Registered Trademark- Portfolio, 0.56%
for Equity-Income Portfolio, 0.65% for Growth Portfolio, and 0.87% for
Overseas Portfolio.
(5) FMR agreed to reimburse a portion of the Index 500 Portfolio's expenses
during the period. With this reimbursement, the Portfolio's "Management
Fee," "Rule 12b-1 Fee," "Other Expenses," and "Total Portfolio Annual
Expense" would have been: 0.24%, N/A, 0.04% and 0.28% respectively.
(6) Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with
its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the series' expenses. "Other Expenses" do
not take into account these expense reductions, and are therefore higher
than the actual expenses of the series. Had these fee reductions been taken
into account, "Total Portfolio Annual Expenses" would be lower for certain
series and would equal: 0.83% for Emerging Growth Series, 0.87% for Growth
with Income Series, and 0.85% for Research Series.
(7) "Other Expenses" are based on estimated amounts for the current year.
(8) On February 8, 2000, a merger and reorganization was approved that combined
the fund with a similar fund of Templeton Variable Products Series Fund,
effective May 1, 2000. The table shows total expenses based on the fund's
assets as of December 31, 1999, and not the assets of the combined fund.
However, if the table reflected combined assets, the fund's expenses after
May 1, 2000 would be estimated as: "Management Fees" 0.60%, "Rule 12b-1
Fees" 0.25%, "Other Expenses" 0.04%, and "Total Portfolio Annual Expenses"
0.89%.
(9) On February 8, 2000, a merger and reorganization was approved that combined
the fund with a similar fund of Templeton Variable Products Series Fund,
effective May 1, 2000. The table shows total expenses based on the fund's
assets as of December 31, 1999, and not the assets of the combined fund.
However, if the table reflected combined assets, the fund's expenses after
May 1, 2000 would be estimated as: "Management Fees" 0.80%, "Rule 12b-1
Fees" 0.25%, "Other Expenses" 0.05%, and "Total Portfolio Annual Expenses"
1.10%.
(10) The fund administration fee is paid indirectly through the management fee.
(11) The funds' class 2 distribution plan or "Rule 12b-1 plan" is described in
the fund's prospectus.
9 - PROSPECTUS
<PAGE>
EXAMPLE 1
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
- - invested $1,000 in a Variable Sub-Account,
- - earned a 5% annual return on your investment,
- - surrendered your Contract at the end of each time period, and
- - elected the Enhanced Death Benefit Rider.
THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO
PAY IF YOU SURRENDER YOUR CONTRACT.
<TABLE>
<CAPTION>
Variable Sub-Account 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Balanced $82 $121 $164 $308
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation $77 $107 $139 $260
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth $77 $107 $139 $260
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income $77 $108 $141 $264
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. High Yield $81 $119 $160 $301
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value $77 $108 $141 $263
- ------------------------------------------------------------------------------------------------------------------------------
Federated Prime Money Fund II $77 $107 $139 $260
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund-Registered Trademark- $76 $105 $136 $253
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income $75 $102 $131 $243
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth $76 $104 $135 $252
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income $76 $105 $137 $255
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 $73 $ 94 $119 $218
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas $79 $112 $148 $278
- ------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth $78 $110 $145 $271
- ------------------------------------------------------------------------------------------------------------------------------
MFS Growth With Income $78 $111 $147 $275
- ------------------------------------------------------------------------------------------------------------------------------
MFS Research $78 $111 $146 $273
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth $76 $105 $136 $253
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation $77 $106 $138 $257
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities $76 $105 $137 $255
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Income $77 $108 $142 $265
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Multiple Strategies $77 $107 $139 $260
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond $77 $108 $142 $265
- ------------------------------------------------------------------------------------------------------------------------------
STI Capital Appreciation $81 $120 $161 $302
- ------------------------------------------------------------------------------------------------------------------------------
STI Growth and Income $82 $121 $163 $307
- ------------------------------------------------------------------------------------------------------------------------------
STI International Equity $86 $133 $183 $346
- ------------------------------------------------------------------------------------------------------------------------------
STI Investment Grade Bond $77 $107 $140 $262
- ------------------------------------------------------------------------------------------------------------------------------
STI Mid-Cap Equity $81 $121 $161 $302
- ------------------------------------------------------------------------------------------------------------------------------
STI Quality Growth Stock $83 $124 $168 $317
- ------------------------------------------------------------------------------------------------------------------------------
STI Small Cap Value Equity $82 $121 $163 $307
- ------------------------------------------------------------------------------------------------------------------------------
STI Value Income Stock $79 $113 $150 $282
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Global Income Securities -- Class 2 $79 $112 $148 $277
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Growth Securities -- Class 2 $81 $119 $160 $300
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10 - PROSPECTUS
<PAGE>
EXAMPLE 2
Same assumptions as Example 1 above, except that you decide not to surrender
your Contract or you began receiving income payments at the end of each period.
<TABLE>
<CAPTION>
Variable Sub-Account 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Balanced $28 $ 86 $146 $308
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Capital Appreciation $23 $ 71 $121 $260
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth $23 $ 71 $121 $260
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth and Income $23 $ 72 $123 $264
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. High Yield $27 $ 84 $142 $301
- ------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value $23 $ 72 $123 $263
- ------------------------------------------------------------------------------------------------------------------------------
Federated Prime Money Fund II $23 $ 71 $121 $260
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund-Registered Trademark- $22 $ 69 $118 $253
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income $21 $ 66 $113 $243
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth $22 $ 69 $118 $252
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income $23 $ 70 $119 $255
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Index 500 $19 $ 59 $101 $218
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas $25 $ 77 $131 $278
- ------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth $24 $ 74 $127 $271
- ------------------------------------------------------------------------------------------------------------------------------
MFS Growth With Income $25 $ 76 $129 $275
- ------------------------------------------------------------------------------------------------------------------------------
MFS Research $24 $ 75 $128 $273
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth $22 $ 69 $118 $253
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation $23 $ 70 $120 $257
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities $23 $ 70 $119 $255
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Income $24 $ 72 $124 $265
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Multiple Strategies $23 $ 71 $121 $260
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond $24 $ 72 $124 $265
- ------------------------------------------------------------------------------------------------------------------------------
STI Capital Appreciation $27 $ 84 $143 $302
- ------------------------------------------------------------------------------------------------------------------------------
STI Growth and Income $28 $ 85 $145 $307
- ------------------------------------------------------------------------------------------------------------------------------
STI International Equity $32 $ 98 $166 $346
- ------------------------------------------------------------------------------------------------------------------------------
STI Investment Grade Bond $23 $ 72 $122 $262
- ------------------------------------------------------------------------------------------------------------------------------
STI Mid-Cap Equity $27 $ 84 $143 $302
- ------------------------------------------------------------------------------------------------------------------------------
STI Quality Growth Stock $29 $ 88 $151 $317
- ------------------------------------------------------------------------------------------------------------------------------
STI Small Cap Value Equity $28 $ 85 $145 $307
- ------------------------------------------------------------------------------------------------------------------------------
STI Value Income Stock $25 $ 78 $133 $282
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Global Income Securities -- Class 2 $25 $ 76 $130 $277
- ------------------------------------------------------------------------------------------------------------------------------
Templeton Growth Securities -- Class 2 $27 $ 83 $142 $300
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please remember that you are looking at examples and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return maybe lower or greater than 5%,
which is not guaranteed. The above examples assume the election of the Enhanced
Death Benefit Rider with a mortality and expense risk charge of 1.35% rather
than 1.25%. If that Rider were not elected, the expense figures shown above
would be slightly lower. To reflect the contract maintenance charge in the
examples, we estimated an equivalent percentage charge, based on the current
average Contract size of $57,476.
11 - PROSPECTUS
<PAGE>
FINANCIAL INFORMATION
- -------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "ACCUMULATION UNIT."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "ACCUMULATION UNIT VALUE." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
Attached as Appendix A to this prospectus are tables showing the Accumulation
Unit Values of each Variable Sub-Account since its inception. No Accumulation
Unit Values are shown for the following Variable Sub-Accounts which commenced
operations as of the date of this prospectus: AIM V.I. Balanced, AIM V.I.
Growth, AIM V.I. Growth and Income, AIM V.I. Value, Fidelity VIP
Contrafund-Registered Trademark-, Fidelity VIP Equity-Income, Fidelity VIP
Growth, Fidelity VIP High Income, Fidelity VIP Index 500, Fidelity VIP Overseas,
MFS Emerging Growth, MFS Growth With Income, MFS Research, Oppenheimer
Aggressive Growth, Oppenheimer Capital Appreciation, Oppenheimer Global
Securities, Oppenheimer Main Street Growth & Income, STI Growth and Income, STI
Quality Growth Stock, Templeton Global Income Securities (Class 2), and
Templeton Growth Securities (Class 2). To obtain a fuller picture of each
Variable Sub-Account's finances, please refer to the Variable Account's
financial statements contained in the Statement of Additional Information. The
financial statements of Glenbrook also appear in the Statement of Additional
Information.
12 - PROSPECTUS
<PAGE>
THE CONTRACT
- -------------------------------------------------------------------
CONTRACT OWNER
The STI Classic Variable Annuity is a contract between you, the Contract owner,
and Glenbrook, a life insurance company. As the Contract owner, you may exercise
all of the rights and privileges provided to you by the Contract. That means it
is up to you to select or change (to the extent permitted):
- - the investment alternatives during the Accumulation and Payout Phases,
- - the amount and timing of your purchase payments and withdrawals,
- - the programs you want to use to invest or withdraw money,
- - the income payment plan you want to use to receive retirement income,
- - the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
- - the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract owner dies, and
- - any other rights that the Contract provides.
If you die, any surviving Contract owner or, if none, the Beneficiary may
exercise the rights and privileges provided to them by the Contract.
The Contract cannot be jointly owned by both a non-natural person and a natural
person.
You can use the Contract with or without a qualified plan. A qualified plan is a
retirement savings plan, such as an IRA or tax-sheltered annuity, that meets the
requirements of the Internal Revenue Code. Qualified plans may limit or modify
your rights and privileges under the Contract. We use the term "Qualified
Contract" to refer to a Contract issued within a qualified plan. See "Qualified
Plans" on page 33.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plans with guaranteed payments for a specified period). You
initially designate an Annuitant in your application. The Annuitant must be a
natural person. If the Contract owner is a natural person, you may change the
Annuitant at any time prior to the Payout Start Date. You may designate a joint
Annuitant, prior to the Payout Start Date, who is a second person on whose life
income payments depend.
If the Annuitant dies prior to the Payout Start Date, the new Annuitant will be:
(i) the youngest Contract owner; otherwise,
(ii) the youngest Beneficiary.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract owner if the sole surviving Contract owner dies before
the Payout Start Date. If the sole surviving Contract owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time, unless you have designated an
irrevocable Beneficiary. We will provide a change of Beneficiary form to be
signed and filed with us. Any change will be effective at the time you sign the
written notice. Until we receive your written notice to change a Beneficiary, we
are entitled to rely on the most recent Beneficiary information in our files. We
will not be liable as to any payment or settlement made prior to receiving the
written notice. Accordingly, if you wish to change your Beneficiary, you should
deliver your written notice to us promptly.
If you did not name a Beneficiary or if the named Beneficiary is no longer
living, the Beneficiary will be:
- - your spouse or, if he or she is no longer alive,
- - your surviving children equally, or if you have no surviving children,
- - your estate.
If more than one Beneficiary survives you (the Annuitant if the Contract owner
is not a natural person), we will divide the death benefit among your
Beneficiaries according to your most recent written instructions. If you have
not given us written instructions, we will pay the death benefit in equal
amounts to the surviving Beneficiaries.
MODIFICATION OF THE CONTRACT
Only a Glenbrook officer may approve a change in or waive any provision of the
Contract. Any change or waiver must be in writing. None of our agents has the
authority to change or waive the provisions of the Contract. We may not change
the terms of the Contract without your consent, except to conform the Contract
to applicable law or changes in the law. If a provision of the Contract is
inconsistent with state law, we will follow state law.
13 - PROSPECTUS
<PAGE>
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. However, you may assign periodic income payments under the
Contract prior to the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are payable to the Beneficiary. We will not be
bound by any assignment until the Assignor signs it and files it with us. We are
not responsible for the validity of any assignment. Federal law prohibits or
restricts the assignment of benefits under many types of retirement plans and
the terms of such plans may themselves contain restrictions on assignments. An
assignment may also result in taxes or tax penalties. YOU SHOULD CONSULT WITH AN
ATTORNEY BEFORE TRYING TO ASSIGN YOUR CONTRACT.
PURCHASES
- -------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $3,000 ($2,000 for a Qualified
Contract). All subsequent purchase payments must be $50 or more. You may make
purchase payments at any time prior to the earlier of the Payout Start Date or
your 86th birthday. We reserve the right to limit the maximum amount of purchase
payments we will accept.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments by automatically transferring money
from your bank account. Please call or write us for an enrollment form.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to credit your
purchase payments among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percentages that total 100% or in whole dollars. You can change your
allocations by notifying us in writing. We reserve the right to limit
availability of the investment alternatives.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"VALUATION DATES." Our business day closes when the New York Stock Exchange
closes, usually 4 p.m. Eastern Time (3 p.m. Central Time). If we receive your
purchase payment after 3 p.m. Central Time on any Valuation Date, we will credit
your purchase payment using the Accumulation Unit Values computed on the next
Valuation Date.
RIGHT TO CANCEL
You may cancel the Contract by returning it to us within the Cancellation
Period, which is the 20 day period after you receive the Contract, or a longer
period should your state require it. You may return your Contract by delivering
it or mailing it to us. If you exercise this "RIGHT TO CANCEL," the Contract
terminates and we will pay you the full amount of your purchase payments
allocated to the Fixed Account. We also will return your purchase payments
allocated to the Variable Account adjusted, to the extent applicable law
permits, to reflect investment gain or loss that occurred from the date of
allocation through the date of cancellation. Some states may require us to
return a greater amount to you.
14 - PROSPECTUS
<PAGE>
CONTRACT VALUE
- -------------------------------------------------------------------
Your Contract Value at any time during the Accumulation Phase is equal to the
sum of the value of your Accumulation Units in the Variable Sub-Accounts you
have selected, plus the value of your interest in the Fixed Account Options.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
credit to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
will rise or fall to reflect:
- - changes in the share price of the Portfolio in which the Variable Sub-Account
invests, and
- - the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have accrued
since we last calculated the Accumulation Unit Value.
We determine contract maintenance charges, withdrawal charges, and transfer fees
(currently waived) separately for each Contract. They do not affect the
Accumulation Unit Value. Instead, we obtain payment of those charges and fees by
redeeming Accumulation Units. For details on how we compute Accumulation Unit
Value, please refer to the Statement of Additional Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date. We also determine a separate set of Accumulation Unit
Values reflecting the cost of the Enhanced Death Benefit Rider described on
page 28.
YOU SHOULD REFER TO THE PROSPECTUSES FOR THE PORTFOLIOS THAT ACCOMPANY THIS
PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED,
SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE
CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE.
15 - PROSPECTUS
<PAGE>
INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS
- -------------------------------------------------------------------
You may allocate your purchase payments to up to 32 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and risks
associated with the Portfolio, please refer to the accompanying prospectus for
the Portfolio. You should carefully review the Portfolio prospectuses before
allocating amounts to the Variable Sub-Accounts.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
PORTFOLIO: EACH PORTFOLIO SEEKS: INVESTMENT ADVISOR:
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS*
- ---------------------------------------------------------------------------------------------------
AIM V.I. Balanced Fund As high a total return as possible,
consistent with preservation of
capital
- ------------------------------------------------------------------------------
AIM V.I. Capital Appreciation Fund Growth of capital
- ------------------------------------------------------------------------------
AIM V.I. Growth Fund Growth of capital A I M
Advisors, Inc.
- ------------------------------------------------------------------------------
AIM V.I. Growth and Income Fund Growth of capital with a secondary
objective of current income
- ------------------------------------------------------------------------------
AIM V.I. High Yield Fund A high level of current income
- ------------------------------------------------------------------------------
AIM V.I. Value Fund Long-term growth of capital and income
as a secondary objective
- ---------------------------------------------------------------------------------------------------
FEDERATED INSURANCE SERIES
- ---------------------------------------------------------------------------------------------------
Federated Prime Money Fund II Current income consistent with the Federated
stability of principal and liquidity Investment
Management Company
- ---------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- ---------------------------------------------------------------------------------------------------
Fidelity VIP Contrafund-Registered Long-term capital appreciation
Trademark- Portfolio
- ------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio Reasonable income
- ------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio Capital appreciation Fidelity Management
& Research Company
- ------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio High level of current income while
also considering growth of capital
- ------------------------------------------------------------------------------
Fidelity VIP Index 500 Portfolio Investment results that correspond to
the total return of common stocks
publicly traded in the United States,
as represented by the S&P 500
- ------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio Long-term growth of capital
- ---------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (VIP) -- CLASS 2
- ---------------------------------------------------------------------------------------------------
Templeton Global Income Securities High current income. Capital Franklin
Fund (surviving fund of merger with appreciation is a secondary Advisers, Inc.
Templeton Bond Fund) consideration.
- ---------------------------------------------------------------------------------------------------
Templeton Growth Securities Fund Long-term capital growth Templeton Global
(surviving fund of merger with Advisors Limited
Templeton Stock Fund)
- ---------------------------------------------------------------------------------------------------
MFS-REGISTERED TRADEMARK- VARIABLE INSURANCE TRUST-SM-
- ---------------------------------------------------------------------------------------------------
MFS Emerging Growth Series Long-term growth of capital
- ------------------------------------------------------------------------------
MFS Growth with Income Series Reasonable current income and Massachusetts
long-term growth of capital and income Financial Services
- ------------------------------------------------------------------------------
MFS Research Series Long-term growth of capital and future
income
- ---------------------------------------------------------------------------------------------------
</TABLE>
16 - PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PORTFOLIO: EACH PORTFOLIO SEEKS: INVESTMENT ADVISOR:
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS
- --------------------------------------------------------------------------------------------------------------------------
Oppenheimer Aggressive Growth Fund/VA Capital appreciation
- ------------------------------------------------------------------------------------------------
Oppenheimer Capital Appreciation Fund/VA Capital appreciation
- ------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA Long-term capital appreciation OppenheimerFunds, Inc.
- ------------------------------------------------------------------------------------------------
Oppenheimer Main Street Growth & Income Fund/VA High total return, which includes growth in the
value of its shares as well as current income,
from equity and debt securities
- ------------------------------------------------------------------------------------------------
Oppenheimer Multiple Strategies Fund/VA A high total investment return which includes
current income and capital appreciation in the
value of its shares.
- ------------------------------------------------------------------------------------------------
Oppenheimer Strategic Bond Fund/VA High level of current income
- --------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
- --------------------------------------------------------------------------------------------------------------------------
STI Capital Appreciation Fund Captial appreciation SunTrust Bank
- --------------------------------------------------------------------------------------------------------------------------
STI Growth and Income Fund Long-term capital appreciation with the Trusco Capital
secondary goal of current income Management, Inc.
- --------------------------------------------------------------------------------------------------------------------------
STI International Equity Fund Long-term capital appreciation SunTrust Bank
- --------------------------------------------------------------------------------------------------------------------------
STI Investment Grade Bond Fund High total return through current income and SunTrust Bank
capital appreciation, while preserving the
principal amount invested
- --------------------------------------------------------------------------------------------------------------------------
STI Mid-Cap Equity Fund Capital appreciation SunTrust Bank
- --------------------------------------------------------------------------------------------------------------------------
STI Quality Growth Stock Fund Long-term capital appreciation with nominal Trusco Capital
dividend income Management Inc.
- --------------------------------------------------------------------------------------------------------------------------
STI Small Cap Value Equity Fund Capital appreciation with the secondary goal of SunTrust Bank
current income
- --------------------------------------------------------------------------------------------------------------------------
STI Value Income Stock Fund Current income with the secondary goal of SunTrust Bank
capital appreciation
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* A portfolio's investment objective may be changed by the Fund's Board of
Trustees without shareholder approval.
VARIABLE INSURANCE TRUST PORTFOLIOS MAY NOT BE MANAGED BY THE SAME PORTFOLIO
MANAGERS WHO MANAGE RETAIL MUTUAL FUNDS WITH SIMILAR NAMES. THESE PORTFOLIOS ARE
LIKELY TO DIFFER FROM RETAIL FUNDS IN ASSETS, CASH FLOW, AND TAX MATTERS.
ACCORDINGLY, THE HOLDINGS AND INVESTMENT RESULTS OF A PORTFOLIO CAN BE EXPECTED
TO BE HIGHER OR LOWER THAN THE INVESTMENT RESULTS OF RETAIL MUTUAL FUNDS.
17 - PROSPECTUS
<PAGE>
INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS
- -------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. You may choose from among 3 Fixed Account Options, including a STANDARD
FIXED ACCOUNT OPTION, a DOLLAR COST AVERAGING FIXED ACCOUNT OPTION, and the
option to invest in one or more GUARANTEE PERIODS (included in the Guaranteed
Maturity Amount Fixed Account). The Fixed Account Options may not be available
in all states. Please consult with your representative for current information.
The Fixed Account supports our insurance and annuity obligations. The Fixed
Account consists of our general assets other than those in segregated asset
accounts. We have sole discretion to invest the assets of the Fixed Account,
subject to applicable law. Any money you allocate to a Fixed Account Option does
not entitle you to share in the investment experience of the Fixed Account.
STANDARD FIXED ACCOUNT OPTION AND
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
STANDARD FIXED ACCOUNT OPTION. Purchase payments and transfers that you allocate
to the Standard Fixed Account Option will earn interest for a one year period at
the current rate in effect at the time of allocation. We will credit interest
daily at a rate that will compound over the year to the effective annual
interest rate we guaranteed at the time of allocation. After the one year
period, we will declare a renewal rate which we guarantee for a full year.
Subsequent renewal dates will be every 12 months for each payment or transfer.
Each payment or transfer you allocate to this Option must be at least $50.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION. You may establish a Dollar Cost
Averaging Program by allocating purchase payments to the Dollar Cost Averaging
Fixed Account Option ("DCA Fixed Account Option"). We will credit interest to
purchase payments you allocate to this Option for up to one year at the current
rate in effect at the time of allocation. Each purchase payment you allocate to
the DCA Fixed Account Option must be at least $5,000. We reserve the right to
reduce the minimum allocation amount.
We will follow your instructions in transferring amounts monthly from the DCA
Fixed Account Option to one or more Variable Sub-Accounts. However, you may not
choose monthly installments of less than 3 or more than 12. Further, you must
transfer each purchase payment and all its earnings out of this Option to one or
more Variable Sub-Accounts by means of dollar cost averaging within the selected
program period. If you discontinue the Dollar Cost Averaging Program before the
end of the transfer period, we will transfer the remaining balance in this
Option to the Standard Fixed Account Option.
We bear the investment risk for all amounts allocated to the Standard Fixed
Account Option and the DCA Fixed Account Option. That is because we guarantee
the current and renewal interest rates we credit to the amounts you allocate to
either of these Options, which will never be less than the minimum guaranteed
rate in the Contract. Currently, we determine, in our sole discretion, the
amount of interest credited in excess of the guaranteed rate.
We may declare more than one interest rate for different monies based upon the
date of allocation to the Standard Fixed Account Option and the DCA Fixed
Account Option. For current interest rate information, please contact your
representative or Glenbrook at 1-800-755-5275.
GUARANTEE PERIODS
Each payment or transfer allocated to a Guarantee Period earns interest at a
specified rate that we guarantee for a period of years. Guarantee Periods may
range from 1 to 10 years. We are currently offering Guarantee Periods of 3, 5, 7
and 10 years in length. In the future we may offer Guarantee Periods of
different lengths or stop offering some Guarantee Periods.
Each payment or transfer allocated to a Guarantee Period must be at least $50.
We reserve the right to limit the number of additional purchase payments that
you may allocate to this Option.
INTEREST RATES. We will tell you what interest rates and Guarantee Periods we
are offering at a particular time. We will not change the interest rate that we
credit to a particular allocation until the end of the relevant Guarantee
Period. We may declare different interest rates for Guarantee Periods of the
same length that begin at different times.
We have no specific formula for determining the rate of interest that we will
declare initially or in the future. We will set interest rates based on
investment returns available at the time of the determination. In addition, we
may consider various other factors in determining interest rates including
regulatory and tax requirements, our sales commission and administrative
expenses, general economic trends, and competitive factors. WE DETERMINE THE
INTEREST RATES TO BE DECLARED IN OUR SOLE DISCRETION. WE CAN NEITHER PREDICT NOR
GUARANTEE WHAT THOSE RATES WILL BE IN THE FUTURE. For current interest rate
information, please contact your representative or Glenbrook at 1-800-755-5275.
The annual interest rate will never be less than the minimum guaranteed rate
stated in the Contract.
HOW WE CREDIT INTEREST. We will credit interest daily to each amount allocated
to a Guarantee Period at a rate that compounds to the annual interest rate that
we declared at the beginning of the applicable Guarantee Period.
18 - PROSPECTUS
<PAGE>
The following example illustrates how a purchase payment allocated to a
Guarantee Period would grow, given an assumed Guarantee Period and annual
interest rate:
<TABLE>
<S> <C>
Purchase Payment............................................ $10,000
Guarantee Period............................................ 5 years
Annual Interest Rate........................................ 4.50%
</TABLE>
END OF CONTRACT YEAR
<TABLE>
<CAPTION>
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Beginning Contract Value.............. $10,000.00
X (1 + Annual Interest Rate) 1.045
----------
$10,450.00
Contract Value at end of Contract
Year................................. $10,450.00
X (1 + Annual Interest Rate) 1.045
----------
$10,920.25
Contract Value at end of Contract
Year................................. $10,920.25
X (1 + Annual Interest Rate) 1.045
----------
$11,411.66
Contract Value at end of Contract
Year................................. $11,411.66
X (1 + Annual Interest Rate) 1.045
----------
$11,925.19
Contract Value at end of Contract
Year................................. $11,925.19
X (1 + Annual Interest Rate) 1.045
----------
$12,461.82
</TABLE>
TOTAL INTEREST CREDITED DURING GUARANTEE PERIOD = $2,461.82
($12,461.82-$10,000.00)
This example assumes no withdrawals during the entire 5 year Guarantee Period.
If you were to make a withdrawal, you might be required to pay a withdrawal
charge. In addition, the amount withdrawn might be increased or decreased by a
Market Value Adjustment that reflects changes in interest rates since the time
you invested the amount withdrawn. The hypothetical interest rate is for
illustrative purposes only and is not intended to predict future interest rates
to be declared under the Contract. Actual interest rates declared for any given
Guarantee Period may be more or less than shown above but will never be less
than the guaranteed minimum rate stated in the Contract.
RENEWALS. At the end of each Guarantee Period, we will mail you a notice asking
you what to do with the relevant amount, including the accrued interest. During
the 30-day period after the end of the Guarantee Period, you may:
1) take no action. We will automatically apply your money to a new
Guarantee Period of the same length as the expiring Guarantee Period.
The new Guarantee Period will begin on the day the previous Guarantee
Period ends. The new interest rate will be our then current declared
rate for a Guarantee Period of that length; or
2) instruct us to apply your money to one or more new Guarantee Periods of
your choice. The new Guarantee Period(s) will begin on the day the
previous Guarantee Period ends. The new interest rate will be our then
current declared rate for those Guarantee Periods; or
3) instruct us to transfer your money to the Standard Fixed Account Option.
Your allocation will be effective on the day the previous Guarantee
Period ends; or
4) instruct us to transfer all or a portion of your money to one or more
Variable Sub-Accounts of the Variable Account. We will effect the
transfer on the day we receive your instructions. We will not adjust the
amount transferred to include a Market Value Adjustment; or
5) withdraw all or a portion of your money. You may be required to pay a
withdrawal charge, but we will not adjust the amount withdrawn to
include a Market Value Adjustment. The amount withdrawn will be deemed
to have been withdrawn on the day the Guarantee Period ends. Amounts not
withdrawn will be applied to a new Guarantee Period of the same length
as the previous Guarantee Period. The new Guarantee Period will begin on
the day the previous Guarantee Period ends.
19 - PROSPECTUS
<PAGE>
MARKET VALUE ADJUSTMENT. All withdrawals and transfers from a Guarantee Period,
other than those taken during the 30 day period after such Guarantee Period
expires, are subject to a Market Value Adjustment. A Market Value Adjustment
also applies upon payment of a death benefit under Contracts issued before
May 1, 1997 and when you apply amounts currently invested in a Guarantee Period
to an Income Plan (unless paid or applied during the 30 day period after such
Guarantee Period expires).
We apply the Market Value Adjustment to reflect changes in interest rates from
the time the amount being withdrawn or transferred was allocated to a Guarantee
Period to the time of its withdrawal, transfer, or application to an Income
Plan. As such, you bear some investment risk on amounts you allocate to any
Guarantee Period.
The Market Value Adjustment may be positive or negative, depending on changes in
interest rates. If interest rates increase significantly from the time you make
a purchase payment, the Market Value Adjustment, withdrawal charge, premium
taxes, and income tax withholding (if applicable) could reduce the amount you
receive upon full withdrawal of your Contract Value to an amount that is less
than the purchase payment plus interest at the minimum guaranteed interest rate
under the Contract.
Generally, if the effective annual interest rate for the Guarantee Period is
lower than the applicable current effective annual interest rate for a period
equal to the time remaining in the Guarantee Period, then the Market Value
Adjustment will result in a lower amount payable to you or transferred.
