AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 24, 1997
REGISTRATION NO. 33-89848
811-8190
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 o
PRE-EFFECTIVE AMENDMENT NO. o
POST-EFFECTIVE AMENDMENT NO. 3 x
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
Amendment No. 9
UNITED OF OMAHA SEPARATE ACCOUNT C
(EXACT NAME OF REGISTRANT)
UNITED OF OMAHA LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
MUTUAL OF OMAHA PLAZA, OMAHA, NEBRASKA, 68175
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE
(402) 351-5087
NAME AND ADDRESS OF AGENT FOR SERVICE:
Kenneth W. Reitz, Esquire
Mutual of Omaha Companies
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska, 68175-1008
It is proposed that this filing will become effective (check appropriate
box):
o immediately upon filing pursuant to paragraph (b)
x on MAY 1, 1997 pursuant to paragraph (b)
o 60 days after filing pursuant to paragraph (a)(i
o on __________ pursuant to paragraph (a)(i)
o 75 days after filing pursuant to paragraph (a)(ii)
o on ________pursuant to paragraph (a)(ii) or Rule 485
If appropriate, check the following box:
o This Post-Effective Amendment designates a new effective date for a
previously filed Post-Effective Amendment.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant previously registered an indefinite amount of Ultrannuity Series V
Variable Annuity Policies under the Securities Act of 1933. The Registrant filed
a Rule 24f-2 notice on February 26, 1997 for its most recent fiscal year ended
December 31, 1996.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
<TABLE>
<CAPTION>
Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
OF REGISTRATION STATEMENT OF INFORMATION REQUIRED BY FORM N-4
PART A
ITEM OF FORM N-4 PROSPECTUS CAPTION
<S> <C>
1. Cover Page................................ Cover Page
2. Definitions............................... Definitions
3. Synopsis.................................. Summary; Historical Performance Data
4. Condensed Financial Information........... Financial Statements
5. General
(a) Depositor................................. United of Omaha Life Insurance Company
(b) Registrant................................ The Variable Account
(c) Portfolio Company......................... The Series Funds
(d) Fund Prospectus........................... The Series Funds
(e) Voting Rights............................. Voting Rights
6. Deductions and Expenses
(a) General................................... Charges and Deductions
(b) Sales Load %.............................. Withdrawal Charge
(c) Special Purchase Plan..................... N/A
(d) Commissions............................... Distributor of the Policies
(e) Expenses - Registrant..................... N/A
(f) Fund Expenses............................. Expenses Including Investment
Advisory Fees
(g) Organizational Expenses................... N/A
7. Policies
(a) Persons with Rights....................... The Policy; Election of Annuity Option;
Determination of Annuity Payments; Annuity
Starting Date; Ownership of the Policy;
Voting Rights
(b) (i) Allocation of Premium Payments...... Allocation of Purchase Payments
(ii) Transfers........................... Transfers
(iii) Exchanges........................... N/A
(c) Changes................................... Addition, Deletion or Substitution of
Investments; Election of Annuity Option;
Annuity Starting Date; Beneficiary; Ownership
of the Policy
(d) Inquiries................................. Summary
8. Annuity Period............................ Payout Options
9. Death Benefit............................. Death of Annuitant or Owner Prior to Annuity
Starting Date
10. Purchase and Policy Values
(a) Purchases................................. Policy Application and Issuance of Policies;
Purchase Payments
(b) Valuation................................. Accumulation Value; The Variable Account Value
(c) Daily Calculation......................... The Variable Account Value
(d) Underwriter............................... Distributor of the Policies
11. Redemptions
(a) By Owners................................. Withdrawals
By Annuitant.............................. N/A
(b) Texas ORP................................. Restrictions Under the Texas Optional
Retirement Program
(c) Check Delay............................... Payment not Honored by Bank
(d) Lapse..................................... N/A
(e) Free Look................................. Summary
12. Taxes..................................... Certain Federal Income Tax Consequences
13. Legal Proceedings......................... Legal Proceedings
14. Table of Contents for the
Statement of Statement of Additional
Additional Information........................Information
PART B
ITEM OF FORM N-4 Statement of Additional
INFORMATION CAPTION
15. Cover Page................................ Cover Page
16. Table of Contents......................... Table of Contents
17. General Information
and History............................... (Prospectus) United of Omaha
Life Insurance Company
18. Services
(a) Fees and Expenses
of Registrant............................. N/A
(b) Management Policies....................... N/A
(c) Custodian................................. Custody of Assets
Independent
Auditors ................................ Independent Auditors
(d) Assets of Registrant...................... Custody of Assets
(e) Affiliated Person......................... N/A
(f) Principal Underwriter..................... Distribution of the Policies
19. Purchase of Securities
Being Offered............................ Distribution of the Policies
Offering Sales Load...................... N/A
20. Underwriters.............................. Distribution of the Policies; (Prospectus)
Distributor of the Policies
21. Calculation of Performance
Data Calculation of Yields and Total Returns; Other Performance Data
22. Annuity Payments.......................... (Prospectus) Election of Payout Option;
(Prospectus) Determination of Annuity Payments
23. Financial Statements...................... Financial Statements
PART C -- OTHER INFORMATION
ITEM OF FORM N-4 PART C CAPTION
24. Financial Statements
and Exhibits.............................. Financial Statements and Exhibits
(a) Financial Statements...................... Financial Statements
(b) Exhibits.................................. Exhibits
25. Directors and Officers of................. Directors and Officers of the
the Depositor............................. Depositor
26. Persons Controlled By or Under Common Persons Controlled By or Under Common
Control with the Depositor or Registrant.. Control with the Depositor or Registrant
27. Number of Policyowners.................... Number of Policyowners
28. Indemnification........................... Indemnification
29. Principal Underwriters.................... Principal Underwriters
30. Location of Accounts
and Records............................... Location of Accounts and Records
31. Management Services....................... Management Services
32. Undertakings.............................. Undertakings
Signature Page................................ Signatures
</TABLE>
<PAGE>
Prospectus May 1, 1997
THE ULTRANNUITY SERIES V VARIABLE ANNUITY
Issued Through
UNITED OF OMAHA SEPARATE ACCOUNT C
by
UNITED OF OMAHA LIFE INSURANCE COMPANY
This Prospectus describes the Ultrannuity Series V Variable Annuity Policy (the
"Policy"), a Flexible Payment Variable Deferred Annuity offered by United of
Omaha Life Insurance Company. The Policy is designed to aid in long-term
financial planning and provides for the accumulation of capital by individuals
on a tax-deferred basis for retirement or other long-term purposes.
The Owner may allocate Net Purchase Payments to one or more of the 23 Eligible
investments, which are the 23 Ultrannuity Series V Subaccounts of the United of
Omaha Separate Account C (the "Variable Account") and the Fixed Account. Assets
of each Subaccount of the Variable Account are invested in a corresponding
mutual fund Portfolio. The Portfolios are described in separate prospectuses
that accompany this Prospectus. The Policy's available investment options are:
ALGER AMERICAN GROWTH PORTFOLIO
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
FEDERATED PRIME MONEY FUND II("MONEY MARKET") PORTFOLIO
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES PORTFOLIO
FIDELITY ASSET MANAGER: GROWTH PORTFOLIO
FIDELITY EQUITY INCOME PORTFOLIO
FIDELITY CONTRAFUND PORTFOLIO
FIDELITY INDEX 500 PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
MFS HIGH INCOME FUND PORTFOLIO
MFS RESEARCH PORTFOLIO
MFS WORLD GOVERNMENT PORTFOLIO
MFS VALUE SERIES PORTFOLIO
PIONEER CAPITAL GROWTH PORTFOLIO
PIONEER REAL ESTATE PORTFOLIO
SCUDDER GLOBAL DISCOVERY PORTFOLIO
SCUDDER GROWTH & INCOME PORTFOLIO
SCUDDER INTERNATIONAL PORTFOLIO
T. ROWE PRICE EQUITY INCOME PORTFOLIO
T. ROWE PRICE INTERNATIONAL PORTFOLIO
T. ROWE PRICE LIMITED TERM BOND PORTFOLIO
T. ROWE PRICE NEW AMERICA GROWTH PORTFOLIO
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO
FIXED ACCOUNT
The Accumulation Value in the Variable Account will vary in accordance with
the investment performance of the Subaccounts selected by the Owner. Therefore,
the Owner bears the entire investment risk under this Policy for all amounts
allocated to the Variable Account. Amounts allocated to the Fixed Account are
guaranteed by United of Omaha Life Insurance Company ("United of Omaha") and
will earn a specified rate of interest declared periodically.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
AN INTEREST IN THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED
OR ENDORSED BY ANY BANK, NOR IS THE POLICY FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THE POLICY INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
This Prospectus sets forth the information that a prospective investor should
consider before investing in a Policy. A Statement of Additional Information
about the Policy and the Variable Account, which has the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information is
available at no cost to any person requesting a copy by writing United of Omaha
at its Service Office (United of Omaha Variable Product Service, P.O. Box 8430,
Omaha, Nebraska 68108-0430) or by calling 1-800-238-9354. The table of contents
of the Statement of Additional Information is included at the end of this
Prospectus.
The Policy may be purchased with an initial Purchase Payment of at least
$5,000, and an Owner generally may pay additional Purchase Payments of at least
$500 each (but no additional Purchase Payments are required).
The Policy provides for periodic annuity payments to be made by United of
Omaha to the Owner, if living, for the life of the Annuitant or for some other
period, beginning on the Annuity Starting Date selected by the Owner. Prior to
the Annuity Starting Date, the Owner can transfer Accumulation Value among the
Eligible Investments, that is, among the Fixed Account and the 23 Subaccounts of
the Variable Account (some prohibitions and restrictions apply, especially on
transfers out of the Fixed Account). The Owner can also elect to withdraw all or
a portion of the Cash Surrender Value; however, withdrawals may be taxable,
subject to a Withdrawal Charge and/or a tax penalty, and withdrawals from the
Fixed Account may be delayed.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION GENERALLY DESCRIBE
ONLY THE POLICIES AND THE VARIABLE ACCOUNT, EXCEPT WHEN THE FIXED ACCOUNT IS
SPECIFICALLY MENTIONED.
PLEASE READ THIS PROSPECTUS CAREFULLY
AND RETAIN IT FOR FUTURE REFERENCE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED
BY A CURRENT PROSPECTUS FOR EACH PORTFOLIO
<PAGE>
TABLE OF CONTENTS
Page
DEFINITIONS ................................................................. 4
SUMMARY .................................................................... 6
FINANCIAL STATEMENTS......................................................... 13
UNITED OF OMAHA LIFE INSURANCE COMPANY....................................... 14
THE ELIGIBLE INVESTMENTS..................................................... 14
The Variable Account................................................ 14
Historical Performance Data......................................... 18
Standardized Performance Data................................... 18
Non-Standardized Performance Data............................... 20
The Fixed Account................................................... 22
Transfers........................................................... 23
Dollar Cost Averaging............................................... 24
Asset Allocation Program............................................ 24
THE POLICY................................................................... 24
Policy Application and Issuance of Policies......................... 24
Purchase Payments................................................... 25
Accumulation Value.................................................. 25
Telephone Transactions.............................................. 26
DISTRIBUTIONS UNDER THE POLICY............................................... 26
Withdrawals......................................................... 26
Systematic Withdrawal Plan.......................................... 27
Annuity Payments.................................................... 27
Annuity Starting Date........................................... 27
Election of Payout Option....................................... 27
Payout Options.................................................. 28
Death Benefit....................................................... 29
Death of Owner Prior to Annuity Starting Date................... 29
Death of Owner On or After Annuity Starting Date................ 30
Beneficiary..................................................... 30
IRS Required Distributions.......................................... 30
Restrictions Under the Texas Optional Retirement Program............ 30
CHARGES AND DEDUCTIONS....................................................... 30
Withdrawal Charge................................................... 31
Waiver of Withdrawal Charges........................................ 31
Mortality and Expense Risk Charge .................................. 32
Administrative Charges.............................................. 33
Transfer Fee........................................................ 33
Premium Taxes................................................................ 33
Federal, State and Local Taxes...................................... 33
Other Expenses Including Investment Advisory Fees................... 33
CERTAIN FEDERAL INCOME TAX CONSEQUENCES...................................... 34
Tax Status of the Policy............................................ 34
Taxation of Annuities............................................... 34
DISTRIBUTOR OF THE POLICIES.................................................. 36
VOTING RIGHTS................................................................ 37
LEGAL PROCEEDINGS............................................................ 37
STATEMENT OF ADDITIONAL INFORMATION.......................................... 37
<PAGE>
DEFINITIONS
ACCUMULATION UNIT -- An accounting unit of measure used in calculating the
Accumulation Value in the Variable Account prior to the Annuity Starting Date.
ACCUMULATION VALUE -- The dollar value as of any Valuation Date prior to the
Annuity Starting Date of all amounts in the Variable Account, plus the value in
the Fixed Account.
ANNIVERSARY VALUE -- An amount equal to the Accumulation Value on a Policy
Anniversary.
ANNUITANT -- The person on whose life Annuity Payments involving life
contingencies are based. If the Annuitant is other than the Owner, the Annuitant
has no rights under the Policy.
ANNUITY PAYMENT -- A payment made by United of Omaha under an annuity Payout
Option.
ANNUITY PURCHASE VALUE -- An amount equal to the Accumulation Value for the
Valuation Period which ends immediately preceding the Annuity Starting Date
reduced by any Withdrawal Charge, and any charge for applicable premium or
similar taxes.
ANNUITY STARTING DATE -- The date upon which Annuity Payments are to begin. The
latest Annuity Starting Date permitted is when the Annuitant attains age 95.
(Age 85 in Pennsylvania.)
AVERAGE DEATH BENEFIT AMOUNT -- The mean of the death benefit amount on the most
recent policy anniversary and the death benefit amount on the immediately
preceding Policy Anniversary. The Average Death Benefit Amount is the basis used
to calculate the Enhanced Death Benefit Charge under Policies issued with the
Elective Death Benefit Amendment.
BENEFICIARY -- The person(s) or other legal entity listed by the Owner in the
Policy application and referred to in the Policy as the named beneficiary. In
the case of joint Owners, the surviving joint Owner is the primary Beneficiary
and the named Beneficiary is the contingent Beneficiary. If the named
Beneficiary does not survive the Owner, the estate of the Owner is the
Beneficiary.
CASH SURRENDER VALUE -- The Accumulation Value less any applicable Withdrawal
Charge, any applicable Policy Fee, and any applicable premium tax charge not
previously deducted, and, if the Enhanced Death Benefit is elected, the Enhanced
Death Benefit Charge.
CURRENT INTEREST RATE GUARANTEE -- United of Omaha's guarantee to pay a declared
current interest rate on amounts under a Policy allocated to the Fixed Account.
A particular Current Interest Rate Guarantee will be in effect for at least one
year.
DATE OF ISSUE -- The date the Policy is issued, as shown on the Policy Data
Page.
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, a
written statement by the attending physician, or any other proof satisfactory to
United of Omaha will constitute Due Proof of Death.
ELIGIBLE INVESTMENTS -- The Fixed Account and any of the Subaccounts of the
Variable Account.
ENHANCED DEATH BENEFIT -- The death benefit available under Policies issued with
the Elective Death Benefit Amendment.
ENHANCED DEATH BENEFIT CHARGE -- An amount equal to an annual rate of 0.35% of
the Average Death Benefit Amount. The Enhanced Death Benefit Charge is assessed
under each Policy issued with the Elective Death Benefit Amendment on each
Policy Anniversary or upon full surrender.
FIXED ACCOUNT -- The account which consists of general account assets of United
of Omaha Life Insurance Company.
NET PURCHASE PAYMENT -- A Purchase Payment less any charge for applicable
premium taxes.
NONQUALIFIED POLICY -- A Policy other than a Qualified Policy.
PAYEE -- The person who receives Annuity Payments under the Policy.
PAYOUT OPTION -- Any method of payment of Policy Proceeds under the Policy.
POLICY -- The variable annuity policy offered by this Prospectus.
POLICY ANNIVERSARY -- The same month and day as the Date of Issue in each
calendar year after the calendar year in which the Date of Issue occurs.
POLICY OWNER OR OWNER -- The person(s) who may exercise all rights and
privileges under the Policy. If there are joint Owners, the signatures of both
Owners are needed to exercise rights under the Policy. The Policy Owner may
change the ownership of the Policy or pledge it as collateral by assigning it.
POLICY YEAR -- A Policy Year begins on the Date of Issue and each Policy
Anniversary.
PORTFOLIO -- A Series Fund's separate investment series that is available under
the Policy.
PURCHASE PAYMENT -- An amount paid to United of Omaha by the Policy Owner or on
the Policy Owner's behalf as consideration for the benefits provided by, and in
accordance with the provisions of, the Policy.
PROCEEDS -- The death benefit or the Annuity Purchase Value.
QUALIFIED POLICY -- A Policy that may be issued as set forth herein in
connection with a qualified plan that receives favorable tax treatment under
Section 401, 403(b), or 408 of the Internal Revenue Code of 1986, as amended.
SERIES FUNDS -- Alger American Fund, Federated's Insurance Management Series,
Fidelity's Variable Insurance Products Fund, Fidelity's Variable Insurance
Products Fund II, MFS Variable Insurance Trust, Pioneer Variable Contracts Trust
Scudder Variable Life Investment Fund, T. Rowe Price International Series, Inc.,
T. Rowe Price Fixed Income Series, Inc., and T. Rowe Price Equity Series, Inc.,
each of which is a diversified, open-end management company in which the
Variable Account invests.
SERVICE OFFICE - United of Omaha Variable Product Service, P.O. Box 8430, Omaha,
Nebraska 68108-0430. Telephone: 1-800-238-9354.
STANDARD DEATH BENEFIT -- The death benefit available under Policies issued
without the Elective Death Benefit Amendment.
SUBACCOUNT -- A segregated account within the Variable Account which invests in
a specified Portfolio of one of the Series Funds.
UNITED OF OMAHA -- United of Omaha Life Insurance Company, the issuer of the
Policies.
VALUATION DATE -- Each day that the New York Stock Exchange is open for trading.
VALUATION PERIOD -- The period commencing at the close of business of the New
York Stock Exchange on each Valuation Date and ending at the close of business
for the next succeeding Valuation Date.
VARIABLE ACCOUNT -- United of Omaha Separate Account C, a separate account
maintained by United of Omaha in which a portion of United of Omaha's assets has
been allocated for the Policy and certain other policies.
WRITTEN NOTICE OR REQUEST -- Written notice, signed by the Policy Owner, that
gives United of Omaha the information it requires and is received at the Service
Office.
THE ULTRANNUITY SERIES V VARIABLE ANNUITY
SUMMARY
THE POLICY
The Ultrannuity Series V Variable Annuity is a Flexible Payment Variable
Deferred Annuity Policy. The Policy can be purchased on a non-tax qualified
basis ("Nonqualified Policy") or in connection with certain plans qualifying for
favorable federal income tax treatment ("Qualified Policy"). The Owner allocates
the Net Purchase Payments among the Eligible Investments offered under the
Policy by United of Omaha Life Insurance Company ("United of Omaha"). These
Eligible Investments are the 23 Subaccounts of United of Omaha Separate Account
C (the "Variable Account") and the Fixed Account.
THE ELIGIBLE INVESTMENTS
THE VARIABLE ACCOUNT. The Variable Account is a segregated investment
account of United of Omaha. It is divided into Subaccounts, each of which
invests exclusively in shares of a corresponding mutual fund Portfolio. The
available Portfolios are: the Alger American Growth Portfolio and the Alger
American Small Capitalization Portfolio of the Alger American Fund ("Alger
Fund"); the Federated Prime Money Fund II Portfolio and the Federated Fund for
U.S. Government Securities II Portfolio of the Insurance Management Series Trust
("Insurance Management Series"); the Fidelity Equity Income Portfolio of the
Variable Insurance Products Fund ("Fidelity VIP Fund"); the Fidelity Asset
Manager: Growth Portfolio, Fidelity Contrafund Portfolio, and Fidelity Index 500
of the Variable Insurance Products Fund II ("Fidelity VIP Fund II"); the MFS
Emerging Growth Portfolio, the MFS High Income Fund Portfolio, the MFS Research
Portfolio, MFS Value Series and the MFS World Government Portfolio of the MFS
Variable Insurance Trust ("MFS Trust"); the Pioneer Capital Growth Portfolio of
the Pioneer Capital Growth Fund and the Pioneer Real Estate Portfolio of the
Pioneer Real Estate Fund,(collectively "Pioneer Funds"), the Scudder Global
Discovery Portfolio, Scudder Growth & Income and the Scudder International
Portfolio of the Scudder Variable Life Investment Fund ("Scudder Fund"); the T.
Rowe Price International Stock Portfolio of T. Rowe Price International Series,
Inc. ("T. Rowe Price International Series"); the T. Rowe Price Limited-Term Bond
Portfolio of T. Rowe Price Fixed Income Series, Inc. ("T. Rowe Price Fixed
Income Series"); the T. Rowe Price Personal Strategy Balanced Portfolio, the T.
Rowe Price New America Growth Portfolio and T. Rowe Price Equity Income
Portfolio of T. Rowe Price Equity Series, Inc. ("T. Rowe Price Equity Series")
(each of the Alger Fund, Insurance Management Series, Fidelity VIP Fund,
Fidelity VIP Fund II, MFS Trust, Scudder Fund, T. Rowe Price International
Series, T. Rowe Price Fixed Income Series, and T. Rowe Price Equity Series are
referred to as the "Series Funds"). Because the Accumulation Value will increase
or decrease in accordance with the investment experience of the selected
Subaccounts, the Owner bears the entire investment risk with respect to Net
Purchase Payments allocated to, and amounts transferred to, the Variable
Account. (See "The Variable Account," p.14.)
THE FIXED ACCOUNT. The Fixed Account guarantees safety of principal and a
minimum 3% effective annual return on Net Purchase Payments allocated to, and
amounts transferred to, the Fixed Account. United of Omaha may, IN ITS SOLE
DISCRETION, declare a higher current interest rate. A current interest rate is
guaranteed for at least one year. (See "The Fixed Account," p.22.)
PURCHASE PAYMENTS
A Nonqualified Policy or a Qualified Policy may be purchased with an
Initial Purchase Payment of at least $5,000. An Owner may pay additional
Purchase Payments of at least $500 each at any time prior to the Annuity
Starting Date and up to the Policy Anniversary next following such Owner's 88th
birthday. There is no deduction from Purchase Payments for sales or
administrative expenses, although a charge for any applicable premium taxes will
be deducted from Purchase Payments, and there is a Withdrawal Charge. (See
"Withdrawal Charge," p. 31.)
Net Purchase Payments will be allocated among the Eligible Investments
(that is, among the Fixed Account and/or the Subaccounts of the Variable
Account) in accordance with the allocation percentages specified by the Owner in
the Policy application. Any allocation must be in whole percentages, and the
total allocation must equal 100%. (The Policy provides for a "Free Look Period"
during which the Owner can return the Policy for a full refund of the
Accumulation Value or Purchase Payments as determined by the law of the state of
issue. In some states the Net Purchase Payment(s) allocated to the Variable
Account will be held in the Money Market Subaccount during the Free Look Period,
and then allocated among the other Subaccounts as instructed by the Owner. See
"Free Look Right," p. 12.) Allocations for additional Net Purchase Payments may
be changed by sending Written Notice to United of Omaha's Service Office or by
telephone (subject to the provisions described below under "Telephone
Transactions," p. 26.)
TRANSFERS
An Owner can transfer Accumulation Value from one Subaccount to another
Subaccount or to the Fixed Account with certain limitations. The minimum amount
which may be transferred is the lesser of $500 or the entire Subaccount Value.
HOWEVER, following a transfer out of a particular Subaccount, at least $500 must
remain in that Subaccount. Transfers out of the Variable Account currently may
be made as often as the Owner wishes either by telephone (subject to the
provisions described below under "Telephone Transactions," p. 26) or by sending
Written Notice to the Service Office.
There is no charge for the first 12 transfers during any Policy Year.
However, a charge of $10 may be imposed for any transfers from Subaccounts in
excess of 12 per Policy Year. No such charge will be imposed on transfers out of
the Fixed Account.
Transfers from the Fixed Account to one or more Subaccounts of the Variable
Account may be made only once each Policy Year. The maximum amount that can be
transferred out of the Fixed Account during any Policy Year will be determined
periodically by United of Omaha. Such amount will not be less than 10% of the
Fixed Account Value on the date of the transfer. (See "Transfers," p. 22.)
Transfers from the Fixed Account may be delayed up to 6 months.
WITHDRAWALS
The Owner may elect to surrender the Policy for its Cash Surrender Value,
or to withdraw a portion of the Cash Surrender Value ($500 minimum) at any time
prior to the earlier of the Owner's death or the Annuity Starting Date. The Cash
Surrender Value equals the Accumulation Value less any applicable Withdrawal
Charge, any applicable Policy Fee, any applicable premium taxes, and, if the
Elective Death Benefit Amendment is attached, the Enhanced Death Benefit Charge
(See p. 33). A surrender or withdrawal request must be made by Written Request,
and a request for a partial withdrawal may specify the Eligible Investment(s)
from which the withdrawal is to be made, but no more than a pro-rata amount can
be deducted from the Fixed Account. If the Owner does not provide specific
withdrawal instructions, the withdrawal will be made pro-rata from each Eligible
Investment. There is currently no limit on the frequency or timing of
withdrawals from the Variable Account, but surrenders and partial withdrawals
from the Fixed Account may be delayed for up to six months. Withdrawals may be
taxable, and subject to a Withdrawal Charge and/or a tax penalty. If the
Contract is issued pursuant to a Qualified Plan, withdrawals may be restricted
by applicable law or the terms of the Qualified Plan.
CHARGES AND DEDUCTIONS
WITHDRAWAL CHARGE. In order to permit maximum investment of Purchase
Payments, United of Omaha does not deduct sales or other charges at the time of
investment. However, Purchase Payments surrendered or withdrawn or applied to
provide Annuity Payments within seven years after they were made will be subject
to a Withdrawal Charge to partially cover sales expenses, but each Policy Year
up to 15% of the Accumulation Value may be withdrawn as of the date of the first
withdrawal that Policy Year without imposition of the Withdrawal Charge. In
addition, amounts applied to provide a death benefit or applied after the second
Policy Year to the Payout Option that provides a Lifetime Income (Option 4) will
not be subject to a Withdrawal Charge. The applicable Withdrawal Charge is
calculated separately as to each Purchase Payment based on the period of time
elapsed since the Purchase Payment was made. There will be no Charge imposed on
any Purchase Payments in connection with a withdrawal or surrender that occurs
more than seven years after the Purchase Payment was made. The Withdrawal Charge
is 7% of any Purchase Payment withdrawn within one year after the Purchase
Payment is made, and the percentage declines by 1% each year to zero after the
seventh year following the date of the Purchase Payment. For purposes of
calculating the Withdrawal Charge, the oldest Purchase Payment is deemed to be
withdrawn first (a first-in, first-out arrangement), and all Purchase Payments
are deemed to be withdrawn before any earnings. (See "Withdrawal Charge," p.
30.)
ACCOUNT CHARGES. United of Omaha deducts a daily charge equal to a
percentage of the net assets in the Variable Account for the mortality and
expense risks assumed by United of Omaha. The annual rate of this charge is
1.00% of the value of each Subaccount's net assets. (See "Mortality and Expense
Risk Charge," p. 32.)
United of Omaha also deducts a daily Administrative Expense Charge from the
net assets of the Variable Account to partially cover expenses incurred by
United of Omaha in connection with the administration of the Variable Account
and the Policies. The annual rate of this charge is .20% of the value of each
Subaccount's net assets. (See "Administrative Charges," p. 33.)
The account charges for mortality and expense risks and administrative
expenses are guaranteed not to increase.
In the event the Owner elects to purchase the Enhanced Death Benefit (See
"Elective Death Benefit Amendment", p. 29), a charge equal to the annual rate of
0.35% of the Average Death Benefit Amount will be assessed on each Policy
Anniversary or pro rata upon full surrender for expenses related to the Death
Benefit under the Amendment. (See "Death Benefit", p. 29). The Enhanced Death
Benefit Charge is deducted from each Subaccount on a pro-rata basis through the
cancellation of accumulation units. If Subaccount assets are not sufficient to
deduct the full amount of the Enhanced Death Benefit Charge, the charge will be
deducted first from Subaccount assets then from the Fixed Account.
ANNUAL POLICY FEE. There is also an annual Policy Fee for Policy
maintenance and related administrative expenses. This fee is $30 per year and is
deducted from the Accumulation Value on the last Valuation Date of each Policy
Year (and upon complete surrender of the Policy). This fee will be waived if the
Accumulation Value is greater than $50,000 on the last Valuation Date of the
applicable Policy Year. This fee will not be increased in the future. (See
"Administrative Charges," p. 33.)
TRANSFER FEE. No fee is imposed for transfers from the Fixed Account or for
the first 12 transfers from Subaccounts of the Variable Account in each Policy
Year. However, a $10 Transfer Fee may be imposed for the thirteenth and each
subsequent request to transfer Accumulation Value from a Subaccount during a
single Policy Year. This fee will not be increased in the future.
(See "Transfer Fee," p. 33.)
TAXES. United of Omaha may incur premium taxes relating to the Policies.
United of Omaha will deduct any premium taxes related to a particular Policy
from Purchase Payments, upon surrender, upon death of any Owner, or at the
Annuity Starting Date. (See "Premium Taxes," p. 33.)
No deductions are currently made for federal, state, or local income taxes.
Should United of Omaha determine that charges for any such taxes should be
imposed with respect to any of the Accounts, United of Omaha may deduct such
taxes or the economic burden thereof from Purchase Payments or from amounts held
in the relevant Account. (See "Federal, State and Local Taxes," p.
33.)
CHARGES AGAINST THE SERIES FUNDS. The value of the net assets of the
Subaccounts of the Variable Account will reflect the investment advisory fee and
other expenses incurred by the Portfolios of the Series Funds. (See "Other
Expenses Including Investment Advisory Fees," p. 33.)
EXPENSE DATA. The charges and deductions are summarized in the following
table. The purpose of this table is to help the Owner understand the costs and
expenses that the Owner will bear directly and indirectly. This table and the
examples that follow should be considered only in conjunction with the detailed
descriptions under the heading "Charges and Deductions" of this prospectus. This
tabular information regarding expenses assumes that the entire Accumulation
Value is in the Variable Account and reflects expenses of the Variable Account
as well as of the Portfolios. In addition to the expenses listed below, a charge
for premium taxes may be applicable.
POLICY OWNER TRANSACTION EXPENSES
======================================= =======================================
Maximum Withdrawal Charge (as a % of each 7%
urchase Payment Surrendered)1
======================================= ======================================
Transfer Fee First 12 Transfers Per Year: NO FEE
More Than 12 in One Year: $10 each
======================================= ======================================
VARIABLE ACCOUNT ANNUAL EXPENSES (as a percentage of account value)
- ------------------------------------------------------------ ----------------
Mortality and Expense Risk Fees 1.00%
- ------------------------------------------------------------ ----------------
Administrative Expense Charge 0.20%
============================================================ ----------------
Total Variable Account Annual Expenses 1.20%
============================================================ ----------------
OTHER ANNUAL EXPENSES
- ------------------------------------------------------------ ----------------
Annual Policy Fee $30 Per Year
============================================================ ----------------
Current Annual Death Benefit Charge
(as a percentage of Average Death Benefit Amount)2 0.35%
============================================================- ---------------
1 /Each Policy Year up to fifteen percent (15%) of the Accumulation Value as of
the date of the first withdrawal that year can be withdrawn without a Withdrawal
Charge. Thereafter, the Withdrawal Charge is calculated separately for each
Purchase Payment withdrawn based on the number of years elapsed since the
Purchase Payment was made; it is 7% in the first year after a Purchase Payment
is made and then decreases by 1% in each successive year to 0% after the seventh
year.
2/ If the Policy has been issued with the Elective Death Benefit Amendment, the
Death Benefit Charge will apply. This charge will never exceed 0.35% of the
Average Death Benefit Amount.
=========== ========= ===============
SERIES FUND ANNUAL EXPENSES3 Management Other Total Series
(as a percentage of average net assets) Fees Expenses Fund Annual
Expenses
- ------------------------------------------ ============ ========= ==============
PORTFOLIO:
Alger American Growth 0.75% 0.10% 0.85%
Alger American Small Capitalization 0.85% 0.07% 0.92%
Federated Prime Money Fund II 0.50% 0.30% 0.80%
Federated Fund for U.S. Government
Securities II 0.00% 0.80% 0.80%
Fidelity VIP II Asset Manager: Growth 0.71% 0.29% 1.00%
Fidelity VIP II Contrafund 0.61% 0.11% 0.71%
Fidelity VIP Equity Income 0.51% 0.10% 0.61%
Fidelity VIP II Index 500 0.09% 0.19% 0.28%
MFS Emerging Growth 0.75% 0.25% 1.00%
MFS High Income Fund 0.75% 0.25% 1.00%
MFS Research 0.75% 0.25% 1.00%
MFS Value Series 0.75% 0.25% 1.00%
MFS World Government 0.75% 0.25% 1.00%
Pioneer Capital Growth 0.65% 0.60% 1.25%
Pioneer Real Estate 1.00% 0.25% 1.25%
Scudder Global Discovery 0.16% 1.34% 1.40%
Scudder Growth & Income 0.48% 0.18% 0.66%
Scudder International 0.88% 0.21% 1.09%
T. Rowe Price Equity Income * 0.00% 0.85% 0.85%
T. Rowe Price International * 0.00% 1.05% 1.05%
T. Rowe Price Limited-Term Bond * 0.00% 0.70% 0.70%
T. Rowe Price New America Growth * 0.00% 0.85% 0.85%
T. Rowe Price Personal Strategy Balanced * 0.00% 0.90% 0.90%
================================================================================
*.T. Rowe Price Funds do not itemize management fees and other expenses.
================================================================================
3 /The fee and expense data regarding each Series Fund, which are fees and
expenses for 1996, was provided to United of Omaha by the Series Fund. The
Series Funds are not affiliated with United of Omaha.
<TABLE>
<CAPTION>
================================= ======================== ====================== =======================
EXAMPLES.4 1. Surrender Policy 2. Annuitize Policy 3. Policy is not
An Owner would pay the following at end of the time at the end of the surrendered and is
expenses on a $1,000 investment, period or annuitize time period and not annuitized
assuming a 5% annual return on and Annuity Option 4 Annuity Option 4
assets (excluding the Enhanced (Lifetime Income) is (Lifetime Income) IS
Death Benefit) if: NOT chosen chosen
================================== ----- ----- ----- ------ ----- ---- ----- ----- ----- ---- ----- ======
Portfolio 1Yr 3Yr 5Yr 10Yr 1Yr 3Yr 5Yr 10Yr 1Yr 3Yr 5Yr 10Yr
================================== ===== ===== ===== ====== ===== ==== ===== ===== ===== ==== ===== ======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alger American Growth $84 117 151 268 $84 68 118 268 $22 $68 118 268
Alger American Small 85 119 155 277 85 70 122 277 22 70 122 277
Capitalization 83 115 148 262 83 66 116 262 21 66 116 262
Federated Prime Money Fund II
Federated Fund for U.S. 83 115 148 262 83 66 116 262 21 66 116 262
Government
Securities II 85 122 159 287 85 72 127 287 23 72 127 287
Fidelity VIP II Asset Manager: 83 113 144 251 83 64 111 251 20 64 111 251
Growth 82 109 138 238 82 60 105 238 19 60 105 238
Fidelity VIP II Contrafund 79 99 120 197 79 50 88 197 16 50 88 197
Fidelity VIP Equity Income 85 122 159 287 85 72 127 287 23 72 127 287
Fidelity VIP II Index 500 85 122 159 287 85 72 127 287 23 72 127 287
MFS Emerging Growth 85 122 159 287 85 72 127 287 23 72 127 287
MFS High Income Fund 85 122 159 287 85 72 127 287 23 72 127 287
MFS Research 85 122 159 287 85 72 127 287 23 72 127 287
MFS Value Series 88 129 173 318 88 80 141 318 26 80 141 318
MFS World Government 88 129 173 318 88 80 141 318 26 80 141 318
Pioneer Capital Growth 90 137 182 337 90 88 149 337 28 88 149 337
Pioneer Real Estate 83 111 141 244 83 62 108 244 20 62 108 244
Scudder Global Discovery 86 124 164 297 86 75 131 297 24 75 131 297
Scudder Growth & Income 84 117 151 268 84 68 118 268 22 68 118 268
Scudder International 86 123 162 293 86 74 129 293 24 74 129 293
T. Rowe Price Equity Income 82 112 143 249 82 63 110 249 20 63 110 249
T. Rowe Price International 84 117 151 268 84 68 118 268 22 68 118 268
T. Rowe Price Limited-Term Bond
T. Rowe Price New America Growth 84 118 154 274 84 69 121 274 22 69 121 268
T. Rowe Price Personal Strategy
Balanced
================================== ===== ===== ===== ====== ===== ==== ===== ===== ===== ==== ===== ======
The assumed 5% annual return is hypothetical and should not be considered a
representation or indication of past or future expenses (in either the Variable
or Fixed Account), which could be greater or lesser than the 5% rate assumed
solely for purposes of these examples.
4 /The $30 annual Policy Fee is reflected as a daily 0.10% charge in these
Examples, based on an average Accumulation Value of $30,000.
</TABLE>
<TABLE>
<CAPTION>
================================== ======================= ======================= =======================
EXAMPLES.5 1. Surrender Policy 2. Annuitize Policy 3. Policy is not
An Owner would pay the following at end of the time at the end of the surrendered and is
expenses on a $1,000 investment, period or annuitize time period and not annuitized
assuming a 5% annual return on and Annuity Option 4 Annuity Option 4
assets (including the Enhanced (Lifetime Income) is (Lifetime Income) IS
Death Benefit): NOT chosen chosen
================================== ----- ----- ---- ------ ----- ----- ---- ------ ----- ---- ----- ======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Portfolio 1Yr 3Yr 5Yr 10Yr 1Yr 3Yr 5Yr 10Yr 1Yr 3Yr 5Yr 10Yr
================================== ===== ===== ==== ====== ===== ===== ==== ====== ===== ==== ===== ======
Alger American Growth $87 128 170 312 87 79 138 312 25 79 138 312
Alger American Small 88 130 174 321 88 81 141 321 26 81 141 321
Capitalization 87 126 167 306 87 77 135 306 25 77 135 306
Federated Prime Money Fund II
Federated Fund for U.S. 87 126 167 306 87 77 135 306 25 77 135 306
Government
Securities II 89 133 178 331 89 83 146 331 27 83 146 331
Fidelity VIP II Asset Manager: 86 124 163 296 86 75 130 296 24 75 130 296
Growth 85 120 157 282 85 71 124 282 23 71 124 282
Fidelity VIP II Contrafund 82 110 139 241 82 61 107 241 19 61 107 241
Fidelity VIP Equity Income 89 133 178 331 89 83 146 331 27 83 146 331
Fidelity VIP II Index 500 89 133 178 331 89 83 146 331 27 83 146 331
MFS Emerging Growth 89 133 178 331 89 83 146 331 27 83 146 331
MFS High Income Fund 89 133 178 331 89 83 146 331 27 83 146 331
MFS Research 89 133 178 331 89 83 146 331 27 83 146 331
MFS Value Series 91 140 192 362 91 91 160 362 29 91 160 362
MFS World Government 91 140 192 362 91 91 160 362 29 91 160 362
Pioneer Capital Growth 94 148 201 381 94 99 168 381 32 99 168 381
Pioneer Real Estate 86 122 160 288 86 73 127 288 23 73 127 288
Scudder Global Discovery 90 135 183 341 90 86 150 341 27 86 150 341
Scudder Growth & Income 87 128 170 312 87 79 138 312 25 79 138 312
Scudder International 89 134 181 337 89 85 149 337 27 85 149 337
T. Rowe Price Equity Income 86 123 162 293 86 74 129 293 24 74 129 293
T. Rowe Price International 87 128 170 312 87 79 138 312 25 79 138 312
T. Rowe Price Limited-Term Bond
T. Rowe Price New America Growth 88 129 173 318 88 80 140 318 26 80 140 318
T. Rowe Price Personal Strategy
Balanced
================================== ===== ===== ==== ====== ===== ===== ==== ====== ===== ==== ===== ======
5/ The $30 annual Policy Fee is reflected as a daily 0.10% charge in these
Examples, based on an average Accumulation Value of $30,000.
</TABLE>
<PAGE>
================================================================================
DEATH BENEFIT
================================================================================
STANDARD DEATH BENEFIT. In the event that any Owner dies prior to the Annuity
Starting Date (and the Policy is in force), the death benefit payable to the
Beneficiary is calculated and is payable upon United of Omaha's receipt of Due
Proof of Death of any Owner, as well as an election of the method of settlement.
If any Owner dies, the death benefit will equal the greater of (a) the
Accumulation Value (without deduction of the Withdrawal Charge) on the later of
the date on which Due Proof of Death or an election of Payout Option is received
by United of Omaha's Service Office, less any applicable premium taxes; or (b)
the sum of Net Purchase Payments less partial withdrawals. No Withdrawal Charge
is imposed upon amounts paid as a death benefit. Subject to any limitations of
state or federal law, the death benefit may be paid as either a lump sum cash
benefit or as an Annuity. (See "Death Benefit," p. 29.)
ELECTIVE DEATH BENEFIT AMENDMENT. If this Amendment is attached to the Policy
and the Owner dies prior to age 81, the Death Benefit under the Policy will
equal the greatest of: (1) the Accumulation Value as of the end of the valuation
period during which due proof of death and an election of a payout option are
received by United of Omaha's Service Office; (2) the greatest Anniversary Value
plus any subsequent purchase payments and less any subsequent partial
withdrawals; and (3) the sum of all net purchase payments, less any partial
withdrawals, accumulated at a 4.5% annual rate of interest, not exceeding a
maximum of two times each purchase payment.
If the Owner dies after attaining age 81, the Death Benefit under the Policy
will equal the greatest of: (1) the Accumulation Value as of the end of the
valuation period during which due proof of death and an election of a payout
option are received by United of Omaha's Service Office; (2) the greatest
Anniversary Value before the Owner attained age 81, plus any subsequent purchase
payments and less any subsequent partial withdrawals; and (3) the sum of all net
purchase payments paid prior to the last Policy Anniversary before the Owner
attained age 81 less any partial withdrawals, accumulated at a 4.5% annual rate
of interest not exceeding a maximum of two times each purchase payment. If the
death benefit payable equals (3), United of Omaha will add to the Death Benefit,
any purchase payments paid after the last Policy Anniversary before the Owner
attained age 81.
Any applicable premium taxes not previously deducted will be deducted from
the death benefit payable.
ACCIDENTAL DEATH BENEFIT
If the Owner dies from bodily injury sustained in a common carrier accident,
United of Omaha will pay the Standard Death Benefit or the Enhanced Death
Benefit, as applicable, multiplied by two, instead of the amount that would
otherwise be payable. (See Accidental Death Benefit, p. 30).
FREE LOOK RIGHT
The Policy Owner may, until the end of the period of time specified in the
Policy, examine the Policy and return it to United of Omaha's Service Office or
the agent from whom it was purchased for a refund. The applicable period will
depend on the state in which the Policy is issued. In most states it is ten (10)
days after the Policy is delivered to the Policy Owner. Return of the Policy is
effective upon being postmarked, properly addressed, and postage pre-paid.
United of Omaha will pay the refund within seven (7) days after it receives
written notice of cancellation and the returned Policy.
In states that permit it to do so, United of Omaha will promptly refund the
Accumulation Value calculated on the date United of Omaha receives the Policy
and refund request. This amount may be more or less than the Purchase Payments
made. In other states, United of Omaha will refund the greater of Accumulation
Value or Purchase Payments made under the Policy. (In these states, any portion
of the initial Net Purchase Payment that is allocated to the Variable Account
will be held in the Money Market Subaccount for the applicable Free Look Period
plus 5 days from the date the Policy is mailed from the Service Office, to allow
for this Free Look Right; the extra days are to provide time for mail or other
delivery of the Policy.)
FEDERAL INCOME TAX CONSEQUENCES OF INVESTMENT IN THE POLICY
With respect to Owners who are natural persons under existing tax law, there
should be no federal income tax on increases (if any) in the Accumulation Value
until a distribution under the Policy occurs (E.G., a withdrawal or Annuity
Payment) or is deemed to occur (E.G., a pledge or assignment of a Policy).
Generally, a portion of any distribution or deemed distribution will be taxable
as ordinary income. The taxable portion of certain distributions will be subject
to withholding unless the recipient (if permitted) elects otherwise. In
addition, a penalty tax of 10% of the amount withdrawn may apply to certain
distributions or deemed distributions under the Policy made prior to the Owner's
attaining age 59 1/2. (See "Certain Federal Income Tax Consequences," p. 34 .)
INQUIRIES AND WRITTEN NOTICES AND REQUESTS
Any questions about procedures or the Policy, or any Written Notice or
Written Request required to be sent to United of Omaha, should be sent to United
of Omaha's Service Office: United of Omaha Variable Product Service, P.O. Box
8430, Omaha, Nebraska 68108-0430. Telephone requests and inquiries may be made
by calling 1-800-238-9354. All inquiries, Notices and Requests should include
the Policy number, the Owner's name and the Annuitant's name.
VARIATIONS IN POLICY PROVISIONS
Certain provisions of the Policies may vary from the descriptions in this
Prospectus in order to comply with different state laws. Any such variations
will be included in the Policy itself or in riders or amendments. Policy
provisions which may vary by state include the Free Look provision and the
Waiver of Surrender Charge provision for nursing home/hospital confinement,
disability, terminal illness or unemployment. One or a very few number of states
also require variations in the Annuity Starting Date, Termination, and Delay of
Payments or Transfers from the Fixed Account provisions.
* * *
NOTE: THE FOREGOING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED
INFORMATION IN THE REMAINDER OF THIS PROSPECTUS AND IN THE STATEMENT OF
ADDITIONAL INFORMATION AND IN THE PROSPECTUSES FOR THE SERIES FUNDS AND IN THE
POLICY, ALL OF WHICH SHOULD BE REFERRED TO FOR MORE DETAILED INFORMATION. THIS
PROSPECTUS GENERALLY DESCRIBES ONLY THE POLICY AND THE VARIABLE ACCOUNT.
SEPARATE PROSPECTUSES DESCRIBE THE SERIES FUNDS. (THERE IS NO PROSPECTUS FOR THE
FIXED ACCOUNT SINCE INTERESTS IN THE FIXED ACCOUNT ARE NOT SECURITIES. SEE "THE
FIXED ACCOUNT," P. 22.)
FINANCIAL STATEMENTS
The Financial Statements for United of Omaha and the Series V Subaccounts of
the Variable Account and the Variable Account and the related independent
auditor's report are contained in the Statement of Additional Information, which
is available free upon request. At December 31, 1996, net assets of the Series V
Subaccounts of the Variable Account were represented by the following
Accumulation Unit Values and Accumulation Units. This information should be read
in conjunction with the Variable Account's financial statements and related
notes included in the Statement of Additional Information.
<TABLE>
<CAPTION>
===============================================================================
Accumulation Unit Value* Accumulation Units**
========================== =====================
Subaccount Commen- Year Year Year Year
cement- Ended Ended Ended Ended
(Date of Inception) Date 12/31/95 12/31/96 12/31/95 12/31/96
================================= ======== ========= ========= ========= ===========
<S> <C> <C> <C> <C> <C>
Alger American Growth (6/5/95) 10 11.673 13.071 140,897 1,358,882
Alger American Small (6/5/95)
Capitalization (6/5/95) 10 12.094 12.448 148,670 1,474,106
Federated Prime Money Fund II
(6/5/95) 1 1.023 1.059 3,065,603 21,525,823
Federated Fund for U.S.
Government Securities II 10 10.570 10.882 122,440 1,128,539
(6/5/95)
Fidelity VIP II Asset Manager:
Growth (6/5/95) 10 11.269 13.353 199,570 1,655,034
Fidelity VIP II Contrafund (6/5/95) 10 11.740 14.070 150,364 1,785,094
Fidelity VIP Equity Income (6/5/95) 10 11.596 13.920 233,679 2,256,678
Fidelity VIP II Index 500 (5/1/97) 10 N/A N/A N/A N/A
MFS Emerging Growth (6/5/95) 10 11.659 13.480 123,460 1,854,146
MFS High Income Fund (6/5/95) 10 10.452 11.548 87,378 859,361
MFS Research (6/5/95) 10 10.986 13.277 117,165 1,381,316
MFS Value Series (5/1/97) 10 N/A N/A N/A N/A
MFS World Government (6/5/95) 10 10.243 10.527 56,393 819,686
Pioneer Capital Growth (5/1/97) 10 N/A N/A N/A N/A
Pioneer Real Estate (5/1/97) 10 N/A N/A N/A N/A
Scudder Global Discovery (5/1/97) 10 N/A N/A N/A N/A
Scudder Growth & Income (5/1/97) 10 N/A N/A N/A N/A
Scudder International (6/5/95) 10 10.642 12.067 99,029 1,269,457
T. Rowe Price Equity Income
(6/5/95) 10 11.625 13.731 121,994 1,861,298
T. Rowe Price International
(6/5/95) 10 10.569 11.976 181,399 1,736,784
T. Rowe Price Limited-Term Bond
(6/5/95) 10 10.373 10.582 56,018 631,437
T. Rowe Price New America Growth
(6/5/95) 10 13.061 15.496 58,666 917,255
T. Rowe Price Personal Strategy
Balanced (6/5/95) 10 11.272 12.719 123,287 1,703,217
================================= ======== ========= ========= ========= ===========
* Accumulation Unit Values are rounded to the nearest tenth of a cent.
** Accumulation Units are rounded to the nearest unit.
</TABLE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
United of Omaha Life Insurance Company, Mutual of Omaha Plaza, Omaha,
Nebraska, 68175, is a stock life insurance company. It was incorporated under
the name United Benefit Life Insurance Company under the laws of the State of
Nebraska on August 9, 1926. In 1981, it changed its name to United of Omaha Life
Insurance Company. It is principally engaged in the sale of life insurance,
accident and health insurance, and annuity policies, and is licensed in all
states except New York and in several foreign countries and the District of
Columbia. As of December 31, 1996, United of Omaha had assets of over $8 1/2
billion. United of Omaha is a wholly-owned subsidiary of Mutual of Omaha
Insurance Company.
United of Omaha may from time to time publish (in advertisements, sales
literature and reports to Owners) the ratings and other information assigned to
it by one or more independent rating organizations such as A.M. Best Company,
Moody's, Standard & Poor's, and Duff & Phelps. The purpose of the ratings is to
reflect the financial strength and/or claims-paying ability of United of Omaha,
and the ratings should not be considered as bearing on the investment
performance of assets held in the Variable Account. Each year the A.M. Best
Company reviews the financial status of thousands of insurers, culminating in
the assignment of Best's Ratings. These ratings reflect A.M. Best Company's
current opinion of the relative financial strength and operating performance of
an insurance company in comparison to the norms of the life/health insurance
industry. In addition, the claims-paying ability of United of Omaha, as measured
by Moody's Insurance Credit Report, Standard and Poor's Insurance Ratings
Services, or Duff & Phelps may be referred to in such advertisements, sales
literature, or reports. These ratings are opinions regarding an operating
insurance company's financial capacity to meet the obligations of its insurance
and annuity policies in accordance with their terms. Such ratings do not reflect
the investment performance of the Variable Account or the degree of risk
associated with an investment in the Variable Account.
THE ELIGIBLE INVESTMENTS
Net Purchase Payments made under a Policy may be allocated to one of the 23
Ultrannuity Series V Subaccounts of the Variable Account, to the Fixed Account,
or to a combination of these Eligible Investment(s).
THE VARIABLE ACCOUNT
The United of Omaha Separate Account C of United of Omaha Life Insurance
Company (the "Variable Account") was established as a separate investment
account under the laws of the State of Nebraska on December 1, 1993. The
Variable Account will receive and invest the Net Purchase Payments under the
Policies that are allocated to it for investment in shares of a Series Fund.
The Variable Account currently is divided into 23Subaccounts. Each Subaccount
invests exclusively in shares of a Portfolio of one of the Series Funds. Under
Nebraska law, the assets of the Variable Account are owned by United of Omaha,
but they are held separately from the other assets of United of Omaha and are
not chargeable with any liabilities arising out of any other separate investment
account or any other business of United of Omaha which has no specific and
determinable relation to or dependence upon the Variable Account. The income,
gains and losses, realized or unrealized, from assets allocated to the Variable
Account are credited to or charged against the Variable Account, without regard
to other income, gains, or losses of United of Omaha. Section 44-2212 of the
Nebraska Statutes provides that "Any surplus or deficit which may arise in the
Variable Account by virtue of mortality experience guaranteed by United of Omaha
or by expense costs is adjusted by withdrawals from or additions to the Variable
Account so that the assets of the Variable Account equal the liabilities." The
investment performance of any Subaccount should be entirely independent of the
investment performance of United of Omaha's general account assets or any other
accounts maintained by United of Omaha.
The Variable Account is registered with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940 as a unit
investment trust. However, the SEC does not supervise the management or the
investment practices or policies of the Variable Account or United of Omaha.
THE SERIES FUNDS. Each Subaccount of the Variable Account will invest
exclusively in shares of a specific Portfolio of one of the Series Funds, each
of which is a mutual fund registered with the SEC under the Investment Company
Act of 1940 (the "1940 Act") as an open-end, diversified investment management
company. 6/ The assets of each Portfolio of each Series Fund are held separate
from the assets of that Series Fund's other Portfolios, and each Portfolio has
its own distinct investment objectives and policies. Each Portfolio operates as
a separate investment fund, and the income or losses of one Portfolio generally
have no effect on the investment performance of any other Portfolio.
Each of the Series Funds is managed by an investment adviser registered with
the SEC under the Investment Advisers Act of 1940, as amended. Each investment
manager is responsible for selecting Portfolio investments consistent with the
investment objectives and policies of the Portfolio, and conducts securities
trading for the Portfolio. Alger Management is responsible for the overall
administration of the Alger American Fund, subject to the supervision of the
Alger Fund Board of Trustees; Federated Advisers is responsible for the
portfolio investment decisions of the Insurance Management Series, subject to
direction by the Insurance Management Series Trustees; Fidelity Management &
Research Company ("FMR") is the manager of the Fidelity VIP Fund and Fidelity
VIP Fund II. On behalf of the Asset Manager: Growth Portfolio of the Fidelity
VIP Fund II, FMR has entered into sub-advisory agreements with Fidelity
Investment Management and Research (U.K.) Inc. ("FMR (U.K.)") and Fidelity
Management and Research (Far East) Inc. ("FMR Far East") pursuant to which those
entities provide research and investment recommendations with respect to
companies based outside of the United States. FMR (U.K.) primarily focuses on
companies based in Europe, and FMR Far East focuses primarily on companies based
in Asia and the Pacific Basin. Massachusetts Financial Services Company is
responsible for the management of the assets of the MFS Variable Insurance
Trust. Pioneer Fund Group is responsible for the management of the assets of the
Pioneer Variable Contracts Trust., subject to direction by the Trust's own
Trustees. The investment advisor for each Pioneer Variable Contracts Trust
portfolio is Pioneer Management Corporation. Scudder, Stevens & Clark, Inc.
manages the daily business and affairs of the Scudder Variable Life Investment
Fund, subject to policies established by the Trustees of Scudder Variable Life
Investment Fund. T. Rowe Price Associates, Inc. is responsible for selection and
management of the portfolio investments of T. Rowe Price Equity Series and T.
Rowe Price Fixed Income Series. Rowe Price-Fleming International, Inc.,
incorporated in 1979 as a joint venture between T. Rowe Price Associates, Inc.
and Robert Fleming Holdings Limited, is responsible for selection and management
of the portfolio investments of T. Rowe Price International Series.
6/ THE REGISTRATION OF THE SERIES FUNDS DOES NOT INVOLVE SUPERVISION OF THE
MANAGEMENT OR INVESTMENT PRACTICES OR POLICIES OF THE SERIES FUNDS BY THE SEC.
The investment objectives of each Portfolio are summarized as follows:
ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO -- seeks long-term capital appreciation by
investing in a diversified portfolio of equity securities, primarily of
companies with total market capitalization of $1 billion or greater.
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO -- seeks long-term capital
appreciation by investing in a diversified portfolio of equity securities,
primarily of smaller, newer companies with total market capitalization of
less than $1 billion. The securities in such companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the market
averages in general.(*)
INSURANCE MANAGEMENT SERIES
FEDERATED PRIME MONEY FUND II PORTFOLIO -- invests in money market
instruments maturing in thirteen months or less to achieve current income
consistent with stability of principal and liquidity. The Portfolio
attempts to maintain a stable net asset value of $1.00 per share, but there
can be no assurance the Portfolio will be able to do so.
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II PORTFOLIO -- seeks current
income by investing in a diversified portfolio limited to U.S. government
securities.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FIDELITY EQUITY INCOME PORTFOLIO -- seeks reasonable income by investing
mainly in income-producing equity securities. In selecting investments, the
Portfolio also considers the potential for capital appreciation. The
Portfolio seeks to achieve a yield that beats that of the S&P 500. The
Portfolio does not expect to invest in debt securities of companies that do
not have proven earnings or credit.(*)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
FIDELITY ASSET MANAGER: GROWTH PORTFOLIO -- seeks to obtain high total return
with reduced risk over the long-term by allocating its assets among stocks,
bonds, and short-term fixed-income instruments. Although the Portfolio
seeks to reduce its overall risk by diversifying among different types of
investments, the fund aggressively invests in a wide variety of security
types, including stocks and bonds issued in developing countries and
derivative transactions. The Portfolio spreads investment risk by limiting
its holdings in any one company or industry.(*)
FIDELITY CONTRAFUND PORTFOLIO -- seeks to increase the value of the
Portfolio's return over the long term by investing in securities of
companies that are undervalued or out-of-favor. This strategy can lead to
investments in domestic or foreign companies, many of which may not be well
known. The stocks of small companies often involve more risk than those of
larger companies. The Portfolio may use various investment techniques to
hedge the Portfolio's risk, but there is no guarantee that these strategies
will work as intended.(*)
FIDELITY INDEX 500 PORTFOLIO -- seeks to match the total return of the S&P
500 while keeping expenses low. The Portfolio utilizes a "passive" or
"indexing" approach and tries to allocate its assets similarly to those of
the index. Normally 80% (65% if fund assets are below $20 million) of the
fund's assets are invested in equity securities of companies that compose
the S&P 500. The Standard & Poor's Corporation is neither an affiliate nor
a sponsor of the fund.
MFS VARIABLE INSURANCE TRUST
MFS EMERGING GROWTH PORTFOLIO -- seeks to provide long-term growth of capital
through investing primarily in common stocks of emerging growth companies,
which involves greater risk than is customarily associated with investments
in more established companies. The Portfolio may invest in a limited extent
in lower rated fixed income securities or comparable unrated securities.(*)
MFS HIGH INCOME PORTFOLIO -- seeks high current income by investing primarily
in a diversified portfolio of fixed income securities, some of which may
involve equity features. The Portfolio may invest in lower rated fixed
income securities or comparable unrated securities.(*)
MFS RESEARCH PORTFOLIO -- seeks to provide long-term growth of capital and
future income by investing a substantial proportion of its assets in the
common stocks or securities convertible into common stocks of companies
believed to possess better than average prospects for long-term growth. No
more than 5% of the Portfolio's convertible securities, if any, will
consist of securities in lower rated categories or securities believed to
be of similar quality to lower rated securities. The Portfolio may invest
in a limited extent in lower rated fixed income securities or comparable
unrated securities.(*)
MFS VALUE SERIES PORTFOLIO -- seeks capital appreciation by investing
primarily in common stocks, including to a limited extent foreign
securities which are not traded on a U.S. exchange. The Portfolio may
invest to a limited extent in lower rated fixed income securities or
comparable unrated securities. (*)
MFS WORLD GOVERNMENT PORTFOLIO -- seeks preservation and growth of capital,
together with moderate current income by investing its assets in an
internationally diversified portfolio consisting primarily of debt
securities and to a lesser extent equity securities. The Portfolio
investments are expected to consist primarily of securities which are of
relatively high quality and minimal credit risk. However, an error of
judgment in selecting a currency or an interest rate environment could
result in a loss of capital, and a held security whose quality deteriorates
significantly will be sold only if the Portfolio investment adviser
believes it is advantageous to do so.
PIONEER VARIABLE CONTRACTS TRUST
PIONEER CAPITAL GROWTH PORTFOLIO - seeks capital appreciation by investing in
a diversified portfolio of securities consisting primarily of common
stocks.
PIONEER REAL ESTATE PORTFOLIO - seeks long-term growth of capital by
investing primarily in securities of real estate investment trusts (REITs)
and other real estate industry companies.
Current income is the Portfolio's secondary investment objective.
SCUDDER VARIABLE LIFE INVESTMENT FUND
SCUDDER GLOBAL DISCOVERY PORTFOLIO -- seeks above-average capital
appreciation over the long term by investing primarily in the equity
securities of small companies located throughout the world, including to a
limited extent in lower rated fixed income securities or comparable unrated
securities. Since the Portfolio normally will invest in both U.S. and
foreign securities markets, changes in the Portfolio's unit value may have
a low correlation with movements in the U.S. markets. (*)
SCUDDER GROWTH & INCOME PORTFOLIO -- seeks long term growth of capital,
current income and growth of income by investing primarily in common
stocks, preferred stocks, and securities convertible into common stocks of
companies which offer the prospect for growth of earnings while paying
higher than average current dividends.
SCUDDER INTERNATIONAL PORTFOLIO -- seeks long-term growth of capital
primarily through diversified holdings of marketable foreign equity
investments. The Portfolio invests in companies, wherever organized, which
do business primarily outside the United States. The Portfolio intends to
diversify investments among several countries, and does not intend to
concentrate investments in any particular industry.
T. ROWE PRICE INTERNATIONAL SERIES, INC.
T.ROWE PRICE INTERNATIONAL STOCK PORTFOLIO -- seeks a total return on its
assets from long-term growth of capital and income, by investing
substantially all of its assets in common stocks of established non-U.S.
companies. The Portfolio will not purchase any debt security which at the
time of purchase is rated below investment grade. This would not prevent
the Portfolio from retaining a security downgraded to below investment
grade after purchase.
T. ROWE PRICE EQUITY SERIES, INC.
T.ROWE PRICE NEW AMERICA GROWTH PORTFOLIO -- seeks long-term growth of
capital through investments primarily in common stocks of U.S. growth
companies which operate in service industries believed to be above-average
performers in their fields. Total return will consist primarily of capital
appreciation or depreciation.
T. ROWE PRICE EQUITY INCOME PORTFOLIO -- Seeks to provide substantial
dividend income and also capital appreciation by investing primarily
in dividend-paying common stocks of established companies.(*)
T.ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO -- seeks the highest total
return over time consistent with an emphasis on both capital appreciation
and income. There are no limitations on market capitalization or types of
stock the Portfolio can hold. While bond holdings are primarily investment
grade, the Portfolio can also invest in more volatile below-investment
grade bonds.(*)
T. ROWE PRICE FIXED INCOME SERIES, INC.
T.ROWE PRICE LIMITED TERM BOND PORTFOLIO -- seeks a high level of income
consistent with modest price fluctuation by investing primarily in
investment grade debt securities.
(*) THE PORTFOLIOS' INVESTMENT STRATEGIES MAY PROVIDE THE OPPORTUNITY OF HIGHER
THAN AVERAGE YIELDS BY INVESTING IN SECURITIES WITH HIGHER THAN AVERAGE
RISK, SUCH AS LOWER AND UNRATED DEBT AND COMPARABLE EQUITY INSTRUMENTS.
PLEASE CONSULT EACH PORTFOLIO'S SERIES FUND PROSPECTUS ACCOMPANYING THIS
PROSPECTUS FOR MORE INFORMATION ABOUT THE RISK ASSOCIATED WITH SUCH
INVESTMENTS.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE.
MORE DETAILED INFORMATION, INCLUDING A DESCRIPTION OF EACH PORTFOLIO'S
INVESTMENT OBJECTIVE AND POLICIES AND A DESCRIPTION OF RISKS INVOLVED IN
INVESTING IN EACH OF THE PORTFOLIOS AND OF EACH PORTFOLIO'S FEES AND EXPENSES,
IS CONTAINED IN THE PROSPECTUSES FOR THE SERIES FUNDS, CURRENT COPIES OF WHICH
ACCOMPANY THIS PROSPECTUS. INFORMATION CONTAINED IN THE SERIES FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN A SUBACCOUNT OF THE
VARIABLE ACCOUNT.
An investment in the Variable Account, or in any Portfolio, including the
Money Market Portfolio, is not insured or guaranteed by the U.S. Government and
there can be no assurance that the Money Market Portfolio will be able to
maintain a stable net asset value per share.
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS. United of Omaha does not
control the Series Funds and cannot and does not guarantee that any of the
Portfolios will always be available for Net Purchase Payments, allocations, or
transfers. United of Omaha retains the right, subject to any applicable law, to
make certain changes in the Variable Account and its investments. United of
Omaha reserves the right to eliminate the shares of any Portfolio held by a
Subaccount and to substitute shares of another Portfolio of a Series Fund, or of
another registered open-end management investment company for the shares of any
Portfolio, if the shares of the Portfolio are no longer available for investment
or if, in United of Omaha's judgment, investment in any Portfolio would be
inappropriate in view of the purposes of the Variable Account. To the extent
required by the 1940 Act, substitutions of shares attributable to an Owner's
interest in a Subaccount will not be made without prior notice to the Owner and
the prior approval of the SEC. If required, approval of or change of any
investment policy will be filed with the Insurance Department of any state in
which the Policy is sold. Nothing contained herein shall prevent the Variable
Account from purchasing other securities for other series or classes of variable
annuity policies, or from effecting an exchange between series or classes of
variable annuity policies on the basis of requests made by Owners.
New Subaccounts may be established when, in the sole discretion of United of
Omaha, marketing, tax, investment or other conditions warrant. Any new
Subaccounts may be made available to existing Owners on a basis to be determined
by United of Omaha. Each additional Subaccount will purchase shares in a
Portfolio of a Series Fund or in another mutual fund or investment vehicle.
United of Omaha may also eliminate one or more Subaccounts if, in its sole
discretion, marketing, tax, investment or other conditions warrant such change.
In the event any Subaccount is eliminated, United of Omaha will notify Owners
and request a reallocation of the amounts invested in the eliminated Subaccount.
If no such reallocation is provided by the Owner, United of Omaha will reinvest
the amounts invested in the eliminated Subaccount in the Subaccount that invests
in the Money Market Portfolio (or in a similar portfolio of money market
instruments).
In the event of any such substitution or change, United of Omaha may, by
appropriate endorsement, make such changes in the Policies as may be necessary
or appropriate to reflect such substitution or change. Furthermore, the Variable
Account may be (i) operated as a management company under the 1940 Act or any
other form permitted by law, (ii) deregistered under the 1940 Act in the event
such registration is no longer required or (iii) combined with one or more other
separate accounts. To the extent permitted by applicable law, United of Omaha
also may transfer the assets of the Variable Account associated with the
Policies to another account or accounts.
HISTORICAL PERFORMANCE DATA
From time to time, United of Omaha may advertise or include in sales
literature yields, effective yields, and total returns for the Subaccounts of
the Variable Account. THESE FIGURES ARE BASED ON HISTORICAL PERFORMANCE AND DO
NOT INDICATE OR PROJECT FUTURE PERFORMANCE. Performance relative to certain
performance rankings and indices compiled by independent organizations may also
be advertised or included in sales literature. More detailed information as to
the calculation of performance information, as well as comparisons with
unmanaged market indices, appears in the Statement of Additional Information.
STANDARDIZED PERFORMANCE DATA. Effective yields and total returns for the
Subaccounts are based on the investment performance of the corresponding
Portfolios of the Series Funds. The Series Funds' performance in part reflects
the Series Funds' expenses. See the Prospectuses for the Series Funds.
The yield of the Money Market Subaccount refers to the annualized income
generated by an investment in the Subaccount over a specified seven-day period.
The yield is calculated by assuming that the income generated for that seven-day
period is generated each seven-day period over a 52-week period and is shown as
a percentage of the investment. The effective yield is calculated similarly but,
when annualized, the income earned by an investment in the Subaccount is assumed
to be reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment.
The yield of a Subaccount (except the Money Market Subaccount) refers to
the annualized income generated by an investment in the Subaccount over a
specified 30-day or one-month period. The yield is calculated by assuming that
the income generated by the investment during that 30-day or one-month period is
generated each period over a 12-month period and is shown as a percentage of the
investment.
Yield quotations do not reflect the Withdrawal Charge.
For the class of Policies issued with the Elective Death Benefit
Amendment, the Death Benefit Charge is included.
The total return of a Subaccount refers to return quotations assuming
Accumulation Value has been held in the Subaccount for various periods of time
including, but not limited to, a period measured from the date the Subaccount
commenced operations. When a Subaccount has been in operation for one, five, and
ten years, respectively, the total return for these periods will be provided.
The average annual total return quotations represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a Policy to the redemption value of that investment as of the last day of
each of the periods for which total return quotations are provided. Average
annual total return information shows the average percentage change in the value
of an investment in the Subaccount from the beginning date of the measuring
period to the end of that period. This standardized version of average annual
total return reflects all historical investment results, less all charges and
deductions applied against the Subaccount (including any Withdrawal Charge that
would apply if an Owner terminated the Policy at the end of each period
indicated, but excluding any deductions for premium tax charges). For the class
of Policies issued with the Elective Death Benefit Amendment, the Death Benefit
Charge is included. Such standardized average annual total return information
for the Subaccounts of Policies is as follows:
============================================== ============ ===========
SUBACCOUNT STANDARDIZED 1 Year From
AVERAGE ANNUAL TOTAL RETURN TABLE Ended Inception
Subaccount (date of inception) 12/31/96 to
(Policy issued WITHOUT Enhanced Death % 12/31/96
Benefit) %
============================================== ============ ===========
Alger American Growth (6/5/95) 5.24 9.27
Alger American Small Capitalization (6/5/95) -3.28 3.83
Federated Prime Money Fund II (6.5.95) -2.79 -0.02
Federated Fund for U.S. Government
Securities (6/5/5) -3.26 1.85
Fidelity VIP II Asset Manager: Growth
(6/5/95) 11.36 14.18
Fidelity VIP II Contrafund (6/5/95) 12.64 15.91
Fidelity VIP Equity Income (6/5/95) 6.11 13.88
Fidelity VIP II Index 500 (5/1/97) N/A N/A
MFS Emerging Growth (6/5/95) 8.66 16.95
MFS High Income (6/5/95) 3.81 5.96
MFS Research (6/5/95) 13.59 15.82
MFS Value Series (5/1/97) N/A N/A
MFS World Government (6/5/95) -3.42 -0.20
Pioneer Capital Growth (5/1/97) N/A N/A
Pioneer Real Estate (5/1/97) N/A N/A
Scudder Global Discovery (5/1/97) N/A N/A
Scudder Growth & Income (5/1/97) N/A N/A
Scudder International (6/5/95) 6.57 8.62
T. Rowe Price International (6/5/95) 6.50 8.86
T. Rowe Price New America Growth (6/5/95) 11.51 21.85
T. Rowe Price Equity Income (6/5/95) 11.01 17.88
T. Rowe Price Limited-Term Bond (6/5/95) -4.14 0.14
T. Rowe Price Personal Strategy Balanced
(6/5/95) 6.04 11.13
============================================== ============ ===========
1 Year From
Subaccount (date of inception ) Ended Inception
(Policy issued WITH Enhanced Death Benefit) 12/31/96 to
12/31/96
============================================== ============ ===========
Alger American Growth (6/5/95) 4.88 8.91
Alger American Small Capitalization (6/5/95) -3.62 3.49
Federated Prime Money Fund II (6.5.95) -3.13 -0.35
Federated Fund for U.S. Government
Securities (6/5/5) -3.60 1.51
Fidelity VIP II Asset Manager: Growth
(6/5/95) 10.98 13.80
Fidelity VIP II Contrafund (6/5/95) 12.25 15.53
Fidelity VIP Equity Income (6/5/95) 5.74 13.51
Fidelity VIP II Index 500 (5/1/97) N/A N/A
MFS Emerging Growth (6/5/95) 8.28 16.56
MFS High Income (6/5/95) 3.45 5.61
MFS Research (6/5/95) 13.20 15.44
MFS Value Series (5/1/97) N/A N/A
MFS World Government (6/5/95) -3.76 -0.53
Pioneer Capital Growth (5/1/97) N/A N/A
Pioneer Real Estate (5/1/97) N/A N/A
Scudder Global Discovery (5/1/97) N/A N/A
Scudder Growth & Income (5/1/97) N/A N/A
Scudder International (6/5/95) 6.20 8.26
T. Rowe Price International (6/5/95) 6.13 8.50
T. Rowe Price New America Growth (6/5/95) 11.12 21.45
T. Rowe Price Equity Income (6/5/95) 10.63 17.49
T. Rowe Price Limited-Term Bond (6/5/95) -4.47 -0.20
T. Rowe Price Personal Strategy Balanced
(6/5/95) 5.67 10.77
============================================== ============ ===========
NON-STANDARDIZED PERFORMANCE DATA. In addition to the standard version described
above, total return performance information computed on different non-standard
bases may be used in advertisements. Average annual total return information may
be presented, computed on the same basis as described above, except deductions
will not include the Withdrawal Charge. Such non-standardized average annual
total return information for the Subaccounts of Policies is as follows:
============================================== =========== ===========
SUBACCOUNT NON-STANDARDIZED 1 Year From
AVERAGE ANNUAL TOTAL RETURN TABLE Ended Inception
Subaccount (date of inception) 12/31/96 to
(Policy issued WITHOUT Enhanced Death % 12/31/96
Benefit) %
============================================== ============ ===========
Alger American Growth (6/5/95) 11.90 12.97
Alger American Small Capitalization (6/5/95) 2.84 735
Federated Prime Money Fund II (6.5.95) 3.36 3.36
Federated Fund for U.S. Government
Securities (6/5/5) 2.86 5.30
Fidelity VIP II Asset Manager: Growth
(6/5/95) 18.41 18.04
Fidelity VIP II Contrafund (6/5/95) 19.76 19.84
Fidelity VIP Equity Income (6/5/95) 12.82 17.74
Fidelity VIP II Index 500 (5/1/97) N/A N/A
MFS Emerging Growth (6/5/95) 15.53 20.90
MFS High Income (6/5/95) 10.37 9.55
MFS Research (6/5/95) 20.78 19.74
MFS Value Series (5/1/97) N/A N/A
MFS World Government (6/5/95) 2.69 3.18
Pioneer Capital Growth (5/1/97) N/A N/A
Pioneer Real Estate (5/1/97) N/A N/A
Scudder Global Discovery (5/1/97) N/A N/A
Scudder Growth & Income (5/1/97) N/A N/A
Scudder International (6/5/95) 13.32 12.29
T. Rowe Price International (6/5/95) 13.24 12.54
T. Rowe Price New America Growth (6/5/95) 18.56 25.97
T. Rowe Price Equity Income (6/5/95) 18.04 21.87
T. Rowe Price Limited-Term Bond (6/5/95) 1.93 3.53
T. Rowe Price Personal Strategy Balanced
(6/5/95) 12.75 14.89
============================================== ============ ===========
Subaccount (date of inception) 1 Year From
(Policy issued WITH Enhanced Death Benefit) Ended Inception
12/31/96 to
12/31/96
============================================== ============ ===========
Alger American Growth (6/5/95) 11.51 12.59
Alger American Small Capitalization (6/5/95) 2.48 6.99
Federated Prime Money Fund II (6.5.95) 3.00 3.02
Federated Fund for U.S. Government
Securities (6/5/5) 2.50 4.95
Fidelity VIP II Asset Manager: Growth (6/5/95) 18.00 17.66
Fidelity VIP II Contrafund (6/5/95) 19.35 19.44
Fidelity VIP Equity Income (6/5/95) 12.43 17.35
Fidelity VIP II Index 500 (5/1/97) N/A N/A
MFS Emerging Growth (6/5/95) 15.13 20.51
MFS High Income (6/5/95) 9.99 9.19
MFS Research (6/5/95) 20.36 19.35
MFS Value Series (5/1/97) N/A N/A
MFS World Government (6/5/95) 2.33 2.83
Pioneer Capital Growth (5/1/97) N/A N/A
Pioneer Real Estate (5/1/97) N/A N/A
Scudder Global Discovery (5/1/97) N/A N/A
Scudder Growth & Income (5/1/97) N/A N/A
Scudder International (6/5/95) 12.92 11.92
T. Rowe Price International (6/5/95) 12.84 12.17
T. Rowe Price New America Growth (6/5/95) 18.15 25.56
T. Rowe Price Equity Income (6/5/95) 17.63 21.47
T. Rowe Price Limited-Term Bond (6/5/95) 1.57 3.18
T. Rowe Price Personal Strategy Balanced
(6/5/95) 12.36 14.52
- ---------------------------------------------- ------------ --------
In addition, United of Omaha may from time to time disclose average annual total
return in non-standard formats and cumulative total return for Policies funded
by the Subaccounts.
THE FIGURES ABOVE ARE NOT AN INDICATION OF PRESENT, PAST, OR FUTURE PERFORMANCE
OF THE APPLICABLE SUBACCOUNTS OR OF THE ACTUAL PORTFOLIOS AVAILABLE UNDER THE
POLICY.
HYPTHETICAL PERFORMANCE DATA. United of Omaha may, from time to time, also
disclose yield, standard total returns, and non-standard total returns for the
Portfolios of the Series Funds, including such disclosure for periods prior to
the dates the Subaccounts commenced operations. For periods prior to the date
the Subaccount commenced operations, performance information for Policies will
be calculated based on the performance of the Series Fund Portfolios and the
assumption that the Subaccounts were in existence for the same periods as those
indicated for the Series Fund Portfolios, with the level of Policy charges that
were in effect at the inception of the Subaccounts (this is referred to as
"hypothetical" performance data).
United of Omaha may also disclose average annual total returns for Series Fund
Portfolios (or comparable portfolios) since their inception, including such
disclosure for periods prior to the date the Variable Account commenced
operations. These figures do not reflect the Variable Account or Policy
expenses. Such average annual total return information is as follows:
<TABLE>
<CAPTION>
================================================== ========= ======== ========== ==========
1 Year 5 Years 10 Years Since
Ended Ended Ended Inception
Series Fund 12/31/96 12/31/96 12/31/96 to
(date of inception) % % % 12/31/96
%
================================================== ========= ======== ========== ==========
<S> <C> <C> <C> <C>
Alger American Growth (1/9/89) 13.35 16.63 N/A 18.65
Alger American Small Capitalization (9/21/88) 4.18 11.02 N/A 20.21
Federated Prime Money Fund II (11/21/94) 4.75 N/A N/A 4.95
Federated Fund for U.S. Government Securities
(3/28/94) 4.20 N/A N/A 5.62
Fidelity VIP II Asset Manager: Growth (1/3/95) 20.04 N/A N/A 21.56
Fidelity VIP II Contrafund (1/3/95) 21.22 N/A N/A 30.19
Fidelity VIP Equity Income (10/9/86) 14.28 17.98 13.74 13.43
Fidelity VIP II Index 500 (8/27/92) 22.82 N/A N/A 17.08
MFS Emerging Growth (7/24/95) 17.02 N/A N/A 24.76
MFS High Income (7/26/95) 11.80 N/A N/A 12.00
MFS Research (7/26/95) 22.33 N/A N/A 23.46
MFS Value Series (8/14/96) N/A N/A N/A 8.78
MFS World Government (6/14/94) 4.03 N/A N/A 7.39
Pioneer Capital Growth (7/25/90) 11.66 20.34 N/A 17.48
Pioneer Real Estate (10/25/93) 36.46 N/A N/A 12.95
Scudder Global Discovery (5/1/96) N/A N/A N/A 5.50
Scudder Growth & Income (5/2/94) 22.17 N/A N/A 21.69
Scudder International (5/1/87) 14.78 11.05 N/A 9.93
T. Rowe Price International (3/31/94) 14.70 N/A N/A 9.94
T. Rowe Price New America Growth (3/31/94) 20.09 N/A N/A 24.60
T. Rowe Price Equity Income (3/31/94) 19.56 N/A N/A 21.93
T. Rowe Price Limited-Term Bond (5/17/94) 3.26 N/A N/A 5.97
T. Rowe Price Personal Strategy Balanced (12/31/94) 14.21 N/A N/A 21.22
================================================== ========= ======== ========== ==========
</TABLE>
Non-standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed. For additional
information regarding the calculation of other performance data, please refer to
the Statement of Additional Information.
In advertising and sales literature, the performance of each Subaccount
may be compared to the performance of other variable annuity issuers in general
or to the performance of particular types of variable annuities investing in
mutual funds, or mutual fund portfolios with investment objectives similar to
each of the Subaccounts. Lipper Analytical Services, Inc. ("Lipper") and the
Variable Annuity Research Data Service ("VARDS") are independent services which
monitor and rank the performance of variable annuity issuers in each of the
major categories of investment objectives on an industry-wide basis.
Lipper's rankings include variable life insurance issuers as well as
variable annuity issuers. VARDS rankings compare only variable annuity issuers.
The performance analyses prepared by Lipper and VARDS each rank such issuers on
the basis of total return, assuming reinvestment of distributions, but do not
take sales charges, redemption fees, or certain expense deductions at the
separate account level into consideration. In addition, VARDS prepares risk
adjusted rankings, which consider the effects of market risk on total return
performance. This type of ranking provides data as to which funds provide the
highest total return within various categories of funds defined by the degree of
risk inherent in their investment objectives.
Advertising and sales literature may also compare the performance of each
Subaccount to the Standard & Poor's Index of 500 Common Stocks, a widely used
measure of stock performance. This unmanaged index assumes the reinvestment of
dividends but does not reflect any "deduction" for the expense of operating or
managing an investment portfolio. Other independent ranking services and indices
may also be used as a source of performance comparison.
United of Omaha may also report other information including the effect of
tax-deferred compounding on a Subaccount's investment returns, or returns in
general, which may be illustrated by tables, graphs, or charts. All income and
capital gains derived from Subaccount investments are reinvested and can lead to
substantial long-term accumulation of assets, provided that the underlying
portfolio's investment experience is positive.
THE FIXED ACCOUNT
This Prospectus is generally intended to serve as a disclosure document only
for the Policy and the Variable Account. For complete details regarding the
Fixed Account, see the Policy itself.
NET PURCHASE PAYMENTS ALLOCATED AND AMOUNTS TRANSFERRED TO THE FIXED ACCOUNT
BECOME PART OF THE GENERAL ACCOUNT ASSETS OF UNITED OF OMAHA. INTERESTS IN THE
GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"1933 ACT"), NOR IS THE GENERAL ACCOUNT REGISTERED AS AN INVESTMENT COMPANY
UNDER THE 1940 ACT. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS
THEREIN ARE GENERALLY SUBJECT TO THE PROVISIONS OF THE 1933 OR 1940 ACTS, AND
UNITED OF OMAHA HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO
THE FIXED ACCOUNT.
The Fixed Account includes all the assets of United of Omaha except those
segregated in the Variable Account or in any other separate investment account.
The Policy Owner may allocate Net Purchase Payments to the Fixed Account at the
time of a Purchase Payment or transfer amounts from the Variable Account to the
Fixed Account. Instead of the Policy Owner bearing the investment risk, as is
the case for Accumulation Value in the Variable Account, United of Omaha bears
the full investment risk for all Accumulation Value in the Fixed Account. United
of Omaha has sole discretion to invest the assets of its general account,
including the Fixed Account, subject to applicable law.
United of Omaha guarantees that it will credit interest to amounts in the
Fixed Account at an effective rate of at least 3% per year. United of Omaha may,
IN ITS SOLE DISCRETION, credit amounts in the Fixed Account with interest at a
current interest rate in excess of 3%. Once declared, a current interest rate
will be guaranteed for at least one year. ONE TRANSFER OUT OF THE FIXED ACCOUNT
IS ALLOWED EACH POLICY YEAR. Moreover, the maximum amount that can be
transferred out of the Fixed Account during any Policy Year will be determined
by United of Omaha in its sole discretion, but will not be less than 10% of
Fixed Account Value on the date of the transfer. No charge is imposed on such
transfers. United of Omaha reserves the right to modify transfer privileges at
any time. (SEE "Transfers," p. 23.) Partial withdrawals from the Fixed Account
are limited to a pro rata amount (with withdrawals from the Variable Account).
Withdrawals and transfers from the Fixed Account may be delayed for up to six
months, and withdrawals may be subject to a Withdrawal Charge. (See
"Withdrawals," p. 26.) For purposes of crediting interest, the oldest payment or
transfer into the Fixed Account, plus interest allocable to that payment or
transfer, is considered to be withdrawn or transferred out first; the next
oldest payment plus interest is considered to be transferred out next, and so on
(this is a "first-in, first-out" procedure).
United of Omaha guarantees that, at any time prior to the Annuity Starting
Date, the amount in the Fixed Account allocable to a particular Policy will be
not be less than the amount of the Net Purchase Payments allocated or
transferred to the Fixed Account, plus interest at an effective rate of 3% per
year, plus any excess interest credited to amounts in the Fixed Account, less
any applicable premium or other taxes allocable to the Fixed Account, and less
any amounts deducted from the Fixed Account in connection with partial
withdrawals (including any Withdrawal Charges) or transfers to the Variable
Account.
The current interest rates will be determined by United of Omaha in its sole
discretion.
UNITED OF OMAHA'S MANAGEMENT HAS COMPLETE AND SOLE DISCRETION TO DETERMINE
THE CURRENT INTEREST RATES. UNITED OF OMAHA CANNOT PREDICT OR GUARANTEE THE
LEVEL OF FUTURE CURRENT INTEREST RATES, EXCEPT THAT UNITED OF OMAHA GUARANTEES
THAT FUTURE CURRENT INTEREST RATES WILL NOT BE BELOW AN EFFECTIVE RATE OF 3% PER
YEAR COMPOUNDED ANNUALLY. THE POLICY OWNER BEARS THE RISK THAT CURRENT INTEREST
RATES WILL NOT EXCEED AN EFFECTIVE RATE OF 3% PER YEAR.
TRANSFERS
SUBJECT TO the limitations and restrictions described below, transfers out of
a Subaccount of the Variable Account may be made any time prior to the Annuity
Starting Date, by sending Written Notice, signed by the Policy Owner, to the
Service Office. Transfers also may be requested by telephone, subject to the
provisions described below under "Telephone Transactions," p. 26. United of
Omaha reserves the right, at any time and without notice to any party, to modify
the transfer privileges under the Policy.
An Owner can transfer Accumulation Value from one Subaccount of the Variable
Account to another, or from the Variable Account to the Fixed Account or from
the Fixed Account to any Subaccount of the Variable Account within certain
limits. The minimum amount which may be transferred is the lesser of $500 or the
entire Subaccount Value. If the Subaccount Value remaining after a transfer is
less than $500, United of Omaha will include that amount as part of the
transfer. Transfers out of a Subaccount currently may be made as often as the
Owner wishes, subject to the minimum amount specified above (United of Omaha
reserves the right to otherwise limit or restrict transfers in the future or to
eliminate the transfer privilege). United of Omaha reserves the right to
restrict transfers from the Variable Account to the Fixed Account of amounts
previously transferred from the Fixed Account, for a period of time determined
by United of Omaha.
A transfer fee of $10 may be imposed for any transfer in excess of 12 per
Policy Year. The transfer fee is deducted from the amount transferred. (See
"Charges and Deductions," p. 30.)
Transfers from the Fixed Account currently may be made once each Policy Year.
Transfers from the Fixed Account do not count toward the 12 free transfer limit
described above, and no transfer charge will be imposed on transfers from the
Fixed Account. Moreover, the maximum amount that can be transferred out of the
Fixed Account during any Policy Year will be determined by United of Omaha, at
its sole discretion, but will not be less than 10% of the Fixed Account Value on
the date of the transfer.
The Policy is designed as a long-term investment, for retirement or other
financial planning. The Policy is not intended for active trading or "market
timing." Excessive transfers could harm other Policy Owners by having a
detrimental effect on portfolio management (which could occur, for example, if
it caused excessive commission expense or caused the manager to keep higher cash
reserves than otherwise). Therefore, United of Omaha reserves the right to limit
the number of Transfers from the Subaccounts of the Variable Account and the
Fixed Account if United of Omaha believes that: (a) excessive trading by the
Policy Owner or a specific Transfer request would have a detrimental effect on
Accumulation Unit values or the share prices of the Portfolios; or (b) United of
Omaha is informed by one or more of the Series Funds or the Variable Account
that the purchase or redemption of shares is to be restricted because of
excessive trading or a Transfer or group of Transfers is deemed to have a
detrimental effect on share prices of one or more Portfolios or the Variable
Account.
Where permitted by law, United of Omaha may accept a Policy Owner's
authorization of third party reallocation on such Owner's behalf, subject to
United of Omaha's rules. United of Omaha may suspend or cancel such acceptance
at any time. For example, third party reallocation by "market timers" could be
suspended if they cause harm to other Policy Owners. United of Omaha will notify
the Policy Owner of any such suspension or cancellation. United of Omaha may
restrict the availability of Subaccounts and the Fixed Account for Transfers
during any period in which the Policy Owner authorizes such third party to act
on his behalf. United of Omaha will give Owners prior notification of any such
restrictions. However, United of Omaha will not enforce such restrictions if it
is provided with satisfactory evidence that: (a) such third party has been
appointed by a court of competent jurisdiction to act on the Policy Owner's
behalf; or (b) such third party has been appointed by the Policy Owner to act on
his behalf for all his financial affairs.
DOLLAR COST AVERAGING
Under the Dollar Cost Averaging program, the Policy Owner can instruct United
of Omaha to automatically transfer, on a periodic basis, a predetermined amount
or percentage specified by the Policy Owner from any one Subaccount or the Fixed
Account to any Subaccount(s) of the Variable Account. The automatic transfers
can occur monthly, quarterly, semi-annually, or annually, and the amount
transferred each time must be at least $100 and must be $50 per Subaccount. At
the time the program begins, there must be at least $5,000 of Accumulation Value
in the applicable Subaccount or the Fixed Account. If transfers are made from
the Fixed Account, the maximum periodic transfer amount is 10% of that account's
value at the time of election, or a sufficient amount to provide transfers for
10 months. There is no maximum transfer amount requirement out of the
Subaccounts of the Variable Account.
Dollar Cost Averaging results in the purchase of more Accumulation Units when
the Accumulation Unit value is low, and fewer units when the Accumulation Unit
value is high. However, there is no guarantee that the Dollar Cost Averaging
program will result in higher Accumulation Value or otherwise be successful.
The Policy Owner can request participation in the Dollar Cost Averaging
program when purchasing the Policy or at a later date. Transfers will begin on
the first or 15th day (or, if not a Valuation Date, the next following Valuation
Date) of the month, as specified by the Owner, during which the request is
processed. The Owner can specify that only a certain number of transfers will be
made, in which case the program will terminate when that number of transfers has
been made. Otherwise, the program will terminate when the amount remaining in
the applicable Subaccount or, if applicable, the Fixed Account is less than
$500.
The Owner can increase or decrease the amount or percentage of the transfers
or discontinue the program by sending Written Notice to the Service Office or by
telephone, if telephone transactions are authorized. There is no charge for
participation in this program.
ASSET ALLOCATION PROGRAM
Under the Asset Allocation Program, the Policy Owner can instruct United of
Omaha to allocate purchase payments and Accumulation Value among the Subaccounts
of the Variable Account and the Fixed Account in accordance with allocation
instructions specified by the Policy Owner or allocation instructions
recommended by United of Omaha and approved by the Policy Owner. United of Omaha
will rebalance a Policy Owner's investment by allocating purchase payments and
transferring Accumulation Value among the Subaccounts and the Fixed Account to
ensure conformity with current allocation instructions. Rebalancing will be
performed on a quarterly, semi-annual or annual basis as specified by the Policy
Owner. Transfers of Accumulation Value made pursuant this program will not be
counted in determining whether the Transfer Fee applies. At the time the program
begins, there must be at least $10,000 of Accumulation Value under the Policy.
The Policy Owner can request participation in the Asset Allocation Program
when purchasing the Policy or at a later date. The Owner can change his
allocation percentage or discontinue the program by sending Written Notice to
the Service Office or by calling 1-(800) 238-9354. There is no charge for
participation in this program.
THE POLICY
The Ultrannuity Series V Variable Annuity Policy is a Flexible Payment
Variable Deferred Annuity Policy. The rights and benefits under the Policy are
summarized below; however, the description of the Policy contained in this
Prospectus is qualified in its entirety by the Policy itself, a copy of which is
available upon request from United of Omaha. The Policy may be purchased as a
Nonqualified Policy or as a Qualified Policy. The Policy will remain in force
until surrendered for its Cash Surrender Value, or all Proceeds have been paid
under a Payout Option or as a death benefit or upon termination.
POLICY APPLICATION AND ISSUANCE OF POLICIES
Before it will issue a Policy, United of Omaha must receive a completed
Policy application and a minimum initial Purchase Payment of $5,000. A
Nonqualified Policy ordinarily will be issued only in respect of Owner's Age 0
through 85, and a Qualified Policy ordinarily will be issued only in respect of
Owner's Age 0 through 70 1/2. United of Omaha reserves the right to reject any
application or Purchase Payment. Under United of Omaha's Electronic Fund
Transfer program, the Owner can select a monthly payment schedule pursuant to
which purchase payments will be automatically deducted from a bank or credit
union account or other sources. The minimum size of an initial Purchase Payment
must be at least $2,000. Each subsequent monthly payment must be at least $100.
If the application can be accepted in the form received, the initial Net
Purchase Payment will be credited to the Accumulation Value within two business
days after the later of receipt of the application or receipt of the initial
Purchase Payment. If the initial Purchase Payment cannot be credited because the
application or other issuing requirements are incomplete, the applicant will be
contacted within five business days and given an explanation for the delay, and
the initial Purchase Payment will be returned at that time unless the applicant
consents to United of Omaha's retaining the initial Purchase Payment and
crediting it, net of any charge for applicable premium taxes, as soon as the
necessary requirements are completed.
The date on which the initial Net Purchase Payment is credited to the
Accumulation Value is the Date of Issue. The Date of Issue is the date used to
determine Policy Years and Policy anniversaries.
PURCHASE PAYMENTS
All initial Purchase Payment checks or drafts should be made payable to
United of Omaha Life Insurance Company and sent to the Service Office.
Additional Purchase Payments should be sent to the Service Office. The death
benefit will not take effect until the check or draft for the Purchase Payment
is honored.
INITIAL PURCHASE PAYMENT. The minimum initial Purchase Payment that United of
Omaha currently will accept under both a Nonqualified Policy and a Qualified
Policy is $5,000 except under the Electronic Fund Transfer Program where the
minimum initial Purchase Payment is $2,000. United of Omaha reserves the right
to increase or decrease this amount. The initial Purchase Payment is the only
Purchase Payment required to be paid under a Policy.
ADDITIONAL PURCHASE PAYMENTS. The Owner may pay additional Purchase Payments.
The minimum additional Purchase Payment under both a Nonqualified Policy and a
Qualified Policy is $500 except under the Electronic Transfer Program where the
minimum additional Purchase Payment is $100. Additional Net Purchase Payments
will be credited to the Policy and added to the Accumulation Value as of the
Valuation Date when they are received at the Service Office. United of Omaha
will not accept any additional Purchase Payments beginning on the Policy
Anniversary following the Owner's 88th birthday.
ALLOCATION OF NET PURCHASE PAYMENTS. An Owner must allocate Net Purchase
Payments to one or more of the Eligible Investments. The Owner must specify the
initial allocation in the Policy application. This allocation will be used for
additional Net Purchase Payments unless the Owner requests a change of
allocation. All allocations must be made in whole percentages and must total
100%. The minimum allocation amount is $500 ($100 under the Electronic Fund
Transfer Program). If the Owner fails to specify how Net Purchase Payments are
to be allocated, the Purchase Payment(s) cannot be accepted. In states that
permit United of Omaha to refund only the Accumulation Value upon the Owner's
cancellation of the Policy during the free look period, the initial Net Purchase
Payment will be allocated to the Owner's selected Subaccounts on the Date of
Issue. In states where at least the full Purchase Payment is refunded, the
portion of the initial Net Purchase Payment (and of any additional Purchase
Payments made during the free look period) allocated to the Variable Account
will be held in the Money Market Subaccount for the applicable Free Look period
specified by the state of issue plus 5 days, from the date that the Policy is
mailed from United of Omaha's Service Office. (Since the Free Look period is
measured from the Owner's date of receipt of the Policy, the extra 5 days is to
allow for estimated time needed for delivery of the Policy.) At the end of that
period, if the Policy has not been returned for a refund, the initial Net
Purchase Payment will be invested in the Subaccounts in accordance with the
allocation instructions provided in the Owner's application. All additional Net
Purchase Payments received after the end of the free look period will be
allocated and credited to the Owner's Policy as of the Valuation Period during
which they are received.
The Owner may change the allocation instructions for future additional Net
Purchase Payments by sending Written Notice, signed by the Owner, to United of
Omaha's Service Office, or by telephone (subject to the provisions described
below under "Telephone Transactions," p. 26). The allocation change will apply
to payments received on or after the date the Written Notice or telephone
request is received.
PAYMENT NOT HONORED BY BANK. Any payment due under the Policy which is
derived, all or in part, from any amount paid to United of Omaha by check or
draft may be postponed until such time as United of Omaha determines that such
instrument has been honored. Payment by certified check, banker's draft, or
chasier's check will be promptly applied.
ACCUMULATION VALUE
On the Date of Issue, the Accumulation Value equals the initial Purchase
Payment less any charge for applicable premium taxes. On any Valuation Date
thereafter, the Accumulation Value equals the sum of the values in the Variable
Account and the Fixed Account.
The Accumulation Value is expected to change from Valuation Period to
Valuation Period, reflecting the expenses and investment experience of the
selected Eligible Investments as well as the Variable Account deductions for
charges.
THE VARIABLE ACCOUNT VALUE. The Accumulation Value for each Subaccount is
equal to:
(a) the current number of Accumulation Units in the Subaccount for the
Policy; multiplied by
(b) the current Accumulation Unit value.
A Net Purchase Payment or transfer allocated to a Subaccount is converted
into Accumulation Units by dividing it by the Accumulation Unit value for the
Valuation Period during which the Net Purchase Payment or transfer is allocated
to the Variable Account. The initial Accumulation Unit value for each Subaccount
was set at $10 when the Subaccount was established. The Accumulation Unit value
may increase or decrease from one Valuation Date to the next.
The Accumulation Unit value for a Subaccount on any Valuation Date is
calculated as follows:
(a) The net asset value per share of the Portfolio multiplied by
the number of shares held in the Subaccount, before the purchase or
redemption of any shares on that date; minus
(b) the cumulative unpaid charge for the Mortality and Expense Risk
Charge and Administrative Expense Charge; minus
(c) any applicable charge for federal and state income taxes, if any;
the result divided by
(d) the total number of Accumulation Units held in the Subaccount on
the Valuation Date, before the purchase or redemption of any
Accumulation Units on that day.
Positive investment experience of the applicable Portfolio will increase the
Accumulation Unit values and negative investment experience will decrease the
Unit values. Expenses and deductions will have a negative effect on Unit values.
THE FIXED ACCOUNT VALUE. The Accumulation Value of the Fixed Account on
any Valuation Date is equal to:
(a) the Accumulation Value at the end of the preceding Policy Month;
plus
(b) any Net Purchase Payments credited since the end of the previous
Policy Month; plus
(c) any transfers from the Subaccounts credited to the Fixed Account
since the end of the
previous Policy Month; minus
(d) any transfers from the Fixed Account to the Subaccounts since the
end of the previous Policy Month; minus
(e) any partial withdrawal and Withdrawal Charge taken from the Fixed
Account since the end of the previous Policy Month; plus
(f) interest credited on the Fixed Account balance.
United of Omaha guarantees that the Accumulation Value in the Fixed Account will
be credited with an effective annual interest rate of at least 3%.
TELEPHONE TRANSACTIONS
Owners can make transfers, partial withdrawals, and/or change the
allocation of subsequent Net Purchase Payments by telephone if they have checked
the "Telephone Transaction Authorization" box in the application or if they have
subsequently authorized telephone transactions in writing. United of Omaha will
not be liable for following instructions communicated by telephone that it
believes to be genuine. However, United of Omaha will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine.
If United of Omaha fails to do so, it may be liable for any losses due to
unauthorized or fraudulent instructions. All telephone requests will be recorded
on voice recorder equipment for the protection of the Policy Owner. Owners
making telephone requests will be required to provide their social security
number and/or other information for identification purposes.
Telephone requests must be received at United's Service Office no later
than 4:00 p.m. Eastern time in order to be processed. Telephone transfer
requests will not be accepted after that time.
The telephone transaction privilege may be discontinued at any time as to
some or all Owners.
NON-PARTICIPATING POLICY
The Policy does not participate or share in the profits or surplus earnings
of United of Omaha. No dividends are payable on the Policy.
TERMINATION
If the Accumulation Value is less than $500, United of Omaha may cancel the
Policy upon 60 days' notice to the Owner. This cancellation will be considered a
full surrender of the Policy. If the Accumulation Value in any Subaccount falls
below $500, United of Omaha reserves the right to transfer the remaining
balance, without charge, to the Money Market Subaccount.
DISTRIBUTIONS UNDER THE POLICY
WITHDRAWALS
The Owner may withdraw all or a portion of the Cash Surrender Value in
exchange for a cash payment from United of Omaha. The Cash Surrender Value is
the Accumulation Value less any applicable Withdrawal Charge, any applicable
Policy Fee, any applicable premium taxes, and, if the Enhanced Death Benefit is
elected, the Enhanced Death Benefit Charge. (See "Charges and Deductions," p.
30).
The Owner may withdraw Cash Surrender Value from the Variable Account at
any time prior to the Annuity Starting Date by sending a Written Request to
United of Omaha's Service Office. The minimum amount that can be withdrawn from
any Eligible Investment is $500. After a partial withdrawal, the remaining
Accumulation Value must be at least $500. In the absence of written instructions
from the Owner, withdrawals will result in cancellation of Accumulation Units
from each applicable Subaccount and the deduction of Accumulation Value from the
Fixed Account in the ratio that the value of each such Eligible Investment bears
to the total Accumulation Value of the Policy (I.E., pro rata from each Eligible
Investment). No more than a pro-rata amount may be withdrawn from the Fixed
Account for any partial withdrawal. If the Owner requests a surrender, the
Policy must be returned to the Service Office.
Withdrawals from the Fixed Account may be delayed for up to six months.
Each Policy Year the Owner may withdraw up to 15% of Accumulation Value as
of the date of the first withdrawal that year without deduction of a Withdrawal
Charge. Amounts withdrawn in excess of this free withdrawal amount may be
subject to the Withdrawal Charge of up to 7%. For a discussion of the Withdrawal
Charge, see "Withdrawal Charge," p. 31.
Withdrawals may be taxable and subject to a penalty tax. (See "Certain
Federal Income Tax Consequences," p. 34.)
Since the Owner assumes the investment risk with respect to Net Purchase
Payments allocated to the Variable Account, and because surrenders and
withdrawals are subject to a Withdrawal Charge, and possibly a charge for
premium taxes, the total amount paid upon total surrender of the Policy (taking
any prior partial withdrawals into account) may be more or less than the total
Purchase Payments made. Following a surrender of the Policy, or at any time the
Accumulation Value is zero, all rights of the Owner will terminate.
SYSTEMATIC WITHDRAWAL PLAN
Under the Systematic Withdrawal Plan, the Policy Owner can instruct United
of Omaha to make automatic payments of a predetermined dollar amount or fixed
percentage of Accumulation Value to them monthly, quarterly, semi-annually or
annually from a specified Eligible Investment. The minimum systematic withdrawal
payment is $100. The "Request for Systematic Withdrawal" form must specify a
date for the first payment, which must be at least 30 but not more than 90 days
after the form is submitted. The Owner may specify the Eligible Investments from
which Systematic Withdrawals will be made, but no more than a pro-rata amount
can be withdrawn from the Fixed Account. If the Owner does not specify the
Eligible Investments from which Systematic Withdrawals are to be taken,
Systematic Withdrawals will be taken from each Eligible Investment in the
proportion that the Accumulation Value in each Eligible Investment bears to the
total Accumulation Value of the Policy.
The Withdrawal Charge will apply in accordance with its terms.
A qualified tax adviser should be consulted before a Systematic Withdrawal
Plan is requested since distributions under such a Plan may be taxable and
subject to a penalty tax.(See "Certain Federal Income Tax Consequences," p.34.)
ANNUITY PAYMENTS
Payees receiving Annuity Payments under the Policy must be individuals who
receive payments in their own behalf unless otherwise agreed to by United of
Omaha. Any Payout Option chosen will be effective when United of Omaha
acknowledges it. United of Omaha may require proof of the Owner's or the
Annuitant's age or survival. The level of Annuity Payments is determined by the
Accumulation Value, the age and sex of the Annuitant, and the Payout Option
elected.
ANNUITY STARTING DATE. Unless the Annuity Starting Date is changed, Annuity
Payments under a Policy will begin on the Annuity Starting Date which is
selected by the Policy Owner at the time the Policy is applied for. The latest
Annuity Starting Date permitted is when the Annuitant attains age 95 (age 85 in
Pennsylvania). An earlier Annuity Starting Date is required for Qualified
Contracts. The Annuity Starting Date may be changed from time to time by the
Policy Owner by Written Notice to United of Omaha, provided that notice of each
change is received by United of Omaha at its Service Office at least thirty (30)
days prior to the then current Annuity Starting Date.
ELECTION OF PAYOUT OPTION. The Policy Owner will choose a Payout Option, to
provide variable annuity payments or fixed annuity payments or a combination of
both, under which the Policy Proceeds will be paid to the Payee(s)shown in the
Policy application. During the lifetime of the Owner and prior to the Annuity
Starting Date, the Policy Owner may change the election, but Written Notice of
any election or change of election must be received by United of Omaha at its
Service Office at least thirty (30) days prior to the Annuity Starting Date. If
no election is made prior to the Annuity Starting Date, then the Accumulation
Value in the Variable Account will be used to provide variable Annuity Payments,
and the Accumulation Value in the Fixed Account will be used to provide fixed
Annuity Payments, and Annuity Payments will be made under Option 4 providing
lifetime income with payments guaranteed for 10 years. United of Omaha reserves
the right to pay the Proceeds in one sum when the Proceeds are less than $2,000,
or when the Payout Option chosen would result in periodic payments of less than
$20.
If the Owner dies prior to the Annuity Starting Date (and the Policy is in
force), the Beneficiary may elect to receive the death benefit under one of the
Payout Options, to the extent allowed by law and subject to the terms of any
settlement agreement. (See "Death Benefit," p. 29.)
The longer the guaranteed or projected Payout Option period, the lower the
amount of each payment.
Unless the Policy Owner specifies otherwise, the Payee shall be the
Annuitant.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are available under all six
Payout Options below. Under each fixed Payout Option the amount of each payment
will be set on the Annuity Starting Date and will not change. Annuity Payments
will begin on that date. The Annuity Purchase Value will be transferred to the
general account of United of Omaha, and the Annuity Payments will be fixed in
amount by the fixed annuity provisions selected and the age and sex (if
consideration of sex is allowed) of the Annuitant. The guaranteed effective
annual interest rate used in the Payout Options is 3%. Using a procedure
approved by its Board of Directors, United of Omaha may, AT ITS SOLE DISCRETION,
declare additional interest to be paid or credited annually for Payout Options
1, 2, 3, or 6. Current immediate annuity rates for the same class of annuities
will be used if higher than the guaranteed amounts (guaranteed amounts are based
upon the tables contained in the Policy). The guaranteed amounts are based on
the 1983 Table "A" mortality table, and 3.0% guaranteed interest rate. Current
amounts may be obtained from United of Omaha. For further information, contact
United of Omaha at its Service Office.
VARIABLE ANNUITY PAYMENTS. Only Payout Options 2, 4, and 6 are available
for variable annuity payments. The dollar amount of the first monthly annuity
payment will be determined by applying the Annuity Purchase Value allocated to
variable annuity payments to the annuity table applicable to the Payout Option
chosen. The tables are determined from the 1983 Table "a" mortality table with
an assumed investment rate of 4%. If more than one subaccount has been selected,
the Annuity Purchase Value of each subaccount is applied separately to the
annuity table to determine the amount of the first annuity payment attributable
to that particular subaccount.
All variable annuity payments other than the first will vary in
amount according to the investment performance of the applicable subaccounts.
The amount of each subsequent payment is the sum of: the number of Variable
Annuity Units for each subaccount as determined for the first annuity payment
multiplied by the value of a Variable Annuity Unit for that subaccount 10 days
prior to the date the variable annuity payment is due. This amount may increase
or decrease from month to month.
If the net investment return of a subaccount for a payment period
is equal to the pro-rated portion of the 4% annual assumed investment rate, the
variable annuity payment attributable to that subaccount for that period will
equal the payment for the prior period. To the extent that such net investment
return exceeds an annualized rate of 4% for a payment period, the payment for
that period will be greater than the payment for the prior period and to the
extent that such return for a period falls short of an anualized rate of 4%, the
payment for that period will be less than the payment for the prior period.
TRANSFERS BETWEEN FIXED AND VARIABLE SUBACCOUNTS. After the Annuity
Commencement Date the annuitant may exchange the value of a designated number of
Variable Annuity Units of a particular subaccount into other Variable Annuity
Units, the value of which would be such that the dollar amount of an annuity
payment made on the date of the exchange would be unaffected by the fact of the
exchange. No more than four (4) exchanges may be made within each account year.
Transfers may be made between subaccounts and from a subaccount to the
fixed account. No exchanges may be made from the fixed account to the variable
subaccounts. Transfers will be made using the Variable Annuity Unit values for
the Valuation Period during which any request is received by United of Omaha.
PAYOUT OPTIONS. The Policy provides six Payout Options which are described
below.
OPTION 1 -- PROCEEDS HELD ON DEPOSIT AT INTEREST. While the Proceeds
are held by United of Omaha, United of Omaha will annually:
(a) pay interest to the Payee; or
(b) add interest to the Proceeds.
OPTION 2 -- INCOME OF A SPECIFIED AMOUNT. The Proceeds will be paid in
monthly installments of a specified amount over at least a five year period
until the Proceeds, with interest, have been fully paid.
OPTION 3 -- INCOME FOR A SPECIFIED PERIOD. The Proceeds will be paid in
installments for the number of years chosen. The monthly incomes for each $1,000
of Proceeds, shown in the table set forth in the Policy, include interest.
United of Omaha will provide the income amounts for payments other than monthly
upon request.
OPTION 4 -- LIFETIME INCOME. The Proceeds will be paid as monthly
income for as long as the Annuitant lives. The following guarantees are
available:
GUARANTEED PERIOD - The monthly income will be paid for a minimum of
10 years and as long thereafter as the Annuitant lives; or
GUARANTEED AMOUNT - The monthly income will be paid until the sum of
all payments equals the Proceeds placed under this option and as
long thereafter as the Annuitant lives.
The monthly income will be the amount computed using either the Lifetime Monthly
Income Table set forth in the Policy (which is based on the 1983 Table "A"
mortality table and interest at 3%, adjusted to age last birthday) or, if more
favorable to the Annuitant, United of Omaha's then current lifetime monthly
income rates for payment of Proceeds. If a variable Payout Option is chosen, all
variable annuity payments, other than the first variable annuity payment, will
vary in amount according to the investment performance of the applicable
Subaccounts (see "Variable Annuity Payments," p. 28).
Note Carefully. If no guarantee is elected, then IT WOULD BE POSSIBLE FOR
ONLY ONE ANNUITY PAYMENT TO BE MADE if the Annuitant(s) were to die before the
due date of the second annuity payment; only two Annuity Payments if the
Annuitant(s) were to die before the due date of the third annuity payment; and
so forth.
When the Annuitant dies, any remaining guaranteed Annuity Payments will be
paid to the Beneficiary. When the last Payee dies, United of Omaha will pay to
the estate of that Payee any remaining guaranteed Annuity Payments.
OPTION 5 -- LUMP SUM. The Proceeds will be paid in one sum.
OPTION 6 -- ALTERNATIVE SCHEDULE. Upon request and if available, United
of Omaha will provide payments for other options, including joint and survivor
periods. Certain options may not be available in some states. If variable
Annuity Payments are being made under Option 2 or 6 and do not involve life
contingencies, then the Owner may surrender the Contract and receive the
commuted value of any unpaid Annuity Payments.
Additional information about any Payout Option may be obtained by contacting the
Service Office.
* * *
A portion or the entire amount of the Annuity Payments may be taxable as
ordinary income. If, at the time the Annuity Payments begin, the Policy Owner
has not provided United of Omaha with a written election not to have federal
income taxes withheld, United of Omaha must by law withhold such taxes from the
taxable portion of such annuity payments and remit that amount to the federal
government. Withholding is mandatory for certain Qualified Policies. (See
"Certain Federal Income Tax Consequences," p. 34.)
DEATH BENEFIT
DEATH OF OWNER PRIOR TO ANNUITY STARTING DATE. If any Owner or joint Owner
dies prior the Annuity Starting Date (and the Policy is in force), the Policy
will terminate, and a death benefit will be paid to the Beneficiary. The death
benefit will equal the largest of (i) the Accumulation Value (without deduction
of the Withdrawal Charge), on the later of the date on which Due Proof of Death
or an election of Payout Option is received by United of Omaha's Service Office
less any charge for applicable premium taxes; or (ii) the sum of Net Purchase
Payments, less partial withdrawals.
The death benefit is payable upon receipt of Due Proof of Death of the
first Owner to die, election of a Payout Option, and proof that such Owner died
prior to the commencement of Annuity Payments. The death benefit generally will
be paid within seven days, or as soon thereafter as United of Omaha has
sufficient information about the Beneficiary to make the payment. The
Beneficiary may receive the amount payable in a lump sum cash benefit, or,
subject to any limitation under any state or federal law, rule, or regulation,
under one of the Payout Options described above, unless a settlement agreement
is effective at the death of the Owner that prevents such election. The
Beneficiary must make such election within sixty days of the date United of
Omaha receives Due Proof of Death; otherwise a lump sum payment will be made.
If an Owner of the Policy is a corporation, trust or other nonindividual,
the primary Annuitant will be treated as an Owner of the Policy for purposes of
the death benefit. The "primary Annuitant" is that individual whose life affects
the timing or the amount of the payout under the Policy. A change in the primary
Annuitant will be treated as the death of an Owner.
If the Annuitant is an Owner or joint Owner, the death of the Annuitant
will be treated as the death of an Owner rather than of the Annuitant.
(If the Annuitant is not an Owner and the Annuitant dies before the Annuity
Starting Date, the Owner may name a new Annuitant if such Owner(s) is not a
corporation or other non-individual or if such Owner is the trustee of a Code
Sec. 401(a) retirement plan. If the Owner does not name a new Annuitant, the
Owner will become the Annuitant.)
ELECTIVE DEATH BENEFIT AMENDMENT. If this Amendment is attached to the
Policy and any Owner or Joint Owner dies prior to age 81, the Death Benefit will
equal the greatest of: (1) the Accumulation Value as of the end of the valuation
period during which due proof of death and an election of a payout option are
received by us; (2) the greatest Anniversary Value plus subsequent purchase
payments and less any subsequent partial withdrawals;7/ and (3) the sum of all
net purchase payments, less any partial withdrawals, accumulated at a 4.5%
annual rate of interest up to a maximum of two times each purchase payment.
If any Owner or Joint Owner dies after attaining age 81, the Death Benefit
under the Amendment will equal the greatest of: (1) the Accumulation Value as of
the end of the valuation period during which due proof of death and an election
of a payout option are received by us; (2) the greatest Anniversary Value prior
to the last Policy Anniversary before the Owner attained age 81, plus any
subsequent purchase payments and less any subsequent purchase payments and less
any subsequent partial withdrawals; and (3) the sum of all net purchase payments
paid prior to the last Policy Anniversary before the Owner attained age 81, less
any partial withdrawals accumulated at a 4.5% annual rate of interest up to a
maximum of two times each purchase payment. If the death benefit payable equals
(3), United of Omaha will add to the death benefit amount, any purchase payments
paid after the last Policy Anniversary before the Owner attained age 81.
The Elective Death Benefit is only available to Owners age 80 and under,
and not available for non-person owners.
Any applicable premium tax not previously deducted will be deducted from
the death benefit payable.
ACCIDENTAL DEATH BENEFIT. If any Owner or Joint Owner dies from bodily
injury sustained in a common carrier accident, United of Omaha will pay the
Standard Death Benefit or the Enhanced Death Benefit, as applicable, multiplied
by two, instead of the amount that would otherwise be payable.
For this benefit to be payable, bodily injury must be sustained by the
Owner while a passenger in a common carrier. Death must be independent of any
sickness or other causes and must occur within 90 days of the date of the
accident. United of Omaha will pay only the Standard Death Benefit or the
Enhanced Death Benefit, if applicable, if the Owner's death results from the
following: (a) suicide; (b) an act of declared or undeclared war; (c) an injury
received while intoxicated; (d) an injury received while the owner is under the
influence of a controlled substance, unless administered on the advice of a
physician; or (e) an injury received while committing a felony or engaged in an
illegal occupation. The Accidental Death Benefit may not be available in all
states.
7/ THE ANNIVERSARY VALUE EQUALS THE ACCUMULATION VALUE ON A POLICY ANNIVERSARY
AND ANY SUBSEQUENT PURCHASE PAYMENTS LESS PARTIAL WITHDRAWALS AND UNDEDUCTED
PREMIUM TAX.
DEATH OF OWNER ON OR AFTER ANNUITY STARTING DATE. If any Owner or joint
Owner dies on or after the Annuity Starting Date and before all the Proceeds
have been paid, any remaining Proceeds will be paid at least as rapidly as under
the Payout Option in effect at the time of the death.
BENEFICIARY. The Owner may change the named Beneficiary by sending Written
Notice to the Service Office unless the named Beneficiary is irrevocable. When
recorded and acknowledged by United of Omaha, the change will be effective as of
the date the Owner signed the request. The change will not apply to any payments
made or other action taken by United of Omaha before recording. If the named
Beneficiary is irrevocable, the Owner may change the named Beneficiary only by
joint written request from the Owner and the Beneficiary. If more than one named
Beneficiary is designated, and the Policy Owner fails to specify their
interests, they will share equally.
If there are joint Owners, the surviving joint Owner will be deemed the
Beneficiary, and the Beneficiary named in the Policy application or as
subsequently changed will be deemed the contingent Beneficiary. If both joint
Owners die simultaneously, the death benefit will be paid to the contingent
Beneficiary.
If the Beneficiary is the deceased Owner's surviving spouse, the spouse may
elect either to receive the death benefit, in which case the Policy will
terminate, or to continue the Policy in force with the spouse as Owner.
If the named Beneficiary does not survive the Owner, then the estate of the
Owner is the Beneficiary.
IRS REQUIRED DISTRIBUTION
Federal tax law requires that if a Policy Owner of a nonqualified Policy
dies before the Annuity Starting Date, then the entire value of the Policy must
generally be distributed within five years of the date of death of such Policy
Owner. Therefore, generally, any death benefit must be paid within five years
after the date of death. The five-year rule does not apply to that portion of
the Proceeds which (a) is payable to or for the benefit of an individual
Beneficiary; and (b) will be paid over the lifetime or the life expectancy of
that Beneficiary as long as payments begin not later than one year after the
date of the Owner's death. Special rules may apply to the spouse of the deceased
Owner. See "Federal Tax Matters" in the Statement of Additional Information for
a detailed description of these rules. Other required distribution rules apply
to Qualified Contracts. (See "Certain Federal Income Tax Consequences," p. 34.)
The Policy contains provisions designed to comply with these requirements.
RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM
The Texas Educational Code permits participants in the Texas Optional
Retirement Program (ORP) to withdraw their interest in a variable annuity Policy
issued under the ORP only upon: (1) termination of employment in the Texas
public institutions of higher education; (2) retirement; (3) death or (4)
participant's attainment of age 70 1/2. Accordingly, a participant in the ORP
(or the participant's estate if the participant has died) will be required to
obtain a certificate of termination from the employer or a certificate of death
before the Policy can be redeemed.
CHARGES AND DEDUCTIONS
United of Omaha will make certain charges and deductions in connection with
the Policy in order to compensate it for incurring expenses in distributing the
Policy, bearing mortality and expense risks under the Policy, and administering
the Accounts and the Policies. Charges may also be made for premium taxes,
federal, state or local taxes (or the economic burden thereof), or for certain
transfers. Charges and expenses are also deducted from each Portfolio.
WITHDRAWAL CHARGE
United of Omaha will incur expenses relating to the sale of Policies,
including commissions to registered representatives and other promotional
expenses. United of Omaha will apply a Withdrawal Charge, expressed as a
percentage of any Purchase Payment surrendered or withdrawn, in connection with
a full surrender or partial withdrawal, in order to partially cover distribution
expenses. The Withdrawal Charge may also be deducted from amounts applied to
provide Annuity Payments. The Withdrawal Charge Percentage will vary depending
upon the number of years that have elapsed since the date the Purchase Payment
was made. The amount of the Withdrawal Charge is determined by multiplying the
amount of each Purchase Payment withdrawn by the applicable Withdrawal Charge
Percentages. For purposes of determining the Withdrawal Charge, the oldest
Purchase Payment is considered to be withdrawn first; the next oldest Purchase
Payment is considered to be withdrawn next, and so on (this is a "first-in,
first-out" procedure), and all Purchase Payments are deemed to be withdrawn
before any earnings. The amount of the partial withdrawal requested plus any
Withdrawal Charge will be deducted from the Accumulation Value on the date an
Owner's Written Request is received at the Service Office. In the absence of
other instructions, partial withdrawals (including any charge) will be deducted
from the Subaccounts and the Fixed Account on a pro-rata basis. No more than a
pro-rata amount can be withdrawn from the Fixed Account. The following is the
table of Withdrawal Charge Percentages:
========================================== ---- ---- ---- ---- ---- --- --- ====
Years Since Receipt of Purchase Payment 1 2 3 4 5 6 7 8+
========================================== ==== ==== ==== ==== ==== === === ====
Applicable Withdrawal Charge Percentage 7% 6% 5% 4% 3% 2% 1% 0%
========================================== ==== ==== ==== ==== ==== === === ====
United of Omaha anticipates that the Withdrawal Charge will not generate
sufficient funds to pay the cost of distributing the Policies. If this charge is
insufficient to cover the distribution expenses, the deficiency will be met from
United of Omaha's general funds, which will include amounts derived from the
charge for mortality and expense risks (described below).
Each Policy year, the Owner can withdraw up to 15% of Accumulation Value,
without imposition of the Withdrawal Charge. A Withdrawal Charge will also not
be applied on the Annuity Starting Date if the Accumulation Value is applied
after the second Policy Anniversary to provide lifetime Annuity Payments under
Payout Option 4. (The Withdrawal Charge will apply to Proceeds placed under
Payout Options 1, 2, 3, 5, and 6.) No Withdrawal Charge will be imposed as a
result of any death benefit payment or, under Qualified Plans, any refund of
contributions paid in excess of the Owner's deductible amounts. United of Omaha
will not increase the withdrawal charge.
WAIVER OF WITHDRAWAL CHARGES
United of Omaha will waive the Withdrawal Charge upon partial withdrawals
and surrenders in the event the Owner becomes confined to a hospital or nursing
home, disabled, diagnosed with a terminal illness or unemployed. Those waivers
and any restrictions associated with such waivers are set forth below:
NURSING HOME WAIVER. The Withdrawal Charge will not be imposed as a result
of any withdrawal made pursuant to the Owner's confinement, upon the
recommendation of a licensed physician, to the following facilities for 30 or
more consecutive days: (a) a hospital licensed or recognized as a general
hospital by the state in which it is located; (b) a hospital recognized as a
general hospital by the Joint Commission on the Accreditation of Hospitals; (c)
a Medicare certified hospital; (d) a state licensed nursing home with a
registered nurse on duty 24 hours a day; and (e) a Medicare certified long term
care facility. This waiver only applies to partial withdrawals and surrenders
requested no later than 91 days of the last day of confinement to such facility.
Proof of confinement must be provided. The Nursing Home Waiver is not available
if any Owner is confined to a nursing home or hospital facility on the Date of
Issue.
United of Omaha will not accept any additional purchase payments under a
Policy once the Nursing Home Waiver has been elected. The Nursing Home Waiver
may not be available in all states.
DISABILITY WAIVER. The Withdrawal Charge will not be imposed upon any
withdrawal where either the Owner is physically disabled. United of Omaha may
require proof of such disability, including written confirmation of receipt and
approval of any claim for Social Security Disability Benefits. Proof of
continued disability may be required through the date of any partial withdrawal
or surrender. United of Omaha reserves the right to have any Owner claiming such
disability examined by a licensed physician.
United of Omaha will not accept any additional purchase payments under a
Policy once the Disability Waiver has been elected. The Disability Waiver is not
available if any Owner is receiving Social Security Disability Benefits on the
Date of Issue or is age 65 or older. The Disability Waiver may not be available
in all states.
TERMINAL ILLNESS WAIVER. United of Omaha will waive the Withdrawal Charge
for any withdrawal where the Owner is diagnosed with a terminal illness. A
terminal illness is a medical condition that, with a reasonable degree of
medical certainty, will result in your death within 12 months or less. United of
Omaha may require proof of such illness including written confirmation from a
licensed physician. United of Omaha reserves the right to have an Owner
diagnosed with such illness examined by a licensed physician.
United of Omaha will not accept any additional purchase payments under a
Policy once the Terminal Illness Waiver has been elected. The Terminal Illness
Waiver is not available if any Owner is diagnosed with a terminal illness prior
to or on the Date of Issue. The Terminal Illness Waiver may not be available in
all states.
UNEMPLOYMENT WAIVER. United of Omaha will waive the Withdrawal Charge for
any partial withdrawal or surrender in the event the Owner becomes unemployed.
The Unemployment Waiver is available upon submission of a determination letter
from a state Department of Labor indicating the Owner received unemployment
benefits for at least 60 consecutive days prior to the election of such waiver.
The Unemployment Waiver may be exercised only once and is not available if any
Owner or Annuitant is receiving unemployment benefits on the Date of Issue. The
Unemployment Waiver may not be available in all states.
TRANSPLANT WAIVER. United of Omaha will waive surrender charges if the
Owner undergoes transplant surgery as an organ donor or recipient for the
following body organs: heart, liver, lung, kidney, pancreas; or as a recipient
of a bone marrow transplant. Within 91 days of surgery, the Owner must submit a
letter from a licensed physician (who is not the Owner of this policy) stating
that the Owner underwent transplant surgery for any of these organs. United of
Omaha reserves the right to have the Owner examined by a physician of its choice
and at its expense.
This waiver may be exercised only once per transplant surgery.
RESIDENCE DAMAGE WAIVER. United of Omaha will waive surrender charges if
the Owner's primary residence suffers physicial damage in the amount of $50,000
or more. To claim this waiver, submit to United of Omaha a certified copy of a
licensed appraiser's report stating the amount of the damage. This certified
copy must be submitted with 91 days of the date of the appriaser's report.
United of Omaha reserves the right to obtain a second opinion by having the
affected residence inspected by a licensed appraiser of its choice and at its
expense, and to rely upon its appraiser's opinion. This waiver may be exercised
only once per occurrence.
DEATH OF SPOUSE OR MINOR DEPENDENT WAIVER. United of Omaha will waive
surrender charges for withdrawals of the following percentage of Accumulation
Value made within six months of the Owner's spouse's or minor dependent(s)'
death: death of spouse, 50%; death of minor dependent(s), 25%. Proof of death
must be submitted to United of Omaha. This waiver may be exercised once for a
spouse and once for each minor dependent, subject to no more than 50% of the
Accumulation Value being withdrawn pursuant to this wiaver each year. Subsequent
withdrawals, or withdrawals above the waiver limit, are subject to the
Withdrawal Charge.
MORTALITY AND EXPENSE RISK CHARGE
United of Omaha imposes a daily charge as compensation for bearing certain
mortality and expense risks in connection with the Policies. This charge is
equal to an annual rate of 1.00% (.0027535% daily) of the value of the net
assets in the Variable Account and it will not increase. The Mortality and
Expense Risk Charge is reflected in the accumulation unit values for each
Subaccount.
Accumulation Values and Annuity Payments are not affected by changes in
actual mortality experience or by actual expenses incurred by United of Omaha.
The mortality risks assumed by United of Omaha arise from its contractual
obligations to make Annuity Payments (determined in accordance with the Annuity
tables and other provisions contained in the Policy) and to pay death benefits
prior to the Annuity Starting Date. Thus, Owners are assured that neither an
Annuitant's own longevity nor an unanticipated improvement in general life
expectancy will adversely affect the periodic Annuity Payments that the Payee
will receive under the Policy.
The expense risk assumed by United of Omaha is the risk that United of
Omaha's actual expenses in administering the Policy will exceed the amount
recovered through the Administrative Charges.
If the Mortality and Expense Risk Charge is insufficient to cover United of
Omaha's actual costs, United of Omaha will bear the loss; conversely, if the
charge is more than sufficient to cover costs, the excess will be profit to
United of Omaha. United of Omaha expects a profit from this charge. To the
extent that the proceeds of the Withdrawal Charge are insufficient to cover the
actual cost of Policy distribution, the deficiency will be met from United of
Omaha's general corporate assets, which may include amounts, if any, derived
from the Mortality and Expense Risk Charge.
ADMINISTRATIVE CHARGES
In order to cover the costs of administering the Policies, United of Omaha
deducts an annual Policy Fee from the Accumulation Value and also deducts a
daily Administrative Expense Charge from the assets of each Subaccount.
The annual Policy Fee is deducted from the Accumulation Value of each
Policy on the last Valuation Date of each Policy Year prior to the Annuity
Starting Date (and upon a complete surrender). This annual Policy Fee is $30,
and it will not be increased. The annual Policy Fee will be deducted from each
Subaccount of the Variable Account in the same proportion that the Accumulation
Value in each such Subaccount bears to the total Accumulation Value in the
Variable Account. The portion of the annual Policy Fee deducted from the
Subaccounts will be deducted by cancelling Accumulation Units. This fee is
waived if the Accumulation Value exceeds $50,000 on the last Valuation Date of
the applicable Policy Year. The fee is also waived for sales of the Policy to
employees of United of Omaha or its affiliated companies.
United of Omaha also deducts a daily Administrative Expense Charge from the
assets of each Subaccount of the Variable Account. This charge is equal to an
annual rate of .20% (.0005485% daily) of the net assets of each Subaccount of
the Variable Account. The Administrative Expense Charge will not be increased in
the future.
ENHANCED DEATH BENEFIT CHARGE
There will be a charge made each year for expenses related to the Enhanced
Death Benefit available under the terms of the Elective Death Benefit Amendment.
United of Omaha deducts this charge through the cancellation of accumulation
units at each Policy Anniversary and at surrender to compensate it for the
increased risks associated with providing the Enhanced Death Benefit. United of
Omaha guarantees that this charge will never exceed an annual rate of 0.35% of
the Average Death Benefit Amount.
TRANSFER FEE
There is no charge for transfers from the Fixed Account or for the first 12
transfers from Subaccounts of the Variable Account in each Policy Year. However,
there is a $10 fee for the thirteenth and each subsequent request made by the
Owner to transfer Accumulation Value from a Subaccount during a single Policy
Year. Any applicable Transfer Fee is deducted from the amount transferred. All
transfer requests made simultaneously will be treated as a single request. No
transfer fee will be imposed for any transfer which is not at the Owner's
request. The Transfer Fee will not increase.
PREMIUM TAXES
Various states and other governmental entities levy a premium tax,
currently ranging up to 3.5%, on annuity contracts issued by insurance
companies. Premium tax rates are subject to change from time to time by
legislative and other governmental action. In addition, other governmental units
within a state may levy such taxes.
The timing of tax levies varies from one taxing authority to another. If
premium taxes are applicable to a Policy, a charge for such taxes will be
deducted, depending on when such taxes are paid to the taxing authority, either
(a) from Purchase Payments as they are received, (b) upon payment in respect of
a Surrender of the Policy, (c) upon death of any Owner, or (d) upon application
of the Proceeds to a Payout Option.
FEDERAL, STATE AND LOCAL TAXES
No charges are currently made for federal, state, or local taxes other than
premium taxes. However, United of Omaha reserves the right to deduct amounts
from the Subaccounts for such taxes or any other economic burden resulting from
imposition of the tax laws that United of Omaha determines to be properly
attributable to the Variable Account in the future.
OTHER EXPENSES INCLUDING INVESTMENT ADVISORY FEES
Each Portfolio of the Series Funds is responsible for all of its expenses.
The net assets of each Portfolio of the Series Funds will reflect deductions in
connection with the investment advisory fee and other expenses.
For more information concerning the investment advisory fee and other
charges against the Portfolios, see the prospectuses for the Series Funds,
current copies of which accompany this Prospectus.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING DISCUSSION IS A GENERAL DESCRIPTION OF FEDERAL TAX
CONSIDERATIONS RELATING TO THE POLICY AND IS NOT INTENDED AS TAX ADVICE. THIS
DISCUSSION IS NOT INTENDED TO ADDRESS THE TAX CONSEQUENCES RESULTING FROM ALL OF
THE SITUATIONS IN WHICH A PERSON MAY BE ENTITLED TO OR MAY RECEIVE A
DISTRIBUTION UNDER THE POLICY. ANY PERSON CONCERNED ABOUT THESE TAX IMPLICATIONS
SHOULD CONSULT A COMPETENT TAX ADVISOR BEFORE INITIATING ANY TRANSACTION. THIS
DISCUSSION IS BASED UPON UNITED OF OMAHA'S UNDERSTANDING OF THE PRESENT FEDERAL
INCOME TAX LAWS AS THEY ARE CURRENTLY INTERPRETED BY THE INTERNAL REVENUE
SERVICE. NO REPRESENTATION IS MADE AS TO THE LIKELIHOOD OF THE CONTINUATION OF
THE PRESENT FEDERAL INCOME TAX LAWS OR OF THE CURRENT INTERPRETATION BY THE
INTERNAL REVENUE SERVICE. MOREOVER, THIS SUMMARY DISCUSSES ONLY CERTAIN FEDERAL
INCOME TAX CONSEQUENCES TO "UNITED STATES PERSONS," AND NO ATTEMPT HAS BEEN MADE
TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS. UNITED STATES PERSONS MEANS
CITIZENS OR RESIDENTS OF THE UNITED STATES, DOMESTIC CORPORATIONS, DOMESTIC
PARTNERSHIPS AND TRUSTS OR ESTATES THAT ARE SUBJECT TO UNITED STATES FEDERAL
INCOME TAX REGARDLESS OF THE SOURCE OF THEIR INCOME.
The Policy may be purchased on a non-tax qualified basis ("Nonqualified
Policy") or purchased and used in connection with plans qualifying for favorable
tax treatment ("Qualified Policy"). Qualified Policies are designed for use by
individuals whose Purchase Payments are comprised solely of proceeds from and/or
contributions under retirement plans which are intended to qualify as plans
entitled to special income tax treatment under Sections 401(a), 403(b), or 408
of the Internal Revenue Code of 1986, as amended (the "Code"). The ultimate
effect of Federal income taxes on the amounts held under a Policy, on Annuity
Payments, and on the economic benefit to the Policy Owner, the Annuitant, or the
Beneficiary depends, among other things, on the type of retirement plan, on the
tax and employment status of the individual concerned and on the employer's tax
status. In addition, certain requirements must be satisfied in purchasing a
Qualified Policy with proceeds from a tax qualified plan and receiving
distributions from a Qualified Policy in order to continue receiving favorable
tax treatment. Therefore, purchasers of Qualified Policies should seek competent
legal and tax advice regarding the suitability of the Policy for their
situation, the applicable requirements, and the tax treatment of the rights and
benefits of the Policy. The following discussion assumes that a Qualified Policy
is purchased with proceeds from and/or contributions under retirement plans that
qualify for the intended special Federal income tax treatment.
TAX STATUS OF THE POLICY
The following discussion is based on the assumption that the Policy
qualifies as an annuity contract for federal income tax purposes. The Statement
of Additional Information discusses the requirements for qualifying as an
annuity.
TAXATION OF ANNUITIES
IN GENERAL. Section 72 of the Code governs taxation of annuities in
general. United of Omaha believes that the Policy Owner who is a natural person
generally is not taxed on increases (if any) in the value of a Policy until
distribution occurs by withdrawing all or part of the Accumulation Value (E.G.,
partial withdrawals, full surrenders or Annuity Payments under the Payout Option
elected). For this purpose, the assignment, pledge, or agreement to assign or
pledge any portion of the Accumulation Value (and in the case of a Qualified
Policy, any portion of an interest in the qualified plan) generally will be
treated as a distribution. The taxable portion of a distribution (in the form of
a single sum payment or an annuity) is taxable as ordinary income.
The owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Policy's Accumulation
Value over the "investment in the contract" (discussed below) during the taxable
year. There are some exceptions to this rule, and a prospective Policy Owner
that is not a natural person may wish to discuss these with a competent tax
adviser.
THE FOLLOWING DISCUSSION GENERALLY APPLIES TO A POLICY OWNED BY A NATURAL
PERSON.
SURRENDERS AND PARTIAL WITHDRAWALS. In the case of a surrender or partial
withdrawal (including systematic withdrawals) under a QUALIFIED POLICY, under
Section 72(e) of the Code a ratable portion of the amount received is taxable,
generally based on the ratio of the "investment in the contract" to the
individual's total accrued benefit for balance under the retirement plan. The
"investment in the contract" generally equals the amount of any purchase
payments paid by or on behalf of any individual. For a Policy issued in
connection with qualified plans, the "investment in the contract" can be zero.
Special tax rules may be available for certain distributions from a Qualified
Policy.
With respect to NONQUALIFIED POLICIES, partial withdrawals (including
systematic withdrawals) are generally treated as taxable income to the extent
that the Accumulation Value immediately before the partial withdrawal exceeds
the "investment in the contract" at that time.
Full surrenders are treated as taxable income to the extent that the amount
received exceeds the "investment in the contract."
ANNUITY PAYMENTS. Although tax consequences may vary depending on the
Payout Option elected under the Policy, in general, only the portion of the
payout that represents the amount by which the Accumulation Value exceeds the
"investment in the contract" will be taxed; after the "investment in the
contract" is recovered, the full amount of any additional payments is taxable.
In general there is no tax on the portion of each Annuity Payment which
represents the same ratio that the "investment in the contract" bears to the
total expected value of the Annuity Payments for the term of the payments;
however, the remainder of each Annuity Payment is taxable. Once the "investment
in the contract" has been fully recovered, the full amount of any additional
Annuity Payments is taxable. If Annuity Payments cease by reason of the death of
the Annuitant, the excess (if any) of the "investment in the contract" as of the
Annuity Starting Date over the aggregate amount of Annuity Payments received on
or after the Annuity Starting Date that was excluded from gross income is
allowable as a deduction for the last taxable year of the Annuitant.
PENALTY TAX. In the case of a distribution pursuant to a Nonqualified
Policy, there may be imposed a Federal penalty tax equal to 10% of the amount
treated as taxable income. In general, however, there is no penalty tax on
distributions: (a) made on or after the date on which the Policy Owner attains
age 59 1/2; (b) made as a result of death or disability of a Policy Owner; (c)
received in substantially equal periodic payments as a life annuity or a joint
and survivor annuity for the lives or life expectancies of the Policy Owner and
a "designated beneficiary"; (d) from a qualified plan; (e) allocable to
investment in the Policy before August 14, 1982; (f) under a qualified funding
asset (as defined in Code section 130(d)); (g) under an immediate annuity (as
defined in Code Section 72(u)(4)); or (h) which are purchased by an employer on
termination of certain types of qualified plans and which are held by the
employer until the employee separates from service. Other tax penalties may
apply to certain distributions under a Qualified Policy.
DEATH BENEFIT PROCEEDS. Amounts may be distributed from the Account because
of the death of a Policy Owner. Generally, such amounts are includable in the
income of the recipient as follows: (1) if distributed in a lump sum, they are
taxed in the same manner as a full surrender as described above; or (2) if
distributed under an Annuity Payout Option, they are taxed in the same manner as
Annuity Payments, as described above.
TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF THE POLICY. A transfer of ownership
of a Policy, the designation of an Annuitant or Beneficiary who is not also the
Policy Owner, the selection of certain annuity starting dates, or the exchange
of a Policy may result in certain tax consequences to the Policy Owner that are
not discussed herein. Policy Owners contemplating any such transfer, assignment,
or exchange of a Policy should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.
MULTIPLE POLICIES. All nonqualified deferred annuity contracts that are
issued by United of Omaha (or its affiliates) to the same Policy Owner during
any calendar year are treated as one annuity contract for purposes of
determining the amount includable in gross income under section 72(e) of the
Code. In addition, the Treasury Department has specific authority to issue
regulations that prevent the avoidance of section 72(e) through the serial
purchase of annuity contracts or otherwise. Congress has also indicated that the
Treasury Department may have authority to treat the combination purchase of an
immediate annuity contract and separate deferred annuity contract as a single
annuity contract under its general authority to prescribe rules as may be
necessary to enforce the income tax laws. Any Policy Owner or prospective Policy
Owner contemplating the purchase of more than one annuity in a calendar year
should consult a tax advisor.
WITHHOLDING. Pension and annuity distributions generally are subject to
withholding for the recipient's federal income tax liability at rates that vary
according to the type of distribution and the recipient's tax status.
Recipients, however, generally are provided the opportunity to elect not to have
tax withheld from distributions. Effective January 1, 1994, distributions from
certain qualified plans are generally subject to mandatory withholding. Certain
states also require withholding of state income taxes whenever federal income
taxes are withheld.
POSSIBLE CHANGES IN TAXATION. In past years, legislation has been proposed
that would have adversely modified the federal taxation of certain annuities.
For example, one such proposal would have changed the tax treatment of
nonqualified annuities that did not have "substantial life contingencies" by
taxing income as it is credited to the annuity. Although as of the date of this
prospectus Congress is not actively considering any legislation regarding the
taxation of annuities, there is always the possibility that the tax treatment of
annuities could change by legislation or other means (such as IRS regulations,
revenue rulings, judicial decisions, etc.). Moreover, it is also possible that
any change could be retroactive (that is, effective prior to the date of the
change).
OTHER TAX CONSEQUENCES. As noted above, the foregoing discussion of the
Federal income tax consequences under the Policy is not exhaustive and special
rules are provided with respect to other tax situations not discussed in this
Prospectus. Further, the Federal income tax consequences discussed herein
reflect United of Omaha's understanding of current law and the law may change.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of distributions under the Policy depend on
the individual circumstances of each Policy Owner or recipient of the
distribution. A competent tax adviser should be consulted for further
information.
QUALIFIED PLANS
The Policy may be used with certain qualified plans as described in the
following paragraphs. The tax rules applicable to Policy Owners in qualified
plans, including restrictions on contributions and benefits, taxation of
distributions and any tax penalties, vary according to the type of plan and the
terms and condition of the plan itself. Various tax penalties may apply to
contributions in excess of specified limits, aggregate distributions in excess
of $155,000 annually, distribution that do not satisfy specified requirements
and certain other transactions with respect to qualified plans. Therefore, no
attempt is made to provide more than general information about the use of the
Policy with qualified plans. Policy Owners, Annuitants and Beneficiaries are
cautioned that the rights of any person to any benefits under qualified plans
may be subject ot the terms and conditions of the plans themselves, regardless
of the provisions of the Policy. Some retirement plans are subject to
distribution and other requirements that are not incorporated in United of
Omaha's Policy provisions or administration procedures. Policy Owners,
participants and beneficiaries are responsible for determining that
contributions, distributions and other transactions with respect to the Policy
comply with applicable law. Following are brief descriptions of the
circumstances in which United of Omaha will issue the Policy in connection with
qualified plans. When issued in connection with a qualified plan, the Policy
will be amended to conform with certain requirements of the Code, and this
amendment must be approved by the applicable State Insurance Department before
the Policy is available for use with a qualified plan. The Policy may not be
available in all States for all types of qualified plans.
QUALIFIED PENSION OR PROFIT SHARING PLANS. Section 401(a) of the Code
permits employers to establish retirement plans for employees and also permits
self-employed individuals to establish retirement plans for themselves and their
employees. Subject to the Policy's purchase payment limits, the Policy may be
issued to the trustee of such plan if the trustee is the Owner and Beneficiary
of the Policy, if the trustee or the employer selects the Policy as a plan
investment, and if the trustee arranges for plan services from a party other
than United of Omaha (unless an officer of United of Omaha agrees in writing to
perform services before the Policy is issued). If the participant directs
investments under the plan, an individual Policy must be issued for each
participant. Purchasers of a Policy for use with such plans should seek
competent advice regarding the suitability of the Policy to their specific
needs. Adverse tax or other legal consequences to the plan, the participant or
to both may result if the Policy is assigned or transferred to any individual as
a means to provide benefit payments, unless the plan establishes compliance with
all legal requirements applicable to such benefits prior to transfer of the
Policy.
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"). Also, distribution from certain other
types of qualified plans may be "rolled over" on a tax-deferred basis to an IRA.
Subject to the Policy's purchase payment limits, the Policy may be issued as an
IRA. Purchasers of a Policy for use as an IRA will be provided with supplemental
information required by the Internal Revenue Service. Such purchasers will have
the right to revoke their purchase within seven days of the earlier of the
establishment of the IRA or their purchase. Purchasers should seek competent
advice as to the suitability of the Policy to their specific needs. An IRA
cannot be assigned.
TAX SHELTERED ANNUITIES. Section 403(b) of the Code permits public school
employees and employees of certain types of religious, charitable, educational
and scientific organizations specified in Section 501(c)(3) of the Code to
direct the purchase of annuity contracts and, subject to certain limitations,
exclude the amount of purchase payments from gross income for income tax
purposes. This Section 403(b) annuity contract is commonly referred to as a "Tax
Sheltered Annuity". Subject to the Policy's purchase payment limits, the Policy
may be issued as a Tax Sheltered Annuity if each purchase payment is a direct
transfer from another Tax Sheltered Annuity Policy. The Policy may not be issued
to accept direct purchase payments from an employer's payroll office. In
addition, the Policy prohibits withdrawals or distributions except upon the
Annuitant's death, attainment of age 59 1/2, separation from service or
disability; and the Policy does not provide for hardship withdrawals. Purchasers
of a Policy for use as a Tax Sheltered Annuity should seek competent advice as
to the suitability of the Policy to their specific needs. A Tax Sheltered
Annuity cannot be assigned.
SIMPLE RETIREMENT ACCOUNTS
Beginning January 1, 1997, certain small employers may establish Simple
Retirement Accounts as provided by Section 408(p) of the Code, under which
employees may elect to defer up to $6,000 (as increased for cost of living
adjustments) as a percentage of compensation. The sponsoring employer is
required to make a matching contribution on behalf of contributing employees.
Distributions from a Simple Retirement Account are subject to the same
restrictions that apply to IRA distributions and are taxed as ordinary income.
Subject to certain exceptions, premature distributions prior to age 59 1/2 are
subject to a 10% penalty tax, which is increased to 25% if the distribution
occurs within the first two years after the commencement of the employee's
participation in the plan. The failure of the Simple Retirement Account to meet
Code requirements may result in adverse tax consequences.
Distributions From Qualified Plans
For qualified plans under Section 401 (a), 401(k), 403(a), and 403(b), the Code
requires that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the owner (or
plan participant) (i) attains age 70 1/2 or (ii) retires, and must by made in a
specified form or manner. If the plan participant is a "5 percent owner "( as
defined in the Code), distributions generally must begin no later than the date
described in (i).
DISTRIBUTOR OF THE POLICIES
Mutual of Omaha Investor Services ("MOIS"), Mutual of Omaha Plaza, Omaha
Nebraska 68175, is the principal underwriter of the Policies. Like United of
Omaha, MOIS is a 100% owned subsidiary of Mutual of Omaha Insurance Company.
MOIS has entered or will enter into one or more contracts with various
broker-dealers for the distribution of the Policies. MOIS is registered with the
Securities and Exchange Commission as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. Commissions paid to a
broker-dealer will be up to 7 1/2% of Purchase Payments.
VOTING RIGHTS
To the extent required by law, United of Omaha will vote Series Fund shares
held by the Variable Account at regular and special shareholder meetings of the
Series Funds in accordance with instructions received from persons having voting
interests in the portfolios. If, however, the 1940 Act or any regulation
thereunder should be amended or if the present interpretation thereof should be
amended or if the present interpretation thereof should change, and as a result
United of Omaha determines that it is permitted to vote Series Fund shares in
its own right, it may elect to do so. The Series Funds may not hold routine
annual Shareholder meetings.
The Policy Owner holds the voting interest in the selected Portfolios. The
number of votes that an Owner has the right to instruct will be calculated
separately for each Subaccount. The number of votes that an Owner has the right
to instruct for a particular Subaccount will be determined by dividing his or
her Accumulation Value in the Subaccount by the net asset value per share of the
corresponding Portfolio in which the Subaccount invests. Fractional shares will
be counted. Each Owner having a voting interest in a Subaccount will receive
proxy material, reports, and other materials relating to the appropriate
Portfolio.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party or
to which the assets of the Variable Account are subject. United of Omaha is not
involved in any litigation that is of material importance in relation to its
total assets or that relates to the Variable Account.
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information is available (at no cost) which
contains more details concerning the subjects discussed in this Prospectus. The
following is the Table of Contents for that Statement:
TABLE OF CONTENTS
Page
The Policy-General Provisions..................................... 2
Owner and Joint Owner........................................ 2
Death of Annuitant........................................... 2
Entire Contract............................................. 2
Deferment of Payment and Transfers........................... 2
Incontestability ............................................ 2
Misstatement of Age or Sex................................... 2
Nonparticipating............................................. 3
Assignment ............................................... 3
Evidence of Age or Survival.................................. 3
Federal Tax Matters............................................... 3
Tax Status of the Policy..................................... 3
Taxation of United of Omaha.................................. 4
State Regulation of United of Omaha .............................. 4
Administration ............................................... 5
Records and Reports .............................................. 5
Distribution of the Policies ..................................... 5
Custody of Assets ............................................... 5
Historical Performance Data....................................... 5
Money Market Yields ......................................... 6
Other Subaccount Yields ..................................... 6
Total Returns ............................................... 7
Other Performance Data....................................... 7
Legal Matters ............................................... 10
Other Information ............................................... 10
Financial Statements.............................................. 10
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE ULTRANNUITY SERIES V VARIABLE ANNUITY
Issued through: UNITED OF OMAHA SEPARATE ACCOUNT C
Offered by: UNITED OF OMAHA LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
This Statement of Additional information expands upon subjects discussed in
the current Prospectus for the Ultrannuity Series V Variable Annuity Policy (the
"Policy") offered by United of Omaha Life Insurance Company. You may obtain a
copy of the Prospectus dated May 1, 1997 by calling 1-800-238-9354 or by writing
to the Service Office: United of Omaha Variable Product Service, P.O. Box 8430,
Omaha, Nebraska 68108-0430. Terms used in the current Prospectus for the Policy
are incorporated in this Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ ONLY IN CONJUNCTION WITH THE PROSPECTUSES FOR THE POLICY AND THE SERIES
FUNDS
Dated: May 1, 1997
TABLE OF CONTENTS
Page
The Policy-General Provisions ...............................................2
Owner and Joint Owner...................................................2
Death of Annuitant..................................................... 2
Entire Contract ............................................................ 2
Deferment of Payment and Transfers......................................2
Incontestability .......................................................2
Misstatement of Age or Sex..............................................2
Nonparticipating........................................................3
Assignment..............................................................3
Evidence of Age or Survival.............................................3
Federal Tax Matters (33).....................................................3
Tax Status of the Policy................................................3
Taxation of United of Omaha.............................................4
State Regulation of United of Omaha..........................................4
Administration ..............................................................5
Records and Reports..........................................................5
Distribution of the Policies (26)............................................5
Custody of Assets............................................................5
Historical Performance Data (18).............................................5
Money Market Yields.....................................................6
Other Subaccount Yields.................................................6
Total Returns...........................................................7
Other Performance Data..................................................7
Legal Matters...............................................................10
Other Information...........................................................10
Financial Statements (13)...................................................10
(Numbers in parentheses indicate corresponding sections of the Prospectus).
<PAGE>
In order to supplement the description in the Prospectus, the following
provides additional information about United of Omaha and the Policy which may
be of interest to an Owner.
THE POLICY - GENERAL PROVISIONS
OWNER AND JOINT OWNER
While the Owner is alive, only the Owner may exercise the rights under the
Policy. Ownership may be changed as described below under "Assignment." If there
are joint Owners, the signatures of both Owners are needed to exercise rights
under the Policy. If the Annuitant is other than the Owner, the Annuitant has no
rights under the Policy.
DEATH OF ANNUITANT
If the Annuitant is an Owner or joint Owner, the death of the Annuitant
will be treated as the death of the Owner rather than of the Annuitant.
If the Annuitant is not an Owner and the Annuitant dies before the Annuity
Starting Date, the Owner may name a new Annuitant if such Owner(s) is not a
corporation or other non-individual. If the Owner does not name a new Annuitant,
the Owner will become the Annuitant.
ENTIRE CONTRACT
The entire contract is the Policy, data page, any riders and the signed
application, a copy of which will be attached to the Policy. All statements made
in the application will be deemed representations and not warranties. No
statement, unless it is in the application, will be used by United of Omaha to
contest the Policy or deny a claim.
Any change of the Policy and any riders requires the consent of the
president, vice president, assistant vice president, the secretary or assistant
secretary of United of Omaha. No agent or Registered Representative has
authority to change or waive any provision of the Policy.
United of Omaha reserves the right to amend the Policies to meet the
requirements of, or take advantage of, the Internal Revenue Code, regulations or
published rulings. A Policy Owner can refuse such a change by giving Written
Notice, but a refusal may result in adverse tax consequences.
DEFERMENT OF PAYMENT AND TRANSFERS
United of Omaha will usually pay any amounts payable from the Variable
Account as a result of a partial withdrawal or cash surrender within seven days
after receiving written request at the Service Office in a form satisfactory to
United of Omaha. United of Omaha can postpone such payments or any transfers of
amounts between Subaccounts or into the Fixed Account if:
(a) the New York Stock Exchange is closed for other than customary
weekend and holiday closings;
(b) trading on the New York Stock Exchange is restricted;
(c) an emergency exists as determined by the Securities Exchange
Commission, as a result of which it is not reasonably practical to
dispose of securities, or not reasonably practical to determine the
value of the net assets of the Variable Account; or
(d) the Securities Exchange Commission permits delay for the protection
of security holders. The applicable rules of the Securities Exchange Commission
will govern as to whether the conditions in (c) or (d) exist.
United of Omaha may defer payment of partial withdrawals or a surrender
from the Fixed Account for up to six months from the date written request is
received at the Service Office.
INCONTESTABILITY
United of Omaha will not contest the validity of the Policy after the
Date of Issue.
MISSTATEMENT OF AGE OR SEX
United of Omaha may require proof of the age of the Annuitant before
making any life annuity payment. If the age or sex of the Annuitant has been
misstated, the Annuity Starting Date and Annuity Payments will be determined
using the correct age and sex. If misstatement of age or sex results in Annuity
Payments that are too large, the overpayments will be deducted from future
Annuity Payments. If United of Omaha has made payments that are too small, the
underpayments will be added to the next payment. Adjustments for overpayments or
underpayments will include 6% interest.
NONPARTICIPATING
No dividends will be paid. Neither the Owner nor the Beneficiary will
have the right to share in United of Omaha's surplus earnings or profits.
ASSIGNMENT
The Owner may change the ownership of the Policy or pledge it as
collateral by assigning it. No assignment will be binding on United of Omaha
until United of Omaha records and acknowledges it. The rights of any Payee will
be subject to a collateral assignment.
If the named Beneficiary is irrevocable, a change of ownership or a
collateral assignment may be made only by joint written request from the Owner
and the named Beneficiary. On the Annuity Starting Date, the Owner may select
another Payee, but the Owner retains all rights of ownership unless the Owner
signs an absolute assignment.
EVIDENCE OF AGE OR SURVIVAL
United of Omaha reserves the right to require proof of the age or
survival of any Owner, Annuitant or Payee. No payment will be made until United
of Omaha receives such proof.
VARIABLE ANNUITY UNITS. All variable annuity payments other than the
first are determined by means of Variable Annuity Units credited to the Policy
with respect to the particular Payee. The number of Variable Annuity Units for
each applicable subaccount is the amount of the first annuity payment
attributable to that subaccount divided by the Annuity Unit Value for that
subaccount as of the Annuity Starting Date. The number of Variable Annuity Units
of each particular subaccount credited with respect to the Payee or Annuitant
then remains fixed unless a transfer of Variable Annuity Units is made as
described below. The number of Variable Annuity Units will not change as a
result of investment experience.
For any Valuation Period, the value of a Variable Annuity Unit of
a particular subaccount is the Variable Annuity Unit value during the last
Valuation Period for that particular Subaccount, multiplied by the Net
Investment Factor for that subaccount for the current Valuation Period. The
value of a subaccount may increase or decrease from one Valuation Period to the
next.
The Net Investment Factor for any subaccount for any Valuation
Period is determined by dividing (a) by (b) and then subtracting (c) from the
result where:
(a) is the net result of:
(1)the net asset value of a Portfolio share held in the subaccount
determined as of the end of the current Valuation Period, plus
(2)the per share amount of any declared and unpaid dividends or
capital gains accruing to that Portfolio, plus or minus
(3)a per share credit or charge with respect to any taxes paid or
reserved for by United of Omaha during the Valueation Period
which is determined by United of Omaha to be attributable to the
operations of the subaccount;
(b) is the net asset value per share of the Fund held in the subaccount
determined as of the end of the preceding Valuation Period plus or
minus the per share credit or charge with respect to any taxes paid
or reserved for the preceding Valuation Period; and
(c) is the asset charge factor determined by United of Omaha for the
Valuation Period to reflect the Mortality and Expense Risk Charge
and the Administrative Expense Charge deducted from the Variable
Account. This factor is equal, on an annual basis, to 1.20% of the
net asset value of the Variable Account.
The result is then multiplied by a factor that offsets the Assumed Investment
Rate used to establish the Annuity Payment Rates found in the applicable
Contract, which allows the actual investment rate to be credited. For a one day
Valuation Period the factor is 0.99989255 using an Assumed Investment Rate of 4%
per year.
FEDERAL TAX MATTERS
TAX STATUS OF THE POLICY
DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Internal Revenue
Code provides that in order for a variable contract which is based on a
segregated asset account to qualify as an annuity contract under the Code, the
investments made by such account must be "adequately diversified" in accordance
with Treasury regulations. The Treasury regulations issued under Section 817(h)
(Treas. Reg. ss. 1.817-5) apply a diversification requirement to each of the
Subaccounts of the Variable Account. The Variable Account, through the Series
Funds and their Portfolios, intends to comply with those diversification
requirements. United of Omaha and the Series Funds have entered into agreements
regarding participation in the Series Funds that requires the Series Funds and
their Portfolios to be operated in compliance with the Treasury regulations.
OWNER CONTROL. In certain circumstances, owners of variable annuity
contracts may be considered the owners, for federal income tax purposes, of the
assets of the separate account used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has stated in
published rulings that a variable contract owner will be considered the owner of
separate account assets if the contract owner possesses incidents of ownership
in those assets, such as the ability to exercise investment control over the
assets. The Treasury Department also announced, in connection with the issuance
of regulations concerning diversification, that those regulations "do not
provide guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
Owner), rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts without being treated as
owners of the underlying assets." As of the date of this prospectus, no such
guidance has been issued.
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating premium payments and
policy values. These differences could result in an Owner being treated as the
owner of a pro-rata portion of the assets of the Separate Account. In addition,
United of Omaha does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. United of Omaha therefore reserves the right to modify the Policy as
necessary to attempt to prevent an Owner from being considered the owner of a
pro-rata share of the assets of the Variable Account or to otherwise qualify the
Policy for favorable tax treatment.
DISTRIBUTION REQUIREMENTS. The Code also requires that Nonqualified
Policies contain specific provisions for distribution of Policy Proceeds upon
the death of an Owner. In order to be treated as an annuity contract for federal
income tax purposes, the Code requires that such Policies provide that if an
Owner dies on or after the Annuity Starting Date and before the entire interest
in the Policy has been distributed, the remaining portion must be distributed at
least as rapidly as under the method in effect on the Owner's death. If an Owner
dies before the Annuity Starting Date, the entire interest in the Policy must
generally be distributed within five years after the Owner's date of death,
these requirements are considered to be satisfied if the entire interest in the
Policy is used to purchase an immediate annuity under which payments will begin
within one year of the Owner's death and will be made for the life of the
Beneficiary or for a period not extending beyond the life expectancy of the
Beneficiary. If the Beneficiary is the deceased Owner's surviving spouse, the
Policy may be continued with the Owner's surviving spouse as the new Owner. The
Policy contains provisions intended to comply with these requirements of the
Code. No regulations interpreting these requirements of the Code have yet been
issued and thus no assurance can be given that the provisions contained in the
Policies satisfy all such Code requirements. The provisions contained in the
Policies will be reviewed and modified if necessary to assure that they comply
with the Code requirements when clarified by regulation or otherwise.
TAXATION OF UNITED OF OMAHA
United of Omaha at present is taxed as a life insurance company under
part I of Subchapter L of the Code. The Variable Account is treated as part of
United of Omaha and, accordingly, will not be taxed separately as a "regulated
investment company" under Subchapter M of the Code. United of Omaha does not
expect to incur any federal income tax liability with respect to investment
income and net capital gains arising from the activities of the Variable Account
retained as part of the reserves under the Policy. Based on this expectation, it
is anticipated that no charges will be made against the Variable Account for
federal income taxes. If, in future years, any federal income taxes or related
economic burdens are incurred by United of Omaha with respect to the Variable
Account, United of Omaha may make a charge to the Variable Account.