Similarly, if the effective annual interest rate for the Guarantee Period is
higher than the applicable current effective annual interest rate, then the
Market Value Adjustment will result in a higher amount payable to you or
transferred.
For example, assume that you purchase a Contract and select an initial Guarantee
Period of 5 years that has an effective annual rate of 4.50%. Assume that at the
end of 3 years, you make a partial withdrawal. If, at that later time, the
current interest rate for a 2 year Guarantee Period is 4.00%, then the Market
Value Adjustment will be positive, which will result in an increase in the
amount payable to you. Conversely, if the current interest rate for the 2 year
Guarantee Period is 5.00%, then the Market Value Adjustment will be negative,
which will result in a decrease in the amount payable to you.
The formula for calculating Market Value Adjustments is set forth in Appendix B
to this prospectus, which also contains additional examples of the application
of the Market Value Adjustment.
INVESTMENT ALTERNATIVES: TRANSFERS
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TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. You may request transfers in writing or by telephone
according to the procedure described below. There is no minimum transfer amount.
We currently do not assess, but reserve the right to assess, a $10 charge on
each transfer in excess of 12 per Contract Year. All transfers to or from more
than one Portfolio on a given day count as one transfer.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Options for up to 6 months from the date
we receive your request. If we decide to postpone transfers from any Fixed
Account Option for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date we receive the
transfer request to the date we make the transfer.
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We limit the amount you may transfer from the Standard Fixed Account Option to
any other investment alternative in any Contract Year to the greater of:
1) 25% of the value in the Standard Fixed Account Option as of the most
recent Contract Anniversary (if this amount is less than $1,000, then up
to $1,000 may be transferred); or
2) 25% of the sum of all purchase payments and transfers to the Standard
Fixed Account Option as of the most recent Contract Anniversary.
If you transfer an amount from the Guaranteed Maturity Fixed Account Option
other than during the 30 day period after a Guarantee Period expires, we will
increase or decrease the amount by a Market Value Adjustment.
You may not transfer Contract Value into the DCA Fixed Account Option.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. In addition, you will have a
limited ability to make transfers from the Variable Sub-Accounts to increase the
proportion of your income payments consisting of fixed income payments. You may
not, however, convert any portion of your right to receive fixed income payments
into variable income payments.
You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed income payments. Your transfers must be at
least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-755-5275, if you first send
us a completed authorization form. The cut off time for telephone transfer
requests is 3:00 p.m. Central time. In the event that the New York Stock
Exchange closes early, i.e., before 3:00 p.m. Central Time, or in the event that
the Exchange closes early for a period of time but then reopens for trading on
the same day, we will process telephone transfer requests as of the close of the
Exchange on that particular day. We will not accept telephone requests received
at any telephone number other than the number that appears in this paragraph or
received after the close of trading on the Exchange.
We may suspend, modify or terminate the telephone transfer privilege at any time
without notice.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a
fixed dollar amount every month during the Accumulation Phase from any Variable
Sub-Account, the Standard Fixed Account Option or the Dollar Cost Averaging
Fixed Account Option, to any other Variable Sub-Account. You may not use the
Dollar Cost Averaging Program to transfer amounts to a Fixed Account Option.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money allocated
to the Fixed Account Options will not be included in the rebalancing.
We will rebalance your account each quarter according to your instructions. We
will transfer amounts among
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the Variable Sub-Accounts to achieve the percentage allocations you specify. You
can change your allocations at any time by contacting us in writing or by
telephone. The new allocation will be effective with the first rebalancing that
occurs after we receive your request. We are not responsible for rebalancing
that occurs prior to receipt of your request.
Example:
Assume that you want your initial purchase payment split among two Variable
Sub-Accounts. You want 40% to be in the STI Investment Grade Bond Variable
Sub-Account and 60% to be in the STI Capital Appreciation Variable
Sub-Account. Over the next 2 months the bond market does very well while the
stock market performs poorly. At the end of the first quarter, the STI
Investment Grade Bond Variable Sub-Account now represents 50% of your
holdings because of its increase in value. If you choose to have your
holdings rebalanced quarterly, on the first day of the next quarter, we
would sell some of your units in the STI Investment Grade Bond Variable
Sub-Account and use the money to buy more units in the STI Capital
Appreciation Variable Sub-Account so that the percentage allocations would
again be 40% and 60% respectively.
The Automatic Portfolio Rebalancing Program is available only during the
Accumulation Phase. The transfers made under the Program do NOT count towards
the 12 transfers you can make without paying a transfer fee. Portfolio
rebalancing is consistent with maintaining your allocation of investments among
market segments, although it is accomplished by reducing your Contract Value
allocated to the better performing segments.
EXPENSES
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As a Contract owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your Contract Value invested in each
Variable Sub-Account in proportion to the amount invested. If you surrender your
Contract, we will deduct the contract maintenance charge pro rated for the part
of the Contract Year elapsed, unless your Contract qualifies for a waiver,
described below. During the Payout Phase, we will deduct the charge
proportionately from each income payment.
The charge is to compensate us for the cost of administering Contracts and the
Variable Account. Maintenance costs include expenses we incur collecting
purchase payments; keeping records; processing death claims, cash withdrawals,
and policy changes; proxy statements; calculating Accumulation Unit Values and
income payments; and issuing reports to Contract owners and regulatory agencies.
We cannot increase the charge. However, we will waive this charge if:
- - total purchase payments equal $25,000 or more as of a Contract Anniversary or
upon full withdrawal, or
- - all of your money is allocated to the Fixed Account Options on a Contract
Anniversary.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.25%
of the average daily net assets you have invested in the Variable Sub-Accounts
(1.35% if you select the Enhanced Death Benefit Rider, available to purchasers
after May 1, 1997). The mortality and expense risk charge is for all the
insurance benefits available with your Contract (including our guarantee of
annuity rates and the death benefits), for certain expenses of the Contract, and
for assuming the risk (expense risk) that the current charges will be sufficient
in the future to cover the cost of administering the Contract. If the charges
under the Contract are not sufficient, then we will bear the loss. We charge an
additional 0.10% for the Enhanced Death Benefit Rider to compensate us for the
additional risk that we accept by providing the rider.
We guarantee that we will not raise the mortality and expense risk charge. We
assess the mortality and expense risk charge during both the Accumulation Phase
and the Payout Phase.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.10% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
intend this charge to cover actual administrative expenses that exceed the
revenues from the contract maintenance charge. We assess this charge each day
during the
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Accumulation Phase and the Payout Phase. We guarantee that we will not raise
this charge.
TRANSFER FEE
We do not currently impose a fee upon transfers among the investment
alternatives. However, we reserve the right to charge $10 per transfer after the
12th transfer in each Contract Year. We will NOT charge a transfer fee on
transfers that are part of a dollar cost averaging or automatic portfolio
rebalancing program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge of up to 7% of the purchase payment(s) you
withdraw. The charge declines annually to 0% over a 7 year period that begins on
the day we receive your purchase payment. A schedule showing how the charge
declines appears on page 7. During each Contract Year, you can withdraw up to
10% of the Contract Value on the date of the first withdrawal in that Contract
Year without paying the charge. Unused portions of this 10% "FREE WITHDRAWAL
AMOUNT" are NOT carried forward to future Contract Years.
We will deduct withdrawal charges, if applicable, from the amount paid. For
purposes of the withdrawal charge, we will treat withdrawals as coming from the
oldest purchase payments first. However, for federal income tax purposes, please
note that withdrawals are considered to have come first from earnings in the
Contract. Thus, for tax purposes, earnings are considered to come out first,
which means you pay taxes on the earnings portion of your withdrawal.
We do not apply a withdrawal charge in the following situations:
- - on the Payout Start Date;
- - withdrawals taken to satisfy IRS minimum distribution rules for this Contract,
or
- - withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.
Withdrawals may be subject to tax penalties or income tax and a Market Value
Adjustment. You should consult your own tax counsel or other tax advisers
regarding any withdrawals.
CONFINEMENT WAIVER. We will waive the withdrawal charge on all withdrawals taken
prior to the Payout Start Date under your Contract if the following conditions
are satisfied:
1. you or the Annuitant, if the Contract is owned by a company or other legal
entity, are confined to a long term care facility or a hospital (as defined in
the Contract) for at least 90 consecutive days. You or the Annuitant must enter
the long term care facility or hospital (as defined in the Contract) at least 30
days after the Issue Date;
2. you must request the withdrawal and provide written proof of the stay no
later than 90 days following the end of your or the Annuitant's stay at the long
term care facility or hospital (as defined in the Contract); and
3. a physician must have prescribed the stay and the stay must be medically
necessary (as defined in the Contract).
You may not claim this benefit if you or the Annuitant, or a member of your or
the Annuitant's immediate family, is the physician prescribing your or the
Annuitant's stay in a long term care facility.
TERMINAL ILLNESS WAIVER. We will waive the withdrawal charge on all withdrawals
taken prior to the Payout Start Date under your Contract if:
1. you (or the Annuitant, if the Contract owner is not a natural person) are
diagnosed by a physician (we may require a second opinion) with a terminal
illness at least 30 days after the Issue Date; and
2. you claim this benefit and deliver adequate proof of diagnosis to us.
UNEMPLOYMENT WAIVER. We will waive the withdrawal charge on one partial or a
full withdrawal taken prior to the Payout Start Date under your Contract, if you
meet the following requirements:
1. you (or the Annuitant, if the Contract owner is not a natural person) become
unemployed at least one year after the Issue Date;
2. you (or the Annuitant, if the Contract owner is not a natural person) have
been granted unemployment compensation for at least 30 consecutive days as a
result of that unemployment and we receive due proof thereof (as defined in the
Contract) prior to the time of the withdrawal request; and
3. you exercise this benefit within 180 days of your initial receipt of
unemployment compensation.
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You may exercise this benefit once during the life of your Contract.
Please refer to your Contract for more detailed information about the terms and
conditions of these waivers.
The laws of your state may limit the availability of these waivers and may also
change certain terms and/or benefits available under the waivers. You should
consult your Contract for further details on these variations. Also, even if you
do not need to pay our withdrawal charge because of these waivers, you still may
be required to pay taxes or tax penalties on the amount withdrawn. You should
consult your tax adviser to determine the effect of a withdrawal on your taxes.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. We are responsible for paying these taxes and
will deduct them from your Contract Value. Some of these taxes are due when the
Contract is issued, others are due when income payments begin or upon surrender.
Our current practice is not to charge anyone for these taxes until income
payments begin or when a total withdrawal occurs, including payment upon death.
At our discretion, we may discontinue this practice and deduct premium taxes
from the purchase payments. Premium taxes generally range from 0% to 4%,
depending on the state.
At the Payout Start Date, we deduct the applicable charge for premium taxes from
each investment alternative in the proportion that the Contract owner's value in
the investment alternative bears to the total Contract Value.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
We are not currently maintaining a provision for taxes. In the future, however,
we may maintain a provision for taxes if we determine, in our sole discretion,
that we will incur a tax as a result of the operation of the Variable Account.
We will deduct for any taxes we incur as a result of the operation of the
Variable Account, whether or not we previously made a provision for taxes and
whether or not it was sufficient. Our status under the Internal Revenue Code is
briefly described in the Statement of Additional Information.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the Portfolios. For a summary of current estimates
of those charges and expenses, see page 7. We may receive compensation from the
investment advisers or administrators of the Portfolios in connection with
administrative services we provide to the Portfolios.
ACCESS TO YOUR MONEY
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You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page 25.
The amount payable upon withdrawal is the Contract Value next computed after we
receive the request for a withdrawal at our headquarters, adjusted by any Market
Value Adjustment, less any withdrawal charges, contract maintenance charges,
income tax withholding, penalty tax, and any premium taxes. We will pay
withdrawals from the Variable Account within 7 days of receipt of the request,
subject to postponement in certain circumstances.
You can withdraw money from the Variable Account and/or the Fixed Account
Options. To complete a partial withdrawal from the Variable Account, we will
cancel Accumulation Units in an amount equal to the withdrawal and any
applicable withdrawal charge and premium taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time. You also may withdraw a
lesser amount if you are withdrawing your entire interest in a Variable Sub-
Account.
If you request a total withdrawal, we may require that you return your Contract
to us.
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POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted;
2. An emergency exists as defined by the SEC; or
3. The SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Options
for up to 6 months (or shorter period if required by law). If we delay payment
or transfer for 30 days or more, we will pay interest as required by law.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. The minimum amount of each systematic withdrawal is $50. At our
discretion, systematic withdrawals may not be offered in conjunction with Dollar
Cost Averaging or Automatic Portfolio Rebalancing.
Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. We
may modify or suspend the Systematic Withdrawal Program and charge a processing
fee for the service. If we modify or suspend the Systematic Withdrawal Program,
existing systematic withdrawal payments will not be affected.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal will reduce the Contract Value to less
than $2,000, we may treat it as a request for a withdrawal of your entire
Contract Value. Your Contract will terminate if you withdraw all of your
Contract Value. We will, however, ask you to confirm your withdrawal request
before terminating your Contract.
MINIMUM SURRENDER VALUE
Certain states may require us to endorse your Contract to provide a minimum
surrender value. Please refer to the endorsement for details.
INCOME PAYMENTS
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PAYOUT START DATE
You select the Payout Start Date in your application. The Payout Start Date is
the day that money is applied to an Income Plan. The Payout Start Date must be:
- - at least one month after the Issue Date; and
- - no later than the day the Annuitant reaches age 90, or the 10th Contract
Anniversary, if later.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
An Income Plan is a series of scheduled payments to you or someone you
designate. You may choose and change your choice of Income Plan until 30 days
before the Payout Start Date. If you do not select an Income Plan, we will make
income payments in accordance with Income Plan 1 with guaranteed payments for 10
years.
Three Income Plans are available under the Contract. Each is available to
provide:
- - fixed income payments;
- - variable income payments; or
- - a combination of the two.
The three Income Plans are:
INCOME PLAN 1 -- LIFE INCOME WITH GUARANTEED PAYMENTS. Under this plan, we make
periodic income payments for at least as long as the Annuitant lives. If the
Annuitant dies before we have made all of the guaranteed income payments, we
will continue to pay the remainder of the guaranteed income payments.
INCOME PLAN 2 -- JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS. Under
this plan, we make periodic income payments for at least as long as either the
Annuitant or the joint Annuitant is alive. If both the Annuitant and the joint
Annuitant die before we have made all of the guaranteed income payments, we will
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continue to pay the remainder of the guaranteed income payments.
INCOME PLAN 3 -- GUARANTEED PAYMENTS FOR A SPECIFIED PERIOD (5 YEARS TO 30
YEARS). Under this plan, we make periodic income payments for the period you
have chosen. These payments do not depend on the Annuitant's life. We will
deduct the mortality and expense risk charge from the Variable Account assets
supporting these payments even though we may not bear any mortality risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer Guarantee Periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant is alive before
we make each payment. Please note that under such Income Plans, if you elect to
take no minimum guaranteed payments, it is possible that the payee could receive
only 1 income payment if the Annuitant and any joint Annuitant both die before
the second income payment, or only 2 income payments if they die before the
third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving variable income payments
that do not depend on the life of the Annuitant (such as under Income Plan 3).
In that case you may terminate all or part of the Variable Account portion of
the income payments at any time and receive a lump sum equal to the present
value of the remaining variable payments associated with the amount withdrawn.
The minimum amount you may withdraw under this feature is $1,000.
We may make other Income Plans available.
You must apply at least the Contract Value in the Fixed Account Options on the
Payout Start Date to fixed income payments. If you wish to apply any portion of
your Fixed Account Option balance to provide variable income payments, you
should plan ahead and transfer that amount to the Variable Sub-Accounts prior to
the Payout Start Date. If you do not tell us how to allocate your Contract Value
among fixed and variable income payments, we will apply your Contract Value in
the Variable Account to variable income payments and your Contract Value in the
Fixed Account Options to fixed income payments.
We will apply your Contract Value, adjusted by a Market Value Adjustment, less
applicable taxes to your Income Plan on the Payout Start Date. If the amount
available to apply under an Income Plan is less than $2,000 or not enough to
provide an initial payment of at least $20, and state law permits, we may:
- - pay you the Contract Value, adjusted by any Market Value Adjustment and less
any applicable taxes, in a lump sum instead of the periodic payments you have
chosen, or
- - reduce the frequency of your payments so that each payment will be at least
$20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Portfolios and (b) the Annuitant could live longer or shorter than we
expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable income payments
will decrease. The dollar amount of your variable income payments will increase,
however, if the actual net investment return exceeds the assumed investment
rate. The dollar amount of the variable income payments stays level if the net
investment return equals the assumed investment rate. Please refer to the
Statement of Additional Information for more detailed information as to how we
determine variable income payments. We reserve the right to make other assumed
investment rates available.
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FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1. adjusting the portion of the Contract Value in any Fixed Account Option on
the Payout Start Date by any applicable Market Value Adjustment;
2. deducting any applicable premium tax; and
3. applying the resulting amount to the greater of (a) the appropriate value
from the income payment table in your Contract or (b) such other value as we are
offering at that time.
We may defer making fixed income payments for a period of up to 6 months or such
shorter time period required by law. If we defer payments for 30 days or more,
we will pay interest as required by law from the date we receive the withdrawal
request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age, except in
states that require unisex tables. We reserve the right to use income payment
tables that do not distinguish on the basis of sex to the extent permitted by
law. In certain employment-related situations, employers are required by law to
use the same income payment tables for men and women. Accordingly, if the
Contract is to be used in connection with an employment-related retirement or
benefit plan and we do not offer unisex annuity tables in your state, you should
consult with legal counsel as to whether the purchase of a Contract is
appropriate.
DEATH BENEFITS
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We will pay a death benefit if, prior to the Payout Start Date:
1. any Contract owner dies , or
2. the Annuitant dies, if the Contract owner is not a natural person.
We will pay the death benefit to the new Contract owner as determined
immediately after the death. The new Contract owner would be a surviving
Contract owner or, if none, the Beneficiary(ies).
A claim for a distribution on death must include DUE PROOF OF DEATH. We will
accept the following documentation as "Due Proof of Death":
- - a certified copy of a death certificate,
- - a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or
- - any other proof acceptable to us.
CONTRACTS ISSUED BEFORE MAY 1, 1997
DEATH BENEFIT AMOUNT. Prior to the Payout Start Date, the death benefit before
any Market Value Adjustment is equal to the greater of:
1. the Contract Value as of the date we receive a complete request for payment
of the death benefit, or
2. for each previous DEATH BENEFIT ANNIVERSARY, the Contract Value at that
Anniversary; plus any purchase payments made since that anniversary; minus any
amounts we paid the Contract owner (including income tax we withheld from you)
since that Anniversary.
A "Death Benefit Anniversary" is every seventh Contract Anniversary beginning
with the Issue Date. For example, the Issue Date, 7th and 14th Contract
Anniversaries are the first three Death Benefit Anniversaries.
We will adjust the death benefit by any applicable Market Value Adjustment as of
the date we determine the death benefit. The death benefit will never be less
than the sum of all purchase payments less any amounts previously paid to the
Contract owner (including income tax withholding).
DEATH BENEFIT PAYMENTS. The Contract owner eligible to receive death benefits
has the following options:
1. If the Contract owner is not a natural person, then the Contract owner must
receive the death benefit in a lump sum within 5 years of the date of death.
2. Otherwise, within 60 days of the date when the death benefit is calculated,
the Contract owner may elect to receive the death benefit under an Income Plan
or in a lump sum. Payments from the Income Plan must begin within one year of
the Date of Death and must be payable throughout:
- - the life of the Contract owner; or
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- - a period not to exceed the life expectancy of the Contract owner; or
- - the life of the Contract owner with payments guaranteed for a period not to
exceed the life expectancy of the Contract owner.
Any death benefit payable in a lump sum must be paid within five years of the
date of death. If no election is made, funds will be distributed at the end of
the 5 year period.
3. If the surviving spouse of the deceased Contract owner is the new Contract
owner, then the spouse may elect one of the options listed above or may continue
the Contract in the Accumulation Phase as if the death had not occurred. If the
Contract is continued in the Accumulation Phase, the surviving spouse may make a
single withdrawal of any amount within one year of the date of death without
incurring a withdrawal charge. However, any applicable Market Value Adjustment,
determined as of the date of the withdrawal, will apply.
CONTRACTS ISSUED ON OR AFTER
MAY 1, 1997
DEATH BENEFIT AMOUNT. Prior to the Payout Start Date, the death benefit is equal
to the greatest of:
1. the Contract Value as of the date we receive a complete request for payment
of the death benefit, or
2. the SETTLEMENT VALUE (that is, the amount payable on a full withdrawal of
Contract Value) on the date we receive a complete request for payment of the
death benefit, or
3. the Contract Value on each Death Benefit Anniversary prior to the date we
receive a complete request for payment of the death benefit, increased by
purchase payments made since that Death Benefit Anniversary and reduced by an
adjustment for any partial withdrawals since that Death Benefit Anniversary. The
adjustment is equal to (a) divided by (b) and the result multiplied by
(c) where:
(a) is the withdrawal amount,
(b) is the Contract Value immediately prior to the withdrawal, and
(c) is the Contract Value on the Death Benefit Anniversary adjusted by any
prior purchase payments or withdrawals made since that Anniversary.
We will calculate the Death Benefit Anniversary values until the oldest Contract
owner, or the Annuitant if the Contract owner is not a natural person, attains
age 80.
ENHANCED DEATH BENEFIT RIDER. For Contracts with the Enhanced Death Benefit
Rider, the death benefit will be the greatest of (1) through (3) above, or
(4) the value of the Enhanced Death Benefit Rider, which is the greatest of the
ANNIVERSARY VALUES as of the date we determine the death benefit. An
"Anniversary Value" is equal to the Contract Value on a Contract Anniversary,
increased by purchase payments made since that Anniversary and reduced by an
adjustment for any partial withdrawals since that Anniversary. The adjustment is
equal to (a) divided by (b), and the result multiplied by (c) where:
(a) is the withdrawal amount,
(b) is the Contract Value immediately prior to the withdrawal, and
(c) is the Contract Value on that Contract Anniversary adjusted by any prior
purchase payments and withdrawals since that Contract Anniversary.
We will calculate Anniversary Values for each Contract Anniversary prior to the
oldest Contract owner's or the Annuitant's, if the Contract owner is not a
natural person, 80th birthday. The Enhanced Death Benefit Rider will never be
greater than the maximum death benefit allowed by any non-forfeiture laws that
govern the Contract.
DEATH BENEFIT PAYMENTS. A death benefit will be paid:
1. if the Contract owner elects to receive the death benefit distributed in a
single payment within 180 days of the date of death, and
2. if the death benefit is paid as of the day the value of the death benefit is
determined. Otherwise, the Settlement Value will be paid. We are currently
waiving the 180 day limit, but we reserve the right to enforce the limitation in
the future.
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the Contract owner eligible to receive the distribution upon death is not a
natural person, the Contract owner may elect to receive the distribution upon
death in one or more distributions.
If the Contract owner is a natural person, the Contract owner may elect to
receive the distribution upon death either in one or more distributions or by
periodic payments through an Income Plan. Payments from the
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Income Plan must begin within one year of the date of death and must be payable
throughout:
- - the life of the Contract owner; or
- - a period not to exceed the life expectancy of the Contract owner; or
- - the life of the Contract owner with payments guaranteed to a period not to
exceed the life expectancy of the Contract owner.
If the surviving spouse of the deceased Contract owner is the new Contract
owner, then the spouse may elect one of the options listed above or may continue
the Contract in the Accumulation Phase as if the death had not occurred. If the
Contract is continued in the Accumulation Phase, the surviving spouse may make a
single withdrawal of any amount within one year of the date of death without
incurring a withdrawal charge. However, any applicable Market Value Adjustment,
determined as of the date of the withdrawal, will apply.
MORE INFORMATION
- -------------------------------------------------------------------
GLENBROOK
Glenbrook is the issuer of the Contract. Glenbrook is a stock life insurance
company organized under the laws of the State of Arizona in 1998. Previously,
Glenbrook was organized under the laws of the State of Illinois in 1992.
Glenbrook was originally organized under the laws of the State of Indiana in
1965. From 1965 to 1983 Glenbrook was known as "United Standard Life Assurance
Company" and from 1983 to 1992 as "William Penn Life Assurance Company of
America."
Glenbrook is currently licensed to operate in the District of Columbia and all
states except New York. We intend to offer the Contract in those jurisdictions
in which we are licensed and in which SunTrust Bank, Inc., through its banking
subsidiaries, conducts business. Our headquarters is located at 3100 Sanders
Road, Northbrook, Illinois, 60062.
Glenbrook is a wholly owned subsidiary of Allstate Life Insurance Company
("ALLSTATE LIFE"), a stock life insurance company incorporated under the laws of
the State of Illinois. Allstate Life is a wholly owned subsidiary of Allstate
Insurance Company, a stock property-liability insurance company incorporated
under the laws of Illinois. All of the outstanding capital stock of Allstate
Insurance Company is owned by The Allstate Corporation.
Glenbrook and Allstate Life entered into a reinsurance agreement effective
June 5, 1992. Under the reinsurance agreement, Allstate Life reinsures
substantially all of Glenbrook's liabilities under its various insurance
contracts. The reinsurance agreement provides us with financial backing from
Allstate Life. However, it does not create a direct contractual relationship
between Allstate Life and you. In other words, the obligations of Allstate Life
under the reinsurance agreement are to Glenbrook; Glenbrook remains the sole
obligor under the Contract to you.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns A+ (Superior) to Allstate Life which automatically reinsures all
net business of Glenbrook. A.M. Best Company also assigns Glenbrook the rating
of A+(r) because Glenbrook automatically reinsures all net business with
Allstate Life. Standard & Poor's Insurance Rating Services assigns an AA+ (Very
Strong) financial strength rating and Moody's assigns an Aa2 (Excellent)
financial strength rating to Glenbrook. Glenbrook shares the same ratings of its
parent, Allstate Life. These ratings do not reflect the investment performance
of the Variable Account. We may from time to time advertise these ratings in our
sales literature.
THE VARIABLE ACCOUNT
Glenbrook established the Glenbrook Life and Annuity Company Variable Annuity
Account on December 15, 1992. We have registered the Variable Account with the
SEC as a unit investment trust. The SEC does not supervise the management of the
Variable Account or Glenbrook.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Arizona law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Glenbrook.
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The Variable Account consists of 32 Variable Sub-Accounts, each of which invests
in a corresponding Portfolio. We may add new Variable Sub-Accounts or eliminate
one or more of them, if we believe marketing, tax, or investment conditions so
warrant. We do not guarantee the investment performance of the Variable Account,
its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.
THE PORTFOLIOS
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolio at their net asset value.
VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date, the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserve for such Contract allocated to the applicable Variable
Sub-Account by the net asset value per share of the corresponding Portfolio. The
votes decrease as income payments are made and as the reserves for the Contract
decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted on a pro-rata basis to reduce the votes eligible
to be cast.
We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi annual financial report we send to you.
CHANGES IN PORTFOLIOS. If the shares of any of the Portfolios are no longer
available for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Portfolio and substitute shares of another
eligible investment fund. Any substitution of securities will comply with the
requirements of the Investment Company Act of 1940. We also may add new Variable
Sub-Accounts that invest in additional mutual funds. We will notify you in
advance of any change.
CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The boards of directors or trustees of these Portfolios
monitor for possible conflicts among separate accounts buying shares of the
Portfolios. Conflicts could develop for a variety of reasons. For example,
differences in treatment under tax and other laws or the failure by a separate
account to comply with such laws could cause a conflict. To eliminate a
conflict, a Portfolio's board of directors or trustees may require a separate
account to withdraw its participation in a Portfolio. A Portfolio's net asset
value could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
DISTRIBUTION. ALFS, Inc.* ("ALFS"), located at 3100 Sanders Road, Northbrook, IL
60062-7154, serves as distributor of the Contracts. ALFS is a wholly owned
subsidiary of Allstate Life Insurance Company. ALFS is a registered broker
dealer under the Securities and Exchange Act of 1934, as amended ("EXCHANGE
ACT"), and is a member of the National Association of Securities Dealers, Inc.
We will pay commissions to broker-dealers who sell the contracts. Commissions
paid may vary, but we estimate that the total commissions paid on all Contract
sales will not exceed 6% of all purchase payments (on a present value basis).
These commissions are intended to cover distribution expenses. Sometimes, we
also pay the broker-dealer a persistency bonus in addition to the
* Effective May 1, 2000, Allstate Life Financial
Services, Inc. was renamed ALFS, Inc.
30 - PROSPECTUS
<PAGE>
standard commissions. In some states, Contracts may be sold by representatives
or employees of banks which may be acting as broker-dealers without separate
registration under the Exchange Act, pursuant to legal and regulatory
exceptions.
Glenbrook does not pay ALFS a commission for distribution of the Contracts. The
underwriting agreement with ALFS provides that we will reimburse ALFS for any
liability to Contract owners arising out of services rendered or Contracts
issued.
ADMINISTRATION. We have primary responsibility for all administration of the
Contracts and the Variable Account. We provide the following administrative
services, among others:
- - issuance of the Contracts;
- - maintenance of Contract owner records;
- - Contract owner services;
- - calculation of unit values;
- - maintenance of the Variable Account; and
- - preparation of Contract owner reports.
We will send you Contract statements and transaction confirmations at least
quarterly. You should notify us promptly in writing of any address change. You
should read your statements and confirmations carefully and verify their
accuracy. You should contact us promptly if you have a question about a periodic
statement. We will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.