STATE REGULATION OF UNITED OF OMAHA
United of Omaha is subject to the laws of Nebraska governing insurance
companies and to regulation by the Nebraska Division of Insurance. An annual
statement in a prescribed form is filed with the Department of Insurance each
year covering the operation of United of Omaha for the preceding year and its
financial condition as of the end of such year. Regulation by the Department of
Insurance includes periodic examination to determine United of Omaha's contract
liabilities and reserves so that the Department may certify the items are
correct. United of Omaha's books and accounts are subject to review by the
Department of Insurance at all times and a full examination of its operations is
conducted periodically by the National Association of Insurance Commissioners.
In addition, United of Omaha is subject to regulation under the insurance laws
of other jurisdictions in which it may operate.
ADMINISTRATION
Effective on or about March 3, 1997, United of Omaha performs all
administration for the Policies. Prior to then, United of Omaha had an
administrative services agreement with The Continuum Company, Inc. (a/k/a
Vantage Computer Systems), ("Vantage"), P.O. Box 419472, Kansas City, Missouri
64141-6472. The services provided by Vantage under the agreement included
issuance and redemption of the Policies, maintenance of records concerning the
Policies, and certain valuation services. For the fiscal year ended December 31,
1996, United of Omaha paid $_57,116 total compensation to Vantage, and in fiscal
year ended December 31, 1995 the amount was $_518,248 for its services.
RECORDS AND REPORTS
All records and accounts relating to the Variable Account will be
maintained by United of Omaha or by its Administrator. As presently required by
the Investment Company Act of 1940 and regulations promulgated thereunder,
United of Omaha will mail to all Policy Owners at their last known address of
record, at least annually, financial statements of the Variable Account and such
other information as may be required under that Act or by any other applicable
law or regulation. Policy Owners will also receive confirmation of each
financial transaction and any other reports required by applicable state and
federal laws, rules, and regulations.
DISTRIBUTION OF THE POLICIES
The Policies are offered to the public through brokers licensed under
the federal securities laws and state insurance laws. The offering of the
Policies is continuous and United of Omaha does not anticipate discontinuing the
offering of the Policies. However, United of Omaha reserves the right to
discontinue the offering of the Policies.
Mutual of Omaha Investor Services, Inc. ("MOIS") will be the principal
underwriter of the Policies. The Policies will be distributed by MOIS through
retail broker-dealers. Commissions payable to a broker-dealer will be up to 7.5%
of Purchase Payments. For the fiscal year ended December 31, 1996, United of
Omaha paid $18,853,282 in total compensation to MOIS; of this amount MOIS
retained $1,626,399 as concessions for its services as Principal Underwriter and
for distribution concessions, with the remaining amount paid to other
broker-dealers. In 1995, these amounts were $2,096,354 and $137,803
respectively.
CUSTODY OF ASSETS
The assets of each of the Subaccounts of the Variable Account are held
by United of Omaha. The assets of the Variable Account are segregated and held
separate and apart from United of Omaha's general account assets. United of
Omaha or the Administrator maintains records of all purchases and redemptions of
shares of the Series Funds held by each of the Subaccounts. Additional
protection for the assets of the Variable Account is afforded by United of
Omaha's fidelity bond, presently in the amount of $10 million, covering the acts
of officers and employees of United of Omaha.
HISTORICAL PERFORMANCE DATA
From time to time, United of Omaha may disclose yields, total returns,
and other performance data pertaining to the Policies for a Subaccount. Such
performance data will be computed, or accompanied by performance data computed,
in accordance with the standards defined by the Securities and Exchange
Commission.
The yields and total returns of the Subaccounts of the Variable Account
normally will fluctuate over time. THEREFORE, THE DISCLOSED YIELDS AND TOTAL
RETURNS FOR ANY GIVEN PAST PERIOD ARE NOT AN INDICATION OR REPRESENTATION OF
FUTURE YIELDS OR RATES OF RETURN. A Subaccount's actual yield and total return
is affected by the types and quality of portfolio securities held by the
Portfolio and its operating expenses.
Because of the charges and deductions imposed under a Policy, the yields
and total returns for the Subaccounts will be lower than the yields and total
returns for their respective Portfolios. The yield figures will not reflect the
Withdrawal Charge. The calculations of yields, total returns, and other
performance data do not reflect the effect of any premium tax charge that may be
applicable to a particular Policy. Premium taxes currently range for 0% to 3.5%
of Purchase Payments based on the state in which the Policy is sold. For the
class of Policies issued with the Elective Death Benefit Amendment, the Death
Benefit Charge is reflected.
MONEY MARKET YIELDS
From time to time, advertisements and sales literature may quote the
current annualized yield of the Money Market Subaccount for a seven-day period
in a manner which does not take into consideration any realized or unrealized
gains or losses on shares of the Money Market Portfolio or on its portfolio
securities. As of 12/31/96, this current annualized yield is 3.55%.
This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the seven-day period in the value
of a hypothetical account under a Policy having a balance of one Accumulation
Unit of the Money Market Subaccount at the beginning of the period to determine
the base period return, and annualizing this quotient on a 365-day basis. The
net change in account value reflects: (1) net income from the Portfolio
attributable to the hypothetical account; and (2) charges and deductions imposed
under the Policy which are attributable to the hypothetical account. The charges
and deductions include the per Unit charges for the hypothetical account for:
(1) the annual Policy Fee; (2) the Administrative Expense Charge; and (3) the
Mortality and Expense Risk Charge. The $30 annual Policy Fee is reflected as an
annual 0.10% charged daily, based on an anticipated average Accumulation Value
of $30,000. Yield figures will not reflect the Withdrawal Charge.
Because of the charges and deductions imposed under the Policy, the
yield for the Money Market Subaccount will be lower than the yield for the Money
Market Portfolio.
The Securities and Exchange Commission also permits United of Omaha to
disclose the effective yield of the Money Market Subaccount for the same
seven-day period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return by adding one to
the base period return, raising the sum to a power equal to 365 divided by 7,
and subtracting one from the result.
The current and effective yields on amounts held in the Money Market
Subaccount normally will fluctuate on a daily basis. THEREFORE, THE DISCLOSED
YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF FUTURE
YIELDS OR RATES OF RETURN. The Money Market Subaccount's actual yield is
affected by changes in interest rates on money market securities, average
portfolio maturity of the Money Market Portfolio, the types of quality of
portfolio securities held by the Money Market Portfolio and the Money Market
Portfolio's operating expenses. Yields figures do not reflect the effect of any
Withdrawal Charge that may be applicable to a Policy. For the class of Policies
issued with the Elective Death Benefit Amendment, the Death Benefit Charge is
included.
OTHER SUBACCOUNT YIELDS
From time to time, sales literature or advertisements may quote the
current annualized yield of one or more of the Subaccounts (except the Money
Market Subaccount) for a Policy for 30-day or one-month periods. The annualized
yield of a Subaccount refers to income generated by the Subaccount over a
specific 30-day or one-month period. Because the yield is annualized, the yield
generated by a Subaccount during a 30-day or one-month period is assumed to be
generated each period over a 12-month period.
The yield is computed by: (a) dividing the net investment income of the
Portfolio attributable to the Subaccount Accumulation Units less Subaccount
expenses for the period by the maximum offering price per Accumulation Unit on
the last day of the period times the daily average number of units outstanding
for the period; (b) compounding that yield for a six-month period; and (c)
multiplying that result by 2. Expenses attributable to the Subaccount include:
(a) the annual Policy Fee; (b) the Administrative Expense Charge; and (c) the
Mortality and Expense Risk Charge. The $30 annual Policy Fee is reflected as an
annual 0.10% charged daily in the yield calculation, based on an anticipated
average Accumulation Value of $30,000. For the class of Policies issued with the
Elective Death Benefit Amendment, the Death Benefit Charge is included. The
30-day or one-month yield is calculated according to the following formula:
Yield = [2 {A-B + 1} 6 - 1]
[ cd ]
Where:
a =-- net income of the Portfolio for the 30-day or
one-month period attributable to the Subaccount's
Accumulation Units.
b =-- expenses of the Subaccount for the 30-day or one-month period.
c =-- the average number of Accumulation Units outstanding.
d =-- the Accumulation Unit value at the close of the last
day in the 30-day or one-month period.
Because of the charges and deductions imposed under the Policies, the
yield for a Subaccount will be lower than the yield for the corresponding Series
Fund Portfolio.
Yield calculations do not take into account the Withdrawal Charge under
the Policy (a maximum of 7% of the Purchase Payments surrendered or withdrawn).
AVERAGE ANNUAL TOTAL RETURNS
From time to time, sales literature or advertisements may also quote
average annual total returns for one or more of the Subaccounts for various
periods of time.
When a Subaccount has been in operation for 1, 5, and 10 years,
respectively, the average annual total return for these periods will be
provided. Until a Subaccount has been in operation for 10 years, United of Omaha
will always include quotes of average annual total return for the period
measured from the date the Policies were first offered for sale. Average annual
total returns for other periods of time may, from time to time, also be
disclosed.
Average annual total returns represent the average annual compounded
rates of return that would equate an initial investment of $1,000 under a Policy
to the redemption value of that investment as of the last day of each of the
periods. Average annual total returns will be calculated using Subaccount
Accumulation Unit values which United of Omaha calculates at the end of each
Valuation Period based on the performance of the Subaccount's underlying
Portfolio, the deductions for (a) the annual Policy Fee; (b) the Administrative
Expense Charge; and (c) the Mortality and Expense Risk Charge. The $30 annual
Policy Fee is reflected as an annual 0.10% charged daily in the calculation of
average annual total returns, based on an anticipated average Accumulation Value
of $30,000. The calculation also assumes surrender of the Policy at the end of
the period for the return quotation. Standard total returns will therefore
reflect a deduction of any applicable Withdrawal Charge. For the class of
Policies issued with the Elective Death Benefit Amendment, the deduction for the
Death Benefit Charge is also reflected. The total return will then be calculated
according to the following formula:
P(1+TR) n = ERV
Where:
P =-- a hypothetical initial Purchase Payment of $1,000.
TR = -- the average annual total return.
ERV = -- the ending redeemable value (net of any applicable
Withdrawal Charge) of the hypothetical account at the end
of the period.
n =-- the number of years in the period.
HYPTHETICAL PERFORMANCE DATA. United of Omaha may, from time to time,
also disclose yield, standard total returns, and non-standard total returns for
the Portfolios of the Series Funds, including such disclosure for periods prior
to the dates the Subaccounts commenced operations. For periods prior to the date
the Subaccount commenced operations, performance information for Policies will
be calculated based on the performance of the Series Fund Portfolios and the
assumption that the Subaccounts were in existence for the same periods as those
indicated for the Series Fund Portfolios, with the level of Policy charges that
were in effect at the inception of the Subaccounts (this is referred to as
"hypothetical" performance data). Such standardized but "hypothetical average
annual total return information for the Subaccounts of Policies is as follows:
<TABLE>
<CAPTION>
================================================ ========= ========= ============ ===========
SUBACCOUNT STANDARDIZED 1 Year 5 Years 10 Years Since
"HYPOTHETICAL" Ended Ended Ended Inception
AVERAGE ANNUAL TOTAL RETURN TABLE 12/31/96 12/31/96 12/31/96 to
Subaccount (date of inception of corresponding % % % 12/31/96
Portfolio) %
(Policy issued WITHOUT Enhanced Death Benefit)
================================================ ========= ========= ============ ===========
<S> <C> <C> <C> <C>
Alger American Growth (1/9/87) 5.24 14.55 N/A 17.15
Alger American Small Capitalization (9/21/88) -3.28 9.03 N/A 18.67
Federated Prime Money Fund II (11/21/94) -2.79 N/A N/A 1.44
Federated Fund for U.S. Government Securities
(3/28/94) -3.26 N/A N/A 2.62
Fidelity VIP II Asset Manager: Growth (1/3/95) 11.36 N/A N/A 16.95
Fidelity VIP II Contrafund (1/3/95) 12.64 N/A N/A 25.29
Fidelity VIP Equity Income (10/9/86) 6.11 15.87 12.28 11.98
Fidelity VIP II Index 500 (8/27/92) 14.05 N/A N/A 14.90
MFS Emerging Growth (7/24/95) 8.66 N/A N/A 18.67
MFS High Income (7/26/95) 3.81 N/A N/A 6.56
MFS Research (7/26/95) 13.59 N/A N/A 17.49
MFS Value Series (8/14/96) N/A N/A N/A 3.21
MFS World Government (6/14/94) -3.42 N/A N/A 4.20
Pioneer Capital Growth (7/15/90) 3.67 18.94 N/A 17.20
Pioneer Real Estate (10/25/93) 26.72 N/A N/A 10.78
Scudder Global Discovery (5/1/96) N/A N/A N/A -1.63
Scudder Growth & Income (5/2/94) 13.44 N/A N/A 18.22
Scudder International (5/1/87) 6.57 9.06 N/A 8.53
T. Rowe Price International (3/31/94) 6.50 N/A N/A 6.83
T. Rowe Price New America Growth (3/31/94) 11.51 N/A N/A 21.10
T. Rowe Price Equity Income (3/31/94) 11.01 N/A N/A 18.50
T. Rowe Price Limited-Term Bond (5/17/94) -4.14 N/A N/A 2.85
T. Rowe Price Personal Strategy Balanced
(12/31/94 ) 6.04 N/A N/A 16.59
================================================ ========= ========= ============ ===========
Subaccount (date of inception of 1 Year 5 Years 10 Years Since
corresponding Portfolio) Ended Ended Ended Inception
(Policy issued WITH Enhanced Death Benefit) 12/31/96 12/31/96 12/31/96 to
12/31/96
================================================ ========= ========= ============ ===========
Alger American Growth (1/9/87) 4.88 14.15 N/A 16.74
Alger American Small Capitalization (9/21/88) -3.62 8.65 N/A 18.26
Federated Prime Money Fund II (11/21/94) -3.13 N/A N/A 1.08
Federated Fund for U.S. Government Securities
(3/28/94) -3.60 N/A N/A 2.26
Fidelity VIP II Asset Manager: Growth (1/3/95) 10.98 N/A N/A 16.55
Fidelity VIP II Contrafund (1/3/95) 12.25 N/A N/A 24.86
Fidelity VIP Equity Income (10/9/86) 5.74 15.47 11.89 11.59
Fidelity VIP II Index 500 (8/27/92) 13.65 N/A N/A 14.50
MFS Emerging Growth (7/24/95) 8.28 N/A N/A 18.24
MFS High Income (7/26/95) 3.45 N/A N/A 6.18
MFS Research (7/26/95) 13.20 N/A N/A 17.07
MFS Value Series (8/14/96) N/A N/A N/A 3.10
MFS World Government (6/14/95) -3.76 N/A N/A 3.84
Pioneer Capital Growth (7/25/90) 3.31 18.53 N/A 16.79
Pioneer Real Estate (10/25/93) 26.29 N/A N/A 10.40
Scudder Global Discovery (5/1/96) N/A N/A N/A -1.86
Scudder Growth & Income (5/2/94) 13.05 N/A N/A 17.81
Scudder International (5/1/87) 6.20 8.69 N/A 8.16
T. Rowe Price International (3/31/94) 6.13 N/A N/A 6.46
T. Rowe Price New America Growth (3/31/94) 11.12 N/A N/A 20.68
T. Rowe Price Equity Income (3/31/94) 10.63 N/A N/A 18.09
T. Rowe Price Limited-Term Bond (5/17/94) -4.47 N/A N/A 2.49
T. Rowe Price Personal Strategy Balanced
(12/31/94 ) 5.67 N/A N/A 16.18
================================================ ========= ========= ============ ===========
Such non-standardized (i.e., assuming no withdrawal charge) but hypothetical
average annual total return information for the Subaccounts is as follows:
================================================ ========= ========= ============ ===========
SUBACCOUNT NON-STANDARDIZED 1 Year 5 Years 10 Years Since
"HYPOTHETICAL" Ended Ended Ended Inception
AVERAGE ANNUAL TOTAL RETURN TABLE 12/31/96 12/31/96 12/31/96 to
Subaccount (date of inception of corresponding % % % 12/31/96
Portfolio) %
(Policy issued WITHOUT Enhanced Death Benefit)
================================================ ========= ========= ============ ===========
Alger American Growth (1/9/87) 11.90 15.14 N/A 17.15
Alger American Small Capitalization (9/21/88) 2.84 9.59 N/A 18.67
Federated Prime Money Fund II (11/21/94) 3.36 N/A N/A 3.55
Federated Fund for U.S. Government Securities
(3/28/94) 2.86 N/A N/A 4.26
Fidelity VIP II Asset Manager: Growth (1/3/95) 18.41 N/A N/A 20.07
Fidelity VIP II Contrafund (1/3/95) 19.76 N/A N/A 28.63
Fidelity VIP Equity Income (10/9/86) 12.82 16.73 12.28 11.98
Fidelity VIP II Index 500 (8/27/92) 21.26 N/A N/A 15.59
MFS Emerging Growth (7/24/95) 15.53 N/A N/A 23.07
MFS High Income (7/26/95) 10.37 N/A N/A 10.53
MFS Research (7/26/95) 20.78 N/A N/A 21.87
MFS Value Series (8/14/96) N/A N/A N/A 8.09
MFS World Government (6/14/94) 2.69 N/A N/A 5.99
Pioneer Capital Growth (7/25/90) 10.23 19.55 N/A 17.44
Pioneer Real Estate (10/25/93) 24.74 N/A N/A 11.99
Scudder Global Discovery (5/1/96) N/A N/A N/A 4.59
Scudder Growth & Income (5/2/94) 20.61 N/A N/A 20.16
Scudder International (5/1/87) 13.32 9.63 N/A 8.53
T. Rowe Price International (3/31/94) 13.24 N/A N/A 8.53
T. Rowe Price New America Growth (3/31/94) 18.56 N/A N/A 23.03
T. Rowe Price Equity Income (3/31/94) 18.04 N/A N/A 20.38
T. Rowe Price Limited-Term Bond (5/17/94) 1.93 N/A N/A 4.56
T. Rowe Price Personal Strategy Balanced
(12/31/94 ) 12.75 N/A N/A 19.68
================================================ ========= ========= ============ ===========
Subaccount (date of inception of 1 Year 5 Years 10 Years Since
corresponding Portfolio) Ended Ended Ended Inception
(Policy issued WITH Enhanced Death Benefit) 12/31/96 12/31/96 12/31/96 to
12/31/96
================================================ ========= ========= ============ ===========
Alger American Growth (1/9/87) 11.51 14.74 N/A 16.74
Alger American Small Capitalization (9/21/88) 2.48 9.21 N/A 18.26
Federated Prime Money Fund II (11/21/94) 3.00 N/A N/A 3.18
Federated Fund for U.S. Government Securities
(3/28/94) 2.50 N/A N/A 3.90
Fidelity VIP II Asset Manager: Growth (1/3/95) 18.00 N/A N/A 19.65
Fidelity VIP II Contrafund (1/3/95) 19.35 N/A N/A 28.19
Fidelity VIP Equity Income (10/9/86) 12.43 16.07 11.89 11.59
Fidelity VIP II Index 500 (8/27/92) 20.84 N/A N/A 15.18
MFS Emerging Growth (7/24/95) 15.13 N/A N/A 22.62
MFS High Income (7/26/95) 9.99 N/A N/A 10.13
MFS Research (7/26/95) 20.36 N/A N/A 21.43
MFS Value Series (8/14/96) N/A N/A N/A 7.97
MFS World Government (6/14/94) 2.33 N/A N/A 5.62
Pioneer Capital Growth (7/25/90) 9.85 19.14 N/A 17.03
Pioneer Real Estate (10/25/93) 34.28 N/A N/A 11.61
Scudder Global Discovery (5/1/96) N/A N/A N/A 4.35
Scudder Growth & Income (5/2/94) 20.20 N/A N/A 19.75
Scudder International (5/1/87) 12.92 9.25 N/A 8.16
T. Rowe Price International (3/31/94) 12.84 N/A N/A 8.16
T. Rowe Price New America Growth (3/31/94) 18.15 N/A N/A 22.60
T. Rowe Price Equity Income (3/31/94) 17.63 N/A N/A 19.97
T. Rowe Price Limited-Term Bond (5/17/94) 1.57 N/A N/A 4.19
T. Rowe Price Personal Strategy Balanced
(12/31/94 ) 12.36 N/A N/A 19.27
================================================ ========= ========= ============ ===========
</TABLE>
THE FIGURES ABOVE ARE NOT AN INDICATION OF PRESENT, PAST, OR FUTURE PERFORMANCE
OF THE APPLICABLE SUBACCOUNTS OR OF THE ACTUAL PORTFOLIOS AVAILABLE UNDER THE
POLICY.
United of Omaha may disclose Cumulative Total Returns in conjunction
with the standard formats described above. The Cumulative Total Returns will be
calculated using the following formula:
CTR = (ERV/P) - 1
Where:
CTR = -- The Cumulative Total Return net of Subaccount
recurring charges for the period.
ERV = -- The ending redeemable value of the hypothetical
investment at the end of the period.
P = -- A hypothetical initial Purchase Payment of $1,000.
OTHER INFORMATION
The following is a partial list of those publications which may be cited
in the Series Funds' advertising shareholder materials which contain articles
describing investment results or other data relative to one or more of the
Subaccounts. Other publications may also be cited.
Across the Board
Advertising Age
American Banker
Barron's
Best's Review
Broker World
Business Insurance
Business Month
Business Week
Changing Times
Consumer Reports
Economist
Financial Planning
Financial World
Forbes
Fortune
Inc.
Institutional Investor
Insurance Forum
Insurance Sales
Insurance Week
Journal of Accountancy
Journal of the American Society
of CLU & ChFC
Journal of Commerce
Life Association News
Life Insurance Selling
Manager's Magazine
Market Facts
Money
LEGAL MATTERS
We know of no material legal proceedings pending to which the Variable
Account is a party or which would materially affect the Variable Account. We are
not involved in any litigation of material importance to our total assets or to
the Variable Account. Legal matters in connection with the Policy have been
passed upon by our Law Staff.
OTHER INFORMATION
A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Policies discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the Prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the Policies and other legal
instruments are intended to be summaries. For a complete statement of the terms
of these documents, reference should be made to the instruments filed with the
Securities and Exchange Commission.
FINANCIAL STATEMENTS
This Statement of Additional Information contains financial statements for
the Variable Account as of and for the year ended December 31, 1996 which have
been audited by Deloitte & Touche, LLP, independent auditors, as stated in their
report appearing herein. The statement of changes in net assets of the Variable
Account for the year ended December 31, 1995 contained in this Statement of
Additional Information was audited by Coopers & Lybrand, Omaha, Nebraska,
independent auditors, as stated in their report appearing herein.
The Financial Statements of United of Omaha Life Insurance Company as of
and for the year ended December 31, 1996 included in this Statement of
Additional Information have been audited by independent auditors Deloitte &
Touche LLP, Omaha, Nebraska, as stated in their report appearing herein. The
financial statements of United of Omaha Life Insurance Company as of December
31, 1995 and for the two years then ended was audited by independent auditors
Coopers & Lybrand, Omaha, Nebraska, as stated in their report appearing herein.
The financial statements of United of Omaha Life Insurance Company should be
considered only as bearing on the ability of United of Omaha to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in the Variable Account.
<PAGE>
UNITED OF OMAHA
LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL
OF OMAHA INSURANCE COMPANY)
STATUTORY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1996, 1995 AND 1994
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
United of Omaha Life Insurance Company
Omaha, Nebraska
We have audited the accompanying statutory statement of admitted assets,
liabilities, and surplus of United of Omaha Life Insurance Company as of
December 31, 1996, and the related statutory statements of income and changes in
surplus, and cash flows for the year then ended. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of United of Omaha Life Insurance Company for the years
ended December 31, 1995 and 1994 were audited by other auditors whose report,
dated April 9, 1997, expressed an unqualified opinion on the presentation of
those financial statements in conformity with accounting practices prescribed or
permitted by the Insurance Department of the State of Nebraska and also
expressed an opinion that the financial statements were not presented in
conformity with generally accepted accounting principles. The financial
statements are the responsibility of the Company's management.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
As more fully described in Note 1 to the financial statements, the Company has
prepared these financial statements in conformity with accounting practices
prescribed or permitted by the Insurance Department of the State of Nebraska.
Those practices differ from generally accepted accounting principles. The
effects on the financial statements of the differences between the statutory
basis of accounting and generally accepted accounting principles are not
reasonably determinable, but are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the 1996 financial statements referred to above do not present fairly
the financial position of United of Omaha Life Insurance Company as of December
31, 1996, and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the admitted assets, liabilities, and
surplus of United of Omaha Life Insurance Company as of December 31, 1996, and
the results of its operations and its cash flows for the year then ended, on the
basis of accounting described in Note 1 to the financial statements.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
United of Omaha Life Insurance Company
Omaha, Nebraska
We have audited the accompanying balance sheet of United of Omaha Life Insurance
Company (a Nebraska corporation and wholly-owned subsidiary of Mutual of Omaha
Insurance Company), as of December 31, 1995, and the related statements of
operations, capital and surplus, and cash flows for each of the two years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to report on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our originally issued report dated February 23, 1996, we expressed an opinion
that the 1995 financial statements, prepared using accounting practices
prescribed or permitted by the Insurance Department of the State of Nebraska,
presented fairly, in all material respects, the financial position of United of
Omaha Life Insurance Company as of December 31, 1995, and the results of its
operations and its cash flow for each of the two years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
As described in Note 1 to the financial statements, pursuant to the provisions
of Statement of Financial Accounting Standards Board Interpretation 40,
Applicability of Generally Accepted Accounting Principles to Mutual Life
Insurance and Other Enterprises, as amended ("FIN 40"), financial statements of
mutual life insurance enterprises for periods ending on or before December 15,
1996, prepared using accounting practices prescribed or permitted by insurance
regulators (statutory financial statements) are no longer considered
presentations in conformity with generally accepted accounting principles.
Accordingly, our present opinion on the presentation of the 1995 financial
statements in accordance with generally accepted accounting principles, as
presented herein, is different from that expressed in our previous report.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of United of Omaha Life Insurance Company as of December 31, 1995, or the
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1995.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United of Omaha Life Insurance
Company as of December 31, 1995, and the results of its operations and its cash
flows for the each of the two years in the period ended December 31, 1995, in
conformity with accounting practices prescribed or permitted by the Insurance
Department of the State of Nebraska.
Coopers & Lybrand L.L.P.
Omaha, Nebraska
February 23, 1996 [except for the change in our opinion as required by FIN 40,
for which the date is April 9, 1997]
UNITED OF OMAHA LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL OF OMAHA INSURANCE COMPANY)
<TABLE>
<CAPTION>
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS
DECEMBER 31, 1996 AND 1995
(in thousands)
- ------------------------------------------------------------------------------------------------------------------------
ADMITTED ASSETS 1996 1995
Cash and invested assets (Notes 2 and 3):
<S> <C> <C>
Bonds $ 6,194,033 $ 5,348,682
Preferred stocks 2,967 2,967
Common stocks 206,792 215,614
Mortgage loans 914,877 1,039,336
Real estate occupied by the Company, net of accumulated depreciation of
$51,913 in 1996 and $48,176 in 1995 85,958 89,366
Real estate acquired in satisfaction of debt, net of accumulated depreciation
of $3,418 in 1996 and $4,007 in 1995 47,288 53,812
Investment in real estate, net of accumulated depreciation of $14,576 in 1996
and $14,052 in 1995 9,930 13,234
Policy loans 118,150 111,335
Cash and short-term investments 117,502 176,000
Other invested assets 70,027 46,272
-------------- ------------
Total cash and invested assets 7,767,524 7,096,618
Premiums deferred and uncollected 94,802 85,015
Investment income due and accrued 75,193 73,470
Electronic data processing equipment, net 44,971 53,474
Receivable from parent, subsidiaries and affiliates (Note 6) 8,075 7,671
Other assets (Note 3) 47,050 70,443
Separate accounts assets 499,423 156,212
-------------- ------------
Total admitted assets $ 8,537,038 $ 7,542,903
============== ============
LIABILITIES
Policy reserves (Notes 6 and 10):
Aggregate reserve for policies and contracts $ 5,427,996 $ 4,724,703
Liability for premium and other deposit funds 1,670,294 1,746,619
Policy and contract claims 49,317 48,022
Other 74,171 71,293
-------------- ------------
Total policy reserves 7,221,778 6,590,637
Interest maintenance reserve 26,872 25,378
Asset valuation reserve 114,495 106,346
General expenses and taxes due or accrued (Note 5) 35,147 32,866
Federal income taxes due or accrued (Note 4) 20,241 17,342
Other liabilities (Note 3) 84,293 101,537
Separate accounts liabilities 499,392 156,184
-------------- -------------
Total liabilities 8,002,218 7,030,290
-------------- -------------
SURPLUS
Capital stock, $10 par value, 900,000 shares authorized and outstanding 9,000 9,000
Gross paid-in and contributed surplus 62,724 62,724
Unassigned surplus (Note 11) 463,096 440,889
-------------- ------------
Total surplus 534,820 512,613
-------------- ------------
Total liabilities and surplus $ 8,537,038 $ 7,542,903
============== ============
The accompanying notes are an integral part of these statutory financial
statements.
</TABLE>
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL OF OMAHA INSURANCE COMPANY)
<TABLE>
<CAPTION>
STATUTORY STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(in thousands)
- -------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
Income:
<S> <C> <C> <C>
Net premiums and annuity considerations (Notes 6 and 7) $ 1,285,507 $ 1,278,389 $ 1,198,989
Other considerations and fund deposits 260,508 81,818 51,580
Net investment income (Notes 2 and 6) 546,634 526,246 444,160
Other income 20,604 25,233 32,075
------------- ------------ -----------
Total income 2,113,253 1,911,686 1,726,804
------------- ------------ -----------
Benefits and expenses:
Policyholder and beneficiary benefits (Note 6) 890,668 728,340 668,542
Increase in reserves for policyholder and beneficiary benefits 561,185 781,059 718,113
Commissions 126,692 98,132 97,436
Operating expenses (Notes 5 and 6) 175,723 186,158 175,988
Expense realignment costs (Note 13) 9,099 - -
Net transfers to separate accounts 277,638 41,074 23,453
------------- ------------ -----------
Total benefits and expenses 2,041,005 1,834,763 1,683,532
------------- ------------ -----------
Net gain from operations before federal income taxes and
net realized capital gains 72,248 76,923 43,272
Federal income taxes (Note 4) 41,101 30,227 25,500
------------- ------------ -----------
Net gain from operations before net realized capital gains 31,147 46,696 17,772
Net realized capital gains (Notes 2 and 6) 23,461 14,476 4,826
------------- ------------ -----------
Net income $ 54,608 $ 61,172 $ 22,598
============= =========== ===========
The accompanying notes are an integral part of these statutory financial
statements.
</TABLE>
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL OF OMAHA INSURANCE COMPANY)
<TABLE>
<CAPTION>
STATUTORY STATEMENTS OF CHANGES IN SURPLUS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(in thousands)
- -----------------------------------------------------------------------------------------------------------
1996 1995 1994
Capital stock:
<S> <C> <C> <C>
Balance at beginning and end of year $ 9,000 $ 9,000 $ 9,000
--------- ----------- ----------
Gross paid-in and contributed surplus:
Balance at beginning of year 62,724 62,724 12,724
Paid-in by Mutual of Omaha Insurance Company (Note 6) - - 50,000
--------- ----------- ----------
Balance at end of year 62,724 62,724 62,724
--------- ----------- ----------
Unassigned surplus:
Balance at beginning of year 440,889 378,242 354,608
Net income 54,608 61,172 22,598
Change in net unrealized capital gains (losses) (Note 2) (23,064) 6,299 12,348
(Increase) decrease in:
Non-admitted assets 2,561 1,593 (4,670)
Asset valuation reserve (8,150) (6,483) (6,619)
Pension plan contribution (Note 5) (3,599) - -
Other, net (149) 66 (23)
--------- ----------- ----------
Balance at end of year 463,096 440,889 378,242
--------- ----------- ----------
Total surplus $ 534,820 $ 512,613 $ 449,966
========= ========== ==========
The accompanying notes are an integral part of these statutory financial
statements.
</TABLE>
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL OF OMAHA INSURANCE COMPANY)
<TABLE>
<CAPTION>
STATUTORY STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(in thousands)
- -------------------------------------------------------------------------------------------------------------------------
1996 1995 1994
Cash from operations:
<S> <C> <C> <C>
Premiums, considerations and other fund deposits $ 1,539,502 $1,343,041 $1,240,212
Net investment income 537,288 512,992 434,840
Other income 20,642 21,771 53,829
Benefits (888,661) (728,025) (665,575)
Commissions and general expenses (314,100) (276,574) (262,282)
Federal income taxes (42,235) (23,796) (30,496)
Net transfers to separate accounts (292,935) (41,112) (23,453)
------------------------------------------------
Net cash from operations 559,501 808,297 747,075
-----------------------------------------------
Cash from investments:
Proceeds from investments sold, redeemed or matured:
Bonds 992,065 582,788 606,001
Mortgage loans 132,406 131,975 135,034
Stocks 52,062 73,863 365,849
Real estate 18,601 15,353 26,537
Other invested assets 32,150 4,391 7,781
Tax on capital gains (9,665) (2,525) (12,993)
Cost of investments acquired:
Bonds (1,818,632) (1,460,824) (1,441,532)
Mortgage loans (22,607) (56,781) (32,909)
Stocks (25,848) (28,873) (386,130)
Other invested assets (53,150) (22,321) (3,744)
Real estate (4,205) (4,897) (6,256)
Net increase in policy loans (6,815) (6,494) (3,771)
------------------------------------------------
Net cash from investments (713,638) (774,345) (746,133)
----------------------------------------------
Cash from financing and other sources:
Other cash provided 102,623 38,420 8,067
Other cash used (6,984) (5,434) (38,888)
Capital and surplus paid-in (Note 6) - - 50,000
-----------------------------------------------
Net cash from financing and other sources 95,639 32,986 19,179
-----------------------------------------------
Net change in cash and short-term investments (58,498) 66,938 20,121
Cash and short-term investments:
Beginning of year 176,000 109,062 88,941
--------------------------------------------
End of year $ 117,502 176,000 109,062
============================================
The accompanying notes are an integral part of these statutory financial
statements.
</TABLE>
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
(A WHOLLY-OWNED SUBSIDIARY OF MUTUAL OF OMAHA INSURANCE COMPANY)
NOTES TO STATUTORY FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(dollar amounts in thousands)
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations - United of Omaha Life Insurance Company (the
Company) is a wholly-owned subsidiary of Mutual of Omaha Insurance Company
(Mutual of Omaha), a mutual life and health and accident insurance company
domiciled in the State of Nebraska. At December 31, 1996, the Company
owned 100% of the outstanding common stock of the following entities:
Companion Life Insurance Company (Companion), United World Life Insurance
Company (United World), Mutual of Omaha Structured Settlement Company -
Nebraska (MOSSCO-NE), Mutual of Omaha Structured Settlement
Company-Connecticut (MOSSCO-CT), and Mutual of Omaha Structured Settlement
Company-New York (MOSSCO-NY). The Company has insurance licenses to
operate in 49 states, the District of Columbia, Guam, Puerto Rico, and the
U.S. Virgin Islands. Individual life insurance and annuity products are
sold primarily through a network of career agents, direct mail, brokers,
financial planners and banks. Group business is produced by
representatives located in Mutual of Omaha group offices throughout the
country.
Basis of Presentation - The accompanying financial statements have been
prepared in conformity with accounting practices prescribed or permitted
by the Insurance Department of the State of Nebraska. Prescribed statutory
accounting practices are contained in 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 which may not
necessarily be prescribed but are not prohibited.
The 1995 and 1994 financial statements, presented for comparative
purposes, were previously described as also being prepared in accordance
with generally accepted accounting principles (GAAP) for mutual life
insurance companies and their wholly-owned life insurance company
subsidiaries. Pursuant to Financial Accounting Standards Board
Interpretation 40, Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises ("FIN 40"), as
amended, which is effective for 1996 annual financial statements,
financial statements based on statutory accounting practices can no longer
be described as prepared in conformity with GAAP. Furthermore, financial
statements prepared in conformity with statutory accounting practices for
periods prior to the effective date of FIN 40 are no longer considered
GAAP presentations when presented in comparative form with financial
statements for periods subsequent to the effective date. Accordingly, the
prior independent auditors' reports have been reissued in accordance with
FIN 40.
The accompanying statutory financial statements vary in some respects from
those that would be presented in conformity with GAAP. The most
significant differences include: (a) bonds are generally carried at
amortized cost rather than being valued at either amortized cost or fair
value based on their classification according to the Company's ability and
intent to hold or trade the securities; (b) acquisition costs, such as
commissions and other costs related to acquiring new business, are charged
to operations as incurred and not deferred, whereas premiums are taken
into income on a pro rata basis over the respective term of the policies;
(c) deferred federal income taxes are not provided for temporary
differences between tax and financial reporting; (d) no provision has been
made for federal income taxes on unrealized appreciation of investments
which are carried at market value; (e) asset valuation reserves (AVR) and
interest maintenance reserves (IMR) are established; (f) different
actuarial assumptions are used for calculating certain policy reserves;
and (g) changes in certain assets designated as "non-admitted" assets have
been charged to unassigned surplus. The aggregate effect of the foregoing
differences on the accompanying statutory financial statements has not
been determined, but was presumed to be material.
Management is required to make estimates and assumptions that affect the
reported amounts in the statutory financial statements. Actual results
could differ significantly from those estimates.
Investments - Bonds are generally stated at amortized cost. Bonds not
backed by other loans are amortized using the scientific method.
Loan-backed bonds and structured securities are amortized using the
interest method based on anticipated prepayments at the date of purchase.
Changes in estimated cash flows from the original purchase assumptions are
accounted for using the retrospective method. Preferred stocks are stated
primarily at cost. Common stocks of unaffiliated companies are stated at
market value and affiliated companies (principally insurance companies)
are valued at underlying statutory book value. The change in the stated
value is recorded as a change in unrealized capital gains (losses), a
component of unassigned surplus, ignoring the effect of income taxes.
Mortgage loans and policy loans are stated at the aggregate unpaid
balance. In accordance with statutory accounting practices, the Company
records a general reserve for losses on mortgage loans as part of the
asset valuation reserve.
Home office and investment real estate are valued at cost, less allowance
for depreciation. Property acquired in satisfaction of debt is initially
valued at the lower of cost or fair market value. Depreciation is provided
on the straight-line basis over the estimated useful lives of the related
assets.
Short-term investments include all investments whose maturities, at the
time of acquisition, are one year or less and are stated at cost which
approximates market.
Investment income is recorded when earned. Realized gains and losses on
sale or maturity of investments are determined on the specific
identification basis. Any portion of invested assets designated as
"non-admitted" was excluded from the statutory statements of admitted
assets, liabilities and surplus and recorded as a change in unrealized
capital gains (losses).
Asset Valuation and Interest Maintenance Reserves - The Company
establishes certain reserves as promulgated by the National Association of
Insurance Commissioners (NAIC). The AVR is established for the specific
risk characteristics of invested assets of the Company. The IMR is
established for the realized gains and losses on the redemption of fixed
income securities resulting from changes in interest rates, net of tax.
Gains and losses pertaining to the IMR are subsequently amortized into
investment income over the expected remaining period to maturity of the
investments sold or called.
Policy Reserves - Policy reserves provide amounts adequate to discharge
estimated future obligations in excess of estimated future premiums on
policies in force. Reserves for life policies are computed principally by
using the Commissioners' Reserve Valuation Method basis or the net level
premium basis with assumed interest rates (2.5% to 6%) and mortality
(American Experience, 1941, 1958, 1960 and 1980 CSO tables) as prescribed
by regulatory authorities. Reserves for annuities and deposit
administration contracts are computed on the basis of interest rates
ranging from 2.5% to 12.75%. Policy and contract claim liabilities include
provisions for reported claims and estimates for claims incurred but not
reported. To the extent the ultimate liability differs from the amounts
recorded, such differences are reflected in operations when additional
information becomes known.
Premiums and Related Commissions - Premiums are recognized as income over
the premium paying period. Commissions and other expenses related to the
acquisition of policies are charged to operations as incurred.
Federal Income Taxes - The Company files a consolidated federal income tax
return with its parent and other eligible subsidiaries. The method of
allocating taxes among the companies is subject to a written agreement
approved by the Board of Directors. Each company's provision for federal
income taxes is based on a separate return calculation with each company
recognizing tax benefits of net operating loss carryforwards and tax
credits on a separate return basis.
The provision for federal income taxes is based on income which is
currently taxable. Deferred federal income taxes are not provided for
temporary differences between income tax and statutory reporting. The
Company recognizes the benefits of net operating losses, foreign tax
credit, and general business credit carryforwards when realized.
Non-Admitted Assets - Certain assets designated as "non-admitted" assets,
principally receivables and office furniture and equipment, are excluded
from the statutory statements of admitted assets, liabilities, and
surplus. The net change in such assets is charged or credited directly to
unassigned surplus.
Fair Values of Financial Instruments - The following methods and
assumptions were used by the Company in estimating its fair value
disclosures for financial instruments:
Cash, Short-Term Investments and Other Invested Assets - The
carrying amounts reported in the statutory statements of admitted
assets, liabilities, and surplus approximate their fair values.
Bonds - The fair values for bonds are based on quoted market prices,
where available. For bonds not actively traded, fair values are
estimated using values obtained from independent pricing services or
based on expected future cash flows using a current market rate
applicable to the yield, credit quality and maturity of the
investments.
Unaffiliated Common Stocks - The fair values for unaffiliated common
stocks are based on quoted market prices and are reported in the
statutory statements of admitted assets, liabilities, and surplus.
Mortgage Loans - The fair values for mortgage loans are estimated
using discounted cash flow analyses, using interest rates currently
being offered for similar loans to borrowers with similar credit
ratings, credit quality, and maturity of the investments.
Policy Loans - The Company does not believe an estimate of the fair
value of policy loans can be made without incurring excessive cost.
Policy loans have no stated maturities and are usually repaid by
reductions to benefits and surrenders. Because of the numerous
assumptions which would have to be made to estimate fair value, the
Company believes that such information would not be meaningful.
Investment Contracts - The fair values for liabilities under
investment-type insurance contracts are estimated using discounted
cash flow calculations, which are based on interest rates currently
being offered for similar contracts with maturities consistent with
those remaining for the contracts being valued.
Derivatives - The Company utilizes swap and cap arrangements, for purposes
other than trading, to hedge risk, to manage investment returns, and to
align currency rates with its insurance obligations. The foreign currency
swap arrangements are stated at market value. The differences between the
amounts paid or received on foreign currency and interest-rate swaps are
reflected in the statutory statements of income. Interest-rate cap
arrangements are stated at amortized cost. Interest-rate caps are
amortized and recorded as an adjustment to net investment income over the
life of the investment using the effective interest method.
The Company also invests in equity linked notes that are stated at
amortized cost and intends to hold them to maturity. These instruments pay
interest based on a very modest (or no) semi-annual or annual coupon rate
and pay at maturity all principal plus "contingent" interest based on a
coupon rate equal to the percentage increase in a designated index. If the
index has declined over the term of the note, no contingent interest is
payable, but at maturity all principal would nevertheless be payable. The
designated index is typically linked to the performance of a known stock
index or basket of indices. Interest income is recognized when earned.
Separate Accounts - The assets of the separate accounts shown in the
statutory statements of admitted assets, liabilities, and surplus are
carried at fair value and consist primarily of common stocks, mutual funds
and commercial paper held by the Company for the benefit of certificate
holders under specific individual and group annuity contracts. Benefits
paid to separate account certificate holders are reflected in the
statutory statements of income, but are offset by transfers from the
separate accounts. The payment of such benefits and the earning of
investment income constitute the only significant activities in the
separate accounts.
Reclassifications - Certain reclassifications have been made to the prior
years amounts to conform with current year presentation with no changes to
unassigned surplus or net income.
2. INVESTMENTS
The cost or amortized cost, gross unrealized gains, gross unrealized
losses and estimated fair value of the Company's investment securities
were as follows:
<TABLE>
<CAPTION>
Cost or Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
At December 31, 1996:
<S> <C> <C> <C> <C>
Governments $ 67,058 $ 447 $ 1,077 $ 66,428
States, territories and possessions 1,187 47 - 1,234
Political subdivisions 20,104 327 232 20,199
Special revenue 1,210,844 18,600 13,724 1,215,720
Public utilities 416,189 21,892 995 437,086
Industrial and miscellaneous 4,340,670 122,767 50,250 4,413,187
Credit-tenant loans 277,025 10,186 2,557 284,654
--------- -------- -------- ---------
Total $6,333,077 $ 174,266 $ 68,835 $ 6,438,508
========= ======== ======== ===========
Bonds $6,194,033
Short-term investments 139,044
---------
$6,333,077
Preferred stocks $ 3,365 $ 1,899 $ 398 $ 4,866
========= ========= ========= ==========
Common stocks:
Affiliated $ 66,086 $ 7,514 $ - $ 73,600
Unaffiliated 61,054 74,540 2,402 133,192
--------- -------- -------- ---------
$ 127,140 $ 82,054 $ 2,402 $ 206,792
========= ========= ========= ==========
At December 31, 1995:
Governments $ 68,814 $ 3,600 $ 74 $ 72,340
States, territories and
possessions 6,354 164 - 6,518
Political subdivisions 23,300 703 6 23,997
Special revenue 1,243,137 39,397 4,179 1,278,355
Public utilities 433,579 36,389 450 469,518
Industrial and
miscellaneous 3,527,698 197,605 21,205 3,704,098
Credit-tenant loans 231,739 19,304 540 250,503
--------- -------- -------- ---------
Total 5,534,621 297,162 26,454 5,805,329
========= ========= ========= ==========
Bonds 5,348,682
Short-term investments 185,939
---------
5,534,621
=========
Preferred stocks $ 3,365 $1,860 $ 398 $ 4,827
========= ========= ========= ==========
Common stocks:
Affiliated $ 66,085 3,374 763 68,696
Unaffiliated 46,422 101,917 1,421 146,918
----------- ----------- ------------- -----------
112,507 105,291 2,184 215,614
========= ========= ========= ==========
</TABLE>
The amortized cost and estimated fair value of debt securities at December
31, 1996, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
Amortized Estimated
Cost Fair Value
Due in one year or less $ 328,043 $ 329,148
Due after one year through five years 1,363,244 1,374,351
Due after five years through ten years 1,511,490 1,527,455
Due after ten years 3,130,300 3,207,554
------------ ---------
$ 6,333,077 $ 6,438,508
============ ============
The sources of net investment income were as follows:
1996 1995 1994
Bonds $ 439,884 $ 388,690 $ 320,299
Preferred stocks 399 399 400
Common stocks (Note 6) 1,789 27,756 3,651
Mortgage loans 87,035 96,891 109,279
Real estate 29,860 26,860 27,978
Policy loans 6,855 6,348 5,914
Short-term investments 7,339 6,665 4,047
Other (2,732) (1,858) 497
---- --------------- ----------------------
570,429 551,751 472,065
Investment expense (28,270) (29,424) (31,414)
Amortization of IMR 4,475 3,919 3,509
----- --------------- --------------- -----
$ 546,634 $ 526,246 $ 444,160
============= ============= ==========
<PAGE>
Realized capital gains and losses on invested assets consist of the
following:
Net
Gross Gross Realized
ealized Realized Gains
Gains Losses (Losses)
Year ended December 31, 1996:
Bonds $ 9,290 $ 1,489 $ 7,801
Common stocks (Note 6) 41,198 351 40,847
Mortgage loans 660 7,618 (6,958)
Real estate 2,690 2,949 (259)
Other 3,830 34 3,796
------------ ---------- ---------
$ 57,668 $ 12,441 45,227
============ ===========
Less: Capital gains tax (Note 6) (15,798)
Transfer to IMR (5,968)
-------
Net realized capital gains $ 23,461
=========
Year ended December 31, 1995:
Bonds $ 4,830 $ 158 $ 4,672
Common stocks (Note 6) 36,564 663 35,901
Mortgage loans 977 8,894 (7,917)
Real estate 1,804 8,041 (6,237)
Other 1,479 185 1,294
------------ ---------- ---------
$ 45,654 $ 17,941 27,713
============ ===========
Less: Capital gains tax (Note 6) (9,665)
Transfer to IMR (3,572)
-------
Net realized capital gains $ 14,476
=========
Year ended December 31, 1994:
Bonds $ 5,764 $ 145 $ 5,619
Common stocks 6,608 1,478 5,130
Mortgage loans 2,270 7,011 (4,741)
Real estate 6,540 1,922 4,618
Other 3,985 20 3,965
------------ ---------- ---------
$ 25,167 $ 10,576 14,591
============ ===========
Less: Capital gains tax (5,075)
Transfer to IMR (4,690)
Net realized capital gains $ 4,826
==========
The maximum and minimum lending rates for mortgage loans during 1996
ranged from 6.86% to 7.88%. The maximum percentage of any one loan to the
value of security at the time of the loan, exclusive of insured or
guaranteed or purchase money mortgages, was 75%. The estimated fair value
of the mortgage loan portfolio was approximately $928,621 and $1,072,501
at December 31, 1996 and 1995, respectively.
The Company's mortgage loans finance various types of commercial
properties throughout the United States. The geographic distributions of
the mortgage loans were as follows at December 31, 1996 and 1995:
1996 1995
California $ 87,778 $ 98,299
Nebraska 53,118 59,210
Missouri 49,422 61,494
Indiana 49,004 47,693
Washington 44,615 47,189
All other states 630,940 725,451
---------- -------
$ 914,877 $ 1,039,336
========== ============
The following table summarizes the non-performing and restructured
mortgage loans at December 31, 1996 and 1995:
1996 1995
Non-performing $ 8,917 $ 2,013
Restructured 13,501 24,184
-------- ------
$ 22,418 $ 26,197
========= =========
At December 31, 1996, securities with an amortized cost of $5,487 were on
deposit with government agencies as required by law in various
jurisdictions in which the Company conducts business.
3. DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into interest-rate swap agreements to manage
interest-rate exposure. The primary reason for the interest-rate swap
agreements is to modify the interest-rate sensitivities of certain
investments so that they are highly correlated with the interest-rate
sensitivities of certain insurance liabilities. Interest-rate swap
transactions generally involve the exchange of fixed or floating rate
interest payment obligations without the exchange of the underlying
principal amount.
The Company also uses interest-rate caps to more effectively manage
interest-rate risk associated with single premium deferred annuity
contracts. An interest-rate cap is a right to receive the excess of a
reference interest rate over a given rate. This allows the Company to
limit the risk associated with an increase in interest rates.
The Company purchases corporate bonds in the foreign bond markets. These
bonds are typically issued by U.S. corporations and denominated in a
variety of currencies. These bonds, on occasion, are available for
purchase in the secondary market at attractive yields. The Company enters
into currency swaps simultaneous with its foreign currency bond purchases
so that all future foreign currency-denominated interest and principal
payments on such bonds are swapped with high quality counterparties at the
time of purchase for known amounts of U.S.
dollars.
The Company uses equity linked notes to more cost effectively diversify
its exposure to equity markets and as an asset replication instrument to
match the liabilities of certain group annuity contracts where the
customer seeks equity market participation. Equity linked notes help
reduce the Company's exposure to fluctuations in equity instruments by
linking a substantial portion of their expected total return to certain
market indices while preserving the invested principal.
The following table summarizes the Company's derivative financial
instruments. Notional amounts are used on certain instruments to express
the volume of these transactions, but do not represent the much smaller
amounts potentially subject to credit risk.
Notional Statement Fair Year(s) of
Amount Value Value Maturity
At December 31, 1996:
Interest-rate swaps $ 202,500 $ - $ (9,259) 1999 - 2003
=========== ========== ============
Interest-rate caps $ 320,000 $ 2,739 $ 1,883 2000 - 2001
=========== ========== ============
Foreign currency swaps $ 21,503 $ (10,401) $ (10,401) 1997 - 1998
============ ========== ===========
Equity linked notes $ 109,925 $ 5,902 $ 41,289 1997 - 2016
=========== ========== ============
At December 31, 1995:
Interest-rate swaps $ 202,500 $ - $ (17,210) 1999 - 2003
=========== ========== ============
Interest-rate caps $ 165,000 $ 1,343 $ 608 2000
=========== ========== ============
Foreign currency swaps $ 80,729 $ (32,796) $ (32,796) 1996 - 1998
============ ========== ===========
Equity linked notes $ 48,925 $ - $ 15,741 1997 - 2015
============ ======================
The Company has considerable experience in evaluating and managing credit
risk. Each issuer or counterparty is extensively reviewed to evaluate its
financial stability before entering into each agreement and throughout the
period that the financial instrument is owned.
The Company has commitments to fund bond investments of approximately
$42,200 and mortgage loans of approximately $7,200 as of December 31,
1996. These commitments are legally binding and have fixed expiration
dates or other termination clauses that may require a payment of a fee. In
the event that the financial condition of a borrower deteriorates
materially, the commitment may be terminated. Since some of the
commitments may expire or terminate, the total commitments do not
necessarily represent future liquidity requirements.
4. FEDERAL INCOME TAXES
The provision for federal income taxes reflects an effective income tax
rate which differs from the prevailing federal income tax rate primarily
as a result of income and expense recognition differences between
statutory and income tax reporting. The major differences include
capitalization and amortization of certain acquisition amounts for tax
purposes, different methods for determining statutory and tax insurance
reserves, timing of the recognition of market discount on bonds and
certain accrued expenses, and the acceleration of depreciation for tax
purposes.
The Company's tax returns have been examined by the Internal Revenue
Service (IRS) through 1992. The Company is currently appealing certain
adjustments proposed by the IRS for tax years 1987 through 1992. The tax
returns for 1993 through 1995 are currently under examination. Management
believes the results of these examinations will have no material impact on
the Company's statutory financial statements.
Under federal income tax law prior to 1984, the Company accumulated
approximately $31,615 of deferred taxable income which could become
subject to income taxes in the future under certain conditions. Management
believes the chance that those conditions will exist is remote.
5. RETIREMENT BENEFITS
The Company participates with affiliated companies in a noncontributory
defined benefit plan covering all United States employees meeting certain
minimum requirements. Mutual of Omaha and certain subsidiaries
(collectively referred to as the Companies) generally make annual
contributions to the plan in an amount between the minimum ERISA required
contribution and the maximum tax deductible contribution. Funds for the
plan are held in the general and separate accounts of the Company under a
group annuity contract.
Information regarding accrued benefits and net assets has not been
determined on an individual company basis. The Company's employees
comprised approximately 28% of the total employee group in 1996, 1995 and
1994. The Companies expensed contributions of $12,152, $9,115 and $8,746
in 1996, 1995 and 1994, respectively. During 1996, the Companies changed
mortality tables from 1971 GAM to the 1983 GAM. As a result of the table
change, the actuarial present value of accrued benefits as of January 1,
1996, increased by $21,637. The Companies made an additional contribution
of $21,637 and recorded it as a direct charge to surplus, net of federal
income taxes of $7,573. A comparison of accrued benefits and net assets
for the entire plan as of January 1, 1996 and 1995 follows:
1996 1995
Actuarial present value of accrued benefits:
Vested $ 352,736 $ 280,516
Nonvested 4,036 1,263
------ --------------- -----
$ 356,772 $ 281,779
============= ==========
Net assets available for benefits $ 324,925 $ 301,773
============= ==========
Assumptions:
Annual investment return 9.00 % 9.16 %
Mortality table 1983 GAM 1971 GAM
Discount rate 7.62 % 7.93 %
The Companies also have the Mutual of Omaha 401(k) Long-Term Savings Plan
covering all United States employees who have completed one year of
service and have reached their 21st birthday. Participants may elect to
contribute 1% to 16% of their salary annually subject to plan and IRS
limitations. The Companies match at least 25% of the first 6% of the
contributions made by each participant. The Companies match up to an
additional 75% of the first 6% of the contributions made by each
participant if certain company-wide performance measures are met.
Contributions by the Companies were $5,600, $5,775 and $5,477 in 1996,
1995 and 1994, respectively.
The Companies provide certain postretirement medical and life insurance
benefits. The Companies subsidize these benefits with certain limitations
to retirees and eligible employee groups. Associates retiring on or before
December 31, 1997, are eligible for the full subsidy if they are at least
age 55 with at least 10 years of service and continuously covered by one
of the Companies' health plans for 10 years prior to retirement.
Associates retiring after December 31, 1997, must be at least age 60 with
at least 15 years of service and continuously covered for 15 years by one
of the Companies' health plans prior to retirement to be eligible for a
subsidy. Associates hired on or after January 1, 1995, are not eligible
for a Company subsidy. The cost of these postretirement benefits is
allocated to the Companies in accordance with an intercompany cost-sharing
arrangement. The Companies use the accrual method of accounting for
postretirement benefits and elected to amortize the original transition
obligation over 20 years.
The following table sets forth the Plan's funded status at December 31,
1996 and 1995:
1996 1995
Accumulated postretirement benefits obligation:
Fully eligible actives $ 8,008 $ 9,071
Retirees 76,136 72,688
------ ------
84,144 81,759
Unrecognized transition obligation (64,294) (69,716)
Unrecognized gain 7,928 9,951
------ ------
Total accrued $ 27,778 $ 21,994
============= ===========
Assumptions:
Discount rate 7.50 % 7.25 %
Health care cost trend rate:
First year 8.50 % 8.50 %
Ultimate 5.00 % 5.00 %
Grading period 8 years 10 years
The Companies' net periodic postretirement benefit costs include the
following components:
1996 1995 1994
Eligibility costs $ 1,385 $ 1,654 $ 1,839
Interest costs 5,909 5,567 5,761
Net amortization and deferral - (683) -
Amortization of transition obligation 4,018 4,101 4,101
----------- ----------- ---------
Total benefit costs $ 11,312 $ 10,639 $ 11,701
============ ============ =========
The health care cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost
trend rate by one percentage point in each year would increase the
Companies' accumulated postretirement benefits obligation as of December
31, 1996 by approximately $6,130 and the estimated eligibility cost and
interest cost components of the net periodic postretirement benefit costs
for 1996 by approximately $799.
6. RELATED PARTY TRANSACTIONS
The home office properties are occupied jointly by the Company, Mutual of
Omaha and certain affiliates. Because of this relationship, the Companies
incur joint operating expenses subject to allocation. Management believes
the method of allocating such expenses is fair and reasonable.
The Company received management and administrative service fees for
MOSSCO-NE, MOSSCO-NY and MOSSCO-CT of $350 and $151 and for the years
ended December 31, 1996 and 1995, respectively.
The Company paid Kirkpatrick, Pettis, Smith, Polian, Inc., an affiliate,
for equity investment management services of $444, $543 and $431 during
1996, 1995 and 1994, respectively, and MOSSCO-NE, MOSSCO-NY and MOSSCO-CT
for assignment fees of $440 and $361 during 1996 and 1995, respectively.
On January 2, 1996, the Company sold 7,580 shares of First National of
Nebraska, Inc. common stock for $27,667 to Mutual. The share price was
determined by the stock's publicly traded market value at the date of the
transaction. The Company recognized a realized gain of $27,632 and related
federal income taxes were $9,671.
In July 1995, the Company received a $25,000 extraordinary dividend from
United World. Assets distributed to the Company included cash of $1,744,
bonds with a market value of $23,113 and accrued interest on the
transferred bonds of $143. The transfer of bonds and accrued interest
occurred July 1, 1995 and the cash was transferred July 3, 1995, the first
banking day after July 1. The bonds transferred to the Company consisted
of corporate bonds, agency mortgage-backed bonds and agency asset-backed
bonds.
On August 31, 1995, the Company received $23,250 in cash from Mutual of
Omaha, for 600,000 shares of FirsTier, Inc. common stock. The gross
realized capital gain on the common stock transferred was $22,852, and
related federal income taxes were $7,998.
In 1994, the Company received a $50,000 contribution to its capital and
surplus from Mutual of Omaha and the Company contributed $20,000 to the
capital and surplus of Companion.
Under the terms of a reinsurance treaty effected June 1, 1955, all health
and accident insurance written by the Company is ceded to Mutual of Omaha.
The operating results of certain lines of group health and accident and
life insurance are shared equally by the Company and Mutual of Omaha. The
amounts ceded by the Company and included in the statutory statements of
admitted assets, liabilities and surplus were as follows:
1996 1995
Aggregate reserve for policies and contracts $ 88,332 $ 89,012
============== ===========
Policy and contract claims $ 104,874 $ 127,625
============= ==========
The amounts ceded by the Company and included in the statutory statements
of income were as follows:
1996 1995 1994
Premium considerations $368,126 $ 395,014 $ 439,361
========= ========== ==========
Policyholder and beneficiary benefits $273,576 $ 309,876 $ 324,846
========= ========== ==========
Group reinsurance settlement income (expense)$ (2,818) $ 5,354 11,324
========== ============ ==========
The Company also assumes group and individual life insurance from
Companion. The amounts assumed by the Company and included in the
statutory statements of admitted assets, liabilities and surplus were as
follows:
1996 1995
Aggregate reserve for policies and contracts $ 3,749 $ 3,736
=========== ===========
Policy and contract claims $ 2,125 $ 2,430
=========== ===========
The amounts assumed by the Company and included in the statutory
statements of income were as follows:
1996 1995 1994
Premium considerations $ 2,668 $ 4,268 $ 5,018
=========== =========== ========
Policyholder and beneficiary benefits $ 2,390 $ 3,061 $ 4,413
=========== =========== ========
7. REINSURANCE
In the normal course of business, the Company assumes and cedes
reinsurance. The ceding of reinsurance does not discharge an insurer from
its primary legal liability to a policyholder. The Company remains liable
to the extent that a reinsurer is unable to meet its obligations.
The reconciliation of total premiums to net premiums is as follows:
1996 1995 1994
Direct $ 1,641,295 $ 1,658,506 $ 1,622,903
Assumed 26,581 27,496 25,317
Ceded (382,369) (407,613) (449,231)
-------------- -------------- -----------
Net $ 1,285,507 $ 1,278,389 $ 1,198,989
=============== =============== ============
8. CREDIT ARRANGEMENTS
The Company and Mutual of Omaha are authorized by their Boards of
Directors to borrow a maximum of $50,000 on a joint basis under lines of
credit. At December 31, 1996, the Company had no outstanding borrowings
against its uncommitted, uncollateralized revolving lines of credit.
Interest rates applicable to borrowings under the Companies' lines of
credit arrangements are negotiated with the lender at the time of
borrowing.
9. CONTINGENT LIABILITIES
Various lawsuits have arisen in the ordinary course of the Company's
business. The Company believes that its defenses are meritorious and the
eventual outcome of those lawsuits will not have a material effect on the
Company's financial position.
10. DEPOSIT FUNDS
The estimated fair value and statement value of guaranteed investment and
select maturity contracts were:
1996 1995
Estimated fair value $ 1,200,031 $ 1,355,355
============ ============
Statement value $ 1,247,546 $ 1,315,730
============= ============
Fair values for the Company's insurance liabilities other than those for
investment-type insurance contracts are not required to be disclosed.
However, the fair values of liabilities under all insurance contracts are
taken into consideration in the Company's overall management of
interest-rate risk, which minimizes exposure to changing interest rates
through the matching of investment maturities with amounts due under
insurance contracts.
At December 31, 1996 and 1995, the Company held annuity reserves and
deposit fund liabilities of $1,092,555 and $954,862, respectively, that
were subject to discretionary withdrawal at book value with a surrender
charge of less than 5%.
11. STOCKHOLDER DIVIDENDS
Regulatory restrictions limit the amount of dividends available for
distribution without prior approval of regulatory authorities. The maximum
amount of dividends which can be paid to the stockholder without prior
approval of the Director of Insurance of the State of Nebraska is the
greater of 10% of the insurer's surplus as of the previous December 31 or
net gain from operations for the previous twelve month period ending
December 31. Based upon these restrictions, the Company is permitted a
maximum dividend distribution of $52,582 in 1997.
12. BUSINESS RISKS
The Company is subject to regulation by state insurance departments and
undergoes periodic examinations by those departments. The following is a
description of the most significant risks facing life and health insurers
and how the Company manages those risks:
Legal/Regulatory Risk is the risk that changes in the legal or
regulatory environment in which an insurer operates will occur and
create additional costs or expenses not anticipated by the insurer in
pricing its products. The Company mitigates this risk by operating
throughout the United States, thus reducing its exposure to any
single jurisdiction, and by diversifying its products.
Credit Risk is the risk that issuers of securities owned by the
Company will default, or that other parties, including reinsurers
which owe the Company money, will not pay. The Company minimizes this
risk by adhering to a conservative investment strategy and by
maintaining sound reinsurance, credit and collection policies.
Interest-Rate Risk is the risk that interest rates will change and
cause a decrease in the value of an insurer's investments. The
Company mitigates this risk by attempting to match the maturity
schedule of its assets with the expected payouts of its liabilities.
To the extent that liabilities come due more quickly than assets
mature, the Company may have to sell assets prior to maturity and
recognize a gain or loss.
13. EXPENSE REALIGNMENT COSTS
In March 1996, the Company and its affiliates (the Companies) announced
the elimination of approximately 1,000 positions as a part of the
initiative to reduce operating costs 15% by the end of 1997. The Companies
incurred approximately $27,300 of severance and related costs, consulting
fees and other one-time costs associated with expense realignment
activities during 1996.
<PAGE>
UNITED OF OMAHA
SEPARATE ACCOUNT C
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1996 AND 1995
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
United of Omaha Life Insurance Company
We have audited the accompanying statement of net assets of United of Omaha
Separate Account C as of December 31, 1996, and the related statements of
operations and changes in net assets for the year then ended. Our responsibility
is to express an opinion on these financial statements based on our audit. The
statement of changes in net assets of United of Omaha Separate Account C for the
year ended December 31, 1995 was audited by other auditors whose report, dated
March 20, 1996, expressed an unqualified opinion. The financial statements are
the responsibility of the Company's management.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United of Omaha Separate
Account C as of December 31, 1996, and the results of its operations and changes
in its net assets for the year then ended in conformity with generally accepted
accounting principles.
March 18, 1997
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------------------------------------------------------
Series I
-------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
---------------------------- ------------------- ---------------------------------------
New Limited -
Asset Index Money Internationl America Equity Term
ASSETS Growth Manager 500 Market Bond Stock Growth Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in portfolio shares,
at cost $821,366 $447,256 $344,899 $22,805 $398,980 $729,757 $448,804 $504,616 $90,791
======= ======== ======== ======= ======== ======== ========= ======== ========
Investments in portfolio shares,
at market $863,055 $502,220 $392,606 $22,805 $403,878 $780,860 $497,148 $547,464 $90,388
-------- -------- -------- ------- -------- ------- -------- -------- -------
Net assets $863,055 $502,220 $392,606 $22,805 $403,878 $780,860 $497,148 $547,464 $90,388
======= ======== ======== ======= ======== ======== ========= ======== ========
Accumulation units outstanding 54,874 39,757 23,634 20,740 34,258 63,804 28,069 34,029 8,059
======= ======== ======== ======= ======== ======== ========= ======== ========
Net asset value per unit $ 15.73 12.63 16.61 1.10 11.79 12.24 17.71 16.09 11.22
======= ======== ======== ======= ======== ======== ========= ======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1996 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
---------------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
----------------------------------- ----------- -------------------------------------------------------
Asset New Limited -
Manager Equity - America Personal Equity Term
ASSETS Contrafund Growth Income International Growth Strategy Income International Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in portfolio
shares, at cost $23,074,471 $21,029,439 $27,514,727 $14,373,937 $13,685,377 $20,779,697 $23,871,090 $19,752,092 $6,670,659
=========== =========== =========== =========== =========== =========== =========== =========== ==========
Investments in portfolio
shares, at market value $25,116,473 $22,102,000 $29,544,271 $15,319,638 $14,213,674 $21,663,152 $25,558,736 $20,800,847 $6,681,908
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Net assets $25,116,473 $22,102,000 $29,544,271 $15,319,638 $14,213,674 $21,663,152 $25,558,736 $20,800,847 $6,681,908
=========== =========== =========== =========== =========== =========== =========== =========== ==========
Accumulation units
outstanding 1,785,274 1,655,034 2,256,678 1,269,457 917,255 1,703,217 1,861,298 1,736,784 631,437
=========== =========== =========== =========== =========== =========== =========== =========== ==========
Net asset value per unit $14.07 $13.35 $13.09 $12.07 $15.50 $12.72 $13.73 $11.98 $10.58
=========== =========== =========== =========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1996 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
-------------------------------------------------------------------------------------------------
Alger Federated MFS
----------------------- ----------------------- ----------------------------------------------
American U.S.
Small American Money Government World High Emerging
ASSETS Capitalization Growth Market Securities II Government Income Research Growth
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in portfolio
shares, at cost $18,592,669 $16,937,604 $22,789,036 $12,194,841 $8,279,921 $9,852,512 $17,293,387 $25,158,674
=========== =========== =========== =========== =========== =========== =========== ===========
Investments in portfolio
shares, at market
$18,350,561 $17,765,602 $22,789,036 $12,279,967 $8,628,974 $9,921,613 $18,340,296 $24,993,470
----------- ------------ ----------- ----------- ---------- ----------- ----------- ----------
Net assets $18,350,561 $17,765,602 $22,789,036 $12,279,967 $8,628,974 $9,921,613 $18,340,296 $24,993,470
=========== =========== =========== =========== =========== =========== =========== ===========
Accumulation units outstanding 1,474,107 1,358,882 21,525,823 1,128,539 819,686 859,361 1,381,316 1,854,145
=========== =========== =========== =========== =========== =========== =========== ===========
Net asset value per unit $ 12.45 $13.07 $ 1.06 $10.88 $10.53 $11.55 $13.28 $13.48
=========== =========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Series I
-----------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
--------------------------- ------------------ ----------------------------------
New Limited -
Asset Index Money Internatiol America Equity Term
Growth Manager 500 Market Bond Stock Growth Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Reinvested dividends and capital
gain distributions $50,482 $30,416 $15,604 $8,123 $31,760 $15,596 $14,802 $18,036 $7,624
Mortalilty risk charges and expenses (Note 2) (10,764) (6,964) (5,344) (2,354) (4,782) (9,746) (6,591) (7,018) (1,848)
-------- ------- -------- ------- -------- -------- -------- ------- -------
Net investment income 39,718 23,452 10,260 5,769 26,978 5,850 8,211 11,018 5,776
-------- ------- -------- ------- -------- -------- -------- ------- -------
Gains (losses) on investments:
Net realized gains (losses) 63,433 28,483 65,211 - (6,984) 74,996 94,845 85,226 (1,281)
Net change in unrealized gains (losses) (14,264) 9,046 (1,854) - (13,389) 5,222 (26,737) (10,984) (3,493)
-------- ------- -------- ------- -------- -------- -------- ------- -------
Net gains (losses) on investments 49,169 37,529 63,357 - (20,373) 80,218 68,108 74,242 (4,774)
-------- ------- -------- ------- -------- -------- -------- ------- -------
Changes in net assets resulting from operations $88,887 $60,981 $73,617 $5,769 $6,605 $86,068 $76,319 85,260 $1,002
======= ======= ========= ======= ======= ========= ========= ======= ======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
--------------------------------- ----------- ------------------------------------------------
Asset New Limited -
Manager Equity - America Personal Equity Term
Contrafund Growth Income International Growth Strategy Income International Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Reinvested dividends and
capital gain distributions $28,266 962,332 198,092 90,929 136,780 756,282 533,897 279,801 186,164
Mortalilty risk charges and
expenses (Note) (162,408) (128,204) (192,101) (108,767) (77,133) (119,454) (140,270) (130,949) (38,590)
-------- --------- --------- ---------- ------- ------- ---------- -------- -------
Net investment income (expense) (134,142) 834,128 5,991 (17,838) 59,647 636,828 393,627 148,852 147,574
-------- --------- --------- ---------- ------- ------- ---------- -------- -------
Gains (losses) on investments:
Net realized gains (losses) 853,257 26,270 66,968 142,614 270,938 71,841 139,631 211,865 (8,394)
Net change in unrealized
gains (losses) 2,043,475 1,113,958 1,952,736 931,966 501,079 849,854 1,630,152 998,543 7,327
-------- --------- --------- ---------- ------- ------- ---------- -------- -------
Net gains (losses)
on investments 2,896,732 1,140,228 2,019,704 1,074,580 772,017 921,695 1,769,783 1,210,408 (1,067)
-------- --------- --------- ---------- ------- ------- ---------- -------- -------
Changes in net assets resulting
from operations $2,762,590 1,974,356 2,025,695 1,056,742 831,664 1,558,523 2,163,410 1,359,260 146,507
========= ========= ========= ========= ======== ========= ========= ========= ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
------------------------------------------------------------------------------------
Alger Federated MFS
---------------------- ------------------- --------------------------------------
American U.S.
Small American Money Government World High Emerging
Capitalization Growth Market Securities IGovernment Income Research Growth
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Reinvested dividends and capital gain
distributions $32,685 209,881 648,902 383,899 - 540,303 256,668 208,228
Mortalilty risk charges and expenses
(Note 2) (122,787) (113,220) (168,920) (77,667) (59,094) (71,106) (95,561)(152,438)
--------- --------- --------- -------- -------- -------- ------ ---------
Net investment income (expense) (90,102) 96,661 479,982 306,232 (59,094) 469,197 161,107 55,790
--------- --------- --------- -------- -------- -------- ------ ---------
Gains (losses) on investments:
Net realized gains (losses) 74,642 14,309 - (49,646) (67,457) 152,606 214,289 774,322
Net change in unrealized gains (losses) (226,324) 829,801 - 73,418 391,014 75,136 1,023,212 (182,142)
--------- --------- --------- -------- -------- -------- ------ ---------
Net gains (losses) on investments (151,682) 844,110 - 23,772 323,557 227,742 1,237,501 592,180
--------- --------- --------- -------- -------- -------- ------ ---------
Changes in net assets resulting from
operations $ (241,784) 940,771 479,982 330,004 264,463 696,939 1,398,608 647,970
========== ======== ========= ======= ======== ======= ========= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Series I
---------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
------------------------------ ---------------------- -------------------------------------
New Limited -
Asset Index Money Internationl America Equity Term
1996 Growth Manager 500 Market Bond Stock Growth Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income (expense) $39,718 $23,452 $10,260 $ 5,769 $26,978 $ 5,850 $8,211 $11,018 $ 5,776
Net realized gains (losses) 63,433 28,483 65,211 - (6,984) 74,996 94,845 85,226 (1,281)
Net change in unrealized gains
(losses) (14,264) 9,046 (1,854) - (13,389) 5,222 (26,737) (10,984) (3,493)
-------- ------- -------- ------- ------- ------ -------- ------- -------
88,887 60,981 73,617 5,769 6,605 86,068 76,319 85,260 1,002
-------- ------- -------- ------- ------- ------ -------- ------- -------
From policyowner transactions:
Policy purchases 576,908 225,912 318,093 1,935,551 498,979 657,977 354,624 497,476 77,168
Policy withdrawals (519,798) (227,418) (354,611) (2,164,070) (478,603) (639,384) (343,889) (558,562)(182,180)
-------- ------- -------- ------- ------- ------ -------- ------- -------
57,110 (1,506) (36,518) (228,519) 20,376 18,593 10,735 (61,086 (105,012)
-------- ------- -------- ------- ------- ------ -------- ------- -------
Increase (decrease) in net assets 145,997 59,475 37,099 (222,750) 26,981 104,661 87,054 24,174 (104,010)
Net assets, beginning of year 717,058 442,745 355,507 245,555 376,897 676,199 410,094 523,290 194,398
-------- ------- -------- ------- ------- ------ -------- ------- -------
Net assets, end of year $863,055 $502,220 $392,606 $22,805 $403,878 $780,860 $497,148 $547,464 $90,388
======= ======== ======== ======== ========= ========= ========= ======== =======
Accumulation unit purchases 38,413 19,583 21,578 1,798,321 43,899 57,565 21,755 34,541 7,101
Accumulation unit withdrawals (35,107) (19,435) (23,865) (2,009,547) (42,051) (56,257) (21,106) (38,862) (16,690)
-------- ------- -------- ------- ------- ------ -------- ------- -------
Net increase (decrease) in units
outstanding 3,306 148 (2,287) (211,226) 1,848 1,308 649 (4,321) (9,589)
Units outstanding, beginning of year 51,568 39,609 25,921 231,966 32,410 62,496 27,420 38,350 17,648
-------- ------- -------- ------- ------- ------ -------- ------- -------
Units outstanding, end of year 54,874 39,757 23,634 20,740 34,258 63,804 28,069 34,029 8,059
======= ======== ======== ======== ========= ========= ========= ======== =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
--------------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
----------------------------------- ----------- ------------------------------------------------------
Asset New Limited -
Manager Equity - America Personal Equity Term
1996 (continued) Contrafund Growth Income International Growth Strategy Income International Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income
(expense) $(134,142) $834,128 $5,991 $(17,838) $59,647 $636,828 $393,627 $148,852 $147,574
Net realized gains (losses) 853,257 26,270 6,968 142,614 270,938 71,841 139,631 211,865 (8,394)
Net change in unrealized
gains (losses) 2,043,475 1,113,958 1,952,736 931,966 501,079 849,854 1,630,152 998,543 7,327
--------- ---------- --------- --------- -------- --------- --------- --------- --------
2,762,590 1,974,356 2,025,695 1,056,742 831,664 1,558,523 2,163,410 1,359,260 146,507
From policyowner transactions:
Policy purchases 28,902,535 18,900,374 28,928,271 17,755,845 14,607,377 20,255,902 23,732,206 20,749,014 6,350,319
Policy withdrawals (8,313,477) (1,021,094)(4,118,781) (4,546,528) (1,991,381) (1,540,617)(1,754,680)(3,224,170)(395,866)
--------- ---------- --------- --------- -------- --------- --------- --------- --------
20,589,058 17,879,280 24,809,490 13,209,317 12,615,996 18,715,285 21,977,526 17,524,844 5,954,453
--------- ---------- --------- --------- -------- --------- --------- --------- --------
Increase in net assets 23,351,648 19,853,636 26,835,185 14,266,059 13,447,660 20,273,808 24,140,936 18,884,104 6,100,960
Net assets, beginning of
year 1,764,825 2,248,364 2,709,086 1,053,579 766,014 1,389,344 1,417,800 1,916,743 580,948
--------- ---------- --------- --------- -------- --------- --------- --------- --------
Net assets, end of year 25,116,473 22,102,000 29,544,271 15,319,638 14,213,674 21,663,152 25,558,736 20,800,847 6,681,908
========= ========== ========= ========== ======= ========== ========= ========= =======
Accumulation unit purchases 2,289,226 1,547,210 2,376,936 1,580,078 997,035 1,722,222 1,892,614 1,853,967 616,757
Accumulation unit withdrawals (654,316) (91,746) (353,937) (409,650) (138,446) (142,292) (153,310) (298,582) (41,338)
--------- ---------- --------- --------- -------- --------- --------- --------- --------
Net increase in units
outstanding 1,634,910 1,455,464 2,022,999 1,170,428 858,589 1,579,930 1,739,304 1,555,385 575,419
Units outstanding,
beginning of year 150,364 199,570 233,679 99,029 58,666 123,287 121,994 181,399 56,018
--------- ---------- --------- --------- -------- --------- --------- --------- --------
Units outstanding, end
of year 1,785,274 1,655,034 2,256,678 1,269,457 917,255 1,703,217 1,861,286 1,736,784 631,437
========= ========== ========= ========== ======= ========== ========= ========= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
--------------------------------------------------------------------------------------------
Alger Federated MFS
----------------------- -------------------------------------------------------------------
American U.S.
Small American Money Government World High Emerging
1996 (continued) Capitalization Growth Market Securities II Government Income Research Growth
<S> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income (expense) $(90,102) 96,661 479,982 306,232 (59,094) 469,197 161,107 55,790
Net realized gains (losses) 74,642 14,309 - (49,646) (67,457) 152,606 214,289 774,322
Net change in unrealized gains
(losses) (226,324) 829,801 - 73,418 391,014 75,136 1,023,212 (182,142)
-------- -------- -------- -------- ------- ------- --------- ----------
(241,784) 940,771 479,982 330,004 264,463 696,939 1,398,608 647,970
-------- -------- -------- -------- ------- ------- --------- ----------
From policyowner transactions:
Policy purchases 18,653,051 16,379,038 95,951,854 12,639,198 9,995,281 2,970,271 17,476,610 33,768,862
Policy withdrawals (1,858,776)(1,198,863) (76,778,825) (1,983,287) (2,208,387(4,658,885)(1,822,076)(10,862,876)
-------- -------- -------- -------- ------- ------- --------- ----------
16,794,275 15,180,175 19,173,029 10,655,911 7,786,895 8,311,386 15,654,534 22,905,986
-------- -------- -------- -------- ------- ------- --------- ----------
Increase in net assets 16,552,491 16,120,946 19,653,011 10,985,915 8,051,358 9,008,325 17,053,142 23,553,956
Net assets, beginning of year 1,798,070 1,644,656 3,136,025 1,294,052 577,616 913,288 1,287,154 1,439,514
-------- -------- -------- -------- ------- ------- --------- ----------
Net assets, end of year $18,350,561 17,765,602 22,789,036 12,279,967 8,628,974 9,921,613 18,340,296 24,993,470
========== ========== ========== ========== ========== ========= ========== ==========
Accumulation unit purchases 1,481,303 1,325,942 92,414,020 1,201,567 987,874 1,205,897 1,423,099 2,557,929
Accumulation unit withdrawals (155,866) (107,957) (73,953,800) (195,468) (224,581) (433,914) (158,948) (827,244)
-------- -------- -------- -------- ------- ------- --------- ----------
Net increase in units outstanding 1,325,437 1,217,985 18,460,220 1,006,099 763,293 771,983 1,264,151 1,730,685
Units outstanding, beginning of year 148,670 140,897 3,065,603 122,440 56,393 87,378 117,165 123,460
-------- -------- -------- -------- ------- ------- --------- ----------
Units outstanding, end of year 1,474,107 1,358,882 21,525,823 1,128,539 819,686 859,361 1,381,316 1,854,145
========== ========== ========== ========== ========== ========= ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
- -----------------------------------------------------------------------------------------------------------------------------
Series I
----------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
----------------------------- --------------------- ---------------------------------------
New Limited -
Asset Index Money InternationAmerica Equity Term
1995 Growth Manager 500 Market Bond Stock Growth Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income
(expense) $(6,032) (2,973) (2,481) 6,971 12,29 (5,329) (3,237) 10,060 7,302
Net realized gains (losses) 51,335 6,107 7,221 - 8,672 14,204 20,051 23,083 (266)
Net change in unrealized
gains (losses) 55,541 46,256 49,539 - 18,311 46,323 74,806 53,984 3,769
------- ------- -------- -------- -------- ------- ------ ------- ------
100,844 49,390 54,279 6,971 39,281 55,198 91,620 87,127 10,805
------- ------- -------- -------- -------- ------- ------ ------- ------
From policyowner transactions
Policy purchases 812,170 444,084 340,669 1,687,720 507,554 779,041 400,288 628,482 230,791
Policy withdrawals (209,820) (69,970) (40,455) (1,584,587) (170,937) (183,337) (87,850) (203,293) (78,201)
------- ------- -------- -------- -------- ------- ------ ------- ------
602,350 374,114 300,214 103,133 336,617 595,704 312,438 425,189 152,590
------- ------- -------- -------- -------- ------- ------ ------- ------
Increase in net assets 703,194 423,504 354,493 110,104 375,898 650,902 404,058 512,316 163,395
Net assets, beginning
of year 13,864 19,241 1,014 135,451 999 25,297 6,036 10,974 31,003
------- ------- -------- -------- -------- ------- ------ ------- ------
Net assets, end of year $ 717,058 442,745 355,507 245,555 376,897 676,199 410,094 523,290 194,398
======= ======== ======== ========= ======= ========= ======== ========= =======
Accumulation unit purchases 65,591 44,206 29,101 1,634,827 47,785 77,911 33,546 53,879 22,142
------- ------- -------- -------- -------- ------- ------ ------- ------
Net increase in units
outstanding 50,239 37,625 25,824 98,759 32,308 59,931 26,817 37,280 14,596
Units outstanding,
beginning of year 1,329 1,984 97 133,207 102 2,565 603 1,070 3,052
------- ------- -------- -------- -------- ------- ------ ------- ------
Units outstanding, end of year 51,568 39,609 25,921 231,966 32,410 62,496 27,420 38,350 17,648
======= ======== ======== ========= ======= ========= ======== ========= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
-------------------------------- ----------- -------------------------------------------------
Asset New Limited -
Manager Equity - America Personal Equity Term
1995 (continued) Contrafund Growth Income International Growth Strategy Income International Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income (expense) $17,612 82,490 8,528 (1,943) (1,535) 10,358 10,791 (3,098) 3,597
Net realized gains (losses) 648 (6,780) 3,329 1,297 6,022 1,657 182 630 45
Net change in unrealized
gains (losses) (1,473) (41,397) 76,808 13,735 27,218 33,601 57,494 50,212 3,922
------- -------- ------ -------- ------- ------- ------- ------- -------
16,787 34,313 88,665 13,089 31,705 45,616 68,467 47,744 7,564
------- -------- ------ -------- ------- ------- ------- ------- -------
From policyowner transactions:
Policy purchases 1,829,379 2,534,948 2,725,552 1,109,625 850,222 1,381,006 1,355,232 1,931,038 591,784
Policy withdrawals (81,341) (320,897) (105,131) (69,135) (115,913) (37,278) (5,899) (62,039)(18,400)
------- -------- ------ -------- ------- ------- ------- ------- -------
1,748,038 2,214,051 2,620,421 1,040,490 734,309 1,343,728 1,349,333 1,868,999 573,384
------- -------- ------ -------- ------- ------- ------- ------- -------
Increase in net assets 1,764,825 2,248,364 2,709,086 1,053,579 766,014 1,389,344 1,417,800 1,916,743 580,948
Net assets, beginning of year - - - - - - - - -
------- -------- ------ -------- ------- ------- ------- ------- -------
Net assets, end of year $1,764,825 2,248,364 2,709,086 1,053,579 766,014 1,389,344 1,417,800 1,916,743 580,948
========= ========= ========= =========== ======= ========= ========= ========= ========
Accumulation unit purchases 157,743 229,399 243,665 105,654 68,110 126,843 122,813 187,685 57,913
Accumulation unit withdrawals (7,379) (29,829) (9,986) (6,625) (9,444) (3,556) (819) (6,286) (1,895)
------- -------- ------ -------- ------- ------- ------- ------- -------
Net increase in units outstanding 150,364 199,570 233,679 99,029 58,666 123,287 121,994 181,399 56,018
Units outstanding, beginning of year - - - - - - - - -
------- -------- ------ -------- ------- ------- ------- ------- -------
Units outstanding, end of year 150,364 199,570 233,679 99,029 58,666 123,287 121,994 181,399 56,018
========= ========= ========= =========== ======= ========= ========= ========= ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Series V
----------------------------------------------------------------------------------------
Alger Federated MFS
----------------------- ---------------------------------------------------------------
American U.S.
Small American Money Government World High Emerging
1995 (continued) Capitalization Growth Market Securities II Government Income Research Growth
<S> <C> <C> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income (expense) $(2,598) (2,794) 19,437 10,808 48,304 18,284 16,825 35,768
Net realized gains (losses) (6,715) 776 - 750 1,664 2,898 827 6,101
Net change in unrealized gains (losses) (15,784) (4,802) - 11,708 (41,961) (6,035) 23,697 16,938
--------- -------- ------- -------- -------- ------- ------ -------
(25,097) (6,820) 19,437 23,266 8,007 15,147 41,349 58,807
--------- -------- ------- -------- -------- ------- ------ -------
From policyowner transactions:
Policy purchases 1,978,407 1,795,154 6,534,133 1,343,005 654,040 988,556 1,257,919 1,515,369
Policy withdrawals (155,240) (143,678) (3,417,545) (72,219) (84,431) (90,415) (12,114) (134,662)
--------- -------- ------- -------- -------- ------- ------ -------
1,823,167 1,651,476 3,116,588 1,270,786 569,609 898,141 1,245,805 1,380,707
--------- -------- ------- -------- -------- ------- ------ -------
Increase in net assets 1,798,070 1,644,656 3,136,025 1,294,052 577,616 913,288 1,287,154 1,439,514
Net assets, beginning of year - - - - - - - -
--------- -------- ------- -------- -------- ------- ------ -------
Net assets, end of year 1,798,070 1,644,656 3,136,025 1,294,052 577,616 913,288 1,287,154 1,439,514
========= =========== ======== ========= ======= ======= ========= =========
Accumulation unit purchases 161,350 153,249 6,430,464 129,643 64,841 96,273 118,459 136,247
Accumulation unit withdrawals (12,680) (12,352) (3,364,861) (7,203) (8,448) (8,895) (1,294) (12,787)
--------- -------- ------- -------- -------- ------- ------ -------
Net increase in units outstanding 148,670 140,897 3,065,603 122,440 56,393 87,378 117,165 123,460
Units outstanding, beginning of year - - - - - - - -
--------- -------- ------- -------- -------- ------- ------ -------
Units outstanding, end of year 148,670 140,897 3,065,603 122,440 56,393 87,378 117,165 123,460
========= =========== ======== ========= ======= ======= ========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
United of Omaha Separate Account C (the Separate Account) was established
by United of Omaha Life Insurance Company (United of Omaha) on December 1,
1993, under procedures established by Nebraska law, and is registered as a
unit investment trust under the Investment Company Act of 1940, as amended.
The Separate Account is a segregated investment account of United of Omaha.
It is divided into subaccounts, each of which invests exclusively in shares
of a corresponding mutual fund portfolio. The available portfolios are:
SERIES I
FIDELITY T. ROWE PRICE
VIP Growth International Stock
VIP II Asset Manager New America Growth
VIP II Index 500 Equity Income
Limited-Term Bond
SCUDDER
Money Market
Bond
SERIES V
FIDELITY ALGER
Contrafund Portfolio American Small Capitalization Portfolio
Asset Manager: Growth Portfolio American Growth Portfolio
Equity-Income Portfolio
SCUDDER FEDERATED
International Portfolio Prime Money Fund II ("Money Market")
Portfolio
Fund for U.S. Government Securities
II Portfolio
T. ROWE PRICE MFS
New America Growth Portfolio World Government Portfolio
Personal Strategy Balanced Portfolio High Income Fund Portfolio
Equity Income Portfolio Research Portfolio
International Portfolio Emerging Growth Portfolio
Limited-Term Bond Portfolio
SECURITY VALUATION AND RELATED INVESTMENT INCOME - The market value of
investments is based on year end closing bid prices. Investment
transactions are accounted for on the trade date (date the order to buy or
sell is executed) and dividend income is recorded on the ex-dividend date.
FEDERAL INCOME TAXES - Operations of the Separate Account are part of, and
are taxed with, the operations of United of Omaha, which is taxed as a
"life insurance company" under the Internal Revenue Code.
RECLASSIFICATIONS - Certain reclassifications have been made to prior year
amounts to conform with current year presentation.
2. ACCOUNT CHARGES
United of Omaha deducts a daily charge as compensation for the mortality
and expense risks assumed by United of Omaha. The charge is equal on an
annual basis to a percentage of the average daily net assets of each
subaccount. United of Omaha guarantees that the mortality and expense
charge shall not increase. The percentages are:
Series I 1.25%
Series V 1.00%
United of Omaha may incur premium taxes relating to the policies. United of
Omaha will deduct a charge for any premium taxes related to a particular
policy at the time of purchase payments, upon surrender, upon death of any
owner, or at the annuity start date.
No charges are currently deducted from the Separate Account for federal or
state income taxes, since none are currently imposed. Should such taxes be
imposed in the future, United of Omaha may make deductions from the
Separate Account to pay such taxes.
United of Omaha deducts a daily administrative expense charge from the net
assets of the Separate Account. The nominal annual rate is a percentage of
the net asset value of each subaccount as follows:
Series I .15%
Series V .20%
There is also an annual policy fee of $30 that is deducted from the
accumulation value on the last valuation date of each policy year or at
complete surrender. The annual policy fee is waived if the accumulation
value is greater than $50,000 on the last valuation date of the applicable
policy year. The annual policy fee shall not increase.
On the Series V products, the policyowner has the option to purchase the
enhanced death benefit. A charge equal to the annual rate of .35% of the
average death benefit amount will be assessed on each policy anniversary or
pro rata upon full surrender.
A withdrawal charge will be assessed on withdrawals in excess of a
percentage of the participant's accumulation value as of the last contract
anniversary preceding the request for the withdrawal. The allowable
withdrawal percentage is as follows:
Series I 10%
Series V 15%
The amount of the charge will depend upon the period of time elapsed since
the purchase payment (first-in, first-out arrangement) was made, as
follows:
CHARGE ON WITHDRAWAL
EXCEEDING
PURCHASE PAYMENT YEAR ALLOWABLE AMOUNT
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
There is no charge for the first 12 transfers between subaccounts of the
Separate Account in each policy year. However, there is a $10 fee for the
13th and each subsequent request during a single policy year. Any
applicable transfer fee is deducted from the amount transferred. All
transfer requests made simultaneously will be treated as a single request.
No transfer fee will be imposed for any transfer which is not at the
policyowner's request. The transfer fee will not increase.
3. NET ASSETS
Total net assets (policyowners' cumulative investment accounts) consist of
the following at December 31, 1996:
<TABLE>
<CAPTION>
Series I
------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
------------------------------ --------------------- -----------------------------------------
New Limited -
Asset Index Money International America Equity Term
Growth Manager 500 Market Bond Stock Growth Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares purchased $1,402,565 689,609 659,762 3,758,544 1,007,534 1,462,813 760,684 1,136,963 338,959
Shares sold (746,629)(308,572) (403,200) (3,753,430) (658,089) (838,339) (441,645) (773,346) (264,374)
Reinvested dividends and
capital gains distributions 50,662 31,629 15,905 17,691 47,847 16,083 14,869 32,689 17,753
Net realized gains (losses) 114,768 34,590 72,432 - 1,688 89,200 114,896 108,310 (1,547)
Change in unrealized gains
(losses) 41,689 54,964 47,707 - 4,898 51,103 48,344 42,848 (403)
----------- ------- ------- ---------- --------- ---------- -------- -------- -------
Net assets $ 863,055 502,220 392,606 22,805 403,878 780,860 497,148 547,464 90,388
=====================================================================================================
Series V
----------------------------------------------------------------------------------------------------------
Fidelity Scudder T. Rowe Price
----------------------------------- ------------ ---------------------------------------------------------
Asset New Limited -
Manager Equity - America Personal Equity Term
Contrafund Growth Income International Growth Strategy Income International Bond
Shares purchased $30,731,914 21,435,322 31,653,823 18,865,470 15,457,599 21,636,908 25,087,438 22,680,052 6,942,103
Shares sold (8,560,666)(1,475,408) (4,420,248) (4,726,373) (2,185,962) (1,700,088)(1,903,742) (3,420,256) (453,835)
Reinvested dividends
and capital gains
distributions 49,318 1,050,035 210,855 90,929 136,780 769,379 547,581 279,801 190,740
Net realized
gains (losses) 853,905 19,490 70,297 143,911 276,960 73,498 139,813 212,495 (8,349)
Change in unrealized
gains 2,042,002 1,072,561 2,029,544 945,701 528,297 883,455 1,687,646 1,048,755 11,249
----------------------------------------------------------------------------------------------------------
Net assets $25,116,473 22,102,000 29,544,271 15,319,638 14,213,674 21,663,152 25,558,736 20,800,847 6,681,908
=============================================================================================================
Series V
--------------------------------------------------------------------------------------------------
Alger Federated MFS
----------------------- ------------------------ ------------------------------------------------
American U.S.
Small American Money Government World High Emerging
Capitalization Growth Market Securities II Government Income Research Growth
Shares purchased $20,631,458 18,174,192 102,485,987 13,982,203 10,649,322 13,958,827 18,734,529 35,284,231
Shares sold (2,139,401) (1,458,555) (80,371,179)(2,135,387) (2,352,776)(4,821,690) (1,931,478) (11,152,213)
Reinvested dividends
and capital
gains distributions 32,685 209,881 674,228 396,921 49,168 559,871 275,220 246,233
Net realized gains (losses) 67,927 15,085 - (48,896) (65,793) 155,504 215,116 780,423
Change in unrealized gains
(losses) (242,108) 824,999 22 85,126 349,053 69,101 1,046,909 (165,204)
------------ --------- ------------ --------- ----------- --------- ----------- ------------
Net assets $18,350,561 17,765,602 22,789,058 12,279,967 8,628,974 9,921,613 18,340,296 24,993,470
=====================================================================================================
Gross unrealized gains on investments aggregated $12,915,951 and $662,936 at December 31, 1996 and 1995, respectively, and gross
unrealized losses on investments aggregated $407,715 at December 31, 1996.
</TABLE>
<PAGE>
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
All required financial statements are included in Part B of this
Registration Statement.
(b) Exhibits: The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
(1) (a) Resolution of the Board of Directors establishing the Variable
Account.
(2) Not applicable.
(3) (a) Principal Underwriter Agreement by and between United, on
its own behalf and on behalf of the Variable Account, and Mutual
of Omaha Investor Services.
(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between Mutual of Omaha Investor Services, Inc. and the Broker/
Dealer.
(4) (a) Form of Policy for the SERIES V variable annuity Policy.
(b) Form of Riders to the Policy.
(5) Form of Application to the Policy.
(6) (a) Articles of Incorporation of United of Omaha Life Insurance
Company.
(b) Bylaws of United of Omaha Life Insurance Company.
(7) Not applicable.
(8) (a) Participation Agreement with the Alger American Fund
(b) Participation Agreement with the Insurance Management Series
(c) Participation Agreement with the Fidelity VIP Fund and Fidelity
VIP Fund II.
(d) Participation Agreement with the MFS Variable Insurance Trust.
(e) Participation Agreement with the Pioneer Variable Contracts
Trust.
(f) Participation Agreement with the Scudder Variable Life
Investment Fund.
(g) Participation Agreement with T. Rowe Price International
Series, T. Rowe Price Fixed Income Series, and T. Rowe Price
Equity Series.
(h) Administrative Services Agreement with Vantage Computer Systems.
(9) Opinion and Consent of Counsel.
(10) Consents of Independent Auditors
(11) Not applicable.
(12) Not applicable.
(13) Schedules of Computation of Performance Data.
(14) Powers of Attorney.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Our Directors and senior officers* are:
DIRECTORS
Foggie, Samuel L. Banking and Finance Industry Executive
Plunkett III, Hugh V. Attorney (Plunkett, Schwartz & Petersen)
Sampson, Richard J. Retired Group Insurance Executive (Mutual of Omaha
Insurance Company)
Skutt, Thomas J. Chairman of the Board (Mutual of Omaha Insurance Company)
Straus, Oscar S. Investments; President, The Daniel and Florence Guggenheim
Foundation
Sturgeon, John A. President and General Comptroller
Wayne, Michael A. Foundation and Cance Institute Executive
Weekly, John W. Vice Chairman of the Board, Chief Executive Officer
(Mutual of Omaha Insurance Company)
OFFICERS*
Thomas J. Skutt Chairman of the Board
John W. Weekly Vice Chairman of the Board, Chief Executive Officer
G. Ronald Ames Executive Vice President (Acquisitions)
Robert B. Bogart Executive Vice President (Human Resources)
Stephen R. Booma Executive Vice President (Managed Care)
Cecil D. Bykerk Executive Vice President (Chief Actuary)
James L. Hanson Executive Vice President (Information Services)
Lawrence F. Harr Executive Vice President (Executive Counsel)
Randall C. Horn Executive Vice President (Group Insurance)
M. Jane Huerter Executive Vice President (Corporate Secretary; Federal
Legislative Issues; Public Affairs)
Ernest B. Johnston Executive Vice President (Underwriting; Customer Service)
John L. Maginn Executive Vice President (Treasurer; Chief Investment
Officer)
Thomas J. McCusker Executive Vice President (General Counsel)
Thomas T. Sawicz Executive Vice President (Sales and Marketing)
John A. Sturgeon Executive Vice President (General Comptroller)
*Business address for all directors and officers is Mutual of Omaha
Plaza, Omaha, Nebraska 68175.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT
<TABLE>
<CAPTION>
NAME OF CORPORATION (WHERE ORGANIZED) TYPE OF CORPORATION
<S> <C>
Mutual of Omaha Insurance Company (NE) Accident & Health Insurance
KFS Corporation (NE) Holding corporation
Kirkpatrick, Pettis, Smith, Polian Inc. (NE) Registered broker-dealer & investment advisor
KPM Investment Management, Inc. (NE) Investment advisor
Kirkpatrick Pettis Trust Company (NE) Trust company
Mutual of Omaha Health Plans, Inc. (NE) Holding corporation
Exclusive Healthcare, Inc. (NE) HMO
Mutual of Omaha of Colorado, Inc. (CO) (50%) HMO
Mutual of Omaha Health Plans of Lincoln, Inc.(NE) Staff Model HMO
Preferred HealthAlliance, Inc. (NE) (51%) Joint venture w/physician &
hospital organization
Mutual of Omaha Dental Plans of Nebraska, Inc. (NE) Limited pre-paid DHMO
Mutual of Omaha Dental Plans of Nevada, Inc. (NV) Limited pre-paid DHMO
Mutual of Omaha Health Plans of Indiana, Inc. (IN) HMO
Mutual of Omaha Health Plans of Ohio, Inc. (OH) HMO
Mutual of Omaha of South Dakota & Community Health
Plus HMO, Inc. (SD) HMO
Mutual of Omaha Tri-State Health Plans, Inc. (TN) HMO
Mutual of Omaha Holdings, Inc. (NE) Holding corporation
Mutual Asset Management Co. (NE) Asset management services
Mutual of Omaha Investor Services, Inc. (NE) Registered securities Broker-Dealer
Mutual of Omaha Marketing Corporation (NE) Markets health insurance
Omex Realty, Inc. (NE) Real estate investments
TWCO, Inc. (NE) Markets water purification products
UB Realty, Inc. (NE) Real estate investments
Mutual of Omaha U.K. Limited (U.K.) Insurance in United Kingdom (inactive)
The Omaha Indemnity Company (WI) Property & casualty insurance (no new business
since 1986)
Omaha Property and Casualty Insurance Company (NE) Property & casualty insurance
Adjustment Services, Inc. (NE) Claims adjusting services
Tele-Trip Company, Inc. (DE) Markets travel/flight insurance in airports
United of Omaha Life Insurance Company (NE) Life, H&A insurance/annuities
Companion Life Insurance Company (NY) Life insurance/annuities
Mutual of Omaha Structured Settlement Company, Inc. (CT) Structured settlements
Mutual of Omaha Structure Settlement Company of
New York, Inc. (NY) Structured settlements
United World Life Insurance Company (NE) Accident & health and life insurance
United Properties Co. (CA) (50%) Real estate general partnership
*Subsidiaries of subsidiaries are indicated by indentations.
</TABLE>
ITEM 27. NUMBER OF POLICYOWNERS
As of December 31, 1996, there were 6026 Owners of the Policies.
ITEM 28. INDEMNIFICATION
The Nebraska Business Corporation Act (Section 21-2004(15)) provides for
permissive indemnification in certain situations, mandatory indemnification in
other situations, and prohibits indemnification in certain situations. The
Nevada Business Corporation Act also specifies procedures for determining when
indemnification payments can be made.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
United of Omaha pursuant to the foregoing provisions, or otherwise, United of
Omaha 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 the payment by United of Omaha of expenses
incurred or paid by a director, officer or controlling person in connection with
the securities being registered), United of Omaha will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue. With respect to indemnification, Section XI of
United of Omaha's Articles of Incorporation provides as follows:
An outside director of the Company shall not be personally liable
in the Company on its Stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for: (i) any act or
omission not in good faith which involves intentional misconduct or a
knowing violation of the law; (ii) any transaction from which the outside
director derived an improper direct or indirect financial benefit; (iii)
paying or approving a dividend which is in violation of Nebraska law; (v)
any act or omission which violates a declaratory or injunctive order
obtained by the Company or its Stockholders; and (v) any act or omission
occurring prior to the effective date of the amendments to the Articles of
Incorporation of the Company incorporating this ARTICLE XI.
For purposes of this ARTICLE XI, an outside director shall mean a
member of the Board of Directors who is not an officer or a person who may
control the conduct of the Company through management agreements, voting
trusts, directorships in related corporations, or any other device or
relationship.
If the Nebraska Business Corporation Act is amended after
approval by the Stockholders of this ARTICLE XI to authorize corporate
action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Company shall be
eliminated or limited to the fullest extent permitted by the Nebraska
Business Corporation Act as so amended.
Any repeal or modification of the foregoing ARTICLE XI by the
Stockholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such
repeal or modification.
Article VII of United of Omaha's Bylaws provides as follows:
Any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such
person then is or was a director, officer, employee, or agent of the
Company (or is or was serving at the request of the Company in any such
capacity for an other legal entity or enterprise, shall be indemnified by
the Company against expense, judgements, fines, and amounts paid in
settlement to the full extent that such persons are permitted to be
indemnified by the laws of the State of Nebraska as in effect as of any
date of determination. The provisions of this Article shall not adversely
affect any right to indemnification which any person may have apart from
the provisions of this Article.
ITEM 29. PRINCIPAL UNDERWRITER
(a) In addition to Registrant, Mutual of Omaha Investor Services is the
Principal Underwriter for policies offered by Companion Life Insurance Company
through Companion Life Separate Account C.
(b) The directors and officers of Mutual of Omaha Investor Services, Inc.
(principal address: Mutual of Omaha Plaza, Omaha, Nebraska 68175) are as
follows:
NAME TITLE
Richard A. Witt President, Director
William J. Bluvas Vice President, Finance and Treasurer
M. Jane Huerter Secretary and Director
Scott C. Hoyt Assistant Secretary
Michael F. Gentile Vice President, Operations
Linda K. Augustyn Vice President, Investor Relations and
Communications
Lawrence F. Harr Director
John L. Maginn Director
Thomas T. Sawicz Director
John W. Weekly Chairman, Director
(c) Mutual of Omaha Investor Services, Inc. ("MOIS") is the principal
underwriter of the Policies. Commissions payable to a broker-dealer will be up
to 7.5% of Purchase Payments. For the fiscal year ended December 31, 1996,
United of Omaha paid $??? in total compensation to MOIS; of this amount MOIS
retained $??? as concessions for its services as Principal Underwriter and for
distribution concessions, with the remaining amount paid to other
broker-dealers.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder,
are maintained by United of Omaha Life Insurance Company at Mutual of Omaha
Plaza, Omaha, Nebraska 68175.
ITEM 31. MANAGEMENT SERVICES.
All management policies are discussed in Part A or Part B of this
registration statement.
ITEM 32. UNDERTAKINGS
(a)Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement are never
more than 16 months old for so long as Purchase Payments under the Policy may be
accepted.
(b)Registrant undertakes that it will include either (i) a postcard
or similar written communication affixed to or included in the Prospectus that
the applicant can remove to send for a Statement of Additional Information or
(ii) a space in the Policy application that an applicant can check to request a
Statement of Additional Information.
(c)Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request to United of Omaha at the
address or phone number listed in the Prospectus.
(d) Registrant represents that the fees and charges under the
Policy, in the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by Registrant.
SECTION 403(B) REPRESENTATIONS
United of Omaha represents that it is relying on a no-action letter
dated November 28, 1988, to the American Council of Life Insurance (Ref. No.
IP-6-88), regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment
Company Act of 1940, in connection with redeemability restrictions on Section
403(b) Policies, and that paragraphs numbered (1) through (4) of that letter
will be complied with.
STATEMENT PURSUANT TO RULE 6C-7: TEXAS OPTIONAL RETIREMENT PROGRAM
United of Omaha and the Variable Account rely on 17 C.F.R. ss. 270.6c-7,
and represent that the provisions of that Rule have been or will be complied
with.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets all of the requirements for the
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1993 and has caused this Posteffective Amendment No. 2 to the
Registration Statement to be signed on its behalf, in the City of Omaha and
State of Nebraska, on this 23rd day of April, 1997.
UNITED OF OMAHA SEPARATE ACCOUNT C
UNITED OF OMAHA LIFE INSURANCE COMPANY
Depositor
/s/ Kenneth W. Reitz
---------------------------------------
By: Kenneth W. Reitz
First Vice President & Counsel
As required by the Securities Act of 1933, this Preeffective Amendment
No. 3 to the Registration Statement has been signed by the following persons in
the capacities and on the duties indicated.
SIGNATURES TITLE DATE
/s/ Thomas J. Skutt
by__________________________* Chairman of the Board 4/23/1997
Thomas J. Skutt
/s/ John W. Weekly
by__________________________* Vice-Chairman of the Board, 4/23/1997
John W. Weekly Chief Executive Officer
/s/ John A. Sturgeon
by__________________________* President and General 4/23/1997
John A. Sturgeon Comptroller, Director
(Principal Financial
Officer and Principal
Accounting Officer)
/s/ Samuel L. Foggie
by__________________________* Director 4/23/1997
Samuel L. Foggie
/s/ Hugh V. Plunkett, III
by__________________________ Director 4/23/1997
Hugh V. Plunkett, III
/s/ Richard J. Sampson
by__________________________* Director 4/23/1997
Richard J. Sampson
/s/ Oscar S. Straus
by__________________________* Director 4/23/1997
Oscar S. Straus
by__________________________ Director
Michael A. Wayne
* Signed by Kenneth W. Reitz under Powers of Attorney executed on May 22 and
23 and June 1, 1995.
- --------------------------------------------------------------------------------
EXHIBIT (1) (A): RESOLUTION OF THE BOARD OF DIRECTORS ESTABLISHING THE
VARIABLE ACCOUNT
- --------------------------------------------------------------------------------
RESOLUTION OF THE BOARD OF DIRECTORS
UNITED OF OMAHA LIFE INSURANCE COMPANY
DECEMBER 1, 1993
WHEREAS, at its April 28, 1970 meeting, the Board of Directors of United
of Omaha Life Insurance Company (the "Company"), then known as United
Benefit Life Insurance Company, authorized establishment of a United
Benefit Variable Fund B as a separate account under Nebraska statutes,
and later amended such authorization at its April 26, 1977 meeting, and,
at its October 15, 1982 meeting, the Board authorized the liquidation of
said separate account and said separate account was liquidated in the
year 1983; and
WHEREAS, at its February 10, 1978 meeting, the Board of Directors of
United of Omaha Life Insurance Company (the "Company"), then known as
United Benefit Life Insurance Company, authorized establishment of a
United Benefit Variable Account C as a separate account under Nebraska
statutes, but said separate account was never established; now
therefore,
BE IT RESOLVED, That the Board of Directors of the Company hereby
establishes separate accounts, pursuant to Nebraska Revised Statutes
Sections 44-2221 and 44-402.01 (1991) and any other applicable statute
and the regulations thereunder, designated "United of Omaha Separate
Account B" and "United of Omaha Separate Account C" (hereinafter
"Variable Accounts") for the following use and purposes, and subject to
such conditions as hereinafter set forth; and
FURTHER RESOLVED, That the Variable Accounts are established for the
purpose of providing for the issuance by the Company of certain variable
annuity contracts ("Contracts"), and shall constitute a funding medium
to support reserves under such Contracts issued by the Company; and
FURTHER RESOLVED, That the Variable Accounts shall not be chargeable
with any liabilities arising out of any other separate investment
account or any other business of the Company which has no specific and
determinable relation to or dependence upon the Variable Accounts, and
FURTHER RESOLVED, That any surplus or deficit which may arise in the
Variable Accounts by virtue of mortality experience guaranteed by the
Company or by expense costs shall be adjusted by withdrawals from or
additions to the Variable Accounts so that the assets of the Variable
Accounts equal the liabilities; and
FURTHER RESOLVED, That the income, gains and losses, realized or
unrealized, from assets allocated to the Variable Accounts shall be
credited to or charged against the Variable Accounts without regard to
other income, gains, or losses of the Company; and
FURTHER RESOLVED, That the Variable Accounts shall be divided into
investment subaccounts, each investment subaccount in the Variable
Accounts shall invest in the shares of a mutual fund portfolio or other
investment medium designated on the schedule page of the Contract, and
net premiums under the Contracts shall be allocated to the eligible
portfolios in accordance with instructions received from owners of the
Contracts; and
FURTHER RESOLVED, That the income, gains and losses, realized or
unrealized, from assets allocated to an investment subaccount shall be
credited to or charged against that investment subaccount, without
regard to other income, gains, or losses of any other investment
subaccount; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to add or remove any investment
subaccount of the Variable Accounts and to substitute one designated
mutual fund or other investment medium for another as they may hereafter
deem necessary, advisable, or appropriate; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to invest such amount or amounts
of the Company's cash in the Variable Accounts or in any investment
subaccount thereof as may be deemed necessary, advisable, or appropriate
to facilitate the commencement of the Variable Accounts' operations
and/or to meet any minimum capital requirements under the Investment
Company Act of 1940 (the "1940 Act"); and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to transfer cash from time to time
between the Company's general account and the Variable Accounts as
deemed necessary, advisable, or appropriate and consistent with the
terms of the Contracts; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, authorized to change the designation of the Variable
Accounts hereafter to such other designation as they may deem necessary,
advisable, or appropriate; and
FURTHER RESOLVED, That the appropriate officers of the Company, with
such assistance from the Company's independent certified public
accountants, legal counsel and independent consultants or others as they
may require or deem appropriate, be, and they hereby are, severally
authorized and directed to take all action necessary, advisable, or
appropriate to: (a) register the Variable Accounts as unit investment
trusts under the 1940 Act; (b) register the Contracts in such amounts,
which may be indefinite amounts, as such officers of the Company shall
from time to time deem appropriate under the Securities Act of 1933 (the
"1933 Act"); and (c) take all other actions which are necessary,
advisable, or appropriate in connection with the offering of the
Contracts for sale and the operation of the Variable Accounts in order
to comply with the 1940 Act, the Securities Exchange Act of 1934, the
1933 Act, and other applicable federal laws, including the filing of any
amendments to registration statements, any periodic reports, any
undertakings, any no-action requests, and any applications (and any
amendments thereto) for exemptions from the 1940 Act or other applicable
federal laws as the appropriate officers of the Company shall deem
necessary, advisable, or appropriate; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized and empowered to prepare, execute
and cause to be filed with the Securities and Exchange Commission on
behalf of the Variable Accounts, and by the Company as sponsor and
depositor, Registration Statements on Form N-4 registering the Variable
Accounts as investment companies under the 1940 Act and the Contracts
under the 1933 Act, and any and all amendments to the foregoing on
behalf of the Variable Accounts and the Company and on behalf of and as
attorneys-in-fact for the principal executive officer and/or the
principal financial officer and/or the principal accounting officer
and/or any other officer or director of the Company; and
FURTHER RESOLVED, That Lawrence F. Harr, Senior Executive Vice President
and Chief Counsel of the Company, is duly appointed as agent for service
under any such registration statement, duly authorized to receive
communications and notices from the Securities and Exchange Commission
with respect thereto; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized on behalf of the Variable Accounts
and on behalf of the Company to take any and all action that each of
them may deem necessary, advisable, or appropriate in order to offer and
sell the Contracts, including any registrations, filings and
qualifications both of the Company, its officers, agents and employers,
and of the Contracts, under the insurance and securities laws of any of
the states of the United States of America or other jurisdictions, and
in connection therewith to prepare, execute, deliver and file all such
applications, reports, covenants, resolutions, applications for
exemptions (and amendments thereto), consents to service of process and
other papers and instruments as may be required under such laws, and to
take any and all further action which such officers or legal counsel of
the Company may deem necessary, desirable, or appropriate (including
entering into whatever agreements and contracts may be necessary,
desirable, or appropriate) in order to maintain such registrations or
qualifications for as long as the appropriate officers or legal counsel
deem it to be in the best interest of the Variable Accounts and the
Company; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to expend such monies as may be
advisable or appropriate with respect to the following:
(a) for the procurement of banking, custodial, consulting,
administrative, actuarial, accounting, legal or other such
services as the appropriate officers of the Company may
deem necessary, desirable or appropriate to carry out the
purposes of these Resolutions; (b) for the marketing and
distribution of Contracts; and (c) to provide whatever
capital is deemed necessary, advisable, or appropriate to
establish and maintain the Variable Accounts during its
initial period of operation; and
FURTHER RESOLVED, That the form of any resolutions required by any state
authority to be filed in connection with any of the documents or
instruments referred to in any of the preceding resolutions be, and the
same hereby are, adopted as if fully set forth herein if; (i) in the
opinion of the appropriate officers of the Company, the adoption of the
resolutions is advisable; and (ii) the Secretary or any Assistant
Secretary of the Company evidences such adoption by inserting into these
minutes copies of such resolutions; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized in the names and on behalf of the
Variable Accounts and the Company to execute and file irrevocable
written consents to service of process on the part of the Variable
Accounts and of the Company to be used in such jurisdictions wherein
such consents may be required under the insurance or securities laws
therein in connection with the registration or qualification of the
Variable Accounts and/or the Contracts and to appoint the appropriate
jurisdiction official, or such other person as may be allowed by
insurance or securities laws, agent of the Variable Accounts and of the
Company for the purpose of receiving and accepting process; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to establish procedures under
which the Company will provide voting rights for owners of the Contracts
with respect to securities owned by the Variable Accounts, and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to execute such agreement or
agreements as deemed necessary, advisable, or appropriate (i) with one
or more broker dealers or other qualified entities under which such
entities will act as distributor(s) for the Contracts, (ii) with one or
more qualified banks or other qualified entities to provide
administrative and/or custody services in connection with the
establishment and maintenance of the Variable Accounts and the design,
issuance, and administration of the Contracts, and (iii) with the
designated mutual funds or other investment media and/or the principal
underwriter and distributor of those funds or media for the purchase and
redemption of shares; and
FURTHER RESOLVED, That the appropriate officers of the Company be, and
they hereby are, severally authorized to execute and deliver such
agreements and other documents and do such acts and things as each of
them may deem necessary, desirable or appropriate to carry out the
foregoing resolutions and the intent and purposes thereof.
EXHIBIT (3) (A): PRINCIPAL UNDERWRITER AGREEMENT
PRINCIPAL UNDERWRITING AGREEMENT
UNITED OF OMAHA SEPARATE ACCOUNT C
PRINCIPAL UNDERWRITING AGREEMENT effective May 1, 1994, by and between UNITED OF
OMAHA LIFE INSURANCE COMPANY ("UNITED") on its own behalf and on behalf of
UNITED OF OMAHA SEPARATE ACCOUNT C ("ACCOUNT") and MUTUAL OF OMAHA INVESTOR
SERVICES, INC. ("UNDERWRITER").
WHEREAS:
o The ACCOUNT was established under authority of a resolution of
UNITED's Board of Directors on December 1, 1993, in order to set aside
and invest assets attributable to certain variable annuity contracts
("Contracts") issued by UNITED;
o UNITED has registered the ACCOUNT as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act") and has registered the
Contracts under the Securities Act of 1933;
o UNDERWRITER is registered as a broker-dealer with the Securities and
the Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD");
o UNITED and the ACCOUNT desire to have the Contract sold and
distributed through UNDERWRITER and UNDERWRITER is willing to sell and
distribute such Contracts under the terms stated herein; and
o UNDERWRITER desires to have UNITED perform certain services in
connection with the sale of the Contracts;
NOW, THEREFORE, the parties agree as follows:
A. UNDERWRITER APPOINTMENT. UNITED appoints UNDERWRITER, and UNDERWRITER
agrees to serve as, distributor and principal underwriter of the
Contracts during the term of this Agreement. UNDERWRITER will be under
no obligation to effectuate any particular amount of sales of
Contracts or to promote or to make sales, except to the extent that
UNITED deems advisable. UNDERWRITER shall be responsible for carrying
out its sales and underwriting obligations hereunder in continued
compliance with the NASD Rules of Fair Practice and federal and state
securities laws.
B. RETAIL BROKER-DEALER AGREEMENTS
B.1. UNITED authorizes UNDERWRITER to enter into separate written
agreements, on terms and conditions UNDERWRITER determines are not
inconsistent with this Agreement, with independent broker-dealers who
are registered as such under the 1934 Act and are members of the NASD,
and who agree to participate in the distribution of the Contracts and
to use their best efforts to solicit applications for the Contracts.
UNDERWRITER and UNITED may also enter into consulting and/or wholesale
agreements with other distributors to obtain assistance in locating
independent broker-dealers who are willing to enter into retail
broker-dealer agreements for the sale of Contracts.
B.2. Each retail broker-dealer agreement shall require that each retail
broker-dealer shall be responsible for carrying out its sales
obligations hereunder in compliance with the NASD Rules of Fair
Practice and federal and state securities laws, and specifically shall
be fully responsible for:
(a) ensuring that no person shall offer or sell the Contracts on the
retail broker-dealer's behalf until such person is duly registered as
a representative of such retail broker-dealer, duly appointed by
UNITED, and appropriately licensed, registered or otherwise qualified
to offer and sell such Contracts under the federal securities laws and
any applicable securities laws of each state or other jurisdiction in
which such Contracts may be lawfully sold, in which UNITED is licensed
to sell the Contracts and in which such person shall offer or sell the
Contracts (such persons hereinafter referred to as "Representatives");
and
(b) training, supervising, and controlling of all such persons for
purposes of complying on a continuous basis with the NASD Rules of
Fair Practice and with federal and state securities law requirements
applicable in connection with the offering and sale of the Contracts.
In this connection, the retail broker-dealer shall:
(1) conducts its training (including the preparation
and utilization of training materials) as in the
opinion of UNDERWRITER is necessary to accomplish
the purposes of this Agreement;
(2) establish and implement reasonable written
procedures for supervision of sales practices
of agents, representatives or brokers selling the
Contracts; and
(3) take reasonable steps to ensure that its associated
persons shall not make recommendations to an
applicant to purchase a contract and shall not sell
a Contract in the absence of reasonable grounds to
believe that the purchase of the Contract is
suitable for such applicant. Without limiting any
of the following, a determination of suitability
shall be based upon information furnished after
reasonable inquiry of the applicant concerning the
applicant's insurance and investment objectives,
financial situation and needs, and the likelihood
of whether the applicant will persist with the
Contact for such a period of time that UNITED's
acquisition costs are amortized over a reasonable
period of time. UNITED and UNDERWRITER will rely on
the signature of a principal of the retail
broker-dealer as evidence that the broker-dealer
has made a reasonable determination of suitability.
B.3. Each retail broker-dealer shall provide that the only information or
representations made concerning the Contracts are those contained in
the Registration Statement and prospectus filed with the SEC or are
contained in sales or promotional material approved by UNITED and
UNDERWRITER.
B.4. Applications for Contracts solicited by retail broker-dealers through
their Representatives shall be forwarded to UNITED. All payment for
Contracts shall be made payable to "United of Omaha Life Insurance
Company" and remitted promptly to UNITED as agent for UNDERWRITER.
B.5. Each broker-dealer who agrees to participate in the distribution of
the Contracts shall act as an independent contractor and nothing
herein shall constitute such broker-dealer or its agents or employees
as employees of UNDERWRITER or UNITED in connection with the sale of
Contracts.
B.6. UNITED shall apply for the proper insurance licenses in the
appropriate states or jurisdictions for the Representatives associated
with UNDERWRITER or with other independent retail broker-dealers which
have entered into agreements with UNDERWRITER for the sale of
Contracts, provided that UNITED reserves the right to refuse to
appoint any proposed Representative as an agent or broker, or to
terminate a Representative once appointed.
C. PROSPECTUSES AND PROMOTIONAL MATERIAL.
C.1. UNITED shall furnish UNDERWRITER with copies of all prospectuses,
financial statements and other documents and materials which
UNDERWRITER reasonably requests for use in connection with the
distribution of Contracts. UNITED shall have responsibility for the
preparation, filing and printing of all required prospectuses and/or
registration statements in connection with the marketing or sales of
the Contracts, and the payment of all related expenses. UNDERWRITER
will, at UNITED's sole expense, execute such papers and do such acts
and things that shall from time to time be reasonably requested by
UNITED for the purpose of maintaining the registration of the
Contracts under the 1933 Act and the Account under the 1940 Act, and
qualifying and maintaining qualification of the Contracts for sale
under the applicable laws of any state.
C.2. UNDERWRITER and UNITED shall cooperate fully in designing, drafting
and reviewing of sales promotion materials. UNDERWRITER shall only use
such materials that have been provided or approved by UNITED.
UNDERWRITER will make timely filings with the SEC, NASD and any other
securities regulatory authorities of any sales literature or materials
relating to the Account as required by law to be filed.
C.3. UNITED, on behalf of UNDERWRITER, will make timely filings with those
state securities regulatory authorities of any information related to
the Contracts as required by such state's Blue Sky laws in order to
qualify and maintain qualification of the Contracts for sale in such
state.
D. REPRESENTATIVES RECORDS. UNITED, on behalf of UNDERWRITER, shall have
the responsibility for maintaining the records of Representatives
licensed, registered or otherwise qualified to sell the Contracts.
E. OTHER RECORDS. UNITED agrees to maintain all required books of account
and related financial records on behalf of UNDERWRITER. All such books
of account and records shall be maintained and preserved pursuant to
1934 Act Rules 17a-3 and 17a-4 (or the corresponding provisions of any
future federal securities laws or regulations). All such books and
records shall be maintained by UNITED on behalf of and as agent for
UNDERWRITER whose property they are and shall remain for all purposes
and shall at all times be subject to reasonable periodic, special or
other examination by the SEC and all other regulatory bodies having
jurisdiction. UNITED also agrees to send to UNDERWRITER's customers
all required confirmations of customer transactions.
F. COMPENSATION.
F.1. As compensation for UNDERWRITER's assuming its distribution expenses
and performing the services to be assumed and performed by it pursuant
to this Agreement, UNDERWRITER shall receive from UNITED such amounts
and at such times as may from time to time be agreed upon in writing
by UNDERWRITER and UNITED.
F.2. UNITED will, on behalf of UNDERWRITER and on its account, in
connection with the sale of the Contracts, pay all amounts (including
the sales commissions described in the Prospectus for the Contracts)
due to Representatives or to those broker-dealers who have entered
into a standard form Retail Broker-Dealer Agreement with UNDERWRITER
and UNITED, and UNDERWRITER shall have no interest whatsoever in, nor
any obligation, to pay such accounts.
F.3. As compensation for its services performed and expenses incurred under
this Agreement, UNITED will receive all amounts charged as sales
charges under the Contracts. It is understood that UNITED assumes the
risk that the above compensation for its services may not prove
sufficient to cover its actual expenses in connection therewith.
G. INVESTIGATION AND PROCEEDINGS. UNDERWRITER and UNITED agree to
cooperate fully in any customer complaint, insurance regulatory
investigation or proceeding or judicial proceeding arising in
connection with the Contracts distributed under this Agreement.
UNDERWRITER and UNITED further agree to cooperate fully in any
securities regulatory inspection, inquiry, investigation or proceeding
or any judicial proceeding with respect to UNDERWRITER, UNITED, their
affiliates and their Representatives to the extent that such
inspection, inquiry, investigation or proceeding is in connection with
Contracts distributed under this Agreement. Such cooperation shall
include prompt notification to the other party of any customer
complaint or notice of any regulatory inspection, inquiry,
investigation or proceeding received in connection with any activity
in connection with any such Contract.
H. INDEMNIFICATION.
H.1. UNITED and UNDERWRITER each, as the indemnifying party, agree to
indemnify and hold harmless, as the indemnified party, the other and
the other's directors and officers against any and all losses, claims,
damages, liabilities (including amounts paid in settlement by the
indemnified party with the written consent of the indemnifying party)
or litigation (including reasonable legal expenses and expenses of
counsel chosen by the indemnified party and consented to by the
indemnifying party which consent shall not be unreasonably withheld
and other reasonable expenses), to which the indemnified party may
become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related
directly or indirectly to the sale or distribution of the Contracts
and:
(a) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the Registration
Statement, Prospectus, Contracts or sales literature for the Contracts
(or any amendment or supplement to any of the foregoing), for which
the indemnifying party is responsible or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact required to be stated therein, or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply if such statement or omission or such
alleged statement or omission was made in reliance upon and in
conformity with information furnished to the indemnifying party by the
indemnified party for use in the Registration Statement, Prospectus,
Contracts or sales literature for the Contracts (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts; or
(b) arise as the result of any failure by the indemnifying party to
provide the services and furnish the materials under the terms of this
Agreement; or
(c) arise out of or result from any material breach or representation
and/or warranty made by the indemnifying party in this Agreement or
arise out of or result from any other material breach of this
Agreement by the indemnifying party, as limited by and in accordance
with the provisions of Sections H.1(a) and H.1(b) hereof; or
(d) arise out of wrongful conduct of the indemnifying party or persons
under its control with respect to the Registration Statement,
Prospectus, materials furnished, or this Agreement.
H.2. The indemnifying party shall not be liable under this Indemnification
Provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against the indemnified party as such
may arise from the indemnified party's wilful misfeasance, bad faith,
or gross negligence in the performance of its duties or by reasons of
its reckless disregard, obligations or duties under this Agreement.
H.3. The indemnifying party shall not be liable under this Indemnification
Provision with respect to any claim made against the indemnified party
unless the indemnified party shall have notified the indemnifying
party in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim
shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any
designated agent), but failure to notify the indemnifying party of any
such claim shall not relieve the indemnifying party from any liability
which it may have to the indemnified party otherwise than on account
of this Indemnification Provision. In case any such action is brought
against the indemnified party, the indemnifying party shall be
entitled to participate at the indemnifying party's own expense, in
the defense of such action. The indemnifying party shall be entitled
to assume the defense thereof, at the indemnifying party's own cost
and expense, with counsel satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of the
election by the indemnifying party to assume the defense thereof, the
indemnified party shall bear the fees and expenses of any additional
counsel retained by it, and the indemnifying party will not be liable
to the indemnified party under this Agreement for any legal or other
expenses subsequently incurred by the indemnified party independently
in connection with the defense thereof other than reasonable costs of
investigation.
H.4. The indemnified party will promptly notify the indemnifying party of
the commencement of any litigation or proceedings against it in
connection with the issuance for sale of the Contracts.
I. TERMINATION. This Agreement may be terminated at any time by either
party upon 60 days written notice to the other party, without the
payment of any penalty. This Agreement shall terminate automatically
if it shall be assigned. Upon termination of this Agreement, all
authorizations, rights and obligations shall cease except the
obligation to settle accounts hereunder, including commissions on
premiums subsequently received for Contracts in effect at the time of
termination or issued pursuant to obligations received by UNITED prior
to termination, and the agreements contained in Section G, above.
J. REGULATION. This Agreement shall be subject to the provisions to the
1940 Act and the 1934 Act and the rules, regulations and rulings
thereunder and of the NASD, from time-to-time in effect, including
such exemptions from the 1940 Act as the SEC may grant, and the terms
hereof shall be interpreted and construed in accordance therewith.
Without limiting the generality of the foregoing, the term "assigned"
shall not include any transaction exempted from Section 15(b)(2) of
the 1940 Act.
UNDERWRITER shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Accounts, present or future, any
information, reports or other material which such body by reason of this
Agreement may request or require pursuant to applicable laws or
regulations.
K. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
L. APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Nebraska.
Signed by the parties.
UNITED OF OMAHA LIFE INSURANCE COMPANY MUTUAL OF OMAHA INVESTOR SERVICES, INC.
- --------------------------------------- ----------------------------------------
By: By:
- --------------------------------------- ----------------------------------------
Print Name: Print Name:
- --------------------------------------- ----------------------------------------
Title: Title:
- --------------------------------------- ----------------------------------------
Date: Date:
<PAGE>
COMPENSATION SCHEDULE to the
PRINCIPLE UNDERWRITING AGREEMENT between
UNITED OF OMAHA LIFE INSURANCE COMPANY
("UNITED")
and
MUTUAL OF OMAHA INVESTOR SERVICES, INC.
("UNDERWRITER")
Compensation Schedule Effective Date: MAY 1, 1994
For Services Rendered by UNDERWRITER to UNITED on UNITED'S own behalf and on
behalf of UNITED OF OMAHA SEPARATE ACCOUNT C, UNITED shall pay to UNDERWRITER:
1.
2.
This compensation schedule shall remain in effect for at least one year from the
effective date stated above. Either party may initiate subsequent compensation
schedule terms upon 45 days advance notice to the other party.
EXHIBIT (3) (B): FORM OF BROKER/DEALER SUPERVISION AND SALES AGREEMENT
VARIABLE PRODUCT DISTRIBUTION AGREEMENT
(Retail Broker-Dealer)
This Distribution Agreement ("Agreement") effective _______________________,
is between _____________________________________________ ("Broker-Dealer"), an
NASD-licensed Broker-Dealer and Mutual of Omaha Investor Services, Inc.
("Company"). This Agreement shall not be effective unless approved by an
authorized representative of Company in Omaha, Nebraska.
This Agreement, including the Attachments incorporated from time to time by
reference, is the entire agreement and supersedes any prior agreement, whether
oral or written, between the parties relating to the subject matter of this
Agreement.
In consideration of the mutual covenants contained herein, the parties agree as
follows:
A. DEFINED AGREEMENT TERMS.
1. "ATTACHMENT" means any Company distributed document signed by an
authorized representative which is intended to modify or alter the
terms or conditions of this Agreement. An Attachment is automatically
incorporated into and becomes part of this Agreement.
2. "AUTHORIZED AFFILIATED COMPANY" means any organization identified as
such in the Attachments.
3. "CLIENT" means any individual or organization directly or individually
utilizing one or more Products.
4. "COMPANY" means Mutual of Omaha Investor Services, Inc. and the
Authorized Affiliated Companies.
5. "BROKER-DEALER" means an organization authorized herein as a
NASD-licensed securities broker-dealer for the sale of Products
registered with the Securities Exchange Commission and is performing
those duties requiring such authorization.
6. "PRODUCT" means any variable annuity or variable life insurance
product, investment vehicle or other offering identified in any
Attachment.
7. "PROPRIETARY INFORMATION" means all complete or partial copies of
information which relates to Clients and the business of Company
including without limitation: sales and rate information; computer
software and related documentation; business plans and operating
strategies; Product information; Client information, including policy
expirations; and material identifying an association with Company.
9. "REPRESENTATIVE" means any agent, representative, broker or other
sales agency for which Broker-Dealer has supervisory obligations
relating to its regulatory licensure and/or is assigned to
Broker-Dealer.
10. "VESTED COMPENSATION" means compensation which remains payable to
Broker-Dealer as long as (a) policies related to the Products sold
remain in force, and (2) the premiums for such policies are paid to
and accepted by Company.
B. LICENSING AND APPOINTMENT.
1. LICENSE. Broker-Dealer is responsible for securing and keeping in
effect any licenses required to represent Company, shall provide
evidence of such licenses upon request, and shall provide immediate
notice to Company of any change in the status of such licenses or
regulatory approval.
2. APPOINTMENT. Company hereby appoints Broker-Dealer to solicit
Products. This appointment is not exclusive and may be changed or
cancelled by Company.
3. APPOINTMENT FEES. Company shall pay, or arrange for the Product issuer
to pay, the fees for Broker-Dealer's and Representative's appointment
with the state insurance department.
C. BROKER-DEALER'S DUTIES. Broker-Dealer shall:
1. Comply with all applicable laws, rules, regulations and orders of
governmental authorities and Company written policies, rules and
procedures where each sale occurs relating to its duties hereunder, and
use its best effort to ensure that representatives and employees,
including any employee Representatives, similarly comply.
2. Be responsible for all money collected by Broker-Dealer or by
Broker-Dealer's employees and shall promptly remit to Company all
payments and collections received for or payable to Company from
Representatives, applicants, policy owners, or others, without
deduction. All money tendered as payment shall always be the property of
Company and shall be held by Broker-Dealer purely in a fiduciary
capacity and only for Company's own benefit. Broker-Dealer is not
authorized to expend or cash or deposit for any purpose any portion of
such money.
3. Keep regular and accurate records of all transactions related to this
Agreement, which records shall be preserved for a period of at least
five (5) years and, upon request, shall be open to examination and
available for copying by Company.
4. Secure Company's written approval prior to using any material or script
identifying Company or Products except such material provided by Company
and used pursuant to Company's directions.
5. Preserve and protect the confidentiality of all Proprietary Material
to which they, their employees, or any Representative may have access.
6. Pay, with their own funds, all expenses, fees and taxes incurred by them
in the performance of this Agreement, whether imposed on Company, them
or Representative, unless otherwise expressly provided in Section B.3.
7. Upon receipt of notice from Company of the postponement or rejection of
any application, counter offer of insurance not accepted by an
applicant, or the cancellation or refusal to renew a policy, immediately
return to the applicant or policy owner any money in their possession as
advanced payment of premium; and Company shall be immediately furnished
with evidence that such return has been made.
8. Promptly notify Company on receiving notice of potential or threatened
litigation with respect to a claim. Company shall have final
decision-making authority and assume administration and defense of any
claim.
9. Promptly notify Company of the receipt of any regulatory inquiry or any
regulatory complaint promulgated by an insurance department or other
regulatory agency with authority to regulate the parties, in connection
with the solicitation, sale or, administration of a Product. Each notice
shall be accompanied by a copy of the correspondence or document
received.
10. Cooperate fully with Company in any insurance or securities regulatory
investigation or proceeding or judicial proceeding arising in connection
with any transaction connected to this Agreement.
11. Solicit, recruit, instruct and train Representatives on an ongoing basis
for Company in the marketing of Products.
12. Assist Representative in all phases of the distribution process of
Products and perform all necessary services.
13. Use its best efforts to promptly secure its or the Representative's
return of all agency supplies and authorizations to represent Company,
upon termination of their appointment with Company.
14. Deliver or have delivered all Products in accordance with the
applicable rules and procedures of Company.
15. Instruct its Representatives that they shall deliver to Company,
immediately upon receipt by the Representative, such proof of loss or
other evidence of claim as is presented by any insured or beneficiary or
other claimant. Broker-Dealer shall have the same responsibility to the
extent such information is received by Broker-Dealer, and shall assist
its Representatives in obtaining such information.
16. Not give any information or make any representation in connection with
the marketing of Products other than those contained in the Prospectus
or other solicitation material authorized by Company.
17. Carry out all obligations hereunder in compliance with the NASD Rules of
Fair Practice, and federal and state securities laws.
18. Be a duly registered Broker-Dealer under the Securities Act of 1934 and
be a member in good standing with the NASD. Broker-Dealer shall maintain
appropriate securities licensure and registration and, where required,
state insurance licensure.
19. Have filed and keep current Form BD with the SEC and agree to provide a
current copy of it to Company upon request.
20. Not have any noted material deficiency in any inspection letters or
similar findings issued by the SEC or NASD, and immediately notify
Company upon having knowledge that such a finding is imminent.
21. Not have any pending litigation, arbitration or other regulatory
proceeding or an adverse decision which would materially affect the
financial condition of the Broker-Dealer. Broker-Dealer will immediately
notify Company upon having knowledge that such action or proceeding is
imminent.
22. Control, supervise and assume responsibility for all securities
activities in connection with Products identified in this Attachment,
including those activities carried out by Insurance Agency.
23. Accurately reflect all compensation payable hereunder on its FOCUS
reports.
D. LIMITATIONS. Broker-Dealer is without authority to do or perform and
expressly agrees not to do or perform personally or through
Representatives or employees the following acts on behalf of Company:
1. Incur any expense or liability on account of, or otherwise bind, Company
without specific written approval from an officer of Company.
2. Make, alter, or discharge contracts or Products.
3. Waive forfeitures or any other terms or conditions of any Products.
4. Quote rates other than as specified or published by Company.
5. Extend the time for payment of any premium or waive payment thereof in
cash, or bind Company to reinstate any terminated contract, or accept
notes or any other funds as payment of premium.
6. Institute or file a response to any legal or regulatory proceeding on
behalf of Company in connection with any matter pertaining to any
Product.
E. COMPENSATION.
1. Broker-Dealer's compensation for all acts performed hereunder are
specified in the Attachments. No compensation shall be payable until the
Broker-Dealer and Representative are appropriately licensed and
appointed, the Product on which such compensation is claimed is actually
issued, all delivery requirements are fulfilled and the premium paid.
Company has the right to change any commission on any Product at any
time. However, any change in commission shall only affect those policies
issued after the effective date of the commission change.
2. Company is obligated to pay compensation due under this Agreement only
while (A) this Agreement is in effect; and (B) Broker-Dealer is
performing the duties specified in Section C; provided, however, that
Company agrees to continue to pay Vested Compensation and compensation
defined as "deferred" in an Attachment, and such compensation shall not
be withheld pursuant to this provision.
3. Company will account at least monthly to Broker-Dealer for commissions
based upon initial and renewal premiums paid and accepted by Company for
policies issued upon applications submitted by or through Broker-Dealer.
4. If any premium or premiums shall be returned by Company on any policy,
or should Company become liable for the return thereof for any cause
either before or after termination of this Agreement, Broker-Dealer
shall pay to Company the amounts of commissions or overwrite commissions
previously paid or credited to any Broker-Dealer's or Representative's
account on such returned premium.
5. Company shall at all times, whether before or after termination of this
Agreement, have the right to offset any amounts owed by Broker-Dealer or
any Representative to Company under this Section against any amounts
owed by Company to any of them.
6. Broker-Dealer shall be responsible to Company for any indebtedness of
their employees or Representatives when such indebtedness shall have
been incurred in the conduct of Company business and while under their
supervision.
7. Company shall at all times, whether before or after termination of this
Agreement, have a first lien on commissions, fees, allowances, or other
moneys due or to become due hereunder to any other party hereto to the
extent of that party's indebtedness to Company, including interest
thereon.
8. In the event that any party does not pay any moneys as are due within
two (2) months after termination of this Agreement, the net amount such
party owes will accrue interest, compounded daily at the fluctuating
prime interest rate charged on the date of termination by Harris Trust
and Savings Bank, Chicago, Illinois plus one percent (1%). If a party is
owed money after termination and any arbitration, action, or proceeding
is brought to recover that money, the indebted party shall also be
liable for all reasonable collection costs, including but not limited
to, attorneys' fees incurred by the party seeking to collect the debt.
F. TERMINATION.
1. Company may, in its sole discretion, terminate this Agreement as to any
party or all of them, effective on the date Broker-Dealer or such party
receives the termination notice, or on a later date, if any, specified
in the termination notice, if such party commits any of the following
"Wrongful Acts":
(A)Commits a fraudulent act or commits malfeasance related to the
performance of any duty under this Agreement.
(B)Fails to comply with any obligation described in Section C.2.
(C)Violates any law or regulation that materially or adversely affects
Company's ability to sell Products, unless such violation results
from following instructions by Company or from a failure by Company
to perform any of its obligations hereunder.
(D)Has its regulatory licensure required to perform its duties hereunder
revoked by any governmental regulatory agency.
(E)Postpones delivery to Company of premium paid to reinstate a lapsed
policy in an attempt to gain a commission advantage.
(F)Directly or indirectly induces any policy owner to (1) discontinue
premium payment required to keep policies in force or (2) relinquish
any policy in order to sell such policy owner insurance with another
insurer.
(G)Intentionally misrepresents, or intentionally induces any
Representative to misrepresent, any provision, benefit, or premium of
any Product.
(H)Breaches any material provision of this Agreement other than those
set forth in the preceding subparagraphs of this Section J.1., if the
breach remains uncured for twenty (20) days after receipt of notice
from Company that a breach has occurred.
2. If Company elects to terminate this Agreement pursuant to Section
G.1., all compensation related to those actions which caused Company
to elect to terminate this Agreement shall be forfeited, and
notwithstanding Section E.2., all rights to receive any and all Vested
Compensation and deferred compensation otherwise payable after
termination shall also be forfeited.
3. If Broker-Dealer is a corporation, partnership, or joint venture and
becomes generally unable to pay its debts as they mature, files a
voluntary petition of bankruptcy, seeks reorganization or to effect a
plan or other arrangement with the creditors, files an answer
admitting the jurisdiction of the court and the material allegations
of an involuntary petition filed pursuant to any act of Congress
relating to bankruptcy or reorganization, is adjudicated a bankrupt,
makes a general assignment for the benefit of creditors or applies for
or consents to the appointment of a receiver or trustee for all or a
substantial part of its property, then this Agreement will immediately
terminate as to that party upon the occurrence of one of these events.
4. This Agreement may be terminated by any party without cause by
delivering to the other party(ies) written notice within thirty (30)
days prior to the effective date of such termination.
5. Upon termination of this Agreement, Broker-Dealer shall immediately
return to Company all Proprietary Information, material identifying
their association with Company, and property owned by Company.
G. INDEPENDENT CONTRACTOR. Broker-Dealer is an independent contractor and
nothing contained in this Agreement shall create or shall be construed to
create the relationship of employer and employee between Company and
Broker-Dealer.
H. INSPECTION OF BOOKS AND RECORDS. During and after the term of this
Agreement, Company and Broker-Dealer shall each have the right, during
normal working hours and with reasonable notice, to inspect, audit and make
copies from the books and records of the other party relating to the
Products, for the purpose of verifying adherence to the provisions of this
Agreement.
I. INDEMNITY AND HOLD HARMLESS.
1. Each party shall indemnify and hold the other party harmless from any
liability, loss, costs, expense (including reasonable attorneys' fees
incurred by the indemnified party), or damages, resulting from any act
or omission by indemnifying party or any of its employees or
representatives in the performance of its services under this
Agreement, provided that such claim does not arise out of an act or
omission by the indemnified party, or its employees, contrary to the
terms and provisions of this Agreement. The indemnified party may, in
its sole discretion, require the indemnifying party to assume
responsibility for and control over the defense of any claim, action,
or proceeding to which this indemnity provision is applicable by
delivering to the indemnifying party a written notice so requesting
within ten (10) days after notice of the commencement or assertion of
any such claim, action or proceeding is received by the indemnified
party. The indemnifying party shall select counsel of its own
choosing, but subject to the approval of the indemnified party, which
approval shall not be unreasonably withheld.
2. Broker-Dealer specifically agrees to indemnify and hold harmless
Company in connection with any losses, claims, damages or liabilities,
joint or several, to which Company becomes subject under the
Securities Act of 1933, or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) any unauthorized use of sales and promotional
materials or any verbal or written misrepresentations or any unlawful
sales practices or other improper conduct concerning any Products by
Broker-Dealer or a Representative; or (b) claims by a Broker-Dealer's
employees or Representatives for compensation or remuneration of any
type.
J. GENERAL.
1. WITHDRAWAL OF PRODUCT. Company reserves the right to withdraw, limit,
restrict or change any Product at any time.
2. NOTICES. Any notice required or permitted under this Agreement shall
be delivered personally or sent by Certified Mail with all postage
prepaid or by express mail delivery system:
to Broker-Dealer
-------------------------
-------------------------
-------------------------
-------------------------
to Company:
MUTUAL OF OMAHA COMPANIES
SUPPLEMENTAL DISTRIBUTION ORGANIZATION
ADMINISTRATION
DODGE AT 33RD STREET - 7TH FLOOR
OMAHA, NEBRASKA 68131
3. ENTIRE AGREEMENT. This Agreement and any Attachments constitute the
entire contract between the parties hereto and shall be construed in
accordance with the laws of the State of Nebraska and subject to the
courts of Nebraska.
4. ORDER OF PREFERENCE. This Agreement and its Attachments shall be
construed as being consistent with each other. When such construction
is unreasonable, the order of preference shall be: (a) Attachment
signed by all parties; (b) Attachment signed by Company's authorized
representative; and (c) this Agreement.
5. SEVERABILITY. This Agreement is subject to all laws and regulations in
the state or states where it is to be effective, but any provision
which may be inconsistent with or in violation of such laws or
regulations shall merely be unenforceable and will not effect the
validity of the NO remaining provisions.
6. WAIVER. No failure or delay on the part of either party hereto in
exercising any power or right under this Agreement shall operate as a
waiver thereof. This Agreement may be amended or modified only by
written instrument, executed by duly authorized officers of the
parties.
7. MODIFICATION/ ASSIGNMENT. This Agreement may not be modified or
assigned without the prior written consent of the other party.
8. HEADINGS. Headings herein are for convenience only and have no legal
force.
9. SURVIVING PROVISIONS. In addition to the provisions of this Agreement
which set forth post-termination obligations, the provisions of
Section C.2-5, 8-10, and 15, E, and I-J survive termination of this
Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed in duplicate by the
parties.
MUTUAL OF OMAHA INVESTOR SERVICES, INC.
By:
(Print or Type name)
Title:
Date:
BROKER DEALER
By:
(Print or Type name)
Title:
Date:
<PAGE>
PRODUCT AND COMPENSATION ATTACHMENT
TO THE
VARIABLE PRODUCT DISTRIBUTION AGREEMENT
WITH
---------------------------------------------------
(BROKER-DEALER)
PRODUCTS
This Attachment amends the above-referenced Agreement and applies only to
Products for which Mutual of Omaha Investor Services ("MOIS") is the Principal
Underwriter and which are sold on or after the effective date of this Attachment
and while it is in effect.
COMPENSATION
PRODUCT: Variable Annuity
ISSUER: United of Omaha Life Insurance Company, Omaha, NE
AUTHORIZED
CONTRACT: Variable Annuity Ultrannuity Series I (United Separate Account C)
Variable Annuity Ultrannuity Series V (United Seperate Account C)
[COMPENSATION TABLES INSERTED HERE]
In the event an Authorized Contract is surrendered during the first 12
contract months, 100% of the compensation paid will be charged back to
Broker-Dealer.
Broker-Dealer shall look solely to MOIS for payment of compensation
payable for Products identified in this Schedule. MOIS may arrange for
certain terms of this Agreement, including receipt of payment and
payment of compensation hereunder, to be administered on its behalf by
the Product Issuer.
IN SIGNING THIS ATTACHMENT, BROKER-DEALER AGREES TO BE BOUND BY THE TERMS OF THE
AGREEMENT TO WHICH IT IS ATTACHED EFFECTIVE AS OF
_______________________________, 19____. THE AGREEMENT AND THIS ATTACHMENT SHALL
SUPERSEDE ANY PRIOR SCHEDULES RELATING TO ANY OF THE PRODUCTS ADDRESSED HEREIN.
THIS ATTACHMENT SHALL REMAIN EFFECTIVE UNTIL CANCELLED OR OTHERWISE MODIFIED BY
MOIS.
BROKER-DEALER:
By:
Title:
Date:
PRINCIPAL UNDERWRITER:
MUTUAL OF OMAHA INVESTOR SERVICES
By:
Title:
Date:
EXHIBIT (4) (A): FORM OF POLICY
UNITED OF OMAHA
LIFE INSURANCE COMPANY
ANNUITY POLICY
United of Omaha Life Insurance Company will pay you, if living, the annuity
payments as set forth in this policy beginning on the annuity starting date. If
you die before the annuity starting date and while this policy is in force, we
will pay the death benefit according to the policy provisions.
READ YOUR POLICY CAREFULLY.
IT INCLUDES THE PROVISIONS ON THE FOLLOWING PAGES.
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND UNITED OF
OMAHA LIFE INSURANCE COMPANY.
IF YOU ARE NOT SATISFIED WITH YOUR POLICY, RETURN IT TO US OR OUR AGENT WITHIN
10 DAYS AFTER YOU RECEIVE IT. RETURN OF THIS POLICY BY MAIL IS EFFECTIVE ON
BEING POSTMARKED, PROPERLY ADDRESSED, AND POSTAGE PRE-PAID. THE RETURNED POLICY
WILL BE TREATED AS IF WE HAD NEVER ISSUED IT. WE WILL PROMPTLY REFUND THE
ACCUMULATION VALUE IN STATES WHERE PERMITTED. THIS MAY BE MORE OR LESS THAN THE
PURCHASE PAYMENTS. WE RESERVE THE RIGHT TO ALLOCATE PAYMENTS TO THE MONEY MARKET
FUND UNTIL THE EXPIRATION OF 15 DAYS FROM THE DATE THE POLICY IS MAILED FROM OUR
SERVICE OFFICE. IF WE SO ALLOCATE PAYMENTS, WE WILL REFUND THE GREATER OF THE
PURCHASE PAYMENTS OR THE ACCUMULATION VALUE.
THIS IS A FLEXIBLE PAYMENT VARIABLE DEFERRED ANNUITY POLICY. THE POLICY'S
ACCUMULATION VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE
IN THAT ACCOUNT AND WILL INCREASE OR DECREASE DAILY. THE DOLLAR AMOUNT IS NOT
GUARANTEED. NO DIVIDENDS ARE PAYABLE.
For inquiries regarding coverage or customer service, please call United of
Omaha Annuity Service Division at 800/238-9354.
/S/ John W. Weekly
President and Chief Executive Officer
[GRAPHIC OMITTED] /s/ M.Jane Huerter
Home Office: Mutual of Omaha Plaza Corporate Secretary
Omaha, Nebraska
<PAGE>
TABLE OF CONTENTS
PAGE PAGE
POLICY DATA..........................3 THE SEPARATE ACCOUNT
General Description...............8
POLICY CHARGES.......................4 Investment Allocations to the
Separate Account................8
Valuation of Assets...............8
DEFINITIONS..........................5 Transfers Between Subaccounts.....8
GENERAL PROVISIONS THE FIXED ACCOUNT
The Contract.....................6 General Description...............9
Delay of Payments................6 Transfers from the Fixed Account..9
Incontestability.................6
Misstatement of Age or Sex.......6 VALUES
Nonparticipating.................6 Accumulation Value................9
Periodic Reports.................6 Accumulation Unit.................9
Policy Dates.....................6 The Fixed Account.................9
Taxes............................6 Policy Charges....................10
Termination......................6 Partial Withdrawals or
Cash Surrender..................10
Waiver of Withdrawal Charges......10
OWNER, JOINT OWNER, ANNUITANT AND Death Benefit.....................11
BENEFICIARY Accidental Death Benefit..........11
Owner and Joint Owner............7 Computations......................11
Death of Owner, Joint Owner......7
Annuitant........................7 PAYOUT OPTIONS FOR PAYMENT OF
Death of Annuitant...............7 POLICY PROCEEDS
Beneficiary Change...............7 General Conditions................11
Assignments......................7 Payout Options....................11
PURCHASE PAYMENTS
Consideration....................8
Purchase Payments................8
Allocation of Purchase Payments..8
<PAGE>
POLICY DATA
POLICY NUMBER: 1234567
POLICY OWNER: JOHN J. DOE
ANNUITANT: JOHN J. DOE
DATE OF ISSUE: FEBRUARY 1, 1995
ANNUITY STARTING DATE: FEBRUARY 1, 2025
INITIAL PURCHASE PAYMENT: $5,000
SUBSEQUENT MINIMUM PURCHASE PAYMENT: $500
ELIGIBLE INVESTMENTS: INITIAL ALLOCATION (%):
UNITED OF OMAHA FIXED ACCOUNT 10
(ALGER AMERICAN GROWTH PORTFOLIO) 0
(ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO) 0
(FEDERATED PRIME MONEY MARKET PORTFOLIO) 30
(FEDERATED U.S. GOVERNMENT BOND PORTFOLIO) 30
(FIDELITY EQUITY INCOME PORTFOLIO) 0
(FIDELITY ASSET MANAGER GROWTH PORTFOLIO) 0
(FIDELITY CONTRAFUND PORTFOLIO) 0
(MFS EMERGING GROWTH PORTFOLIO) 30
(MFS HIGH INCOME PORTFOLIO) 0
(MFS RESEARCH PORTFOLIO) 0
(MFS WORLD GOVERNMNET PORTFOLIO) 0
(SCUDDER INTERNATIONAL PORTFOLIO) 0
(T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO) 0
(T. ROWE PRICE NEW AMERICAN GROWTH PORTFOLIO) 0
(T. ROWE PRICE EQUITY INCOME PORTFOLIO) 0
(T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO) 0
(T. ROWE PRICE LIMITED TERM BOND PORTFOLIO) 0
SEPARATE ACCOUNT: UNITED OF OMAHA SEPARATE ACCOUNT C
ANNUITY SERVICE OFFICE:
UNITED OF OMAHA ANNUITY SERVICE DIVISION
301 WEST 11TH STREET
P. O. BOX 419472
KANSAS CITY, MO 64141-6472
800/238-9354
POLICY CHARGES
POLICY FEE: $30.00 EACH POLICY YEAR
MORTALITY AND EXPENSE CHARGE: EQUAL ON AN ANNUAL BASIS TO 1.00% OF THE AVERAGE
DAILY NET ASSETS OF THE SEPARATE ACCOUNT
ADMINISTRATIVE EXPENSE CHARGE: EQUAL ON AN ANNUAL BASIS TO 0.20% OF THE AVERAGE
DAILY NET ASSETS OF THE SEPARATE ACCOUNT
SCHEDULE OF WITHDRAWAL CHARGES
YEARS SINCE PERCENTAGE OF
PURCHASE PAYMENT EACH PURCHASE PAYMENT
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 AND LATER 0%
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DEFINITIONS
ACCUMULATION UNIT - An accounting unit of measure used to calculate the
accumulation value of the Separate Account prior to the annuity starting date.
ACCUMULATION VALUE - The dollar value as of any valuation date of all amounts
accumulated under this policy prior to the annuity starting date.
AGE - Age last birthday.
ANNUITANT - The person upon whose life annuity payments are based.
ANNUITY PURCHASE VALUE - An amount equal to the Accumulation Value for the
valuation period which ends immediately preceding the annuity starting date,
reduced by any withdrawal charge and any applicable premium tax or similar
taxes.
ANNUITY STARTING DATE - The date on which annuity payments are to begin.
BENEFICIARY - The person(s) or other legal entity listed by the owner in the
application and referred to in this policy as the named beneficiary. In the case
of joint owners, the surviving joint owner is the primary beneficiary and the
named beneficiary is the contingent beneficiary. If the named beneficiary does
not survive the owner, the estate of the owner is the beneficiary.
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, a
written statement by the attending physician, or any other proof satisfactory to
us.
ELIGIBLE INVESTMENT(S) - Those investments available under the policy. Current
Eligible Investments are shown on the data pages.
EXECUTIVE OFFICER - The president, vice president, assistant vice president, the
secretary or assistant secretary of United of Omaha Life Insurance Company.
FIXED ACCOUNT - The account which consists of the general account assets of
United of Omaha Life Insurance Company.
FUND - A segment of an Eligible Investment which constitutes a separate and
distinct class of interests under an Eligible Investment.
NET ASSET VALUE PER SHARE - The net assets of a Fund divided by the number of
shares in the Fund.
NET PURCHASE PAYMENT - A purchase payment less any applicable premium tax.
OUR, US, WE - Refers to United of Omaha Life Insurance Company, Mutual of Omaha
Plaza, Omaha, Nebraska 68175.
OWNER - (a) the annuitant; or
(b) the person named on the application as owner; or
(c) the persons named on the application as joint owners. Any
reference to owner in the policy will include both owners if
joint owners are named in the application.
PAYEE - The person who receives the annuity payments under this policy.
PAYOUT OPTION - Any option of payment of policy proceeds available under this
policy.
PROCEEDS - The death benefit or the Annuity Purchase Value.
PURCHASE PAYMENT - An amount paid to United of Omaha Life Insurance Company in
accordance with the provisions of this policy.
SUBACCOUNTS - That portion of the Separate Account which invests in shares of
mutual funds or any other investment portfolios that we determine to be suitable
for this policy's purposes.
VALUATION DATE - Each day that the New York Stock Exchange is open for trading.
VALUATION PERIOD - The period commencing at the close of business of the New
York Stock Exchange on each valuation date and ending at the close of business
for the next succeeding valuation date.
SEPARATE ACCOUNT - A separate account maintained by us in which a portion of our
assets has been allocated for this and certain other policies. It has been
designated on the data pages.
YOU, YOUR - Refers to the owner.
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
THE CONTRACT
The entire contract is this policy, data page, any riders and the signed
application, a copy of which is attached. All statements made in the application
will be deemed representations and not warranties. No statement, unless it is in
the application, will be used by us to contest this policy or deny a claim.
Any change of this policy and any riders requires the written consent of an
executive officer.
DELAY OF PAYMENTS
We will usually pay any amounts payable from the Separate Account as a result of
a partial withdrawal or cash surrender within seven days after we receive your
written request at our Service Office in a form satisfactory to us. We can
postpone such payments or any transfers of amounts between subaccounts or into
the Fixed Account if:
(a) the New York Stock Exchange is closed for other than customary weekend
and holiday closings; (b) trading on the New York Stock Exchange is
restricted; (c) an emergency exists as determined by the Securities Exchange
Commission,
as a result of which it is not reasonably practical to dispose of
securities, or not reasonably practical to determine the value of the
net assets of the Separate Account;
(d) the Securities Exchange Commission permits delay for the protection of
security holders.
The applicable rules of the Securities Exchange Commission will govern as to
whether the conditions in (c) or (d) exist.
We may defer payment of partial withdrawals or a cash surrender from the Fixed
Account for up to six months from the date your written request is received at
our Service Office.
INCONTESTABILITY
We will not contest the validity of this policy after it has been in force
during the lifetime of the owner for two years from the date of issue.
MISSTATEMENT OF AGE OR SEX
We may require proof of the age of the annuitant before making any life annuity
payment provided for by this policy. If the age or sex of the annuitant has been
misstated, the annuity starting date and monthly income will be determined using
the correct age and sex.
If a misstatement of age or sex results in monthly income payments that are too
large, the overpayments will be deducted from future payments. If we have made
payments that are too small, the underpayments will be added to the next
payment. Adjustments for overpayments or underpayments will include 6% interest.
NONPARTICIPATING
No dividends will be paid. Neither you nor the beneficiary of this policy will
have the right to share in our surplus earnings or profits.