We also will provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
QUALIFIED PLANS
If you use the Contract within a qualified plan, the plan may impose different
or additional conditions or limitations on withdrawals, waivers of withdrawal
charges, death benefits, Payout Start Dates, income payments, and other Contract
features. In addition, adverse tax consequences may result if qualified plan
limits on distributions and other conditions are not met. Please consult your
qualified plan administrator for more information.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Glenbrook on
certain federal securities law matters. All matters of state law pertaining to
the Contracts, including the validity of the Contracts and Glenbrook's right to
issue such Contracts under state insurance law, have been passed upon by Michael
J. Velotta, General Counsel of Glenbrook.
YEAR 2000
Glenbrook is heavily dependent upon complex computer systems for all phases of
its operations, including customer service, and policy and contract
administration. Since many of Glenbrook's older computer software programs
recognize only the last two digits of the year in any date, some software may
have failed to operate properly in or after the year 1999, if the software was
not reprogrammed or replaced ("YEAR 2000 ISSUE"). Glenbrook believes that many
of its counterparties and suppliers also had potential Year 2000 Issues which
could affect Glenbrook. In 1995, Allstate Insurance Company commenced a four
phase plan intended to mitigate and/or prevent the adverse effects of Year 2000
Issues. These strategies included normal development and enhancement of new and
existing systems, upgrades to operating systems already covered by maintenance
agreements and modifications to existing systems to make them Year 2000
compliant. The plan also included Glenbrook actively working with its major
external counterparties and suppliers to assess their compliance efforts and
Glenbrook's exposure to them. Because of the accuracy of this plan, and its
timely completion, Glenbrook has experienced no material impacts on its results
of operations, liquidity or financial position due to the Year 2000 issue. Year
2000 costs are expensed as incurred.
TAXES
- -------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. GLENBROOK
MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with
31 - PROSPECTUS
<PAGE>
regard to your individual circumstances, you should consult a competent tax
adviser.
TAXATION OF ANNUITIES IN GENERAL
TAX DEFERRAL. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
1. the Contract owner is a natural person,
2. the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
3. Glenbrook is considered the owner of the Variable Account assets for federal
income tax purposes.
NON-NATURAL OWNERS. As a general rule, annuity contracts owned by non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for Contracts owned by non-natural
persons.
DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Glenbrook does not have control over the Portfolios or their
investments, we expect the Portfolios to meet the diversification requirements.
OWNERSHIP TREATMENT. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of separate account investments may cause an investor to be
treated as the owner of the separate account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the separate account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Glenbrook does not know what standards will
be set forth in any regulations or rulings which the Treasury Department may
issue. It is possible that future standards announced by the Treasury Department
could adversely affect the tax treatment of your Contract. We reserve the right
to modify the Contract as necessary to attempt to prevent you from being
considered the federal tax owner of the assets of the Variable Account. However,
we make no guarantee that such modification to the Contract will be successful.
TAXATION OF PARTIAL AND FULL WITHDRAWALS. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
Contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a partial withdrawal
under a Qualified Contract, the portion of the payment that bears the same ratio
to the total payment that the investment in the Contract (i.e., nondeductible
IRA contributions, after tax contributions to qualified plans) bears to the
Contract Value, is excluded from your income. If you make a full withdrawal
under a non-Qualified Contract or a Qualified Contract, the amount received will
be taxable only to the extent it exceeds the investment in the Contract.
"Non-qualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than 5 taxable years after the taxable year of the first contribution
to any Roth IRA and which are:
- - made on or after the date the individual attains age 59 1/2,
- - made to a beneficiary after the Contract owner's death,
- - attributable to the Contract owner being disabled, or
32 - PROSPECTUS
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- - for a first time home purchase (first time home purchases are subject to a
lifetime limit of $10,000).
If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive as a loan under a Contract, and any assignment
or pledge (or agreement to assign or pledge) of the Contract Value is treated as
a withdrawal of such amount or portion.
TAXATION OF ANNUITY PAYMENTS. Generally, the rule for income taxation of annuity
payments received from a non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the Contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.
TAXATION OF ANNUITY DEATH BENEFITS. Death of a Contract owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included in income as follows:
1. if distributed in a lump sum, the amounts are taxed in the same manner as a
full withdrawal; or
2. if distributed under an annuity option, the amounts are taxed in the same
manner as an annuity payment. Please see the Statement of Additional Information
for more detail on distribution at death requirements.
PENALTY TAX ON PREMATURE DISTRIBUTIONS. A 10% penalty tax applies to the taxable
amount of any premature distribution from a Non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1. made on or after the date the Contract owner attains age 59 1/2;
2. made as a result of the Contract owner's death or disability;
3. made in substantially equal periodic payments over the Contract owner's life
or life expectancy;
4. made under an immediate annuity; or
5. attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
AGGREGATION OF ANNUITY CONTRACTS. All non-qualified deferred annuity contracts
issued by Glenbrook (or its affiliates) to the same Contract owner during any
calendar year will be aggregated and treated as one annuity contract for
purposes of determining the taxable amount of a distribution.
TAX QUALIFIED CONTRACTS
The income on qualified plan and IRA investments is tax-deferred and variable
annuities held by such plans do not receive any additional tax-deferral. You
should review the annuity features, including all benefits and expenses, prior
to purchasing a variable annuity in a qualified plan. Glenbrook reserves the
right to limit the availability of the Contract for use with any of the
Qualified Plans listed below.
Contracts may be used as investments with certain qualified plans such as:
- - Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Internal Revenue Code ("Code");
- - Roth IRAs under Section 408A of the Code;
- - Simplified Employee Pension Plans under Section 408(k) of the Code;
- - Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;
- - Tax Sheltered Annuities under Section 403(b) of the Code;
- - Corporate and Self Employed Pension and Profit Sharing Plans; and
- - State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans.
In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract.
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RESTRICTIONS UNDER SECTION 403(b) PLANS. Section 403(b) of the Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a
403(b) plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only:
1. on or after the date the employee
- attains age 59 1/2,
- separates from service,
- dies,
- becomes disabled, or
2. on account of hardship (earnings on salary reduction contributions may not be
distributed on the account of hardship).
These limitations do not apply to withdrawals where Glenbrook is directed to
transfer some or all of the Contract Value to another 403(b) plan.
INCOME TAX WITHHOLDING
Glenbrook is required to withhold federal income tax at a rate of 20% on all
"eligible rollover distributions" unless you elect to make a "direct rollover"
of such amounts to an IRA or eligible retirement plan. Eligible rollover
distributions generally include all distributions from Qualified Contracts,
excluding IRAs, with the exception of:
1. required minimum distributions, or
2. a series of substantially equal periodic payments made over a period of at
least 10 years, or, over the life (joint lives) of the participant (and
beneficiary).
Glenbrook may be required to withhold federal and state income taxes on any
distributions from non-Qualified Contracts or Qualified Contracts that are not
eligible rollover distributions, unless you notify us of your election to not
have taxes withheld.
ANNUAL REPORTS AND OTHER DOCUMENTS
- -------------------------------------------------------------------
Glenbrook's annual report on Form 10-K for the year ended December 31, 1999 is
incorporated herein by reference, which means that it is legally a part of this
prospectus.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Exchange Act are also incorporated herein by reference, which means
that they also legally become a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's "EDGAR"
system using the identifying number CIK No. 0000945094. The SEC maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http://www.sec.gov. You can also view these materials at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of SEC's Public Reference Room,
call 1-800-SEC-0330.
If you have received a copy of this prospectus, and would like a free copy of
any document incorporated herein by reference (other than exhibits not
specifically incorporated by reference into the text of such documents), please
write or call us at 3100 Sanders Road, Northbrook, Illinois 60062 (telephone:
1-800-755-5275).
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PERFORMANCE INFORMATION
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We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Yield refers to the income generated by an
investment in a Variable Sub-Account over a specified period. Total return
represents the change, over a specified period of time, in the value of an
investment in a Variable Sub-Account after reinvesting all income distributions.
All performance advertisements will include, as applicable, standardized yield
and total return figures that reflect the deduction of insurance charges, the
contract maintenance charge, and withdrawal charge. Performance advertisements
also may include total return figures that reflect the deduction of insurance
charges, but not the contract maintenance or withdrawal charges. The deduction
of such charges would reduce the performance shown. In addition, performance
advertisements may include aggregate average, year-by-year, or other types of
total return figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Portfolios for the periods beginning with the inception dates of the Portfolios
and adjusted to reflect current Contract expenses. You should not interpret
these figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
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EXPERTS
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The financial statements and related financial statement schedule of Glenbrook
as of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999, which are incorporated herein by reference, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and are included in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended, which are incorporated herein
by reference, have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report, which is incorporated herein by reference, and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
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APPENDIX A
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ACCUMULATION UNIT VALUE AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR
EACH VARIABLE SUB-ACCOUNT SINCE INCEPTION
BASIC POLICY
<TABLE>
<CAPTION>
FOR THE YEARS BEGINNING JANUARY 1 AND ENDING DECEMBER 31(1)
1995 1996 1997 1998 1999
-------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
AIM V. I. CAPITAL APPRECIATION SUB-ACCOUNT(5)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $14.58
Number of Units Outstanding, End of
Period..................................... - - - - 468,136
AIM V.I. HIGH YIELD SUB-ACCOUNT(5)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $10.89
Number of Units Outstanding, End of
Period..................................... - - - - 76,290
FEDERATED PRIME MONEY FUND II SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of
Period..................................... $10.00 $10.05 $10.42 $10.79 $11.17
Accumulation Unit Value, End of Period...... $10.05 $10.42 $10.79 $11.17 $11.54
Number of Units Outstanding, End of
Period..................................... 132,650 488,506 343,107 483,734 481,530
OPPENHEIMER MULTIPLE STRATEGIES SUB-ACCOUNT(5)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $11.14
Number of Units Outstanding, End of
Period..................................... - - - - 186,352
OPPENHEIMER STRATEGIC BOND SUB-ACCOUNT(5)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $10.25
Number of Units Outstanding, End of
Period..................................... - - - - 73,123
STI CAPITAL APPRECIATION SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of
Period..................................... $10.00 $10.66 $13.10 $17.53 $22.31
Accumulation Unit Value, End of Period...... $10.66 $13.01 $17.53 $22.31 $23.93
Number of Units Outstanding, End of
Period..................................... 103,697 1,680,419 2,788,068 3,048,172 3,298,412
STI INTERNATIONAL EQUITY SUB-ACCOUNT(3)
Accumulation Unit Value, Beginning of
Period..................................... - $10.00 $10.15 $11.69 $12.79
Accumulation Unit Value, End of Period...... - $10.15 $11.69 $12.79 $13.73
Number of Units Outstanding, End of
Period..................................... - 97,975 734,702 785,600 681,256
STI INVESTMENT GRADE BOND SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of
Period..................................... $10.00 $10.33 $10.42 $11.20 $12.09
Accumulation Unit Value, End of Period...... $10.33 $10.42 $11.20 $12.09 $11.72
Number of Units Outstanding, End of
Period..................................... 40,503 506,887 685,967 974,155 996,889
STI MID-CAP EQUITY SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of
Period..................................... $10.00 $10.28 $11.77 $14.20 $15.03
Accumulation Unit Value, End of Period...... $10.28 $11.77 $14.20 $15.03 $16.88
Number of Units Outstanding, End of
Period..................................... 80,549 959,682 1,354,069 1,398,523 1,236,668
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEARS BEGINNING JANUARY 1 AND ENDING DECEMBER 31(1)
1995 1996 1997 1998 1999
-------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STI SMALL CAP VALUE EQUITY SUB-ACCOUNT(4)
Accumulation Unit Value, Beginning of
Period..................................... - - $10.00 $9.76 $8.46
Accumulation Unit Value, End of Period...... - - $9.76 $8.46 $7.95
Number of Units Outstanding, End of
Period..................................... - - 111,688 339,380 330,184
STI VALUE INCOME STOCK SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of
Period..................................... $10.00 $10.69 $12.51 $15.66 $16.95
Accumulation Unit Value, End of Period...... $10.69 $12.51 $15.66 $16.95 $16.22
Number of Units Outstanding, End of
Period..................................... 124,596 2,238,993 3,718,933 3,867,770 3,911,784
TEMPLETON BOND (CLASS 2) SUB-ACCOUNT(5,6)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $9.26
Number of Units Outstanding, End of
Period..................................... - - - - 32,244
TEMPLETON STOCK (CLASS 2) SUB-ACCOUNT(5,6)
Accumulation Unit Value, Beginning of
Period..................................... - - - - $10.00
Accumulation Unit Value, End of Period...... - - - - $12.92
Number of Units Outstanding, End of
Period..................................... - - - - 147,546
</TABLE>
No Accumulation Unit Values are shown for the following Variable Sub-Accounts
that commenced operations as of the date of this prospectus: AIM V.I. Balanced,
AIM V.I. Growth, AIM V.I. Growth and Income, AIM V.I. Value, Fidelity VIP
Contrafund-Registered Trademark-, Fidelity VIP Equity-Income, Fidelity VIP
Growth, Fidelity VIP High Income, Fidelity VIP Index 500, Fidelity VIP Overseas,
MFS Emerging Growth, MFS Growth With Income, MFS Research, Oppenheimer
Aggressive Growth, Oppenheimer Capital Appreciation, Oppenheimer Global
Securities, Oppenheimer Main Street Growth & Income, STI Growth and Income, STI
Quality Growth Stock, Templeton Global Income Securities (Class 2), and
Templeton Growth Securities (Class 2).
(1) The Accumulation Unit Values in this table reflect a Mortality and Expense
Risk Charge of 1.25% and an Administrative Expense Charge of 0.10%.
(2) Variable Sub-Accounts that commenced operations on October 2, 1995.
(3) Variable Sub-Accounts that commenced operations on November 7, 1996.
(4) Variable Sub-Accounts that commenced operations on October 21, 1997.
(5) Variable Sub-Accounts that commenced operations on January 10, 1999.
(6) Effective May 1, 2000, the Portfolios in which the Templeton Bond (Class 2)
and Templeton Stock (Class 2) Variable Sub-Accounts invested were merged
into the Templeton Global Income Securities (Class 2) and Templeton Growth
Securities (Class 2) Portfolios. Accordingly, for administrative
convenience, as of May 1, 2000, the corresponding Variable Sub-Accounts
merged with and into new Variable Sub-Accounts named Templeton Global Income
Securities (Class 2) and Templeton Growth Securities (Class 2) respectively,
with Accumulation Unit Values starting at $10.00.
A-2
<PAGE>
ACCUMULATION UNIT VALUES AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR
EACH VARIABLE SUB-ACCOUNT SINCE INCEPTION
BASIC POLICY PLUS ENHANCED DEATH BENEFIT RIDER
<TABLE>
<CAPTION>
FOR THE YEARS BEGINNING JANUARY 1 AND
ENDING DECEMBER 31(1)
1997 1998 1999
--------- ----------- -----------
<S> <C> <C> <C>
AIM V. I. CAPITAL APPRECIATION SUB-ACCOUNT(4)
Accumulation Unit Value, Beginning of Period.............. - - $10.00
Accumulation Unit Value, End of Period.................... - - $14.57
Number of Units Outstanding, End of Period................ - - 592,699
AIM V.I. HIGH YIELD SUB-ACCOUNT(4)
Accumulation Unit Value, Beginning of Period.............. - - $10,00
Accumulation Unit Value, End of Period.................... - - $10.87
Number of Units Outstanding, End of Period................ - - 115,113
FEDERATED PRIME MONEY FUND II SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $10.43 $10.78 $11.15
Accumulation Unit Value, End of Period.................... $10.78 $11.15 $11.51
Number of Units Outstanding, End of Period................ 240,430 266,876 268,039
OPPENHEIMER MULTIPLE STRATEGIES SUB-ACCOUNT(4)
Accumulation Unit Value, Beginning of Period.............. - - $10.00
Accumulation Unit Value, End of Period.................... - - $11.13
Number of Units Outstanding, End of Period................ - - 180,771
OPPENHEIMER STRATEGIC BOND SUB-ACCOUNT(4)
Accumulation Unit Value, Beginning of Period.............. - - $10.00
Accumulation Unit Value, End of Period.................... - - $10.24
Number of Units Outstanding, End of Period................ - - 98,211
STI CAPITAL APPRECIATION SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $13.01 $17.52 $22.27
Accumulation Unit Value, End of Period.................... $17.52 $22.27 $23.87
Number of Units Outstanding, End of Period................ 740,261 1,683,922 2,274,389
STI INTERNATIONAL EQUITY SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $10.15 $11.69 $12.76
Accumulation Unit Value, End of Period.................... $11.69 $12.76 $13.69
Number of Units Outstanding, End of Period................ 449,232 694,787 650,400
STI INVESTMENT GRADE BOND SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $10.43 $11.19 $12.07
Accumulation Unit Value, End of Period.................... $11.19 $12.07 $11.69
Number of Units Outstanding, End of Period................ 187,763 604,179 847,001
STI MID-CAP EQUITY SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $11.77 $14.19 $15.01
Accumulation Unit Value, End of Period.................... $14.19 $15.01 $16.84
Number of Units Outstanding, End of Period................ 329,138 671,132 584,235
STI SMALL CAP VALUE EQUITY SUB-ACCOUNT(3)
Accumulation Unit Value, Beginning of Period.............. $10.00 $9.76 $8.45
Accumulation Unit Value, End of Period.................... $9.76 $8.45 $7.93
Number of Units Outstanding, End of Period................ 161,267 706,858 545,289
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEARS BEGINNING JANUARY 1 AND
ENDING DECEMBER 31(1)
1997 1998 1999
--------- ----------- -----------
<S> <C> <C> <C>
STI VALUE INCOME STOCK SUB-ACCOUNT(2)
Accumulation Unit Value, Beginning of Period.............. $12.52 $15.65 $16.90
Accumulation Unit Value, End of Period.................... $15.65 $16.90 $16.18
Number of Units Outstanding, End of Period................ 923,837 1,961,704 2,345,908
TEMPLETON BOND (CLASS 2) SUB-ACCOUNT(4,5)
Accumulation Unit Value, Beginning of Period.............. - - $10.00
Accumulation Unit Value, End of Period.................... - - $9.25
Number of Units Outstanding, End of Period................ - - 23,888
TEMPLETON STOCK (CLASS 2) SUB-ACCOUNT(4,5)
Accumulation Unit Value, Beginning of Period.............. - - $10.00
Accumulation Unit Value, End of Period.................... - - $12.91
Number of Units Outstanding, End of Period................ - - 190,464
</TABLE>
No Accumulation Unit Values are shown for the following Variable Sub-Accounts
that commenced operations as of the date of this prospectus: AIM V.I. Balanced,
AIM V.I. Growth, AIM V.I. Growth and Income, AIM V.I. Value, Fidelity VIP
Contrafund-Registered Trademark-, Fidelity VIP Equity-Income, Fidelity VIP
Growth, Fidelity VIP High Income, Fidelity VIP Index 500, Fidelity VIP Overseas,
MFS Emerging Growth, MFS Growth With Income, MFS Research, Oppenheimer
Aggressive Growth, Oppenheimer Capital Appreciation, Oppenheimer Global
Securities, Oppenheimer Main Street Growth & Income, STI Growth and Income, STI
Quality Growth Stock, Templeton Global Income Securities (Class 2), and
Templeton Growth Securities (Class 2).
(1) The Accumulation Unit Values in this table reflect a Mortality and Expense
Risk Charge of 1.35% and an Administrative Expense Charge of 0.10%.
(2) Variable Sub-Accounts made available with the Enhanced Death Benefit Rider
on May 1, 1997.
(3) Variable Sub-Accounts made available with the Enhanced Death Benefit Rider
on October 21, 1997.
(4) Variable Sub-Accounts made available with the Enhanced Death Benefit Rider
on January 10, 1999.
(5) Effective May 1, 2000, the Portfolios in which the Templeton Bond (Class 2)
and Templeton Stock (Class 2) Variable Sub-Accounts invested were merged
into the Templeton Global Income Securities (Class 2) and Templeton Growth
Securities (Class 2) Portfolios. Accordingly, for administrative
convenience, as of May 1, 2000, the corresponding Variable Sub-Accounts
merged with and into new Variable Sub-Accounts named Templeton Global Income
Securities (Class 2) and Templeton Growth Securities (Class 2) respectively,
with Accumulation Unit Values starting at $10.00.
A-4
<PAGE>
APPENDIX B
MARKET VALUE ADJUSTMENT
- -------------------------------------------------------------------
The Market Value Adjustment is based on the following:
I = the interest crediting rate for a Guarantee Period
N = the number of whole and partial years from the date we receive the
transfer, withdrawal, or death benefit request, or from the Payout
Start Date to the end of the Guarantee Period; and
J = the current interest crediting rate offered for a Guarantee Period of
length N on the date we determine the Market Value Adjustment.
J will be determined by a linear interpolation between the current
interest rates for the next higher and lower integral years. For
purposes of interpolation, current interest rates for Guarantee
Periods not available under this Contract will be calculated in a
manner consistent with those which are available.
The Market Value Adjustment factor is determined from the following formula:
.9 X (I - J) X N
Any transfer, withdrawal, or death benefit (depending on your Contract) paid or
amount applied to an Income Plan from a Guarantee Period (except during the 30
day period after such Guarantee Period expires) will be multiplied by the Market
Value Adjustment factor to determine the Market Value Adjustment.
EXAMPLES OF MARKET VALUE ADJUSTMENT
<TABLE>
<S> <C>
Purchase Payment: $10,000 allocated to a Guarantee Period
Guarantee Period: 5 years
Interest Rate: 4.50%
Full Surrender: End of Contract Year 3
</TABLE>
NOTE: This illustration assumes that premium taxes are not applicable.
EXAMPLE 1: (ASSUMES DECLINING INTEREST RATES)
<TABLE>
<S> <C>
Step 1. Calculate Contract Value at End of $10,000.00 X (1.045) to the power of 3 =
Contract Year 3: $11,411.66
Step 2. Calculate the Free Withdrawal Amount: .10 X $11,411.66 = $1,141.17
Step 3. Calculate the Withdrawal Charge: .05 X ($10,000.00 - $1,141.17) = $442.94
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Step 4. Calculate the Market Value Adjustment: I = 4.5%
J = 4.2%
730 days
N = ------- = 2
365 days
Market Value Adjustment Factor:
.9 X (I X J) X N
= .9 X (.045 - .042) X (730/365)
= .0054
Market Value Adjustment = Market
Value Adjustment Factor X Amount
Subject to Market Value
Adjustment:
= .0054 X $11,411.66 = $61.62
Step 5. Calculate the amount received by Customers
as a result of full withdrawal at the end of $11,411.66 - $442.94 + $61.62 =
Contract Year 3: $11,030.34
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
EXAMPLE 2: (ASSUMES RISING INTEREST RATES)
Step 1. Calculate Contract Value at End of $10,000.00 X (1.045) to the power
Contract Year 3: of 3 = $11,411.66
Step 2. Calculate the Free Withdrawal Amount: .10 X ($11,411.66) = $1,141.17
.05 X ($10,000.00 - $1,141.17) =
Step 3. Calculate the Withdrawal Charge: $442.94
Step 4. Calculate the Market Value Adjustment: I = 4.5%
J = 4.8%
730 days
N = ------- = 2
365 days
Market Value Adjustment Factor:
.9 X (I - J) X N
.9 X (.045 - .048) X (730/365) =
-.0054
Market Value Adjustment = Market
Value Adjustment Factor X Amount
Subject to Market Value
Adjustment:
= -.0054 X $11,411.66 = -$61.62
Step 5. Calculate the amount received by Customers
as a result of full withdrawal at the end of $11,411.66 - $442.94 - $61.62 =
Contract Year 3: $10,907.10
</TABLE>
B-2
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION PAGE
<S> <C>
- ----------------------------------------------------------------------------
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS 2
- ----------------------------------------------------------------------------
THE CONTRACT 3
- ----------------------------------------------------------------------------
Purchases 3
- ----------------------------------------------------------------------------
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) 3
- ----------------------------------------------------------------------------
PERFORMANCE INFORMATION 4
- ----------------------------------------------------------------------------
CALCULATION OF ACCUMULATION UNIT VALUES 9
- ----------------------------------------------------------------------------
CALCULATION OF VARIABLE INCOME PAYMENTS 10
- ----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION PAGE
<S> <C>
- ----------------------------------------------------------------------------
GENERAL MATTERS 11
- ----------------------------------------------------------------------------
Incontestability 11
- ----------------------------------------------------------------------------
Settlements 11
- ----------------------------------------------------------------------------
Safekeeping of the Variable Account's Assets 11
- ----------------------------------------------------------------------------
Premium Taxes 11
- ----------------------------------------------------------------------------
Tax Reserves 11
- ----------------------------------------------------------------------------
FEDERAL TAX MATTERS 12
- ----------------------------------------------------------------------------
EXPERTS 14
- ----------------------------------------------------------------------------
FINANCIAL STATEMENTS F-1
- ----------------------------------------------------------------------------
</TABLE>
------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE
ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.
C-1
<PAGE>
THE STI CLASSIC VARIABLE ANNUITY
Glenbrook Life and Annuity Company Statement of Additional Information
Glenbrook Life and Annuity Company dated May 4, 2000
Variable Annuity Account
3100 Sanders Road, Northbrook, IL 60062
1-800/755-5275
This Statement of Additional Information supplements the information in the
prospectus for The STI Classic Variable Annuity. This Statement of Additional
Information is not a prospectus. You should read it with the prospectus, dated
May 4, 2000, for the Contract. You may obtain a prospectus by calling or writing
us at the address or telephone number listed above.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Description Page
<S> <C>
Additions, Deletions or Substitutions of Investments 2
The Contract 3
Purchases 3
Tax-free Exchanges (1035 Exchanges, Rollovers
and Transfers) 3
Performance Information 4
Calculation of Accumulation Unit Values 9
Calculation of Variable Income Payments 10
General Matters 11
Incontestability 11
Settlements 11
Safekeeping of the Variable Account's Assets 11
Premium Taxes 11
Tax Reserves 11
Federal Tax Matters 12
Experts 14
Financial Statements F-1
</TABLE>
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
We may add, delete, or substitute the Portfolio shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any
Portfolio with those of another Portfolio of the same or different mutual fund
if the shares of the Portfolio are no longer available for investment, or if we
believe investment in any Portfolio would become inappropriate in view of the
purposes of the Variable Account.
We will not substitute shares attributable to a Contract owner's interest in a
Variable Sub-Account until we have notified the Contract owner of the change,
and until the Securities and Exchange Commission has approved the change, to the
extent such notification and approval are required by law. Nothing contained in
this Statement of Additional Information shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by Contract owners.
We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Portfolio of the same or different mutual fund. We may establish new
Variable Sub-Accounts when we believe marketing needs or investment conditions
warrant. We determine the basis on which we will offer any new Variable
Sub-Accounts in conjunction with the Contract to existing Contract owners.
We may eliminate one or more Variable Sub-Accounts if, in our sole discretion,
marketing, tax or investment conditions so warrant.
We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Portfolios. If we
believe the best interests of persons having voting rights under the Contracts
would be served, we may operate the Variable Account as a management company
under the Investment Company Act of 1940 or we may withdraw its registration
under such Act if such registration is no longer required.
<PAGE>
THE CONTRACT
The Contract is primarily designed to aid individuals in long-term financial
planning. You can use it for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.
PURCHASE OF CONTRACTS
We offer the Contracts to the public through banks as well as brokers licensed
under the federal securities laws and state insurance laws. The principal
underwriter for the Variable Account, ALFS, Inc. ("ALFS"), distributes the
Contracts. ALFS is an affiliate of Glenbrook. The offering of the Contracts is
continuous. We do not anticipate discontinuing the offering of the Contracts,
but we reserve the right to do so at any time.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a Contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code ("Code"). Except as required by federal law in calculating the basis of the
Contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract owner
contemplating any such exchange, rollover or transfer of a Contract should
contact a competent tax adviser with respect to the potential effects of such a
transaction.
<PAGE>
PERFORMANCE INFORMATION
From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract owner. Also, please note that the
performance figures shown do not reflect any applicable taxes.
STANDARDIZED TOTAL RETURNS
A Variable Sub-Account's standardized total return represents the average annual
total return of that Sub-Account over a particular period. We compute
standardized total return by finding the annual percentage rate that, when
compounded annually, will accumulate a hypothetical $1,000 purchase payment to
the redeemable value at the end of the one, five or ten year period, or for a
period from the date of commencement of the Variable Sub-Account's operations,
if shorter than any of the foregoing. We use the following formula prescribed by
the SEC for computing standardized total return:
n
1000(1 + T) = ERV
where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of 1, 5, or 10 year periods or
shorter period
n = number of years in the period
1000 = hypothetical $1,000 investment
When factoring in the withdrawal charge assessed upon redemption, we exclude the
Free Withdrawal Amount, which is the amount you can withdraw from the Contract
without paying a withdrawal charge. We also use the withdrawal charge that would
apply upon redemption at the end of each period. Thus, for example, when
factoring in the withdrawal charge for a one year standardized total return
calculation, we would use the withdrawal charge that applies to a withdrawal of
a purchase payment made one year prior.
When factoring in the contract maintenance charge, we pro rate the charge by
dividing (i) the contract maintenance charge by (ii) the average contract size
of $57,476. We then multiply the resulting percentage by a hypothetical $1,000
investment.
<PAGE>
The standardized total returns for the Variable Sub-Accounts for the periods
ended December 31, 1999 are set out below. No standardized total returns are
shown for the Federated Prime Money Fund II Variable Sub-Account. In
addition, no standardized total returns are set out for the following
Sub-Accounts, which commenced operations as of the date of this prospectus:
AIM V.I. Balanced, AIM V.I. Growth, AIM V.I. Growth and Income, AIM V.I.
Value, Fidelity VIP Contrafund-Registered Trademark-, Fidelity VIP
Equity-Income, Fidelity VIP Growth, Fidelity VIP High Income, Fidelity VIP
Index 500, Fidelity VIP Overseas, MFS Emerging Growth, MFS Growth With
Income, MFS Research, Oppenheimer Aggressive Growth, Oppenheimer Capital
Appreciation, Oppenheimer Global Securities, Oppenheimer Main Street Growth
and Income, STI Growth and Income, STI Quality Growth Stock, Templeton Global
Income Securities, and Templeton Growth Securities.
(Without the Enhanced Death Benefit Option)
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception*
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 34.91% N/A 38.30%
AIM V.I. High Yield 3.09% N/A 2.01
Oppenheimer Multiple Strategies 4.28% N/A 4.50%
Oppenheimer Strategic Bond (4.10%) N/A (4.18%)
STI Capital Appreciation 1.41% N/A 21.97%
STI International Equity 1.49% N/A 9.24%
STI Investment Grade Bond (8.32%) N/A 3.08%
STI Mid-Cap Equity 6.17% N/A 12.33%
STI Small Cap Equity (11.20%) N/A (11.91%)
STI Value Income Stock 9.53% N/A 11.28%
</TABLE>
* The Variable Sub-Accounts commenced operations on the following dates:
AIM V.I. Capital Appreciation January 14, 1999
AIM V.I. High Yield January 14, 1999
Oppenheimer Multiple Strategies January 14, 1999
Oppenheimer Strategic Bond January 14, 1999
STI Capital Appreciation October 6, 1995
STI International Equity November 7, 1996
STI Investment Grade Bond October 6, 1995
STI Mid-Cap Equity October 6, 1995
STI Small Cap Equity October 20, 1997
STI Value Income October 6, 1995
(With the Enhanced Death Benefit Option)*
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception**
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 34.77% N/A 38.17%
AIM V.I. High Yield 2.99% N/A 1.91%
Oppenheimer Multiple Strategies 4.17% N/A 4.39%
Oppenheimer Strategic Bond (4.19%) N/A (4.28%)
STI Capital Appreciation 1.31 N/A 21.84%
STI International Equity 1.39% N/A 9.13%
STI Investment Grade Bond (8.42%) N/A 2.97%
STI Mid-Cap Equity 6.07% N/A 12.22%
STI Small Cap Equity (11.29%) N/A (12.00%)
STI Value Income Stock (9.62%) N/A 11.17%
</TABLE>
<PAGE>
*The Enhanced Death Benefit Option was made available for each Variable
Sub-Account on May 1, 1997, except that it became available for the STI Small
Cap Equity Variable Sub-Account on October 20, 1997, and for the AIM,
Oppenheimer, and Templeton Variable Sub-Accounts on January 14, 1999. The STI
Variable Sub-Accounts (other than Small Cap Equity) commenced operations prior
to the time the Enhanced Death Benefit Option became available. Accordingly, the
"Since Inception" performance figures shown for those Variable Sub-Accounts
reflects the historic performance of those Variable Sub-Accounts, adjusted to
reflect the current charge for the Enhanced Death Benefit Option.
**The inception dates of the Variable Sub-Accounts appear in the footnote to the
preceding table.
NON-STANDARDIZED TOTAL RETURNS
From time to time, we also may quote average annual total returns that do not
reflect the withdrawal charge. We calculate these "non-standardized total
returns" in exactly the same way as the standardized total returns described
above, except that we replace the ending redeemable value of the hypothetical
account for the period with an ending redeemable value for the period that does
not take into account any charges on amounts surrendered.
In addition, we may advertise the total return over different periods of time by
means of aggregate, average, year-by-year or other types of total return
figures. Such calculations would not reflect deductions for withdrawal charges
which may be imposed on the Contracts which, if reflected, would reduce the
performance quoted. The formula for computing such total return quotations
involves a per unit change calculation. This calculation is based on the
Accumulation Unit Value at the end of the defined period divided by the
Accumulation Unit Value at the beginning of such period, minus 1. The periods
included in such advertisements are "year-to- date" (prior calendar year end to
the day of the advertisement); "year to most recent quarter" (prior calendar
year end to the end of the most recent quarter); "the prior calendar year"; "
'n' most recent Calendar Years"; and "Inception (commencement of the
Sub-account's operation) to date" (day of the advertisement).
The non-standardized total returns for the Variable Sub-Accounts for the
periods ended December 31, 1999 are set out below. No non-standardized total
returns are shown for the Federated Prime Money Fund II Variable Sub-Account.
In addition, no non-standardized total returns are set out for the following
Sub-Accounts, which commenced operations as of the date of this prospectus:
AIM V.I. Balanced, AIM V.I. Growth, AIM V.I. Growth and Income, AIM V.I.
Value, Fidelity VIP Contrafund-Registered Trademark-, Fidelity VIP
Equity-Income, Fidelity VIP Growth, Fidelity VIP High Income, Fidelity VIP
Index 500, Fidelity VIP Overseas, MFS Emerging Growth, MFS Growth With
Income, MFS Research, Oppenheimer Aggressive Growth, Oppenheimer Capital
Appreciation, Oppenheimer Global Securities, Oppenheimer Main Street Growth
and Income, STI Growth and Income, STI Quality Growth Stock, Templeton Global
Income Securities, and Templeton Growth Securities.
(Without the Enhanced Death Benefit Option)
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception*
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 42.68% N/A 48.07%
AIM V.I. High Yield 9.04% N/A 9.23%
Oppenheimer Multiple Strategies 10.30% N/A 11.89%
Oppenheimer Strategic Bond 1.45% N/A 2.60%
STI Capital Appreciation 7.27% N/A 22.81%
STI International Equity 7.35% N/A 10.60%
STI Investment Grade Bond (3.02%) N/A 3.82%
STI Mid-Cap Equity 12.30% N/A 13.13%
STI Small Cap Equity (6.06%) N/A (9.92%)
STI Value Income Stock (4.30%) N/A 12.07%
</TABLE>
*The inception dates of the Variable Sub-Accounts appear in the footnote to the
first table under "Standardized Total Returns."
(With the Enhanced Death Benefit Option)*
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception**
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 42.53% N/A 47.92%
AIM V.I. High Yield 8.93% N/A 9.12%
Oppenheimer Multiple Strategies 10.19% N/A 11.78%
Oppenheimer Strategic Bond 1.35% N/A 2.50%
<PAGE>
STI Capital Appreciation 7.16% N/A 22.69%
STI International Equity 7.24% N/A 10.49%
STI Investment Grade Bond (3.12) N/A 3.71%
STI Mid-Cap Equity 12.19% N/A 13.02%
STI Small Cap Equity (6.15%) N/A (10.02%)
STI Value Income Stock (4.39%) N/A 11.96%
Templeton Bond (7.41%) N/A (7.82%)
Templeton Stock 26.93% N/A 30.44%
</TABLE>
*The Enhanced Death Benefit Option was made available for each Variable
Sub-Account on May 1, 1997, except that it became available for the STI Small
Cap Equity Variable Sub-Account on October 20, 1997, and for the AIM,
Oppenheimer, and Templeton Variable Sub-Accounts on January 14, 1999. The STI
Variable Sub-Accounts (other than Small Cap Equity) commenced operations prior
to the time the Enhanced Death Benefit Option became available. Accordingly, the
"Since Inception" performance figures shown for those Variable Sub-Accounts
reflect the historic performance of those Variable Sub-Accounts, adjusted to
reflect the current charge for the Enhanced Death Benefit Option.
**The inception dates of the Variable Sub-Accounts appear in the footnote to the
first table under "Standardized Total Returns."
ADJUSTED HISTORICAL TOTAL RETURNS
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We will calculate such "adjusted
historical total returns" using the performance of the underlying Portfolios and
adjusting such performance to reflect the current level of charges that apply to
the Variable Sub-Accounts under the Contract and the contract maintenance charge
and the appropriate withdrawal charge.
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended December 31, 1999 are set out below. No adjusted historical total
returns are set out for the following Sub-Accounts: STI Growth and Income,
STI Quality Growth Stock, Templeton Global Income Securities, and Templeton
Growth Securities.
(Without the Enhanced Death Benefit Option)
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception*
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 34.91% 23.41% 20.49%
AIM V.I. High Yield 3.09% N/A (3.51%)
Oppenheimer Multiple Strategic 4.28% 12.40% 9.29%
Oppenheimer Strategies Bond (4.10%) 6.36% 4.55%
STI Capital Appreciation 1.41% N/A 21.97%
STI International Equity 1.49% N/A 9.24%
STI Investment Grade Bond (8.32%) N/A 3.08%
STI Mid-Cap Equity 6.17% N/A 12.33%
STI Small Cap Equity (11.20%) N/A (11.91%)
STI Value Income Stock (9.53%) N/A 11.28%
MFS Emerging Growth 64.87% #N/A 33.73%
MFS Growth and Income -0.49% #N/A 18.67%
MFS Research 15.71% #N/A 20.41%
AIM Balanced 11.28% #N/A 13.10%
AIM Growth 26.15% 25.62% 19.80%
AIM Growth and Income 25.23% 25.59% 22.07%
AIM Value 21.17% 23.79% 20.32%
VIP Equity Income -0.83% 14.65% 11.98%
VIP Growth 28.21% 23.90% 16.61%
VIP High Income 0.88% 6.37% 9.57%
VIP Overseas 33.10% 15.27% 9.85%
VIP Contrafund 15.90% #N/A 23.84%
VIP Index 500 12.44% 25.92% 19.41%
Oppenheimer Aggressive Growth 71.30% 27.45% 18.76%
Oppenheimer Capital Appreciation 32.14% 28.39% 16.82%
Oppenheimer Global Sec. Fund 47.85% 19.54% 15.17%
Oppenheimer Main Street Growth 13.53% #N/A 23.31%
</TABLE>
* The inception dates of the Portfolios corresponding to the Variable
Sub-Accounts are as follows:
AIM V.I. Capital Appreciation Fund May 5, 1993
AIM V.I. High Yield Fund May 1, 1998
Oppenheimer Multiple Strategies Fund February 9, 1987
Oppenheimer Strategic Bond Fund May 3, 1993
STI Capital Appreciation Fund October 2, 1995
STI International Equity Fund November 7, 1996
STI Investment Grade Bond Fund October 2, 1995
STI Mid-Cap Equity Fund October 2, 1995
STI Small Cap Equity Fund October 22, 1997
STI Value Income Stock Fund October 2, 1995
MFS Emerging Growth July 24, 1995
MFS Growth and Income October 9, 1995
MFS Research July 26, 1995
AIM Balanced May 1, 1998
AIM Growth May 5, 1993
AIM Growth and Income May 2, 1994
AIM Value May 5, 1993
VIP Equity Income October 9, 1986
VIP Growth October 9, 1986
VIP High Income September 19, 1985
VIP Overseas January 28, 1997
VIP Contrafund January 3, 1995
VIP Index 500 August 27, 1982
Oppenheimer Aggressive Growth August 15, 1986
Oppenheimer Capital Appreciation April 3, 1985
Oppenheimer Global Sec. Fund November 12, 1980
Oppenheimer Main Street Growth July 15, 1985
<PAGE>
(With the Enhanced Death Benefit Option)*
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Ten Years
Or Since
Inception**
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 34.77% 23.28% 20.37%
AIM V.I. High Yield 2.99% N/A (3.60%)
Oppenheimer Multiple Strategies 4.17% 12.29% 9.19%
Oppenheimer Strategies Bond (4.19%) 6.25% 4.45%
STI Capital Appreciation 1.31% N/A 21.84%
STI International Equity 1.39% N/A 9.13%
STI Investment Grade Bond (8.42%) N/A 2.97%
STI Mid-Cap Equity 6.07% N/A 12.22%
STI Small Cap Equity (11.29%) N/A (12.00%)
STI Value Income Stock (9.62%) N/A 11.17%
MFS Emerging Growth 64.70% #N/A 33.59%
MFS Growth and Income -0.59% #N/A 18.55%
MFS Research 15.60% #N/A 20.29%
AIM Balanced 11.17% #N/A 12.99%
AIM Growth 26.03% 25.50% 19.68%
AIM Growth and Income 25.10% 25.47% 21.95%
AIM Value 21.05% 23.67% 20.19%
VIP Equity Income -0.93% 14.53% 11.87%
VIP Growth 28.08% 23.77% 16.49%
VIP High Income 0.78% 6.26% 9.46%
VIP Overseas 32.97% 15.15% 9.75%
VIP Contrafund 15.79% #N/A 23.72%
VIP Index 500 12.33% 25.79% 19.29%
Oppenheimer Aggressive Growth 71.13% 27.32% 18.64%
Oppenheimer Capital Appreciation 32.01% 28.26% 16.70%
Oppenheimer Global Sec. Fund 47.70% 19.42% 15.06%
Oppenheimer Main Street Growth 13.41% #N/A 23.18%
</TABLE>
*Performance figures have been adjusted to reflect the current charge for the
Enhanced Death Benefit Option as if that feature had been available throughout
the periods shown.
** The inception dates for the Portfolios appear in the first footnote to the
preceding table.
<PAGE>
CALCULATION OF ACCUMULATION UNIT VALUES
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Portfolio shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 3:00 p.m.
Central Time).
The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period
equals the Accumulation Unit Value as of the immediately preceding Valuation
Period, multiplied by the Net Investment Factor (described below) for that
Sub-Account for the current Valuation Period.
NET INVESTMENT FACTOR
The Net Investment Factor for a Valuation Period is a number representing the
change, since the last Valuation Period, in the value of Sub-account assets per
Accumulation Unit due to investment income, realized or unrealized capital gain
or loss, deductions for taxes, if any, and deductions for the mortality and
expense risk charge and administrative expense charge. We determine the Net
Investment Factor for each Variable Sub-Account for any Valuation Period by
dividing (A) by (B) and subtracting (C) from the result, where:
(A) is the sum of:
(1) the net asset value per share of the Portfolio underlying the
Variable Sub-Account determined at the end of the current Valuation
Period; plus,
(2) the per share amount of any dividend or capital gain distributions
made by the Portfolio underlying the Variable Sub-Account during the
current Valuation Period;
(B) is the net asset value per share of the Portfolio underlying the
Variable Sub-Account determined as of the end of the immediately preceding
Valuation Period; and
(C) is the annualized mortality and expense risk and administrative
expense charges divided by 365 and then multiplied by the number of calendar
days in the current Valuation Period.
<PAGE>
CALCULATION OF VARIABLE INCOME PAYMENTS
We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.
CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular
Portfolio in which the Variable Sub-Account invests. We calculate the Annuity
Unit Value for each Variable Sub-Account at the end of any Valuation Period by:
- - multiplying the Annuity Unit Value at the end of the immediately
preceding Valuation Period by the Variable Sub-Account's Net
Investment Factor (described in the preceding section) for the
Period; and then
- - dividing the product by the sum of 1.0 plus the assumed investment
rate for the Valuation Period.
The assumed investment rate adjusts for the interest rate assumed in the income
payment tables used to determine the dollar amount of the first variable income
payment, and is at an effective annual rate which is disclosed in the Contract.
We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states that require the use of unisex tables.
<PAGE>
GENERAL MATTERS
INCONTESTABILITY
We will not contest the Contract after we issue it.
SETTLEMENTS
We may require you to return the Contract prior to any settlement. We must
receive due proof of the Contract owner(s) death (or Annuitant's death if
there is a non-natural Contract owner) before we will settle a death claim.
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Portfolio shares
held by each of the Variable Sub-Accounts.
The Portfolios do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the Funds'
prospectuses for a more complete description of the custodian of the Funds.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts.
TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
<PAGE>
FEDERAL TAX MATTERS
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on the individual circumstances
of each person. If you are concerned about any tax consequences with regard to
your individual circumstances, you should consult a competent tax adviser.
TAXATION OF GLENBROOK LIFE AND ANNUITY COMPANY
Glenbrook is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. Since the Variable Account is not an entity separate
from Glenbrook, and its operations form a part of Glenbrook, it will not be
taxed separately as a "Regulated Investment Company" under Subchapter M of the
Code. Investment income and realized capital gains of the Variable Account are
automatically applied to increase reserves under the contract. Under existing
federal income tax law, Glenbrook believes that the Variable Account investment
income and capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the contract. Accordingly,
Glenbrook does not anticipate that it will incur any federal income tax
liability attributable to the Variable Account, and therefore Glenbrook does not
intend to make provisions for any such taxes. If Glenbrook is taxed on
investment income or capital gains of the Variable Account, then Glenbrook may
impose a charge against the Variable Account in order to make provision for such
taxes.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity contracts held by
a non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the Contract as agent for a
natural person. However, this special exception will not apply in the case of an
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees. Other exceptions to the
non-natural owner rule are: (1) contracts acquired by an estate of a decedent by
reason of the death of the decedent; (2) certain qualified contracts; (3)
contracts purchased by employers upon the termination of certain qualified
plans; (4) certain contracts used in connection with structured settlement
agreements, and (5) contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
In order to be considered an annuity contract for federal income tax purposes,
an annuity contract must provide: (1) if any owner dies on or after the annuity
start date but before the entire interest in the contract has been distributed,
the remaining portion of such interest must be distributed at least as rapidly
as under the method of distribution being used as of the date of the owner's
death; (2) if any owner dies prior to the annuity start date, the entire
interest in the contract will be distributed within five years after the date of
the owner's death. These requirements are satisfied if any portion of the
owner's interest which is payable to (or for the benefit of) a designated
beneficiary is distributed over the life of such beneficiary (or over a period
not extending beyond the life expectancy of the beneficiary) and the
distributions begin within one year of the owner's death. If the owner's
designated beneficiary is the surviving spouse of the owner, the contract may be
continued with the surviving spouse as the new owner. If the owner of the
contract is a non-natural person, then the annuitant will be treated as the
owner for purposes of applying the distribution at death rules. In addition, a
change in the annuitant on a contract owned by a non-natural person will be
treated as the death of the owner.
<PAGE>
QUALIFIED PLANS
The Contract may be used with several types of qualified plans. The income on
qualified plan and IRA investments is tax deferred and variable annuities held
by such plans do not receive any additional tax deferral. You should review the
annuity features, including all benefits and expenses, prior to purchasing a
variable annuity in a qualified plan or IRA. Glenbrook reserves the right to
limit the availability of the Contract for use with any of the Qualified Plans
listed below. The tax rules applicable to participants in such qualified plans
vary according to the type of plan and the terms and conditions of the plan
itself. Adverse tax consequences may result from excess contributions, premature
distributions, distributions that do not conform to specified commencement and
minimum distribution rules, excess distributions and in other circumstances.
Contract owners and participants under the plan and annuitants and beneficiaries
under the Contract may be subject to the terms and conditions of the plan
regardless of the terms of the Contract.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (IRA).
Individual Retirement Annuities are subject to limitations on the amount that
can be contributed and on the time when distributions may commence. Certain
distributions from other types of qualified plans may be "rolled over" on a
tax-deferred basis into an Individual Retirement Annuity. An IRA generally may
not provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid and the Contract's Cash Value. The Contract
provides a death benefit that in certain circumstances may exceed the greater of
the payments and the Contract Value. It is possible that the death benefit could
be viewed as violating the prohibition on investment in life insurance contracts
with the result that the Contract would not be viewed as satisfying the
requirements of an IRA.
ROTH INDIVIDUAL RETIREMENT ANNUITIES
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth Individual
Retirement Annuity. Roth Individual Retirement Annuities are subject to
limitations on the amount that can be contributed and on the time when
distributions may commence. "Qualified distributions" from Roth Individual
Retirement Annuities are not includible in gross income. "Qualified
distributions" are any distributions made more than five taxable years after the
taxable year of the first contribution to the Roth Individual Retirement
Annuity, and which are made on or after the date the individual attains age 59
1/2, made to a beneficiary after the owner's death, attributable to the owner
being disabled or for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000). "Nonqualified distributions" are
treated as made from contributions first and are includible in gross income to
the extent such distributions exceed the contributions made to the Roth
Individual Retirement Annuity. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The taxable portion of a conversion or rollover distribution is
includible in gross income, but is exempted from the 10% penalty tax on
premature distributions.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the
employees to their individual retirement annuities. Employers intending to use
the Contract in connection with such plans should seek competent advice. In
particular, employers should consider that an IRA generally may not provide life
insurance, but it may provide a death benefit that equals the greater of the
premiums paid and the contract's cash value. The Contract provides a death
benefit that in certain circumstances may exceed the greater of the payments and
the Contract Value.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase annuity contracts for them, and subject
to certain limitations, to exclude the purchase payments from the employees'
gross income. An annuity contract used for a Section 403(b) plan must provide
that distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
on or after the date the employee attains age 59 1/2, separates from service,
dies, becomes disabled or on the account of hardship (earnings on salary
reduction contributions may not be distributed for hardship). These limitations
do not apply to withdrawals where Glenbrook is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to establish
various types of tax favored retirement plans for employees. The Self-Employed
Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R.
10" or "Keogh") permits self-employed individuals to establish tax favored
retirement plans for themselves and their employees. Such retirement plans may
permit the purchase of annuity contracts in order to provide benefits under the
plans.
<PAGE>
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION
PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the contract has the sole right to the proceeds of the
contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.
EXPERTS
The financial statements of Glenbrook as of December 31, 1999 and 1998 and
for each of the three years in the period ended December 31, 1999, and related
financial statement schedule which are incorporated herein by reference, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and are included in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
The financial statements of the Variable Account as of December 31, 1999 and
for each of the periods in the two years then ended, which are incorporated
herein by reference, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and are included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of the Variable Account as of December 31, 1999 and
for each of the periods in the two years then ended, the financial statements
of Glenbrook as of December 31, 1999 and 1998 and for each of the three years
in the period ended December 31, 1999 amd related financial statement
schedules and the accompanying Independent Auditors' Reports appear in the
pages that follow. The financial statements and schedules of Glenbrook
included herein should be considered only as bearing upon the ability of
Glenbrook to meet its obligations under the Contracts.
<PAGE>
Financial Statements
INDEX
PAGE
<TABLE>
<S> <C>
Independent Auditors' Report F-1
Financial Statements:
Statements of Financial Position
December 31, 1999 and 1998 F-2
Statements of Operations and Comprehensive Income for the Years Ended
December 31, 1999, 1998 and 1997 F-3
Statements of Shareholder's Equity for the Years Ended
December 31, 1999, 1998 and 1997 F-4
Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997 F-5
Notes to Financial Statements F-6
Schedule IV - Reinsurance for the Years Ended
December 31, 1999, 1998 and 1997 F-13
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Glenbrook Life and Annuity Company:
- --------------------------------------------------------------------------------
We have audited the accompanying Statements of Financial Position of Glenbrook
Life and Annuity Company (the "Company", an affiliate of The Allstate
Corporation) as of December 31, 1999 and 1998, and the related Statements of
Operations and Comprehensive Income, Shareholder's Equity and Cash Flows for
each of the three years in the period ended December 31, 1999. Our audits also
included Schedule IV--Reinsurance. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles. Also, in our opinion, Schedule IV--Reinsurance,
when considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 25, 2000
F-1
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1999 1998
------------ ------------
($ IN THOUSANDS, EXCEPT PAR
VALUE DATA)
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value (amortized cost
$94,173 and $87,415)..................................... $ 92,937 $ 94,313
Short-term................................................ 53,063 4,663
---------- ----------
Total investments......................................... 146,000 98,976
Cash........................................................ 9 --
Reinsurance recoverable from Allstate Life Insurance
Company................................................... 4,144,165 3,113,278
Deferred income taxes....................................... 293 --
Other assets................................................ 2,706 2,590
Separate Accounts........................................... 1,541,756 993,622
---------- ----------
TOTAL ASSETS.......................................... $5,834,929 $4,208,466
========== ==========
LIABILITIES
Reserve for life-contingent contract benefits............... 800 --
Contractholder funds........................................ 4,143,365 3,113,278
Current income taxes payable................................ 2,360 2,181
Deferred income taxes....................................... -- 2,499
Payable to affiliates, net.................................. 4,122 3,583
Separate Accounts........................................... 1,541,756 993,622
---------- ----------
TOTAL LIABILITIES..................................... 5,692,403 4,115,163
---------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 11)
SHAREHOLDER'S EQUITY
Common stock, $500 par value, 10,000 and 4,200 shares
authorized, 5,000 and 4,200 shares issued and
outstanding............................................... 2,500 2,100
Additional capital paid-in.................................. 119,241 69,641
Retained income............................................. 21,588 17,079
Accumulated other comprehensive (loss) income:
Unrealized net capital (losses) gains..................... (803) 4,483
---------- ----------
Total accumulated other comprehensive (loss) income... (803) 4,483
---------- ----------
TOTAL SHAREHOLDER'S EQUITY............................ 142,526 93,303
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY............ $5,834,929 $4,208,466
========== ==========
</TABLE>
See notes to financial statements.
F-2
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
REVENUES
Net investment income..................................... $6,579 $6,231 $5,304
Realized capital gains and losses......................... 312 (5) 3,460
------ ------ ------
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE............ 6,891 6,226 8,764
INCOME TAX EXPENSE.......................................... 2,382 2,182 3,078
------ ------ ------
NET INCOME.................................................. 4,509 4,044 5,686
------ ------ ------
OTHER COMPREHENSIVE (LOSS) INCOME, AFTER-TAX
Change in unrealized net capital gains and losses......... (5,286) 1,315 378
------ ------ ------
COMPREHENSIVE (LOSS) INCOME................................. $ (777) $5,359 $6,064
====== ====== ======
</TABLE>
See notes to financial statements.
F-3
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
COMMON STOCK
Balance, beginning of year.................................. $ 2,100 $ 2,100 $ 2,100
Issuance of new shares of stock............................. 400 -- --
-------- ------- -------
Balance, end of year........................................ 2,500 2,100 2,100
-------- ------- -------
ADDITIONAL CAPITAL PAID-IN
Balance, beginning of year.................................. 69,641 69,641 69,641
Capital contribution........................................ 49,600 -- --
-------- ------- -------
Balance, end of year........................................ 119,241 69,641 69,641
-------- ------- -------
RETAINED INCOME
Balance, beginning of year.................................. 17,079 13,035 7,349
Net income.................................................. 4,509 4,044 5,686
-------- ------- -------
Balance, end of year........................................ 21,588 17,079 13,035
-------- ------- -------
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Balance, beginning of year.................................. 4,483 3,168 2,790
Change in unrealized net capital gains and losses........... (5,286) 1,315 378
-------- ------- -------
Balance, end of year........................................ (803) 4,483 3,168
-------- ------- -------
Total shareholder's equity.............................. $142,526 $93,303 $87,944
======== ======= =======
</TABLE>
See notes to financial statements.
F-4
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------
($ IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................. $ 4,509 $ 4,044 $ 5,686
Adjustments to reconcile net income to net cash provided by
operating activities
Amortization and other non-cash items................... (65) (24) 29
Realized capital gains and losses....................... (312) 5 (3,460)
Changes in:
Income taxes payable.................................. 235 1,590 240
Other operating assets and liabilities................ 264 915 961
-------- -------- --------
Net cash provided by operating activities............... 4,631 6,530 3,456
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed income securities
Proceeds from sales....................................... 9,049 1,966 1,405
Investment collections.................................... 4,945 7,123 14,217
Investment purchases...................................... (20,328) (15,250) (50,115)
Participation in Separate Accounts.......................... -- -- 13,981
Change in short-term investments, net....................... (48,288) (369) (2,944)
-------- -------- --------
Net cash used in investing activities................... (54,622) (6,530) (23,456)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock...................... 400 -- --
Capital contribution........................................ 49,600 -- 20,000
-------- -------- --------
Net cash provided by financing activities............... 50,000 -- 20,000
-------- -------- --------
NET INCREASE IN CASH........................................ 9 -- --
CASH AT THE BEGINNING OF YEAR............................... -- -- --
-------- -------- --------
CASH AT END OF YEAR......................................... $ 9 $ -- $ --
======== ======== ========
</TABLE>
See notes to financial statements.
F-5
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
- -------------------------------------------------------------------
1. GENERAL
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Glenbrook Life and
Annuity Company (the "Company"), a wholly owned subsidiary of Allstate Life
Insurance Company ("ALIC"), which is wholly owned by Allstate Insurance Company
("AIC"), a wholly owned subsidiary of The Allstate Corporation (the
"Corporation"). These financial statements have been prepared in conformity with
generally accepted accounting principles.
NATURE OF OPERATIONS
The Company markets savings and life insurance products through banks and
securities firms. Savings products include deferred annuities and immediate
annuities without life contingencies. Deferred annuities include fixed rate,
market value adjusted, indexed and variable annuities. Life insurance consists
of interest-sensitive life and variable life insurance. In 1999, substantially
all of the Company's statutory premiums and deposits were from annuities.
Annuity contracts and life insurance policies issued by the Company are subject
to discretionary surrender or withdrawal by customers, subject to applicable
surrender charges. These policies and contracts are reinsured primarily with
ALIC (see Note 3), which invests premiums and deposits to provide cash flows
that will be used to fund future benefits and expenses.
The Company monitors economic and regulatory developments which have the
potential to impact its business. Recently enacted federal legislation will
allow for banks and other financial organizations to have greater participation
in the securities and insurance businesses. This legislation may present an
increased level of competition for sales of the Company's products. Furthermore,
the market for deferred annuities and interest-sensitive life insurance is
enhanced by the tax incentives available under current law. Any legislative
changes which lessen these incentives are likely to negatively impact the demand
for these products.