PERIODIC REPORTS
At least quarterly each calendar year we will send you a statement showing your
Accumulation Value as of a date not more than two months prior to the date of
mailing. We will also send such statements as may be required by applicable
state and federal laws, rules and regulations.
POLICY DATES
Policy years and policy anniversaries are measured from the date of issue shown
on the data pages.
TAXES
Premium taxes, if any, levied by any unit of government will be deducted as
required by state law or when annuity payments begin.
TERMINATION
This policy will remain in force until surrendered for its full value, or all
annuity payments have been made, or the death benefit has been paid.
If the Accumulation Value is less than $500, we may cancel this policy upon 60
days' no`tice to you. This cancellation would be considered a full surrender of
this policy.
If the accumulation value in any Fund falls below $500, we reserve the right to
transfer the remaining balance, without charge, to the Money Market Fund.
- --------------------------------------------------------------------------------
OWNER, JOINT OWNER, ANNUITANT AND BENEFICIARY
OWNER AND JOINT OWNER
While you are alive, only you may exercise the rights under this policy.
Ownership may be changed as described in the ASSIGNMENTS provision. If there are
joint owners, the signatures of both owners are needed to exercise rights under
the policy.
DEATH OF OWNER, JOINT OWNER
If any owner or joint owner dies before the annuity starting date, the policy
will end and the death benefit will be paid to the beneficiary.
If there are joint owners, the beneficiary is the surviving joint owner. If both
joint owners die simultaneously, the death benefit will be paid to the named
beneficiary.
If an owner of this policy is a corporation or other nonindividual, the primary
annuitant will be treated as an owner of this policy. The "primary annuitant" is
that individual whose life affects the timing or the amount of the payout under
this policy. A change in the primary annuitant will be treated as the death of
an owner.
If the beneficiary is the surviving spouse, the spouse may either receive the
death benefit and the policy will end, or the spouse may continue the policy in
force.
If any owner or joint owner dies on or after the annuity starting date and
before all the proceeds have been paid, any remaining proceeds will be paid at
least as rapidly as under the payment option in effect at the time of such
owner's death.
Generally, any death benefit must be paid within five years after the date of
death. The five-year rule does not apply to that portion of the proceeds which:
(a) is payable to or for the benefit of an individual named beneficiary; and
(b) will be paid over the lifetime or the life expectancy of that named
beneficiary
as long as payments begin not later than one year after the date of your death.
ANNUITANT
If the owner is different from the annuitant, the annuitant does not have any
rights under this policy.
DEATH OF ANNUITANT
If the annuitant is an owner or joint owner, the death of the annuitant will be
treated as the death of an owner. If the annuitant is not an owner and the
annuitant dies before the annuity starting date, you may name a new annuitant.
If you do not name a new annuitant, you will become the annuitant.
BENEFICIARY CHANGE
You may change the named beneficiary by sending a written request to our Service
Office unless the beneficiary is irrevocable. When recorded and acknowledged by
us, the change will be effective as of the date you signed the request. The
change will not apply to any payments made or other action taken by us before
recording.
If the named beneficiary is irrevocable, you may change the named beneficiary
only by joint written request from you and the named beneficiary.
ASSIGNMENTS
You may change the ownership of this policy or pledge it as collateral by
assigning it. No assignment will be binding on us until we record and
acknowledge it. The right of any payee will be subject to a collateral
assignment.
If the named beneficiary of this policy is irrevocable, a change of ownership or
a collateral assignment may be made only by joint written request from you and
the named beneficiary. On the annuity starting date, you may select another
payee, but you retain all rights of ownership unless you sign an absolute
assignment.
- --------------------------------------------------------------------------------
PURCHASE PAYMENTS
CONSIDERATION
The consideration for this policy is the application and the payment of the
initial purchase payment.
PURCHASE PAYMENTS
Purchase payments after the first may be made at any time but are not required.
Purchase payments are payable at our Service Office. Upon request a receipt
signed by our Secretary or an Assistant Secretary will be given for any purchase
payment. The minimum purchase payment allowed is shown in the data pages.
We will not accept any additional purchase payments beginning on the policy
anniversary next following your 88th birthday.
ALLOCATION OF PURCHASE PAYMENTS
Net purchase payments are allocated to one or more Eligible Investments
according to your instructions. We have the right to allocate the initial net
purchase payment to the Money Market Fund until the expiration of 15 days from
the date the policy is mailed from our Service Office. Thereafter, the
Accumulation Value will be allocated to one or more Funds as shown in the data
pages.
Changes in the allocation will be effective on the date your written request is
received at our Service Office. The change will apply to future purchase
payments.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT
GENERAL DESCRIPTION
The name of the Separate Account is shown in the data pages. The assets of the
Separate Account are our property but are not chargeable with the liabilities
arising out of any other business we may conduct, except to the extent that the
assets of the Separate Account exceed the liabilities of the Separate Account
arising under the contracts supported by the Separate Account.
INVESTMENT ALLOCATIONS TO THE SEPARATE ACCOUNT
The assets of the Separate Account are segregated by Eligible Investments or
Funds and, where appropriate, by Funds within the Eligible Investment. This
establishes a series of subaccounts within the Separate Account.
We may, from time to time, add other Eligible Investments or Funds. In such
event you may be permitted to select from these other Eligible Investments or
Funds, limited by the terms and conditions we may impose on such transactions.
We may also substitute other Eligible Investments or Funds. If required,
approval of or change of any investment policy will be filed with the Insurance
Department of the state in which this policy is delivered.
VALUATION OF ASSETS
Assets of Eligible Investments within each subaccount will be valued at their
net asset value on each valuation date.
TRANSFERS BETWEEN SUBACCOUNTS
Prior to the annuity starting date, you may transfer all or part of your
interest in a subaccount to another subaccount or to the Fixed Account. You may
make 12 transfers each policy year without charge. We reserve the right to
charge a $10 fee or additional transfers, to be deducted from the amount
transferred.
The minimum transfer amount is $500 or the entire amount in the subaccount if it
is less than $500. The minimum amount that can remain in a subaccount after a
transfer is $500.
We reserve the right at any time and without prior notice to any party to modify
the transfer privileges described above.
- --------------------------------------------------------------------------------
THE FIXED ACCOUNT
GENERAL DESCRIPTION
Any portion of the purchase payments allocated to the Fixed Account and
transfers to the Fixed Account under the policy become part of the general
account assets of United of Omaha Life Insurance Company. The Fixed Account
includes all of our assets except those assets segregated in separate accounts.
We maintain sole discretion to invest the assets of the Fixed Account, subject
to applicable law.
TRANSFERS FROM THE FIXED ACCOUNT
You may transfer part of the accumulation value in the Fixed Account to the
subaccounts once each policy year. The maximum percentage that may be
transferred is 10% of the value in the Fixed Account on the date of the
transfer. These transfers do not count toward the 12 free transfers allowed each
policy year.
We reserve the right to defer transfers from the Fixed Account to the
subaccounts for up to six months from the date your written request is received
at our Service Office.
You may transfer amounts from the subaccounts to the Fixed Account at any time.
However, we reserve the right to restrict transfers back to the Fixed Account
for a period of time, to be determined by us, immediately following a transfer
to the subaccounts.
- --------------------------------------------------------------------------------
VALUES
ACCUMULATION VALUE
On the date of issue the Accumulation Value is equal to the initial purchase
payment, reduced by any applicable premium taxes. On any valuation date after
the date of issue the Accumulation Value is equal to the total of your values in
each subaccount plus the accumulation value of the Fixed Account.
The value for each subaccount is equal to:
(a) your current number of Accumulation Units; multiplied by
(b) the current unit value.
ACCUMULATION UNIT
Each net purchase payment is converted into Accumulation Units by dividing it by
the Accumulation Unit value for the valuation period during which the net
purchase payment is allocated to the Separate Account. The initial Accumulation
Unit value for each subaccount was set when the subaccount was established. The
unit value may increase or decrease from one valuation date to the next.
The Accumulation Unit value for a subaccount on any valuation date is calculated
as follows:
(a) the net asset value per share of the Fund multiplied by the number of
shares held in the subaccount, before the purchase or redemption of any
shares on that date; less
(b) the cumulative unpaid charge for the Mortality and Expense Risk Charge
and Administrative Expense Charge, which are shown on the data pages;
less
(c) any applicable charge for federal and state income tax; the result
divided by
(d) the total number of Accumulation Units held in the subaccount on the
valuation date, before the purchase or redemption of any shares on that
date.
THE FIXED ACCOUNT
The accumulation value of the Fixed Account on any valuation date is equal to:
(a) the value at the end of the preceding policy month; plus
(b) any net purchase payments credited since the end of the previous policy
month; plus
(c) any transfers from the subaccounts to the Fixed Account since the
end of the previous policy month; minus
(d) any transfers from the Fixed Account to the subaccounts since the end
of the previous policy month; minus
(e) any partial withdrawal and withdrawal charge taken from the Fixed
Account since the end of the previous policy month; plus
(f) interest credited on the balance.
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 3%.
POLICY CHARGES
The following charges are deducted under the policy:
(a) ANNUAL POLICY FEE - An annual charge, shown on the data pages, is
deducted from the Accumulation Value on the last valuation date of each
policy year or on a full surrender, if between policy anniversaries. The
annual policy fee is deducted from the subaccounts on a pro rata basis
by canceling Accumulation Units.
(b) ADMINISTRATIVE EXPENSE CHARGE - A charge equal, on an annual basis, to
the amount shown in the data pages. The administrative expense charge
compensates us for some of the costs associated with the administration
of this policy and the Separate Account.
(c) MORTALITY AND EXPENSE RISK CHARGE - A charge equal, on an annual basis,
to the amount shown on the data pages. The mortality and expense risk
charge compensates us for assuming the mortality and expense risks under
this policy.
(d) OTHER - Depending on Fund choices, other charges may apply, such as
management fees or other expenses.
PARTIAL WITHDRAWALS OR CASH SURRENDER
You may withdraw all or part of the Accumulation Value prior to the annuity
starting date. The minimum withdrawal amount is $500.
Partial withdrawals may be subject to a withdrawal charge. The withdrawal charge
is calculated by:
(a) allocating purchase payments to the amount withdrawn on a first-in,
first-out basis; and
(b) multiplying each such allocated purchase payment by the applicable
percentage according to the length of time since the purchase payments
were made.
The percentages are shown on the data pages.
The withdrawal charge will not apply to the following:
(a) in each policy year, up to 15% of the Accumulation Value as of the first
withdrawal that policy year;
(b) amounts placed under Payout Option 4 (Lifetime Income) after the
first two policy years; or
(c) amounts you paid in excess of the allowable tax deduction that we refund
to you.
The amount of the cash withdrawal requested and any withdrawal charge will be
deducted from the Accumulation Value on the date your written request is
received at our Service Office. Partial withdrawals will result in cancellation
of Accumulation Units from each applicable subaccount. In the absence of
instructions from you, amounts will be deducted from the subaccounts and the
Fixed Account on a pro rata basis. No more than a pro rata amount may be
withdrawn from the Fixed Account for any partial withdrawal. We reserve the
right to defer withdrawals from the Fixed Account for up to six months from the
date your written request is received at our Service Office.
If you request a cash surrender, the policy must be returned to us to receive
the cash surrender value. The cash surrender value equals:
(a) the Accumulation Value at the end of the valuation period in which your
written request is received at our Service Office; less
(b) any applicable withdrawal charge;
(c) any applicable policy fee; and
(d) any applicable premium tax not previously deducted.
WAIVER OF WITHDRAWAL CHARGES
We will waive any applicable withdrawal charges if you request a partial
withdrawal or a cash surrender under the the following conditions, provided that
you or the annuitant is eligible as described below:
CONFINEMENT OR HOME HEALTH CARE - Withdrawal charges will be waived if any owner
or annuitant is confined at the recommendation of a physician for medically
necessary reasons for at least 30 consecutive days to:
(a) a hospital licensed or recognized as general hospital by the proper
authority of the state in which it is located; or
(b) a hospital recognized as a general hospital by the Joint Commission on
the Accreditation of Hospitals; or
(c) a place certified as a hospital by Medicare; or
(d) a nursing home licensed by the state having a registered nurse on duty
24 hours a day; or
(e) a place certified by Medicare as a long term care facility.
You must provide proof of confinement and request the partial withdrawal or cash
surrender no later than 91 days after the last day of confinement.
We will not accept any additional purchase payments after you exercise this
waiver.
You are not eligible for this waiver if any owner or annuitant were confined to
a nursing home or hospital on this policy's date of issue.
DISABILITY - Withdrawal charges will be waived if you submit a copy of the form
or letter that confirms approval or receipt of any owner or annuitant's claim
for Social Security Disability Benefits. We may also require proof of continued
disability through the date of the partial withdrawal or cash surrender. We
reserve the right to have the disabled person examined by a physician of our
choice, at our expense.
We will not accept any additional purchase payments after you exercise this
waiver.
You are not eligible for this waiver if any owner or annuitant is receiving
Social Security Disability Benefits on this policy's date of issue. An owner or
annuitant is no longer eligible after attaining age 65.
TERMINAL ILLNESS - Withdrawal charges will be waived if any owner or annuitant
is diagnosed as having a terminal illness. A terminal illness is a medical
condition that, with a reasonable degree of medical certainty, will result in
your death within 12 months or less. You must submit a written statement from a
licensed physician other than an owner or annuitant of this policy. We reserve
the right to have the terminally ill person examined by a physician of our
choice, at our expense.
We will not accept any additional purchase payments after you exercise this
waiver.
You are not eligible for this waiver if any owner or annuitant is diagnosed as
having a terminal illness prior to or on this policy's date of issue.
UNEMPLOYMENT - Withdrawal charges will be waived if you submit a determination
letter from the applicable state's Department of Labor, indicating that any
owner or annuitant has been receiving unemployment benefits for at least 60
consecutive days. You may exercise this waiver only once.
You are not eligible for this waiver if any owner or annuitant is receiving
unemployment benefits on this policy's date of issue.
DEATH BENEFIT
The death benefit is the amount payable to the beneficiary if any owner dies
before the annuity starting date. The death benefit equals the greater of:
(a) the Accumulation Value as of the end of the valuation period during
which due proof of death and an election of a payout option are received
by our Service Office, less any applicable premium taxes; or
(b) the sum of the net purchase payments less any partial withdrawals.
ACCIDENTAL DEATH BENEFIT
If your death results from accidental bodily injury sustained in a common
carrier accident, we will pay the death benefit amount defined in the DEATH
BENEFIT provision multiplied by two, instead of the amount that would otherwise
be payable.
The accidental bodily injury must be sustained while riding as a passenger, and
not as an operator or member of the crew, in any public land, air or water
conveyance provided by a common carrier primarily for passenger service. Death
resulting from accidental bodily injury must be independent of sickness and all
other causes and occur within 90 days of the date of the accident.
We will pay only the amount defined in the DEATH BENEFIT provision if your death
results from
(a) suicide, while sane or insane;
(b) an act of declared or undeclared war;
(c) injury received while intoxicated. Intoxication means a blood alcohol
level that equals or exceeds the legal limit for operating a motor
vehicle in your state of residence.
(d) injury received while under the influence of any controlled substance,
unless administered on the advice of a physician; or
(e) injury received while committing or attempting to commit a felony or
being engaged in an illegal occupation.
COMPUTATIONS
We have filed a detailed statement of the method used to compute the policy
values and benefits with the state in which this policy is delivered. With
regard to amounts allocated to the Fixed Account, the accumulation value, cash
surrender value, death benefit and paid-up annuity benefit are not less than
those required by the state in which this policy is delivered.
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PAYOUT OPTIONS FOR PAYMENT OF POLICY PROCEEDS
GENERAL CONDITIONS
You may choose to have the Annuity Purchase Value applied under any of the
options for payment shown in the PAYOUT OPTIONS provision. If no option is
chosen, Option 4 with a guaranteed period of 10 years will be the automatic
option.
A beneficiary may also have the death benefit applied to a payout option. If the
beneficiary does not choose an option within 60 days of the date due proof of
death is received at our Service Office, we will make payment in a lump sum.
If the option chosen provides for monthly income payments, the payments will
begin as of the annuity starting date. We reserve the right to pay the proceeds
in one sum when the proceeds are less than $2,000, or when the option of payment
chosen would result in periodic payments of less than $20. Payees must be
individuals who receive payments in their own behalf unless otherwise agreed to
by us. Any option chosen will be effective when we acknowledge it.
Proof of your age or survival or the age or survival of the annuitant may be
required by us.
The guaranteed interest rate used in these options is 3%. Using a procedure
approved by our Board of Directors, additional interest may be paid or credited
annually.
PAYOUT OPTIONS
OPTION 1 - PROCEEDS HELD ON DEPOSIT AT INTEREST - While the proceeds are held by
us, we will annually:
(a) pay interest to any payee; or
(b) add interest to the proceeds.
OPTION 2 - INCOME OF A SPECIFIED AMOUNT - The proceeds will be paid in
installments of a specified amount until the proceeds, with interest, have been
fully paid.
OPTION 3 - INCOME FOR A SPECIFIED PERIOD - The proceeds will be paid in
installments for the number of years chosen. The monthly incomes for each $1,000
of proceeds, shown in the following table, include interest. We will provide the
income amounts for payments other than monthly upon request.
- ------ -------- ------- ------- ------- -------
Years Monthly Years Monthly Years Monthly
Chosen Income Chosen Income Chosen Income
- ------ -------- ------- ------- ------- -------
1 $84.47 8 $11.68 15 $6.87
2 42.86 9 10.53 16 6.53
3 28.99 10 9.61 17 6.23
4 22.06 11 8.86 18 5.96
5 17.91 12 8.24 19 5.73
6 15.14 13 7.71 20 5.51
7 13.16 14 7.26
- ------ -------- ------- ------- ------- -------
OPTION 4 - LIFETIME INCOME - The proceeds will be paid as a monthly income for
as long as the annuitant lives. The following guarantees are available:
GUARANTEED PERIOD - The monthly income will be paid for a minimum of 10
years and as long thereafter as the annuitant lives; or GUARANTEED AMOUNT
The monthly income will be paid until the sum of all payments equals the
proceeds placed under this option and as long thereafter as the annuitant
lives.
The monthly income will be the amount computed using one of the following bases:
(i) the Lifetime Monthly Income Tables shown in this policy, or, if more
favorable to the payee, (ii) our then current lifetime monthly income rates for
payment of proceeds.
The Lifetime Monthly Income Table is based on the 1983a Mortality Table and
interest at 3%.
OPTION 5 - LUMP SUM - The proceeds will be paid in one sum.
OPTION 6 - ALTERNATIVE SCHEDULE - Upon request and if available, we will provide
payments for other options, including joint and survivor periods.
Additional information about any of the options may be obtained by contacting
us.
<PAGE>
<TABLE>
<CAPTION>
A. Lifetime Monthly Income Table for Option 4
B. Monthly Income for Each $1,000 of Proceeds
- ---------------------------------------------------------------------------------------------
Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed
Birthday Period Amount Birthday Period Amount Birthday Period Amount
--------------------- ----------------------- --------------------
of Payee Male Female Male Female of Payee Male Female Male Female of Payee Male Female Male Female
- -------- ----- ------ ---- ----- -------- ----- ------ ---- ----- --------- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7 and
under $2.84 $2.77 $2.83$2.76
8 2.85 2.78 2.84 2.77 34 $3.40 $3.23 $3.36$3.20 60 $5.14 $4.66 $4.86 $4.48
9 2.86 2.79 2.85 2.78 35 3.44 3.26 3.39 3.23 61 5.27 4.76 4.96 4.56
10 2.87 2.80 2.86 2.79 36 3.48 3.29 3.42 3.26 62 5.39 4.87 5.07 4.66
11 2.89 2.81 2.88 2.80 37 3.52 3.32 3.46 3.29 63 5.53 4.98 5.19 4.75
12 2.90 2.82 2.89 2.82 38 3.56 3.35 3.49 3.32 64 5.66 5.10 5.30 4.86
13 2.91 2.83 2.90 2.83 39 3.60 3.38 3.53 3.35 65 5.81 5.22 5.43 4.96
14 2.93 2.85 2.92 2.84 40 3.65 3.42 3.57 3.38 66 5.96 5.36 5.56 5.08
15 2.95 2.86 2.93 2.85 41 3.69 3.46 3.61 3.42 67 6.12 5.50 5.70 5.20
16 2.96 2.87 2.95 2.86 42 3.74 3.50 3.66 3.45 68 6.28 5.65 5.85 5.33
17 2.98 2.89 2.96 2.88 43 3.79 3.54 3.70 3.49 69 6.44 5.80 6.00 5.47
18 3.00 2.90 2.98 2.89 44 3.85 3.58 3.75 3.53 70 6.61 5.97 6.16 5.61
19 3.01 2.92 3.00 2.91 45 3.90 3.63 3.80 3.57 71 6.79 6.14 6.33 5.76
20 3.03 2.93 3.02 2.92 46 3.96 3.67 3.85 3.61 72 6.96 6.32 6.51 5.93
21 3.05 2.95 3.04 2.94 47 4.02 3.72 3.90 3.66 73 7.14 6.50 6.69 6.10
22 3.07 2.96 3.06 2.95 48 4.09 3.78 3.96 3.70 74 7.32 6.69 6.90 6.28
23 3.09 2.98 3.08 2.97 49 4.15 3.83 4.01 3.75 75 7.50 6.89 7.10 6.47
24 3.12 3.00 3.10 2.99 50 4.22 3.89 4.07 3.80 76 7.67 7.09 7.32 6.68
25 3.14 3.02 3.12 3.01 51 4.30 3.95 4.14 3.86 77 7.84 7.29 7.54 6.90
26 3.16 3.04 3.14 3.02 52 4.37 4.01 4.20 3.91 78 8.01 7.49 7.78 7.12
27 3.19 3.06 3.16 3.04 53 4.45 4.08 4.27 3.97 79 8.18 7.69 8.03 7.37
28 3.22 3.08 3.19 3.06 54 4.54 4.15 4.34 4.03 80 8.33 7.89 8.30 7.64
29 3.24 3.10 3.21 3.09 55 4.62 4.22 4.42 4.10 81 8.48 8.08 8.58 7.90
30 3.27 3.12 3.24 3.11 56 4.72 4.30 4.50 4.17 82 8.61 8.26 8.88 8.20
31 3.30 3.15 3.27 3.13 57 4.82 4.38 4.58 4.24 83 8.74 8.43 9.19 8.50
32 3.33 3.17 3.30 3.15 58 4.92 4.47 4.67 4.31 84 8.86 8.59 9.53 8.81
33 3.37 3.20 3.33 3.18 59 5.03 4.56 4.77 4.39 85 8.97 8.74 9.83 9.18
and over
- -----------------------------------------------------------------------------------------------------
</TABLE>
THIS IS A FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY . THE POLICY'S ACCUMULATION
VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE IN THAT
ACCOUNT AND WILL INCREASE OR DECREASE DAILY. THE DOLLAR AMOUNT IS NOT
GUARANTEED. NO DIVIDENDS ARE PAYABLE.
EXHIBIT (4) (B): FORM OF RIDERS TO THE POLICY
ELECTIVE DEATH BENEFIT AMENDMENT
This elective amendment is effective as of the policy's date of issue. It will
remain in effect while this policy is in force until the annuity starting date,
or until the policy anniversary next following the date we receive your written
request to terminate the amendment.
If you terminate this amendment, the death benefit charge shown on page 4 will
no longer apply. Once terminated, this amendment may not be reinstated.
<TABLE>
<CAPTION>
THE FOLLOWING IS HEREBY ADDED TO THE DEFINITIONS SECTION:
<S> <C>
ANNIVERSARY VALUE - The Accumulation Value on AVERAGE DEATH BENEFIT AMOUNT - The mean of
a policy anniversary. the death benefit amount on the most recent
policy anniversary and the death benefit
amount on the immediately preceding policy
anniversary.
THE LAST PARAGRAPH OF THE PARTIAL WITHDRAWALS OR CASH SURRENDER PROVISION IS
HEREBY DELETED AND REPLACED WITH THE FOLLOWING:
If you request a cash surrender, the policy (b) any applicable withdrawal charge;
must be returned to us to receive the cash (c) any applicable policy fee;
surrender value. The cash surrender value (d) the pro-rata portion of the death
equals: benefit charge from the most
recent policy anniversary to the date
(a) the Accumulation Value at the end of of surrender; and
the valuation period in which your (e) any applicable premium tax not
written request is received at our previously deducted.
Service Office; less
THE DEATH BENEFIT PROVISION IS HEREBY DELETED AND REPLACED WITH THE FOLLOWING:
DEATH BENEFIT The death benefit is the amount If you had attained age 81, the
death payable to the beneficiary if any owner dies benefit equals the greatest
of:
before the annuity starting date. If you had
not attained age 81, the death benefit equals
the greatest of:
(a) the Accumulation Value as of the end (a) the Accumulation Value as of the end
of the valuation period during of the valuation period during
which due proof of death and an which due proof of death and an
election of a payout option are election of a payout option are
received by our Service Office; or received by our Service Office; or
b) the greatest Anniversary Value, plus (b) the greatest Anniversary Value up to
any purchase payments paid after the last policy anniversary
that anniversary and less any partial before you attained age 81, plus any
withdrawals made after that purchase payments paid after that
anniversary; or anniversary and less any partial
c) the sum of all net purchase payments withdrawals made after that
paid, less any partial anniversary; or
withdrawals, accumulated at 4.5% (c) the sum of all net purchase payments
interest, up to a maximum of two times paid prior to the last policy
each purchase payment. anniversary before you attained age
81, less any partial
withdrawals, accumulated
at 4.5% interest, up to
a maximum of two times
each purchase payment.
If the death benefit payable after your If there is not enough value in the
attained age 81 equals(c), we will add to the subaccounts to cover the death
benefit death benefit amount any purchase payments charge, we will deduct it
first from the paid after the last policy anniversary before subaccounts and
then from the Fixed Account.
you attained age 81.
Any applicable premium tax not previously
deducted will be deducted from the death United of Omaha Life Insurance
benefit payable. Company
The death benefit charge is shown on page 4 of /s/ John W. Weekly
the policy. This charge is deducted on each President and Chief Executive Officer
policy anniversary and on a pro-rata basis at
surrender. The charge is applied to the
average death benefit amount for the previous
policy year. It is deducted from the
subaccounts by canceling accumulation units on
a pro-rata basis.
</TABLE>
<PAGE>
(a) United of Omaha Life Insurance Company
WAIVER OF WITHDRAWAL CHARGES RIDER
This rider is made a part of the policy to which it is attached. It is subject
to all of the policy provisions that are not inconsistent with the rider
provisions. The rider is effective as of the policy's date of issue. It ends
when the policy ends.
THE FOLLOWING PROVISIONS ARE HEREBY ADDED TO THE POLICY:
WAIVER OF WITHDRAWAL CHARGES
We will waive withdrawal charges if:
(a) you request a partial withdrawal or a cash surrender under the following
conditions; and
(b) you qualify as described below.
RESIDENCE DAMAGE - We will waive withdrawal charges if your primary residence
suffers physical damage in the amount of $50,000 or more. You must submit a
certified copy of a licensed appraiser's report, stating the amount of the
damage. The certified copy must be submitted within 91 days of the date of the
appraiser's report. We reserve the right to obtain a second opinion by having
your residence inspected by a licensed appraiser of our choice at our expense.
We may rely upon our appraiser's opinion. This waiver may be exercised only
once.
ORGAN TRANSPLANT - We will waive withdrawal charges if you undergo transplant
surgery as an organ donor or recipient for the following body organs:
(a) heart;
(b) liver;
(c) lung;
(d) kidney;
(e) pancreas; or
(f) bone marrow (recipients only).
Within 91 days of your surgery you must submit a letter from a licensed
physician other than an owner or annuitant of this policy. The letter must state
that you have undergone transplant surgery for any of the organs listed above.
We reserve the right to have you examined by a physician of our choice at our
expense. You may exercise this waiver only once per transplant surgery.
DEATH OF SPOUSE OR MINOR DEPENDENT - We will waive withdrawal charges for one
withdrawal of a percentage of the Accumulation Value. For the death of a spouse
the percentage is 50% of the Accumulation Value as of the date of withdrawal.
For the death of a minor dependent the percentage is 25% of the Accumulation
Value as of the date of withdrawal. The withdrawal must be made within six
months of your spouse's or minor dependent's death. You must submit a certified
copy of the death certificate or other proof of death satisfactory to us.
You may exercise this waiver only once for a spouse and once for each minor
dependent. In each policy year no more than 50% of the Accumulation Value as of
the date of the first withdrawal that policy year may be withdrawn without a
withdrawal charge pursuant to this waiver.
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
(a)
(a) United of Omaha Life Insurance Company
VARIABLE ANNUITY PAYOUT OPTIONS RIDER
This rider is made a part of the policy to which it is attached. It is subject
to all of the policy provisions that are not inconsistent with the rider
provisions. The rider is effective as of the policy's date of issue. It ends
when the policy ends.
THE FOLLOWING PROVISIONS ARE HEREBY ADDED TO THE POLICY:
You may choose payout options 2, 4 or 6 shown in the policy to be paid as a
variable annuity. Variable annuity payments will vary according to the net
investment return of the subaccounts chosen. A beneficiary may also have the
death benefit applied to a variable annuity payout option.
FIRST VARIABLE ANNUITY PAYMENT
We will compute the dollar amount of the first monthly variable annuity payment
by applying all or part of the Accumulation Value to the Monthly Payout Table
shown in this rider for the payout option you choose. The Table shows the dollar
amount of monthly payment that you can buy with each $1,000 of Accumulation
Value.
If you have chosen more than one subaccount, we will apply the accumulation
value of each subaccount separately to the Monthly Payout Table. The total
amount of the first variable annuity payment equals the sum of the payment
amounts payable for each subaccount.
SECOND AND LATER VARIABLE ANNUITY PAYMENTS
The dollar amount of the second and later variable annuity payments is not set.
It may change from month to month. We will compute the payment on the 10th
valuation date before the payment is due.
The amount of each variable annuity payment after the first equals the sum of:
(a) the number of annuity units under each subaccount; multiplied by (b) the
current annuity unit value for each subaccount as of the date we
compute the payment.
An annuity unit is a measuring unit used in computing the amount of the variable
annuity payments. The value of an annuity unit for each subaccount will vary
with the net investment return of the subaccount.
ANNUITY UNIT VALUE
The current value of an annuity unit for each subaccount is:
(a) the value as of the date we computed the last payment; multiplied by
(b) the Net Investment Factor for the subaccount as of the date on which we
are computing the current payment.
The Net Investment Factor is figured by dividing (a) by (b), then subtracting
(c) from the result, then multiplying by the offset factor described below. The
values of (a), (b) and (c) are defined as follows:
(a) is the net result of
(1)the net asset value of a Fund share held in a subaccount as of the
end of the current payment period; plus or minus
(2)a per share credit or charge for any taxes we incurred since the last
computation date that were charged to the operation of the
subaccount.
(b) is the net asset value of a Fund share held in the subaccount as of the
beginning of the current payment period.
(c) is the asset charge factor that reflects the mortality and expense risk
charge and administrative expense charge deducted from the Separate Account.
This factor is equal, on an annual basis, to 1.20% of the daily net asset value
of the Separate Account.
The result of the calculation described above is then multiplied by a factor
that offsets the assumed investment rate upon which this rider's Monthly Payout
Table is based. This allows the actual investment rate to be credited. For a
one-day valuation period the factor is 0.99989255, using an assumed investment
rate of 4.00% per year.
NUMBER OF ANNUITY UNITS
The number of annuity units payable for each subaccount equals:
(a) the amount of the first monthly variable annuity payment payable for
that subaccount; divided by
(b) the annuity unit value for that subaccount as of the 10th valuation date
before the annuity starting date.
The number of annuity units payable for each subaccount is fixed when we compute
the first variable annuity payment. The number remains fixed unless you exchange
annuity units between subaccounts. The number of annuity units will not change
as a result of investment experience.
We guarantee that the dollar amount of each variable annuity payment after the
first will not be affected by actual expenses or changes in mortality
experience.
EXCHANGE OF ANNUITY UNITS
After the Annuity Starting Date you may exchange the value of a specified number
of Annuity Units of one subaccount for Annuity Units of another subaccount or
the Fixed Account. You may not exchange Annuity Units of the Fixed Account for
Annuity Units of the subaccounts.
The value of the Annuity Units being exchanged will be the value for the
Valuation Period during which we receive your request for the exchange. The
value of the new Annuity Units will be such that the dollar amount of an annuity
payment made on the date of the exchange would not change as a result of the
exchange.
No more than four exchanges may be made each policy year.
<PAGE>
<TABLE>
<CAPTION>
MONTHLY PAYOUTS PER $1,000 BASED ON 4.00% INTEREST AND
1983A MORTALITY TABLE ALB PROJECTED 20 YEARS WITH
PROJECTION SCALE 'G'
- -------------------------------------------------------------------------------------------------------
- ---------------------------------------------------- --------------------------------------------------
FEMALE RATES MALE RATES
- ---------------------------------------------------- --------------------------------------------------
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
Age 20 Year 10 Year Life Only Installment 20 Year 10 Year Life Only Installment Age
Certain Certain Refund Certain Certain Refund
& Life & Life & Life & Life
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 0
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
1 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 1
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
2 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 2
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
3 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 3
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
4 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 4
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
5 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 5
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
6 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 6
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
7 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 7
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
8 3.44 3.45 3.45 3.44 3.50 3.50 3.51 3.50 8
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
9 3.45 3.45 3.45 3.45 3.51 3.51 3.51 3.50 9
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
10 3.46 3.46 3.46 3.46 3.52 3.52 3.53 3.51 10
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
11 3.47 3.47 3.47 3.47 3.53 3.53 3.53 3.52 11
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
12 3.48 3.48 3.48 3.47 3.54 3.54 3.54 3.53 12
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
13 3.48 3.49 3.49 3.48 3.55 3.55 3.56 3.54 13
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
14 3.49 3.50 3.50 3.49 3.56 3.57 3.57 3.56 14
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
15 3.50 3.51 3.51 3.50 3.57 3.58 3.58 3.57 15
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
16 3.51 3.51 3.52 3.51 3.58 3.59 3.59 3.58 16
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
17 3.52 3.53 3.53 3.52 3.60 3.60 3.60 3.59 17
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
18 3.53 3.54 3.54 3.53 3.61 3.62 3.62 3.60 18
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
19 3.54 3.55 3.55 3.54 3.62 3.63 3.63 3.62 19
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
20 3.55 3.56 3.56 3.55 3.64 3.64 3.65 3.63 20
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
21 3.57 357 3.57 3.56 3.65 3.66 3.66 3.65 21
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
22 3.58 3.58 3.58 3.58 3.67 3.67 3.68 3.66 22
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
23 3.59 3.60 3.60 3.59 3.68 3.69 3.70 3.68 23
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
24 3.61 3.61 3.61 3.60 3.70 3.71 3.71 3.70 24
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
25 3.62 3.62 3.63 3.62 3.72 3.73 3.73 3.71 25
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
26 3.63 3.64 3.64 3.63 3.74 3.75 3.75 3.73 26
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
27 3.65 3.65 3.66 3.65 3.76 3.77 3.77 3.75 27
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
28 3.67 3.67 3.67 3.66 3.78 3.79 3.79 3.77 28
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
29 3.68 3.69 3.69 3.68 3.80 3.81 3.81 3.79 29
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
30 3.70 3.71 3.71 3.70 3.82 3.83 3.84 3.81 30
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
31 3.72 3.73 3.73 3.72 3.84 3.86 3.86 3.84 31
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
32 3.74 3.75 3.75 3.74 3.87 3.88 3.89 3.86 32
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
33 3.76 3.77 3.77 3.76 3.89 3.91 3.91 3.89 33
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
34 3.78 3.79 3.79 3.78 3.92 3.94 3.94 3.92 34
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
35 3.80 3.81 3.81 3.80 3.95 3.97 3.97 3.94 35
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
36 3.82 3.84 3.84 3.82 3.97 4.00 4.00 3.97 36
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
37 3.85 3.86 3.86 3.85 4.00 4.03 4.04 4.00 37
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
38 3.87 3.89 3.89 3.87 4.04 4.07 4.07 4.03 38
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
39 3.90 3.92 3.92 3.90 4.07 4.10 4.11 4.06 39
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
40 3.93 3.95 3.95 3.93 4.10 4.14 4.15 4.10 40
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
41 3.96 3.98 3.98 3.96 4.14 4.18 4.19 4.14 41
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
42 3.99 4.01 4.01 3.99 4.18 4.22 4.24 4.18 42
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
43 4.02 4.04 4.05 4.02 4.22 4.27 4.28 4.21 43
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
44 4.05 4.08 4.09 4.05 4.25 4.32 4.33 4.25 44
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
45 4.09 4.12 4.13 4.09 4.30 4.36 4.38 4.30 45
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
46 4.13 4.16 4.17 4.13 4.34 4.41 4.43 4.35 46
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
47 4.16 4.20 4.21 4.16 4.38 4.47 4.49 4.39 47
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
48 4.20 4.24 4.25 4.20 4.43 4.52 4.55 4.44 48
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
49 4.24 4.29 4.30 4.24 4.48 4.58 4.61 4.49 49
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
50 4.29 4.34 4.35 4.29 4.53 4.64 4.68 4.55 50
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
51 4.33 4.39 4.40 4.34 4.58 4.70 4.74 4.61 51
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
52 4.38 4.44 4.46 4.39 4.63 4.77 4.81 4.67 52
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
53 4.43 4.50 4.52 4.44 4.69 4.84 4.89 4.73 53
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
54 4.48 4.56 4.58 4.49 4.74 4.91 4.97 4.80 54
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
55 4.53 4.62 4.65 4.56 4.80 4.99 5.06 4.87 55
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
56 4.59 4.69 4.72 4.62 4.86 5.08 5.14 4.94 56
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
57 4.65 4.76 4.79 4.68 4.92 5.16 5.24 5.02 57
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
58 4.71 4.83 4.87 4.74 4.98 5.25 5.34 5.10 58
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
59 4.77 4.91 4.96 4.82 5.04 5.35 5.45 5.19 59
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
60 4.83 5.00 5.05 4.89 5.01 5.45 5.57 5.28 60
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
61 4.89 5.08 5.14 4.97 5.17 5.56 5.69 5.37 61
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
62 4.96 5.18 5.24 5.06 5.23 5.67 5.82 5.47 62
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
63 5.03 5.28 5.35 5.14 5.29 5.79 5.97 5.58 63
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
64 5.09 5.38 5.47 5.24 5.35 5.92 6.11 5.69 64
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
65 5.16 5.49 5.59 5.34 5.41 6.05 6.28 5.81 65
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
66 5.23 5.61 5.72 5.45 5.47 6.19 6.45 5.93 66
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
67 5.30 5.74 5.86 5.56 5.52 6.32 6.63 6.06 67
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
68 5.37 5.86 6.02 5.68 5.58 6.47 6.84 6.20 68
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
69 5.43 6.00 6.18 5.80 5.63 6.62 7.05 6.35 69
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
70 5.50 6.15 6.36 5.93 5.67 6.78 7.28 6.50 70
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
71 5.56 6.30 6.55 6.07 5.72 6.94 7.51 6.64 71
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
72 5.61 6.46 6.76 6.22 5.76 7.10 7.77 6.82 72
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
73 5.67 6.63 6.99 6.37 5.80 7.27 8.04 6.99 73
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
74 5.72 6.80 7.23 6.55 5.83 7.43 8.33 7.17 74
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
75 5.76 6.99 7.49 6.72 5.86 7.60 8.64 7.37 75
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
76 5.80 7.17 7.77 6.91 5.89 7.77 8.97 7.57 76
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
77 5.83 7.36 8.07 7.11 5.91 7.94 9.32 7.78 77
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
78 5.86 7.55 8.40 7.33 5.93 8.11 9.70 8.01 78
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
79 5.89 7.74 8.75 7.55 5.94 8.28 10.10 8.25 79
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
80 5.91 7.93 9.14 7.78 5.96 8.44 10.54 8.50 80
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
81 5.93 8.12 9.55 8.03 5.97 8.60 10.99 8.76 81
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
82 5.95 8.31 9.99 8.30 5.98 8.75 11.49 9.03 82
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
83 5.96 8.49 10.47 8.57 5.98 8.89 12.01 9.33 83
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
84 5.97 8.66 10.99 8.86 5.99 9.03 12.57 9.62 84
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
85 5.98 8.82 11.56 9.18 6.00 9.16 13.14 9.94 85
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
86 5.99 8.97 12.17 9.49 6.00 9.28 13.77 10.28 86
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
87 5.99 9.11 12.80 9.82 6.00 9.38 14.44 10.62 87
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
88 6.00 9.24 13.51 10.17 6.00 9.48 15.18 11.00 88
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
89 6.00 9.35 14.25 10.53 6.00 9.58 16.96 11.38 89
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
90 6.00 9.46 15.04 10.90 6.00 9.66 15.80 11.81 90
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
91 6.00 9.56 15.81 11.29 6.00 9.74 17.62 12.22 91
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
92 6.00 9.63 16.60 11.69 6.00 9.79 18.52 12.65 92
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
93 6.00 9.71 17.43 12.10 6.00 9.85 19.47 13.15 93
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
94 6.00 9.78 18.32 12.53 6.00 9.90 20.48 13.66 94
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
95 6.00 9.84 19.20 12.99 6.00 9.94 21.59 14.21 95
- ----------- --------- --------- ---------- --------- --------- --------- ---------- --------- ---------
</TABLE>
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
(a)
(a) United of Omaha Life Insurance Company
VARIABLE ANNUITY PAYOUT OPTIONS RIDER
This rider is made a part of the policy to which it is attached. It is subject
to all of the policy provisions that are not inconsistent with the rider
provisions. The rider is effective as of the policy's date of issue. It ends
when the policy ends.
THE FOLLOWING PROVISIONS ARE HEREBY ADDED TO THE POLICY:
You may choose payout options 2, 4 or 6 shown in the policy to be paid as a
variable annuity. Variable annuity payments will vary according to the net
investment return of the subaccounts chosen. A beneficiary may also have the
death benefit applied to a variable annuity payout option.
FIRST VARIABLE ANNUITY PAYMENT
We will compute the dollar amount of the first monthly variable annuity payment
by applying all or part of the Accumulation Value to the Monthly Payout Table
shown in this rider for the payout option you choose. The Table shows the dollar
amount of monthly payment that you can buy with each $1,000 of Accumulation
Value.
If you have chosen more than one subaccount, we will apply the accumulation
value of each subaccount separately to the Monthly Payout Table. The total
amount of the first variable annuity payment equals the sum of the payment
amounts payable for each subaccount.
SECOND AND LATER VARIABLE ANNUITY PAYMENTS
The dollar amount of the second and later variable annuity payments is not set.
It may change from month to month. We will compute the payment on the 10th
valuation date before the payment is due.
The amount of each variable annuity payment after the first equals the sum of:
(a) the number of annuity units under each subaccount; multiplied by (b) the
current annuity unit value for each subaccount as of the date we
compute the payment.
An annuity unit is a measuring unit used in computing the amount of the variable
annuity payments. The value of an annuity unit for each subaccount will vary
with the net investment return of the subaccount.
ANNUITY UNIT VALUE
The current value of an annuity unit for each subaccount is:
(a) the value as of the date we computed the last payment; multiplied by
(b) the Net Investment Factor for the subaccount as of the date on which we
are computing the current payment.
The Net Investment Factor is figured by dividing (a) by (b), then subtracting
(c) from the result, then multiplying by the offset factor described below. The
values of (a), (b) and (c) are defined as follows:
(a) is the net result of
(1)the net asset value of a Fund share held in a subaccount as of the
end of the current payment period; plus or minus
(2)a per share credit or charge for any taxes we incurred since the last
computation date that were charged to the operation of the
subaccount.
(b) is the net asset value of a Fund share held in the subaccount as of the
beginning of the current payment period.
(c) is the asset charge factor that reflects the mortality and expense risk
charge and administrative expense charge deducted from the Separate Account.
This factor is equal, on an annual basis, to 1.20% of the daily net asset value
of the Separate Account.
The result of the calculation described above is then multiplied by a factor
that offsets the assumed investment rate upon which this rider's Monthly Payout
Table is based. This allows the actual investment rate to be credited. For a
one-day valuation period the factor is 0.99989255, using an assumed investment
rate of 4.00% per year.
NUMBER OF ANNUITY UNITS
The number of annuity units payable for each subaccount equals:
(a) the amount of the first monthly variable annuity payment payable for
that subaccount; divided by
(b) the annuity unit value for that subaccount as of the 10th valuation date
before the annuity starting date.
The number of annuity units payable for each subaccount is fixed when we compute
the first variable annuity payment. The number remains fixed unless you exchange
annuity units between subaccounts. The number of annuity units will not change
as a result of investment experience.
We guarantee that the dollar amount of each variable annuity payment after the
first will not be affected by actual expenses or changes in mortality
experience.
EXCHANGE OF ANNUITY UNITS
After the Annuity Starting Date you may exchange the value of a specified number
of Annuity Units of one subaccount for Annuity Units of another subaccount or
the Fixed Account. You may not exchange Annuity Units of the Fixed Account for
Annuity Units of the subaccounts.
The value of the Annuity Units being exchanged will be the value for the
Valuation Period during which we receive your request for the exchange. The
value of the new Annuity Units will be such that the dollar amount of an annuity
payment made on the date of the exchange would not change as a result of the
exchange.
No more than four exchanges may be made each policy year.
<PAGE>
- --------------------------------------------------------------------------------
MONTHLY PAYOUTS PER $1,000 BASED ON 4.00% INTEREST
AND 1983A MORTALITY TABLE ALB PROJECTED 20
YEARS WITH PROJECTION SCALE 'G'
- --------------------------------------------------------------------------------
UNISEX RATES (50% MALE 50% FEMALE)
- --------------------------------------------------------------------------------
AGE 20 YEAR CERTAIN & 10 YEAR CERTAIN & LIFE ONLY INSTALLMENT
LIFE LIFE REFUND
- --------------------------------------------------------------------------------
0 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
1 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
2 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
3 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
4 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
5 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
6 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
7 3.46 3.47 3.47 3.46
- --------------------------------------------------------------------------------
8 3.47 3.47 3.48 3.47
- --------------------------------------------------------------------------------
9 3.48 3.48 3.48 3.48
- --------------------------------------------------------------------------------
10 3.49 3.49 3.49 3.49
- --------------------------------------------------------------------------------
11 3.50 3.50 3.50 3.49
- --------------------------------------------------------------------------------
12 3.51 3.51 3.51 3.50
- --------------------------------------------------------------------------------
13 3.52 3.52 3.52 3.51
- --------------------------------------------------------------------------------
14 3.53 3.53 3.53 3.52
- --------------------------------------------------------------------------------
15 3.54 3.54 3.54 3.53
- --------------------------------------------------------------------------------
16 3.55 3.55 3.55 3.54
- --------------------------------------------------------------------------------
17 3.56 3.56 3.56 3.56
- --------------------------------------------------------------------------------
18 3.57 3.58 3.58 3.57
- --------------------------------------------------------------------------------
19 3.58 3.59 3.59 3.58
- --------------------------------------------------------------------------------
20 3.59 3.60 3.60 3.59
- --------------------------------------------------------------------------------
21 3.61 3.61 3.62 3.61
- --------------------------------------------------------------------------------
22 3.62 3.63 3.63 3.62
- --------------------------------------------------------------------------------
23 3.64 3.64 3.65 3.63
- --------------------------------------------------------------------------------
24 3.65 3.66 3.66 3.65
- --------------------------------------------------------------------------------
25 3.67 3.67 3.68 3.66
- --------------------------------------------------------------------------------
26 3.68 3.69 3.70 3.68
- --------------------------------------------------------------------------------
27 3.70 3.71 3.71 3.70
- --------------------------------------------------------------------------------
28 3.72 3.73 3.73 3.72
- --------------------------------------------------------------------------------
29 3.74 3.75 3.75 3.74
- --------------------------------------------------------------------------------
30 3.76 3.77 3.77 3.76
- --------------------------------------------------------------------------------
31 3.78 3.79 3.79 3.78
- --------------------------------------------------------------------------------
32 3.80 3.81 3.82 3.80
- --------------------------------------------------------------------------------
33 3.82 3.84 3.84 3.82
- --------------------------------------------------------------------------------
34 3.85 3.86 3.87 3.84
- --------------------------------------------------------------------------------
35 3.87 3.89 3.89 3.87
- --------------------------------------------------------------------------------
36 3.90 3.91 3.92 3.90
- --------------------------------------------------------------------------------
37 3.93 3.94 3.95 3.92
- --------------------------------------------------------------------------------
38 3.95 3.97 3.98 3.95
- --------------------------------------------------------------------------------
39 3.98 4.01 4.01 3.98
- --------------------------------------------------------------------------------
40 4.01 4.04 4.05 4.01
- --------------------------------------------------------------------------------
41 4.05 4.08 4.08 4.04
- --------------------------------------------------------------------------------
42 4.08 4.11 4.12 4.08
- --------------------------------------------------------------------------------
43 4.12 4.15 4.16 4.11
- --------------------------------------------------------------------------------
44 4.15 4.19 4.20 4.15
- --------------------------------------------------------------------------------
45 4.19 4.24 4.25 4.19
- --------------------------------------------------------------------------------
46 4.23 4.28 4.30 4.23
- --------------------------------------------------------------------------------
47 4.27 4.33 4.34 4.28
- --------------------------------------------------------------------------------
48 4.31 4.38 4.40 4.32
- --------------------------------------------------------------------------------
49 4.36 4.43 4.45 4.37
- --------------------------------------------------------------------------------
50 4.40 4.48 4.51 4.41
- --------------------------------------------------------------------------------
51 4.45 4.54 4.57 4.46
- --------------------------------------------------------------------------------
52 4.50 4.60 4.63 4.52
- --------------------------------------------------------------------------------
53 4.55 4.66 4.69 4.58
- --------------------------------------------------------------------------------
54 4.61 4.73 4.77 4.64
- --------------------------------------------------------------------------------
55 4.66 4.80 4.84 4.70
- --------------------------------------------------------------------------------
56 4.72 4.87 4.92 4.77
- --------------------------------------------------------------------------------
57 4.78 4.95 5.00 4.84
- --------------------------------------------------------------------------------
58 4.84 5.03 5.09 4.91
- --------------------------------------------------------------------------------
59 4.90 5.12 5.19 4.99
- --------------------------------------------------------------------------------
60 4.96 5.21 5.29 5.07
- --------------------------------------------------------------------------------
61 5.02 5.30 5.40 5.16
- --------------------------------------------------------------------------------
62 5.09 5.41 5.51 5.24
- --------------------------------------------------------------------------------
63 5.15 5.52 5.63 5.34
- --------------------------------------------------------------------------------
64 5.21 5.63 5.76 5.44
- --------------------------------------------------------------------------------
65 5.28 5.75 5.91 5.55
- --------------------------------------------------------------------------------
66 5.34 5.87 6.06 5.66
- --------------------------------------------------------------------------------
67 5.40 6.00 6.21 5.77
- --------------------------------------------------------------------------------
68 5.46 6.14 6.39 5.90
- --------------------------------------------------------------------------------
69 5.52 6.28 6.57 6.03
- --------------------------------------------------------------------------------
70 5.58 6.44 6.76 6.17
- --------------------------------------------------------------------------------
71 5.63 6.59 6.97 6.32
- --------------------------------------------------------------------------------
72 5.68 6.75 7.20 6.47
- --------------------------------------------------------------------------------
73 5.73 6.92 7.44 6.64
- --------------------------------------------------------------------------------
74 5.77 7.09 7.70 6.81
- --------------------------------------------------------------------------------
75 5.80 7.26 7.98 6.99
- --------------------------------------------------------------------------------
76 5.84 7.43 8.28 7.18
- --------------------------------------------------------------------------------
77 5.86 7.61 8.60 7.39
- --------------------------------------------------------------------------------
78 5.89 7.80 8.94 7.61
- --------------------------------------------------------------------------------
79 5.91 7.97 9.31 7.83
- --------------------------------------------------------------------------------
80 5.93 8.15 9.71 8.07
- --------------------------------------------------------------------------------
81 5.95 8.33 10.14 8.33
- --------------------------------------------------------------------------------
82 5.96 8.49 10.59 8.59
- --------------------------------------------------------------------------------
83 5.97 8.66 11.08 8.87
- --------------------------------------------------------------------------------
84 5.98 8.82 11.61 9.16
- --------------------------------------------------------------------------------
85 5.99 8.96 12.17 9.46
- --------------------------------------------------------------------------------
86 5.99 9.10 12.78 9.79
- --------------------------------------------------------------------------------
87 6.00 9.22 13.42 10.12
- --------------------------------------------------------------------------------
88 6.00 9.34 14.12 10.48
- --------------------------------------------------------------------------------
89 6.00 9.44 14.88 10.84
- --------------------------------------------------------------------------------
90 6.00 9.53 15.69 11.22
- --------------------------------------------------------------------------------
91 6.00 9.62 16.47 11.62
- --------------------------------------------------------------------------------
92 6.00 9.70 17.29 12.03
- --------------------------------------------------------------------------------
93 6.00 9.76 18.16 12.44
- --------------------------------------------------------------------------------
94 6.00 9.83 19.07 12.90
- --------------------------------------------------------------------------------
95 6.00 9.87 20.03 13.38
- --------------------------------------------------------------------------------
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
(a) United of Omaha Life Insurance Company
UNISEX ENDORSEMENT
This endorsement is attached to and made a part of the policy. It is effective
as of the policy's date of issue.
THE MISSTATEMENT OF AGE OR SEX PROVISION IS HEREBY DELETED AND REPLACED WITH THE
FOLLOWING:
MISSTATEMENT OF AGE
If you have misstated the age of the annuitant, we will change the annuity
starting date and periodic payment amount based on the correct age.
If a misstatement of age results in payments that are too large, we will deduct
the overpayments from future payments. If we have made payments that are too
small, we will add the underpayments to the next payment. The adjustments will
include 6% interest.
THE LIFETIME MONTHLY INCOME TABLE FOR OPTION 4 IS HEREBY DELETED AND REPLACED
WITH THE FOLLOWING:
(see reverse)
<PAGE>
<TABLE>
<CAPTION>
B. Lifetime Monthly Income Table for Option 4
C. Monthly Income for Each $1,000 of Proceeds
- ------------------------------------------------------------------------------------------
Age Last Age Last Age Last
Birth Guaranteed Guaranteed Birthday Guaranteed Guaranteed Birthday Guaranteed Guaranteed
of Period Amount of Payee Period Amount of Payee Period Amount
Payee
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7
and
under $2.82 $2.81
8 2.83 2.83 34 $3.37 $3.33 60 $5.05 $4.79
9 2.85 2.84 35 3.40 3.36 61 5.17 4.88
10 2.86 2.85 36 3.44 3.39 62 5.29 4.99
11 2.87 2.86 37 3.48 3.43 63 5.42 5.10
12 2.89 2.88 38 3.52 3.46 64 5.56 5.22
13 2.90 2.89 39 3.56 3.50 65 5.70 5.34
14 2.91 2.90 40 3.60 3.54 66 5.84 5.47
15 2.93 2.92 41 3.65 3.58 67 6.00 5.60
16 2.94 2.93 42 3.69 3.62 68 6.16 5.74
17 2.96 2.95 43 3.74 3.66 69 6.32 5.89
18 2.98 2.96 44 3.80 3.71 70 6.49 6.05
19 3.00 2.98 45 3.85 3.75 71 6.66 6.22
20 3.01 3.00 46 3.91 3.80 72 6.84 6.39
21 3.03 3.02 47 3.96 3.85 73 7.02 6.58
22 3.05 3.04 48 4.03 3.91 74 7.20 6.77
23 3.07 3.06 49 4.09 3.96 75 7.38 6.97
24 3.09 3.08 50 4.16 4.02 76 7.56 7.20
25 3.12 3.10 51 4.23 4.08 77 7.74 7.42
26 3.14 3.12 52 4.30 4.15 78 7.92 7.65
27 3.16 3.14 53 4.38 4.21 79 8.09 7.90
28 3.19 3.17 54 4.46 4.28 80 8.25 8.16
29 3.22 3.19 55 4.55 4.36 81 8.40 8.44
30 3.24 3.22 56 4.64 4.44 82 8.55 8.73
31 3.27 3.24 57 4.73 4.52 83 8.69 9.04
32 3.30 3.27 58 4.83 4.60 84 8.81 9.37
33 3.34 3.30 59 4.94 4.69 85 8.93 9.72
and over
- -------------------------------------------------------------------------------------------
This table is based on the 1983a Mortality Table (80% Male, 20% Female) and interest at 3%. The
table has been adjusted to age last birthday.
</TABLE>
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
INDIVIDUAL RETIREMENT ANNUITY RIDER
This rider is attached to and made a part of the policy to qualify the policy as
an Individual Retirement Annuity under the Internal Revenue Code of 1986, as
amended, (the Code). Where the provisions of this rider and those of the policy
disagree, the provisions of the rider will apply. This rider replaces any rider
Individual Annuity Retirement rider previously issued.
AMENDMENTS
OWNERSHIP
The policy is established for the exclusive benefit of the Owner and his or her
beneficiaries. The Owner is the Annuitant of the policy and may exercise all
rights under the policy during his or her lifetime. The Owner's rights to
benefits under the policy are nonforfeitable.
ASSIGNMENTS
The policy may not be sold, assigned, discounted or pledged as collateral for a
loan or as a security for the performance of an obligation, and the policy may
not be transferred by the Owner. To the extent permitted by law, benefits
payable under this policy will be exempt from the claims of creditors.
PREMIUMS (Also called purchase payments or contributions in the policy)
Premiums under the policy must be paid in cash. Premiums may not exceed $2,000
for any taxable year except for:
(a) rollover contributions (as permitted by section 402(c), 403(a)(4),
403(b)(8) or 408(d)(3) of the Code); or
(b) a contribution made in accordance with a Simplified Employee Pension
(SEP) as described in section 408(k) of the Code.
MATURITY DATE
In no event may the maturity date, either as stated on page 3 of the policy or
as later changed, be a date:
(a) prior to the date the Owner attains age 59 1/2; or
(b) after the first day of the Owner's taxable year in which the Owner
attains age 70 1/2.
REQUIRED DISTRIBUTION
Not withstanding any provision of the policy to the contrary, the Owner's entire
interest in the policy will be distributed or begin to be distributed by the
April 1 following the calendar year in which the Owner reaches age 70 1/2 (the
required beginning date). For each succeeding year, a distribution must be made
on or before December 31. Distribution of the entire interest in the policy
shall be made in a single sum payment or over:
(a) the life of the owner; or
(b) the lives of the Owner and his or her named beneficiary; or
(c) a period certain not extending beyond the life expectancy of the Owner;
or
(d) the joint life and last survivor expectancy of the Owner and his or
her named beneficiary.
Periodic payments must be made at intervals of no longer than one year. Payments
must be either non-increasing or may increase only as provided in Q&A F-3 of
section 1.401(a)(9)-1 of the Proposed Income Tax Regulations.
Distributions under this Required Distribution provision shall be made in
accordance with the minimum distribution requirements of section 408(b)(3) of
the Code and regulations thereunder. This includes the incidental death benefit
requirement of section 401(a)(9)(G) of the Code and the incidental death benefit
requirement of section 1.401(a)(9)-2 of the Proposed Income Tax Regulations. All
of these Code sections and regulations are herein incorporated by reference.
Life expectancy is computed by use of the expected return multiples in Tables V
and VI of section 1.72-9 of the Income Tax Regulations. Unless otherwise elected
by the Owner by the time distributions are required to begin, life expectancies
will be recalculated annually. This election will be irrevocable by the Owner
and will apply to all later years. The life expectancy of a non-spouse
beneficiary may not be recalculated. Instead, life expectancy will be calculated
using the attained age of the beneficiary during the calendar year in which the
Owner reaches age 70 1/2. Payments for later years will be calculated based on
that life expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
The Owner will elect prior to the required beginning date a form of distribution
that satisfies this Required Distribution provision.
DISTRIBUTION UPON OWNER'S DEATH
If the Owner dies after distributions have begun, the remaining portion of the
Owner's interest, if any, will continue to be distributed at least as rapidly as
under the method of distribution being used prior to the Owner's death.
If the Owner dies before distribution of his or her interest begins,
distribution of the entire remaining interest in the policy shall be completed
by December 31 of the year containing the fifth anniversary of the Owner's
death. However, to the extent that the Owner elects or, if the Owner has not so
elected, his or her named beneficiary elects, distribution will be made in
accordance with one of the following methods:
1. If the Owner's interest is payable to a named beneficiary, the entire
remaining interest in the policy may be distributed:
(a) over the life of the named beneficiary; or
(b) over a period certain not greater than the life expectancy of the named
beneficiary. Payment must begin on or before December 31 of the calendar
year immediately following the calendar year in which the Owner died.
2. If the named beneficiary is the Owner's surviving spouse, the entire
remaining interest in the policy may be distributed:
(a) over the life of the surviving spouse; or
(b) over a period certain not greater than the life expectancy of the
surviving spouse. Payment must begin on or before the later of:
December 31 of the calendar year immediately following the calendar year in
which the Owner died; or December 31 of the year in which the Owner would
have reached age 70 1/2.
3. If the named beneficiary is the Owner's surviving spouse, the spouse may
elect to treat the policy as his or her own IRA. This election is made if
the surviving spouse makes:
(a) a regular IRA contribution to the policy; or (b) makes a rollover to or
from the policy; or (c) fails to elect a distribution under this provision.
Life expectancy is computed by use of the expected return multiples in Tables V
and VI of section 1.72-9 of the Income Tax Regulations. Unless otherwise elected
by the surviving spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. This election will be irrevocable by
the surviving spouse and will apply to all later years. In the case of any other
named beneficiary, life expectancies will be calculated using the attained age
of the beneficiary during the calendar year in which distributions are required
to begin under this provision. Payments for later years will be calculated based
on that life expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
Distributions under this provision are considered to have begun:
(a) if distributions are made on account of the Owner reaching his or her
required beginning date; or
(b) if, prior to the required beginning date, distributions irrevocably
begin to an individual over a period permitted and in an annuity form
acceptable under section 1.401(a)(9) of the Proposed Income Tax
Regulations.
ALTERNATIVE METHOD OF DISTRIBUTION
An individual may satisfy the minimum distribution requirements under sections
408(a)(6) and 408(b)(3) of the Code by receiving a distribution from one IRA
that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the Owner of two or more
IRAs may use the 'alternative method' described in Notice 88-38, 1988-1 C.B.
524. This method satisfies the minimum distribution requirements described
above.
NOTICE TO COMPANY
The Owner shall notify us of the reason for any partial or total withdrawal. The
Owner or beneficiary is solely responsible for determining that premiums and
distributions under this policy satisfy applicable tax requirements.
ANNUAL REPORT
We will furnish annual calendar reports concerning the status of the policy.
AMENDMENT RIGHT
This rider may be amended by the Company to qualify the policy as an Individual
Retirement Annuity under the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations. Any such amendment may be made effective the
date of issue of the policy.
GENERAL
This rider is part of the policy to which it is attached. It is subject to all
of the policy provisions which are not inconsistent with the rider provisions.
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
RETIREMENT PLAN ANNUITY RIDER
This rider is attached to and made a part of the policy. This rider qualifies
the policy for purchase by the trustee of a retirement plan under Section 401(a)
of the Internal Revenue Code (the trustee). Where the provisions of this rider
and those of the policy disagree, the provisions of this rider will apply.
OWNERSHIP; ASSIGNMENT; BENEFICIARY
The trustee is the owner and named beneficiary and may exercise all rights under
the policy. The trustee's actions are governed by the provisions of the
retirement plan, including the provision that plan assets will be used for the
exclusive benefit of plan participants and their beneficiaries. In no event will
the primary annuitant be treated as the owner. The trustee may not change the
beneficiary or assign the policy except to a successor retirement plan trustee.
OUR RELATIONSHIP TO THE RETIREMENT PLAN
We are not a party to the retirement plan, and we are not responsible for its
administration, compliance or investment decisions. Our duties and obligations
are as stated in the policy. In discharging our obligations under the policy:
(a) we are not required to refer to the retirement plan provisions; and (b) we
are entitled to rely on the information and instructions provided by the
trustee. In no event can the retirement plan modify or enlarge the amounts
payable under the policy.
AMENDMENT RIGHT
We may amend this rider to comply with any law, regulation, ruling or other
requirement for policies issued to retirement plans. Any such amendment may be
made effective the date of issue of the policy.
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
EXHIBIT (5): FORM OF APPLICATION TO THE POLICY
EXHIBIT (5): FORM OF APPLICATION FOR THE ULTRANNUITY SERIES V VARIABLE ANNUITY
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------------------------------------------------------------------------- --------------------------
MAIL TO: SEPARATE ACCOUNT ANNUITY APPLICATION REGISTERED
UNITED OF OMAHA LIFE INSURANCE COMPANY [ ] NONQUALIFIED [ ] 1035 EXCHANGE REPRESENTATIVE
UNITED OF OMAHA VARIABLE PRODUCT SERVICE [ ] IRA TRANSFER [ ] IRA CONTRIBUTION USE ONLY:
P. O. BOX 8430 [ ] IRA ROLLOVER FOR YEAR ________ (CHECK ONLY ONE)
OMAHA, NE 68108-0430 [ ] OTHER __________ [ ] A [ ] B
[ ] C [ ] D
- ------------------------------------------------------------------- ---------------------------------------------------------------
1. OWNER 2. JOINT OWNER
Name___________________________________________________________ Name_____________________________________________________________
Address________________________________________________________ Address__________________________________________________________
City___________________ State________________ ZIP ___________ City___________________ State________________ ZIP _____________
Social Security Number __ __ __-__ __ -___ ___ ___ ___ Social Security Number __ __ __-__ __ -___ ___ ___ ___
Telephone ( )_______________________ Sex [ ] Male [ ] Female Telephone ( )_________________________ Sex [ ] Male [ ] Female
Age __________ Date of Birth ________/________/_______ Age __________ Date of Birth ________/________/_______
- ------------------------------------------------------------------- ---------------------------------------------------------------
3. ANNUITANT 4. JOINT ANNUITANT
Name___________________________________________________________ Name_____________________________________________________________
Address________________________________________________________ Address__________________________________________________________
City___________________ State________________ ZIP ___________ City___________________ State________________ ZIP _____________
Social Security Number __ __ __-__ __ -___ ___ ___ ___ Social Security Number __ __ __-__ __ -___ ___ ___ ___
Telephone ( )_______________________ Sex [ ] Male [ ] Female Telephone ( )_________________________ Sex [ ] Male [ ] Female
Age __________ Date of Birth ________/________/_______ Age __________ Date of Birth ________/________/_______
- ------------------------------------------------------------------- ---------------------------------------------------------------
5. BENEFICIARIES: (IF MULTIPLE BENEFICIARIES, ATTACH SEPARATE SHEET.)
Primary Beneficiary _______________________________ Contingent Beneficiary _______________________________
Relationship to Owner _____________________________ Relationship to Owner _______________________________
Social Security or Tax I.D. No. ______________________ Social Security or Tax I.D. No. ________________________
- ------------------------------------------------------------------------------------------------------------------------------------
6. ANNUITY STARTING DATE:_____/_____/_____ If you do not choose an annuity
starting date, the annuity starting date will be the policy anniversary date
following your 95th birthday.
- ------------------------------------------------------------------------------------------------------------------------------------
7. PURCHASE PAYMENT ALLOCATION: MAKE CHECKS PAYABLE TO UNITED OF OMAHA LIFE INSURANCE COMPANY.
INITIAL PURCHASE PAYMENT $_______________________
Choose your investment portfolio EITHER by allocating your purchase payment
among the funds in section 7A (total must equal 100%) OR by choosing a Model
Portfolio in section 7B. Unless you direct us otherwise, we will allocate
purchase payments according to this election.
7A. [ ] Allocate my purchase payment as follows:
001 Fixed Account ____% 012 Fidelity VIP II Contrafund Portfolio ____%
002 MFS Emerging Growth Series ____% 013 Fidelity VIP II Asset Manager-Growth Portfolio ____%
003 MFS Research Series ____% 014 Fidelity VIP Equity Income Portfolio ____%
004 MFS High Income Series ____% 015 Fidelity VIP II Index 500 Portfolio ____%
005 MFS World Government Series ____% 016 Federated U.S. Government Securities II ____%
006 MFS Value Series ____% 017 Federated Prime Money Fund II ____%
007 T.Rowe Price New America Growth Portfolio ____% 018 Alger American Small Capitalization Portfolio ____%
008 T.Rowe Price Personal Str. Balanced Portfolio ____% 019 Alger American Growth Portfolio ____%
009 T.Rowe Price Equity Income Portfolio ____% 020 Pioneer Capital Growth Portfolio ____%
010 T.Rowe Price International Stock Portfolio ____% 018 Pioneer Real Estate Portfolio ____%
011 T.Rowe Price Limited Term Bond Portfolio ____% 018 Scudder International Portfolio ____%
018 Scudder Growth & Income Portfolio ____%
018 Scudder Global Discovery Portfolio ____%
Total ____%
-----------------------------------------------------------------------------------------------------------------------------
7B. [ ] Allocate my purchase payment according to one of the following Model Portfolios:
_____Aggressive _____Moderate _____Conservative
7C. Rebalance my portfolio as indicated in 7A or 7B: [ ] Yes [ ] No If yes, check how often you would like your
portfolio rebalanced:
[ ] Quarterly [ ] Semi-Annually [ ] Annually
- ------------------------------------------------------------------------------------------------------------------------------------
8. DOLLAR COST AVERAGING: (A minimum value of $5,000 is required in the subaccount from which transfers will be made at the time
of election. No more than 10% can be transferred from the Fixed Account at the time of election.)
Please transfer the amounts shown below:
FROM: ________________________________________________ $___________________
Subaccount
TO: ________________________________________________ __________% or $___________________
Subaccount
________________________________________________ __________% or $___________________
Subaccount
________________________________________________ __________% or $___________________
Subaccount
________________________________________________ __________% or $___________________
Subaccount
FREQUENCY: [ ] Monthly [ ] Semiannually [ ] Quarterly [ ] Annually
DATE OF TRANSFER [ ] 1st of month [ ] 15th of month
MINIMUM TRANSFER: $100 minimum; $50 per Subaccount
- ------------------------------------------------------------------------------------------------------------------------------------
9. OPTIONAL DEATH BENEFIT -- I elect to take the Enhanced Death Benefit [ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
10. Will this annuity replace or change any existing life insurance or annuity? [ ] Yes [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
11. I represent that my answers above are true and complete to the best of my knowledge and belief. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES, WHEN BASED UPON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT SEPARATE ACCOUNT ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED
[ ] IF YOU WANT A STATEMENT OF ADDITIONAL INFORMATION, PLEASE CHECK HERE. [ ]
OWNER'S SIGNATURE X______________________________________________________ DATE __________________
Signed at _______________________________________________________________________________________________
City State
JOINT OWNER'S SIGNATURE X________________________________________________ DATE __________________
Signed at _______________________________________________________________________________________________
City State
- ------------------------------------------------------------------------------------------------------------------------------------
MUST BE COMPLETED BY REGISTERED REPRESENTATIVE
Do you have reason to believe the policy applied for will replace existing annuities or insurance owned by the applicant?
[ ] Yes [ ] No (If yes, fulfill all state requirements.)
AGENT SIGNATURE X________________________________________________AGENT NUMBER___________________
AGENCY NAME______________________________________________________PHONE NUMBER___________________
AGENCY ADDRESS___________________________________________________________________________________________
CITY____________________________________________________________STATE______________ZIP____________
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
EXHIBIT (6) (A): ARTICLES OF INCORPORATION OF UNITED OF OMAHA LIFE INSURANCE
COMPANY
RESTATED ARTICLES OF INCORPORATION
OF
UNITED OF OMAHA LIFE INSURANCE COMPANY
ARTICLE I
NAME AND LOCATION
The name of this Corporation shall be United of Omaha Life Insurance
Company, and its principal place of business shall be in the City of Omaha,
Douglas County, Nebraska.
ARTICLE II
NATURE OF BUSINESS
The nature of the business to be transacted, and the objects and
purposes of the Company are to make Insurance upon the lives of individuals; and
all and every Insurance pertaining thereto or connected therewith, including the
granting, purchasing and disposing of Annuities, Variable Annuities, Endowments
and Variable Life insurance and including Accidental Death Benefits and
Disability Benefits; and such additional business as is authorized under Article
VIII; and if the Board of Directors shall deem it prudent at any time, to
conduct also an Accident and Health Insurance Department.
ARTICLE III
PLAN AND CAPITAL STOCK
Section I. This Company shall do business upon the Stock Legal Reserve
Plan.
Section II. The Capital Stock of the Company shall be Nine Million
Dollars ($9,000,000.00), divided into Nine Hundred Thousand (900,000) Shares of
the Par Value of Ten Dollars ($10.00) each.
Section III. The Stock shall be transferable only by the actual delivery
of the Stock Certificate properly endorsed, and the transfer duly recorded on
the Stock Books of the Company.
ARTICLE IV
LIMITATION OF CHARTER
The Company may do business under these Articles of Incorporation when
same have been filed and approved according to law, and shall have perpetual
existence, unless sooner dissolved by or in accordance with the law.
ARTICLE V
OFFICERS AND DIRECTORS
Section I. The Officers of this Company shall consist of a President,
one or more Vice Presidents, Secretary, Treasurer and such other Officers as may
be provided for in the Bylaws and all the Officers shall be elected by the Board
of Directors in such manner and for such terms as the Bylaws may prescribe.
Section II. The Board of Directors shall consist of such number of
directors as shall be specified in the Bylaws. The Board of Directors shall be
elected by the Stockholders at the Annual Meeting. The number to be elected at
each Annual Meeting, the terms for which they shall be elected, and the method
of filling vacancies shall be fixed by the Bylaws. Directors need not be
Stockholders unless required by law.
Section III. The Board of Directors shall have the general management
and control of the business of the Company.
ARTICLE VI
ANNUAL MEETING
The Stockholders shall meet annually at such time, place and date as the
Bylaws prescribe. Each Stockholder shall have the right to vote in person or by
proxy and shall be entitled to one vote for each share of stock held by him or
her at all Annual Meetings and at all Special Meetings legally called.
ARTICLE VII
INVESTMENTS
The Company shall be authorized to invest its funds in any manner
permitted by the Laws of the State of Nebraska.
ARTICLE VIII
ADDITIONAL POWERS
The Company, in addition to the powers herein conferred, shall be
entitled to all the privileges and powers accorded like corporations organized
under the Laws of Nebraska; and may engage in the business of rendering
investment advice and services and actuarial, loss prevention, marketing and
sales, safety engineering, data processing, accounting, claims, appraisal and
collection services, act as administrative agent for a government
instrumentality performing an insurance function for a health and welfare
program, and any other business activity reasonably complementary or
supplementary to its insurance business; and the Company shall be entitled to
hold, lease, convey, mortgage, encumber, buy or sell real estate and other
securities and personal property necessary for the prosecution and maintenance
of its business; and through its authorized Officers to do and perform all and
every lawful act expedient or necessary, incident to the ownership of real and
personal property, and the transaction of business connected therewith; and to
do and perform through its authorized Officers all and every lawful act required
or deemed expedient for the maintenance, perpetuity, prosperity or welfare of
the Company.
ARTICLE IX
AMENDMENTS
Amendments to these Articles of Incorporation may be adopted by
two-thirds vote of all the Directors, approved by the Department of Insurance,
and approved by two-thirds vote of all the stock voted in person or by proxy at
that Annual or legally called Special Meeting. If amendments are to be proposed
at any Special Meeting, notice of such Meeting, together with a copy of the
proposed amendments as approved by the Department of Insurance, shall be mailed
to each Stockholder at his address as shown by the Stock Books of the Company,
at least thirty days prior to the date of such Special Meeting.
ARTICLE X
CORPORATE SEAL
The Company's corporate seal shall contain the words, "United of Omaha
Life Insurance Company" surrounding the words, "Corporate Seal", and the same
may be altered at pleasure.
ARTICLE XI
LIMITATION OF LIABILITY
An outside director of the Company shall not be personally liable to the
Company or its Stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability for: (i) any act or omission not in good faith
which involves intentional misconduct or a knowing violation of the law; (ii)
any transaction from which the outside director derived an improper direct or
indirect financial benefit; (iii) paying or approving a dividend which is in
violation of Nebraska law; (iv) any act or omission which violates a declaratory
or injunctive order obtained by the Company or its Stockholders; and (v) any act
or omission occurring prior to the effective date of the amendments to the
Articles of Incorporation of the Company incorporating this ARTICLE XI.
For purposes of this ARTICLE XI, an outside director shall mean a member
of the Board of Directors who is not an officer or a person who may control the
conduct of the Company through management agreements, voting trusts,
directorships in related corporations, or any other device or relationship.
If the Nebraska Business Corporation Act is amended after approval by
the Stockholders of this ARTICLE XI to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Company shall be eliminated or limited to the fullest
extent permitted by the Nebraska Business Corporation Act as so amended.
Any repeal or modification of the foregoing ARTICLE XI by the
Stockholders of the Company shall not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or
modification.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS
To the fullest extent permitted by law, the Corporation shall indemnify
any person, who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, and whether formal or
informal, by reason of the fact that such person is or was a director of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, member, trustee, employee or agent of another
domestic or foreign corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other entity, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding; PROVIDED HOWEVER, that this indemnity shall not protect a
director against liability for (i) receipt of a financial benefit to which he or
she is not entitled, (ii) an intentional infliction of harm on the corporation
or its members, (iii) a violation of section 21-2096 of the Nebraska Business
Corporation Act, or (iv) an intentional violation of criminal law); and PROVIDED
FURTHER HOWEVER, that this indemnity shall not protect a director against
liability in connection with a proceeding by or in the right of the Corporation,
except for reasonable expenses incurred in connection with the proceeding if it
is determined that such person has met the relevant standard of conduct in
section 21-20,103 of the Nebraska Business Corporation Act.
To the fullest extent permitted by law, before final disposition of an
action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, and whether formal or informal, the Corporation
shall advance funds to pay for or reimburse the reasonable expenses incurred by
a director of the Corporation, who is a party to such action, suit or proceeding
because he or she is a director of the Corporation or is or was serving at the
request of the Corporation as a director, officer, partner, member, trustee,
employee or agent of another foreign or domestic corporation, partnership,
limited liability company, joint venture, employee benefit plan or other entity
if he or she delivers to the Corporation: (a) a written affirmation of his or
her good faith belief that he or she has met the relevant standard of conduct or
that the proceeding involves conduct for which liability has been eliminated
under a provision of these Articles of Incorporation as authorized by the
Nebraska Business Corporation Act; and (b) his or her written undertaking to
repay any funds advanced if he or she is not entitled to mandatory
indemnification under section 21-20,104 of the Nebraska Business Corporation Act
and it is ultimately determined under section 21-20,106 or section 20,107 of the
Nebraska Business Corporation Act that he or she has not met the relevant
standard of conduct described in section 21-20,103 of the Nebraska Business
Corporation Act. This undertaking shall be an unlimited general obligation of
the director and shall not be required to be secured. It may be accepted without
reference to the financial ability of the director to make repayment.
* * * * *
EXHIBIT (6) (B): BYLAWS OF UNITED OF OMAHA LIFE INSURANCE COMPANY
Amended Bylaws
of
United of Omaha Life Insurance Company
ARTICLE I
STOCKHOLDERS AND STOCKHOLDERS' MEETINGS
Section 1. ANNUAL MEETING OF STOCKHOLDERS. The stockholders shall
meet annually during the first week in March on a date and at a time and
place to be determined by the Board of Directors.
Section 2. SPECIAL MEETINGS OF STOCKHOLDERS. Special meetings of the
stockholders shall be called by the Chairman of the Board of Directors
on a date and at a time and place designated by the Chairman upon the
request of two-thirds of the total number of directors, or the written
request of the holders of two-thirds of the shares of all of the capital
stock of the Corporation.
Section 3. QUORUM; MAJORITY VOTE; PROXIES. The holders of one-half of
the shares of all of the capital stock of the Corporation present in
person or by proxy shall constitute a quorum for any meeting of the
stockholders, but a lesser number of stockholders may adjourn the
meeting to another time; and at any adjourned meeting of the
stockholders at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
scheduled. A majority vote of the persons present and voting in person
or by proxy at any meeting of the stockholders shall govern all
proceedings not herein or by law requiring a different vote. All proxies
shall be in writing and filed with the Chairman or Secretary at least
five days prior to the date of the meeting.
Section 4. EACH SHARE OF CAPITAL STOCK TO HAVE ONE VOTE. At any meeting
of the stockholders, every stockholder shall be entitled to vote in
person, or by proxy appointed by instrument in writing subscribed by
such stockholder or his or her duly authorized attorney, and filed with
the Chairman or Secretary as provided in Section 3 of this Article, and
every stockholder shall have one vote for each share of stock standing
registered is his or her name at the time of the closing of the transfer
books for said meeting.