Additionally, traditional demutualizations of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies to
convert to a hybrid structure known as a mutual holding company could have a
number of significant effects on the Company by (1) increasing industry
competition through consolidation caused by mergers and acquisitions related to
the new corporate form of business; and (2) increasing competition in the
capital markets.
Although the Company currently benefits from agreements with financial services
entities who market and distribute its products, change in control of these
non-affiliated entities with which the Company has alliances could negatively
impact the Company's sales.
The Company is authorized to sell life and savings products in all states except
New York, as well as in the District of Columbia. The top geographic locations
for statutory premiums and deposits for the Company were Florida, California,
Pennsylvania, Michigan, Texas, Illinois and New Jersey for the year ended
December 31, 1999. No other jurisdiction accounted for more than 5% of statutory
premiums and deposits. Substantially all premiums and deposits are ceded to ALIC
under reinsurance agreements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed securities. All fixed
income securities are carried at fair value and may be sold prior to their
contractual maturity ("available for sale"). The difference between amortized
cost and fair value, net of deferred income taxes, is reflected as a component
of shareholder's equity. Provisions are recognized for declines in the value of
fixed income securities that are other than temporary. Such writedowns are
included in realized capital gains and losses. Short-term investments are
carried at cost or amortized cost, which approximates fair value.
Investment income consists primarily of interest and short-term investment
dividends. Interest is recognized on an accrual basis and dividends are recorded
at the ex-dividend date. Interest income on mortgage-backed securities is
determined on the effective yield method, based on the estimated principal
repayments. Accrual of income is suspended for fixed income securities that are
in default or when the receipt of interest payments is in doubt. Realized
capital gains and losses are determined on a specific identification basis.
REINSURANCE RECOVERABLE
The Company has reinsurance agreements whereby substantially all contract
charges, credited interest, policy benefits and certain expenses are ceded to
ALIC. Such amounts are reflected net of such reinsurance in the statements of
operations and comprehensive income. Investment income earned on the assets
which support contractholder funds and the reserve for life-contingent contract
benefits is not included in the Company's financial statements as those assets
are owned and managed under terms of reinsurance agreements. Reinsurance
recoverable and the related reserve for life-contingent contract benefits and
contractholder funds
F-6
<PAGE>
are reported separately in the statements of financial position. The Company
continues to have primary liability as the direct insurer for risks reinsured.
RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS AND INTEREST CREDITED
Interest-sensitive life contracts are insurance contracts whose terms are not
fixed and guaranteed. The terms that may be changed include premiums paid by the
contractholder, interest credited to the contractholder account balance and one
or more amounts assessed against the contractholder. Premiums from these
contracts are reported as deposits to contractholder funds. Contract charge
revenue consists of fees assessed against the contractholder account balance for
cost of insurance (mortality risk), contract administration and surrender
charges. Contract benefits include interest credited to contracts and claims
incurred in excess of the related contractholder account balance.
Contracts that do not subject the Company to significant risk arising from
mortality or morbidity are referred to as investment contracts. Fixed rate
annuities, market value adjusted annuities, indexed annuities and immediate
annuities without life contingencies are considered investment contracts.
Deposits received for such contracts are reported as deposits to contractholder
funds. Contract charge revenue for investment contracts consists of charges
assessed against the contractholder account balance for contract administration
and surrenders. Contract benefits include interest credited and claims incurred
in excess of the related contractholder account balance.
Crediting rates for fixed rate and interest-sensitive life contracts are
adjusted periodically by the Company to reflect current market conditions.
Crediting rates for indexed annuities are based on an interest rate index, such
as LIBOR or an equity index, such as the S&P 500.
Investment contracts include variable annuity and variable life contracts which
are sold as Separate Accounts products. The assets supporting these products are
legally segregated and available only to settle Separate Accounts contract
obligations. Deposits received are reported as Separate Accounts liabilities.
The Company's contract charge revenue for these contracts consists of charges
assessed against the Separate Accounts fund balances for contract maintenance,
administration, mortality, expense and surrenders.
All contract charges, contract benefits and interest credited are reinsured.
INCOME TAXES
The income tax provision is calculated under the liability method and presented
net of reinsurance. Deferred tax assets and liabilities are recorded based on
the difference between the financial statement and tax bases of assets and
liabilities at the enacted tax rates. Deferred income taxes arise primarily from
unrealized capital gains and losses on fixed income securities carried at fair
value and differences in the tax bases of investments.
SEPARATE ACCOUNTS
The Company issues deferred variable annuity and variable life contracts, the
assets and liabilities of which are legally segregated and recorded as assets
and liabilities of the Separate Accounts. Absent any contract provisions wherein
the Company contractually guarantees either a minimum return or account value to
the beneficiaries of the contractholders in the form of a death benefit, the
contractholders bear the investment risk that the Separate Accounts' funds may
not meet their stated objectives.
The assets of the Separate Accounts are carried at fair value. Separate Accounts
liabilities represent the contractholders' claim to the related assets and are
carried at the fair value of the assets. In the event that the asset value of
certain contractholder accounts are projected to be below the value guaranteed
by the Company, a liability is established through a charge to earnings.
Investment income and realized capital gains and losses of the Separate Accounts
accrue directly to the contractholders and therefore, are not included in the
Company's statements of operations and comprehensive income. Revenues to the
Company from the Separate Accounts consist of contract maintenance and
administration fees, and mortality, surrender and expense charges.
Prior to 1998, the Company had an ownership interest ("Participation") in the
Separate Accounts. The Company's Participation was carried at fair value and
unrealized gains and losses, net of deferred income taxes, were shown as a
component of shareholder's equity. Investment income and realized capital gains
and losses which arose from the Participation were included in the Company's
statements of operations and comprehensive income. The Company liquidated its
Participation during 1997, which resulted in a pretax realized capital gain of
$3.5 million.
RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to certain
variable annuity contract guarantees, is computed on the basis of assumptions as
to mortality, future investment yields, terminations and expenses at the time
the policy is issued. These assumptions include provisions for adverse deviation
and generally vary by such characteristics as type of coverage, year of issue
and policy duration. Detailed reserve assumptions and reserve interest rates are
outlined in Note 6.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of interest-sensitive life and
certain investment contracts. Deposits
F-7
<PAGE>
received are recorded as interest-bearing liabilities. Contractholder funds are
equal to deposits received, net of commissions, and interest credited to the
benefit of the contractholder less withdrawals, mortality charges, and
administrative expenses. Detailed information on crediting rates and surrender
and withdrawal protection on contractholder funds are outlined in Note 6.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NEW ACCOUNTING STANDARDS
In 1999, the Company adopted Statement of Position ("SOP") 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments." The SOP
provides guidance concerning when to recognize a liability for insurance-related
assessments and how those liabilities should be measured. Specifically,
insurance-related assessments should be recognized as liabilities when all of
the following criteria have been met: 1) an assessment has been imposed or it is
probable that an assessment will be imposed, 2) the event obligating an entity
to pay an assessment has occurred and 3) the amount of the assessment can be
reasonably estimated. Adoption of this statement was not material to the
Company's results of operations or financial position.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company has reinsurance agreements whereby substantially all contract
charges, credited interest, policy benefits and certain expenses are ceded to
ALIC and reflected net of such reinsurance in the statements of operations and
comprehensive income. Reinsurance recoverable and the related reserve for
life-contingent contract benefits and contractholder funds are reported
separately in the statements of financial position. The Company continues to
have primary liability as the direct insurer for risks reinsured.
Investment income earned on the assets which support contractholder funds and
the reserve for life-contingent contract benefits is not included in the
Company's financial statements as those assets are owned and managed under terms
of reinsurance agreements. The following amounts were ceded to ALIC under
reinsurance agreements.
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Contract charges $ 27,175 $ 19,009 $ 11,641
Credited interest, policy
benefits, and certain
expenses 253,945 218,008 179,954
</TABLE>
BUSINESS OPERATIONS
The Company utilizes services performed by AIC and ALIC and business facilities
owned or leased, and operated by AIC in conducting its business activities. The
Company reimburses AIC and ALIC for the operating expenses incurred on behalf of
the Company. The Company is charged for the cost of these operating expenses
based on the level of services provided. Operating expenses, including
compensation and retirement and other benefit programs, allocated to the Company
were $26,555, $15,949, and $19,243 in 1999, 1998 and 1997, respectively. Of
these costs, the Company retains investment related expenses. All other costs
are ceded to ALIC under reinsurance agreements.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for fixed
income securities are as follows:
<TABLE>
<CAPTION>
Gross
Unrealized
Amortized ------------------- Fair
At December 31, 1999 Cost Gains Losses Value
-------------------- --------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S. government and
agencies $24,274 $1,260 $ -- $25,534
Municipal 1,656 -- (112) 1,544
Corporate 49,255 9 (2,022) 47,242
Mortgage-backed
securities 18,988 96 (467) 18,617
------- ------ ------- -------
Total fixed income
securities $94,173 $1,365 $(2,601) $92,937
======= ====== ======= =======
At December 31, 1998
U.S. government and
agencies $24,350 $4,308 $ -- $28,658
Municipal 656 24 -- 680
Corporate 33,009 1,575 (39) 34,545
Mortgage-backed
securities 29,400 1,047 (17) 30,430
------- ------ ------- -------
Total fixed income
securities $87,415 $6,954 $ (56) $94,313
======= ====== ======= =======
</TABLE>
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at December
31, 1999:
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
--------- --------
<S> <C> <C>
Due after one year through five years $30,974 $31,085
Due after five years through ten years 32,583 30,911
Due after ten years 11,628 12,324
------- -------
75,185 74,320
Mortgage-backed securities 18,988 18,617
------- -------
Total $94,173 $92,937
======= =======
</TABLE>
Actual maturities may differ from those scheduled as a result of prepayments by
the issuers.
F-8
<PAGE>
NET INVESTMENT INCOME
<TABLE>
<CAPTION>
Year Ended December 31, 1999 1998 1997
----------------------- -------- -------- --------
<S> <C> <C> <C>
Fixed income securities $6,458 $6,151 $5,014
Short-term investments 230 183 231
Participation in Separate Accounts -- -- 161
------ ------ ------
Investment income, before expense 6,688 6,334 5,406
Investment expense 109 103 102
------ ------ ------
Net investment income $6,579 $6,231 $5,304
====== ====== ======
</TABLE>
REALIZED CAPITAL GAINS AND LOSSES
<TABLE>
<CAPTION>
Year Ended December 31, 1999 1998 1997
----------------------- -------- -------- --------
<S> <C> <C> <C>
Fixed income securities $ 312 $(5) $ (61)
Short-term investments -- -- 6
Participation in Separate Accounts -- -- 3,515
----- --- -------
Realized capital gains and losses 312 (5) 3,460
Income Taxes (109) 2 (1,211)
----- --- -------
Realized capital gains and losses,
after tax $ 203 $(3) $ 2,249
===== === =======
</TABLE>
Excluding calls and prepayments, gross gains of $370 were realized on sales of
fixed income securities during 1999, and gross losses of $58, $5 and $61 were
realized on sales of fixed income securities during 1999, 1998 and 1997,
respectively. There were no gross gains realized on sales of fixed income
securities during 1998 and 1997.
UNREALIZED NET CAPITAL GAINS AND LOSSES
Unrealized net capital losses on fixed income securities included in
shareholder's equity at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Gross
Cost/ Unrealized Unrealized
Amortized Fair ------------------- Net
Cost Value Gains Losses Losses
--------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
Fixed income
securities $94,173 $92,937 $ 1,365 $(2,601) $(1,236)
======= ======= ======= =======
Deferred income taxes 433
-------
Unrealized net
capital losses $ (803)
=======
</TABLE>
CHANGE IN UNREALIZED NET CAPITAL GAINS AND LOSSES
<TABLE>
<CAPTION>
Year Ended December 31, 1999 1998 1997
----------------------- -------- -------- --------
<S> <C> <C> <C>
Fixed income securities $(8,134) $2,024 $ 2,410
Participation in Separate Accounts -- -- (1,829)
Deferred income taxes 2,848 (709) (203)
------- ------ -------
(Decrease) increase in unrealized
net capital gains $(5,286) $1,315 $ 378
======= ====== =======
</TABLE>
SECURITIES ON DEPOSIT
At December 31, 1999, fixed income securities with a carrying value of $10,346
were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets and incurs various financial liabilities. The fair value estimates of
financial instruments presented below are not necessarily indicative of the
amounts the Company might pay or receive in actual market transactions.
Potential taxes and other transaction costs have not been considered in
estimating fair value. The disclosures that follow do not reflect the fair value
of the Company as a whole since a number of the Company's significant assets
(including reinsurance recoverable and deferred income taxes) and liabilities
(including interest-sensitive life insurance reserves) are not considered
financial instruments and are not carried at fair value. Other assets and
liabilities considered financial instruments, such as accrued investment income
and cash, are generally of a short-term nature. Their carrying values are
assumed to approximate fair value.
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998
----------------------- -------------------
Carrying Fair Carrying Fair
Value Value Value Value
---------- ---------- -------- --------
<S> <C> <C> <C> <C>
Fixed income
securities $ 92,937 $ 92,937 $ 94,313 $ 94,313
Short-term
investments 53,063 53,063 4,663 4,663
Separate Accounts 1,541,756 1,541,756 993,622 993,622
</TABLE>
Fair values for fixed income securities are based on quoted market prices where
available. Non-quoted securities are valued based on discounted cash flows using
current interest rates for similar securities. Short-term investments are highly
liquid investments with maturities of less than one year whose carrying value
are deemed to approximate fair value. Separate Accounts assets are carried in
the statements of financial position at fair value based on quoted market
prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31, are
as follows:
<TABLE>
<CAPTION>
1998 1999
----------------------- -----------------------
Carrying Fair Carrying Fair
Value Value Value Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Contractholder funds
on investment
contracts $4,156,964 $3,924,117 $3,130,228 $2,967,101
Separate Accounts 1,541,756 1,541,756 993,622 993,622
</TABLE>
The fair value of contractholder funds on investment contracts is based on the
terms of the underlying contracts. Reserves on investment contracts with no
stated maturities (single premium and flexible premium deferred annuities) are
valued at the account balance less surrender charges.
F-9
<PAGE>
The fair value of immediate annuities and annuities without life contingencies
with fixed terms is estimated using discounted cash flow calculations based on
interest rates currently offered for contracts with similar terms and durations.
Separate Accounts liabilities are carried at the fair value of the underlying
assets.
6. RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS AND CONTRACTHOLDER FUNDS
At December 31, 1999 the reserve for life-contingent contract benefits consisted
of reserves for immediate annuities. The assumptions for mortality generally
utilized in calculating immediate annuity reserves is the 1983 group annuity
mortality table. Interest rate assumptions for immediate annuities vary from
3.5% to 7.2%. Other estimation methods used for immediate annuities include the
present value of contractually fixed benefits.
At December 31, contractholder funds consists of the following:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Interest-sensitive life $ 9,503 $ 3,335
Fixed annuities:
Immediate annuities 17,856 12,643
Deferred annuities 4,116,006 3,097,300
---------- ----------
Total contractholder funds $4,143,365 $3,113,278
========== ==========
</TABLE>
Contractholder funds are equal to deposits received, net of commissions, and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Interest rates credited range
from 4.0% to 7.2% for interest-sensitive life contracts; 3.5% to 7.2% for
immediate annuities and 4.3% to 6.7% for deferred annuities. Withdrawal and
surrender charge protection includes: i) for interest-sensitive life, either a
percentage of account balance or dollar amount grading off generally over 20
years; and, ii) for deferred annuities not subject to a market value adjustment,
either a declining or a level percentage charge generally over nine years or
less. Approximately 1% of deferred annuities are subject to a market value
adjustment.
7. CORPORATION RESTRUCTURING
On November 10, 1999 the Corporation announced a series of strategic initiatives
to aggressively expand its selling and service capabilities. The Corporation
also announced that it is implementing a program to reduce expenses by
approximately $600 million. The reduction will result in the elimination of
approximately 4,000 current non-agent positions, across all employment grades
and categories by the end of 2000, or approximately 10% of the Corporation's
non-agent work force. The impact of the reduction in employee positions is not
expected to materially impact the results of operations of the Company.
These cost reductions are part of a larger initiative to redeploy the cost
savings to finance new initiatives including investments in direct access and
internet channels for new sales and service capabilities, new competitive
pricing and underwriting techniques, new agent and claim technology and enhanced
marketing and advertising. As a result of the cost reduction program, the
Corporation recorded restructuring and related charges of $81 million pretax
during the fourth quarter of 1999. The Corporation anticipates that additional
pretax restructuring related charges of approximately $100 million will be
expensed as incurred throughout 2000. The Company's allocable share of these
expenses were immaterial in 1999 and are expected to be immaterial in 2000.
8. INCOME TAXES
For 1996, the Company filed a separate federal income tax return. Beginning in
1997, the Company joined the Corporation and its other eligible domestic
subsidiaries (the "Allstate Group") in the filing of a consolidated federal
income tax return and is party to a federal income tax allocation agreement (the
"Allstate Tax Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the
Company pays to or receives from the Corporation the amount, if any, by which
the Allstate Group's federal income tax liability is affected by virtue of
inclusion of the Company in the consolidated federal income tax return.
Effectively, this results in the Company's annual income tax provision being
computed, with adjustments, as if the Company filed a separate return.
Prior to June 30, 1995, the Corporation was a subsidiary of Sears Roebuck & Co.
("Sears") and was, with its eligible domestic subsidiaries, included in the
Sears consolidated federal income tax return and federal income tax allocation
agreement. Effective June 30, 1995, the Corporation and Sears entered into a new
tax sharing agreement, which governs their respective rights and obligations
with respect to federal income taxes for all periods during which the
Corporation was a subsidiary of Sears, including the treatment of audits of tax
returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the Allstate
Group's federal income tax returns through the 1993 tax year. Any adjustment
that may result from IRS examinations of tax returns are not expected to have a
material impact on the financial position, liquidity or results of operations of
the Company.
F-10
<PAGE>
The components of the deferred income tax assets and liabilities at December 31,
are as follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Deferred Assets
Unrealized net capital losses $ 433 $ --
----- -------
Total deferred assets 433 --
Deferred Liabilities
Difference in tax bases of investments (140) (84)
Unrealized net capital gains -- (2,415)
----- -------
Total deferred liabilities (140) (2,499)
----- -------
Net deferred asset (liability) $ 293 $(2,499)
===== =======
</TABLE>
Although realization is not assured, management believes it is more likely than
not that the deferred tax asset will be realized based on the assumptions that
certain levels of income will be achieved.
The components of income tax expense for the year ended December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Current $2,326 $2,164 $3,037
Deferred 56 18 41
------ ------ ------
Total income tax expense $2,382 $2,182 $3,078
====== ====== ======
</TABLE>
The Company paid income taxes of $2,148, $592 and $2,839 in 1999, 1998 and 1997,
respectively.
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
Other (.4) -- .1
---- ---- ----
Effective income tax rate 34.6% 35.0% 35.1%
==== ==== ====
</TABLE>
9. STATUTORY FINANCIAL INFORMATION
The Company's statutory capital and surplus was $141,362 and $84,865 at December
31, 1999 and 1998, respectively. The Company's statutory net income was $4,179,
$4,698 and $3,636 for the years ended December 31, 1999, 1998 and 1997,
respectively.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting practices prescribed or permitted by the Arizona Department of
Insurance. Prescribed statutory accounting practices include a variety of
publications of the National Association of Insurance Commissioners ("NAIC"), as
well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not so
prescribed. The Company does not follow any permitted statutory accounting
practices that have a significant impact on statutory surplus or statutory net
income.
The NAIC's codification initiative has produced a comprehensive guide of
statutory accounting principles, which the Company will implement in January
2001. The Company's state of domicile, Arizona, has passed legislation revising
various statutory accounting requirements to conform to codification. These
requirements are not expected to have a material impact on the statutory surplus
of the Company.
DIVIDENDS
The ability of the Company to pay dividends is dependent on business conditions,
income, cash requirements of the Company and other relevant factors. The payment
of shareholder dividends by the Company without the prior approval of the state
insurance regulator is limited to formula amounts based on net income and
capital and surplus, determined in accordance with statutory accounting
practices, as well as the timing and amount of dividends paid in the preceding
twelve months. The maximum amount of dividends that the Company can distribute
during 2000 without prior approval of the Arizona Department of Insurance is
$4,179.
RISK-BASED CAPITAL
The NAIC has a standard for assessing the solvency of insurance companies, which
is referred to as risk-based capital ("RBC"). The requirement consists of a
formula for determining each insurer's RBC and a model law specifying regulatory
actions if an insurer's RBC falls below specified levels. The RBC formula for
life insurance companies establishes capital requirements relating to insurance,
business, asset and interest rate risks. At December, 31 1999, RBC for the
Company was significantly above levels that would require regulatory action.
F-11
<PAGE>
10. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax basis for
the year ended December 31, are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------- ------------------------------- -------------------------------
PRETAX TAX AFTER-TAX PRETAX TAX AFTER-TAX PRETAX TAX AFTER-TAX
-------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized capital gains and
losses:
- ----------------------------
Unrealized holding (losses)
gains arising during the
period $(7,822) $2,739 $(5,083) $2,019 $(707) $1,312 $4,034 $(1,412) $2,622
Less: reclassification
adjustments 312 (109) 203 (5) 2 (3) 3,453 (1,209) 2,244
------- ------ ------- ------ ----- ------ ------ ------- ------
Unrealized net capital
(losses) gains $(8,134) $2,848 $(5,286) $2,024 $(709) $1,315 $ 581 $ (203) $ 378
------- ------ ------- ------ ----- ------ ------ ------- ------
Other comprehensive (loss)
income $(8,134) $2,848 $(5,286) $2,024 $(709) $1,315 $ 581 $ (203) $ 378
======= ====== ======= ====== ===== ====== ====== ======= ======
</TABLE>
11. COMMITMENTS AND CONTINGENT LIABILITIES
REGULATION AND LEGAL PROCEEDINGS
The Company's business is subject to the effects of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied and
have included employee benefit regulations, removal of barriers preventing banks
from engaging in the securities and insurance business, tax law changes
affecting the taxation of insurance companies, the tax treatment of insurance
products and its impact on the relative desirability of various personal
investment vehicles, and proposed legislation to prohibit the use of gender in
determining insurance rates and benefits. The ultimate changes and eventual
effects, if any, of these initiatives are uncertain.
From time to time the Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary damages are
asserted. In the opinion of management, the ultimate liability, if any, arising
from such pending or threatened litigation is not expected to have a material
effect on the results of operations, liquidity or financial position of the
Company.
GUARANTY FUNDS
Under state insurance guaranty fund laws, insurers doing business in a state can
be assessed, up to prescribed limits, for certain obligations of insolvent
insurance companies to policyholders and claimants. The Company's expenses
related to these funds have been immaterial. These expenses are ceded to ALIC
under reinsurance agreements.
MARKETING AND COMPLIANCE ISSUES
Companies operating in the insurance and financial services markets have come
under the scrutiny of regulators with respect to market conduct and compliance
issues. Under certain circumstances, companies have been held responsible for
providing incomplete or misleading sales materials and for replacing existing
policies with policies that were less advantageous to the policyholder. The
Company monitors its sales materials and enforces compliance procedures to
mitigate any exposure to potential litigation. The Company is a member of the
Insurance Marketplace Standards Association, an organization which advocates
ethical market conduct.
F-12
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- --------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Life insurance in force..................................... $23,586 $23,586 $ --
======= ======= =======
Premiums and contract charges:
Life and annuities........................................ $27,175 $27,175 $ --
======= ======= =======
<CAPTION>
GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- --------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1998
Life insurance in force..................................... $12,056 $12,056 $ --
======= ======= =======
Premiums and contract charges:
Life and annuities........................................ $19,009 $19,009 $ --
======= ======= =======
<CAPTION>
GROSS NET
AMOUNT CEDED AMOUNT
-------- -------- --------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Life insurance in force..................................... $ 4,095 $ 4,095 $ --
======= ======= =======
Premiums and contract charges:
Life and annuities........................................ $11,641 $11,641 $ --
======= ======= =======
</TABLE>
F-13
<PAGE>
- -------------------------------------------------------------------------------
GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND
FOR THE PERIODS ENDED DECEMBER 31, 1999
AND DECEMBER 31, 1998, AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Glenbrook Life and Annuity Company:
We have audited the accompanying statement of net assets of Glenbrook Life
and Annuity Company Variable Annuity Account as of December 31, 1999
(including the assets of each of the individual sub-accounts which comprise
the Account as disclosed in Note 1), and the related statements of operations
for the period then ended and the statements of changes in net assets for
each of the periods in the two year period then ended for each of the
individual sub-accounts which comprise the Account. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December 31, 1999
by correspondence with the account custodians. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Glenbrook Life and Annuity Company
Variable Annuity Account as of December 31, 1999 (including the assets of
each of the individual sub-accounts which comprise the Account), and the
results of operations for each of the individual sub-accounts for the period
then ended and the changes in their net assets for each of the periods in the
two year period then ended in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 27, 2000
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Allocation to Sub-Accounts investing in the STI Classic Variable Trust:
STI Capital Appreciation, 6,574,222 shares (cost $110,700,641) $ 133,259,491
STI International Equity, 1,311,215 shares (cost $15,925,737) 18,265,226
STI Investment Grade Bond, 2,219,902 shares (cost $22,672,334) 21,599,649
STI Mid-Cap Equity, 2,021,566 shares (cost $25,049,749) 30,728,395
STI Small Cap Equity, 872,515 shares (cost $8,081,225) 6,953,941
STI Value Income Stock, 7,667,552 shares (cost $107,533,389) 101,441,711
Allocation to Sub-Accounts investing in the AIM Variable Insurance Funds:
Capital Appreciation, 434,666 shares (cost $12,397,234) 15,465,430
High Yield, 230,924 shares (cost $2,137,778) 2,082,934
Allocation to Sub-Accounts investing in the Templeton Variable Products Series Fund:
Templeton Bond, 52,109 shares (cost $531,293) 519,530
Templeton Stock, 179,776 shares (cost $3,884,915) 4,366,754
Allocation to Sub-Accounts Investing in the Oppenheimer Variable Account Funds:
Oppenheimer Multiple Strategies, 234,201 shares (cost $3,918,018) 4,089,151
Oppenheimer Strategic Bond, 353,275 shares (cost $1,735,364) 1,755,776
Allocation to Sub-Account investing in the Federated Insurance Series:
Federated Prime Money Fund II, 8,643,797 shares (cost $8,643,797) 8,643,797
---------------
Total Assets 349,171,785
LIABILITIES
Payable to Glenbrook Life and Annuity Company:
Accrued contract maintenance charges 108,649
---------------
Net Assets $ 349,063,136
===============
</TABLE>
See notes to financial statements.
2
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
STI Classic Variable Trust Sub-Accounts
-------------------------------------------------------------------------------
For the Year Ended December 31, 1999
-------------------------------------------------------------------------------
STI Capital STI International STI Investment STI Mid-Cap STI Small Cap
Appreciation (a) Equity Grade Bond Equity Equity
---------------- ---------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 8,978,103 $ 364,214 $ 1,443,585 $ 474,607 $ 94,224
Charges from Glenbrook Life and Annuity Company:
Mortality and expense risk (1,576,987) (240,779) (277,168) (369,973) (99,458)
Administrative expense (122,338) (18,552) (21,446) (28,849) (7,556)
---------------- ---------------- ---------------- ------------- --------------
Net investment income (loss) 7,278,778 104,883 1,144,971 75,785 (12,790)
---------------- ---------------- ---------------- ------------- --------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 10,546,814 4,935,607 6,298,614 6,553,835 3,257,034
Cost of investments sold 8,448,620 4,382,267 6,378,003 6,126,485 3,943,610
---------------- ---------------- ---------------- ------------- --------------
Net realized gains (losses) 2,098,194 553,340 (79,389) 427,350 (686,576)
---------------- ---------------- ---------------- ------------- --------------
Change in unrealized gains (losses) (979,087) 640,078 (1,717,916) 2,723,497 91,211
---------------- ---------------- ---------------- ------------- --------------
Net gains (losses) on investments 1,119,107 1,193,418 (1,797,305) 3,150,847 (595,365)
---------------- ---------------- ---------------- ------------- --------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 8,397,885 $ 1,298,301 $ (652,334) $ 3,226,632 $ (608,155)
================ ================ ================ ============= ==============
</TABLE>
(a) Previously Known as STI Capital Growth.
See notes to financial statements.
3
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
STI Classic
Variable Trust AIM Variable Insurance Templeton Variable Products
Sub-Accounts Fund Sub-Accounts Series Fund Sub-Accounts
--------------- -------------------------------- ----------------------------
For the Year Ended December 31, 1999
------------------------------------------------------------------------------
STI Value Capital High Templeton Templeton
Income Stock Appreciation Yield (b) Bond (b) Stock (b)
--------------- ---------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 10,654,229 $ 280,406 $ 163,461 $ 3,631 $ 25,149
Charges from Glenbrook Life and Annuity Company:
Mortality and expense risk (1,370,950) (60,730) (18,561) (3,595) (16,150)
Administrative expense (106,632) (4,636) (1,415) (278) (1,235)
--------------- ---------------- -------------- ------------- ------------
Net investment income (loss) 9,176,647 215,040 143,485 (242) 7,764
--------------- ---------------- -------------- ------------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 9,742,240 340,138 746,749 137,040 292,947
Cost of investments sold 9,023,187 321,953 739,837 139,921 282,039
--------------- ---------------- -------------- ------------- ------------
Net realized gains (losses) 719,053 18,185 6,912 (2,881) 10,908
--------------- ---------------- -------------- ------------- ------------
Change in unrealized gains (losses) (15,010,333) 3,068,196 (54,844) (11,763) 481,839
--------------- ---------------- -------------- ------------- ------------
Net gains (losses) on investments (14,291,280) 3,086,381 (47,932) (14,644) 492,747
--------------- ---------------- -------------- ------------- ------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ (5,114,633) $ 3,301,421 $ 95,553 $ (14,886) $ 500,511
=============== ================ ============== ============= ============
</TABLE>
(b) For the Period Beginning January 14, 1999 and Ended December 31, 1999.
See notes to financial statements.
4
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------
Federated
Oppenheimer Variable Insurance Series
Account Funds Sub-Accounts Sub-Account
--------------------------------- ------------------
For the Year Ended December 31, 1999
-----------------------------------------------------
Oppenheimer Oppenheimer Federated
Multiple Strategic Prime Money
Strategies (b) Bond (b) Fund II
---------------- -------------- ------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 23,254 $ 16,952 $ 368,398
Charges from Glenbrook Life and Annuity Company:
Mortality and expense risk (17,731) (11,087) (104,442)
Administrative expense (1,360) (845) (8,124)
---------------- -------------- ------------------
Net investment income (loss) 4,163 5,020 255,832
---------------- -------------- ------------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 154,545 72,251 8,791,238
Cost of investments sold 153,612 72,197 8,791,238
---------------- -------------- ------------------
Net realized gains (losses) 933 54 -
---------------- -------------- ------------------
Change in unrealized gains (losses) 171,133 20,412 -
---------------- -------------- ------------------
Net gains (losses) on investments 172,066 20,466 -
---------------- -------------- ------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 176,229 $ 25,486 $ 255,832
================ ============== ==================
</TABLE>
(b) For the Period Beginning January 14, 1999 and Ended December 31, 1999.
See notes to financial statements.
5
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------------
STI Classic Variable Trust Sub-Accounts
----------------------------------------------------------------------------------
STI Capital STI International STI Investment
Appreciation (a) Equity Grade Bond
---------------------------- --------------------------- --------------------------
1999 1998 1999 1998 1999 1998
------------- -------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 7,278,778 $ 6,743,599 $ 104,883 $ (106,396) $ 1,144,971 $ 547,525
Net realized gains (losses) 2,098,194 1,469,881 553,340 109,312 (79,389) 117,368
Change in unrealized gains (losses) (979,087) 11,150,227 640,078 1,143,936 (1,717,916) 398,798
------------- -------------- ------------- ------------- ------------ -------------
Change in net assets resulting from operations 8,397,885 19,363,707 1,298,301 1,146,852 (652,334) 1,063,691
------------- -------------- ------------- ------------- ------------ -------------
FROM CAPITAL TRANSACTIONS
Deposits 15,853,779 24,446,108 1,316,385 4,433,475 3,527,483 6,475,380
Benefit payments (1,157,750) (561,755) (188,434) (73,429) (50,688) (176,342)
Payments on termination (7,850,167) (3,806,509) (1,431,925) (567,154) (2,986,524) (638,646)
Contract maintenance charges (34,572) (30,517) (3,844) (4,847) (4,170) (4,826)
Transfers among the sub-accounts
and with the Fixed Account - net 12,500,249 4,245,636 (1,649,649) 135,938 2,688,900 2,565,986
------------- -------------- ------------- ------------- ------------ -------------
Change in net assets resulting
from capital transactions 19,311,539 24,292,963 (1,957,467) 3,923,983 3,175,001 8,221,552
------------- -------------- ------------- ------------- ------------ -------------
INCREASE (DECREASE) IN NET ASSETS 27,709,424 43,656,670 (659,166) 5,070,835 2,522,667 9,285,243
NET ASSETS AT BEGINNING OF PERIOD 105,508,601 61,851,931 18,918,709 13,847,874 19,070,261 9,785,018
------------- -------------- ------------- ------------- ------------ -------------
NET ASSETS AT END OF PERIOD $133,218,025 $105,508,601 $ 18,259,543 $ 18,918,709 $21,592,928 $ 19,070,261
============= ============== ============= ============= ============ =============
</TABLE>
(a) Previously Known as Capital Growth
See notes to financial statements.
6
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------------
STI Classic Variable Trust Sub-Accounts
----------------------------------------------------------------------------------
STI Mid-Cap STI Small Cap STI Value
Equity Equity Income Stock
--------------------------- ------------------------- ----------------------------
1999 1998 1999 1998 1999 1998
------------- ------------- ------------ ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 75,785 $ 1,922,529 $ (12,790) $ (9,581) $ 9,176,647 $ 7,229,160
Net realized gains (losses) 427,350 138,666 (686,576) (185,121) 719,053 1,032,932
Change in unrealized gains (losses) 2,723,497 (610,704) 91,211 (1,254,137) (15,010,333) (2,112,253)
------------- ------------- ------------ ------------ -------------- -------------
Change in net assets resulting from operations 3,226,632 1,450,491 (608,155) (1,448,839) (5,114,633) 6,149,839
------------- ------------- ------------ ------------ -------------- -------------
FROM CAPITAL TRANSACTIONS
Deposits 1,453,587 7,141,699 1,042,643 6,248,051 9,542,762 25,036,026
Benefit payments (272,459) (78,213) (173,961) (4,221) (1,193,475) (599,971)
Payments on termination (1,819,424) (1,149,699) (658,337) (203,035) (6,806,043) (4,353,450)
Contract maintenance charges (6,801) (8,116) (1,252) (2,381) (27,822) (29,972)
Transfers among the sub-accouts
and with the Fixed Account - net (2,963,074) (153,787) (1,497,501) 1,592,443 6,290,059 (192,533)
------------- ------------- ------------ ------------ -------------- -------------
Change in net assets resulting
from capital transactions (3,608,171) 5,751,884 (1,288,408) 7,630,857 7,805,481 19,860,100
------------- ------------- ------------ ------------ -------------- -------------
INCREASE (DECREASE) IN NET ASSETS (381,539) 7,202,375 (1,896,563) 6,182,018 2,690,848 26,009,939
NET ASSETS AT BEGINNING OF PERIOD 31,100,372 23,897,997 8,848,340 2,666,322 98,719,298 72,709,359
------------- ------------- ------------ ------------ -------------- -------------
NET ASSETS AT END OF PERIOD $ 30,718,833 $ 31,100,372 $ 6,951,777 $ 8,848,340 $ 101,410,146 $ 98,719,298
============= ============= ============ ============ ============== =============
</TABLE>
See notes to financial statements.
7
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
Oppenheimer
AIM Variable Templeton Variable Product Variable Account
Insurance Fund Sub-Accounts Series Fund Sub-Accounts Funds Sub-Accounts
---------------------------------- ---------------------------- -------------------
Capital High Templeton Templeton Oppenheimer
Appreciation Yield Bond Stock Multiple Strategies
-------------- -------------- ----------- ---------------- -------------------
1999 (b) 1999 (b) 1999 (b) 1999 (b) 1999 (b)
-------------- -------------- ----------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 215,040 $ 143,485 $ (242) $ 7,764 $ 4,163
Net realized gains (losses) 18,185 6,912 (2,881) 10,908 933
Change in unrealized gains (losses) 3,068,196 (54,844) (11,763) 481,839 171,133
-------------- -------------- ----------- ---------------- -------------------
Change in net assets resulting from operations 3,301,421 95,553 (14,886) 500,511 176,229
-------------- -------------- ----------- ---------------- -------------------
FROM CAPITAL TRANSACTIONS
Deposits 3,318,156 1,032,178 335,376 774,673 1,512,033
Benefit payments - (1,128) - - -
Payments on termination (261,261) (201,543) (6,321) (78,990) (89,049)
Contract maintenance charges (5,069) (671) (167) (1,396) (1,319)
Transfers among the sub-accounts
and with the Fixed Account - net 9,107,371 1,157,897 205,366 3,170,597 2,489,985
-------------- -------------- ----------- ---------------- -------------------
Change in net assets resulting
from capital transactions 12,159,197 1,986,733 534,254 3,864,884 3,911,650
-------------- -------------- ----------- ---------------- -------------------
INCREASE (DECREASE) IN NET ASSETS 15,460,618 2,082,286 519,368 4,365,395 4,087,879
NET ASSETS AT BEGINNING OF PERIOD - - - - -
-------------- -------------- ----------- ---------------- -------------------
NET ASSETS AT END OF PERIOD $ 15,460,618 $ 2,082,286 $ 519,368 $ 4,365,395 $ 4,087,879
============== ============== =========== ================ ===================
</TABLE>
(b) For the Period Beginning Janurary 14, 1999 and Ended December 31, 1999.
See notes to financial statements.
8
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------
Oppenheimer
Variable Account Federated
Funds Sub-Accounts Insurance Series Sub-Account
-------------------- -------------------------------
Oppenheimer Federated Prime
Strategic Bond Money Fund II
-------------------- -------------------------------
1999 (b) 1999 1998
-------------------- --------------- --------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 5,020 $ 255,832 $ 237,933
Net realized gains (losses) 54 - -
Change in unrealized gains (losses) 20,412 - -
-------------------- --------------- --------------
Change in net assets resulting from operations 25,486 255,832 237,933
-------------------- --------------- --------------
FROM CAPITAL TRANSACTIONS
Deposits 631,371 920,563 5,468,055
Benefit payments (1,117) (11,009) (119,466)
Payments on termination (32,080) (2,297,384) (711,475)
Contract maintenance charges (547) (413) (888)
Transfers among the sub-accouts
and with the Fixed Account - net 1,132,116 1,388,976 (2,788,014)
-------------------- --------------- --------------
Change in net assets resulting
from capital transactions 1,729,743 733 1,848,212
-------------------- --------------- --------------
INCREASE (DECREASE) IN NET ASSETS 1,755,229 256,565 2,086,145
NET ASSETS AT BEGINNING OF PERIOD - 8,384,543 6,298,398
-------------------- --------------- --------------
NET ASSETS AT END OF PERIOD $ 1,755,229 $ 8,641,108 $ 8,384,543
==================== =============== ==============
</TABLE>
(b) For the Period Beginning Janurary 14, 1999 and Ended December 31, 1999.
See notes to financial statements.
9
<PAGE>
GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. ORGANIZATION
Glenbrook Life and Annuity Company Variable Annuity Account (the
"Account"), a unit investment trust registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, is a
Separate Account of Glenbrook Life and Annuity Company ("Glenbrook Life").
The assets of the Account are legally segregated from those of Glenbrook
Life. Glenbrook Life is wholly owned by Allstate Life Insurance Company, a
wholly owned subsidiary of Allstate Insurance Company, which is wholly
owned by The Allstate Corporation.
Glenbrook Life issues the STI Classic Variable Annuity, the deposits of
which are invested at the direction of the contractholders in the
sub-accounts that comprise the Account. Absent any contract provisions
wherein Glenbrook Life contractually guarantees either a minimum return or
account value to the beneficiaries of the contractholders in the form of a
death benefit, the contractholders bear the investment risk that the
sub-accounts may not meet their stated objectives The sub-accounts invest
in the following underlying mutual fund portfolios (collectively the
"Funds"):
STI CLASSIC VARIABLE TRUST TEMPLETON VARIABLE PRODUCTS SERIES FUND
STI Capital Appreciation Templeton Bond
STI International Equity Templeton Stock
STI Investment Grade Bond
STI Mid-Cap Equity OPPENHEIMER VARIABLE ACCOUNT FUNDS
STI Small Cap Equity Oppenheimer Multiple Strategies
STI Value Income Stock Oppenheimer Strategic Bond
AIM VARIABLE INSURANCE FUND FEDERATED INSURANCE SERIES
Capital Appreciation Federated Prime Money Fund II
High Yield
Glenbrook Life provides insurance and administrative services to the
Account for a fee. Glenbrook Life also maintains a fixed account ("Fixed
Account"), to which contractholders may direct their deposits and receive
a fixed rate of return. Glenbrook Life has sole discretion to invest the
assets of the Fixed Account, subject to applicable law.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments consist of shares of the Funds and
are stated at fair value based on quoted market prices at December 31,
1999.
INVESTMENT INCOME - Investment income consists of dividends declared by
the Funds and is recognized on the ex-dividend date.
REALIZED GAINS AND LOSSES - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
FEDERAL INCOME TAXES - The Account intends to qualify as a segregated
asset account as defined in the Internal Revenue Code ("Code"). As such,
the operations of the Account are included in the tax return of Glenbrook
Life. Glenbrook Life is taxed as a life insurance company under the Code.
No federal income taxes are allocable to the Account as the Account did
not generate taxable income.
10
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. EXPENSES
ADMINISTRATIVE EXPENSE CHARGE - Glenbrook Life deducts administrative
expense charges daily at a rate equal to .10% per annum of the average
daily net assets of the Account. Glenbrook Life guarantees that the amount
of this charge will not increase over the life of the contract.
CONTRACT MAINTENANCE CHARGE - Glenbrook Life deducts an annual maintenance
charge of $30 on each contract anniversary and guarantees that this charge
will not increase over the life of the contract. This charge will be
waived if certain conditions are met.
MORTALITY AND EXPENSE RISK CHARGE - Glenbrook Life assumes mortality and
expense risks related to the operations of the Account and deducts charges
daily at a rate equal to 1.25% per annum of the daily net assets of the
Account. The mortality and expense risk charge covers insurance benefits
available with the contract and certain expenses of the contract. It also
covers the risk that the current charges will not be sufficient in the
future to cover the cost of administering the contract. At the
contractholder's discretion, additional options, primarily death benefits,
may be purchased for an additional charge. Glenbrook Life guarantees that
the amount of this charge will not increase over the life of the contract.
11
<PAGE>
4. UNITS ISSUED AND REDEEMED
(Units in whole amounts)
<TABLE>
<CAPTION>
STI Classic Variable Annuity
------------------------------------------------------------------------------
Unit activity during 1999:
------------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
December 31,1998 Issued Redeemed December 31, 1999 December 31, 1999
------------------- --------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Investments in the STI Classic Variable Trust
Sub-Accounts:
STI Capital Appreciation 3,048,172 641,759 (391,519) 3,298,412 $ 23.93
STI International Equity 785,600 124,886 (229,230) 681,256 13.73
STI Investment Grade Bond 974,155 372,472 (349,738) 996,889 11.72
STI Mid-Cap Equity 1,398,523 128,489 (290,344) 1,236,668 16.88
STI Small Cap Equity 339,380 137,359 (146,555) 330,184 7.95
STI Value Income Stock 3,867,770 562,969 (518,955) 3,911,784 16.22
Investments in the AIM Variable Insurance
Fund Sub-Accounts:
Capital Appreciation - 492,279 (24,143) 468,136 14.58
High Yield - 104,704 (28,414) 76,290 10.89
Investments in the Templeton Variable Products
Series Fund Sub-Accounts:
Templeton Bond - 33,590 (1,346) 32,244 9.26
Templeton Stock - 163,045 (15,499) 147,546 12.92
Investments in the Oppenheimer Variable Account
Funds Sub-Accounts:
Oppenheimer Multiple Strategies - 194,224 (7,872) 186,352 11.14
Oppenheimer Strategic Bond - 74,997 (1,874) 73,123 10.25
Investments in the Federated Insurance Series
Sub-Account:
Federated Prime Money Fund II 483,734 380,457 (382,661) 481,530 11.54
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
12
<PAGE>
4. UNITS ISSUED AND REDEEMED
(Units in whole amounts)
<TABLE>
<CAPTION>
STI Classic Variable Annuity with Enhanced Death Benefit
-------------------------------------------------------------------------------
Unit activity during 1999:
---------------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
December 31,1998 Issued Redeemed December 31, 1999 December 31, 1999
------------------- ---------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Investments in the STI Classic Variable Trust
Sub-Accounts:
STI Capital Appreciation 1,683,922 843,432 (252,965) 2,274,389 $ 23.87
STI International Equity 694,787 146,114 (190,501) 650,400 13.69
STI Investment Grade Bond 604,179 499,325 (256,503) 847,001 11.69
STI Mid-Cap Equity 671,132 99,801 (186,698) 584,235 16.84
STI Small Cap Equity 706,858 154,147 (315,716) 545,289 7.93
STI Value Income Stock 1,961,704 642,348 (258,144) 2,345,908 16.18
Investments in the AIM Variable Insurance
Fund Sub-Accounts:
Capital Appreciation - 614,069 (21,370) 592,699 14.57
High Yield - 154,453 (39,340) 115,113 10.87
Investments in the Templeton Variable Products
Series Fund Sub-Accounts:
Templeton Bond - 28,942 (5,054) 23,888 9.25
Templeton Stock - 198,266 (7,802) 190,464 12.91
Investments in the Oppenheimer Variable Account
Funds Sub-Accounts:
Oppenheimer Multiple Strategies - 189,444 (8,673) 180,771 11.13
Oppenheimer Strategic Bond - 101,820 (3,609) 98,211 10.24
Investments in the Federated Insurance Series
Sub-Account:
Federated Prime Money Fund II 266,876 382,717 (381,554) 268,039 11.51
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
13
<PAGE>
PART C
OTHER INFORMATION
24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS:
The financial statements of Glenbrook Life and Annuity Company and the
financial statements of Glenbrook Life and Annuity Company Variable
Annuity Account are contained in Part B of this Registration Statement.
(b) EXHIBITS:
(1) Resolution of the Board of Directors of Glenbrook Life and Annuity Company
authorizing establishment of the Glenbrook Life and Annuity Company Variable
Annuity Account (Incorporated herein by reference to Post-Effective Amendment
No. 1 to this Registration Statement (File No. 033-91914) dated April 26, 1996.)
(2) Not Applicable
(3) Form of Underwriting Agreement (Incorporated herein by reference to
Post-Effective Amendment No. 1 to this Registration Statement (File No.
033-91914) dated April 26, 1996.)
(4) Form of Contract (Incorporated herein by reference to Post-Effective
Amendment No. 2 to Depositor's Form S-1 Registration Statement (File No.
33-91916) dated February 25, 1997.)
(5) Form of application for a Contract (Incorporated herein by reference to
Post-Effective Amendment No. 2 to Depositor's Form S-1 Registration Statement
(File No. 33-91916) dated February 25, 1997.)
(6)(a) Amended and Restated Articles of Incorporation and Articles of
Redomestication of Glenbrook Life and Annuity Company (Incorporated herein by
reference to Depositor's Form 10-K Annual Report dated March 30, 1999.)
(6)(b) Amended and Restated By-laws of Glenbrook Life and Annuity Company
(Incorporated herein by reference to Depositor's Form 10-K Annual Report dated
March 30, 1999.)
(7) Reinsurance Agreement with Allstate Life Insurance Company (Incorporated
herein by reference to the initial filing of Depositor's Form S-1 Registration
Statement (File No. 333-07275) dated June 28, 1996.)
(8)(a) Form of Participation Agreement with AIM Variable Insurance Funds
(Incorporated herein by reference in Post-Effective Amendment No. 1 to
Depositor's Form N-4 Registration Statement (File No. 033-62203), dated April
22, 1996.)
(8)(b) Schedule A to AIM Variable Insurance Funds Participation Agreement
(Previously filed in Post-Effective Amendment No. 7 to this Registration
Statement (File No. 033-91914) dated December 14, 1998.)
(8)(c) Form of Participation Agreement with Oppenheimer Variable Account Funds
(Previously filed in Post-Effective Amendment No. 7 to this Registration
Statement (File No. 033-91914) dated December 14, 1998.)
(8)(d) Form of Participation Agreement with Templeton Variable Products Series
Fund (Previously filed in Post-Effective Amendment No. 7 to this Registration
Statement (File No. 033-91914) dated December 14, 1998.)
(9)(a) Opinion and Consent of Counsel Re: Legality (Incorporated herein by
reference to the initial filing of Registration's Form S-1 Registration
Statement (File No. 033-91916 dated May 4, 1999)
(9)(b) Opinion and Consent of Counsel Re: Legality (Arizona)
(10)(a) Independent Auditors' Consent
(10)(b) Consent of Freedman, Levy, Kroll and Simonds
(11) Not applicable
(12) Not applicable
(13)(a) Computation of Performance Quotations (Previously filed in
Post-Effective Amendment No. 3 to this Registration Statement, dated February
28, 1997.)
(13)(b) Computation of Adjusted Historical Total Return Performance Quotations
(Previously filed in Post-Effective Amendment No. 7 to this Registration
Statement (File No. 033-91914) dated December 11, 1998.)
(13)(c) Computation of Adjusted Historical Total Return Quotations.
(14) Not Applicable
<PAGE>
(99) Powers of Attorney for Thomas J. Wilson, II, Michael J. Velotta, Sarah
R. Donahue, Brent H. Hamann, John R. Hunter, Timothy N. Vander Pas, G. Craig
Whitehead, Kevin R. Slawin, and Samuel H. Pilch
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR, GLENBROOK LIFE AND ANNUITY
COMPANY
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
Thomas J. Wilson, II Director, President and Chief Operating
Officer
Michael J. Velotta Director, Vice President, Secretary
and General Counsel
Sarah R. Donahue Director and Assistant Vice President
Brent H. Hamann Director
John R. Hunter Director and Vice President
Kevin R. Slawin Director and Vice President
Timothy N. Vander Pas Director and Assistant Vice President
G. Craig Whitehead Director and Assistant Vice President
Marla G. Friedman Vice President
Karen C. Gardner Vice President
Samuel H. Pilch Controller
Casey J. Sylla Chief Investment Officer
James P. Zils Treasurer
A. Sales Miller Assistant Vice President, Operations
Barry S. Paul Assistant Vice President and Assistant
Treasurer
C. Nelson Strom Assistant Vice President and Corporate
Actuary
Joanne M. Derrig Assistant Secretary, Assistant General
Counsel and Chief Compliance Officer
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Patricia W. Wilson Assistant Treasurer
The principal business address of the foregoing officers and directors is
3100 Sanders Road, Northbrook, Illinois.
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Incorporated herein by reference to Annual Report on Form 10-K, filed by the
Allstate Corporation on March 28, 2000 (File No. 1-11840).
27. NUMBER OF CONTRACT OWNERS
As of April 18, 2000, there were 4,462 nonqualified contracts and 2,203
qualified contracts.
28. INDEMNIFICATION
The by-laws of both Glenbrook Life and Annuity Company (Depositor) and Allstate
Life Financial Services, Inc. ("Distributor"), provide for the indemnification
of its directors, officers and controlling persons, against expenses, judgments,
fines and amounts paid in settlement as incurred by such person, if such person
acted properly. No indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of a duty to the Company, unless a
court determines such person is entitled to such indemnity.
Insofar as indemnification for liability arising out of the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
29. PRINCIPAL UNDERWRITERS
(a) Registrant's principal underwriter also acts as principal underwriter
for the following investment companies:
Allstate Financial Advisors Separate Account I
Allstate Life of New York Separate Account A
Glenbrook Life and Annuity Company Separate Account A
Glenbrook Life and Annuity Company Variable Annuity Account
Glenbrook Life Variable Life Separate Account A
Glenbrook Life Multi-Manager Variable Account
Glenbrook Life Scudder Variable Account A
Glenbrook Life AIM Variable Life Separate Account A
Lincoln Benefit Life Variable Annuity Account
Lincoln Benefit Life Variable Account
Charter National Variable Annuity Account
Charter National Variable Account
Intramerica Variable Annuity Account
(b) The directors and principal officers of the principal underwriter
are:
Name and Principal Business
Address* of Each Such Person Positions and Offices with Underwriter
- ---------------------------- --------------------------------------
Thomas J. Wilson, II Director
Kevin R. Slawin Director
Michael J. Velotta Director and Secretary
John R. Hunter Director, President and Chief Executive Officer
Janet H. Albers Director, Vice President and Controller
Brent H. Hamann Vice President
Andrea J. Schur Vice President
Terry R. Young General Counsel and Assistant Secretary
James P. Zils Treasurer
Lisa A. Burnell Assistant Vice President and Compliance Officer
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
Emma M. Kalaidjian Assistant Secretary
Carol S. Watson Assistant Secretary
Barry S. Paul Assistant Treasurer
* The principal business address of the above-named individuals is 3100 Sanders
Road, Northbrook, Illinois.
(c) Compensation of ALFS, Inc.
None
30. LOCATION OF ACCOUNTS AND RECORDS
The Depositor, Glenbrook Life and Annuity Company, is located at 3100 Sanders
Road, Northbrook, Illinois 60062
The Distributor, ALFS, Inc., is located at 3100
Sanders Road, Northbrook, Illinois 60062
Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None
32. UNDERTAKINGS
The Registrant undertakes to file a post-effective amendment to the Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in the Registration Statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be accepted.
Registrant furthermore agrees to include either, as part of any application to
purchase a contract offered by the prospectus, a toll-free number that an
applicant can call to request a Statement of Additional Information or a post
card or similar written communication affixed to or included in the Prospectus
that the applicant can remove to send for a Statement of Additional Information.
Finally, the Registrant agrees to deliver any Statement of Additional
Information and any Financial Statements required to be made available under
this Form N-4 promptly upon written or oral request.
REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE
The Company represents that it is relying upon a November 28, 1988 Securities
and Exchange Commission no-action letter issued to the American Council of Life
Insurance ("ACLI") and that the provisions of paragraphs 1-4 of the no-action
letter have been complied with.
REPRESENTATION REGARDING CONTRACT EXPENSES
<PAGE>
Glenbrook Life and Annuity Company represents that the fees and charges
deducted under the Contracts described in this Registration Statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Glenbrook Life and Annuity
Company under the Contracts. Glenbrook Life and Annuity Company bases its
representation on its assessment of all of the facts and circumstances,
including such relevant factors as: the nature and extent of such services,
expenses and risks; the need for Glenbrook Life and Annuity Company to earn a
profit; the degree to which the Contracts include innovative features; and
the regulatory standards for exemptive relief under the Investment Company
Act of 1940 used prior to October 1996, including the range of industry
practice. This representation applies to all Contracts sold pursuant to this
Registration Statement, including those sold on the terms specifically
described in the prospectus(es) contained herein, or any variations therein,
based on supplements, endorsements, or riders to any Contracts or
prospectus(es), or otherwise.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company Act of
1940, Registrant, Glenbrook Life and Annuity Company Variable Annuity Account,
certifies that it meets the requirements of Securities Act Rule 485(b) for
effectiveness of this amended Registration Statement and has caused this amended
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the Township of Northfield, State of Illinois on the
17th day of April, 2000.
GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
BY: GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
By:/s/ Michael J. Velotta
----------------------
Michael J. Velotta
Vice President, Secretary
and General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been duly signed below by the following Directors and Officers of Glenbrook
Life and Annuity Company on the 17th day of April, 2000.
*/THOMAS J. WILSON, II President, Chief Operating Officer
Thomas J. Wilson, II and Director, (Principal Executive Officer)
/s/MICHAEL J. VELOTTA Vice President, Secretary,
Michael J. Velotta General Counsel and Director
*/JOHN R. HUNTER Vice President and Director
John R. Hunter
*/KEVIN R. SLAWIN Vice President and Director
Kevin R. Slawin (Principal Financial Officer)
*/SAMUEL H. PILCH Controller
Samuel H. Pilch (Principal Accounting Officer)
*/SARAH R. DONAHUE Assistant Vice President and Director
Sarah R. Donahue
*/TIMOTHY N. VANDER PAS Assistant Vice President and Director
Timothy N. VanderPas
*/BRENT H. HAMANN Director
Brent H. Hamann
*/G. CRAIG WHITEHEAD Assistant Vice President and Director
G. Craig Whitehead
*/By Michael J. Velotta, pursuant to Powers of Attorney filed herewith
<PAGE>
EXHIBIT INDEX
Exhibit Description
9(b) Opinion and Consent of Counsel Re: Legality (Arizona)
(10)(a) Independent Auditors' Consent
(10)(b) Consent of Freedman, Levy, Kroll and Simonds
(13)(c) Computation of Adjusted Historical Total Return Quotations
(99) Powers of Attorney for Thomas J. Wilson, II, Michael J.
Velotta, Sarah R. Donahue, Brent H. Hamann, John R. Hunter,
Timothy N. Vander Pas, G. Craig Whitehead, Kevin R. Slawin,
and Samuel H. Pilch
<PAGE>
DATE: MAY 1, 2000
TO: GLENBROOK LIFE AND ANNUITY COMPANY
NORTHBROOK, ILLINOIS 60062
FROM: MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
RE: FORM N-4 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
AND THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 033-91914
With reference to the Registration Statement on Form N-4 filed by Glenbrook Life
and Annuity Company (the "Company"), as depositor, and Glenbrook Life and
Annuity Company Variable Annuity Account as Registrant), with the Securities and
Exchange Commission covering the Flexible Premium Deferred Variable Annuity
Contracts, I have examined such documents and such laws as I have considered
necessary and appropriate, and on the basis of such examination it is my opinion
that as of May 1, 2000:
1. The Company is duly organized and existing under the laws of the State of
Arizona and has been duly authorized to do business by the Director of
insurance of the State of Arizona.
2. The securities registered by the above Registration Statement when issued
will be valid, legal and binding obligations of the Company.
I hereby consent to the filing of the opinion as an exhibit to the above
referenced Registration Statement and to the use of my name under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement.