ARTICLE II
BOARD OF DIRECTORS
Section 1. COMPOSITION OF THE BOARD; TERMS OF DIRECTORS; ELIGIBILITY AND
DIRECTORS EMERITI. The Board of Directors shall consist of not less than
seven nor more than fifteen directors. Not less than three of the
directors shall be residents of Nebraska. The Board of Directors shall
be elected at the annual meeting of the stockholders by a majority vote
of the stock represented in person or by proxy at the meeting for a term
of one year each. The directors shall hold office until their successors
are elected and qualified. At the expiration of the term of any director
who is, for any reason, not elected to a new term, such director may be
accorded the honorary title of Director Emeritus by the Board of
Directors. Directors Emeriti shall be elected for one year terms and
shall perform such duties and functions as are assigned to them by the
Board of Directors, and shall receive such compensation for their
services as the Board of Directors may provide.
Section 2. NOMINATIONS FOR DIRECTORS. Nominations for election to the
Board of Directors shall be made in writing, in duplicate, one of which
shall be filed with the Chairman of the Board of Directors and one of
which shall be filed with the Secretary, at least thirty days prior to
the meeting of the stockholders at which such election shall take place.
The unanimous vote of the stockholders present in person or by proxy
shall be necessary to elect a director whose nomination was not so
filed.
Section 3. POWERS OF THE BOARD OF DIRECTORS. The Board of Directors
shall have the general management and control of the business of the
Corporation; shall have power to take such action as shall be necessary
or desirable for the proper transaction of the business and affairs of
the Corporation; may appoint such committees and specify their powers
and duties and responsibilities as may, in the judgement of the Board of
Directors, be necessary or advisable; shall have power to prescribe
additional duties for any officer; shall approve the investment of all
funds of the Corporation; shall have power to issue certificates of
stock in the Corporation in the form and under the conditions prescribed
by these Bylaws; shall have power to declare and authorize payment of
dividends to stockholders from surplus remaining after payment of all
losses and expenses, and after debiting of reserves, both voluntary and
those required by law; and generally, and in addition to the powers
herein above specified (which are included by way of illustration and
not limitation), the Board of Directors shall have power to do and
perform every act and thing whatsoever suitable, lawful and proper for
the accomplishment of the purposes, attainment of any of the objects, or
the furtherance of the business and successful operation of the
Corporation.
Section 4. COMMITTEES. From time to time, the Board of Directors may
create such committees as they may see fit and may designate the duties
and powers of such committees; provided, however, that no such committee
shall be given authority to amend the Articles of Incorporation or to
amend the Bylaws of the Corporation. Each such committee shall submit to
the Board of Directors each year at their annual meeting, or at such
other meeting(s) as the Board of Directors may designate, a report of
the actions or recommendations of such committee for consideration,
approval and/or ratification by the Board of Directors.
Section 5. RESIGNATION. Any director may resign from the Board of
Directors at any time, such resignation to be made in writing and to
take effect immediately without acceptance.
ARTICLE III
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. ANNUAL MEETING OF THE BOARD. The annual meeting of the Board
of Directors shall be held immediately following the adjournment of the
annual meeting of the stockholders or as soon thereafter as practicable.
Section 2. REGULAR AND SPECIAL MEETINGS. In addition to the annual
meeting, regular meetings of the Board of Directors shall be held during
the second, third, and fourth quarters respectively of each calendar
year, at a time and place to be determined by the Board of Directors.
Special meetings may be held at such times and places as the Chairman of
the Board may designate. Notice of meetings of the Board of Directors
shall be given by the Chairman, the Secretary, or the Assistant
Secretary at least forty-eight hours prior to the time of meeting. No
notice need be given to any director who executes and files a written
waiver of notice of such meeting, either before or after the holding
thereof, or who signifies waiver by attending the meeting.
Section 3. QUORUM. A majority of the total number of directors currently
holding office shall constitute a quorum at all meetings. If, at any
meeting of the Board, a quorum is not present, a majority of those
present may adjourn the meeting from time to time until a quorum shall
have been obtained. The Board of Directors shall take no action in the
absence of a quorum.
Section 4. ACTION WITHOUT A MEETING. Any action that may be taken by the
Board of Directors at a meeting may be taken without a meeting if a
consent in writing, setting forth the action to be so taken, shall be
signed by all of the directors.
ARTICLE IV
OFFICERS
Section 1. OFFICERS AND QUALIFICATION. The officers of the Corporation
shall consist of a Chairman of the Board of Directors, President, one or
more Vice Presidents, Secretary, Treasurer, and such additional officers
with such functions and titles as may be authorized by the Board of
Directors. The Chairman of the Board or President are authorized to
appoint officers below the Vice President level. A director, while
serving as such, shall be eligible to be elected and serve as an officer
of the Corporation.
Section 2. TERM OF OFFICE; ELECTION; REMOVAL. Officers at or above the
Vice President level may be elected at any meeting of the Board of
Directors for such terms as shall be fixed by the Board of Directors at
the time of their election, and shall serve for such terms or until
their successors are elected and qualified. Any such officer elected at
a meeting other than an annual meeting shall be elected for a term
expiring with the next succeeding annual meeting. Elections shall
require the vote of not less than a majority of the directors present at
the meeting. All such officers shall be subject to removal at any time
with or without cause by the same vote by the Board of Directors as is
required for their election. The Board of Directors may fill vacancies
in any office or any newly created office at or above the Vice President
level at any meeting of the Board. Vacancies in any such office may be
filled for the balance of the terms of that office. Officers below the
Vice President level may at any time be appointed for terms, and removed
with or without cause, as authorized by the Chairman of the Board or the
President.
Section 3. DUTIES OF OFFICERS. The duties and powers of the officers
are as follows:
(a) THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
have general charge of the policymaking of the Corporation. The
Chairman shall preside at all meetings of the stockholders and at
all meetings of the Board of Directors. The Chairman shall
perform such other duties as may be assigned by the Board of
Directors, and shall be an ex officio member of all Board
Committees.
(b) THE VICE CHAIRMAN OF THE BOARD. The Board of Directors, at
its discretion, may appoint a Vice Chairman of the Board. If so
appointed, the Vice Chairman shall perform such duties as are
consistent to the office or properly required by him or her by
the Board of Directors, including but not limited to, strategic
policy development and corporate planning. In the event of the
absence, disability, death or resignation of the Chairman of the
Board, the Vice Chairman shall serve as Chairman until a
successor is duly appointed by the Board of Directors.
(c) THE PRESIDENT. The President shall direct and supervise the
operation of the business and affairs of the Corporation. The
President shall make reports to the Board of Directors and
stockholders, and shall perform such other duties as are incident
to the office or are properly required of the President or
assigned by the Board of Directors, Chairman or Vice Chairman.
(d) THE SECRETARY AND ASSISTANT SECRETARY. The Secretary and/or
such Assistant Secretary as may be designated by the Board of
Directors shall issue notices of the meetings of the Board of
Directors, shall keep the minutes of the meetings of the
stockholders and of the Board of Directors, and shall have
custody of the corporate seal and records. The Secretary and/or
Assistant Secretary shall exercise such other powers and duties
as are assigned to him or her by the Board of Directors,
Chairman, Vice Chairman or President.
(e) THE TREASURER AND ASSISTANT TREASURER. The Treasurer and/or
Assistant Treasurer shall have charge of and be responsible for
all funds, securities, receipts and disbursements of the
Corporation in such banks and depositories as shall be designated
by the Board of Directors or a Committee thereof. The Treasurer
and/or Assistant Treasurer shall exercise such other powers and
duties as are assigned to him or her by the Board of Directors,
Chairman, Vice Chairman or President.
(f) VICE PRESIDENTS AND ALL OTHER OFFICERS. Vice Presidents and
all other officers shall have functions and shall perform such
duties as are assigned to them by the Chairman, Vice Chairman or
the President.
Section 4. BONDS REQUIRED OF THE TREASURER, OFFICERS, AND EMPLOYEES. The
Treasurer and such other officers and employees as may be designated by
the Board of Directors shall obtain, at the expense of the Corporation,
corporate surety bonds in such amount and form as may be approved by the
Board of Directors.
Section 5. EXECUTION OF RELEASES, LEASES, CONTRACTS AND OTHER DOCUMENTS.
Any officer of the Corporation is authorized to execute releases,
assignments or other instruments relating to mortgages, trust deeds,
judgment liens or other liens, and to execute leases and other contracts
relating to real estate. An officer of the Corporation is authorized to
execute and to enter into any contract or execute and deliver any
instrument on behalf of the Corporation and such authority may be
general or confined to specific instances as authorized by the Board of
Directors. Additional representatives of the Corporation may have the
authority to execute and enter into specific types of contracts or other
instruments on behalf of the Corporation as authorized by the Board of
Directors.
ARTICLE V
CAPITAL STOCK AND SEAL
Section 1. FORM OF STOCK CERTIFICATE; LOST CERTIFICATES. The
certificates of shares of the capital stock of the Corporation shall be
in such form, not inconsistent with the Articles of Incorporation, as
shall be prepared or approved by the Board of Directors. The
Certificates shall be signed by the President, or a Vice President; and
also by the Secretary or an Assistant Secretary; or also by the
Treasurer or an Assistant Treasurer; and sealed with the Corporate Seal.
Facsimile signatures may be used in signing the certificates and a
facsimile of the Corporate Seal may be used. All certificates shall be
consecutively numbered. The name of the person owning the shares
represented thereby, with the number of such shares and the date of
issue shall be entered on the Corporation's books. All certificates
surrendered to the Corporation shall be canceled and no new certificates
shall be issued until the former certificates for the same number of
shares shall have been surrendered and canceled. Bond must be furnished
the Corporation in case of lost or destroyed certificates.
Section 2. TRANSFER OF SHARES OF CAPITAL STOCK. Shares of the capital
stock of the Corporation shall be transferred only on the books of the
Corporation by the holder thereof in person, or by his or her duly
authorized attorney, upon surrender and cancellation of certificates for
a like number of shares. The Board of Directors shall have power and
authority to make all such rules and regulations as they may deem
expedient concerning the issue, transfer and registration of
certificates for shares of capital stock of the Corporation.
Section 3. STOCK BOOKS, WHEN CLOSED. The stock books shall be closed for
the meeting of the stockholders during such periods as from time to time
may be fixed by the Board of Directors in accordance with the
requirements of law, and during such periods no stock shall be
transferable.
Section 4. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal containing the name of the Corporation surrounding the
words "Corporate Seal", and the same may be altered at any regular or
special meeting of the Board of Directors by a majority vote of the
Directors present.
ARTICLE VI
COMPENSATION OF DIRECTORS AND OFFICERS
Section 1. The Board of Directors shall determine the compensation to be
paid directors and officers at or above the Vice President level. The
compensation to be paid to officers below the Vice President level shall
be determined by or at the direction of the Chairman, Vice Chairman or
President.
ARTICLE VII
PARLIAMENTARY RULES
Roberts' Rules of Order shall govern all parliamentary matters not
otherwise provided for by these Bylaws.
ARTICLE VIII
AMENDMENT OF BYLAWS
These Bylaws may be adopted, amended, or revised by a majority vote of
all directors of the Corporation present at any meeting of the Board of
Directors.
*****
EXHIBIT (8) (A): PARTICIPATION AGREEMENT WITH ALGER AMERICAN FUND
PARTICIPATION AGREEMENT
AMONG
THE ALGER AMERICAN FUND
FRED ALGER MANAGEMENT INC.
AND
UNITED OF OMAHA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this l day of June, 1995, by
and among UNITED OF OMAHA LIFE INSURANCE COMPANY (hereinafter "United"), a
Nebraska life insurance company, on its own behalf and on behalf of its Separate
Account C (the "Account"), and The Alger American Fund, a business trust
organized under the laws of Massachusetts (hereinafter the "Fund") and Fred
Alger Management, Inc. (hereinafter the "Adviser"), a New York corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
similar to this Agreement (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interests in the Fund are currently divided into
six series of shares, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated February 17, 1989 (File No. 812-7076), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and
WHEREAS, the Fund is registered as an open-end diversified management
investment company under the 1940 Act and shares of the Portfolios are
registered under the Securities Act of 1933, as amended (hereinafter the "1933
Act"); and
WHEREAS, the Adviser is duly registered as an investment adviser under
the federal Investment Advisers Act of 1940, as amended, and any applicable
state securities laws and is the Fund's investment adviser and manager; and
WHEREAS, United has registered certain variable annuity contracts
supported wholly or partially by the Account (the "Contracts") under the 1933
Act and said Contracts are listed in Schedule A hereto, as it may be amended
from time to time by mutual written agreement; and
WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of United on
the date shown for such account on Schedule A hereto, to set aside and invest
assets attributable to the aforesaid variable annuity contracts; and
WHEREAS, United has registered or will register the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, United intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts; and
WHEREAS, United and the Adviser have entered into a Service Agreement
dated ;
NOW, THEREFORE, in consideration of their mutual promises, United, the
Fund, and the Adviser agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Fund agrees to sell to United those shares of the Designated
Portfolios which the Account orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Portfolios. For purposes of this Section 1.1,
United shall be the designee of the Fund for receipt of such orders and receipt
by such designee shall constitute receipt by the Fund. United will use its best
efforts to give the Fund notice of such order by 10 a.m. eastern time on the
next following Business Day. "Business Day" shall mean any day on which the New
York Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
1.2. The Fund agrees to make shares of the Designated Portfolios
available indefinitely for purchase at the applicable net asset value per share
by United on behalf of the Account on those days on which the Fund calculates
its net asset value pursuant to rules of the Securities and Exchange Commission,
and the Fund shall calculate such net asset value on each day which the New York
Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of
Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any
Portfolio to any person, or suspend or terminate the offering of shares of any
Portfolio if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board, acting in good faith
and in light of their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of such Portfolio.
1.3. The Fund and the Adviser agree that shares of the Designated
Portfolios will be sold only to Participating Insurance Companies, their
separate accounts, and other persons but only insofar as consistent with the
applicability of the "lookthrough rule" of paragraph (f)(2)(i) of Treas. Reg.
ss. 1.817-5 pursuant to ss. 817(h)(4) of the Internal Revenue Code of 1986, as
amended (the "Code"). No shares of any Designated Portfolio will be sold to the
general public. The Fund will not sell shares of the Designated Portfolios to
any other insurance company or separate account unless an agreement containing
provisions substantially the same as Sections 3.4 and 3.5 and Articles I and VII
of this Agreement is in effect to govern such sales.
1.4. The Fund agrees to redeem for cash, on United's request, any full
or fractional shares of the Fund held by United, executing such requests on a
daily basis at the net asset value next computed after receipt by the Fund or
its designee of the request for redemption, except that the Fund reserves the
right to suspend the right of redemption, consistent with Section 22(e) of the
1940 Act and any applicable rules thereunder. For purposes of this Section 1.4,
United shall be the designee of the Fund for receipt of requests for redemption
and receipt by such designee shall constitute receipt by the Fund. United will
use its best efforts to give the Fund notice of such request for redemption by
10:00 a.m. on the next following Business Day.
1.5. The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies.
1.6. United shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or
by a credit for any shares redeemed the same day as the purchase. For purposes
of Section 2.7 hereof, upon receipt by the Fund of the federal funds so wired,
such funds shall cease to be the responsibility of United and shall become the
responsibility of the Fund.
1.7. The Fund generally shall pay and transmit the proceeds of
redemptions of Fund shares on the next Business Day after a redemption order is
received in accordance with Section 1.4 hereof (except that the Fund reserves
the right to postpone payment upon redemption consistent with Section 22(e) of
the 1940 Act and any applicable rules thereunder, to the extent consistent with
interpretations of the Securities and Exchange Commission or its staff). Payment
shall be in federal funds transmitted by wire and/or a credit for any shares
purchased the same day as the redemption.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to United or the Account. Shares
ordered from the Fund will be recorded in an appropriate title for the Account
or the appropriate subaccount of the Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to United of any income, dividends, or capital
gain distributions payable on the Designated Portfolios' shares. United hereby
elects to receive all such income, dividends, and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio.
United reserves the right to revoke this election and to receive all such
income, dividends, and capital gain distributions in cash. The Fund shall notify
United of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund shall make the net asset value per share for each
Designated Portfolio available to United on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6 p.m. eastern
time. If the Fund provides incorrect share net asset value information, United
shall be entitled to an appropriate adjustment. Any material error in the
calculation or reporting of net asset value per share, dividend or capital gains
information shall be reported to United.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. United represents and warrants that the Contracts are or, prior to
issuance, will be registered under the 1933 Act; that the Contracts will be
issued and sold in compliance in all material respects with all applicable
federal and state laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. United further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established the Account as a segregated asset account under the Nebraska
Insurance Laws and has registered or, prior to any issuance or sale of the
Contracts, will register the Account as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as a segregated investment account
for the Contracts.
2.2. The Fund represents and warrants that Portfolio shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance AND SOLD IN COMPLIANCE with all applicable federal and
state securities laws including without limitation the 1933 Act, the Securities
Exchange Act of 1934 as amended (hereinafter the "1934 Act"), applicable
securities laws of the State of Nebraska, and the 1940 Act and that the Fund is
and shall remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of shares of
the Designated Portfolios. The Fund shall register and qualify such shares for
sale in accordance with the laws of the various states if and to the extent
required by applicable law.
2.3. The Fund undertakes to have a Board, a majority of whom are not
interested persons of the Fund, formulate and approve any plan pursuant to Rule
12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Fund represents and warrants that it will use its best efforts
to ensure that the investment policies, fees and expenses of the Designated
Portfolios are and shall at all times remain in compliance with applicable
insurance and other applicable laws of the State of Nebraska and any other
applicable state, to the extent required to perform this Agreement and to the
extent specifically requested in writing by United.
2.5. The Fund represents and warrants that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.6. The Adviser represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with any applicable state and federal securities laws (and any other
applicable laws of the State of Nebraska to the extent specifically requested in
writing by United).
2.7. The Fund and the Adviser represent and warrant that all of their
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimal
coverage as required currently by Rule 17g-1 under the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.8. The Fund will provide United with as much notice as is reasonably
practicable of any material change affecting the Fund (including, but not
limited to, any proxy solicitation and any material change in its registration
statement or prospectus) and consult with United in order to implement any such
change in an orderly manner.
ARTICLE III. SHAREHOLDER COMMUNICATIONS
3.1. The Adviser shall provide United with a camera-ready copy of each
updated version of any of the Fund's then-current prospectuses relating to a
Designated Portfolio, any supplements thereto, the Fund's annual and semi-annual
reports, and any supplements thereto, and the Fund's proxy materials relating to
any Designated Portfolio.
3.2. The Adviser shall provide United with a copy of each updated
Statement of Additional Information ("SAI") for the Fund suitable for
duplication.
3.3. It is understood and agreed that, except with respect to
information regarding United, the Account or the Contracts supplied by United or
persons under its control, United is not responsible for the content of the
prospectus or SAI for the Designated Portfolios. It is also understood and
agreed that, except with respect to information regarding the Fund, Adviser, or
the Designated Portfolios provided by the Fund or the Adviser or persons under
their control, neither the Fund nor Adviser are responsible for the content of
the prospectus or SAI for the Contracts.
3.4. If and to the extent required by law or by the Shared Funding
Exemptive Order, United shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received or which are not attributable to Contract owners
in the same proportion as Fund shares of such portfolio
for which instructions have been received, so long as and
to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require
passthrough voting privileges for variable contract
owners.
3.5. Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges in a consistent manner as required by the Shared
Funding Exemptive Order.
3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of directors or
trustees and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. United shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature and other promotional material
that United develops or uses and in which the Fund (or a Portfolio thereof) or
Adviser or the underwriter for the Fund shares is named, at least 15 Business
Days prior to its use. No such material shall be used if the Fund or its
designee objects to such use within 15 Business Days after receipt of such
material.
4.2. United shall not give any information or make any representations
or statements on behalf of the Fund or the Adviser or concerning the Fund or the
Adviser in connection with the sale of the Contracts other than the information
or representations contained in the registration statement or prospectus or SAI
for the Fund shares, as such registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature and other promotional material approved by the
Fund or its designee or by the Adviser, except with the permission of the Fund
or the Adviser or the designee of either.
4.3. The Fund or Adviser shall furnish, or shall cause to be furnished,
to United, each piece of sales literature and other promotional material in
which United and/or its separate account(s), is named at least 15 Business Days
prior to its use. No such material shall be used if United objects to such use
within 15 Business Days after receipt of such material.
4.4. The Fund and the Adviser shall not give any information or make any
representations on behalf of United or concerning United, the Account, or the
Contracts other than the information or representations contained in a
registration statement or prospectus or SAI for the Contracts, as such
registration statement and prospectus and SAI may be amended or supplemented
from time to time, or in reports for the Account, or in sales literature and
other promotional material approved by United or its designee, except with the
permission of United.
4.5. The Fund will provide to United at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Designated Portfolios, contemporaneously
with the filing of such document(s) with the Securities and Exchange Commission
or other regulatory authorities.
4.6. United will provide to the Fund at least one complete copy of all
registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
the Account, contemporaneously with the filing of such document(s) with the
Securities and Exchange Commission.
4.7. For purposes of this Article IV, the phrase "sales literature and
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and the Adviser shall pay no fee or other compensation to
United under this Agreement, and United shall pay no fee or other compensation
to the Fund or Adviser under this Agreement, although the parties hereto will
bear certain expenses in accordance with Articles III, V, and other provisions
of this Agreement, and payments will be made as specified in the Service
Agreement.
5.2. Except as otherwise specifically provided herein or in the Service
Agreement, each party will bear all expenses incident to its performance under
this Agreement. The Fund shall bear the expenses for the cost of registration
and qualification of the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and reports, setting the
prospectus in type, setting the proxy materials and reports to shareholders in
type, the preparation of all statements and notices required by any federal or
state law, and all taxes on the issuance or transfer of the Fund's shares.
5.3. The Fund and Adviser acknowledge that a principal feature of the
Contracts is the Contract owner's ability to choose from a number of
unaffiliated mutual funds (and portfolios or series thereof) ("Unaffiliated
Funds"), and to transfer the Contract's cash value between funds and portfolios.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1. The Fund and Adviser represent and warrant that each Designated
Portfolio will at all times comply, to the extent that it is within the power of
the Fund and Adviser, with Section 817(h) of the Code and Treasury Regulation
ss.1.817-5, as amended from time to time, and any Treasury interpretations
thereof, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other modifications
or successor provisions to such Section or Regulations. In the event that a
Designated Portfolio ceases so to comply, the Fund will take all reasonable
steps (a) to notify United of such noncompliance, and (b) to adequately
diversify the Designated Portfolios so as to achieve compliance within the grace
period afforded by Regulation 1.817-5.
6.2. The Fund and Adviser represent and warrant that each Designated
Portfolio is currently qualified as a Regulated Investment Company under
Subchapter M of the Code, and that it will maintain such qualification (under
Subchapter M or any successor or similar provisions) as long as this Agreement
is in effect. The Fund or Adviser will notify United immediately upon having a
reasonable basis for believing that any Designated Portfolio has ceased to
comply with the aforesaid Section 817(h) diversification or Subchapter M
qualification requirements or might not so comply in the future.
6.3. United shall make every effort to maintain the treatment of the
Contracts as annuity contracts under applicable provisions of the Code, and
shall notify the Fund and the Adviser immediately upon having a reasonable basis
for believing that such Contracts have ceased to be so treated or that they
might not be so treated in the future.
ARTICLE VII. Potential Conflicts and Compliance With
SHARED FUNDING EXEMPTIVE ORDER
7.1. The Board of Trustees of the Fund (the "Board") will monitor the
Fund for the existence of any material irreconcilable conflict between the
interests of the contract owners of all separate accounts investing in the Fund
and determine what action, if any, should be taken in response to such
conflicts. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no- action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; or (f) a decision
by an insurer to disregard the voting instructions of contract owners. The Board
shall promptly inform United if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. United will report any potential or existing conflicts of which it
is aware to the Board. United will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by United to
inform the Board whenever contract owner voting instructions are disregarded and
on all other matters referred to in this Article VII.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists,
United and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, including: (1) withdrawing the
assets allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of all
affected contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by United to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, United may be
required, at the Fund's election, to withdraw the Account's investment in the
Fund and terminate this Agreement; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board. Any such withdrawal and termination must take place within six (6)
months after the Fund gives written notice that this provision is being
implemented, and until the end of that six month period the Fund shall continue
to accept and implement orders by United for the purchase (and redemption) of
shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to United conflicts with the
majority of other state regulators, then United will withdraw the Account's
investment in the Fund and this Agreement shall terminate within six months
after the Board informs United in writing that it has determined that such
decision has created an irreconcilable material conflict; provided, however,
that such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the disinterested members of the Board. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by United for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. United shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then United will withdraw the Account's investment in the Fund and
this Agreement shall terminate within six (6) months after the Board informs
United in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
be deemed modified to the extent necessary also to comply with the terms and
conditions contained in such Rule(s) as so amended or adopted.
7.8. United shall at least annually submit to the Board of Trustees of
the Fund such reports, materials or data as the Trustees may reasonably request
so that the Trustees may fully carry out the obligations imposed upon them by
the Shared Funding Exemptive Order, and said reports, materials and data shall
be submitted more frequently if deemed appropriate by the Board of Trustees.
7.9. United agrees that any remedial action taken by it in resolving any
irreconcilable conflict will be carried out at its expense and with a view only
to the interests of Contract owners.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY UNITED
8.1(a). United agrees to indemnify and hold harmless the Fund,
the Adviser, each of their officers, each member of their Boards and each
person, if any, who controls the Adviser within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of United), or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities, Or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or prospectus or SAI for the Contracts or contained in the Contracts
(or any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
Agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
United by or on behalf of the Fund for use in the Registration
Statement or prospectus or SAI for the Contracts or in the Contracts
or sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus, SAI, or sales literature of the Fund not
supplied by United or persons under its control) or wrongful conduct
of United or persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, SAI,
or sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on
behalf of United; or
(iv) arise as a result of any material failure by United to provide the
services and furnish the materials under the terms of this Agreement;
or
(v) arise out of or result from any material breach of any representation
and/or warranty made by United in this Agreement or arise out of or
result from any other material breach of this Agreement by United; as
limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
8.1(b). United shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities, or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties.
8.1(c). United shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified United in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such SERVICE ON ANY
DESIGNATED AGENT), BUT FAILURE TO NOTIFY UNITED OF ANY SUCH CLAIM SHALL not
relieve United from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, United shall be entitled to participate, at its own
expense, in the defense of such action. United also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action.
After notice from United to such party of United's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and United will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify United of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.
8.2. INDEMNIFICATION BY THE ADVISER
8.2(a).The Adviser agrees to indemnify and HOLD HARMless United
and each of United's directors and officers and each person, if any, who
controls United within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Adviser), or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities, or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or prospectus or SAI or sales literature of the Fund (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to STATE therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this Agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Adviser or
Fund by or on behalf of United for use in the Registration Statement
or prospectus or SAI for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus, SAI, or sales literature for the Contracts not
supplied by the Adviser or Fund or persons under their control) or
wrongful conduct of the Fund or Adviser or persons under their
control, with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, SAI,
or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished
to United by or on behalf of the Fund; or
(iv) arise as a result of any material failure by the Fund to provide the
services and furnish the materials under the terms of this Agreement
(including a material failure, whether unintentional or in good faith
or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this Agreement);
or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Adviser in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Adviser; as limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Adviser shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities, or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to United or the Account, whichever is applicable.
8.2(c).The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). United agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against any Indemnified Party in
connection with the issuance or sale of the Contracts or the operation of the
Account.
8.3. INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless United and
each of its directors and officers and each person, if any, who controls United
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 8.3) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the Fund), or litigation (including legal and other expenses)
to which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages, liabilities, or expenses (or actions in respect thereof) or
settlements, are related to the operations of the Fund and:
(i) arise as a result of any material failure by the Fund to
provide the services and furnish the materials under the
terms of this Agreement (including a material failure,
whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification
requirements specified in Article VI of this Agreement);
or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
agreement or arise out of or result from any other
material breach of this Agreement by the Fund; as limited
by and in accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities, or
litigation to which an Indemnified Party would otherwise be subject by reason of
such Indemnified Party's willful misfeasance, bad faith, or negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
United, the Fund, the Adviser or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund shall also be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). United agrees promptly to notify the Fund of the
commencement of any litigation or proceeding against any Indemnified Party in
connection with the Agreement, the issuance or sale of the Contracts, the
operation of the Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Nebraska.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. TERMINATION
10.1. This Agreement shall continue in full force and effect
until the first to occur of:
(a) termination by any party, with or without cause, with respect
to some or all Portfolios, by six (6) months' advance written
notice delivered to the other parties (unless a shorter time is
agreed to in writing by the non-terminating party(ies)); or
(b) termination by United by written notice to the other parties
with respect to any Portfolio based upon United's determination
that shares of such Portfolio are not reasonably available to
meet the requirements of the Contracts; or
(c) termination by United by written notice to the other parties
with respect to any Portfolio in the event any of the Portfolio's
shares are not registered, issued, or sold in accordance with
applicable state and/or federal law or such law precludes the use
of such shares as the underlying investment media of the
Contracts issued or to be issued by United; or
(d) termination by the Fund in the event that formal
administrative proceedings are instituted against United by the
National Association of Securities Dealers, Inc. ("NASD"), the
Securities and Exchange Commission, the Insurance Commissioner or
like official of any state or any other regulatory body regarding
United's duties under this Agreement or related to the sale of
the Contracts, the operation of any Account, or the purchase of
the Fund shares, provided, however, that the Fund determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect
upon the ability of United to perform its obligations under this
Agreement; or
(e) termination by United in the event that formal administrative
proceedings are instituted against the Fund or Adviser by the
NASD, the Securities and Exchange Commission, or any state
securities or insurance department or any other regulatory body,
provided, however, that United determines in its sole judgment
exercised in good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of the Fund
or Adviser to perform its obligations under this Agreement; or
(f) termination by United by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such
Portfolio fails to meet the Section 817(h) diversification
requirements or Subchapter M qualifications specified in Article
VI hereof or if United reasonably believes that the Portfolio may
fail to meet either of those requirements; or
(g) termination by either the Fund or the Adviser by written
notice to United, if either one or both of the Fund or the
Adviser respectively, shall determine, in their sole judgment
exercised in good faith, that United has suffered a material
adverse change in its business operations, financial condition,
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or
(h) termination by United by written notice to the Fund and the
Adviser, if United shall determine, in its sole judgment
exercised in good faith, that the Fund or the Adviser has
suffered a material adverse change in its business, operations,
financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(i) termination by either the Fund or the Adviser by written
notice to United, in the event that the Contracts cease to
qualify as annuity contracts under the Code or if the Contracts
are not registered, issued, or sold in material compliance with
applicable state and/or federal law; or
(j) termination by United upon a material breach of this
Agreement or of any representation or warranty herein by the Fund
or the Adviser; or
(k) termination by either the Fund or the Adviser upon a material
breach of this Agreement or of any representation or warranty
herein by United.
10.2. EFFECT OF TERMINATION. If this Agreements is terminated pursuant
to any of paragraphs (b), (e), (g), (h), or (j) of Section 10.1, then,
notwithstanding such termination, the Fund and the Adviser shall, at the option
of United and only to the extent consistent with applicable law, continue to
make available additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts.
10.3. SURVIVING PROVISIONS. Notwithstanding any termination of this
Agreement, each party's obligation under Article VIII to indemnify other parties
shall survive and not be affected by any termination of this Agreement.
ARTICLE XI. NOTICES Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.
If to the Fund:
The Alger American Fund
30 Montgomery Street
Jersey City, New Jersey 07302
Attention: Gregory S. Duch
If to United:
United of Omaha Life Insurance Company
3 - Law Division
Mutual of Omaha Plaza
Omaha, NE 68175-1008
Attention: Variable Products Counsel
If to the Adviser:
Fred Alger Management, Inc.
30 Montgomery Street
Jersey City, New Jersey 07302
Attention: Gregory S. Duch
ARTICLE XII. MISCELLANEOUS
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate, or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain. Without limiting the foregoing, no party hereto shall disclose
any information that another party reasonably considers to be proprietary.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.4. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule, or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD, and state insurance regulators)
and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the generality of the
foregoing, each party hereto further agrees to furnish the Nebraska Insurance
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order to
ascertain whether the variable annuity operations of United are being conducted
in a manner consistent with the Nebraska Variable Annuity Regulations and any
other applicable law or regulations.
12.6. The rights, remedies, and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.7. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.8. All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents, or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representatives and its seal to be hereunder affixed hereto as of the date
specified below.
SEAL UNITED OF OMAHA LIFE INSURANCE COMPANY
By its authorized officer,
By: /S/ RICHARD A. WITT
Title: SENIOR VICE PRESIDENT
Date:
Fund:
SEAL THE ALGER AMERICAN FUND
By its authorized officer,
By: /S/ GREGORY S. DUCH
Title: TREASURER
Date: JUNE 5, 1995
Advisor:
SEAL FRED ALGER MANAGEMENT, INC.
By its authorized officer,
By: /S/ GREGORY S. DUCH
Title: EXECUTIVE VICE PRESIDENT
Date: JUNE 5, 1995
<PAGE>
SCHEDULE A
================================================================================
SEPARATE ACCOUNTS, ASSOCIATED CONTRACTS,
AND DESIGNATED PORTFOLIOS
================================================================================
- ------------------------ ------------------------------------ ==================
Name of Separate
Account and Date Contracts Funded by Designated
Established Separate Account Portfolios
- ------------------------ --------------------------- ===========================
- ------------------------ --------------------------- ===========================
Alger American
Separate Account C 6090L Small Capitalization
(12/1/93) Portfolio
Alger American Growth
Portfolio
- ------------------------ --------------------------- ===========================
EXHIBIT (8)(B) PARTICIPATION AGREEMENT WITH THE INSURANCE MANAGEMENT SERIES
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 25th day of May , 1995, by and
between United of Omaha Life Insurance Company (the 'Insurer'), a life
insurance company domiciled in Nebraska, on its behalf and on behalf of
the segregated asset accounts of the Insurer listed on Exhibit A to this
Agreement (the "Separate Accounts"); Insurance Management Series (the
"Fund"), a Massachusetts business trust; and Federated Securities Corp.
(the "Distributor"), a Pennsylvania corporation.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended ("1940 Act") and the Fund
is authorized to issue separate classes of shares of beneficial interest
("shares"), each representing an interest in a separate portfolio of
assets known as a "portfolio" and each portfolio has its own investment
objective, policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of
its portfolios to separate accounts of insurance companies that fund
variable annuity contracts ("Variable Contracts") and to serve as an
investment medium for Variable Contracts offered by insurance companies
that have entered into participation agreements substantially similar to
this agreement ("Participating Insurance Companies"), and the Fund will
be made available in the future to offer shares of one or more of its
portfolios to separate accounts of insurance companies that fund
variable life insurance policies (at which time such policies would also
be "Variable Contracts" hereunder), and
WHEREAS, the Fund is currently comprised of five separate
portfolios, and other portfolios may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC dated
December 29, 1993 (File No. 812-8620), granting Participating insurance
Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 1~(a),
and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be
sold to and held by variable annuity and variable life insurance
separate accounts of life insurance companies that may or may not be
affiliated with one another (hereinafter the "Mixed and Shared Funding
Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-clearer with
the SEC under the Securities Exchange Act of 1934, as amended ("1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"), and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer wishes to purchase shares of one or more of the
Fund's portfolios on behalf of its Separate Accounts to serve as an
investment medium for Variable Contracts funded by the Separate
Accounts, and the Distributor is authorized to sell shares of the Fund's
portfolios;
NOW', THEREFORE. in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I. Sale of Fund Shares
1.1 The Distributor agrees to sell to the Insurer those shares of
the portfolios offered and made available by the Fund and identified on
Exhibit B ("Portfolios") that the Insurer orders on behalf of its
Separate Accounts, and agrees to execute such orders on each day on
which the Fund calculates its net asset value pursuant to rules of the
SEC ("business day") at the net asset value next computed after receipt
and acceptance by the Fund or its agent of the order for the shares of
the Fund.
1.2 The Fund agrees to make available on each business dew shares
of the Portfolios for purchase at the applicable net asset value per
share by the Insurer on behalf of its Separate Accounts; provided,
however, that the Board of Trustees of the Fund may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio, if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of the
Trustees' fiduciary duties under applicable law, necessary in the best
interests of the shareholders of any Portfolio.
1.3 The Fund and the Distributor agree that shares or the
Portfolios of the Fund will be sold only to Participating Insurance
Companies, their separate accounts, and other persons consistent with
each Portfolio being adequately diversified pursuant to Section 817(h)
of the Internal Revenue Code of 1986, as amended ("Code"), and the
regulations thereunder. No shares of any Portfolio will be sold directly
to the general public to the extent not permitted by applicable tax law.
1.4 The Fund and the Distributor will not sell shares of the
Portfolios to any insurance company or separate account unless an
agreement containing provisions substantially the same as the provisions
in Article IV of this Agreement is in effect to govern such sales.
1.5 Upon receipt of a request for redemption in proper form from
the Insurer, the Fund agrees to redeem any full or fractional shares of
the Portfolios held by the Insurer, ordinarily executing such requests
on each business day at the net asset value next computed after receipt
and acceptance by the Fund or its agent of the request for redemption,
except that the Fund reserves the right to suspend the right of
redemption, consistent with Section 22(e) of the 1940 Act and any rules
thereunder. Such redemption shall be paid consistent with applicable
rules of the SEC and procedures and policies of the Fund as described in
the current prospectus.
1.6 For purposes of Sections 1.2 and 1.5., the Insurer shall be
the agent of the Fund for the limited purpose of receiving and accepting
purchase and redemption orders from each Separate Account and receipt of
such orders by 4:00 p.m. Eastern time by the Insurer shall be deemed to
be receipt by the Fund for purposes of Rule 22c-1 of the 1940 Act;
provided that the Fund receives notice of such orders on the next
following business day prior to 4:00 p.m. Eastern time on such day,
although the insurer will use its best efforts to provide such notice by
12:00 noon Eastern time.
1.7 The Insurer agrees to purchase and redeem the shares of each
Portfolio in accordance with the provisions of the current prospectus
for the Fund.
1.8 The Insurer shall pay for shares of the Portfolio on the next
business day after it places an order to purchase shares of the
Portfolio. Payment shall be in federal funds transmitted by wire.
1.9 Issuance and transfer of shares of the Portfolios will be by
book entry only unless otherwise agreed by the Fund. Stock certificates
will not be issued to the Insurer or the Separate Accounts unless
otherwise agreed by the Fund. Shares ordered from the Fund will be
recorded in an appropriate title for the Separate Accounts or the
appropriate subaccounts of the Separate Accounts.
1.10 The Fund shall furnish same Dave notice (by wire or
telephone, followed by written confirmation) to the Insurer of any
income dividends or capital gain distributions payable on the shares of
the Portfolios. The Insurer hereby elects to reinvest in the Portfolio
all such dividends and distributions as are payable on a Portfolio's
shares and to receive such dividends and distributions in additional
shares of that Portfolio. The Insurer reserves the right to revoke this
election in writing and to receive all such dividends and distributions
in cash. The Fund shall notify the Insurer of the number of shares so
issued as payment of such dividends and distributions.
1.11 The Fund shall instruct its recordkeeping agent to advise
the Insurer on each business day of the net asset value per share for
each Portfolio as soon as reasonably practical after the net asset value
per share is calculated and shall use its best efforts to make such net
asset value per share available by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1 The Insurer represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and
that it is taxed as an insurance company under Subchapter L of the Code.
2.2 The Insurer represents and warrants that it has legally and
validly established each of the Separate Accounts as a segregated asset
account under the Nebraska Insurance Code, and that each of the Separate
Accounts is a validly existing segregated asset account under applicable
federal and state law.
2.3 The Insurer represents and warrants that the Variable
Contracts issued by the Insurer or interests in the Separate Accounts
under such Variable Contracts (1) are or, prior to issuance, will be
registered as securities under the Securities Act of 1933 ("1933 Act')
or, alternatively, (2) are not registered because they are properly
exempt from registration under the 1933 Act or will be offered
exclusively in transactions that are properly exempt from registration
under the 1933 Act.
2.4 The Insurer represents and warrants that each or the Separate
Accounts (1) has been registered as a unit investment trust in
accordance with the provisions of the 1940 Act or, alternatively, (2)
has not been registered in proper reliance upon an exclusion from
registration under the 1940 Act.
2.5 The Insurer represents that it believes, in good faith, that
the Variable Contracts issued by the Insurer are currently treated as
annuity; contracts or life insurance policies (which may include
modified endowment contracts), whichever is appropriate, under
applicable provisions of the Code.
2.6 The Fund represents and warrants that it is duly organized as
a business trust under the laws of the Commonwealth of Massachusetts,
and is in good standing under applicable law.
2.7 The Fund represents and warrants that the shares of the
Portfolios are duly authorized for issuance in accordance with
applicable law and that the Fund is registered as an open-end management
investment company under the 1940 Act.
2.8 The Fund represents that it believes. in good faith, that the
Portfolios currently comply with the diversification provisions of
Section 817(h) of the Code and the regulations issued thereunder
relating to the diversification requirements for variable life insurance
policies and variable annuity contracts.
2.9 The Distributor represents and warrants that it is a member
in good standing of the NASD and is registered as a broker-dealer with
the SEC.
ARTICLE III. Central Duties
3.1 The Fund shall take all such actions as are necessary to
permit the sale of the shares of each Portfolio to the Separate
Accounts, including maintaining its registration as an investment
company under the 1940 Act, and registering the shares of the Portfolios
sold to the Separate Accounts under the 1933 Act for so long as required
by applicable law. The Fund shall amend its Registration Statement filed
with the SEC under the 1933 Act and the 1940 Act from time to time as
required in order to effect the continuous offering of the shares of the
Portfolios. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states to the extent deemed
necessary by the Fund or the Distributor.
3.2 The Fund shall make every effort to maintain qualification of
each Portfolio as a Regulated Investment Company under Subchapter M of
the Code (or any successor or similar provision) and shall notify the
Insurer immediately upon having a reasonable basis for believing that a
Portfolio has ceased to so qualify or that it might not so qualify in
the future.
3.3 The Fund shall make every effort to enable each Portfolio to
comply with the diversification provisions of Section 817(h) of the Code
and the regulations issued thereunder relating to the diversification of
requirements for variable life insurance policies and variable annuity
contracts and any prospective amendments or other modifications to
Section 817 or regulations thereunder, and shall notify the Insurer
immediately upon having reasonable basis for believing that any
Portfolio has ceased to comply.
3.4 The Insurer shall take all such actions as are necessary
under applicable federal and state law to permit the sale of the
Variable Contracts issued by the Insurer, including registering each
Separate Account as an investment company to the extent required under
the 1940 Act, and registering the Variable Contracts or interests in the
Separate Accounts under the Variable Contracts to the extent required
under the 1933 Act, and obtaining all necessary approvals to offer the
Variable Contracts from state insurance commissioners
3.5 The Insurer shall make every effort to maintain the treatment
of the Variable Contracts issued by the Insurer as annuity contracts or
life insurance policies, whichever is appropriate, under applicable
provisions of the Code, and shall notify the Fund and the Distributor
immediately upon having a reasonable basis for believing that such
Variable Contracts have ceased to be so treated or that they might not
be so treated in the future.
3.6 The Insurer shall offer and sell the Variable Contracts
issued by the Insurer in accordance with applicable provisions of the
1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice,
and state law respecting the offering of variable life insurance
policies and variable annuity contracts.
3.7 The Distributor shall sell and distribute the shares of the
Portfolios of the Fund in accordance with the applicable provisions to
the 1933 Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair
practice, and state law.
3.8 During such time as the Fund engages in Mixed Funding or
Shared Funding, a majority of the Board of Trustees of the Fund shall
consist of persons who are not "interested persons" of the Fund
("disinterested Trustees"), as defined by Section 2(a)(19) of the 1940
Act and the rules thereunder, and as modified by any applicable orders
of the SEC, except that if this provision of this Section 3.8 is not met
by reason of the death, disqualification, or bona fide resignation of
any Trustee or Trustees, then the operation of this provision shall be
suspended (a) for a period of 45 days if the vacancy or vacancies may be
filled by the Fund's Board; (b) for a period of 60 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
3.9 The Insurer and its agents will not in any way recommend any
proposal or oppose or interfere with any proposal submitted by the Fund
at a meeting of owners of Variable Contracts or shareholders of the
Fund, and will in no way recommend, oppose, or interfere with the
solicitation of proxies for Fund shares held by Contract Owners, without
the prior written consent of the Fund, which consent may be withheld in
the Fund's sole discretion.
3.10 Each party hereto shall cooperate with each other party and
all appropriate governmental authorities having jurisdiction (including,
without limitation, the SEC, the NASD, and state insurance regulators)
and shall permit such authorities reasonable access to its books and
records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
ARTICLE IV. Potential Conflicts
4.1 During such time as the Fund engages in Mixed Funding or
Shared Funding, the parties hereto shall comply with the conditions in
this Article IV.
4.2 The Fund's Board of Trustees shall monitor the Fund for the
existence of any material irreconcilable conflict (1) between the
interests of owners of variable annuity contracts and variable life
insurance policies, and (2) between the interests of owners of Variable
Contracts ("Variable Contract Owners") issued by different Participating
Life Insurance Companies that invest in the Fund. A material
irreconcilable conflict may arise for a variety of reasons, including:
(a) an action by any state insurance regulatory authority; (b) a change
in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or
securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio of the Fund are being managed; (e) a
difference in voting instructions given by variable annuity and variable
life insurance contract owners; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of Variable
Contract Owners.
4.3 The Insurer agrees that it shall report any potential or
existing conflicts of which it is aware to the Fund's Board of Trustees.
The Insurer will be responsible for assisting the Board of Trustees of
the Fund in carrying out its responsibilities under the Mixed and Shared
Funding Exemptive Order, or, if the Fund is engaged in Mixed Funding or
Shared Funding in reliance on Rule 6e-2, 63-3(T), or any other
regulation under the 1940 Act, the Insurer will be responsible for
assisting the Board of Trustees of the Fund in carrying out its
responsibilities under such regulation, by providing the Board with all
information reasonably necessary for the Board to consider any issues
raised. This includes, but is not limited to, an obligation by the
Insurer to inform the Board whenever Variable Contract Owner Voting
instructions are disregarded. The Insurer shall carry out its
responsibility under this Section 4.3 with a view only to the interests
of the Variable Contract Owners.
4.4 The Insurer agrees that in the event that it is determined by
a majority of the Board of Trustees of the Fund or a majority, of the
Fund's disinterested Trustees that a material irreconcilable conflict
exists, the Insurer shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the disinterested Trustees
of the Board of the Fund), take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, up to and including:
(1) withdrawing the assets allocable to some or all of the Separate
Accounts from the Fund or any Portfolio and reinvesting such assets in a
different investment medium, including another portfolio of the Fund, or
submitting the question as to whether such segregation should be
implemented to a vote of all affected Variable Contract Owners and, as
appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners or life insurance contract owners of contracts
issued by one or more Participating Insurance Companies), that votes if
favor of such segregation, or offering to the affected Variable Contract
Owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. If
a material irreconcilable conflict arises because of the Insurer's
decision to disregard Variable Contract Owners' voting instructions and
that decision represents a minority position or would preclude a
majority vote, the Insurer shall be required, at the Fund's election, to
withdraw the Separate Accounts' investment in the Fund, provided,
however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees, and no charge or
penalty will be imposed as a result of such withdrawal. These
responsibilities shall be carried out with a view only to the interests
of the Variable Contract Owners. A majority of the disinterested
Trustees of the Fund shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict, but in no
event will the Fund or its investment adviser or the Distributor be
required to establish a new funding medium for any Variable Contract.
The Insurer shall not be required by this Section 4.4 to establish a new
funding medium for any Variable Contract if any offer to do so has been
declined by vote of a majority of Variable Contract Owners materially
adversely affected by the material irreconcilable conflict.
4.5 The Insurer, at least annually, shall submit to the Fund's
Board of Trustees such reports, materials, or data as the Board
reasonably may request so that the Trustees of the Fund may fully carry
out the obligations imposed upon the Board by the conditions contained
in the application for the Mixed and Shared Funding Exemptive Order and
said reports, materials, and data shall be submitted more frequently if
deemed appropriate by the Board.
4.6 All reports of potential or existing conflicts received by
the Fund's Board of Trustees, and all Board action with regard to
determining the existence of a conflict, notifying Participating
Insurance Companies of a conflict, and determining whether any proposed
action adequately remedies a conflict, shall be properly recorded in the
minutes of the Board of Trustees of the Fund or other appropriate
records, and such minutes or other records shall be made available to
the SEC upon request.
4.7 The Board of Trustees of the Fund shall promptly notify the
Insurer in writing of its determination of the existence of an
irreconcilable material conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements; Voting
5.1 The Insurer shall distribute such prospectuses, proxy
statements and periodic reports of the Fund to the owners of Variable
Contracts issued by the Insurer as required to be distributed to such
Variable Contract Owners under applicable federal or state law.
5.2 The Distributor shall provide the Insurer with as many copies
of the current prospectus of the Fund as the Insurer may reasonably
request. If requested by the Insurer in lieu thereof, the Fund shall
provide such documentation (including a final copy of the Fund's
prospectus as set in type or in camera-ready copy) and other assistance
as is reasonably necessary in order for the Insurer to either print a
stand-alone document or print together in one document the current
prospectus for the Variable Contracts issued by the Insurer and the
current prospectus for the Fund, or a document combining the Fund
prospectus with prospectuses of other funds in which the Variable
Contracts may be invested. The Fund shall bear the expense of printing
copies of its current prospectus that will be distributed to existing
Variable Contract Owners, and the Insurer shall bear the expense of
printing copies of the Fund's prospectus that are used in connection
with offering the variable Contracts issued by the Insurer.
5.3 The Fund and the Distributor shall provide, at the Fund's
expense, such copies of the Fund's current Statement of Additional
Information ("SAI") as may reasonably be requested, to the Insurer and
to any owner of a Variable Contract issued by the Insurer who requests
such SAI.
5.4 The Fund, at its expense, shall provide the Insurer with
copies of its proxy materials, periodic reports to shareholders, all
other communications to shareholders in such quantity as the Insurer
shall reasonably require for purposes of distributing to owners of
Variable Contracts issued by the Insurer. The Fund, at the Insurer's
expense, shall provide the Insurer with copies of its periodic reports
to shareholders and other communications to shareholders in such
quantity as the Insurer shall reasonably request for use in connection
with offering the Variable Contracts issued by the Insurer. If requested
by the Insurer in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's proxy materials,
periodic reports to shareholders, and other communications to
shareholders, as set in type or in camera-ready copy) and other
assistance as reasonably necessary in order for the Insurer to print
such shareholder communications for distribution to owners of Variable
Contracts issued by the Insurer.
5.5 For so long as the SEC interprets the 1940 Act to require
pass-through voting by Participating Insurance Companies whose Separate
Accounts are registered as investment companies under the 1940 Act, the
Insurer shall vote shares of each Portfolio of the Fund held in a
Separate Account or a subaccount thereof, whether or not registered
under the 1940 Act, at regular and special meetings of the Fund in
accordance with instructions timely received by the Insurer (or its
designated agent) from owners of Variable Contracts funded by such
Separate Account or subaccount thereof having a voting interest in the
Portfolio. The Insurer shall vote shares of a Portfolio of the Fund held
in a Separate Account or a subaccount thereof that are attributable to
the Variable Contracts as to which no timely instructions are received,
as well as shares held in such Separate Account or subaccount thereof
that are not attributable to the Variable Contracts and owned
beneficially by the Insurer (resulting from charges against the Variable
Contracts or otherwise), in the same proportion as the votes cast by
owners of the Variable Contracts funded by that Separate Account or
subaccount thereof having a voting interest in the Portfolio from whom
instructions have been timely received. The Insurer shall vote shares of
each Portfolio of the Fund held in its general account, if any, in the
same proportion as the votes cast with respect to shares of the
Portfolio held in all Separate Accounts of the Insurer or subaccounts
thereof, in the aggregate.
5.6 During such time as the Fund engages in Mixed Funding or
Shared Funding, the Fund shall disclose in its prospectus that (l) the
Fund is intended to be a funding, vehicle for variable annuity and
variable life insurance contracts offered by various insurance
companies, (2) material irreconcilable conflicts possibly arise, and (3)
the Board of Trustees of the Fund will monitor events in order to
identify the existence of any material irreconcilable conflicts and to
determine what action, if any, should be taken in response to any such
conflict. The Fund hereby notifies the Insurer that prospectus
disclosure may be appropriate regarding potential risks or offering
shares of the Fund to separate accounts funding both variable annuity
contracts and variable life insurance policies and to separate accounts
funding Variable Contracts of unaffiliated life insurance companies.
ARTICLE VI. Sales Material and Information
6.1 The Insurer shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund (or any Portfolio thereof) or its
investment adviser or the Distributor is named at least 15 days prior to
the anticipated use of such material, and no such sales literature or
other promotional material shall be used unless the Fund and the
Distributor or the designee of either approve the material or do not
respond with comments on the material within 10 days from receipt of the
material.
6.2 The Insurer agrees that neither it nor any of its affiliates
or agents shall give any information or make any representations or
statements on behalf of the Fund or concerning the Fund other than the
information or representations contained in the Registration Statement
or prospectus for the Fund shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee and by
the Distributor or its designee, except with the permission of the Fund
or its designee and the Distributor or its designee.
6.3 The Fund or the Distributor or the designee of either shall
furnish to the Insurer or its designee, each piece of sales literature
or other promotional material in which the Insurer or its Separate
Accounts are named at least 15 days prior to the anticipated use of such
material, and no such material shall be used unless the Insurer or its
designee approves the material or does not respond with comments on the
material within 10 days from receipt of the material.
6.4 The Fund and the Distributor agree that each and the
affiliates and agents of each shall not give any information or make any
representations on behalf of the Insurer or concerning the Insurer, the
Separate Accounts, or the Variable Contracts issued by the Insurer,
other than the information or representations contained in a
registration statement or prospectus for such Variable Contracts, as
such registration statement and prospectus may be amended or
supplemented from time to time, or in reports for the Separate Accounts
or prepared for distribution to owners of such Variable Contracts, or in
sales literature or other promotional material approved by the Insurer
or its designee, except with the permission of the Insurer.
6.5 The Fund will provide to the Insurer at least one complete
copy of the Mixed and Shared Funding Exemptive Application and any
amendments thereto, all prospectuses, Statements of Additional
Information, reports, proxy statements and other voting solicitation
materials, and all amendments and supplements to any of the above, that
relate to the Fund or its shares, promptly after the filing of such
document with the SEC or other regulatory authorities.
6.6 The Insurer will provide to the Fund all prospectuses which
shall include an offering memorandum if the Variable Contracts issued by
the Insurer or interests therein are not registered under the 1933 Act),
Statements of Additional Information, reports, solicitations for voting
instructions relating to the Fund, and all amendments or supplements to
any of the above that relate to the Variable Contracts issued by the
Insurer or the Separate Accounts which utilize the Fund as an underlying
investment medium, promptly after the filing of such document with the
SEC or other regulatory authority.
6.7 For purposes of this Article VI, the phrase "sales literature
or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a
newspaper, magazine, or other periodical, radio, television, telephone
or tape recording, videotape display, signs or billboards, motion
pictures, computerized media, or other public media), sales literature
(i.e., any written communications distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints
or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees.
ARTICLE VII. Indemnification
7.1 Indemnification by the Insurer
7.1(a) The Insurer agrees to indemnify and hold harmless
the Fund, each of its Trustees and officers, any affiliated person of
the Fund within the meaning of Section 2(a)(3) of the 1940 Act, and the
Distributor (collectively, the "Indemnified Parties" for purposes of
this Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written
consent of the Insurer) or litigation expenses (including legal and
other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or litigation expenses are
related to the sale or acquisition of the Fund's shares or the Variable
Contracts issued by the Insurer and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus (which shall include an offering
memorandum) for the Variable Contracts issued by the Insurer or sales
literature for such Variable Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Insurer by or on behalf of the Fund for use
in the registration statement or prospectus for the Variable Contracts
issued by the Insurer or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of such
Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained in
the registration statement, prospectus or sales literature of the Fund
not supplied by the Insurer or persons under its control) or wrongful
conduct of the Insurer or any of its affiliates, employees or agents
with respect to the sale or distribution of the Variable Contracts
issued by the Insurer or the Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on behalf
of the Insurer; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Insurer in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Insurer; except to the extent provided in Sections 7.1(b) and
7.1(c) hereof.
7.1(b) The Insurer shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund.
7.1(c) The Insurer shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such Party shall have notified the Insurance in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Party shall have received notice of
such service on any designated agent), but failure to notify the Insurer
of any such claim shall not relieve the Insurer from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Insurer
shall be entitled to participate, at its own expense, in the defense of
such action. The Insurer also shall be entitled to assume the defense
thereof with counsel satisfactory to the party named in the action.
After notice from the Insurer to such party of the Insurer's election to
assume the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and the Insurer
will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
7.1(d) The Indemnified Parties shall promptly notify the Insurer
of the commencement of any Litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Variable
Contracts issued by the Insurer or the operation of the Fund.
7.2 Indemnification By the Distributor
7.2(a) The Distributor agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts,
and each of their directors and officers and any affiliated person of
the Insurer within the meaning of Section 2(a)(3) of the 1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section
7.2) against any and all losses, claims damages, liabilities (including
amounts paid in settlement with the written consent of the Distributor)
or litigation expenses (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the
Insurer and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the Fund (or
any amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor or
the Fund or the designee of either by or on behalf of the Insurer for
use in the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in the
registration statement or prospectus for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use in connection with
the sale of the Variable Contracts issued by the Insurer or Fund shares;
or
(ii) arise out of or as a result of any statement or
representations (other than statements or representations contained in
the registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any employees or
agents of the Fund or the Distributor with respect to the sale or
distribution of the Variable Contracts issued by the Insurer or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of material fact contained in a registration statement,
prospectus, or sales literature covering the Variable Contracts issued
by the Insurer, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Insurer by or on behalf of
the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Distributor; except to the extent provided in Sections
7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would
otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of the Indemnified Party's duties or
by reason of the Indemnified Party's reckless disregard of obligations
or duties under this Agreement or to the Insurer or the Separate
Accounts.
7.2(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Party shall have notified the Distributor
in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Party shall have
received notice of such service on any designated agent), but failure to
notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of
this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor
also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Distributor to such party of the Distributor's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Distributor will not
be liable to such party under this Agreement for any legal or other
expense subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.2(d) The Insurer shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Variable Contracts issued by the Insurer or the operation of the
Separate Accounts.
7.3 Indemnification by the Fund
7.3(a) The Fund agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts,
and each of their directors and officers and any affiliated person of
the Insurer within the meaning of Section 2(a)(3) of the 1940 Act
(collectively, the "Indemnified Parties" for purposes of this Section
7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or
litigation expenses (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation,
at common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the
Insurer and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the Fund (or
any amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement
or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Distributor or
the Fund or the designee of either by or on behalf of the Insurer for
use in the registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Variable Contracts issued by the Insurer
or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations contained in
the registration statement, prospectus or sales literature for the
Variable Contracts not supplied by the Distributor or any employees or
agents thereof) or wrongful conduct of the Fund, or the affiliates,
employees, or agents of the Fund, with respect to the sale or
distribution of the Variable Contracts issued by the Insurer or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus or sales literature covering the Variable Contracts issued by
the Insurer, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the insurer by or on behalf of
the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Fund;
except to the extent provided in Section 7.3(b) and 7.3(c) hereof.
7.3(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation expenses to which an Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence
in the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Insurer or the Separate Accounts.
7.3(c) The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party
unless such party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of
any such claim shall not relieve the Fund from any liability which it
may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The
Fund also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the
Fund to such party of the Fund's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
7.3(d) The Insurer shall promptly notify the Fund of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Variable Contracts issued by the Insurer or the sale of the Fund's
shares.
ARTICLE VIII. Applicable Law
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
Pennsylvania.
8.2 This Agreement shall be subject to the provisions of the
1933, 1934, and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, the
Mixed and Shared Funding Exemptive Order), and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1 This Agreement shall terminate:
(a) at the option of any party with respect to some or all
Portfolios upon 180 days advance written notice to the other parties; or
(b) at the option of the Insurer with respect to any Portfolio if
shares of the Portfolios are not reasonably available to meet the
requirements of the Variable Contracts issued by the Insurer, as
determined by the insurer, and upon prompt notice by the Insurer to the
other parties; or
(c) at the option of the Fund or the Distributor upon institution
of formal proceedings against the Insurer or its agent by the NASD, the
SEC, or any state securities or insurance department or any other
regulatory body regarding the Insurer's duties under this Agreement or
related to the sale of the Variable Contracts issued by the Insurer, the
operation of the Separate Accounts, or the purchase of the Fund shares;
or
(d) at the option of the Insurer upon institution of formal
proceedings against the Fund or the Distributor by the NASD, the SEC, or
any state securities or insurance department or any other regulatory
body; or
(e) upon requisite vote of the Variable Contract Owners having an
interest in the Separate Accounts (or any subaccounts thereof) to
substitute the shares of another investment company for the
corresponding shares of the Fund or a Portfolio in accordance with the
terms of the Variable Contracts for which those shares had been selected
or serve as the underlying investment media; or
(f) in the event any of the shares of a Portfolio are not
registered, issued or sold in accordance with applicable state and/or
federal law, or such law precludes the use of such shares as the
underlying investment media of the Variable Contracts issued or to be
issued by the insurer; or
(g) by any party to the Agreement upon a determination by a
majority of the Trustees of the Fund, or a majority or its disinterested
Trustees, that an irreconcilable conflict, as described in Article IV
hereof, exists; or
(h) at the option of the Insurer if the Fund or a Portfolio fails
to meet the requirements under Subchapter M of the Code for
qualification as a Regulated Investment Company specified in Section 3.2
hereof or the diversification requirements specified in Section 3.3
hereof, or if the Insurer reasonably believes that the Fund or a
Portfolio may fail to so qualify or comply.
9.2 Each party to this Agreement shall promptly notify the other
parties to the Agreement of the institution against such party of any
such formal proceedings as described in Sections 9.1(c) and (d) hereof.
The Insurer shall give 60 days prior written notice to the Fund of the
date of any proposed vote of Variable Contract Owners to replace the
Fund's shares as described in Section 9.1 (e) hereof.
9.3 Except as necessary to implement Variable Contract Owner
initiated transactions, or as required by state insurance laws or
regulations, the Insurer shall not redeem Fund shares attributable to
the Variable Contracts issued by the Insurer (as opposed to Fund shares
attributable to the Insurer's assets held in the Separate Accounts), and
the Insurer shall not prevent Variable Contract Owners from allocating
payments to a Portfolio, until 60 days after the Insurer shall have
notified the Fund or Distributor of its intention to do so.
9.4 Notwithstanding any termination of this Agreement, the Fund
and the Distributor shall at the option of the Insurer continue to make
available additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Variable Contracts in effect on
the effective date of termination of this Agreement (hereinafter
referred to as 'Existing Contracts"). Specifically, without limitation,
based upon instructions from the owners of the Existing Contracts, the
Separate Accounts shall be permitted to reallocate investments in the
Portfolios of the Fund and redeem investments in the Portfolios, and
shall be permitted to interest in the Portfolios in the event that
owners of the Existing Contracts make additional purchase payments under
the Existing Contracts. If this Agreement terminates, the parties agree
that Sections 3.10, 7.1, 7.2, 7.S, 8.1, and 8.2, and, to the extent that
all or a portion of the assets of the Separate Accounts continue to be
invested in the Fund or any Portfolio of the Fund, Articles I, II, and
IV and Sections 5.5 and 5.6 will remain in effect after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time
specify in writing to the other party.
If to the Fund:
Insurance Management Series
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn.: John W. McGonigle
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn.: John W. McGonigle
If to the Insurer:
United of Omaha Life Insurance Company
3 - Law Division
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1008
Attn.: Variable Products Counsel
ARTICLE XI: Miscellaneous
11.1 The Fund and the Insurer agree that if and to the extent
Rule 6e-2 or Rule 6e-3(T) under the 1940 Act is amended or it Rule the-3
is adopted in final form, to the extent applicable, the Fund and the
Insurer shall each take such steps as may be necessary to comply with
the Rule as amended or adopted in final form.
11.2 A copy of the Fund's Agreement and Declaration of Trust is
on file with the Secretary of the Commonwealth of Massachusetts and
notice is hereby given that any agreements that are executed on behalf
of the Fund by any Trustee or officer of the Fund are executed in his or
her capacity as Trustee or officer and not individually. The obligations
to this Agreement shall be binding upon the assets and property of the
Fund and shall not be binding upon any Trustee, officer or shareholder
of the Fund individually.
11.3 Nothing in this Agreement shall impede the Fund's Trustees
or shareholders of the shares of the Fund's Portfolios from exercising
any of the rights provide to such Trustee or shareholders in the Fund's
Agreement and Declaration of Trust, as amended, a copy of which will be
provided to the Insurer upon request.
11.4 Administrative services to Variable Contract Owners shall be
the responsibility of Insurer. Insurer, on behalf of its separate
accounts will be the sole shareholder of record of Fund shares. Fund and
Distributor recognize that they will derive a substantial savings in
administrative expense by virtue of having a sole shareholder rather
than multiple shareholders. In consideration of the administrative
savings resulting from having a sole shareholder rather than multiple
shareholders, Distributor agrees to pay to Insurer an amount computed at
an annual rate of .25 of 1% of the average daily net asset value of
shares held in subaccounts for which Insurer provides administrative
services. Distributor's payments to Insurer are for administrative
services only and do not constitute payment in any manner for investment
advisory services.
11.5 It is understood that the name "Federated" or any derivative
thereof or logo associated with that name is the valuable property of
the Distributor and its affiliates, and that the Insurer has the right
to use such name (or derivative or logo) only so long as this Agreement
is in effect.
11.6 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
11.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
11.8 If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected thereby.
11.9 This Agreement may not be assigned by any party to the
Agreement except with the written consent of the other parties to the
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
INSURANCE MANAGEMENT SERIES
ATTEST: By:
Name: S. Elliott Cohan Name: John W. McGonigle
Title: Assistant Secretary Title: Vice President
FEDERATED SECURITIES CORP.
ATTEST: By:
Name: S. Elliott Cohan Name: John W. McGonigle
Title: Assistant Secretary Title: Executive Vice
President
UNITED OF OMAHA LIFE INSURANCE
COMPANY
ATTEST: By:
Name: Kenneth W. Reitz Name: Richard A. Witt
Title: 2nd Vice President & Counsel Title: Senior Vice President
EXHIBIT (8)(C) PARTICIPATION AGREEMENT WITH THE FIDELITY VIP FUND AND FIDELITY
VIP FUND II.
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT AMONG
VARIABLE INSURANCE PRODUCTS FUND II
Fidelity DISTRIBUTORS CORPORATION
and
UNITED OF OMAHA LIFE INSURANCE COMPANY
WHEREAS, UNITED OF OMAHA LIFE INSURANCE COMPANY (the "Company"),
VARIABLE INSURANCE PRODUCTS FUND II (the "Fund") and FIDELITY DISTRIBUTORS
CORPORATION have previously entered into a Participation Agreement (the
"Agreement") containing certain arrangements concerning prospectus costs; and
WHEREAS, the Trustees of the Fund have approved certain changes to the
expense structure of the Fund; and
NOW, THEREFORE, the parties do hereby agree to amend the Agreement by
substituting the following arrangement in place of any inconsistent language in
the Participation Agreement, wherever found:
1. The Fund will provide to the Company each year, at the Fund's cost,
such number of prospectuses and Statements of Additional Information as are
actually distributed to the Company's then-existing variable life and/or
variable annuity contract owners.
2. If the Company takes camera-ready film or computer diskettes
containing the Fund's prospectus and/or Statement of Additional Information in
lieu of receiving hard copies of these documents, the Fund will reimburse the
Company in an amount computed as follows. The number of prospectuses and
Statements of Additional Information actually distributed to existing contract
owners by the Company will be multiplied by the Fund's actual per-unit cost of
printing the documents.
3. The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund in order to verify that
the prospectuses and Statements of Additional Information provided to the
Company, or the reimbursement made to the Company, are or have been used only
for the purposes set forth hereinabove.
IN WITNESS WHEREOF we have set our hand as of the 15th day of December,
1994.
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: _______________________________
Name: RICHARD A. WITT
Title: SENIOR VICE PRESIDENT
VARIABLE INSURANCE PRODUCTS FUND II FIDELITY DISTRIBUTORS CORPORATION
By :_________________________________ By:_______________________________
Name: J. GARY BURKHEAD Name: KURT A. LANGE
Title: SENIOR VICE PRESIDENT Title: PRESIDENT
<PAGE>
PARTICIPATION AGREEMENT
Among
VARIABLE INSURANCE PRODUCTS FUND II,
FIDELITY DISTRIBUTORS CORPORATION
and
UNITED OF OMAHA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of the 1st day of
February, 1994 by and among UNITED OF OMAHA LIFE INSURANCE COMPANY, (hereinafter
the "Company"), a Nebraska corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND, an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts (hereinafter
the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Underwriter (hereinafter "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated September 17, 1986 (File No. 812-6422), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the " 1940
Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and annuity contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (hereinafter the " 1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios shown on
Schedule A hereto, as may be amended from time WHEREAS, the Fund is registered
as an open-end management investment company under the 1940 Act shares of the
Portfolios are registered under the Securities Act of 1933, as amended
(hereinafter the " 1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable
annuity contracts under the 1933 Act and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to attributable to the aforesaid variable to time
by mutual written agreement, on behalf of each Account, to fund certain of the
aforesaid variable annuity contracts, and the Underwriter is authorized to sell
such shares to unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. For purposes of this Section 1.1, the Company
shall be the designee of the Fund for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives notice of such order by 10:00 a.m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
1.2. The Fund agrees to make shares of the designated Portfolios
available indefinitely for purchase at the applicable net asset value per share
by the Company and its Accounts on those days on which the Fund calculates its
net asset value pursuant to rules of the Securities and Exchange Commission and
the Fund shall use reasonable efforts to calculate such net asset value on each
day which the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may
refuse to sell shares of any Portfolio to any person, or suspend or terminate
the offering of shares of any Portfolio if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Board acting in good faith and in light of their fiduciary duties under federal
and any applicable state laws, necessary in the best interests of the
shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.4 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus. The Company agrees that all net amounts
available under the variable annuity contracts with the form number(s) which are
listed on Schedule A attached hereto and incorporated herein by this reference,
as such Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the Company so
informs the Fund and Underwriter prior to their signing this Agreement (a list
of such funds appearing on Schedule C to this Agreement); or (d) the Fund or
Underwriter consents to the use of such other investment company, such consent
not to be unreasonably withheld.
1.7. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
For purpose of Section 2.09 and 2.10, upon receipt by the Fund of the federal
funds so wired, such funds shall cease to be the responsibility of the Company
and shall become the responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable Federal and State laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under Sections 44-2221 and 44-40201 of the Nebraska Insurance Code and has
registered or, prior to any issuance or sale of the Contracts, will register
each Account as a unit investment trust in accordance with the provisions of the
1940 Act to serve as a segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Nebraska and all
applicable federal and state securities laws and that the Fund is and shall
remain re ,registered under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states if and to the extent required by applicable law.
2.3. Assuming that all of the Fund's Portfolios in which the Account
invests comply with Article VI of this Agreement, the Company represents that
the Contracts are currently treated as endowment or annuity insurance contracts
under applicable provisions of the Internal Revenue Code of 1986, as amended,
(the "Code"), and that it will make every effort to maintain such treatment and
that it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.
2.4. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it MAY make such payments in the future. The Fund has adopted a "no
fee" or "defensive" Rule 12b-1 Plan under which it makes no payments for
distribution expenses. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b- 1, the Fund undertakes to have a board of
trustees, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b- 1 to finance distribution expenses.
2.5. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the investment policies, fees and expenses
of the designated Portfolios are and shall at all times remain in compliance
with the laws of the State of Nebraska and the Fund and the Underwriter
represent that their respective operations are and shall at all times remain in
material compliance with the laws of the State of Nebraska to the extent
required to perform this Agreement.
2.6. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Nebraska and all applicable state
and federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.7. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.8. The Underwriter represents and warrants that the Adviser is and
shall remain registered, to the extent required, under all applicable federal
and state securities laws and that the Adviser shall perform its obligations for
the Fund in compliance in all material respects with the laws of the State of
Nebraska and any applicable state and federal securities laws.
2.9. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees. investment advisers. and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.10. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Fund are covered by
a blanket fidelity bond or similar coverage in an amount not less $2 million.
The aforesaid includes coverage for larceny and embezzlement is issued by a
reputable bonding company. The Company agrees that any amounts recovered under
such bond will be held by the Company for the benefit of the Fund. The Company
agrees to make all reasonable efforts to see that this bond or another bond
containing these provisions is always in effect, and agrees to notify the Fund
and the Underwriter in the event that such coverage no longer applies. The
Company agrees to exercise its best efforts to ensure that other
individuals/entities not employed or controlled by the Company and dealing with
the money and/or securities of the Fund maintain a similar bond or coverage in a
reasonable amount.
2.11. The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Portfolio, and of any
material change in the Fund's registration statement, particularly any change
resulting in change to the registration statement or prospectus for any Account.
The Fund will work with the Company so as to enable the Company to solicit
proxies from Contract Owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. The Underwriter shall provide the Company (at the Company's
expense) with as many copies of the Fund's current prospectus as the Company may
reasonably request. If requested by the Company in lieu thereof, the Fund shall
provide such documentation (including a final copy of the new prospectus as set
in type at the Fund's expense) and other assistance as is reasonably necessary
(including film or camera-ready proofs) in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Fund's prospectus printed together in one
document (such printing to be at the Company's expense).
3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter (or in the Fund's
discretion, the Prospectus shall state that such Statement is available from the
Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such Statement free of charge to the Company and to any owner of a
Contract or prospective owner who requests such Statement.
3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 1 6(a) with respect to periodic elections of trustees
and with whatever rules the Commission may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses in which the Fund or its investment
adviser or the Underwriter is named, at least fifteen Business Days prior to its
use. No such material shall be used if the Fund or its designee reasonably
objects to such use within fifteen Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time. or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably objects
to such use within fifteen Business Days after receipt of such material.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the designated Portfolios, or their shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (~.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1. The Fund and Underwriter shall pay no fee or other compensation to
the Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
all taxes on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of printing and distributing
the Fund's prospectus to owners of Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. DIVERSIFICATION
6.1. The Fund will at all times invest money from the Contracts in such
a manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify the
Fund so as to achieve compliance with the grace period afforded by Regulation
817-5.
6.2. The Fund represents that it is, and each Designated Portfolio is,
currently qualified as a Regulated Investment Company under Subchapter M of the
Code, and that it will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision) and that it will notify the
Company immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
ARTICLE VII. POTENTIAL CONFLICTS
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order, by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (I.E., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund. Until the end of the foregoing six month
period, the Fund shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the designated Portfolios.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. INDEMNIFICATION
8.1. INDEMNIFICATION BY THE COMPANY
8.l(a). The Company agrees to indemnify and hold harmless the Fund
and each trustee of the Board and officers and such persons, if any, who
controls the Fund within the meaning of Section 15 of the 1933 Act (but only if
such person is (a) a director, trustee, officer or employee of a business entity
that is part of the group of companies known as Fidelity Investments, or (b) a
business entity that is part of the group of companies known as Fidelity
Investments), (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or
litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement or prospectus for the Contracts or contained in
the Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and in
conformity with information furnished to the Company by or on behalf of
the Fund for use in the Registration Statement or prospectus for the
Contracts or in the Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied by
the Company, or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on behalf
of the Company; or
(iiv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1 (b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.
8.1 (c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or prospectus or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons under their
control, with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, or
sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other qualification
requirements specified in Article VI of this Agreement); or
(v)arise out of or result from any material breach of any representation
and/or warranty made by the Underwriter in this Agreement or arise
out of or result from any other material breach of this Agreement by
the Underwriter: as limited by and in accordance with the provisions
of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
are related to the operations of the Fund and:
(i)arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the
diversification and other qualification requirements specified
in Article VI of this Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund; as limited by and in
accordance with the provisions of Sections 8.3(b) and 8.3(c)
hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first LEGAL PROCESS giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceedings against it or any of
its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. TERMINATION
l0. 1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason, with respect to some or
all Portfolios, upon six months' advance written notice delivered
to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M or fails to comply with the diversification
requirements under section 817(h) of the Code, or under any
successor or similar provisions, or if the Company reasonably
believes that the Fund may fail to so qualify or comply; or
(e) termination by any part in the event that formal administrative
proceedings are instituted against any other party by the NASD,
the SEC, the insurance commissioner or like official of any
state, or any other regulatory body having appropriate
jurisdiction over the Company, the Contracts, the Fund or the
Underwriter, provided however, that the party terminating the
Agreement has determined in its sole judgment, exercised in good
faith, that any such proceedings will have a material adverse
effect upon the ability of another to perform its obligations
under this Agreement; or
(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company and/or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity;
or
(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter
has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity.
10.2. EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application,
(hereinafter referred to as a "Legally Required Redemption") or (iii) pursuant
to the terms of a substitution order issued by the SEC pursuant to Section 26(b)
of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract Owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.
10.4 Notwithstanding any termination of this Agreement, each party's obligation
under Article VIII to indemnify other parties shall survive. In addition, with
respect to Existing Contracts, and as stated in Section 10.2 above, all
provisions of this Agreement shall also survive termination of the Agreement.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Variable Insurance Products Fund II
82 Devonshire Street
Boston, MA 02109
Attention: Treasurer
If to the Company:
United of Omaha Life Insurance Company
Law Division
Mutual of Omaha Plaza
Omaha, Nebraska 68175-1008
Attention: Chief Counsel
If to the Underwriter:
Fidelity Distributors Corporation
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such information may come into the public domain.
Without limiting the foregoing, no party hereto shall disclose any information
if such party has notice that any other party considers such information to be
proprietary, unless such other party's position is clearly unreasonable.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Nebraska Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner consistent with the
Nebraska Insurance Regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Underwriter, if such assignee is duly licensed and registered
to perform the obligations of the Underwriter under this Agreement.
12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement prepared under statutory
accounting principles), as soon as practical and in any event
within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory), as soon as
practical and in any event within 60 days after the end of each
quarterly period:
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders and/or policyholders, as soon as
practical after the delivery thereof to stockholders;
(d) any registration statement for the Contracts (without exhibits)
and financial reports of the Company filed with the Securities
and Exchange Commission in connection with the Contracts. as soon
as practical after the filing thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
UNITED OF OMAHA LIFE INSURANCE COMPANY
By its authorized officer,
By: ____________________________________
Name: RICHARD A. WITT
Title: Senior Vice President
VARIABLE INSURANCE PRODUCTS FUND II
By ITS AUTHORIZED OFFICER,
By: _______________________________________
Name: _____________________________________
Title: Senior Vice President
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
By: _____________________________________
Name: KURT A. LANGE
Title: President
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund for
the shareholder meeting to facilitate the establishment of tabulation
procedures. At this time the Underwriter will inform the Company of
the Record, Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for
account adjustments made after this date that could affect the status
of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide at least one copy of the last
Annual Report to the Company.
4. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at its
expense, shall produce and personalize the Voting Instruction Cards.
The Legal Department of the Underwriter or its affiliate ("Fidelity
Legal") must approve the Card before it is printed. Allow
approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification
of votes (already on Cards as printed by the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
5. During this time. Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one document).
Printed and folded notices and statements will be sent to Company for
insertion into envelopes (envelopes and return envelopes are provided
and paid for by the Insurance Company). Contents of envelope sent to
Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to
the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and reviewed
and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness
and completeness. Copy of this approval sent to Fidelity Legal.
7. Package mailed by the Company.
* The Fund MUST allow at least a 1 5-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but NOT
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An
often used procedure is to sort Cards on arrival by proposal into vote
categories of all yes, no, or mixed replies, and to begin data entry.
Note: Postmarks are not generally needed. A need for postmark information
would be due to an insurance company's internal procedure and has not
been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, if the account registration is under "Bertram C.
Jones, Trustee "then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter, a
new Card and return envelope. The mutilated or illegible Card is
disregarded and considered to be NOT RECEIVED for purposes of vote
tabulation. Any Cards that have "kicked out" (e.g. mutilated, illegible)
of the procedure are "hand verified," i.e., examined as to why they did
not complete the system. Any questions on those Cards are usually
remedied individually.