Sincerely,
/s/MICHAEL J. VELOTTA
- ---------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 10 to Registration
Statement No. 033-91914 of Glenbrook Life and Annuity Company Variable Annuity
Account of Glenbrook Life and Annuity Company on Form N-4 of our report dated
February 25, 2000 relating to the financial statements and the related financial
statement schedule of Glenbrook Life and Annuity Company, and our report dated
March 27, 2000 relating to the financial statements of Glenbrook Life and
Annuity Company Variable Annuity Account, appearing in the Statement of
Additional Information (which is incorporated by reference in the Prospectus of
Glenbrook Life and Annuity Company Variable Annuity Account of Glenbrook Life
and Annuity Company), which is part of such Registration Statement, and to the
reference to us under the heading "Experts" in such Prospectus and Statement of
Additional Information.
/s/ Deloitte & Touche LLP
Chicago, Illinois
May 1, 2000
<PAGE>
FREEDMAN, LEVY, KROLL & SIMONDS
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in Post-Effective Amendment No. 10 to the
Form N-4 Registration Statement of Glenbrook Life and Annuity Company Variable
Annuity Account (File No. 033-91914).
/s/ Freedman, Levy, Kroll & Simonds
FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
May 1, 2000
<PAGE>
BASE
- ------------------------------------------------------------------------------
1yr ago: 12/31/98
Date: 12/31/99
<TABLE>
<CAPTION>
<S> <C>
VIP II Index 500
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.391952 119.16179
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 119.09121 1190.9121
1.000
FORMULA: 1000*(1+T)= 1190.9121
= 1148.412116
T = 14.84% 19.09%
R = 14.84% 19.09%
VIP Overseas
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 7.090289 141.03797
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 140.96740 1409.6740
1.000
FORMULA: 1000*(1+T)= 1409.6740
= 1367.173988
T = 36.72% 40.97%
R = 36.72% 40.97%
Multiple Strategies
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.048142 110.51993
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 110.44935 1104.4935
1.000
FORMULA: 1000*(1+T)= 1104.4935
= 1061.99352
T = 6.20% 10.45%
R = 6.20% 10.45%
Growth & Income
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 10.001257 0.07057 0.06
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.296622 107.56595
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 107.49538 1074.9538
1.000
FORMULA: 1000*(1+T)= 1074.9538
= 1032.453767
T = 3.25% 7.50%
R = 3.25% 7.50%
Investment Grade Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.293942 97.14451
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 97.07394 970.7394
1.000
FORMULA: 1000*(1+T)= 970.7394
= 928.2393893
T = -7.18% -2.93%
R = -7.18% -2.93%
Mid-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.886708 112.52761
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 112.45703 1124.5703
1.000
FORMULA: 1000*(1+T)= 1124.5703
= 1082.070329
T = 8.21% 12.46%
R = 8.21% 12.46%
Quality Stock Growth
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 10.001257 0.07057 0.06
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.623489 94.13103
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 94.06046 940.6046
1.000
FORMULA: 1000*(1+T)= 940.6046
= 898.1045782
T = -10.19% -5.94%
R = -10.19% -5.94%
Templeton Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.853454 101.48726
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 101.41668 1014.1668
1.000
FORMULA: 1000*(1+T)= 1014.1668
= 971.6667935
T = -2.83% 1.42%
R = -2.83% 1.42%
Date: 12/31/99
1 yr ago: 12/31/98
2 yr ago: 12/31/97
3 yr ago: 12/31/96
4 yr Ago: 12/29/95
5 Yr. ago: 12/31/94
VIP II Index 500
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 3.066515 326.10308
1 FEE 29-Dec-95 0.705758 4.158670 0.16971
2 FEE 31-Dec-96 0.705758 5.043544 0.13993
3 FEE 31-Dec-97 0.705758 6.623774 0.10655
4 FEE 31-Dec-98 0.705758 8.391952 0.08410
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 325.53222 3255.3222
5.000
FORMULA: 1000*(1+T)= 3255.3222
= 3246.822196
T = 26.56% 26.62%
R = 224.68% 225.53%
VIP Overseas
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 4.765992 209.81991
1 FEE 29-Dec-95 0.705758 5.171176 0.13648
2 FEE 31-Dec-96 0.705758 5.785160 0.12199
3 FEE 31-Dec-97 0.705758 6.371662 0.11077
4 FEE 31-Dec-98 0.705758 7.090289 0.09954
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 209.28055 2092.8055
5.000
FORMULA: 1000*(1+T)= 2092.8055
= 2084.305542
T = 15.82% 15.92%
R = 108.43% 109.28%
Multiple Strategies
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 5.406529 184.96155
1 FEE 29-Dec-95 0.705758 6.486522 0.10880
2 FEE 31-Dec-96 0.705758 7.405574 0.09530
3 FEE 31-Dec-97 0.705758 8.581749 0.08224
4 FEE 31-Dec-98 0.705758 9.048142 0.07800
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 184.52663 1845.2663
5.000
FORMULA: 1000*(1+T)= 1845.2663
= 1836.766329
T = 12.93% 13.03%
R = 83.68% 84.53%
Growth & Income
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 10.001257 0.07057 0.02
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 7.348192 0.09605
3 FEE 31-Dec-97 0.705758 8.487245 0.08316
4 FEE 31-Dec-98 0.705758 9.296622 0.07592
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 8.748645 0.08067
2 FEE 31-Dec-96 0.705758 8.843818 0.07980
3 FEE 31-Dec-97 0.705758 9.517543 0.07415
4 FEE 31-Dec-98 0.705758 10.293942 0.06856
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 6.042801 0.11679
2 FEE 31-Dec-96 0.705758 6.932216 0.10181
3 FEE 31-Dec-97 0.705758 8.376323 0.08426
4 FEE 31-Dec-98 0.705758 8.886708 0.07942
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 10.001257 0.07057 0.02
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 12.237380 0.05767
4 FEE 31-Dec-98 0.705758 10.623489 0.06643
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 7.464677 133.96427
1 FEE 29-Dec-95 0.705758 8.360830 0.08441
2 FEE 31-Dec-96 0.705758 9.177253 0.07690
3 FEE 31-Dec-97 0.705758 9.299915 0.07589
4 FEE 31-Dec-98 0.705758 9.853454 0.07163
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 133.58486 1335.8486
5.000
FORMULA: 1000*(1+T)= 1335.8486
= 1327.348641
T = 5.83% 5.96%
R = 32.73% 33.58%
VIP II Index 500
31-Aug-92
TO NO. YEARS 7.332
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Aug-92 1000.00 2.675771 373.72406
1 FEE 31-Aug-93 0.705758 3.038325 0.23229 0.06
2 FEE 31-Aug-94 0.705758 3.156607 0.22358 0.05
3 FEE 31-Aug-95 0.705758 3.783170 0.18655 0.04
4 FEE 31-Aug-96 0.705758 4.431441 0.15926 0.03
5 FEE 31-Aug-97 0.705758 6.137745 0.11499 0.02
6 FEE 31-Aug-98 0.705758 6.520649 0.10823 0.01
7 FEE 31-Aug-99 0.705758 8.993052 0.07848 0
8 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 372.55010 3725.5010
7.332
FORMULA: 1000*(1+T)= 3725.5010
= 3725.501049
T = 19.65% 19.65%
R = 272.55%
VIP Overseas
30-Jan-87
TO NO. YEARS 12.917
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Jan-87 1000.00 3.048655 328.01350
1 FEE 30-Jan-88 0.705758 2.753228 0.25634 0.06
2 FEE 30-Jan-89 0.705758 3.050438 0.23136 0.05
3 FEE 30-Jan-90 0.705758 3.808794 0.18530 0.04
4 FEE 30-Jan-91 0.705758 3.702756 0.19060 0.03
5 FEE 30-Jan-92 0.705758 3.952724 0.17855 0.02
6 FEE 30-Jan-93 0.705758 3.586508 0.19678 0.01
7 FEE 30-Jan-94 0.705758 4.738956 0.14893 0
8 FEE 30-Jan-95 0.705758 4.765992 0.14808 0
9 FEE 30-Jan-96 0.705758 5.171176 0.13648 0
10 FEE 30-Jan-97 0.705758 5.785160 0.12199 0
11 FEE 30-Jan-98 0.705758 6.574710 0.10734 0
12 FEE 30-Jan-99 0.705758 7.182778 0.09826 0
13 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 325.94291 3259.4291
12.917
FORMULA: 1000*(1+T)= 3259.4291
= 3259.42909
T = 9.58% 9.58%
R = 225.94%
Multiple Strategies
09-Feb-87
TO NO. YEARS 12.890
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Feb-87 1000.00 2.820896 354.49729
1 FEE 09-Feb-88 0.705758 2.948381 0.23937 0.06
2 FEE 09-Feb-89 0.705758 3.687541 0.19139 0.05
3 FEE 09-Feb-90 0.705758 3.914366 0.18030 0.04
4 FEE 09-Feb-91 0.705758 4.002027 0.17635 0.03
5 FEE 09-Feb-92 0.705758 4.650893 0.15175 0.02
6 FEE 09-Feb-93 0.705758 5.003975 0.14104 0.01
7 FEE 09-Feb-94 0.705758 5.690844 0.12402 0
8 FEE 09-Feb-95 0.705758 5.558488 0.12697 0
9 FEE 09-Feb-96 0.705758 6.705042 0.10526 0
10 FEE 09-Feb-97 0.705758 7.581278 0.09309 0
11 FEE 09-Feb-98 0.705758 8.772512 0.08045 0
12 FEE 09-Feb-99 0.705758 8.936044 0.07898 0
13 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 352.73776 3527.3776
12.890
FORMULA: 1000*(1+T)= 3527.3776
= 3527.377564
T = 10.27% 10.27%
R = 252.74%
Growth & Income
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-99 1000.00 10.001257 99.98743
1 FEE N/A 0 N/A 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.001257 99.98743 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
International Equity
07-Nov-96
TO NO. YEARS 3.146
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 07-Nov-96 1000.00 7.237768 138.16414
1 FEE 07-Nov-97 0.705758 8.465876 0.08337 0.06
2 FEE 07-Nov-98 0.705758 8.763222 0.08054 0.05
3 FEE 07-Nov-99 0.705758 9.607731 0.07346 0.04
4 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 137.85621 1378.5621
3.146
FORMULA: 1000*(1+T)= 1378.5621
= 1353.062068
T = 10.09% 10.74%
R = 35.31%
Investment Grade Bond
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Oct-95 1000.00 8.460489 118.19648
1 FEE 02-Oct-96 0.705758 8.684425 0.08127 0.06
2 FEE 02-Oct-97 0.705758 9.329208 0.07565 0.05
3 FEE 02-Oct-98 0.705758 10.431745 0.06765 0.04
4 FEE 02-Oct-99 0.705758 10.049469 0.07023 0.03
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 117.83110 1178.3110
4.246
FORMULA: 1000*(1+T)= 1178.3110
= 1161.311014
T = 3.58% 3.94%
R = 16.13%
Mid-Cap Equity
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Oct-95 1000.00 5.872484 170.28569
1 FEE 02-Oct-96 0.705758 6.604899 0.10685 0.06
2 FEE 02-Oct-97 0.705758 8.604549 0.08202 0.05
3 FEE 02-Oct-98 0.705758 6.943111 0.10165 0.04
4 FEE 02-Oct-99 0.705758 8.306627 0.08496 0.03
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 169.83963 1698.3963
4.246
FORMULA: 1000*(1+T)= 1698.3963
= 1681.396289
T = 13.02% 13.29%
R = 68.14%
Quality Stock Growth
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-99 1000.00 10.001257 99.98743
1 FEE N/A 0 N/A 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.001257 99.98743 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
Small-Cap Equity
21-Oct-97
TO NO. YEARS 2.193
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Oct-97 1000.00 12.521234 79.86433
1 FEE 21-Oct-98 0.705758 9.641056 0.07320 0.06
2 FEE 21-Oct-99 0.705758 9.250413 0.07629 0.05
3 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 79.64426 796.4426
2.193
FORMULA: 1000*(1+T)= 796.4426
= 762.4425897
T = -11.63% -9.86%
R = -23.76%
Templeton Bond
24-Aug-88
TO NO. YEARS 11.351
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Aug-88 1000.00 5.388027 185.59669
1 FEE 24-Aug-89 0.705758 5.695410 0.12392 0.06
2 FEE 24-Aug-90 0.705758 5.966408 0.11829 0.05
3 FEE 24-Aug-91 0.705758 6.359223 0.11098 0.04
4 FEE 24-Aug-92 0.705758 7.303490 0.09663 0.03
5 FEE 24-Aug-93 0.705758 7.885833 0.08950 0.02
6 FEE 24-Aug-94 0.705758 7.452369 0.09470 0.01
7 FEE 24-Aug-95 0.705758 8.134557 0.08676 0
8 FEE 24-Aug-96 0.705758 8.578657 0.08227 0
9 FEE 24-Aug-97 0.705758 9.201106 0.07670 0
10 FEE 24-Aug-98 0.705758 9.507249 0.07423 0
11 FEE 24-Aug-99 0.705758 10.060879 0.07015 0
12 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 184.50198 1845.0198
11.351
FORMULA: 1000*(1+T)= 1845.0198
= 1845.019835
T = 5.54% 5.54%
R = 84.50%
Today: 12/31/99
Ten Years Ago: 12/29/89
VIP II Index 500
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 2.797210 0.25231
4 FEE 29-Dec-93 0.705758 3.036564 0.23242
5 FEE 29-Dec-94 0.705758 3.025152 0.23330
6 FEE 29-Dec-95 0.705758 4.158670 0.16971
7 FEE 28-Dec-96 0.705758 5.154747 0.13691
8 FEE 29-Dec-97 0.705758 6.520431 0.10824
9 FEE 29-Dec-98 0.705758 7.934042 0.08895
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
VIP Overseas
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 3.808794 262.55030
1 FEE 29-Dec-90 0.705758 3.733260 0.18905
2 FEE 29-Dec-91 0.705758 3.823585 0.18458
3 FEE 28-Dec-92 0.705758 3.411338 0.20689
4 FEE 29-Dec-93 0.705758 4.449143 0.15863
5 FEE 29-Dec-94 0.705758 4.797926 0.14710
6 FEE 29-Dec-95 0.705758 5.171176 0.13648
7 FEE 28-Dec-96 0.705758 5.760214 0.12252
8 FEE 29-Dec-97 0.705758 6.325086 0.11158
9 FEE 29-Dec-98 0.705758 6.941400 0.10167
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 261.12123 2611.2123
10.000
FORMULA: 1000*(1+T)= 2611.2123
= 2611.212296
T = 10.07% 10.07%
R = 161.12% 161.12%
Multiple Strategies
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 4.010856 249.32334
1 FEE 29-Dec-90 0.705758 3.871721 0.18229
2 FEE 29-Dec-91 0.705758 4.453069 0.15849
3 FEE 28-Dec-92 0.705758 4.846846 0.14561
4 FEE 29-Dec-93 0.705758 5.573800 0.12662
5 FEE 29-Dec-94 0.705758 5.398323 0.13074
6 FEE 29-Dec-95 0.705758 6.486522 0.10880
7 FEE 28-Dec-96 0.705758 7.434938 0.09492
8 FEE 29-Dec-97 0.705758 8.506606 0.08297
9 FEE 29-Dec-98 0.705758 8.990332 0.07850
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 248.14382 2481.4382
10.000
FORMULA: 1000*(1+T)= 2481.4382
= 2481.438226
T = 9.51% 9.51%
R = 148.14% 148.14%
Growth & Income
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 10.001257 0.07057
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 7.291446 0.09679
8 FEE 29-Dec-97 0.705758 8.444875 0.08357
9 FEE 29-Dec-98 0.705758 9.325706 0.07568
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 8.748645 0.08067
7 FEE 28-Dec-96 0.705758 8.886717 0.07942
8 FEE 29-Dec-97 0.705758 9.515229 0.07417
9 FEE 29-Dec-98 0.705758 10.272346 0.06870
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 6.042801 0.11679
7 FEE 28-Dec-96 0.705758 6.908267 0.10216
8 FEE 29-Dec-97 0.705758 8.136991 0.08673
9 FEE 29-Dec-98 0.705758 8.501138 0.08302
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 10.001257 0.07057
RESULTING VALUE 31-Dec-99 10.001257 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 12.094216 0.05835
9 FEE 29-Dec-98 0.705758 10.307308 0.06847
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 5.827133 171.61098
1 FEE 29-Dec-90 0.705758 6.101758 0.11566
2 FEE 29-Dec-91 0.705758 6.907584 0.10217
3 FEE 28-Dec-92 0.705758 7.333362 0.09624
4 FEE 29-Dec-93 0.705758 7.915338 0.08916
5 FEE 29-Dec-94 0.705758 7.478862 0.09437
6 FEE 29-Dec-95 0.705758 8.360830 0.08441
7 FEE 28-Dec-96 0.705758 9.170388 0.07696
8 FEE 29-Dec-97 0.705758 9.250032 0.07630
9 FEE 29-Dec-98 0.705758 9.818467 0.07188
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 170.73325 1707.3325
10.000
FORMULA: 1000*(1+T)= 1707.3325
= 1707.332462
T = 5.49% 5.49%
R = 70.73% 70.73%
<PAGE>
ENHANCED
- ------------------------------------------------------------------------------
1yr ago: 12/31/98
Date: 12/31/99
VIP II Index 500
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.596336 116.32863
1 FEE 31-Dec-99 0.705758 10.199226 0.06920 0.06
RESULTING VALUE 31-Dec-99 10.199226 116.25943 1185.7562
1.000
FORMULA: 1000*(1+T)= 1185.7562
= 1143.256242
T = 14.33% 18.58%
R = 14.33% 18.58%
VIP Overseas
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 7.461629 134.01899
1 FEE 31-Dec-99 0.705758 10.478848 0.06735 0.06
RESULTING VALUE 31-Dec-99 10.478848 133.95164 1403.6589
1.000
FORMULA: 1000*(1+T)= 1403.6589
= 1361.158892
T = 36.12% 40.37%
R = 36.12% 40.37%
Multiple Strategies
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.065187 110.31212
1 FEE 31-Dec-99 0.705758 9.974861 0.07075 0.06
RESULTING VALUE 31-Dec-99 9.974861 110.24137 1099.6423
1.000
FORMULA: 1000*(1+T)= 1099.6423
= 1057.14231
T = 5.71% 9.96%
R = 5.71% 9.96%
Growth & Income
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 9.993635 0.07062 0.06
RESULTING VALUE 31-Dec-99 9.993635 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.510004 105.15243
1 FEE 31-Dec-99 0.705758 10.184633 0.06930 0.06
RESULTING VALUE 31-Dec-99 10.184633 105.08313 1070.2331
1.000
FORMULA: 1000*(1+T)= 1070.2331
= 1027.733119
T = 2.77% 7.02%
R = 2.77% 7.02%
Investment Grade Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.435701 95.82490
1 FEE 31-Dec-99 0.705758 10.093192 0.06992 0.06
RESULTING VALUE 31-Dec-99 10.093192 95.75498 966.4734
1.000
FORMULA: 1000*(1+T)= 966.4734
= 923.9733517
T = -7.60% -3.35%
R = -7.60% -3.35%
Mid-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.567624 116.71847
1 FEE 31-Dec-99 0.705758 9.598634 0.07353 0.06
RESULTING VALUE 31-Dec-99 9.598634 116.64495 1119.6322
1.000
FORMULA: 1000*(1+T)= 1119.6322
= 1077.132156
T = 7.71% 11.96%
R = 7.71% 11.96%
Quality Stock Growth
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 9.994236 0.07062 0.06
RESULTING VALUE 31-Dec-99 9.994236 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.997498 90.92977
1 FEE 31-Dec-99 0.705758 10.306597 0.06848 0.06
RESULTING VALUE 31-Dec-99 10.306597 90.86130 936.4708
1.000
FORMULA: 1000*(1+T)= 936.4708
= 893.9707709
T = -10.60% -6.35%
R = -10.60% -6.35%
Templeton Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.965944 100.34172
1 FEE 31-Dec-99 0.705758 10.069734 0.07009 0.06
RESULTING VALUE 31-Dec-99 10.069734 100.27164 1009.7087
1.000
FORMULA: 1000*(1+T)= 1009.7087
= 967.2087097
T = -3.28% 0.97%
R = -3.28% 0.97%
Date: 12/31/99
1 yr ago: 12/31/98
2 yr ago: 12/31/97
3 yr ago: 12/31/96
4 yr Ago: 12/29/95
5 Yr. ago: 12/31/94
VIP II Index 500
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 3.195913 312.89963
1 FEE 29-Dec-95 0.705758 4.315643 0.16353
2 FEE 31-Dec-96 0.705758 5.211156 0.13543
3 FEE 31-Dec-97 0.705758 6.814502 0.10357
4 FEE 31-Dec-98 0.705758 8.596336 0.08210
5 FEE 31-Dec-99 0.705758 10.199226 0.06920 0.02
RESULTING VALUE 31-Dec-99 10.199226 312.34580 3185.6854
5.000
FORMULA: 1000*(1+T)= 3185.6854
= 3177.18541
T = 26.01% 26.08%
R = 217.72% 218.57%
VIP Overseas
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 5.104102 195.92085
1 FEE 29-Dec-95 0.705758 5.513923 0.12800
2 FEE 31-Dec-96 0.705758 6.141607 0.11491
3 FEE 31-Dec-97 0.705758 6.734766 0.10479
4 FEE 31-Dec-98 0.705758 7.461629 0.09458
5 FEE 31-Dec-99 0.705758 10.478848 0.06735 0.02
RESULTING VALUE 31-Dec-99 10.478848 195.41121 2047.6844
5.000
FORMULA: 1000*(1+T)= 2047.6844
= 2039.184376
T = 15.32% 15.41%
R = 103.92% 104.77%
Multiple Strategies
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 5.512921 181.39204
1 FEE 29-Dec-95 0.705758 6.585221 0.10717
2 FEE 31-Dec-96 0.705758 7.485088 0.09429
3 FEE 31-Dec-97 0.705758 8.635828 0.08172
4 FEE 31-Dec-98 0.705758 9.065187 0.07785
5 FEE 31-Dec-99 0.705758 9.974861 0.07075 0.02
RESULTING VALUE 31-Dec-99 9.974861 180.96025 1805.0533
5.000
FORMULA: 1000*(1+T)= 1805.0533
= 1796.553333
T = 12.43% 12.54%
R = 79.66% 80.51%
Growth & Income
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 9.993635 0.07062 0.02
RESULTING VALUE 31-Dec-99 9.993635 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 7.583261 0.09307
3 FEE 31-Dec-97 0.705758 8.720312 0.08093
4 FEE 31-Dec-98 0.705758 9.510004 0.07421
5 FEE 31-Dec-99 0.705758 10.184633 0.06930 0.02
RESULTING VALUE 31-Dec-99 10.184633 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 8.987181 0.07853
2 FEE 31-Dec-96 0.705758 9.044837 0.07803
3 FEE 31-Dec-97 0.705758 9.691150 0.07282
4 FEE 31-Dec-98 0.705758 10.435701 0.06763
5 FEE 31-Dec-99 0.705758 10.093192 0.06992 0.02
RESULTING VALUE 31-Dec-99 10.093192 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 5.903362 0.11955
2 FEE 31-Dec-96 0.705758 6.742370 0.10468
3 FEE 31-Dec-97 0.705758 8.111178 0.08701
4 FEE 31-Dec-98 0.705758 8.567624 0.08237
5 FEE 31-Dec-99 0.705758 9.598634 0.07353 0.02
RESULTING VALUE 31-Dec-99 9.598634 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 9.994236 0.07062 0.02
RESULTING VALUE 31-Dec-99 9.994236 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 12.724118 0.05547
4 FEE 31-Dec-98 0.705758 10.997498 0.06417
5 FEE 31-Dec-99 0.705758 10.306597 0.06848 0.02
RESULTING VALUE 31-Dec-99 10.306597 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 7.683197 130.15415
1 FEE 29-Dec-95 0.705758 8.571349 0.08234
2 FEE 31-Dec-96 0.705758 9.363845 0.07537
3 FEE 31-Dec-97 0.705758 9.447397 0.07470
4 FEE 31-Dec-98 0.705758 9.965944 0.07082
5 FEE 31-Dec-99 0.705758 10.069734 0.07009 0.02
RESULTING VALUE 31-Dec-99 10.069734 129.78084 1306.8585
5.000
FORMULA: 1000*(1+T)= 1306.8585
= 1298.358493
T = 5.36% 5.50%
R = 29.84% 30.69%
Today: 12/31/99
Ten Years Ago: 12/29/89
VIP II Index 500
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 2.941983 0.23989
4 FEE 29-Dec-93 0.705758 3.179797 0.22195
5 FEE 29-Dec-94 0.705758 3.153930 0.22377
6 FEE 29-Dec-95 0.705758 4.315643 0.16353
7 FEE 28-Dec-96 0.705758 5.328150 0.13246
8 FEE 29-Dec-97 0.705758 6.710811 0.10517
9 FEE 29-Dec-98 0.705758 8.130147 0.08681
10 FEE 31-Dec-99 0.705758 10.199226 0.06920
RESULTING VALUE 31-Dec-99 10.199226 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
VIP Overseas
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 4.169491 239.83743
1 FEE 29-Dec-90 0.705758 4.070248 0.17339
2 FEE 29-Dec-91 0.705758 4.150517 0.17004
3 FEE 28-Dec-92 0.705758 3.686544 0.19144
4 FEE 29-Dec-93 0.705758 4.787408 0.14742
5 FEE 29-Dec-94 0.705758 5.140173 0.13730
6 FEE 29-Dec-95 0.705758 5.513923 0.12800
7 FEE 28-Dec-96 0.705758 6.117467 0.11537
8 FEE 29-Dec-97 0.705758 6.688177 0.10552
9 FEE 29-Dec-98 0.705758 7.307616 0.09658
10 FEE 31-Dec-99 0.705758 10.478848 0.06735
RESULTING VALUE 31-Dec-99 10.478848 238.50501 2499.2578
10.000
FORMULA: 1000*(1+T)= 2499.2578
= 2499.257792
T = 9.59% 9.59%
R = 149.93% 149.93%
Multiple Strategies
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 4.180806 239.18833
1 FEE 29-Dec-90 0.705758 4.018094 0.17564
2 FEE 29-Dec-91 0.705758 4.601190 0.15339
3 FEE 28-Dec-92 0.705758 4.986022 0.14155
4 FEE 29-Dec-93 0.705758 5.708620 0.12363
5 FEE 29-Dec-94 0.705758 5.504620 0.12821
6 FEE 29-Dec-95 0.705758 6.585221 0.10717
7 FEE 28-Dec-96 0.705758 7.515128 0.09391
8 FEE 29-Dec-97 0.705758 8.560416 0.08244
9 FEE 29-Dec-98 0.705758 9.007485 0.07835
10 FEE 31-Dec-99 0.705758 9.974861 0.07075
RESULTING VALUE 31-Dec-99 9.974861 238.03327 2374.3488
10.000
FORMULA: 1000*(1+T)= 2374.3488
= 2374.348817
T = 9.03% 9.03%
R = 137.43% 137.43%
Growth & Income
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 9.993635 0.07062
RESULTING VALUE 31-Dec-99 9.993635 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 7.525059 0.09379
8 FEE 29-Dec-97 0.705758 8.676987 0.08134
9 FEE 29-Dec-98 0.705758 9.539986 0.07398
10 FEE 31-Dec-99 0.705758 10.184633 0.06930
RESULTING VALUE 31-Dec-99 10.184633 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 8.987181 0.07853
7 FEE 28-Dec-96 0.705758 9.089149 0.07765
8 FEE 29-Dec-97 0.705758 9.689028 0.07284
9 FEE 29-Dec-98 0.705758 10.414059 0.06777
10 FEE 31-Dec-99 0.705758 10.093192 0.06992
RESULTING VALUE 31-Dec-99 10.093192 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 5.903362 0.11955
7 FEE 28-Dec-96 0.705758 6.719399 0.10503
8 FEE 29-Dec-97 0.705758 7.879609 0.08957
9 FEE 29-Dec-98 0.705758 8.196092 0.08611
10 FEE 31-Dec-99 0.705758 9.598634 0.07353
RESULTING VALUE 31-Dec-99 9.598634 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 9.994236 0.07062
RESULTING VALUE 31-Dec-99 9.994236 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 12.575560 0.05612
9 FEE 29-Dec-98 0.705758 10.670439 0.06614
10 FEE 31-Dec-99 0.705758 10.306597 0.06848
RESULTING VALUE 31-Dec-99 10.306597 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 6.131340 163.09648
1 FEE 29-Dec-90 0.705758 6.392218 0.11041
2 FEE 29-Dec-91 0.705758 7.204766 0.09796
3 FEE 28-Dec-92 0.705758 7.615396 0.09268
4 FEE 29-Dec-93 0.705758 8.186154 0.08621
5 FEE 29-Dec-94 0.705758 7.700680 0.09165
6 FEE 29-Dec-95 0.705758 8.571349 0.08234
7 FEE 28-Dec-96 0.705758 9.360326 0.07540
8 FEE 29-Dec-97 0.705758 9.400217 0.07508
9 FEE 29-Dec-98 0.705758 9.930797 0.07107
10 FEE 31-Dec-99 0.705758 10.069734 0.07009
RESULTING VALUE 31-Dec-99 10.069734 162.24361 1633.7500
10.000
FORMULA: 1000*(1+T)= 1633.7500
= 1633.749992
T = 5.03% 5.03%
R = 63.37% 63.37%
VIP II Index 500
31-Aug-92
TO NO. YEARS 7.332
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 31-Aug-92 1000.00 2.817294 354.95053
1 FEE 31-Aug-93 0.705758 3.185136 0.22158
2 FEE 31-Aug-94 0.705758 3.294646 0.21421
3 FEE 31-Aug-95 0.705758 3.931525 0.17951
4 FEE 31-Aug-96 0.705758 4.585283 0.15392
5 FEE 31-Aug-97 0.705758 6.323756 0.11160
6 FEE 31-Aug-98 0.705758 6.688691 0.10552
7 FEE 31-Aug-99 0.705758 9.185375 0.07683
8 FEE 31-Dec-99 0.705758 10.199226 0.06920
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.199226 353.81816 3608.6713
7.332
FORMULA: 1000*(1+T)= 3608.6713
= 3608.671341
T = 19.13% 19.13%
R = 260.87%
VIP Overseas
30-Jan-87
TO NO. YEARS 12.917
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 30-Jan-87 1000.00 3.380221 295.83864
1 FEE 30-Jan-88 0.705758 3.039146 0.23222
2 FEE 30-Jan-89 0.705758 3.353762 0.21044
3 FEE 30-Jan-90 0.705758 4.169491 0.16927
4 FEE 30-Jan-91 0.705758 4.035469 0.17489
5 FEE 30-Jan-92 0.705758 4.289097 0.16455
6 FEE 30-Jan-93 0.705758 3.873116 0.18222
7 FEE 30-Jan-94 0.705758 5.097466 0.13845
8 FEE 30-Jan-95 0.705758 5.104102 0.13827
9 FEE 30-Jan-96 0.705758 5.513923 0.12800
10 FEE 30-Jan-97 0.705758 6.141607 0.11491
11 FEE 30-Jan-98 0.705758 6.946949 0.10159
12 FEE 30-Jan-99 0.705758 7.556353 0.09340
13 FEE 31-Dec-99 0.705758 10.478848 0.06735
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.478848 293.92308 3079.9753
12.917
FORMULA: 1000*(1+T)= 3079.9753
= 3079.97533
T = 9.10% 9.10%
R = 208.00%
Multiple Strategies
09-Feb-87
TO NO. YEARS 12.890
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 09-Feb-87 1000.00 2.977985 335.79753
1 FEE 09-Feb-88 0.705758 3.098897 0.22774
2 FEE 09-Feb-89 0.705758 3.858788 0.18290
3 FEE 09-Feb-90 0.705758 4.078159 0.17306
4 FEE 09-Feb-91 0.705758 4.151225 0.17001
5 FEE 09-Feb-92 0.705758 4.803172 0.14694
6 FEE 09-Feb-93 0.705758 5.144999 0.13717
7 FEE 09-Feb-94 0.705758 5.825551 0.12115
8 FEE 09-Feb-95 0.705758 5.665068 0.12458
9 FEE 09-Feb-96 0.705758 6.803633 0.10373
10 FEE 09-Feb-97 0.705758 7.659172 0.09215
11 FEE 09-Feb-98 0.705758 8.823540 0.07999
12 FEE 09-Feb-99 0.705758 8.948564 0.07887
13 FEE 31-Dec-99 0.705758 9.974861 0.07075
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 9.974861 334.08849 3332.4863
12.890
FORMULA: 1000*(1+T)= 3332.4863
= 3332.486272
T = 9.79% 9.79%
R = 233.25%
Growth & Income
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 31-Dec-99 1000.00 9.993635 100.06369
1 FEE N/A 0 N/A 0.00000
2 FEE N/A 0 N/A 0.00000
3 FEE N/A 0 N/A 0.00000
4 FEE N/A 0 N/A 0.00000
5 FEE N/A 0 N/A 0.00000
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 9.993635 100.06369 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
International Equity
07-Nov-96
TO NO. YEARS 3.146
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 07-Nov-96 1000.00 7.474149 133.79450
1 FEE 07-Nov-97 0.705758 8.704017 0.08108
2 FEE 07-Nov-98 0.705758 8.970301 0.07868
3 FEE 07-Nov-99 0.705758 9.791720 0.07208
4 FEE 31-Dec-99 0.705758 10.184633 0.06930
5 FEE N/A 0 N/A 0.00000
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.184633 133.49336 1359.5809
3.146
FORMULA: 1000*(1+T)= 1359.5809
= 1334.080895
T = 9.60% 10.26%
R = 33.41%
Investment Grade Bond
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 02-Oct-95 1000.00 8.700384 114.93746
1 FEE 02-Oct-96 0.705758 8.891435 0.07938
2 FEE 02-Oct-97 0.705758 9.509693 0.07421
3 FEE 02-Oct-98 0.705758 10.586878 0.06666
4 FEE 02-Oct-99 0.705758 10.154254 0.06950
5 FEE 31-Dec-99 0.705758 10.093192 0.06992
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.093192 114.57777 1156.4555
4.246
FORMULA: 1000*(1+T)= 1156.4555
= 1139.45548
T = 3.12% 3.48%
R = 13.95%
Mid-Cap Equity
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 02-Oct-95 1000.00 5.743070 174.12290
1 FEE 02-Oct-96 0.705758 6.430967 0.10974
2 FEE 02-Oct-97 0.705758 8.341223 0.08461
3 FEE 02-Oct-98 0.705758 6.701052 0.10532
4 FEE 02-Oct-99 0.705758 7.981961 0.08842
5 FEE 31-Dec-99 0.705758 9.598634 0.07353
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 9.598634 173.66128 1666.9111
4.246
FORMULA: 1000*(1+T)= 1666.9111
= 1649.911052
T = 12.52% 12.79%
R = 64.99%
Quality Stock Growth
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 31-Dec-99 1000.00 9.994236 100.05767
1 FEE N/A 0 N/A 0.00000
2 FEE N/A 0 N/A 0.00000
3 FEE N/A 0 N/A 0.00000
4 FEE N/A 0 N/A 0.00000
5 FEE N/A 0 N/A 0.00000
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 9.994236 100.05767 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
Small-Cap Equity
21-Oct-97
TO NO. YEARS 2.193
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 21-Oct-97 1000.00 13.030412 76.74354
1 FEE 21-Oct-98 0.705758 9.989008 0.07065
2 FEE 21-Oct-99 0.705758 9.542184 0.07396
3 FEE 31-Dec-99 0.705758 10.306597 0.06848
4 FEE N/A 0 N/A 0.00000
5 FEE N/A 0 N/A 0.00000
6 FEE N/A 0 N/A 0.00000
7 FEE N/A 0 N/A 0.00000
8 FEE N/A 0 N/A 0.00000
9 FEE N/A 0 N/A 0.00000
10 FEE N/A 0 N/A 0.00000
11 FEE N/A 0 N/A 0.00000
12 FEE N/A 0 N/A 0.00000
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.306597 76.53045 788.7685
2.193
FORMULA: 1000*(1+T)= 788.7685
= 754.7685334
T = -12.04% -10.26%
R = -24.52%
Templeton Bond
24-Aug-88
TO NO. YEARS 11.351
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 24-Aug-88 1000.00 5.702304 175.36771
1 FEE 24-Aug-89 0.705758 6.003033 0.11757
2 FEE 24-Aug-90 0.705758 6.261164 0.11272
3 FEE 24-Aug-91 0.705758 6.644225 0.10622
4 FEE 24-Aug-92 0.705758 7.597611 0.09289
5 FEE 24-Aug-93 0.705758 8.167632 0.08641
6 FEE 24-Aug-94 0.705758 7.684686 0.09184
7 FEE 24-Aug-95 0.705758 8.351572 0.08451
8 FEE 24-Aug-96 0.705758 8.768981 0.08048
9 FEE 24-Aug-97 0.705758 9.364245 0.07537
10 FEE 24-Aug-98 0.705758 9.633441 0.07326
11 FEE 24-Aug-99 0.705758 10.146802 0.06955
12 FEE 31-Dec-99 0.705758 10.069734 0.07009
13 FEE N/A 0 N/A 0.00000
14 FEE N/A 0 N/A 0.00000
15 FEE N/A 0 N/A 0.00000
RESULTING VALUE 31-Dec-99 10.069734 174.30680 1755.2231
11.351
FORMULA: 1000*(1+T)= 1755.2231
= 1755.223137
T = 5.08% 5.08%
R = 75.52%
<PAGE>
COMBO
- -------------------------------------------------------------------------------
1yr ago: 12/31/98
Date: 12/31/99
VIP II Index 500
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.410165 118.90373
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 118.83316 1188.3316
1.000
FORMULA: 1000*(1+T)= 1188.3316
= 1145.831556
T = 14.58% 18.83%
R = 14.58% 18.83%
VIP Overseas
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 7.105457 140.73690
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 140.66633 1406.6633
1.000
FORMULA: 1000*(1+T)= 1406.6633
= 1364.163254
T = 36.42% 40.67%
R = 36.42% 40.67%
Multiple Strategies
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.068066 110.27710
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 110.20652 1102.0652
1.000
FORMULA: 1000*(1+T)= 1102.0652
= 1059.565219
T = 5.96% 10.21%
R = 5.96% 10.21%
Growth & Income
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 10.001497 0.07057 0.06
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.317091 107.32964
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 107.25906 1072.5906
1.000
FORMULA: 1000*(1+T)= 1072.5906
= 1030.090618
T = 3.01% 7.26%
R = 3.01% 7.26%
Investment Grade Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.316614 96.93103
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 96.86045 968.6045
1.000
FORMULA: 1000*(1+T)= 968.6045
= 926.1045217
T = -7.39% -3.14%
R = -7.39% -3.14%
Mid-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 8.906274 112.28040
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 112.20982 1122.0982
1.000
FORMULA: 1000*(1+T)= 1122.0982
= 1079.598234
T = 7.96% 12.21%
R = 7.96% 12.21%
Quality Stock Growth
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 #N/A #N/A
1 FEE 31-Dec-99 0.705758 10.001497 0.07057 0.06
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
1.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 10.646895 93.92410
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 93.85352 938.5352
1.000
FORMULA: 1000*(1+T)= 938.5352
= 896.0352134
T = -10.40% -6.15%
R = -10.40% -6.15%
Templeton Bond
31-Dec-98
TO NO. YEARS 1.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-98 1000.00 9.875160 101.26418
1 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.06
RESULTING VALUE 31-Dec-99 10.000000 101.19361 1011.9361
1.000
FORMULA: 1000*(1+T)= 1011.9361
= 969.4360627
T = -3.06% 1.19%
R = -3.06% 1.19%
Date: 12/31/99
1 yr ago: 12/31/98
2 yr ago: 12/31/97
3 yr ago: 12/31/96
4 yr Ago: 12/29/95
5 Yr. ago: 12/31/94
VIP II Index 500
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 3.099820 322.59938
1 FEE 29-Dec-95 0.705758 4.194848 0.16824
2 FEE 31-Dec-96 0.705758 5.076346 0.13903
3 FEE 31-Dec-97 0.705758 6.652518 0.10609
4 FEE 31-Dec-98 0.705758 8.410165 0.08392
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 322.03152 3220.3152
5.000
FORMULA: 1000*(1+T)= 3220.3152
= 3211.815222
T = 26.28% 26.35%
R = 221.18% 222.03%
VIP Overseas
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 4.818142 207.54889
1 FEE 29-Dec-95 0.705758 5.216367 0.13530
2 FEE 31-Dec-96 0.705758 5.822934 0.12120
3 FEE 31-Dec-97 0.705758 6.399276 0.11029
4 FEE 31-Dec-98 0.705758 7.105457 0.09933
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 207.01220 2070.1220
5.000
FORMULA: 1000*(1+T)= 2070.1220
= 2061.62196
T = 15.57% 15.66%
R = 106.16% 107.01%
Multiple Strategies
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 5.466345 182.93759
1 FEE 29-Dec-95 0.705758 6.543926 0.10785
2 FEE 31-Dec-96 0.705758 7.454610 0.09467
3 FEE 31-Dec-97 0.705758 8.619588 0.08188
4 FEE 31-Dec-98 0.705758 9.068066 0.07783
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 182.50479 1825.0479
5.000
FORMULA: 1000*(1+T)= 1825.0479
= 1816.547872
T = 12.68% 12.79%
R = 81.65% 82.50%
Growth & Income
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 10.001497 0.07057 0.02
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 7.396829 0.09541
3 FEE 31-Dec-97 0.705758 8.524658 0.08279
4 FEE 31-Dec-98 0.705758 9.317091 0.07575
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 8.826070 0.07996
2 FEE 31-Dec-96 0.705758 8.902367 0.07928
3 FEE 31-Dec-97 0.705758 9.559508 0.07383
4 FEE 31-Dec-98 0.705758 10.316614 0.06841
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 6.096266 0.11577
2 FEE 31-Dec-96 0.705758 6.978106 0.10114
3 FEE 31-Dec-97 0.705758 8.413255 0.08389
4 FEE 31-Dec-98 0.705758 8.906274 0.07924
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 #N/A #N/A
4 FEE 31-Dec-98 0.705758 #N/A #N/A
5 FEE 31-Dec-99 0.705758 10.001497 0.07057 0.02
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 #N/A #N/A
1 FEE 29-Dec-95 0.705758 #N/A #N/A
2 FEE 31-Dec-96 0.705758 #N/A #N/A
3 FEE 31-Dec-97 0.705758 12.291370 0.05742
4 FEE 31-Dec-98 0.705758 10.646895 0.06629
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
5.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
31-Dec-94
TO NO. YEARS 5.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-94 1000.00 7.546868 132.50530
1 FEE 29-Dec-95 0.705758 8.436059 0.08366
2 FEE 31-Dec-96 0.705758 9.237913 0.07640
3 FEE 31-Dec-97 0.705758 9.340843 0.07556
4 FEE 31-Dec-98 0.705758 9.875160 0.07147
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
RESULTING VALUE 31-Dec-99 10.000000 132.12764 1321.2764
5.000
FORMULA: 1000*(1+T)= 1321.2764
= 1312.776414
T = 5.59% 5.73%
R = 31.28% 32.13%
Today: 12/31/99
Ten Years Ago: 12/29/89
VIP II Index 500
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 2.840526 0.24846
4 FEE 29-Dec-93 0.705758 3.076855 0.22938
5 FEE 29-Dec-94 0.705758 3.058553 0.23075
6 FEE 29-Dec-95 0.705758 4.194848 0.16824
7 FEE 28-Dec-96 0.705758 5.189293 0.13600
8 FEE 29-Dec-97 0.705758 6.550009 0.10775
9 FEE 29-Dec-98 0.705758 7.952666 0.08874
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
VIP Overseas
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 3.892948 256.87474
1 FEE 29-Dec-90 0.705758 3.808008 0.18534
2 FEE 29-Dec-91 0.705758 3.891615 0.18135
3 FEE 28-Dec-92 0.705758 3.464299 0.20372
4 FEE 29-Dec-93 0.705758 4.508496 0.15654
5 FEE 29-Dec-94 0.705758 4.851309 0.14548
6 FEE 29-Dec-95 0.705758 5.216367 0.13530
7 FEE 28-Dec-96 0.705758 5.798936 0.12170
8 FEE 29-Dec-97 0.705758 6.353753 0.11108
9 FEE 29-Dec-98 0.705758 6.957522 0.10144
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 255.46222 2554.6222
10.000
FORMULA: 1000*(1+T)= 2554.6222
= 2554.622168
T = 9.83% 9.83%
R = 155.46% 155.46%
Multiple Strategies
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 4.100128 243.89482
1 FEE 29-Dec-90 0.705758 3.949212 0.17871
2 FEE 29-Dec-91 0.705758 4.532235 0.15572
3 FEE 28-Dec-92 0.705758 4.922140 0.14338
4 FEE 29-Dec-93 0.705758 5.647923 0.12496
5 FEE 29-Dec-94 0.705758 5.458081 0.12931
6 FEE 29-Dec-95 0.705758 6.543926 0.10785
7 FEE 28-Dec-96 0.705758 7.484348 0.09430
8 FEE 29-Dec-97 0.705758 8.544216 0.08260
9 FEE 29-Dec-98 0.705758 9.010236 0.07833
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 242.72910 2427.2910
10.000
FORMULA: 1000*(1+T)= 2427.2910
= 2427.290963
T = 9.27% 9.27%
R = 142.73% 142.73%
Growth & Income
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 10.001497 0.07057
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
International Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 7.339883 0.09615
8 FEE 29-Dec-97 0.705758 8.482203 0.08320
9 FEE 29-Dec-98 0.705758 9.346351 0.07551
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Investment Grade Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 8.826070 0.07996
7 FEE 28-Dec-96 0.705758 8.945765 0.07889
8 FEE 29-Dec-97 0.705758 9.557300 0.07384
9 FEE 29-Dec-98 0.705758 10.295095 0.06855
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Mid-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 6.096266 0.11577
7 FEE 28-Dec-96 0.705758 6.954165 0.10149
8 FEE 29-Dec-97 0.705758 8.172965 0.08635
9 FEE 29-Dec-98 0.705758 8.519956 0.08284
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Quality Stock Growth
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 #N/A #N/A
9 FEE 29-Dec-98 0.705758 #N/A #N/A
10 FEE 31-Dec-99 0.705758 10.001497 0.07057
RESULTING VALUE 31-Dec-99 10.001497 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Small-Cap Equity
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 #N/A #N/A
1 FEE 29-Dec-90 0.705758 #N/A #N/A
2 FEE 29-Dec-91 0.705758 #N/A #N/A
3 FEE 28-Dec-92 0.705758 #N/A #N/A
4 FEE 29-Dec-93 0.705758 #N/A #N/A
5 FEE 29-Dec-94 0.705758 #N/A #N/A
6 FEE 29-Dec-95 0.705758 #N/A #N/A
7 FEE 28-Dec-96 0.705758 #N/A #N/A
8 FEE 29-Dec-97 0.705758 12.147719 0.05810
9 FEE 29-Dec-98 0.705758 10.330140 0.06832
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 #N/A #N/A
10.000
FORMULA: 1000*(1+T)= #N/A
= #N/A
T = #N/A #N/A
R = #N/A #N/A
Templeton Bond
29-Dec-89
TO NO. YEARS 10.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
0 INIT DEPOSIT 29-Dec-89 1000.00 5.956553 167.88233
1 FEE 29-Dec-90 0.705758 6.223623 0.11340
2 FEE 29-Dec-91 0.705758 7.030127 0.10039
3 FEE 28-Dec-92 0.705758 7.447115 0.09477
4 FEE 29-Dec-93 0.705758 8.021672 0.08798
5 FEE 29-Dec-94 0.705758 7.562625 0.09332
6 FEE 29-Dec-95 0.705758 8.436059 0.08366
7 FEE 28-Dec-96 0.705758 9.232722 0.07644
8 FEE 29-Dec-97 0.705758 9.292468 0.07595
9 FEE 29-Dec-98 0.705758 9.840215 0.07172
10 FEE 31-Dec-99 0.705758 10.000000 0.07058
RESULTING VALUE 31-Dec-99 10.000000 167.01412 1670.1412
10.000
FORMULA: 1000*(1+T)= 1670.1412
= 1670.141202
T = 5.26% 5.26%
R = 67.01% 67.01%
VIP II Index 500
31-Aug-92
TO NO. YEARS 7.332
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Aug-92 1000.00 2.718671 367.82678
1 FEE 31-Aug-93 0.705758 3.080330 0.22912 0.06
2 FEE 31-Aug-94 0.705758 3.193236 0.22102 0.05
3 FEE 31-Aug-95 0.705758 3.818781 0.18481 0.04
4 FEE 31-Aug-96 0.705758 4.463462 0.15812 0.03
5 FEE 31-Aug-97 0.705758 6.168907 0.11441 0.02
6 FEE 31-Aug-98 0.705758 6.539316 0.10793 0.01
7 FEE 31-Aug-99 0.705758 8.999499 0.07842 0
8 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 366.66239 3666.6239
7.332
FORMULA: 1000*(1+T)= 3666.6239
= 3666.623861
T = 19.39% 19.39%
R = 266.66%
VIP Overseas
30-Jan-87
TO NO. YEARS 12.917
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Jan-87 1000.00 3.135957 318.88192
1 FEE 30-Jan-88 0.705758 2.825793 0.24976 0.06
2 FEE 30-Jan-89 0.705758 3.124573 0.22587 0.05
3 FEE 30-Jan-90 0.705758 3.892948 0.18129 0.04
4 FEE 30-Jan-91 0.705758 3.776181 0.18690 0.03
5 FEE 30-Jan-92 0.705758 4.022301 0.17546 0.02
6 FEE 30-Jan-93 0.705758 3.640905 0.19384 0.01
7 FEE 30-Jan-94 0.705758 4.801332 0.14699 0
8 FEE 30-Jan-95 0.705758 4.818142 0.14648 0
9 FEE 30-Jan-96 0.705758 5.216367 0.13530 0
10 FEE 30-Jan-97 0.705758 5.822934 0.12120 0
11 FEE 30-Jan-98 0.705758 6.602046 0.10690 0
12 FEE 30-Jan-99 0.705758 7.196902 0.09806 0
13 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 316.84329 3168.4329
12.917
FORMULA: 1000*(1+T)= 3168.4329
= 3168.432923
T = 9.34% 9.34%
R = 216.84%
Multiple Strategies
09-Feb-87
TO NO. YEARS 12.890
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09-Feb-87 1000.00 2.902036 344.58566
1 FEE 09-Feb-88 0.705758 3.026523 0.23319 0.06
2 FEE 09-Feb-89 0.705758 3.776964 0.18686 0.05
3 FEE 09-Feb-90 0.705758 4.000478 0.17642 0.04
4 FEE 09-Feb-91 0.705758 4.081092 0.17293 0.03
5 FEE 09-Feb-92 0.705758 4.732382 0.14913 0.02
6 FEE 09-Feb-93 0.705758 5.080395 0.13892 0.01
7 FEE 09-Feb-94 0.705758 5.765066 0.12242 0
8 FEE 09-Feb-95 0.705758 5.618595 0.12561 0
9 FEE 09-Feb-96 0.705758 6.762677 0.10436 0
10 FEE 09-Feb-97 0.705758 7.629733 0.09250 0
11 FEE 09-Feb-98 0.705758 8.809071 0.08012 0
12 FEE 09-Feb-99 0.705758 8.953564 0.07882 0
13 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 342.85380 3428.5380
12.890
FORMULA: 1000*(1+T)= 3428.5380
= 3428.538006
T = 10.03% 10.03%
R = 242.85%
Growth & Income
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-99 1000.00 10.001497 99.98503
1 FEE N/A 0 N/A 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.001497 99.98503 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
International Equity
07-Nov-96
TO NO. YEARS 3.146
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 07-Nov-96 1000.00 7.288035 137.21120
1 FEE 07-Nov-97 0.705758 8.505961 0.08297 0.06
2 FEE 07-Nov-98 0.705758 8.785428 0.08033 0.05
3 FEE 07-Nov-99 0.705758 9.610969 0.07343 0.04
4 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 136.90388 1369.0388
3.146
FORMULA: 1000*(1+T)= 1369.0388
= 1343.538829
T = 9.84% 10.50%
R = 34.35%
Investment Grade Bond
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Oct-95 1000.00 8.539889 117.09754
1 FEE 02-Oct-96 0.705758 8.746647 0.08069 0.06
2 FEE 02-Oct-97 0.705758 9.375432 0.07528 0.05
3 FEE 02-Oct-98 0.705758 10.460392 0.06747 0.04
4 FEE 02-Oct-99 0.705758 10.054986 0.07019 0.03
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 116.73334 1167.3334
4.246
FORMULA: 1000*(1+T)= 1167.3334
= 1150.333393
T = 3.35% 3.71%
R = 15.03%
Mid-Cap Equity
02-Oct-95
TO NO. YEARS 4.246
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Oct-95 1000.00 5.927589 168.70265
1 FEE 02-Oct-96 0.705758 6.652214 0.10609 0.06
2 FEE 02-Oct-97 0.705758 8.647176 0.08162 0.05
3 FEE 02-Oct-98 0.705758 6.962159 0.10137 0.04
4 FEE 02-Oct-99 0.705758 8.311178 0.08492 0.03
5 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 168.25808 1682.5808
4.246
FORMULA: 1000*(1+T)= 1682.5808
= 1665.580808
T = 12.77% 13.04%
R = 66.56%
Quality Stock Growth
31-Dec-99
TO NO. YEARS 0.000
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 31-Dec-99 1000.00 10.001497 99.98503
1 FEE N/A 0 N/A 0.00000 0.06
2 FEE N/A 0 N/A 0.00000 0.05
3 FEE N/A 0 N/A 0.00000 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.001497 99.98503 1000.0000
0.000
FORMULA: 1000*(1+T)= 1000.0000
= 1000
T = #N/A #DIV/0!
R = 0.00%
Small-Cap Equity
21-Oct-97
TO NO. YEARS 2.193
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 21-Oct-97 1000.00 12.581859 79.47951
1 FEE 21-Oct-98 0.705758 9.666423 0.07301 0.06
2 FEE 21-Oct-99 0.705758 9.254368 0.07626 0.05
3 FEE 31-Dec-99 0.705758 10.000000 0.07058 0.04
4 FEE N/A 0 N/A 0.00000 0.03
5 FEE N/A 0 N/A 0.00000 0.02
6 FEE N/A 0 N/A 0.00000 0.01
7 FEE N/A 0 N/A 0.00000 0
8 FEE N/A 0 N/A 0.00000 0
9 FEE N/A 0 N/A 0.00000 0
10 FEE N/A 0 N/A 0.00000 0
11 FEE N/A 0 N/A 0.00000 0
12 FEE N/A 0 N/A 0.00000 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 79.25966 792.5966
2.193
FORMULA: 1000*(1+T)= 792.5966
= 758.5966176
T = -11.84% -10.06%
R = -24.14%
Templeton Bond
24-Aug-88
TO NO. YEARS 11.351
31-Dec-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 24-Aug-88 1000.00 5.523697 181.03817
1 FEE 24-Aug-89 0.705758 5.826902 0.12112 0.06
2 FEE 24-Aug-90 0.705758 6.090795 0.11587 0.05
3 FEE 24-Aug-91 0.705758 6.477602 0.10895 0.04
4 FEE 24-Aug-92 0.705758 7.423249 0.09507 0.03
5 FEE 24-Aug-93 0.705758 7.997644 0.08825 0.02
6 FEE 24-Aug-94 0.705758 7.541375 0.09358 0.01
7 FEE 24-Aug-95 0.705758 8.213748 0.08592 0
8 FEE 24-Aug-96 0.705758 8.643201 0.08165 0
9 FEE 24-Aug-97 0.705758 9.250110 0.07630 0
10 FEE 24-Aug-98 0.705758 9.536933 0.07400 0
11 FEE 24-Aug-99 0.705758 10.068701 0.07009 0
12 FEE 31-Dec-99 0.705758 10.000000 0.07058 0
13 FEE N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 31-Dec-99 10.000000 179.95677 1799.5677
11.351
FORMULA: 1000*(1+T)= 1799.5677
= 1799.567707
T = 5.31% 5.31%
R = 79.96%
</TABLE>
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Thomas J. Wilson, II, whose
signature appears below, constitutes and appoints Michael J. Velotta, his
attorney-in-fact, with power of substitution in any and all capacities, to sign
any Form N-4 Registration Statements and amendments thereto for the Glenbrook
Life and Annuity Company Variable Annuity Account and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/THOMAS J. WILSON, II
--------------------------
Thomas J. Wilson, II
President, Chief Operating Officer,
(Principal Executive Officer) and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Michael J. Velotta whose signature
appears below, constitutes and appoints Thomas J. Wilson, II his
attorney-in-fact, with power of substitution in any and all capacities, to sign
any Form N-4 Registration Statements and amendments thereto for the Glenbrook
Life and Annuity Company Variable Annuity Account and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/MICHAEL J. VELOTTA
--------------------------
Michael J. Velotta
Vice President, Secretary,
General Counsel and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Sarah R. Donahue, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, her attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/SARAH R. DONAHUE
--------------------------
Sarah R. Donahue
Assistant Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Brent H. Hamann, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/BRENT H. HAMANN
--------------------------
Brent H. Hamann
Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that John R. Hunter, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/JOHN R. HUNTER
--------------------------
John R. Hunter
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Timothy N. Vander Pas, whose
signature appears below, constitutes and appoints Thomas J. Wilson, II, and
Michael J. Velotta, and each of them, his attorney-in-fact, with power of
substitution in any and all capacities, to sign any Form N-4 Registration
Statements and amendments thereto for the Glenbrook Life and Annuity Company
Variable Annuity Account and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/S/TIMOTHY N. VANDER PAS
--------------------------
Timothy N. Vander Pas
Assistant Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that G. Craig Whitehead, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/G. CRAIG WHITEHEAD
--------------------------
G. Craig Whitehead
Assistant Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Kevin R. Slawin, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/KEVIN R. SLAWIN
--------------------------
Kevin R. Slawin
Vice President and Director
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO THE GLENBROOK LIFE AND ANNUITY COMPANY
VARIABLE ANNUITY ACCOUNT
(REGISTRANT)
AND
GLENBROOK LIFE AND ANNUITY COMPANY
(DEPOSITOR)
Know all men by these presents that Samuel H. Pilch, whose signature
appears below, constitutes and appoints Thomas J. Wilson, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution in
any and all capacities, to sign any Form N-4 Registration Statements and
amendments thereto for the Glenbrook Life and Annuity Company Variable Annuity
Account and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
APRIL 17, 2000
--------------------------
/s/SAMUEL H. PILCH
--------------------------
Samuel H. Pilch
Controller (Principal Accounting Officer)