11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of SHARES.) Fidelity
Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
EXHIBIT (8)(D) PARTICIPATION AGREEMENT WITH THE MFS VARIABLE INSURANCE TRUST
FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this 25th day of May 1995, by and between United of
Omaha Life Insurance Company (the "Insurer"), a life insurance company domiciled
in Nebraska, on its behalf and on behalf of the segreftated asset ccounts of the
Insurer listed on Exhibit A to this Agreement (the "Separate Accounts");
Insurance Management Series (the "Fund"), a Massachusetts business trust; and
Federated Securities Corp. (the "Distributor"), a Pennsylvania corporation.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company_under the
Investment Company Act of 1940, as amended ("1940 Act") and the_Fund is
authorized to issue separate classes of shares of beneficial interest
("shares"), each representing an interest in a separate portfolio of assets
known as a "portfolio" and each portfolio has its own investment objective,
policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of its
portfolios to separate accounts of insurance companies that fund variable
annuity contracts ("Variable Contracts") and to serve as an investment medium
for Variable Contracts offered by insurance companies that have entered into
participation agreements substantially similar to this agreement ("Participating
Insurance Companies"), and the Fund will be made available in the future to
offer shares of one or more of its portfolios to separate accounts of insurance
companies that fund variable life insurance policies (at which time such
policies would also be "Variable Contracts" hereunder), and_
WHEREAS, the Fund is currently comprised of five separate portfolios, and
other portfolios may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC dated December 29,
1993 (File No. 812-8620), granting Participating Insurance Companies and
variable annuity and variable life insurance separate accounts exemptions from
the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of life insurance companies that may
or may not be affiliated with one another (hereinafter_the "Mixed and Shared
Funding Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
("NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Insurer wishes to purchase shares of one or more of the Fund's
portfolios on behalf of its Separate Accounts to serve as an investment medium
for Variable Contracts funded by the Separate Accounts, and the Distributor is
authorized to sell shares of the Fund's portfolios;_
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Distributor agrees to sell to the Insurer those shares of the
portfolios offered and made available by the Fund and identified on Exhibit B
("Portfolios") that the Insurer orders on behalf of its Separate Accounts,
and_agrees to execute such orders on each day on which the Fund calculates its
net asset value pursuant to rules of the SEC ("business day") at the net asset
value next computed after receipt and acceptance by the Fund or its agent of the
order for the shares of the Fund._
1.2 The Fund agrees to make available on each business day shares_of the
Portfolios for purchase at the applicable net asset value per share by the
Insurer on behalf of its Separate Accounts; provided, however, that the Board of
Trustees of the Fund may refuse to sell shares of any Portfolio to any person,
or suspend or terminate the offering of shares of any Portfolio, if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Trustees, acting in good faith and in light of the
Trustees' fiduciary duties under applicable law, necessary in the best interests
of the shareholders of any Portfolio.
1.3 The Fund and the Distributor agree that shares of the Portfolios of
the Fund will be sold only to Participating Insurance Companies, their separate
accounts, and other persons consistent with each Portfolio being adequately
diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code"), and the regulations thereunder. No shares of any Portfolio
will be sold directly to the eneral public to the extent not permitted by
applicable tax law._
1.4 The Fund and the Distributor will not sell shares of the Portfolios
to any insurance company or separate account unless an agreement containing
provisions substantially the same as the provisions in Article IV of this
Agreement is in effect to govern such sales.
1.5 Upon receipt of a request for redemption in proper form from the
Insurer, the Fund agrees to redeem any full or fractional shares of the
Portfolios held by the Insurer, ordinarily executing such requests on each
business day at the net asset value next computed after receipt and acceptance
by the Fund or its agent of the a_'request for redemption, except that the Fund
reserves the right to suspend the right of redemption, consistent with Section
22(e) of the 1940 Act and any rules thereunder. Such redemption shall be paid
consistent with applicable rules of the SEC and procedures and policies of the
Fund as described in the current prospectus.
1.6 For purposes of Sections 1.2 and 1.5, the Insurer shall be the agent
of the Fund for the limited purpose of receiving and accepting purchase and
redemption orders from each Separate Account and receipt of such orders by 4:00
p.m. Eastern time by the Insurer shall be deemed to be receipt by the Fund for
purposes of Rule 22c-1 of the 1940 Act; provided that the Fund receives notice
of such orders on the next following business day prior to 4:00_p.m. Eastern
time on such day, although the Insurer will use its best efforts to provide such
notice by 12:00 noon Eastern time.
1.7 The Insurer agrees to purchase and redeem the shares of each type
Portfolio in accordance with the provisions of the current prospectus for the
Fund.
1.8 The Insurer shall pay for shares of the Portfolio on the next
business day after it places an order to purchase shares of the Portfolio.
Payment shall be in federal funds transmitted by wire.
1.9 Issuance and transfer of shares of the Portfolios will be by book
entry only unless otherwise agreed by the Fund. Stock certificates will not be
issued to the Insurer or the Separate Accounts unless otherwise agreed by the
Fund. Shares ordered from the Fund will be recorded in an appropriate title for
the Separate Accounts or the appropriate subaccounts of the Separate Accounts.
1.10 The Fund shall furnish same day notice (by wire or
telephone,_followed by written confirmation) to the Insurer of any income
dividends or capital gain distributions payable on the shares of the Portfolios.
The Insurer hereby elects to reinvest in the Portfolio all such dividends and
distributions_as are payable on a Portfolio's shares and to receive such
dividends and distributions in additional shares of that Portfolio. The Insurer
reserves the right to revoke this election in writing and to receive all such
dividends and distributions in cash. The Fund shall notify the Insurer of the
number of shares so issued as payment of such dividends and distributions.
1.11 The Fund shall instruct its recordkeeping agent to advise the
Insurer on each business day of' the net asset value per share for each
Portfolio as soon as reasonably practical after the net asset value per share is
calculated and shall use its best efforts to make such net asset value per share
available by 7:00 p.m. Eastern time.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Insurer represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that it is taxed as
an insurance company under Subchapter L of the Code.
2.2 The Insurer represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Nebraska Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under applicable federal and state law.
2.3 The Insurer represents and warrants that the Variable Contracts
issued by the Insurer or interests in the Separate Accounts under such Variable
Contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 ("1933 Act") or, alternatively, (2) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. _
2.4 The Insurer represents and warrants that each of the Separate
Accounts (1) has been registered as a unit investment trust in accordance faith
the provisions of the 1940 Act or, alternatively, (2) has not been registered in
or life insurance policies (which may include modified endowment contracts),
whichever is appropriate, under applicable provisions of the Code.
2.6 The Fund represents and warrants that it is duly organized as a
business trust under the laws of the Commonwealth of Massachusetts, and is_in
good standing under applicable law.
2.7 The Fund represents and warrants that the shares of the Portfolios
are duly authorized for issuance in accordance with applicable law and that the
Fund is registered as an open-end management investment company under the 1940
Act.
2.8 The Fund represents that it believes, in good faith, that the
Portfolios currently comply with the diversification provisions of Section
817(h) of the Code and the regulations issued thereunder relating to the
diversification requirements for variable life insurance policies and variable
annuity contracts.
2.9 The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
ARTICLE III. GENERAL DUTIES
3.1 The Fund shall take all such actions as are necessary to permit the
sale of the shares of each Portfolio to the Separate Accounts, including
maintaining its registration as an investment company under the 1940 Act, and
registering the shares of the Portfolios sold to the Separate Accounts under the
1933 Act for so long as required by applicable law. The Fund shall amend its
Registration Statement filed with the SEC under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of the
shares of the Portfolios. The Fund shall register and qualify the shares for
sale in accordance with the laws of the various states to the extent deemed
necessary by the Fund or the Distributor.
3.2 The Fund shall make every effort to maintain qualification of each
Portfolio as a Regulated Investment Company under Subchapter M of the Code (or
any successor or similar provision) and shall notify the Insurer immediately
upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.
3.3 The Fund shall make every effort to enable each Portfolio to comply
with the diversification provisions of Section 817(h) of the Code and the
regulations issued thereunder relating to the diversification requirements for
variable life insurance policies and variable annuity contracts and any
prospective amendments or other modifications to Section 817 or regulations
thereunder, and shall notify the Insurer immediately upon having a reasonable
basis for believing that any Portfolio has ceased to comply.
3.4 The Insurer shall take all such actions as are necessary under
applicable federal and state law to permit the sale of the Variable Contracts
issued by the Insurer, including registering each Separate Account as an
investment company to the extent required under the 1940 Act, and registering
the Variable Contracts or interests in the Separate Accounts under the Variable
Contracts to the extent required under the 1933 Act, and obtaining all necessary
approvals to offer the Variable Contracts from state insurance commissioners.
3.5 The Insurer shall make every effort to maintain the treatment of the
Variable Contracts issued by the Insurer as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code, and
shall notify the Fund and the Distributor immediately upon having a reasonable
basis for believing that such Variable Contracts have ceased to be so treated or
that they might not be so treated in the future.
3.6 The Insurer shall offer and sell the Variable Contracts issued by
the Insurer in accordance with applicable provisions of the 1933 Act, the 1934
Act, the 1940 Act, the NASD Rules of Fair Practice, and state law respecting the
offering of variable life insurance policies and variable annuity contracts.
3.7 The Distributor shall sell and distribute the shares of the
Portfolios of the Fund in accordance with the applicable provisions of the 1933
Act, the 1934 Act, the 1940 Act, the NASD Rules of Fair Practice, and state law.
3.8 During such time as the Fund engages in Mixed Funding or Shared
Funding, a majority of the Board of Trustees of the Fund shall consist of
persons who are not "interested persons" of the Fund ("disinterested Trustees"),
as defined by Section 2(a)(19) of the 1940 Act and the rules thereunder, and as
modified by any applicable orders of the SEC, except that if_this provision of
this Section 3.8 is not met by reason of the death, disqualification, or bona
fide resignation of any Trustee or Trustees, then the operation of this
provision shall be suspended (a) for a period of 45 days if the vacancy or
vacancies may be filled by the Fund's Board; (b) for a period of 60 days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
3.9 The Insurer and its agents will not in any way recommend any
proposal or oppose or interfere with any proposal submitted by the Fund at a
meeting of owners of Variable Contracts or shareholders of the Fund, and will in
no way recommend, oppose, or interfere with the solicitation of proxies for Fund
shares held by Contract Owners, without the prior written consent of the Fund,
which consent may be withheld in the Fund's sole discretion.
3.10 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
ARTICLE IV. POTENTIAL CONFLICTS
4.1 During such time as the Fund engages in Mixed Funding or Shared
Funding, the parties hereto shall comply with the conditions in this Article IV.
4.2 The Fund's Board of Trustees shall monitor the Fund for the
existence of any material irreconcilable conflict (1) between the interests of
owners of variable annuity contracts and variable life insurance policies, and
(2) between the interests of owners of Variable Contracts ("Variable Contract
'Owners") issued by different Participating Life Insurance Companies that invest
in the Fund. A material irreconcilable conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio of
the Fund are being managed; (e) a difference in voting instructions given by
variable annuity and variable life insurance contract owners; or (f) a decision
by a Participating Insurance Company to disregard the voting instructions of
Variable Contract Owners.
4.3 The Insurer agrees that it shall report any potential or existing
conflicts of which it is aware to the Fund's Board of Trustees. The Insurer will
be responsible for assisting the Board of Trustees of the Fund in carrying out
its responsibilities under the Mixed and Shared Funding Exemptive Order, or, if
the Fund is engaged in Mixed Funding or Shared Funding in reliance on Rule 6e-2,
6e-3(T), or any other regulation under the 1940 Act, the Insurer will be
responsible for assisting the Board of Trustees of the Fund in carrying out its
responsibilities under such regulation, by providing the Board with all
information reasonably necessary for the Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Insurer to inform the
Board whenever Variable Contract Owner voting instructions are disregarded. The
Insurer shall carry out its responsibility under this Section 4.3 with a view
only to the interests of the Variable Contract Owners.
4.4 The Insurer agrees that in the event that it is determined by a
majority of the Board of Trustees of the Fund or a majority of the Fund's
disinterested Trustees that a material irreconcilable conflict exists, the
Insurer shall, at its expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Trustees of the Board of the
Fund), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including: (1) withdrawing the
assets allocable to some or all of the Separate Accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including another portfolio of the Fund, or submitting the question as to
whether such segregation should be implemented to a vote of all affected
Variable Contract Owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners or life insurance contract
owners of contracts issued by one or more Participating Insurance Companies),
that votes in favor of such segregation, or offering to the affected Variable
Contract Owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account. If a
material irreconcilable conflict arises because of the Insurer's decision to
disregard Variable Contract Owners' voting instructions and that decision
represents a minority position or would preclude a majority vote, the Insurer
shall be required, at the Fund's election, to withdraw the Separate Accounts
investment in the Fund, provided, however, that such withdrawal and termination
shall be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees, and no
charge or penalty will be imposed as a result of such withdrawal. These
responsibilities shall be carried out with a view only to the interests of the
Variable Contract Owners. A majority of the disinterested a_'Trustees of the
Fund shall determine whether or not any proposed action adequately remedies any
material irreconcilable conflict, but in no event will the Fund or its
investment adviser or the Distributor be required to establish a new funding
medium for any Variable Contract. The Insurer shall not be required by this
Section 4.4 to establish a new funding medium for any_Variable Contract if any
offer to do so has been declined by vote of a majority of Variable Contract
Owners materially adversely affected by the material irreconcilable conflict.
4.5 The Insurer, at least annually, shall submit to the Fund's Board of
Trustees such reports, materials, or data as the Board reasonably may request so
that the Trustees of the Fund may fully carry out the obligations imposed upon
the Board by the conditions contained in the application for the Mixed and
Shared Funding Exemptive Order and said reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
4.6 All reports of potential or existing conflicts received by the
Fund's Board of Trustees, and all Board action with regard to determining the
existence of a conflict, notifying Participating Insurance Companies of a
conflict, and determining whether any proposed action adequately remedies a
conflict, shall be properly recorded in the minutes of the Board of Trustees of
the Fund or other appropriate records, and such minutes or other records shall
be made available to the SEC upon request._
4.7 The Board of Trustees of the Fund shall promptly notify the Insurer
in writing of its determination of the existence of an irreconcilable material
conflict and its implications._
ARTICLE V. PROSPECTUSES AND PROXY STATEMENTS: VOTING
5.1 The Insurer shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by_the
Insurer as required to be distributed to such Variable Contract Owners under
applicable federal or state law.
5.2 The Distributor shall provide the Insurer with as many copies of the
current prospectus of the Fund as the Insurer may reasonably request. If
requested by the Insurer in lieu thereof, the Fund shall provide such
documentation (including a final copy of the Fund's prospectus as set in type or
in camera-ready copy) and other assistance as is reasonably necessary in order
for the Insurer to either print a stand-alone document or print together in one
document the current prospectus for the Variable Contracts issued by the Insurer
and the current prospectus for the Fund, or a document combining the Fund
prospectus with prospectuses of other funds in which the Variable Contracts may
be invested. The Fund shall bear the expense of printing copies of its current
prospectus that will be distributed to existing Variable Contract Owners, and
the Insurer shall bear the expense of printing copies of the Fund's prospectus
that are used in connection with offering the Variable Contracts issued by the
Insurer.
5.3 The Fund and the Distributor shall provide, at the Fund's expense,
such copies of the Fund's current Statement of Additional Information ("SAI") as
may reasonably be requested, to the Insurer and to any owner of a Variable
Contract issued by the Insurer who requests such SAI.
5.4 The Fund, at its expense, shall provide the Insurer with copies of
its proxy materials, periodic reports to shareholders, and other communications
to shareholders in such quantity as the Insurer shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Insurer.
The Fund, at the Insurer's expense, shall provide the Insurer with copies of its
periodic reports to shareholders and_other communications to shareholders in
such quantity as the Insurer shall reasonably request for use in connection with
offering the Variable Contracts issued by the Insurer. If requested by the
Insurer in lieu thereof, the Fund shall provide such documentation (including a
final copy of the Fund's proxy materials, periodic reports to shareholders, and
other communications to shareholders, as set in type or in camera-ready copy)
and other assistance as reasonably necessary in order for the Insurer to print
such shareholder acommunications for distribution.
5.5 For so long as the SEC interprets the 1940 Act to require pass
through voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act, the Insurer shall vote
shares of each Portfolio of the Fund held in a Separate Account or a subaccount
thereof, whether or not registered under the 1940 Act, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Insurer (or its designated agent) from owners of Variable Contracts funded by
such Separate Account or subaccount thereof having a voting interest in the
Portfolio. The Insurer shall vote shares of a Portfolio of the Fund held in a
Separate Account or a subaccount thereof that are attributable to the Variable
Contracts as to which no timely instructions are received, as well as shares
held in such Separate Account or subaccount thereof that are not attributable to
the Variable Contracts and owned beneficially by the Insurer (resulting from
charges against the Variable Contracts or otherwise), in the same proportion as
the votes cast by owners of the Variable Contracts funded by that Separate
Account or subaccount thereof having a voting interest in the Portfolio from
whom instructions have been timely received. The Insurer shall vote shares of
each Portfolio of the Fund_held in its general account, if any, in the same
proportion as the votes cast with respect to shares of the Portfolio held in all
Separate Accounts of the Insurer or subaccounts thereof, in the aggregate.
5.6 During such time as the Fund engages in Mixed Funding or Shared
Funding, the Fund shall disclose in its prospectus that (1) the Fund is intended
to be a funding vehicle for variable annuity and variable life insurance
contracts offered by various insurance companies, (2) material irreconcilable
conflicts possibly may arise, and (3) the Board of Trustees Of the Fund will
monitor events in order to identify the existence of any material irreconcilable
conflicts and to determine what action, if any, should be taken in response to
any such conflict. The Fund hereby notifies the Insurer that prospectus
disclosure may be appropriate regarding potential risks of offering shares of
the Fund to separate accounts funding both variable annuity contracts and
variable life insurance policies and to separate accounts funding Variable
Contracts of unaffiliated life insurance companies.
ARTICLE VI. SALES MATERIAL AND INFORMATION
6.1 The Insurer shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund (or any Portfolio thereof) or its investment adviser
or the Distributor is named at least 15 days prior to the anticipated use of
such material, and no such sales literature or other promotional material shall
be used unless the Fund and the Distributor or the designee of either approve
the material or do not respond with comments on the material within 10 days from
receipt of the material.
6.2 The Insurer agrees that neither it nor any of its affiliates or
agents shall give any information or make any representations or statements on
behalf of the Fund or concerning the Fund other than the information or
representations contained in the Registration Statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee and by the Distributor or its designee, except with the permission of
the Fund or its designee and the Distributor or its designee.
6.3 The Fund or the Distributor or the designee of either shall furnish
to the Insurer or its designee, each piece of sales literature or other
promotional material in which the Insurer or its Separate Accounts are named at
least 15 days prior to the anticipated use of such material, and no such
material shall be used unless the Insurer or its designee approves the material
or does not respond with comments on the material within 10 days from receipt of
the material.
6.4 The Fund and the Distributor agree that each and the affiliates and
agents of each shall not give any information or make any representations on
behalf of the Insurer or concerning the Insurer, the Separate Accounts, or the
Variable Contracts issued by the Insurer, other than the information or
representations contained in a registration statement or prospectus for such
Variable Contracts, as such registration statement and prospectus may be amended
or supplemented from time to time, or in reports for the Separate Accounts or
prepared for distribution to owners of such Variable Contracts, or in sales
literature or other promotional material approved by the Insurer or its
designee, except with the permission of the Insurer.
6.5 The Fund will provide to the Insurer at least one complete copy of
the Mixed and Shared Funding Exemptive Application and any amendments thereto,
all prospectuses, Statements of Additional Information, reports, proxy
statements and other voting solicitation materials, and all amendments and
supplements to any of the above, that relate to the Fund or its shares, promptly
after the filing of such document with the SEC or other regulatory authorities.
6.6 The Insurer will provide to the Fund all prospectuses (which shall
include an offering memorandum if the Variable Contracts issued by the Insurer
or interests therein are not registered under the 1933 Act), Statements of
Additional Information, reports, solicitations for voting instructions relating
to the Fund, and all amendments or supplements to any of the above that relate
to the Variable Contracts issued by the Insurer or the Separate Accounts which
utilize the Fund as an underlying investment medium, promptly after the filing
of such document with the SEC or other regulatory authority.
6.7 For purposes of this Article VI, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, computerized media, or other
public media), sales literature (i.e., any written communication distributed or
made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees.
ARTICLE VII. INDEMNIFICATION
7.1 INDEMNIFICATION BY THE INSURER
7.1(a) The Insurer agrees to indemnify and hold harmless the
Fund, each of its Trustees and officers, any affiliated person of the Fund
within the meaning of Section 2(a)(3) of the 1940 Act, and the Distributor
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Insurer) or litigation expenses
(including legal and other expenses), to which the Indemnified Parties may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or litigation expenses are
related to the sale or acquisition of the Fund's shares or the Variable
Contracts issued by the Insurer and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus (which shall include an
offering memorandum) for the Variable Contracts issued by the
Insurer or sales literature for such Variable Contracts (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to the Insurer by or on behalf of the
Fund for use in the registration statement or prospectus for the
Variable Contracts issued by the Insurer or sales literature (or
any amendment or supplement) or otherwise for use in connection
with the sale of such Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement, prospectus or sales
literature of the Fund not supplied by the Insurer or persons
under its control) or wrongful conduct of the Insurer or any of
its affiliates, employees or agents with respect to the sale or
distribution of the Variable Contracts issued bv the Insurer or
the Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon information furnished to the Fund by or on behalf of the
Insurer; or
(iv) arise out of or result from any material breach of
any representation and/or warranty made by the Insurer in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Insurer;
except to the extent provided in Sections 7.1(b) and 7.1(c) hereof.
7.1(b) The Insurer shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Fund.
7.1(c) The Insurer shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Insurer in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Insurer of any such claim shall not relieve the Insurer
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, the Insurer
shall be entitled to participate, at its own expense, in the defense of such
action. The Insurer also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Insurer to such party of the Insurer's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Insurer will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.1(d) The Indemnified Parties shall promptly notify the Insurer
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Variable Contracts issued by
the Insurer or the operation of the Fund.
7.2 INDEMNIFICATION BY THE DISTRIBUTOR
7.2(a) The Distributor agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts, and
each of their directors and officers and any affiliated person of the Insurer
within the meaning of Section 2(a)(3) of the 1940 Act (collectively, the
"Indemnified Parties" for purposes of this Section 7.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Distributor) or litigation expenses (including legal
and other expenses) to which the Indemnified Parties may become subject under
any statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or litigation expenses are related to the sale or
acquisition of the Fund's shares or the Variable Contracts issued by the Insurer
and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Distributor
or the Fund or the designee of either by or on behalf of the
Insurer for use in the registration statement or prospectus for
the Fund or in sales literature (or any amendment or supplement)
or otherwise for use in the registration statement or prospectus
for the Fund or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of
such Variable Contracts or Fund shares;or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Variable Contracts not supplied by the
Distributor or any employees or agents thereof) or wrongful
conduct of the Fund or Distributor, or the affiliates, employees,
or agents of the Fund or the Distributor with respect to the sale
or distribution of the Variable Contracts issued by the Insurer
or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature covering the Variable
Contract issued by the Insurer, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished to the Insurer by or on behalf of the
Fund; or
(iv) arise out of or result from any material breach of
any representation and/or warranty made by the Distributor in
this Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor; except to the extent
provided in Sections 7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation expenses to which an Indemnified Party would otherwise
be subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of the Indemnified Party's duties or by reason of the
Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Insurer or the Separate Accounts.
7.2(c) The Distributor shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party after such Party shall have received notice of_such service on
any designated agent), but failure to notify the Distributor of any such claim
shall not relieve the Distributor from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Distributor will be entitled to participate, at is
own expense, in the defense thereof. The Distributor also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Distributor to such party of the Distributor's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Distributor
will not be liable to such party under this Agreement for any legal or other
expense subsequently incurred by such party independently in connection with the
defense thereof other than reasonable costs of investigation.
7.2(d) The Insurer shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
issued by the Insurer or the operation of the Separate Accounts.
7.3 INDEMNIFICATION BY THE FUND_
7.3(a) The Fund agrees to indemnify and hold harmless the
Insurer, its affiliated principal underwriter of the Variable Contracts, each of
their directors and officers and any affiliated person of the Insurer within the
meaning of Section 2(a)(3) of the 1940 Act (collectively, the "Indemnified
Parties" for purposes of this Section 7.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Fund) or litigation expenses (including legal and other expenses)
to which the Indemnified Parties may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or litigation expenses are related to the sale or acquisition of the
Fund's shares or the Variable Contracts issued by the Insurer and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Distributor
or the Fund or the designee of either by or on behalf of the
Insurer for use in the registration statement or prospectus for
the Fund or in sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Variable
Contracts issued by the Insurer or Fund shares; or
(ii) arise out of or as a result of any statement or
representation (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Variable Contracts not supplied by the
Distributor or any employees or agents thereof) or wrongful
conduct of the Fund, or the affiliates, employees, or agents of
the Fund, with respect to the sale or distribution of the
Variable Contracts issued by the Insurer or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus or sales literature covering the Variable
Contracts issued by the Insurer, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished to the Insurer by or on behalf of the
Fund; or
(iv) arise out of or result from any material breach of
any representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund;
except to the extent provided in Sections 7.3(b) and 7.3(c) hereof.
7.3(b) The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of the
Indemnified Party's duties or by reason of the Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Insurer or the
Separate Accounts.
7.3(c) The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such party shall have notified the Fund in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Fund of any such claim shall not relieve the Fund from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Fund will be
entitled to participate, at its own expense, in the defense thereof. The Fund
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from the Fund to such party of
the Fund's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.3(d) The Insurer shall promptly notify the Fund of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
issued by the Insurer or the sale of the Fund's shares.
ARTICLE VIII. APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Pennsylvania.
8.2 This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Mixed and Shared Funding Exemptive Order),
and the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE IX. TERMINATION
9.1 This Agreement shall terminate:
(a) at the option of any party with respect to some or all
Portfolios upon 180 days advance written notice to the other parties; or
(b) at the option of the Insurer with respect to any Portfolio if
shares of the Portfolios are not reasonably available to meet the requirements
of the Variable Contracts issued by the Insurer, as determined by the Insurer,
and upon prompt notice by the Insurer to the other parties; or
(c) at the option of the Fund or the Distributor upon institution
of formal proceedings against the Insurer or its agent by the NASD, the SEC, or
any state securities or insurance department or any other regulatory body
regarding the Insurer's duties under this Agreement or related to the sale of
the Variable Contracts issued by the Insurer, the operation of the Separate
Accounts, or the purchase of the Fund shares; or
(d) at the option of the Insurer upon institution of formal
proceedings against the Fund or the Distributor by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body; or
(e) upon requisite vote of the Variable Contract Owners having an
interest in the Separate Accounts (or any subaccounts thereof) to substitute the
shares of another investment company for the corresponding shares of the Fund or
a Portfolio in accordance with the terms of the Variable Contracts for which
those shares had been selected or serve as the underlying investment media; or
(f) in the event any of the shares of a Portfolio are not
registered, issued or sold in accordance with applicable state and/or federal
law, or such law precludes the use of such shares as the underlying investment
media of the Variable Contracts issued or to be issued by the Insurer; or
(g) by any party to the Agreement upona determination by a
majority of the Trustees of the Fund, or a majority of its disinterested
Trustees, that an irreconcilable conflict, as described in Article IV hereof
exists; or
(h) at the option of the Insurer if the Fund or a Portfolio fails
to meet the requirements under Subchapter M of the Code for qualification as a
Regulated Investment Company specified in Section 3.2 hereof or the
diversification requirements specified in Section 3.3 hereof, or if the Insurer
reasonably believes that the Fund or a Portfolio may fail to so qualify or
comply.
9.2 Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 9.1(c) and (d) hereof. The Insurer shall
give 60 days prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
9.1 (e) hereof.
9.3 Except as necessary to implement Variable Contract Owner initiated
transactions, or as required by state insurance laws or regulations, the Insurer
shall not redeem Fund shares attributable to the Variable Contracts issued by
the Insurer (as opposed to Fund shares attributable to the Insurer's assets held
in the Separate Accounts), and the Insurer shall not prevent Variable Contract
Owners from allocating payments to a Portfolio,_ until 60 days after the Insurer
shall have notified the Fund or Distributor of its intention to do so.
9.4 Notwithstanding any termination of this Agreement, the Fund and the
Distributor shall at the option of the Insurer continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Variable Contracts in effect on the effective date of
reallocate investments in the Portfolios of the Fund and redeem investments in
the Portfolios, and shall be permitted to invest in the Portfolios in the event
that owners of the Existing Contracts make additional purchase payments under
the Existing Contracts. If this Agreement terminates, the parties agree that
Sections 3.10, 7.1, 7.2, 7.3, 8.1, and 8.2, and, to the extent that all or a
portion of the assets of the Separate Accounts continue to be invested in the
Fund or any Portfolio of the Fund, Articles I, II, and IV_--_H and Sections 5.5
and 5.6 will remain in effect after termination.
ARTICLE X. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Insurance Management Series
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn.: John W. McGonigle
If to the Distributor:
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attn.: John W. McGonigle
If to the Insurer:
United of Omaha Life Insurance Company
3 - Law Division
Mutual of Omaha Plaza
Omaha, NE 68175-1008
Attn.: Variable Products Counsel
ARTICLE XI: MISCELLANEOUS
11.1 The Fund and the Insurer agree that if and to the extent Rule 6e-2
or Rule 6e-3(T) under the 1940 Act is amended or if Rule 6e-3 is adopted in
final form, to the extent applicable, the Fund and the Insurer shall each take
such steps as may be necessary to comply with the Rule as amended or adopted in
final form.
11.2 A copy of the Fund's Agreement and Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and notice is hereby
given that any agreements that are executed on behalf of the Fund by any Trustee
or officer of the Fund are executed in his or her capacity as Trustee or officer
and not individually. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
11.3 Nothing in this Agreement shall impede the Fund's Trustees or
shareholders of the shares of the Fund's Portfolios from exercising any of the
rights provided to such Trustees or shareholders in the Fund's Agreement and
Declaration of Trust, as amended, a copy of which will be provided to the
Insurer upon request.
11.4 Administrative services to Variable Contract Owners shall be the
responsibility of Insurer. Insurer, on behalf of its separate accounts will be
the sole shareholder of record of Fund shares. Fund and Distributor recognize
that they will derive a substantial savings in administrative expense by virtue
of having a sole shareholder rather than multiple shareholders. In consideration
of the administrative savings resulting from having a sole shareholder rather
than multiple shareholders, Distributor agrees to pay to Insurer an amount
computed at an annual rate of .25 of 1% of the average daily net asset value of
shares held in subaccounts for which Insurer provides administrative services.
Distributor's payments to Insurer are for administrative services only and do
not constitute payment in any manner for investment advisory services.
11.5 It is understood that the name "Federated" or any derivative
thereof or logo associated with that name is the valuable property of the
Distributor and its affiliates, and that the Insurer has the right to use such
name (or derivative or logo) only so long as this Agreement is in effect. Upon
termination of this Agreement the Insurer shall forthwith cease to use such name
(or derivative or logo).
11.6 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
11.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.8 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.9 This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
INSURANCE MANAGEMENT SERIES
ATTEST: BY:
Name: S.ELLIOTT COHAN Name: JOHN W. MCGONIGLE
Title: ASSISTANT SECRETARY Title: VICE PRESIDENT
FEDERATED SECURITIES CORP.
ATTEST: BY:
Name: S. ELLIOTT COHAN Name: JOHN W. MCGONIGLE
Title: SECRETARY Title: EXECUTIVE VICE
PRESIDENT
UNITED OF OMAHA LIFE
INSURANCE COMPANY
ATTEST: BY:
Name: KENNETH W. REITZ Name: RICHARD A. WITT
Title: 2ND V.P. & COUNSEL Title: SENIOR VICE PRESIDENT
EXHIBIT (8)(E)PARTICIPATION AGREEMENT WITH THE PIONEER VARIABLE CONTRACTS TRUST.
DRAFT
PARTICIPATION AGREEMENT
AMONG
[PIONEER'S FUND NAMES(S)]
AND
UNITED OF OMAHA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 1st day of May, 1997 by
and among UNITED OF OMAHA LIFE INSURANCE COMPANY (hereinafter, the "Company), a
Nebraska life insurance company, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each account hereinafter referred to as the
"Account"), and the undersigned fund, each a business trust organized under the
laws of Massachusetts (hereinafter the "Fund") [PIONEER'S UNDERWRITER NAME].
(hereinafter the Underwriter"), a Massachusetts corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T) (b)(15) thereunder, if and to the extent necessary to permit shares of
the Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, [PIONEER NAMES] (each hereinafter referred to as the "Adviser")
are each duly registered as an investment adviser under the federal Investment
Advisers Act of 1940, as amended, and any applicable state securities laws; and
WHEREAS, the Company has registered or will register certain variable
life insurance and variable annuity contracts supported wholly or partially by
the Account (the "Contracts") under the 1933 Act, and said Contracts are listed
in Schedule A hereto, as it may be amended from time to time by mutual written
agreement; and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid Contracts; and
WHEREAS, the Company has registered or will register the Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Underwriter agrees to sell to the Company those shares of the
Designated Portfolios which the Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios
available for purchase at the applicable net asset value per share by the
Company and the Account on those days on which the Fund calculates its net asset
value pursuant to rules of the Securities and Exchange Commission, and the Fund
shall use reasonable efforts to calculate such net asset value on each day which
the New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell
shares of any Designated Portfolio to any person, or suspend or terminate the
offering of shares of any Designated Portfolio if such action is required by law
or by regulatory authorities having jurisdiction, or is, in the sole discretion
of the Board acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Designated Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Designated Portfolios will be sold to the general public. The Fund
and the Underwriter will not sell Fund shares to any insurance company or
separate account unless an agreement containing provisions substantially the
same as Articles I, III and VII of this Agreement is in effect to govern such
sales.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption, except that
the Fund reserves the right to suspend the right of redemption or postpone the
date of payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus.
1.5 For purposes of Section 1.1 and 1.4, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Account, and receipt by such designee shall constitute receipt by the Fund;
provided that the Company receives the order by 4:00 p.m. Boston time and the
Fund receives notice of such order by 9:30 a.m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.6 The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus.
1.7 The Company shall pay for Fund shares on the next Business Day after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.5 hereof. Payment shall be in federal funds transmitted by wire by
3:00 p.m. Boston time. If payment in Federal Funds for any purchase is not
received or is received by the Fund after 3:00 p.m. Boston time on such Business
Day, the Company shall promptly, upon the Fund's request, reimburse the Fund for
any charges, costs, fees, interest or other expenses incurred by the Fund in
connection with any advances to, or borrowings or overdrafts by, the Fund, or
any similar expenses incurred by the Fund, as a result of portfolio transactions
effected by the Fund based upon such purchase request. For purposes of Section
2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Designated Portfolios' shares. The
Company hereby elects to receive all such income, dividends, and capital gain
distributions as are payable on Designated Portfolio shares in additional shares
of that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10 The Fund shall make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated (normally
by 6:30 p.m. Boston time) and shall use its best efforts to make such net asset
value per share available by 7 p.m. Boston time.
1.11 The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies; provided,
however, that (a) the Company gives the Fund and the Underwriter 45 days written
notice of its intention to make such other investment company available as a
funding vehicle for the Contracts; or (b) such other investment company was
available as a funding vehicle for the Contracts prior to the date of this
Agreement and the Company so informs the Fund and Underwriter prior to their
signing this Agreement; or (c) the Fund or Underwriter consents to the use of
such other investment company, such consent not to be unreasonably withheld.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under the
Nebraska insurance laws and has registered or, prior to any issuance or sale of
the Contracts, will register the Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Nebraska and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have
the Board, a majority of whom are not interested persons of the Fund, formulate
and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees, and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees, and expenses are and shall at all times remain in compliance with the laws
of the State of Nebraska to the extent required to perform this Agreement.
2.5 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Massachusetts and that it does and will
comply in all material respects with the 1940 Act.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Nebraska and any applicable state
and federal securities laws.
2.7 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered under all applicable federal and state securities
laws and that the Adviser shall perform its obligations for the Fund in
compliance in all material respects with the laws of the State of Nebraska and
any applicable state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-(1) of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.9 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Fund are covered by
a blanket fidelity bond or similar coverage in an amount not less than $2
million. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company. The Company agrees that any amounts
received under such bond will be held by the Company for the benefit of the
Fund. The Company agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies. The Company agrees to exercise its best efforts to ensure that other
individuals/entities not employed or controlled by the Company and dealing with
the money and/or securities of the Fund maintain a similar bond or coverage in a
reasonable amount.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS: VOTING
3.1 The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus as the Company may reasonably request. The Fund shall
bear the expense of printing copies of its current prospectus that will be
distributed to existing Contract owners, and the Company shall bear the expense
of printing copies of the Fund's prospectuses that are used in connection with
offering the contracts issued by the Company. If requested by the Company in
lieu thereof, the Fund shall provide such documentation (including a final copy
of the new prospectus as set in type at the Fund's expense) and other assistance
as is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the prospectus for
the Contracts and the Fund's prospectus printed together in one document (such
printing to be at the Company's expense).
3.2 The Fund's prospectus shall state that the Statement of Additional
Information ("SAI") for the Fund is available from the Company, and the
Underwriter (or the Fund), at its expense, shall print and provide a copy of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4 If and to the extent required by law, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
portfolio for which instructions have been received, so
long as and to the extent that the SEC continues to
interpret the 1940 Act to require passthrough voting
privileges for variable contract owners or to the extent
otherwise required by law. The Company reserves the
right to vote Fund shares held in any segregated asset
account in its own right, to the extent permitted by law.
3.5 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt and provide
in writing.
3.6 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the Commission may promulgate with respect thereto.
3.7 The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which the Fund (or a Portfolio
thereof) or the Adviser or the Underwriter is named, at least fifteen Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably object to such use within fifteen Business Days after
receipt of such material. The Fund or its designee reserves the right to
reasonably object to the continued use of any such material, and no such
material shall be used if the Fund or its designee so object.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or SAI for
the Fund shares, as such registration statement, prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops or uses and in which the Company, and/or
its Account, is named at least fifteen Business Days prior to its use. No such
material shall be used if the Company reasonably objects to such use within
fifteen Business Days after receipt of such material. The Company reserves the
right to reasonably object to the continued use of any such material, and no
such material shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus, or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Contracts or the Account,
contemporaneously with the filing of such document(s) with the SEC or other
regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, proxy materials, and
any other communications distributed or made generally available with regard to
the Funds.
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-l to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing, and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter, or other resources
available to the Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated. In addition, nothing herein
shall prevent the parties from otherwise agreeing to perform, and arranging for
appropriate complensation for, other services relating to the Fund and/or to the
Accounts.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
5.3 The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1 Assuming that the Contracts comply with paragraph 6.3 below, the
Fund will invest its assets in such a manner as to ensure that the Contracts
will be treated as annuity or life insurance contracts, whichever is
appropriate, under the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations issued thereunder (or any successor provisions). Without
limiting the scope of the foregoing, the Fund will comply with Section 817(h) of
the Code and Treasury Regulation ss.1.817-5, and any Treasury interpretations
thereof, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, and any amendments or other
modifications or successor provisions to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify the Company of such breach and (b) to adequately diversify
the Fund so as to achieve compliance within the grace period afforded by
Regulation 817.5.
6.2 Assuming that the Contracts comply with paragraph 6.3 below, the
Fund represents that it and each Designated Portfolio is or will be qualified as
a Regulated Investment Company under Subchapter M of the Code, and that it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provisions) and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.
6.3 Assuming that the Designated Portfolios in which the Account invests
comply with paragraphs 6. l and 6.2 above, the Company represents that the
Contracts are currently, and at the time of issuance shall be, treated as life
insurance or annuity insurance contracts, under applicable provisions to the
Code, and that it will make every effort to maintain such treatment, and that it
will notify the Fund and the Underwriter immediately upon having a reasonable
basis for believing the Contracts have ceased to be so treated or that they
might not be so treated in the future. The Company agrees that any prospectus
offering a contract that is a "modified endowment contract" as that term is
defined in Section 7702A of the Code (or any successor or similar provision),
shall identify such contract as a modified endowment contract.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (I.E., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to each Account; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7 If and to the extent the Shared Funding Order contains terms and
conditions different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3 and 7.5 of this
Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the Shared
Funding Exemptive Order, and Sections 3.3, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5
of the Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in the Shared
Funding Exemptive Order or any amendment thereto. If and to the extent that Rule
6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in the
Shared Funding Exemptive Order, then (a) the Fund and/or the participating
Insurance Companies, as appropriate, shall take such steps as may be necessary
to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to
the extent such rules are applicable; and (b) Sections 3.4, 3.5, 3.6, 7.1., 7.2,
7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent
that terms and conditions substantially identical to such Sections are contained
in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.1(a). The Company agrees to indemnify and hold harmless the Fund and
the Underwriter, and each of its directors and officers and each person, if any,
who controls the Fund or Underwriter within the meaning of Section 15 of the
1933 Act (except for those persons who are not associated with the Underwriter,
Adviser, or any of their affiliates or subsidiaries) (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration
statement, prospectus, or SAI for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus, SAI, or sales literature of the Fund not
supplied by the Company or persons under its control) or wrongful
conduct of the Company or persons under its authorization or control,
with respect to the sale or distribution of the Contracts or Fund
Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, SAI,
or sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any material failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good faith
or otherwise, to comply with the qualification requirements specified
in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2 INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts; and
(I)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement, prospectus, SAI, or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated herein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for use in the
registration statement, prospectus, or SAI for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus, SAI or sales literature for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser, Underwriter or persons under their
control, with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, SAI
or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund; or
(iv)arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3 INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or expenses (or
actions in respect thereof) or settlements, are related to the operations of the
Fund and:
(I)arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement including
a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(ii)arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund; as limited by and in accordance with the
provisions of Sections 8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the expense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceeding against it or any of
its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of share of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to
some or all Designated Portfolios, by six (6) months'
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Designated
Portfolio based upon the Company's determination that
shares of the Fund are not reasonably available to meet
the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Designated
Portfolio in the event any of such Portfolio's shares are
not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes
the use of such shares as the underlying investment media
of the Contracts issued or to be issued by the Company; or
(d) termination by the Fund or Underwriter in the event
that formal administrative proceedings are instituted
against the Company by the NASD, the SEC, the Insurance
Commissioner or like official of any state or any other
regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Fund
shares, provided, however, that the Fund or Underwriter
determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a
material adverse effect upon the ability of the Company
to perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund
or Underwriter by the NASD, the SEC, or any state
securities or insurance department or any other regulatory
body, provided, however, that the Company determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of the Fund or Underwriter to
perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the Fund
and the Underwriter with respect to any Designated
Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter
M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI
hereof, or if the Company reasonably believes that such
Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice
to the Company in the event that the Contracts fail to
meet the qualifications specified in Article VI hereof, or
if the Fund or Underwriter reasonably believes that such
Contracts may fail to so qualify; or
(h) termination by either the Fund or the Underwriter by
written notice to the Company, if either one or both of
the Fund or the Underwriter respectively, shall determine,
in their sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its
business, operations, financial condition, or prospects
since the date of this Agreement or is the subject of
material adverse publicity; or
(i) termination by the Company by written notice to the Fund
and the Underwriter, if the Company shall determine, in
its sole judgment exercised in good faith, that the Fund
or the Underwriter has suffered a material adverse change
in its business, operations, financial condition or
prospects since the date of this Agreement or is the
subject of material adverse publicity.
10.2 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, the owners of the Existing Contracts may be permitted
to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2 shall not apply to
any termination under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that this Section 10.2 shall not apply to any termination under
Section l0.1(g) of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption), or (iii) pursuant
to the terms of a substitution order issued by the SEC pursuant to Section 26(b)
of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
The Pioneer Group
60 State Street
Boston, Massachusetts 02109-1820
Attn:
ph:
fax:
If to the Company:
United of Omaha Life Insurance Company
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska 68175-1008
Attention: Variable Products Counsel
ph: 402-351-5087
fax: 402-351-5906
If to Underwriter:
The Pioneer Group
60 State Street
Boston, Massachusetts 02109-1820
Attn:
ph:
fax:
ARTICLE XII. MISCELLANEOUS
12.1 All references herein to the "Fund" are to each of the undersigned
Funds as if this Agreement were between such individual Fund and the Underwriter
and the Company. All references herein to the "Adviser" relate solely to the
Adviser of such individual Fund, as appropriate. All persons dealing with a Fund
must look solely to the property of such Fund, and in the case of a series
company, the respective Designated Portfolios listed on Schedule A hereto as
though each such Designated Portfolio had separately contracted with the Company
and the Underwriter for the enforcement of any claims against the Fund. The
parties agree that neither the Board, officers, agents or shareholders assume
any personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain.
12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Nebraska Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner consistent with the
Nebraska variable annuity laws and regulations and any other applicable law or
regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
COMPANY: UNITED OF OMAHA LIFE INSURANCE COMPANY
By:_________________________________________
Title: Senior Vice President
Date:
FUND: [PIONEER FUND NAME]
By:________________________________
Title:
Date:
FUND: [PIONEER FUND NAME]
By:_______________________________
Title:
Date:
UNDERWRITER: [PIONEER UNDERWRITER NAME]
By:
Title:
Date:
<PAGE>
As of May 1, 1997
SCHEDULE A
ACCOUNTS, POLICIES AND PORTFOLIOS
SUBJECT TO THE PARTICIPATING AGREEMENT
EXHIBIT (8) (F): PARTICIPATION AGREEMENT WITH THE SCUDDER VARIABLE LIFE
INVESTMENT FUND
PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT (the "Agreement") made by and between SCUDDER
VARIABLE LIFE INVESTMENT FUND (the "Fund"), a Massachusetts business trust
created under a Declaration of Trust dated March 15, 1985, as amended, with a
principal place of business in Boston, Massachusetts and UNITED OF OMAHA LIFE
INSURANCE COMPANY, a Nebraska corporation (the "Company"), with a principal
place of business in Omaha, Nebraska on behalf of Separate Account C, a separate
account of the Company, and any other separate account of the Company as
designated by the Company from time to time, upon written notice to the Fund in
accordance with Section 10 herein (each, an "Account").
WHEREAS, the Fund acts as the investment vehicle for the separate
accounts established for variable life insurance policies and variable annuity
contracts (collectively referred to herein as "Variable Insurance Products") to
be offered by insurance companies which have entered into participation
agreements substantially identical to this Agreement ("Participating Insurance
Companies") and their affiliated insurance companies; and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares of beneficial interest ("Shares"), and additional series of
Shares may be established, each designated a "Portfolio" and representing the
interest in a particular managed portfolio of securities; and
WHEREAS, it is in the best interest of Participating Insurance Companies to make
capital contributions if required so that the annual expenses of each Portfolio
of the Fund in which a articipating Insurance Company is a shareholder will not
exceed a fixed percentage of the Portfolio's average annual net assets; and
WHEREAS, the Parties desire to evidence their agreement as to certain
other matters,
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows:
1. ADDITIONAL DEFINITIONS.
For the purposes of this Agreement, the following definitions shall
apply:
(a) The "expenses of a Portfolio" for any fiscal year shall mean
the expenses for such fiscal year as shown in the Statement of Operations (or
similar report) certified by the Fund's independent public accountants;
(b) A "Portfolio's average daily net assets" for each fiscal year
shall mean the sum of the net asset values determined throughout the year for
the purpose of determining net asset value per Share, divided by the number of
such determinations during such year;
(c) The Company's "Required Contribution" on behalf of the
Account in respect of a Portfolio for any fiscal year shall mean an amount equal
to the expenses of that Portfolio for such year minus the below-indicated
percentage of that Portfolio's average daily net assets for the year:
International Portfolio. . . . . . . . . . 1.50%
Each other Portfolio. . . . . . . . . . . . 0.75%
multiplied by a fraction the denominator of which is the average daily net
assets of that Portfolio and the numerator of which is the average daily net
asset value of the Shares of that Portfolio owned by the Account (referred to
herein as a "Participating Shareholder"). The Company's Required Contribution in
respect of a Portfolio shall be pro-rated based on the number of business days
on which this Agreement is in effect for periods of less than a fiscal year.
(d) The "average daily net asset value of the Shares of the
Portfolio" owned by the Account for any fiscal year of the Fund shall]] mean the
greater of (i) $500,000 or (ii) the sum of the aggregate net asset values of the
Shares so owned determined during the fiscal year, as of each determination of
the net asset value per Share, divided by the total number of determinations of
net asset value during such year.
(e) "Shares" means shares of beneficial interest, without par
value, of any Portfolio, now or hereafter created, of the Fund.
2. CAPITAL CONTRIBUTION. The Company on behalf of the Account shall, within
sixty days after the end of each fiscal year of the Fund, make a capital
contribution to the Fund in respect of each Portfolio equal to the Required
Contribution for that Portfolio for such year; provided, however, that in the
event that both clauses (i) and (ii) of paragraph (d) of Section 1 of this
Agreement or similar agreements are applicable to different Participating
insurance Companies during the same fiscal year, there shall be a proportionate
reduction of the Required Contribution of each Participating Insurance Company
to which said clause (ii) is applicable so that the total of all required
capital contributions to the Fund on behalf of any Portfolio is not greater than
the excess of the expenses of that Portfolio for that fiscal year less the
percentage of that Portfolio's total expenses set forth in paragraph (c) of
Section 1 of this Agreement for such fiscal year.
3. DUTY OF FUND TO SELL.
The Fund shall make its Shares available for purchase at the applicable
net asset value per Share by Participating Insurance Companies and their
affiliates and separate accounts on those days on which the Fund calculates its
net asset value pursuant to rules of the Securities and Exchange Commission;
provided, however, that the Trustees of the Fund may refuse to sell Shares of
any Portfolio to any person, or suspend or terminate the offering of Shares of
any Portfolio, if such action is required by law or by regulatory authorities
having jurisdiction or is, in the SOLE DISCRETION OF the Trustees, necessary in
the best interest of the shareholders of any Portfolio.
4. REQUIREMENT TO EXECUTE PARTICIPATION AGREEMENT; REQUESTS.
Each Participating Insurance Company shall, prior to purchasing Shares
in the Fund, execute and deliver a participation agreement in a form
substantially identical to this Agreement.
The Fund shall] make available, upon written request from the Participating
Insurance Company given in accordance with Paragraph 10, to each Participating
Insurance Company which has executed an agreement and which Agreement has not
been terminated pursuant to Paragraph 8 (i) a list of all other Participating
Insurance Companies, and (ii) a copy of the Agreement as executed by any other
Participating Insurance Company.
The Fund shall also make available upon request to each Participating
Insurance Company which has executed an Agreement and which Agreement has not
been terminated pursuant to Paragraph 8, the net asset value of any Portfolio of
the Fund as of any date upon which the Fund calculates the net asset value of
its Portfolios for the purpose of purchase and redemption of Shares.
5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund
and each of its Trustees and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the Securities Act of 1933 (the "Act")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), arising out of the acquisition of any
Shares by any person, to which the Fund or such Trustees, officers or
controlling person may become subject under the Act, under any other statute, at
common law or otherwise, which (i) may be based upon any wrongful act by the
Company, any of its employees or representatives, any affiliate of or any person
acting on behalf of the Company or a principal underwriter of its insurance
products, or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or prospectus
covering Shares or any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished to the
Fund by the Company, or (iii) may be based on any untrue statement or alleged
untrue statement of a material fact contained in a registration statement or
prospectus covering insurance products sold by the Company or any insurance
company which is an affiliate thereof, or any amendments or supplement thereto,
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement or statements therein not
misleading, unless such statement or omission was made in reliance upon
information furnished to the Company or such affiliate by or on behalf of the
Fund; provided, however, that in no case (i) is the Company's indemnity in favor
of a Trustee or officer or any other person deemed to protect such Trustee or
officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his duties or by reason of his reckless
disregard of obligations and duties under this Agreement or (ii) is the Company
to be liable under its indemnity agreement contained in this Paragraph 5 with
respect to any claim made against the Fund or any person indemnified unless the
Fund or such person, as the case may be, shall have notified the Company in
writing pursuant to Paragraph 10 within a reasonable time after the summons or
other first legal process giving information of the nature of the claims shall
have been served upon the Fund or upon such person (or after the Fund or such
person shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it has to the Fund or any person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this Paragraph 5. The Company shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if it elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Fund, to its officers and Trustees, or to any controlling person or persons,
defendant or defendants in the suit. In the event that the Company elects to
assume the defense of any such suit and retain such counsel, the Fund, such
officers and Trustees or controlling person or persons, defendant or defendants
in the suit, shall bear the fees and expenses of any additional counsel retained
by them, but, in case the Company does not elect to assume the defense of any
such suit, the Company will reimburse the Fund, such officers and Trustees or
controlling person or persons, defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained by them. The Company agrees
promptly to notify the Fund pursuant to Paragraph 10 of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any Shares.
(b) The Fund agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses)
to which it or such directors, officers or controlling person may become subject
under the Act, under any other statute, at common law or otherwise, arising out
of the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Fund, any of its employees or representatives or a principal
underwriter of the Fund, or (ii) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus covering Shares or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading unless such statement or omission was made in reliance upon
information furnished to the Fund by the Company or (iii) may be based on any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering insurance products sold by the
Company, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund; provided, however, that in no case (i) is
the Fund's indemnity in favor of a director or officer or any other person
deemed to protect such director or officer or other person against any liability
to which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of his duties or
by reason of his reckless disregard of obligations and duties under this
Agreement or (ii) is the Fund to be liable under its indemnity agreement
contained in this Paragraph 5 with respect to any claims made against the
Company or any such director, officer or controlling person unless it or such
director, officer or controlling person, as the case may be, shall have notified
the Fund in writing pursuant to Paragraph 10 within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon it or upon such director, officer or
controlling person (or after the Company or such director, officer or
controlling person shall have received notice of such service on any designated
agent), but failure to notify the Fund of any claim shall not relieve it from
any liability which it may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
Paragraph. The Fund will BE ENTITLED TO PARTICIPATE AT ITS own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Company, its directors, officers or controlling person or persons, defendant or
defendants, in the suit. In the event the Fund elects to assume the defense of
any such suit and retain such counsel, the Company, its directors, officers or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Fund does not elect to assume the defense of any such suit, it will
reimburse the Company or such directors, officers or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Fund agrees promptly to notify the
Company pursuant to Paragraph 10 of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in connection with the
issuance or sale of any Shares.
6. PROCEDURE FOR RESOLVING IRRECONCILABLE CONFLICTS.
(a) The Trustees of the Fund will monitor the operations of the
Fund for the existence of any material irreconcilable conflict among the
interests of all the contract holders and policy owners of Variable Insurance
Products (the "Participants") of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise, among other things, from: (a) an
action by any state insurance regulatory authority; (b) a change in applicable
insurance laws or regulations; (c) a tax ruling or provision of the Internal
Revenue Code or the regulations thereunder; (d) any other development relating
to the tax treatment - of insurers, contract holders or policy owners or
beneficiaries of Variable Insurance Products; (e) the manner in which the
investments of any Portfolio are being managed; (f) a difference in voting
instructions given by variable annuity contract holders, on the one hand, and
variable life insurance policy owners, on the other hand, or by the contract
holders or policy owners of different participating insurance companies; or (g)
a decision by an insurer to override the voting instructions of Participants.
(b) The Company will be responsible for reporting any potential
or existing conflicts to the Trustees of the Fund. The Company will be
responsible for assisting the Trustees in carrying out their responsibilities
under this Paragraph 6(b) and Paragraph 6(a), by providing the Trustees with all
information reasonably necessary for the Trustees to consider the issues raised.
The Fund will also request its investment adviser to report to the Trustees any
such conflict which comes to the attention of the adviser.
(c) If it is determined by a majority of the Trustees of the
Fund, or a majority of its disinterested Trustees, that a material
irreconcilable conflict exists involving the Company, the Company shall, at its
expense, and to the extent reasonably practicable (as determined by a majority
of the disinterested Trustees), take whatever steps are necessary to eliminate
the irreconcilable material conflict, including withdrawing the assets allocable
to some or all of the separate accounts from the Fund or any Portfolio and
reinvesting such assets in a different investment medium, including another
Portfolio of the Fund, offering to the affected Participants the option of
making such a change or establishing a new funding medium including a registered
investment company.
For purposes of this Paragraph 6(c), the Trustees, or the disinterested
Trustees, shall determine whether or not any proposed action adequately remedies
any irreconcilable material conflict. In the event of a determination of the
existence of an irreconcilable material conflict, the Trustees shall cause the
Fund to take such action, such as the establishment of one or more additional
Portfolios, as they in their sole discretion determine to be in the interest of
all shareholders and Participants in view of all applicable factors, such as
cost, feasibility, tax, regulatory and other considerations. In no event will
the Fund be required by this Paragraph 6(c) to establish a new funding medium
for any variable contract or policy.
The Company shall not be required by this Paragraph 6(c) to establish a
new funding medium for any variable contract or policy if an offer to do so has
been declined by a vote of a majority of the Participants materially adversely
affected by the material irreconcilable conflict. The Company will recommend to
its Participants that they decline an offer to establish a new funding medium
only if the Company believes it is in the best interest of the Participants.
(d) The Trustees' determination of the existence of an
irreconcilable material conflict and its implications promptly shall be
communicated to all Participating Insurance Companies by written notice thereof
delivered or mailed, first class postage prepaid.
7. VOTING PRIVILEGES.
The Company shall be responsible for assuring that its separate account
or accounts participating in the Fund shall use a calculation method of voting
procedures substantially the same as the following: those Participants permitted
to give instructions and the number of Shares for which instructions may be
given will be determined as of the record date for the Fund shareholders!
meeting, which shall not be more than 60 days before the date of the meeting.
Whether or not voting instructions are actually given by a particular
Participant, all Fund shares held in any separate account or sub-account thereof
and attributable to policies will be voted for, against, or withheld from voting
on any proposition in the same proportion as (i) the aggregate record date cash
value held in such sub-account for policies giving instructions' respectively,
to vote for, against, or withhold votes on such proposition, bears to (ii) the
aggregate record date cash value held in the sub-account for all policies for
which voting instructions are received. Participants continued in effect under
lapse options will not be permitted to give voting instructions. Shares held in
any other insurance company general or separate account or sub-account thereof
will be voted in the proportion specified in the second preceding sentence for
shares attributable to policies.
8. DURATION AND TERMINATION.
This Agreement shall remain in force for the period ending five years
from the date of its execution (such date and any anniversary of such date being
hereinafter called a "Renegotiation Date"), and from year to year thereafter
provided that neither the Company nor the Fund shall have given written notice
to the other within thirty (30) days prior to a Renegotiation Date that it
desires to renegotiate the amount of contribution to capital due hereunder
("Renegotiation Notice"). If a Renegotiation Notice is properly given as
aforesaid and the Fund and the Company shall fail, within sixty (60) days after
the Renegotiation Date, either to enter into an amendment to this Agreement or a
written acknowledgment that the Agreement shall continue in effect, this
Agreement shall terminate as of the one hundred twentieth day after such
Renegotiation Date. If this Agreement is so terminated, the Fund may, at any
time thereafter, automatically redeem the Shares of any Portfolio held by a
Participating Shareholder. This Agreement may be terminated at any time, at the
option of either of the Company or the Fund, when neither the Company, any
insurance company nor the separate account or accounts of such insurance company
which is an affiliate thereof which is not a Participating Insurance Company own
any Shares of the Fund or may be terminated by either party to the Agreement
upon a determination by a majority of the Trustees of the Fund, or a majority of
its disinterested Trustees, following certification thereof by a Participating
Insurance Company given in accordance with Paragraph 10 that an irreconcilable
conflict exists among the interests of (i) all contract holders and policy
holders of Variable Insurance Products of all separate accounts or (ii) the
interests of the Participating Insurance Companies investing in the Fund.
Notwithstanding anything to the contrary in this Agreement or its termination as
provided herein, the Company's obligation to make a capital contribution to the
Fund in accordance with this Agreement at the time in effect shall continue (i)
following a properly given Renegotiation Notice, in the absence of agreement
otherwise, until termination of this Agreement, and (ii) (except termination due
to the existence of an irreconcilable conflict), following termination of this
Agreement, until the later of the fifth anniversary of the date of this
Agreement or the date on which the Company, its separate account(s) or the
separate account(s) of any affiliated insurance company owns no Shares.
9. COMPLIANCE.
The Fund will comply with the provisions of Section 4240(a) of the New
York Insurance Law.
Each Portfolio of the Fund will comply with the provisions of Section 817(h) of
the Internal Revenue Code of 1986, as amended (the "Code"), relating to
diversification requirements for variable annuity, endowment and life insurance
contracts. Specifically, each Portfolio will comply with either (i) the
requirement of Section 817(h)(1) of the Code that its assets be adequately
diversified, or (ii) the "Safe Harbor for Diversification" specified in Section
817(h)(2) of the Code, or (iii) the diversification requirement of Section
817(h)(1) of the Code by having all or part of its assets invested in U.S.
Treasury securities which qualify for the "Special Rule for Investments in
United States Obligations" specified in Section 817(h)(3) of the Code.
The provisions of Paragraphs 6 and 7 of this Agreement shall be
interpreted in a manner consistent with any Rule or order of the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended,
applicable to the parties hereto.
No Shares of any Portfolio of the Fund may be sold to the general
public.
10. NOTICES.
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
Scudder Variable Life Investment Fund
175 Federal Street
Boston, Massachusetts 02110
(617) 482-3990
Attn: David B. Watts
If to the Company:
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Law Division
3301 Dodge Street
Omaha, Nebraska 68131
Attn: Chief Counsel
11. MASSACHUSETTS LAW TO APPLY.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
12. MISCELLANEOUS.
The name "Scudder Variable Life Investment Fund" is the designation of
the Trustees for the time being under a Declaration of Trust dated March 15,
1985, as amended, and all persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund. No Portfolio shall
be liable for any obligations properly attributable to any other Portfolio.
The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
13. ENTIRE AGREEMENT.
This Agreement incorporates the entire understanding and agreement among the
parties hereto, and supersedes any and all prior understandings and agreements
between the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the 15th day of May, 1994.
SEAL SCUDDER VARIABLE LIFE
INVESTMENT FUND
By: /S/ DAVID B. WATTS
David B. Watts
President
SEAL UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: /S/ RICHARD A. WITT
Its: SENIOR VICE PRESIDENT
EXHIBIT (8) (G): PARTICIPATION AGREEMENT WITH T. ROWE PRICE
PARTICIPATION AGREEMENT
AMONG
T. ROWE PRICE INTERNATIONAL SERIES, INC.,
T. ROWE PRICE EQUITY SERIES, INC.,
T. ROWE PRICE FIXED INCOME SERIES, INC.,
T. ROWE PRICE INVESTMENT SERVICES, INC.
and
UNITED OF OMAHA LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 6th day of May, 1994 by
and among UNITED OF OMAHA LIFE INSURANCE COMPANY (hereinafter, the "Company), a
Nebraska life insurance company, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each account hereinafter referred to as the
"Account")), and the undersigned funds, each a corporation organized under the
laws of Maryland (each fund hereinafter referred to as the "Fund") and T. ROWE
Price Investment Services, Inc. (hereinafter the Underwriter"), a Maryland
corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is or will be available to act as the investment vehicle
for separate accounts established for variable life insurance and variable
annuity contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund will obtain an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T) (b)(15) thereunder, if and to the extent necessary to permit shares of
the Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, T. ROWE Price Associates, Inc. and ROWE Price-Fleming
International, Inc. (each hereinafter referred to as the "Adviser") are each
duly registered as an investment adviser under the federal Investment Advisers
Act of 1940, as amended, and any applicable state securities laws; and
WHEREAS, the Company has registered or will register certain variable
life insurance and variable annuity contracts supported wholly or partially by
the Account (the "Contracts") under the 1933 Act, and said Contracts are listed
in Schedule A hereto, as it may be amended from time to time by mutual written
agreement; and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid Contracts; and
WHEREAS, the Company has registered or will register the Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Underwriter agrees to sell to the Company those shares of the
Designated Portfolios which the Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios
available for purchase at the applicable net asset value per share by the
Company and the Account on those days on which the Fund calculates its net asset
value pursuant to rules of the Securities and Exchange Commission, and the Fund
shall use reasonable efforts to calculate such net asset value on each day which
the New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell
shares of any Designated Portfolio to any person, or suspend or terminate the
offering of shares of any Designated Portfolio if such action is required by law
or by regulatory authorities having jurisdiction, or is, in the sole discretion
of the Board acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, necessary in the best interests of the
shareholders of such Designated Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Designated Portfolios will be sold to the general public. The Fund
and the Underwriter will not sell Fund shares to any insurance company or
separate account unless an agreement containing provisions substantially the
same as Articles I, III and VII of this Agreement is in effect to govern such
sales.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption, except that
the Fund reserves the right to suspend the right of redemption or postpone the
date of payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus.
1.5 For purposes of Section 1.1 and 1.4, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Account, and receipt by such designee shall constitute receipt by the Fund;
provided that the Company receives the order by 4:00 p.m. Baltimore time and the
Fund receives notice of such order by 9:30 a.m. Baltimore time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.6 The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus.
1.7 The Company shall pay for Fund shares on the next Business Day after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.5 hereof. Payment shall be in federal funds transmitted by wire by
3:00 p.m. Baltimore time. If payment in Federal Funds for any purchase is not
received or is received by the Fund after 3:00 p.m. Baltimore time on such
Business Day, the Company shall promptly, upon the Fund's request, reimburse the
Fund for any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowings or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request. For purposes
of Section 2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Designated Portfolios' shares. The
Company hereby elects to receive all such income, dividends, and capital gain
distributions as are payable on Designated Portfolio shares in additional shares
of that Portfolio. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash. The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10 The Fund shall make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated (normally
by 6:30 p.m. Baltimore time) and shall use its best efforts to make such net
asset value per share available by 7 p.m. Baltimore time.
1.1 l The Parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies; provided,
however, that (a) such other investment company, or series thereof, has
investment objectives or policies that are substantially different from the
investment objectives and policies of the Fund; or (b) the Company gives the
Fund and the Underwriter 45 days written notice of its intention to make such
other investment company available as a funding vehicle for the Contracts; or
(c) such other investment company was available as a funding vehicle for the
Contracts prior to the date of this Agreement and the Company so informs the
Fund and Underwriter prior to their signing this Agreement; or (d) the Fund or
Underwriter consents to the use of such other investment company, such consent
not to be unreasonably withheld.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under the
Nebraska insurance laws and has registered or, prior to any issuance or sale of
the Contracts, will register the Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Nebraska and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have
the Board, a majority of whom are not interested persons of the Fund, formulate
and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees, and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees, and expenses are and shall at all times remain in compliance with the laws
of the State of Nebraska to the extent required to perform this Agreement.
2.5 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Nebraska and any applicable state
and federal securities laws.
2.7 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered under all applicable federal and state securities
laws and that the Adviser shall perform its obligations for the Fund in
compliance in all material respects with the laws of the State of Nebraska and
any applicable state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-(1) of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.9 The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with THE MONEY and/or securities of the Fund are covered by
a blanket fidelity bond or similar coverage in an amount not less than $2
million. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company. The Company agrees that any amounts
received under such bond will be held by the Company for the benefit of the
Fund. The Company agrees to make all reasonable efforts to see that this bond or
another bond containing these provisions is always in effect, and agrees to
notify the Fund and the Underwriter in the event that such coverage no longer
applies. The Company agrees to exercise its best efforts to ensure that other
individuals/entities not employed or controlled by the Company and dealing with
the money and/or securities of the Fund maintain a similar bond or coverage in a
reasonable amount.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS: VOTING
3.1 The Underwriter shall provide the Company with as many copies of the
Fund's current prospectus as the Company may reasonably request. The
Fund shall bear the expense of printing copies of its current
prospectus that will be distributed to existing Contract owners, and
the Company shall bear the expense of printing copies of the Fund's
prospectuses that are used in connection with offering the contracts
issued by the Company. If requested by the Company in lieu thereof,
the Fund shall provide such documentation (including a final copy of
the new prospectus as set in type at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once
each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at
the Company's expense).
3.2 The Fund's prospectus shall state that the Statement of Additional
Information ("SAI") for the Fund is available from the Company, and the
Underwriter (or the Fund), at its expense, shall print and provide a copy of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.
3.4 If and to the extent required by law, the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of
such portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to
interpret the 1940 Act to require passthrough voting
privileges for variable contract owners or to the extent
otherwise required by law. The Company reserves the right
to vote Fund shares held in any segregated asset account
in its own right, to the extent permitted by law.
3.5 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt and provide
in writing.
3.6 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the Commission may promulgate with respect thereto.
3.7 The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which the Fund (or a Portfolio
thereof) or the Adviser or the Underwriter is named, at least fifteen Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably object to such use within fifteen Business Days after
receipt of such material. The Fund or its designee reserves the right to
reasonably object to the continued use of any such material, and no such
material shall be used if the Fund or its designee so object.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or SAI for
the Fund shares, as such registration statement, prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops or uses and in which the Company, and/or
its Account, is named at least fifteen Business Days prior to its use. No such
material shall be used if the Company reasonably objects to such use within
fifteen Business Days after receipt of such material. The Company reserves the
right to reasonably object to the continued use of any such material, and no
such material shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus, or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Contracts or the Account,
contemporaneously with the filing of such document(s) with the SEC or other
regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (~.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
Statements of Additional Information, shareholder reports, proxy materials, and
any other communications distributed or made generally available with regard to
the Funds.
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-l to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing, and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter, or other resources
available to the Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
PREPARATION OF all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.
5.3 The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1 Assuming that the Contracts comply with paragraph 6.3 below, the
Fund will invest its assets in such a manner as to ensure that the Contracts
will be treated as annuity or life insurance contracts, whichever is
appropriate, under the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations issued thereunder (or any successor provisions). Without
limiting the scope of the foregoing, the Fund will comply with Section 817(h) of
the Code and Treasury Regulation ss.1.817-5, and any Treasury interpretations
thereof, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts, and any amendments or other
modifications or successor provisions to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify the Company of such breach and (b) to adequately diversify
the Fund so as to achieve compliance within the grace period afforded by
Regulation 817.5.
6.2 Assuming that the Contracts comply with paragraph 6.3 below, the
Fund represents that it and each Designated Portfolio is or will be qualified as
a Regulated Investment Company under Subchapter M of the Code, and that it will
make every effort to maintain such qualification (under Subchapter M or any
successor or similar provisions) and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.
6.3 Assuming that the Designated Portfolios in which the Account invests
comply with paragraphs 6. l and 6.2 above, the Company represents that the
Contracts are currently, and at the time of issuance shall be, treated as life
insurance or annuity insurance contracts, under applicable provisions to the
Code, and that it will make every effort to maintain such treatment, and that it
will notify the Fund and the Underwriter immediately upon having a reasonable
basis for believing the Contracts have ceased to be so treated or that they
might not be so treated in the future. The Company agrees that any prospectus
offering a contract that is a "modified endowment contract" as that term is
defined in Section 7702A of the Code (or any successor or similar provision),
shall identify such contract as a modified endowment contract.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in WHICH THE investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and REINVESTING such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (=, annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to each Account; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the Fund.
7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by VOTE
OF a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7 If and to the extent the Shared Funding Order contains terms and
conditions different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3 and 7.5 of this
Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the Shared
Funding Exemptive Order, and Sections 3.3, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5
of the Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in the Shared
Funding Exemptive Order or any amendment thereto. If and to the extent that Rule
6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Shared Funding Exemptive
Order) on terms and conditions materially different from those contained in the
Shared Funding Exemptive Order, then (a) the Fund and/or the participating
Insurance Companies, as appropriate, shall take such steps as may be necessary
to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to
the extent such rules are applicable; and (b) Sections 3.4, 3.5, 3.6, 7.1., 7.2,
7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent
that terms and conditions substantially identical to such Sections are contained
in such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.1(a). The Company agrees to indemnify and hold harmless the Fund and
the Underwriter, and each of its directors and officers and each person, if any,
who controls the Fund or Underwriter within the meaning of Section 15 of the
1933 Act (except for those persons who are not associated with the Underwriter,
Adviser, or any of their affiliates or subsidiaries) (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:
(i) arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration
statement, prospectus, or SAI for the Contracts or contained in the
Contracts or sales literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the registration statement,
prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus, SAI, or sales literature of the Fund not
supplied by the Company or persons under its control) or wrongful
conduct of the Company or persons under its authorization or control,
with respect to the sale or distribution of the Contracts or Fund
Shares; or
(iii)arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, SAI,
or sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any material failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good faith
or otherwise, to comply with the qualification requirements specified
in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified PARTY WOULD otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2 INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts; and
(i)arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement, prospectus, SAI, or sales literature of the Fund (or any
amendment or supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to state therein
a material fact required to be stated herein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for use in the
registration statement, prospectus, or SAI for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the registration
statement, prospectus, SAI or sales literature for the Contracts not
supplied by the Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser, Underwriter or persons under their
control, with respect to the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, SAI
or sales literature covering the Contracts, or any amendment thereof
or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund; or
(iv)arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.3 INDEMNIFICATION BY THE FUND
8.3(a). The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the MEANING OF Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of THIS SECTION 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages, liabilities or expenses (or
actions in respect thereof) or settlements, are related to the operations of the
Fund and:
(i)arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement including
a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(ii)arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund; as limited by and in accordance with the
provisions of Sections 8.3(b) and 8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or the Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the expense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceeding against it or any of
its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of share of the Fund.
ARTICLE IX. APPLICABLE LAW
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Maryland.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Shared FUNDING Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to some or all
Designated Portfolios, by six (6) months' advance written notice
delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio based upon the
Company's determination that shares of the Fund are not reasonably
available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio in the event any
of such Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment media of
the Contracts issued or to be issued by the Company; or
(d) termination by the Fund or Underwriter in the event that formal
administrative proceedings are instituted against the Company by the
NASD, the SEC, the Insurance Commissioner or like official of any
state or any other regulatory body regarding the Company's duties
under this Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Fund shares,
provided, however, that the Fund or Underwriter determines in its sole
judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of
the Company to perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund or Underwriter by the
NASD, the SEC, or any state securities or insurance department or any
other regulatory body, provided, however, that the Company determines
in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Fund or Underwriter to perform its obligations
under this Agreement; or
(f) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI hereof, or if the
COMPANY REASONABLY believes that such Portfolio may fail to so qualify
or comply; or
(g) termination by the Fund or Underwriter by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof, or if the Fund or
Underwriter reasonably believes that such Contracts may fail to so
qualify; or
(h) termination by either the Fund or the Underwriter by written notice to
the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change in
its business, operations, financial condition, or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or
(i) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund or the Underwriter has suffered
a material adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is the
subject of material adverse publicity.
10.2 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, the owners of the Existing Contracts may be permitted
to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2 shall not apply to
any termination under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that this Section 10.2 shall not apply to any termination under
Section l0.1(g) of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption), or (iii) pursuant
to the terms of a substitution order issued by the SEC pursuant to Section 26(b)
of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) TO THE effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the COMPANY SHALL not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Fund:
T. ROWE Price Associates, Inc. 100 East Pratt Street Baltimore, Maryland 21202
Attention: Nancy M. Morris, Esq.
If to the Company:
United of Omaha Life Insurance Company Mutual of Omaha Plaza Omaha, Nebraska
68175 Attention: Lawrence F. Harr, Chief Counsel
If to Underwriter:
T. ROWE Price Investment Services 100 East Pratt Street Baltimore, Maryland
21202 Attention: John Cammack
ARTICLE XII. MISCELLANEOUS
12.1 All references herein to the "Fund" are to each of the undersigned
Funds as if this Agreement were between such individual Fund and the Underwriter
and the Company. All references herein to the "Adviser" relate solely to the
Adviser of such individual Fund, as appropriate. All persons dealing with a Fund
must look solely to the property of such Fund, and in the case of a series
company, the respective Designated Portfolios listed on Schedule A hereto as
though each such Designated Portfolio had separately contracted with the Company
and the Underwriter for the enforcement of any claims against the Fund. The
parties agree that neither the Board, officers, agents or shareholders assume
any personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain.
12.3 The captions in this Agreement are included for convenience of
reference ONLY AND in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the TRANSACTIONS contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Nebraska Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner consistent with the
Nebraska variable annuity laws and regulations and ANY OTHER applicable law or
regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies, and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP""), if
any), as soon as practical and in any event within 90 days
after the end of each fiscal year;
(b) the Company's quarterly statements (statutory) (and GAAP,
if any), as soon as practical and in any event within 45
days after the end Of each quarterly period.
IN WITNESS WHEREOF, each Of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as Of the date
specified below.
COMPANY: UNITED OF OMAHA LIFE INSURANCE COMPANY
By its authorized officer
By:________________________________________
Title: Senior Vice President
Date: May 11, 1994
FUND: T. ROWE PRICE INTERNATIONAL SERIES, INC.
By its authorized officer
By:________________________________
Title: Vice President
Date: May 5, 1994
FUND: T. ROWE PRICE EQUITY SERIES, INC.
By its authorized officer
By:_______________________________
Title: Vice President
Date: May 5, 1994
FUND: T. ROWE PRICE FIXED INCOME SERIES, INC.
By its authorized officer
By:________________________________
Title: Vice President
Date: May 5, 1994
UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By:
----------------------------------------
Title: Vice President
Date: May 5, 1994
EXHIBIT (8) (H): ADMINISTRATIVE SERVICES AGREEMENT WITH VANTAGE COMPUTER SYSTEMS
FULL SERVICE AGREEMENT
AGREEMENT made as of the 1st day of February, 1994, by and between MUTUAL OF
OMAHA INSURANCE COMPANY ("CLIENT"), Mutual of Omaha Plaza, Omaha, Nebraska,
68175, and VANTAGE COMPUTER SYSTEMS, INC. ("VANTAGE"), 301 W. 11th Street,
Kansas City, Missouri 64105.
SECTION 1 DEFINITIONS
Throughout this Agreement, the definitions set forth below shall apply to both
singular and plural versions of the defined term.
1.01 "VANTAGE System" is the computerized data processing recordkeeping system
designed to issue, provide reporting on, administer and maintain certain life
insurance and annuity products.
1.02 "Facilities" or "VANTAGE's Facilities" means the necessary data processing
equipment and administrative support personnel required to issue, provide
reporting on, administer and maintain certain life insurance and annuity
products.
1.03 "Contracts" means certain life insurance or annuity products of CLIENT or
its subsidiaries as described in Exhibit A.
1.04 "Model Office" refers to a pre-production version of the VANTAGE System as
modified for CLIENT running in a test environment at VANTAGE's Kansas City
facility.
SECTION 2 TERMS OF APPOINTMENT
2.01 Subject to the conditions set forth in this Agreement, CLIENT hereby
appoints VANTAGE as Recordkeeping Service Agent for the Contracts.
2.02 VANTAGE hereby accepts such appointment and agrees that on and after the
effective date of its appointment it will act as CLIENT's Recordkeeping Service
Agent for the Contracts.
2.03 VANTAGE agrees to provide the necessary facilities, equipment, and
personnel to perform its duties and obligations hereunder in accordance with
this Agreement and the standard industry practice.
2.04 VANTAGE agrees that it will perform, at the direction of CLIENT, those
Recordkeeping Service Functions as set forth in Exhibit B attached.
2.05 VANTAGE agrees to use its best efforts to provide requested training for
CLIENT personnel at VANTAGE's Facility or at CLIENT's offices in connection with
the use and operation of the VANTAGE System. If this training is provided at
VANTAGE's Facility as part of the Model Office (as defined in the Implementation
Schedule), then there shall be no additional cost. Training at Client's offices
will be provided at current education rates not to exceed $7,500.00 per standard
class of up to five days. All travel and out-of-pocket expense incurred by
VANTAGE or Client personnel in connection with and during training shall be
borne by Client. Except as provided above, this training will be provided at
current education rates.
2.06 If requested to do so, VANTAGE will make on-line access to the VANTAGE
System available to CLIENT between the hours of 7 a.m. and 7 p.m., Central Time,
Monday through Friday, except for such holidays as are observed by the New York
Stock Exchange. Access to the VANTAGE System at other times will be by mutual
agreement.
SECTION 3 TERM
3.01 Subject to termination as hereinafter provided, this Agreement shall remain
in force and effect for a period of 3 years, the initial term of this Agreement.
3.02 This Agreement shall be renewed automatically for additional successive
terms of one year at the end of the initial term and the end of each renewal
term unless terminated by either party by prior written notice to the other at
least one hundred eighty (180) days prior to the end of the initial term or the
renewal term.
3.03 Not more than 240 nor less than 210 days prior to the expiration of the
term or any renewal term, VANTAGE shall give notice to CLIENT of such
expiration, which notice shall state the date of expiration and that if not
cancelled by CLIENT not less than 180 days prior thereto, the Agreement will be
automatically renewed. If VANTAGE fails to give such notice during the permitted
period, then CLIENT shall thereafter have the right to cancel the Agreement at
any time, whether or not cancellation date shall be the expiration of the term
or any renewal, upon 60 days notice to VANTAGE, which right shall lapse only
upon VANTAGE's giving timely and proper notice hereunder to CLIENT of the next
scheduled expiration date, assuming this Agreement shall not have been
theretofore cancelled by VANTAGE.
3.04 VANTAGE shall have no right to terminate this Agreement except upon six
months notice as described in Paragraph 3.02 or pursuant to Paragraph 9.01. If
VANTAGE elects to provide such notice and terminate this Agreement for other
than CLIENT'S recurring nonpayment of fees and charges and if CLIENT shall so
request in writing, then VANTAGE shall continue to provide the services
described herein to CLIENT for a period of six (6) months following such
termination, such service to be provided in accordance with the terms of this
Agreement and at 110% of those fees and expenses in effect for the term
immediately preceding such six (6) months period.
3.05 In the event that this Agreement is terminated, VANTAGE agrees that, in
order to assist in providing uninterrupted service to CLIENT, VANTAGE shall use
reasonable efforts to assist CLIENT in converting the records of CLIENT from the
VANTAGE System to whatever service or system is selected by CLIENT, subject to
reimbursement to VANTAGE for such assistance at its standard rates and fees in
effect at that time.
SECTION 4 FEES AND EXPENSES
4.01 During the initial term of this Agreement, CLIENT shall pay to VANTAGE upon
receipt of VANTAGE's statement the fees and charges in the amounts as set out in
Exhibit A attached hereto and made a part of hereof. VANTAGE may impose a 1.5%
per month late payment charge on balances outstanding for over 30 days.
4.02 CLIENT shall also reimburse VANTAGE for all reasonable out-of-pocket
expenses described on Exhibit A attached hereto and made a part hereof, which
are incurred by VANTAGE in the performance of this Agreement. VANTAGE may impose
a 1.5% per month late payment charge on balances outstanding for over 30 days.
4.03 No fees or expenses may be increased during the initial term of this
Agreement. During any renewal term of this Agreement, fees under this Agreement
may be increased only if such increase is imposed generally upon all of
VANTAGE's customers. In addition:
(a) If the number of Active policies of CLIENT (regardless of policy
type now or hereafter administered pursuant to this Agreement and
Amendments hereto) equals or exceeds 30,000, then in no event
shall the aggregate of any price increases during any annual term
of this Agreement exceed the previous year's fee by the greater
of either:
(1) 5% percent; or,
(2) the percentage change in the Consumer Price Index for the
U.S. City average as compiled and calculated by the Bureau
of Labor Statistics of the United States Department of
Labor, in "Consumer Price Index, All Urban Consumers" (or
its appropriate successor Index) for the year immediately
preceding the effective date of such increase.
(b) If the number of Active policies of CLIENT (regardless of policy
type now or hereafter administered pursuant to this Agreement and
Amendments hereto) is less than 30,000, then in no event shall
the aggregate of any price increases during any annual term of
this Agreement exceed the previous year's fee by the greater of
either:
(1) 10% percent; or,
(2) the percentage change in the Consumer Price Index for the
U.S. City average as compiled and calculated by the Bureau
of Labor Statistics of the United States Department of
Labor, in "Consumer Price Index, All Urban Consumers" (or
its appropriate successor Index) for the year immediately
preceding the effective date of such increase.
4.04 CLIENT will pay Nebraska state and Omaha city sales or use taxes arising
out of the transaction contemplated by this Agreement. Such taxes will be
invoiced separately by VANTAGE for payment by CLIENT. VANTAGE shall promptly
notify CLIENT as soon as VANTAGE becomes aware of other taxes to be levied upon
this transaction; the parties agree to negotiate in good faith the issue of the
extent of each party's obligation to bear the financial obligation for such
taxes.
4.05 Except for the charges (whether or not on a fixed or on a time and
materials basis) and expenses expressly stated and agreed upon in this
Agreement, any amendment hereto, or in any Schedule or Exhibit hereto, CLIENT
shall not be billed for, or be obligated to pay, VANTAGE for any charges,
expenses, or other amounts for the products and related services covered by this
Agreement.
SECTION 5 PAYMENTS AND COLLECTIONS
5.01 Receipt by VANTAGE of any premiums or charges for insurance by or on behalf
of an insured shall be deemed to have been received by CLIENT. Payment of return
premiums or claims by the CLIENT to VANTAGE shall not be deemed payment to the
insured or claimant until such payments are received by such insured or
claimant.
5.02 VANTAGE will hold in a fiduciary capacity all insurance charges or premiums
collected by it on behalf of or for CLIENT with respect to insureds, and return
premiums received from CLIENT. VANTAGE will immediately remit such funds to the
person or persons entitled thereto, or shall promptly deposit them in a
fiduciary account established and maintained by VANTAGE in the name of CLIENT.
VANTAGE shall require the bank in which such fiduciary account is maintained to
keep records clearly recording the deposits in and withdrawals from such account
on behalf of or for each insurer for which VANTAGE may collect charges or
premiums. VANTAGE shall promptly obtain and keep copies of all such records and,
upon request of CLIENT, furnish CLIENT with copies of such records pertaining to
deposits and withdrawals on behalf of or for CLIENT. VANTAGE may make
withdrawals from such account for:
(a) remittance to CLIENT when entitled thereto;
(b) transfer to and deposit in a claims paying account, with claims
to be paid as provided in paragraph 5.03 below;
(c) remittance of return premiums to the person or persons entitled
thereto.
5.03 All claims paid by VANTAGE from funds collected on behalf of CLIENT shall
be paid only on checks or drafts of and as authorized by CLIENT.
5.04 To the extent required by applicable law VANTAGE shall provide a written
notice to the insured advising them of the identity of and relationship among
VANTAGE, the insured and CLIENT. If VANTAGE collects funds from the insured,
VANTAGE will provide the insured with written notice of the premium charged by
CLIENT for such insurance coverage.
SECTION 6 MODIFICATIONS AND CUSTOM OUTPUT.
6.01 VANTAGE has reviewed the Contracts, Prospectus and other documentation for
the life and annuity products as identified in Exhibit A.
6.02 VANTAGE and CLIENT have determined that certain modifications need to be
made to the VANTAGE System and its Facilities in order to be able to
successfully issue, administer, provide reporting on and maintain the life and
annuity products identified in Exhibit A and otherwise perform the functions set
forth in this Agreement.
6.03 Those modifications are identified in Exhibit G.
6.04 VANTAGE has agreed to provide and CLIENT has agreed to purchase Vantage's
services to develop those modifications as identified in Exhibit G at a cost set
forth in Exhibit A.
6.05 It is recognized that the CLIENT may make additional changes to its
requirements which will result in an increased cost for the modifications or
which could result in a deviation from the Implementation Schedule. The project
change control procedures set forth in Exhibit H will be followed in order to
estimate the proposed impact on the costs of modifications and the
Implementation Schedule.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF VANTAGE
VANTAGE represents and warrants to CLIENT as follows:
7.01 It is a corporation duly organized and existing and in good standing under
the laws of the State of Delaware. It is empowered under applicable laws and by
its charter and bylaws to enter into and perform the services contemplated in
this Agreement.
7.02 VANTAGE will secure and keep in effect all licenses required to perform its
services under this Agreement. VANTAGE will provide copies of such licenses and
appointments to CLIENT upon request.
7.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform the services contemplated in this Agreement.
7.04 It has and will continue to have and maintain the necessary facilities,
equipment, and personnel to perform its duties and obligations under this
Agreement.
7.05 All services provided under this Agreement shall:
(a) Conform to appropriate written specifications and documentation
developed by VANTAGE or mutually agreed to by VANTAGE and CLIENT
and as further defined in Exhibits B, E, F and G:
(b) Comply with standard industry practice; and
(c) Be performed in a professional and workmanlike manner.
Wherever possible, the above shall be construed as being consistent with each
other. When such construction is unreasonable, the order of preference shall be
as set forth above.
SECTION 8 REPRESENTATIONS AND WARRANTIES OF CLIENT
CLIENT represents and warrants to VANTAGE as follows:
8.01 It is a corporation duly organized and existing and in good standing under
the laws of the State of Nebraska.
8.02 It is empowered under the applicable laws and regulations and by its
charter and bylaws to enter into and perform this Agreement.
8.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
8.04 All of the prospectuses, Contracts and other forms provided or required by
CLIENT shall have been approved by all required regulatory agencies and shall be
in compliance with all Federal, state, and local laws and regulations.
8.05 It has and will continue to comply with all laws with respect to the
Contracts and its has and will continue to make all required filings with
regulatory agencies in connection with the offer, sale, or administration of the
Contracts.
SECTION 9 BREACH, REMEDY AND LIMITATION OF DAMAGES
9.01 EVENTS OF DEFAULT:
(a) BY CLIENT:
(1) Failure or breach of any warranty set forth in provisions
8.04 and 8.05.
(2) Material failure to timely perform any duty, obligation,
or undertaking required by this Agreement.
(3) Making of a written warranty, representation, statement or
response in connection with this Agreement which was
knowingly untrue in any material respect on the date it
was made.
(4) Ceasing to conduct business in the normal course,
insolvency, the making of a general assignment for the
benefit of creditors, suffering or permitting the
appointment of a receiver or similar officer for its
business or assets or availing itself of, or becoming
subject to, any proceeding under the Federal Bankruptcy
Act or any federal or state statute relating to solvency
or the protection of rights of creditors.
(b) BY VANTAGE:
(1) Failure to successfully complete Model Office if due to
the fault of Vantage.
(2) Failure to meet the performance standards in Exhibit E.
(3) Material failure to provide the services or functions
set forth in Exhibit B.
(4) Failure or breach of any warranty set forth in provisions
7.02 through 7.05.
(5) Material failure to timely perform any duty, obligation,
or undertaking required by this Agreement.
(6) Making of a written warranty, representation, statement or
response in connection with this Agreement which was
knowlingly untrue in any material respect on the date it
was made.
(7) Ceasing to conduct business in the normal course,
insolvency, the making of a general assignment for the
benefit of creditors, suffering or permitting the
appointment of a receiver or similar officer for its
business or assets or availing itself of, or becoming
subject to, any proceeding under the Federal Bankruptcy
Act or any federal or state statute relating to solvency
or the protection of rights of creditors.
(c) REMEDIES FOR DEFAULT. In the event of a default, the
non-defaulting party may demand such default be cured within
thirty (30) days. If such default is not cured within thirty (30)
days, then the non-defaulting party may, without further notice,
take any or all, or any combination of the following actions:
(1) Immediately terminate this Agreement without further
obligation.
(2) Cover such default by obtaining performance from a third
party or performance on the part of non-defaulting party
and either offset or recover the costs of such performance
from the defaulting party.
(3) Exercise the right of setoff, recoupment, counterclaim
or offset for such default.
(4) Exercise any other right or remedy which may be available
under the law.
(d) FAILURE TO EXERCISE REMEDY. The remedies set forth above are
cumulative, but the non-defaulting party is under no obligation to
exercise any such remedy. The exercise of, or failure to exercise, any
such remedies shall not prevent any future exercise of the same or any
other remedies, or release the defaulting party from its obligations
under this Agreement. The defaulting party shall additionally pay or
allow the offset of all reasonable attorneys fees and expenses
incurred in the endorsement of any of the rights or privileges
hereunder.
9.02 IN NO EVENT AND UNDER NO CIRCUMSTANCES, HOWEVER, SHALL EITHER PARTY UNDER
THIS AGREEMENT BE LIABLE TO THE OTHER PARTY UNDER ANY PROVISIONS OF THIS
AGREEMENT FOR LOST PROFITS OR FOR EXEMPLARY, SPECIAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES. FURTHER, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR AN
AMOUNT WHICH EXCEEDS THE AMOUNT PAID BY CLIENT TO VANTAGE UNDER THIS AGREEMENT
FOR THE PAST ONE YEAR.
9.03 In the event VANTAGE is unable to perform its obligations under the terms
of this Agreement because of strikes, equipment or transmission failure or
damage, or other causes without fault or negligence on the part of VANTAGE and
beyond its control, VANTAGE will use its best efforts to assist CLIENT to obtain
alternate sources of service. VANTAGE will not be liable for any damages
resulting from such causes.
9.04 At any time VANTAGE may apply to a person indicated on CLIENT's "Schedule
of Authorized Personnel", attached hereto as Exhibit C, as a person authorized
to give instructions under this Section with respect to any matter arising in
connection with this Agreement. VANTAGE shall not be liable for, and shall be
indemnified by CLIENT against, any loss arising from any action taken or omitted
by VANTAGE in good faith in reliance upon such instructions for which VANTAGE
has maintained a written record, either in its own file notations or received
from CLIENT.
9.05 CLIENT shall immediately provide VANTAGE with written notice of any change
of authority of persons authorized and enumerated in Exhibit C to provide
VANTAGE with instructions or directions relating to services to be performed by
VANTAGE under this Agreement.
9.06 In the event malfunction of the VANTAGE System causes an error or mistake
in any record, report, data, information or output under the terms of this
Agreement, VANTAGE shall at its expense correct and reprocess such records,
provided that CLIENT shall notify VANTAGE in writing of such error or mistake as
soon as practical after its discovery.
SECTION 10 COVENANTS OF VANTAGE AND CLIENT
10.01 This Agreement shall be retained as part of the official records of both
parties for its duration and six years thereafter.
10.02 Where a policy is issued to a trustee or trustees, CLIENT will require a
copy of the trust agreement and any amendments thereto to be furnished to it and
CLIENT will provide a copy to VANTAGE. Both parties will retain such documents
as part of their official records for the duration of the policy and six years
thereafter.
10.03 VANTAGE shall establish and maintain facilities and procedures for the
safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all other documents, reports records, books, files, and
other materials relative to this Agreement. VANTAGE shall maintain at its
principal administrative office, for the duration of this Agreement and six
years thereafter, and in accordance with prudent standards of insurance
recordkeeping, adequate books and records of all transactions between VANTAGE,
CLIENT and insureds.
10.04 CLIENT shall have full and free access, during ordinary business hours, to
all documents, records, reports, books, files, and other materials relative to
this Agreement and maintained by VANTAGE.
10.05 All information furnished by CLIENT or furnished to VANTAGE on CLIENT's
behalf, including but not limited to all documents, reports, records, books,
files and other materials relative to this Agreement, shall be the sole property
of CLIENT and such property shall be held by VANTAGE in confidence and trust for
CLIENT. VANTAGE shall not disclose such information directly or indirectly to
any third party except to the extent that VANTAGE is required by law to make
such disclosure or otherwise authorized in writing by CLIENT.
10.06 Any policies, certificates, booklets, termination notices or other written
communications delivered by the CLIENT to VANTAGE for delivery to its
policyholders shall be delivered by VANTAGE promptly after receipt of
instructions from the CLIENT to do so.
10.07 VANTAGE shall exercise its best efforts to continue in effect the
insurance coverage described in Exhibit D attached hereto; provided, however,
that such coverage is available from a domestic insurance carrier at a
reasonable cost to VANTAGE.
10.09 VANTAGE shall maintain backup computer tape files on a daily basis stored
in an off-premises location. The purpose of back-up and recovery procedures is
to permit file recovery in the event of destruction of normal processing files.
CLIENT may review the procedures in effect and inspect the storage facility upon
demand.
10.10 CLIENT shall, from time to time, provide VANTAGE with current forms of
contracts, prospectuses, and applications, names and states of license of all
insurance and/or broker-dealer agents and representatives authorized to sell the
Contracts.
10.11 CONFIDENTIAL INFORMATION.
(a) Confidential Information shall mean the Vantage System and all
information disclosed or authorized to be disclosed by VANTAGE to
CLIENT which, at the time it was communicated to CLIENT, was not
rightfully in CLIENT's possession (or provided to CLIENT pursuant to a
confidentiality agreement between CLIENT and VANTAGE) and was not
common general knowledge. Such information shall remain Confidential
Information as long as it does not become general knowledge except by
disclosure of CLIENT in contravention of its obligations under this
Section.
(b) CLIENT shall exercise at least the same degree of care to protect the
confidentiality of VANTAGE's Confidential Information which CLIENT
exercises to protect the confidentiality of its own similar
Confidential Information. As long as Customer meets this standard of
care, Customer shall have no additional obligations nor liability
regarding confidentiality.
10.12 The insurance policies subject to services performed under this Agreement
are underwritten by CLIENT.
10.13 VANTAGE may use only such advertising pertaining to the business
underwritten by CLIENT as has been approved in writing by CLIENT in advance of
their use.
10.14 Whenever required by a state, VANTAGE shall maintain a deposit or a bond
in favor of such state to be held in trust for the benefit and protection of
insureds and insurers whose monies VANTAGE handles.
10.15 With respect to Wyoming residents, VANTAGE will not:
(a) solicit applications for insurance of annuities for CLIENT,
negotiate insurance or annuities on behalf of CLIENT, or carry
out and countersign insurance policies unless licensed in Wyoming
as an agent;
(b) on behalf of CLIENT, for compensation or fee, solicit, negotiate
or procure insurance or the renewal or continuance thereof for
Wyoming insureds or prospective insureds unless licensed in
Wyoming as a broker;
(c) adjust claims in Wyoming for CLIENT by investigating and
negotiating settlements unless licensed in Wyoming as an
adjuster, or an agent or broker who adjusts or assists in the
adjustment of losses arising under policies issued by the
insurers represented by that agent or through that broker.
Nothing herein shall be interpreted as to prohibit VANTAGE from
engaging in ministerial or clerical activities relating to the
payment of claims.
SECTION 11 ASSIGNMENT
11.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party hereto without the prior written consent of the other.
11.02 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
SECTION 12 OPTION TO LICENSE VANTAGE SYSTEM
12.01 At any time after the first anniversary of this Agreement and for ninety
(90) days after termination of this Agreement, and upon 180 days advance notice
by CLIENT to VANTAGE, CLIENT shall have the option to license the Vantage System
for a one-time license fee, as set forth in Exhibit I, payable as specified in
the System License Agreement. Both parties agree they shall negotiate in good
faith the terms of the System License Agreement governing such option.
12.02 The Vantage System licensed pursuant to this Section shall include, at no
additional cost to CLIENT beyond a one-time cost set forth in Exhibit J,
attached hereto, and those charges expressly identified therein, the following
changes to the Vantage System made between the effective date of this Agreement
and the effective date of a System License Agreement with CLIENT for the Vantage
System:
(a) any enhancements and modifications generally available through
Vantage System enhancement and support; and
(b) enhancements and modifications made by VANTAGE for CLIENT during
the term of this Agreement, retrofitted to function within the
base Vantage System.
SECTION 13 MISCELLANEOUS
13.01 CLIENT or its duly authorized independent auditors have the right under
this Agreement to perform on-site audits of records and accounts directly
pertaining to the Contracts serviced by VANTAGE's Facilities hereunder at
VANTAGE's Facilities in accordance with reasonable procedures and at reasonable
frequencies. CLIENT shall reimburse VANTAGE for all of is costs and expenses
(including Time and Materials) incurred in connection with such audits. At the
request of CLIENT, VANTAGE will make available to CLIENT's auditors and
representatives of the appropriate regulatory agencies all reasonable requested
records and data.
13.02 The parties hereto agree that all tapes, books, reference manuals,
instructions, records, information, and data pertaining to the business of the
other party, VANTAGE's System and the policyowners serviced by CLIENT hereunder
which are exchanged or received pursuant to the negotiation of and/or the
carrying out of this Agreement shall remain confidential and shall not be
voluntarily disclosed to any other person and that all such tapes, books,
reference manuals, instructions, records, information and data in the possession
of each of the parties hereto shall be returned to the party from whom it was
obtained upon the termination or expiration of this Agreement.
13.03 VANTAGE shall have the right, at any time, and from time to time, to alter
and modify the VANTAGE System and any systems, programs, procedures or
facilities used or employed in performing its duties and obligations hereunder,
provided that no such alterations or modifications shall materially change or
affect the operations and procedures of CLIENT in using or employing VANTAGE's
System or Facilities hereunder without the consent of CLIENT, which such consent
shall not be unreasonably withheld.
13.04 It is understood and agreed that all services performed hereunder by
VANTAGE shall be as an independent contractor and not as an employee of CLIENT.
13.05 This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject matter hereof,
whether oral or written, and this Agreement may not be modified except in a
written instrument executed by both of the parties hereto.
13.06 All notices and requests in connection with this Agreement shall be given
or made upon the respective parties in writing and shall be deemed as given as
of the date deposited in the U.S. mails, postage prepaid, certified or
registered, return receipt requested, and addressed as follows:
FOR CLIENT FOR VANTAGE COMPUTER SYSTEMS, INC.
Ernest B. Johnston President
Sr. Executive Vice President, Operations 1004 Baltimore Avenue
United of Omaha Life Ins. Co. Kansas City, MO 64105
Mutual of Omaha Plaza
Omaha, NE 68175
or to such other address as a party to receive the notice or request so
designates by written notice to the other.
13.07 VANTAGE and CLIENT understand and agree that the implementation of this
Agreement will be enhanced by the timely and open resolution of any disputes or
disagreements between such parties.
(a) Each party hereto agrees to use its best efforts to cause any disputes
or disagreements between such parties to be considered, negotiated in
good faith, and resolved as soon as possible.
(b) In the event that any dispute or disagreement between the parties
cannot be resolved to the satisfaction of VANTAGE's project manager
and the CLIENT's project manager within ten (10) days after either
such project manager has notified the other in writing of the need to
resolve the specific dispute or disagreement within such ten (10) day
period, then the dispute or disagreement shall be immediately referred
in writing to the HEAD OF OPERATIONS of CLIENT and the HEAD OF
PROCESSING SERVICES of VANTAGE (or their respective successors) for
consideration. In the event that such officers of CLIENT and VANTAGE
cannot resolve such dispute or disagreement to their mutual
satisfaction within ten (10) days after the latter person has received
written notice of the need to resolve the specific dispute or
disagreement within such ten (10) day period, then the dispute or
disagreement shall be immediately referred to in writing to the
PRESIDENT of CLIENT and the LIFE OPERATIONS MANAGER of VANTAGE (or
their respective successors) for consideration.
(c) No resolution or attempted resolution of any dispute or disagreement
pursuant to this Article shall be deemed to be a waiver of any term or
provision of this Agreement or consent to any breach or default unless
such waiver or consent shall be in writing and signed by the party
claimed to have waived or consented.
13.09 This Agreement is to be construed in accordance with the laws of the State
of Missouri, without regard to conflicts of law principals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
as of the day and year first above written.
VANTAGE COMPUTER SYSTEMS, INC. MUTUAL OF OMAHA INSURANCE COMPANY
By: By:
Name: Robert S. Maltempo Name: Ernest B. Johnston
Title: Executive Vice President Title: Sr. Executive Vice President,
Operations
Date: Date:
<PAGE>
================================================================================
EXHIBIT A
================================================================================
FULL SERVICE FEE SCHEDULE
[CONFIDENTIAL]
<PAGE>
EXHIBIT B
ANNUITY RECORDKEEPING SERVICE AGENT FUNCTIONS
PERFORMED BY VANTAGE COMPUTER SYSTEMS, INC.
FOR CLIENT Contract # 6016L-0194
NOTE: This exhibit pertains to the above referenced Contract series only.
Annuity Recordkeeping Service Agent Functions for other products as mutually
agreed by the Parties will be added by addendum to this Exhibit.
NOTE: This exhibit reflects standard VANTAGE practice. All actual services are
under procedures and time standards mutually agreed to by VANTAGE and the
CLIENT. The CLIENT and VANTAGE may, from time to time, change respective
procedures by mutual agreement. This will not require change to the Service
Agreement.
I. CONTRACT ISSUE
A. Reviews form of application, applies issue criteria to application for
annuity contract. Causes to have printed and maintains supply of
annuity contracts.
B. Prepares contract data page and issues contract for paid business and
mails to contract owners or agents as directed by CLIENT.
C. Establishes and maintains all participant, annuitant, and contract
owner records, as applicable, on computer and microfilm systems.
D. Notifies dealer/agent of any error or missing data needed to establish
participant, annuitant or contract owner records.
E. Causes to have printed and maintains supply of confirmation
statements. Prepares and mails confirmation statements of purchases to
contract owners with copies to dealer/agents.
F. Deposits monies received with application into depository account of
CLIENT.
G. Causes to have printed and maintains inventory of all issue-related
forms, contracts, endorsements and adoption agreements.
II. BILLING AND COLLECTION
A. Receives purchase payments reconciles amount paid with returned
billing statements or other remittance media.
B. Prepares and mails confirmation statement for variable annuity
purchase payments to contract owners with copies to dealer/agents as
directed by CLIENT.
C. Prepares pre-authorized checks ("PAC"), individual bills, or group
billing lists for all periodic payment contracts. Causes to be printed
and maintains supply of PAC authorization forms.
D. Generates and deposits pre-authorized checks on appropriate schedule.
E. Updates the contract owner master records to reflect payments
received, and performs accounting distribution of each payment
received.
F. Deposits all cash received under the contracts into a designated bank
account.
G. Transmits daily accounting and bank transfer authorization summaries
prepared for each valuation period.
III. BANKING
A. Balances, edits, endorses and prepares daily deposit. Generates
pre-authorized checks on scheduled basis.
B. Deposits are placed into a depository account.
C. Transfers funds from the depository account to one of the following:
a. General Account of CLIENT
b. Investment Vehicle(s) Custodian Account(s)
c. Disbursement Account of CLIENT
D. Prepares daily cash journal summary reports
E. Prepares checks for annuitants in "payout" phase. Checks are prepared
for partial and full surrenders, as well as for death claims as
directed by CLIENT.
F. Transfers funds from the appropriate accounts in the event checks are
to be drawn on an account with insufficient funds.
G. On dishonored items, reverses all transactions, prepares reports and
communicates with contract owner.
IV. ACCOUNTING/AUDITING
A. Prepares daily accounting reports for transactions processed.
B. Generates accounting information necessary to post entries to CLIENT
general ledger.
C. Retains systems generated reports in accordance with a retention
schedule mutually established. Provides access to such reports for
internal and external auditing.
D. Determines the "Net Amount Available for Investment".
E. Cooperates in annual audit of separate account financials conducted
for purposes of financial statement certification and publication and
accommodates other client or regulatory audits, as required.
V. VALUATION
A. Performs valuation of all reserves associated with the variable
annuity contracts.
VI. CONTRACT OWNER SERVICE/RECORD MAINTENANCE
A. Receives and implements all contract owner service requests including
information requests, beneficiary changes, transfer of assets between
eligible investment vehicles, and changes of any other information
maintained on the system.
B. Researches all inquiries using both data stored in the system and
microfilm records. Responds directly to any questions or inquiries as
directed by CLIENT.
C. Prepares a set of daily reports confirming all changes made to
participant, annuitant or contract owner accounts. Microfilms all
copies of communications from participants, annuitants and contract
owners.
D. Reviews forms, causes to be printed and maintains adequate supply for
field use.
VII. DISBURSEMENT (SURRENDERS, CLAIMS)
A. Receives requests for partial or full surrenders and death claims from
contract owners and beneficiaries. Retains and accounts for any
contract administrative changes.
B. Processes all surrender requests and death claims against the
participant master files as directed by CLIENT.
C. Prepares checks for surrenders and death claims and forwards to
contract owner or beneficiary as directed by CLIENT.
D. Prepares and mails confirmation statements of disbursement
transactions to contract owners with copies to dealer/agents.
E. Prepares report on surrenders and death claims.
F. Reviews, causes to have printed, and maintains adequate supply of
checks.
VIII. COMMISSIONS
A. Receives application and payment from field. Verifies validity of
application and license status of both writing and general agents.
B. Creates and maintains detailed commission transaction records for each
financial transaction processed.
C. Creates commission adjustment transactions as necessary.
D. Prepares commission statements and checks including overrides to three
levels.
E. Prepares commission interface to CLIENT in machine readable form as
required.
F. Creates agent tax reporting forms.
IX. ANNUITY BENEFIT PROCESSING
A. Receives information for Annuitants going into the annuity (payout)
phase.
B. Calculates the amount of the initial annuity payment for payout based
on tables supplied by CLIENT.
C. Deducts applicable premium taxes, and calculates annuity reserves.
D. Establishes and maintains annuitant records.
E. Withholds appropriate Federal Income Tax, prepares journal entries for
CLIENT's general ledger. Establishes and maintains ledger account
liability for accruing any amounts withheld from annuity payments for
payment of Federal Income Taxes.
F. Provides information for general account ledger maintenance.
X. PROXY PROCESSING
A. Receives record date information and proxy solicitation from
underlying investment vehicle(s).
B. Prepares proxy cards.
C. Mails solicitation and re-solicitations, if necessary.
D. Maintains all proxy registers and other required proxy material.
XI. PERIODIC REPORTS TO CONTRACT OWNERS
A. Collates all information necessary to prepare semi-annual reports for
separate accounts.
B. Prepares and mails statement of account to each participant, annuitant
or contract owner. Mails on required schedule.
C. Inserts and mails all semi-annual reports to contract owners, both
underlying fund and separate account reports.
XII. REGULATORY STATEMENT REPORTS
A. Collates relevant financial information for preparation of separate
account convention blanks.
B. Prepares IRS Reports 1099-R and W-2P for contract owners who received
annuity payments or distributions. Mails to contract owners and IRS.
C. Responds to any request from plan administrators or trustees for
information affecting the plan or participants for qualified plans.
D. Responds to requests for calculations applicable to annuity payments
as may be necessary to tax calculations.
E. Provides relevant financial data for preparation of the Annual SEC
Report for registered investment companies.
XIII. PREMIUM TAXES
A. Collects and accounts for premium taxes as appropriate.
B. Maintains all premium tax records by contract owner and by state.
XIV. FINANCIAL AND MANAGEMENT REPORTS
Provides, on the time schedule agreed upon, reports listed below:
A. Reserve Reports
B. Premium Tax Reports
XV. AGENT LICENSE RECORDKEEPING
A. Receive agent license status information from CLIENT.
1. New Agents
2. Changes in Status
3. Agents Terminated
B. Establishes, maintains or deletes agent records on computer system.
<PAGE>
EXHIBIT C
SCHEDULE OF AUTHORIZED PERSONNEL
The following individuals are authorized to give instructions or direction to
VANTAGE with respect to matters arising in connection with the servicing to be
performed under the Service Agreement:
See Attached
<PAGE>
EXHIBIT D
INSURANCE COVERAGE
Insurance Coverages Maintained by Vantage Computer Systems, Inc.
1. Broker's Blanket Bond - Covers losses caused by dishonesty of employees,
physical loss of securities on or outside of VANTAGE premises while in the
possession of an authorized person and losses caused by forgery or alteration of
checks or similar instruments.
Coverage: $1,000,000
2. Errors and Omissions Insurance - Indemnifies against loss in providing
policyholder recordkeeping services by reason of neglect, error or omission.
Coverage: $1,000,000
3. Mail Insurance - Provides indemnity for securities mailed from offices
of VANTAGE and lost in the mail.
Coverage:
$1,000,000 Non-Negotiable Securities mailed to domestic locations via
Registered Mail.
$1,000,000 Non-Negotiable Securities mailed to domestic locations via
First-Class or Certified Mail.
$1,000,000 Non-Negotiable Securities mailed to foreign locations via
Registered Mail.
$1,000,000 Non-Negotiable Securities mailed to all locations via Registered
Mail.
4. Electronic and Computer Crime Insurance - Covers losses due to computer
related crime which is not covered under the Broker's Blanket Bond.
Coverage: $1,000,000
<PAGE>
EXHIBIT E
PERFORMANCE STANDARDS
SEE ATTACHED
<PAGE>
EXHIBIT F
IMPLEMENTATION SCHEDULE
See Attached
<PAGE>
EXHIBIT G
MODIFICATION SCHEDULE
See Attached
<PAGE>
EXHIBIT H
PROJECT CHANGE CONTROL PROCEDURE
The following describes the process to be followed of the change to the VANTAGE
System or the Facilities as required:
1. A Project Change Request (PCR) will be the vehicle for
communicating change. The PCR must describe the change, the
rationale for the change, and the effect the change will have on
both the costs of the modifications and the Implementation
Schedule.
2. A designated Project Manager of the requesting party will review
the proposed change and determine whether to submit the request
to the other party.
3. The responsible VANTAGE Project Manager and the Mutual Project
Manager will review the proposed change and approve it for
further investigation. The investigation will determine the
effect that the implementation of the PCR will have on price,
schedule and other terms and conditions of the Full Service
Agreement. After investigation has been completed, the
responsible VANTAGE Project Manager and the Mutual Project
Manager will approve, reject or defer implementation of the
proposed change.
<PAGE>
SCHEDULE I
SYSTEM LICENSE FEE
COMPONENTS: The mainframe version of the VANTAGE-ONE System has four base
components:
- - Interest Sensitive Whole Life - Traditional - Universal Life
- - Annuities.
In addition, CLIENT can license pursuant to the option any of the following
mainframe version components:
- - New Business/Underwriting - Distribution Support System - Repetitive Payment
System.
For purposes of this Schedule A, "component" shall be any of the seven
components listed above.
FEE OPTIONS: Pursuant to Section 12 of the Full Service Agreement, CLIENT
has the option to purchase a license to the mainframe version of the VANTAGE
System.
[CONFIDENTIAL]
EXHIBIT (9): OPINION AND CONSENT OF COUNSEL
UNITED OF OMAHA LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
April 23, 1997
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE 68175-1008
Re: Registration Statement
To Whom It May Concern:
With reference to the Registration Statement on Form N-4 as amended, filed by
United of Omaha Life Insurance Company and United of Omaha Separate Account C
with the Securities and Exchange Commission covering individual variable annuity
contracts, I have examined such documents and such laws I considered necessary
and appropriate and on the basis of such examination, it is my opinion that:
1. United of Omaha Life Insurance Company is duly organized and validly
existing under the laws of the State of Nebraska and has been duly
authorized to issue individual variable annuity contracts by the
Insurance Department of the State of Nebraska.
2. United of Omaha Separate Account C is a duly authorized and existing
separate account to establish pursuant to the provision of Nebraska
Revised Statutes ss.ss.44-2221 and 44-402.01(1991).
3. The individual variable annuity contracts, when issued as contemplated
by said Form N-4 Registration Statement, will constitute legal, validly
issued and binding obligations of United of Omaha Life Insurance
Company.
I hereby consent to the filing of this opinion as an Exhibit to said Form N-4
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Registration Statement.
Sincerely,
/s/ Lawrence F. Harr
Lawrence F. Harr
Executive Vice President and
Executive Counsel
Mutual of Omaha Companies
EXHIBIT (10): CONSENTS OF INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
1200 Landmark Center
1299 Farnam, Suite 1000
Omaha, Nebraska 68102-1842
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Part B of the Statement of Additional
Information filed as part of the Post-Effective Amendment No. 3 to the
registration statement of the United of Omaha Separate Account C (the "Variable
Account") on Form N-4 (File No. 33-89848) of our report, dated March 20, 1996,
on our audits of the financial statements of United of Omaha Separate Account C.
We also consent to the reference to our Firm as the independent accountants
for the "Variable Account."
/s/ Coopers & Lybrand L.L.P.
Omaha, Nebraska
April 21, 1997
<PAGE>
Coopers & Lybrand L.L.P.
1200 Landmark Center
1299 Farnam, Suite 1000
Omaha, Nebraska 68102-1842
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in Part B of the Statement of Additional
Information filed as part of the Post-Effective Amendment No. 3 to the
registration statement of the United of Omaha Separate Account C (the "Variable
Account") on Form N-4 (File No. 33-89848) of our report, which includes an
explanatory paragraph regarding the change in opinion as required by Financial
Accounting Standards Board Interpretation 40, Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises,
as amended (FIN 40), dated February 23, 1996, on our audits of the financial
statements of United of Omaha Life Insurance Company (United).
We also consent to the reference to our Firm as the independent accountants
for United.
/s/ Coopers & Lybrand L.L.P.
Omaha, Nebraska
April 21, 1997
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 3 to
Registration Statement No. 33-89848 of United of Omaha Separate Account C of our
report dated March 18 1997 on the financial statements of United of Omaha
Separate Account C and our report dated February 14, 1997 on the financial
statements of United of Omaha Life Insurance Company appearing in the Statement
of Additional Information, which is a part of such Registration Statement, and
to the related reference to us under the heading "Financial Statements."
DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 21, 1997
EXHIBIT (13): SCHEDULES OF COMPUTATION OF PERFORMANCE DATA
Alger American Growth
12/1996
Assume ($10000 @ $10.00 on 1/ 9/1989)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
4/90 0.0600000000 12.18 0.493 100.492611
4/91 0.0470000000 15.77 0.300 100.792113
4/92 0.0490000000 16.96 0.291 101.083317
4/93 0.0250000000 19.63 0.129 101.212053
5/94 1.7590000000 21.45 8.300 109.511913
5/95 0.3180000000 25.96 1.341 110.853392
5/96 0.9520000000 33.02 3.196 114.049407
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 31.16 110.8533915 3454.19168 1000.00000 1000.00000
1 1996 32.17 110.8533915 3566.15361 1.08333 1031.33002 1.37503 1031.03832
2 1996 33.26 110.8533915 3686.98380 1.11727 1065.15678 1.41771 1064.55476
3 1996 32.70 110.8533915 3624.90590 1.15392 1046.06877 1.46380 1045.16701
4 1996 33.53 110.8533915 3716.91422 1.13324 1071.48712 1.43714 1070.25857
5 1996 33.06 114.0494069 3770.47339 1.16078 1085.76603 1.47164 1084.20891
6 1996 32.25 114.0494069 3678.09337 1.17625 1057.98753 1.49082 1056.15398
7 1996 29.89 114.0494069 3408.93677 1.14615 979.41965 1.45225 977.41419
8 1996 31.14 114.0494069 3551.49853 1.06104 1019.31795 1.34398 1016.94568
9 1996 33.15 114.0494069 3780.73784 1.10426 1084.00781 1.39833 1081.18835
10 1996 33.47 114.0494069 3817.23365 1.17434 1093.29750 1.48667 1090.13849
11 1996 35.37 114.0494069 4033.92752 1.18441 1154.17659 1.49898 1150.52368
12 1996 34.33 114.0494069 3915.31614 1.25036 1118.98946 1.58201 1115.11231
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 13.35%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1118.99 1052.41
TOTAL RETURN 11.90% 5.24%
WITH DEATH BENEFIT CHARGE
ERV 1115.11 1048.76
TOTAL RETURN 11.51% 4.88%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 31.16 110.8533915 3454.19168 1000.00000 1000.00000
1 1996 32.17 110.8533915 3566.15361 1.08333 1031.33002 1.37503 1031.03832
2 1996 33.26 110.8533915 3686.98380 1.11727 1065.15678 1.41771 1064.55476
3 1996 32.70 110.8533915 3624.90590 1.15392 1046.06877 1.46380 1045.16701
4 1996 33.53 110.8533915 3716.91422 1.13324 1071.48712 1.43714 1070.25857
5 1996 33.06 114.0494069 3770.47339 1.16078 1085.76603 1.47164 1084.20891
6 1996 32.25 114.0494069 3678.09337 1.17625 1057.98753 1.49082 1056.15398
7 1996 29.89 114.0494069 3408.93677 1.14615 979.41965 1.45225 977.41419
8 1996 31.14 114.0494069 3551.49853 1.06104 1019.31795 1.34398 1016.94568
9 1996 33.15 114.0494069 3780.73784 1.10426 1084.00781 1.39833 1081.18835
10 1996 33.47 114.0494069 3817.23365 1.17434 1093.29750 1.48667 1090.13849
11 1996 35.37 114.0494069 4033.92752 1.18441 1154.17659 1.49898 1150.52368
12 1996 34.33 114.0494069 3915.31614 1.25036 1118.98946 1.58201 1115.11231
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 13.35%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1118.99 1052.41
TOTAL RETURN 11.90% 5.24%
WITH DEATH BENEFIT CHARGE
ERV 1115.11 1048.76
TOTAL RETURN 11.51% 4.88%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 24.67 101.2120526 2496.90134 1000.00000 1000.00000
1 1994 25.75 101.2120526 2606.21035 1.08333 1042.69453 1.37503 1042.40283
2 1994 25.50 101.2120526 2580.90734 1.12959 1031.44170 1.43334 1030.84908
3 1994 23.64 101.2120526 2392.65292 1.11740 955.08973 1.41745 954.24028
4 1994 23.94 101.2120526 2423.01654 1.03468 966.17548 1.31211 965.03782
5 1994 21.72 109.5119128 2378.59875 1.04669 947.41724 1.32696 946.02016
6 1994 20.68 109.5119128 2264.70636 1.02637 901.02651 1.30081 899.42189
7 1994 21.42 109.5119128 2345.74517 0.97611 932.29216 1.23674 930.36950
8 1994 23.15 109.5119128 2535.20078 1.00998 1006.57935 1.27929 1004.23209
9 1994 22.44 109.5119128 2457.44732 1.09046 974.61756 1.38085 972.05190
10 1994 23.48 109.5119128 2571.33971 1.05584 1018.73116 1.33660 1015.76583
11 1994 22.58 109.5119128 2472.77899 1.10363 978.57907 1.39671 975.43431
12 1994 23.13 109.5119128 2533.01054 1.06013 1001.35501 1.34125 997.85253
1 1995 23.07 109.5119128 2526.43983 1.08480 997.67266 1.37208 993.89198
2 1995 24.14 109.5119128 2643.61757 1.08081 1042.86449 1.36663 1038.62264
3 1995 24.71 109.5119128 2706.03936 1.12977 1066.35911 1.42814 1061.71873
4 1995 26.05 109.5119128 2852.78533 1.15522 1123.03153 1.45990 1117.83483
5 1995 26.27 110.8533915 2912.11860 1.21662 1145.17213 1.53706 1139.54691
6 1995 28.60 110.8533915 3170.40700 1.24060 1245.50180 1.56691 1239.05134
7 1995 30.91 110.8533915 3426.47833 1.34929 1344.75073 1.70374 1337.42483
8 1995 31.52 110.8533915 3494.09890 1.45681 1369.83219 1.83900 1361.97952
9 1995 32.73 110.8533915 3628.23150 1.48398 1420.93377 1.87277 1412.39086
10 1995 31.63 110.8533915 3506.29277 1.53934 1371.63924 1.94208 1362.98071
11 1995 31.59 110.8533915 3501.85864 1.48594 1368.41869 1.87414 1359.38291
12 1995 31.16 110.8533915 3454.19168 1.48245 1348.30946 1.86920 1339.00993
1 1996 32.17 110.8533915 3566.15361 1.46067 1390.55201 1.84118 1380.57054
2 1996 33.26 110.8533915 3686.98380 1.50643 1436.16096 1.89833 1425.44939
3 1996 32.70 110.8533915 3624.90590 1.55584 1410.42442 1.96004 1399.48900
4 1996 33.53 110.8533915 3716.91422 1.52796 1444.69622 1.92434 1433.08685
5 1996 33.06 114.0494069 3770.47339 1.56509 1463.94860 1.97054 1451.76649
6 1996 32.25 114.0494069 3678.09337 1.58594 1426.49459 1.99623 1414.20067
7 1996 29.89 114.0494069 3408.93677 1.54537 1320.56078 1.94457 1308.76730
8 1996 31.14 114.0494069 3551.49853 1.43061 1374.35603 1.79960 1361.70036
9 1996 33.15 114.0494069 3780.73784 1.48889 1461.57799 1.87238 1447.72193
10 1996 33.47 114.0494069 3817.23365 1.58338 1474.10336 1.99067 1459.70626
11 1996 35.37 114.0494069 4033.92752 1.59695 1556.18721 2.00714 1540.56263
12 1996 34.33 114.0494069 3915.31614 1.68587 1508.74407 2.11832 1493.14645
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 56.81%
GROSS ANNUAL RETURN = 16.18%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1508.74 1444.62
TOTAL RETURN 50.87% 44.46%
AVERAGE ANNUAL RETURN 14.69% 13.05%
WITH DEATH BENEFIT CHARGE
ERV 1493.15 1429.69
TOTAL RETURN 49.31% 42.97%
AVERAGE ANNUAL RETURN 14.30% 12.65%
<TABLE>
<CAPTION>
Return for 5 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1991 18.00 100.7921132 1814.25804 1000.00000 1000.00000
1 1992 18.60 100.7921132 1874.73331 1.08333 1032.25000 1.37503 1031.95830
2 1992 18.73 100.7921132 1887.83628 1.11827 1038.34638 1.41898 1037.75193
3 1992 17.57 100.7921132 1770.91743 1.12488 972.91388 1.42694 972.05418
4 1992 17.10 101.0833169 1728.52472 1.05399 948.57001 1.33661 947.44827
5 1992 17.04 101.0833169 1722.45972 1.02762 944.21408 1.30277 942.82112
6 1992 16.54 101.0833169 1671.91806 1.02290 915.48536 1.29641 913.85977
7 1992 17.36 101.0833169 1754.80638 0.99178 959.88041 1.25659 957.90941
8 1992 17.03 101.0833169 1721.44889 1.03987 940.59396 1.31716 938.38315
9 1992 17.66 101.0833169 1785.13138 1.01898 974.37089 1.29031 971.80695
10 1992 18.31 101.0833169 1850.83553 1.05557 1009.17835 1.33627 1006.23935
11 1992 19.38 101.0833169 1958.99468 1.09328 1067.05945 1.38361 1063.65836
12 1992 20.17 101.0833169 2038.85050 1.15598 1109.40073 1.46257 1105.55442
1 1993 20.90 101.0833169 2112.64132 1.20185 1148.35072 1.52017 1144.04687
2 1993 19.96 101.0833169 2017.62300 1.24405 1095.45836 1.57310 1091.01903
3 1993 20.59 101.0833169 2081.30549 1.18675 1128.84770 1.50019 1123.95481
4 1993 19.70 101.2120526 1993.87744 1.22292 1080.20601 1.54548 1075.19609
5 1993 20.98 101.2120526 2123.42886 1.17022 1149.22176 1.47843 1143.57812
6 1993 21.20 101.2120526 2145.69552 1.24499 1160.02771 1.57246 1153.99743
7 1993 21.32 101.2120526 2157.84096 1.25670 1165.33721 1.58678 1158.94270
8 1993 22.50 101.2120526 2277.27118 1.26245 1228.57279 1.59358 1221.49323
9 1993 23.30 101.2120526 2358.24083 1.33095 1270.92442 1.67959 1263.24450
10 1993 23.68 101.2120526 2396.70141 1.37683 1290.27511 1.73700 1282.10977
11 1993 23.29 101.2120526 2357.22871 1.39780 1267.62700 1.76294 1259.23100
12 1993 24.67 101.2120526 2496.90134 1.37326 1341.36431 1.73148 1332.11260
1 1994 25.75 101.2120526 2606.21035 1.45314 1398.63324 1.83170 1388.59795
2 1994 25.50 101.2120526 2580.90734 1.51519 1383.53909 1.90937 1373.20705
3 1994 23.64 101.2120526 2392.65292 1.49883 1281.12329 1.88821 1271.15550
4 1994 23.94 101.2120526 2423.01654 1.38788 1295.99331 1.74788 1285.53904
5 1994 21.72 109.5119128 2378.59875 1.40399 1270.83168 1.76766 1260.20538
6 1994 20.68 109.5119128 2264.70636 1.37673 1208.60481 1.73282 1198.13123
7 1994 21.42 109.5119128 2345.74517 1.30932 1250.54343 1.64747 1239.35693
8 1994 23.15 109.5119128 2535.20078 1.35476 1350.18962 1.70416 1337.75022
9 1994 22.44 109.5119128 2457.44732 1.46271 1307.31721 1.83945 1294.88258
10 1994 23.48 109.5119128 2571.33971 1.41626 1366.48962 1.78051 1353.11446
11 1994 22.58 109.5119128 2472.77899 1.48036 1312.63104 1.86058 1299.38833
12 1994 23.13 109.5119128 2533.01054 1.42202 1343.18188 1.78670 1329.25192
1 1995 23.07 109.5119128 2526.43983 1.45511 1338.24250 1.82777 1323.97603
2 1995 24.14 109.5119128 2643.61757 1.44976 1398.86121 1.82051 1383.56230
3 1995 24.71 109.5119128 2706.03936 1.51543 1430.37605 1.90244 1414.32889
4 1995 26.05 109.5119128 2852.78533 1.54957 1506.39442 1.94475 1489.08186
5 1995 26.27 110.8533915 2912.11860 1.63193 1536.09303 2.04754 1518.00479
6 1995 28.60 110.8533915 3170.40700 1.66410 1670.67167 2.08731 1650.55590
7 1995 30.91 110.8533915 3426.47833 1.80989 1803.80064 2.26957 1781.60046
8 1995 31.52 110.8533915 3494.09890 1.95412 1837.44402 2.44976 1814.31008
9 1995 32.73 110.8533915 3628.23150 1.99056 1905.98985 2.49474 1881.46366
10 1995 31.63 110.8533915 3506.29277 2.06482 1839.86793 2.58708 1815.64377
11 1995 31.59 110.8533915 3501.85864 1.99319 1835.54800 2.49657 1810.85110
12 1995 31.16 110.8533915 3454.19168 1.98851 1808.57419 2.48998 1783.71199
1 1996 32.17 110.8533915 3566.15361 1.95929 1865.23685 2.45266 1839.07541
2 1996 33.26 110.8533915 3686.98380 2.02067 1926.41506 2.52879 1898.85909
3 1996 32.70 110.8533915 3624.90590 2.08695 1891.89298 2.61099 1864.27693
4 1996 33.53 110.8533915 3716.91422 2.04955 1937.86396 2.56344 1909.03305
5 1996 33.06 114.0494069 3770.47339 2.09935 1963.68841 2.62498 1933.91643
6 1996 32.25 114.0494069 3678.09337 2.12733 1913.44893 2.65920 1883.87453
7 1996 29.89 114.0494069 3408.93677 2.07290 1771.35310 2.59039 1743.42541
8 1996 31.14 114.0494069 3551.49853 1.91897 1843.51213 2.39727 1813.93821
9 1996 33.15 114.0494069 3780.73784 1.99714 1960.50855 2.49423 1928.52862
10 1996 33.47 114.0494069 3817.23365 2.12388 1977.30964 2.65179 1944.49310
11 1996 35.37 114.0494069 4033.92752 2.14209 2087.41399 2.67374 2052.20289
12 1996 34.33 114.0494069 3915.31614 2.26137 2023.77546 2.82185 1989.03920
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 115.81%
GROSS ANNUAL RETURN = 16.63%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 2023.78 1972.17
TOTAL RETURN 102.38% 97.22%
AVERAGE ANNUAL RETURN 15.14% 14.55%
WITH DEATH BENEFIT CHARGE
ERV 1989.04 1938.32
TOTAL RETURN 98.90% 93.83%
AVERAGE ANNUAL RETURN 14.74% 14.15%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1988 10.00 100.0000000 1000.00000 1000.00000 1000.00000
1 1989 10.31 100.0000000 1031.00000 1.08333 1029.91667 1.37503 1029.62497
2 1989 10.07 100.0000000 1007.00000 1.11574 1004.82614 1.41577 1004.24121
3 1989 10.25 100.0000000 1025.00000 1.08856 1021.69872 1.38087 1020.81103
4 1989 10.92 100.0000000 1092.00000 1.10684 1087.37609 1.40365 1086.13356
5 1989 11.40 100.0000000 1140.00000 1.17799 1133.99485 1.49347 1132.38223
6 1989 11.15 100.0000000 1115.00000 1.22849 1107.89805 1.55706 1105.99222
7 1989 11.98 100.0000000 1198.00000 1.20022 1189.16916 1.52078 1186.80091
8 1989 12.47 100.0000000 1247.00000 1.28827 1236.51970 1.63189 1233.71096
9 1989 12.59 100.0000000 1259.00000 1.33956 1247.07928 1.69639 1243.88669
10 1989 12.12 100.0000000 1212.00000 1.35100 1199.17330 1.71039 1195.74050
11 1989 12.41 100.0000000 1241.00000 1.29910 1226.56728 1.64418 1222.70727
12 1989 12.41 100.0000000 1241.00000 1.32878 1225.23850 1.68126 1221.02600
1 1990 11.27 100.0000000 1127.00000 1.32734 1111.35903 1.67895 1107.18189
2 1990 11.24 100.0000000 1124.00000 1.20397 1107.19670 1.52241 1102.71223
3 1990 11.74 100.0000000 1174.00000 1.19946 1155.24976 1.51627 1150.24900
4 1990 11.75 100.4926108 1180.78818 1.25152 1160.67800 1.58163 1155.31822
5 1990 13.27 100.4926108 1333.53695 1.25740 1309.56788 1.58860 1303.18355
6 1990 13.63 100.4926108 1369.71429 1.41870 1343.67626 1.79192 1336.74552
7 1990 13.12 100.4926108 1318.46305 1.45565 1291.94366 1.83807 1284.88982
8 1990 11.93 100.4926108 1198.87685 1.39961 1173.36319 1.76677 1166.58198
9 1990 11.42 100.4926108 1147.62562 1.27114 1121.93151 1.60409 1115.10725
10 1990 11.74 100.4926108 1179.78325 1.21543 1152.15374 1.53331 1144.82038
11 1990 12.43 100.4926108 1249.12315 1.24817 1218.62160 1.57417 1210.53122
12 1990 12.86 100.4926108 1292.33498 1.32017 1259.45808 1.66452 1250.74349
1 1991 13.73 100.4926108 1379.76355 1.36441 1343.29807 1.71981 1333.63851
2 1991 14.76 100.4926108 1483.27094 1.45524 1442.61464 1.83380 1431.85189
3 1991 15.33 100.4926108 1540.55172 1.56283 1496.76254 1.96884 1485.17814
4 1991 14.98 100.7921132 1509.86586 1.62149 1465.32740 2.04217 1453.55307
5 1991 15.50 100.7921132 1562.27776 1.58744 1514.60580 1.99868 1502.01150
6 1991 14.67 100.7921132 1478.62030 1.64082 1431.86028 2.06532 1419.51589
7 1991 15.81 100.7921132 1593.52331 1.55118 1541.57840 1.95188 1527.87404
8 1991 16.43 100.7921132 1656.01442 1.67004 1600.36242 2.10088 1585.68979
9 1991 16.59 100.7921132 1672.14116 1.73373 1614.21347 2.18038 1598.95131
10 1991 16.30 100.7921132 1642.91145 1.74873 1584.24763 2.19861 1568.80238
11 1991 16.00 100.7921132 1612.67381 1.71627 1553.37343 2.15716 1537.77156
12 1991 18.00 100.7921132 1814.25804 1.68282 1745.86229 2.11449 1727.87852
1 1992 18.60 100.7921132 1874.73331 1.89135 1802.16635 2.37589 1783.09858
2 1992 18.73 100.7921132 1887.83628 1.95235 1812.80978 2.45182 1793.10927
3 1992 17.57 100.7921132 1770.91743 1.96388 1698.57365 2.46558 1679.59154
4 1992 17.10 101.0833169 1728.52472 1.84012 1656.07260 2.30949 1637.07552
5 1992 17.04 101.0833169 1722.45972 1.79408 1648.46775 2.25103 1629.08036
6 1992 16.54 101.0833169 1671.91806 1.78584 1598.31137 2.24004 1579.03867
7 1992 17.36 101.0833169 1754.80638 1.73150 1675.81901 2.17123 1655.15109
8 1992 17.03 101.0833169 1721.44889 1.81547 1642.14753 2.27589 1621.41208
9 1992 17.66 101.0833169 1785.13138 1.77899 1701.11739 2.22950 1679.16436
10 1992 18.31 101.0833169 1850.83553 1.84288 1761.88642 2.30891 1738.65935
11 1992 19.38 101.0833169 1958.99468 1.90871 1862.93885 2.39071 1837.87243
12 1992 20.17 101.0833169 2038.85050 2.01818 1936.86090 2.52714 1910.26373
1 1993 20.90 101.0833169 2112.64132 2.09827 2004.86221 2.62668 1976.77401
2 1993 19.96 101.0833169 2017.62300 2.17193 1912.51944 2.71813 1885.14834
3 1993 20.59 101.0833169 2081.30549 2.07190 1970.81263 2.59214 1942.05738
4 1993 19.70 101.2120526 1993.87744 2.13505 1885.89093 2.67039 1857.80823
5 1993 20.98 101.2120526 2123.42886 2.04305 2006.38293 2.55455 1975.96407
6 1993 21.20 101.2120526 2145.69552 2.17358 2025.24863 2.71702 1993.96736
7 1993 21.32 101.2120526 2157.84096 2.19402 2034.51829 2.74177 2002.51220
8 1993 22.50 101.2120526 2277.27118 2.20406 2144.91889 2.75352 2110.59190
9 1993 23.30 101.2120526 2358.24083 2.32366 2218.85902 2.90213 2182.73303
10 1993 23.68 101.2120526 2396.70141 2.40376 2252.64265 3.00133 2215.32993
11 1993 23.29 101.2120526 2357.22871 2.44036 2213.10218 3.04615 2175.79819
12 1993 24.67 101.2120526 2496.90134 2.39753 2341.83737 2.99179 2301.72874
1 1994 25.75 101.2120526 2606.21035 2.53699 2441.82102 3.16495 2399.32856
2 1994 25.50 101.2120526 2580.90734 2.64531 2415.46872 3.29916 2372.73495
3 1994 23.64 101.2120526 2392.65292 2.61676 2236.66483 3.26259 2196.40229
4 1994 23.94 101.2120526 2423.01654 2.42305 2262.62585 3.02013 2221.25529
5 1994 21.72 109.5119128 2378.59875 2.45118 2218.69710 3.05430 2177.48180
6 1994 20.68 109.5119128 2264.70636 2.40359 2110.05755 2.99411 2070.22521
7 1994 21.42 109.5119128 2345.74517 2.28590 2183.27662 2.84663 2141.45821
8 1994 23.15 109.5119128 2535.20078 2.36522 2357.24513 2.94458 2311.46987
9 1994 22.44 109.5119128 2457.44732 2.55368 2282.39581 3.17835 2237.39979
10 1994 23.48 109.5119128 2571.33971 2.47260 2385.70270 3.07650 2338.01740
11 1994 22.58 109.5119128 2472.77899 2.58451 2291.67303 3.21485 2245.18519
12 1994 23.13 109.5119128 2533.01054 2.48265 2345.01058 3.08720 2296.78584
1 1995 23.07 109.5119128 2526.43983 2.54043 2336.38712 3.15816 2287.66974
2 1995 24.14 109.5119128 2643.61757 2.53109 2442.21902 3.14562 2390.62757
3 1995 24.71 109.5119128 2706.03936 2.64574 2497.23960 3.28719 2443.78850
4 1995 26.05 109.5119128 2852.78533 2.70534 2629.95721 3.36029 2572.95256
5 1995 26.27 110.8533915 2912.11860 2.84912 2681.80689 3.53790 2622.92787
6 1995 28.60 110.8533915 3170.40700 2.90529 2916.76266 3.60661 2851.96008
7 1995 30.91 110.8533915 3426.47833 3.15983 3149.18752 3.92154 3078.38916
8 1995 31.52 110.8533915 3494.09890 3.41162 3207.92421 4.23289 3134.90740
9 1995 32.73 110.8533915 3628.23150 3.47525 3327.59580 4.31060 3250.94065
10 1995 31.63 110.8533915 3506.29277 3.60490 3212.15603 4.47015 3137.21187
11 1995 31.59 110.8533915 3501.85864 3.47984 3204.61403 4.31377 3128.93071
12 1995 31.16 110.8533915 3454.19168 3.47167 3157.52147 4.30238 3082.03763
1 1996 32.17 110.8533915 3566.15361 3.42065 3256.44667 4.23790 3177.69889
2 1996 33.26 110.8533915 3686.98380 3.52782 3363.25541 4.36944 3280.99783
3 1996 32.70 110.8533915 3624.90590 3.64353 3302.98461 4.51148 3221.24405
4 1996 33.53 110.8533915 3716.91422 3.57823 3383.24360 4.42932 3298.57720
5 1996 33.06 114.0494069 3770.47339 3.66518 3428.32954 4.53565 3341.57266
6 1996 32.25 114.0494069 3678.09337 3.71402 3340.61833 4.59477 3255.10632
7 1996 29.89 114.0494069 3408.93677 3.61900 3092.53858 4.47588 3012.42731
8 1996 31.14 114.0494069 3551.49853 3.35025 3218.51831 4.14219 3134.26486
9 1996 33.15 114.0494069 3780.73784 3.48673 3422.77795 4.30972 3332.26318
10 1996 33.47 114.0494069 3817.23365 3.70801 3452.11033 4.58197 3359.84785
11 1996 35.37 114.0494069 4033.92752 3.73979 3644.33737 4.61990 3545.95728
12 1996 34.33 114.0494069 3915.31614 3.94803 3533.23325 4.87581 3436.81810
</TABLE>
SURRENDER CHARGE = 0.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 291.53%
GROSS ANNUAL RETURN = 18.67%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 3533.23 3533.23
TOTAL RETURN 253.32% 253.32%
AVERAGE ANNUAL RETURN 17.15% 17.15%
WITH DEATH BENEFIT CHARGE
ERV 3436.82 3436.82
TOTAL RETURN 243.68% 243.68%
AVERAGE ANNUAL RETURN 16.74% 16.74%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 28.60 110.8533915 3170.40700 1000.00000 1000.00000
7 1995 30.91 110.8533915 3426.47833 1.08333 1079.68590 1.37503 1079.39420
8 1995 31.52 110.8533915 3494.09890 1.16966 1099.82353 1.48420 1099.21153
9 1995 32.73 110.8533915 3628.23150 1.19148 1140.85244 1.51145 1139.89697
10 1995 31.63 110.8533915 3506.29277 1.23592 1101.27439 1.56740 1100.01956
11 1995 31.59 110.8533915 3501.85864 1.19305 1098.68865 1.51256 1097.11589
12 1995 31.16 110.8533915 3454.19168 1.19025 1082.54316 1.50857 1080.67348
1 1996 32.17 110.8533915 3566.15361 1.17276 1116.45925 1.48596 1114.21577
2 1996 33.26 110.8533915 3686.98380 1.20950 1153.07819 1.53208 1150.43610
3 1996 32.70 110.8533915 3624.90590 1.24917 1132.41459 1.58189 1129.48427
4 1996 33.53 110.8533915 3716.91422 1.22678 1159.93106 1.55308 1156.60006
5 1996 33.06 114.0494069 3770.47339 1.25659 1175.38858 1.59036 1171.67582
6 1996 32.25 114.0494069 3678.09337 1.27334 1145.31716 1.61109 1141.35760
7 1996 29.89 114.0494069 3408.93677 1.24076 1060.26404 1.56940 1056.26560
8 1996 31.14 114.0494069 3551.49853 1.14862 1103.45567 1.45240 1098.98623
9 1996 33.15 114.0494069 3780.73784 1.19541 1173.48524 1.51114 1168.41158
10 1996 33.47 114.0494069 3817.23365 1.27128 1183.54173 1.60660 1178.08376
11 1996 35.37 114.0494069 4033.92752 1.28217 1249.44597 1.61990 1243.34043
12 1996 34.33 114.0494069 3915.31614 1.35357 1211.35439 1.70963 1205.07230
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 23.50%
GROSS ANNUAL RETURN = 14.36%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1211.35 1149.58
TOTAL RETURN 21.14% 14.96%
AVERAGE ANNUAL RETURN 12.97% 9.27%
WITH DEATH BENEFIT CHARGE
ERV 1205.07 1143.61
TOTAL RETURN 20.51% 14.36%
AVERAGE ANNUAL RETURN 12.59% 8.91%
<PAGE>
Alger American Small Capitalization
12/1996
Assume ($10000 @ $10.00 on 9/21/1988)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/88 0.0650000000 9.60 0.677 100.677083
4/90 0.1400000000 16.33 0.863 101.540206
4/91 0.0200000000 22.07 0.092 101.632222
4/92 0.3810000000 21.55 1.797 103.429061
5/94 2.0910000000 25.74 8.402 111.831166
5/96 0.1640000000 45.19 0.406 112.237015
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 39.41 111.8311656 4407.26624 1000.00000 1000.00000
1 1996 39.55 111.8311656 4422.92260 1.08333 1002.46906 1.37503 1002.17736
2 1996 41.24 111.8311656 4611.91727 1.08601 1044.21928 1.37803 1043.62310
3 1996 40.87 111.8311656 4570.53974 1.13124 1033.71944 1.43502 1032.82483
4 1996 44.02 111.8311656 4922.80791 1.11986 1112.27211 1.42017 1111.00824
5 1996 45.10 112.2370145 5061.88935 1.20496 1142.49157 1.52767 1140.86928
6 1996 42.33 112.2370145 4750.99282 1.23770 1071.08311 1.56873 1069.22942
7 1996 37.34 112.2370145 4190.93012 1.16034 943.65996 1.47023 941.71490
8 1996 39.67 112.2370145 4452.44237 1.02230 1001.52164 1.29489 999.18262
9 1996 42.45 112.2370145 4764.46127 1.08498 1070.62143 1.37391 1067.82958
10 1996 40.49 112.2370145 4544.47672 1.15984 1020.02889 1.46830 1017.05748
11 1996 41.18 112.2370145 4621.92026 1.10503 1036.30642 1.39849 1032.99092
12 1996 40.91 112.2370145 4591.61626 1.12267 1028.38913 1.42040 1024.79764
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.18%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1028.39 967.20
TOTAL RETURN 2.84% -3.28%
WITH DEATH BENEFIT CHARGE
ERV 1024.80 963.82
TOTAL RETURN 2.48% -3.62%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 39.41 111.8311656 4407.26624 1000.00000 1000.00000
1 1996 39.55 111.8311656 4422.92260 1.08333 1002.46906 1.37503 1002.17736
2 1996 41.24 111.8311656 4611.91727 1.08601 1044.21928 1.37803 1043.62310
3 1996 40.87 111.8311656 4570.53974 1.13124 1033.71944 1.43502 1032.82483
4 1996 44.02 111.8311656 4922.80791 1.11986 1112.27211 1.42017 1111.00824
5 1996 45.10 112.2370145 5061.88935 1.20496 1142.49157 1.52767 1140.86928
6 1996 42.33 112.2370145 4750.99282 1.23770 1071.08311 1.56873 1069.22942
7 1996 37.34 112.2370145 4190.93012 1.16034 943.65996 1.47023 941.71490
8 1996 39.67 112.2370145 4452.44237 1.02230 1001.52164 1.29489 999.18262
9 1996 42.45 112.2370145 4764.46127 1.08498 1070.62143 1.37391 1067.82958
10 1996 40.49 112.2370145 4544.47672 1.15984 1020.02889 1.46830 1017.05748
11 1996 41.18 112.2370145 4621.92026 1.10503 1036.30642 1.39849 1032.99092
12 1996 40.91 112.2370145 4591.61626 1.12267 1028.38913 1.42040 1024.79764
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.18%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1028.39 967.20
TOTAL RETURN 2.84% -3.28%
WITH DEATH BENEFIT CHARGE
ERV 1024.80 963.82
TOTAL RETURN 2.48% -3.62%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 30.88 103.4290612 3193.88941 1000.00000 1000.00000
1 1994 30.54 103.4290612 3158.72353 1.08333 987.90630 1.37503 987.61460
2 1994 30.23 103.4290612 3126.66052 1.07023 976.80821 1.35800 976.23170
3 1994 28.11 103.4290612 2907.39091 1.05821 907.24741 1.34235 906.42718
4 1994 28.37 103.4290612 2934.28247 0.98285 914.65603 1.24637 913.56470
5 1994 25.48 111.8311656 2849.45810 0.99088 887.22423 1.25618 885.89915
6 1994 24.29 111.8311656 2716.37901 0.96116 844.82678 1.21814 843.30660
7 1994 24.74 111.8311656 2766.70304 0.91523 859.56293 1.15957 857.77024
8 1994 26.69 111.8311656 2984.77381 0.93119 926.38225 1.17946 924.20000
9 1994 26.52 111.8311656 2965.76251 1.00358 919.47815 1.27081 917.04257
10 1994 27.76 111.8311656 3104.43316 0.99610 961.47424 1.26096 958.65991
11 1994 26.40 111.8311656 2952.34277 1.04160 913.32871 1.31819 910.37568
12 1994 27.31 111.8311656 3054.10913 0.98944 943.82144 1.25180 940.50425
1 1995 26.84 111.8311656 3001.54849 1.02247 926.55597 1.29322 923.02513
2 1995 28.76 111.8311656 3216.26432 1.00377 991.83341 1.26919 987.78456
3 1995 29.59 111.8311656 3309.08419 1.07449 1019.38277 1.35824 1014.93332
4 1995 30.89 111.8311656 3454.46471 1.10433 1063.06375 1.39557 1058.12759
5 1995 32.07 111.8311656 3586.42548 1.15165 1102.52120 1.45496 1097.09317
6 1995 36.02 111.8311656 4028.15859 1.19440 1237.12222 1.50854 1230.71148
7 1995 41.18 111.8311656 4605.20740 1.34022 1413.00439 1.69227 1405.32324
8 1995 41.72 111.8311656 4665.59623 1.53075 1430.00259 1.93237 1421.81911
9 1995 42.83 111.8311656 4789.72882 1.54917 1466.49999 1.95505 1457.69290
10 1995 40.83 111.8311656 4566.06649 1.58871 1396.43125 2.00438 1387.61974
11 1995 40.76 111.8311656 4558.23831 1.51280 1392.52437 1.90802 1383.33275
12 1995 39.41 111.8311656 4407.26624 1.50857 1344.89441 1.90213 1335.61366
1 1996 39.55 111.8311656 4422.92260 1.45697 1348.21504 1.83651 1338.52178
2 1996 41.24 111.8311656 4611.91727 1.46057 1404.36468 1.84051 1393.87727
3 1996 40.87 111.8311656 4570.53974 1.52140 1390.24350 1.91663 1379.45495
4 1996 44.02 111.8311656 4922.80791 1.50610 1495.88854 1.89680 1483.87778
5 1996 45.10 112.2370145 5061.88935 1.62055 1536.53053 2.04038 1523.76060
6 1996 42.33 112.2370145 4750.99282 1.66457 1440.49368 2.09522 1428.07742
7 1996 37.34 112.2370145 4190.93012 1.56053 1269.12300 1.96365 1257.76729
8 1996 39.67 112.2370145 4452.44237 1.37488 1346.94085 1.72947 1334.52196
9 1996 42.45 112.2370145 4764.46127 1.45919 1439.87278 1.83501 1426.20777
10 1996 40.49 112.2370145 4544.47672 1.55986 1371.83116 1.96108 1358.39587
11 1996 41.18 112.2370145 4621.92026 1.48615 1393.72272 1.86784 1379.67679
12 1996 40.91 112.2370145 4591.61626 1.50987 1383.07480 1.89710 1368.73372
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 43.76%
GROSS ANNUAL RETURN = 12.86%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1383.07 1324.29
TOTAL RETURN 38.31% 32.43%
AVERAGE ANNUAL RETURN 11.42% 9.81%
WITH DEATH BENEFIT CHARGE
ERV 1368.73 1310.56
TOTAL RETURN 36.87% 31.06%
AVERAGE ANNUAL RETURN 11.03% 9.43%
<TABLE>
<CAPTION>
Return for 5 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1991 26.79 101.6322224 2722.72724 1000.00000 1000.00000
1 1992 27.52 101.6322224 2796.91876 1.08333 1026.16564 1.37503 1025.87394
2 1992 27.27 101.6322224 2771.51071 1.11168 1015.73196 1.41061 1015.14398
3 1992 24.23 101.6322224 2462.54875 1.10038 901.40001 1.39586 900.58209
4 1992 22.15 103.4290612 2290.95371 0.97652 837.61224 1.23833 836.58950
5 1992 22.15 103.4290612 2290.95371 0.90741 836.70482 1.15034 835.43916
6 1992 21.21 103.4290612 2193.73039 0.90643 800.29038 1.14876 798.83610
7 1992 22.06 103.4290612 2281.64509 0.86698 831.49538 1.09843 829.75138
8 1992 21.67 103.4290612 2241.30776 0.90079 815.89454 1.14094 813.94122
9 1992 22.87 103.4290612 2365.42263 0.88389 860.19171 1.11920 857.89492
10 1992 23.93 103.4290612 2475.05744 0.93187 899.12880 1.17963 896.47779
11 1992 25.96 103.4290612 2685.01843 0.97406 974.42852 1.23269 971.29399
12 1992 27.26 103.4290612 2819.47621 1.05563 1022.16939 1.33556 1018.59796
1 1993 26.52 103.4290612 2742.93870 1.10735 993.31423 1.40061 989.54649
2 1993 24.38 103.4290612 2521.60051 1.07609 912.08382 1.36066 908.33555
3 1993 24.96 103.4290612 2581.58937 0.98809 932.79420 1.24899 928.69586
4 1993 24.29 103.4290612 2512.29190 1.01053 906.74472 1.27699 902.48993
5 1993 26.36 103.4290612 2726.39005 0.98231 983.03543 1.24095 978.15940
6 1993 26.72 103.4290612 2763.62452 1.06496 995.39585 1.34500 990.17318
7 1993 26.72 103.4290612 2763.62452 1.07835 994.31750 1.36152 988.81166
8 1993 28.89 103.4290612 2988.06558 1.07718 1073.99141 1.35965 1067.75595
9 1993 30.17 103.4290612 3120.45478 1.16349 1120.41217 1.46820 1113.59573
10 1993 30.16 103.4290612 3119.42049 1.21378 1118.82702 1.53123 1111.69539
11 1993 29.06 103.4290612 3005.64852 1.21206 1076.80893 1.52862 1069.62086
12 1993 30.88 103.4290612 3193.88941 1.16654 1143.08191 1.47076 1135.13942
1 1994 30.54 103.4290612 3158.72353 1.23834 1129.25782 1.56085 1121.08027
2 1994 30.23 103.4290612 3126.66052 1.22336 1116.57179 1.54152 1108.15909
3 1994 28.11 103.4290612 2907.39091 1.20962 1037.05809 1.52376 1028.92123
4 1994 28.37 103.4290612 2934.28247 1.12348 1045.52676 1.41480 1037.02331
5 1994 25.48 111.8311656 2849.45810 1.13265 1014.16997 1.42594 1005.61905
6 1994 24.29 111.8311656 2716.37901 1.09868 965.70620 1.38276 957.27057
7 1994 24.74 111.8311656 2766.70304 1.04618 982.55083 1.31628 973.68882
8 1994 26.69 111.8311656 2984.77381 1.06443 1058.93079 1.33885 1049.09585
9 1994 26.52 111.8311656 2965.76251 1.14717 1051.03883 1.44254 1040.97117
10 1994 27.76 111.8311656 3104.43316 1.13863 1099.04380 1.43137 1088.21266
11 1994 26.40 111.8311656 2952.34277 1.19063 1044.00953 1.49633 1033.40332
12 1994 27.31 111.8311656 3054.10913 1.13101 1078.86521 1.42096 1067.60345
1 1995 26.84 111.8311656 3001.54849 1.16877 1059.12937 1.46799 1047.76221
2 1995 28.76 111.8311656 3216.26432 1.14739 1133.74682 1.44071 1121.27319
3 1995 29.59 111.8311656 3309.08419 1.22823 1165.23799 1.54179 1152.09082
4 1995 30.89 111.8311656 3454.46471 1.26234 1215.16894 1.58416 1201.12234
5 1995 32.07 111.8311656 3586.42548 1.31643 1260.27204 1.65158 1245.35371
6 1995 36.02 111.8311656 4028.15859 1.36529 1414.13202 1.71240 1397.02912
7 1995 41.18 111.8311656 4605.20740 1.53198 1615.17975 1.92096 1595.23781
8 1995 41.72 111.8311656 4665.59623 1.74978 1634.61009 2.19351 1613.96292
9 1995 42.83 111.8311656 4789.72882 1.77083 1676.32961 2.21925 1654.68467
10 1995 40.83 111.8311656 4566.06649 1.81602 1596.23529 2.27525 1575.14187
11 1995 40.76 111.8311656 4558.23831 1.72925 1591.76941 2.16587 1570.27554
12 1995 39.41 111.8311656 4407.26624 1.72442 1537.32447 2.15918 1516.10772
1 1996 39.55 111.8311656 4422.92260 1.66543 1541.12022 2.08470 1519.40884
2 1996 41.24 111.8311656 4611.91727 1.66955 1605.30385 2.08924 1582.24504
3 1996 40.87 111.8311656 4570.53974 1.73908 1589.16219 2.17564 1565.87370
4 1996 44.02 111.8311656 4922.80791 1.72159 1709.92313 2.15313 1684.40817
5 1996 45.10 112.2370145 5061.88935 1.85242 1756.38025 2.31612 1729.68073
6 1996 42.33 112.2370145 4750.99282 1.90275 1646.60226 2.37837 1621.06698
7 1996 37.34 112.2370145 4190.93012 1.78382 1450.71154 2.22902 1427.74124
8 1996 39.67 112.2370145 4452.44237 1.57160 1539.66371 1.96319 1514.86848
9 1996 42.45 112.2370145 4764.46127 1.66797 1645.89252 2.08299 1618.94466
10 1996 40.49 112.2370145 4544.47672 1.78305 1568.11538 2.22610 1541.96870
11 1996 41.18 112.2370145 4621.92026 1.69879 1593.13922 2.12026 1566.12551
12 1996 40.91 112.2370145 4591.61626 1.72590 1580.96778 2.15347 1553.70361
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 68.64%
GROSS ANNUAL RETURN = 11.02%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1580.97 1540.65
TOTAL RETURN 58.10% 54.07%
AVERAGE ANNUAL RETURN 9.59% 9.03%
WITH DEATH BENEFIT CHARGE
ERV 1553.70 1514.08
TOTAL RETURN 55.37% 51.41%
AVERAGE ANNUAL RETURN 9.21% 8.65%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8 1988 10.00 100.0000000 1000.00000 1000.00000 1000.00000
9 1988 10.10 100.0000000 1010.00000 1.08333 1008.91667 1.37503 1008.62497
10 1988 9.95 100.0000000 995.00000 1.09299 992.83976 1.38689 992.25850
11 1988 9.69 100.0000000 969.00000 1.07558 965.82063 1.36439 964.96574
12 1988 9.60 100.6770833 966.50000 1.04631 962.28253 1.32686 961.14929
1 1989 10.69 100.6770833 1076.23802 1.04247 1070.49922 1.32161 1068.95817
2 1989 10.90 100.6770833 1097.38021 1.15971 1090.36897 1.46985 1088.48750
3 1989 11.72 100.6770833 1179.93542 1.18123 1171.21549 1.49671 1168.87701
4 1989 12.64 100.6770833 1272.55833 1.26882 1261.88509 1.60724 1259.02461
5 1989 13.31 100.6770833 1340.01198 1.36704 1327.40594 1.73120 1324.02968
6 1989 13.12 100.6770833 1320.88333 1.43802 1307.01923 1.82058 1303.30860
7 1989 14.48 100.6770833 1457.80417 1.41594 1441.08699 1.79209 1436.61557
8 1989 15.59 100.6770833 1569.55573 1.56118 1549.99588 1.97539 1544.76747
9 1989 16.25 100.6770833 1636.00260 1.67916 1613.93553 2.12411 1608.04084
10 1989 15.32 100.6770833 1542.37292 1.74843 1519.82033 2.21111 1513.80031
11 1989 15.71 100.6770833 1581.63698 1.64647 1556.86380 2.08153 1550.25548
12 1989 15.79 100.6770833 1589.69115 1.68660 1563.10521 2.13165 1556.01819
1 1990 14.39 100.6770833 1448.74323 1.69336 1422.82114 2.13958 1415.91626
2 1990 15.15 100.6770833 1525.25781 1.54139 1496.42527 1.94693 1488.75018
3 1990 16.04 100.6770833 1614.86042 1.62113 1582.71295 2.04708 1574.16103
4 1990 15.85 101.5402059 1609.41226 1.71461 1575.65865 2.16452 1566.68566
5 1990 18.05 101.5402059 1832.80072 1.70696 1792.65510 2.15424 1781.98936
6 1990 18.24 101.5402059 1852.09336 1.94204 1809.58311 2.45029 1798.29685
7 1990 17.23 101.5402059 1749.53775 1.96038 1707.42103 2.47272 1696.24739
8 1990 15.63 101.5402059 1587.07342 1.84971 1547.01801 2.33240 1536.39927
9 1990 14.46 101.5402059 1468.27138 1.67594 1429.53842 2.11260 1419.27790
10 1990 14.22 101.5402059 1443.90173 1.54867 1404.26297 1.95155 1393.76986
11 1990 15.75 101.5402059 1599.25824 1.52128 1553.83328 1.91648 1541.81596
12 1990 17.02 101.5402059 1728.21430 1.68332 1677.44318 2.12005 1664.02012
1 1991 18.25 101.5402059 1853.10876 1.81723 1796.85128 2.28808 1781.98731
2 1991 19.58 101.5402059 1988.15723 1.94659 1925.85330 2.45029 1909.40240
3 1991 21.40 101.5402059 2172.96041 2.08634 2102.77886 2.62549 2084.25966
4 1991 20.56 101.6322224 2089.55849 2.27801 2019.79263 2.86593 2001.39631
5 1991 21.70 101.6322224 2205.41923 2.18811 2129.59691 2.75199 2109.61669
6 1991 20.17 101.6322224 2049.92193 2.30706 1977.13854 2.90079 1957.97333
7 1991 21.85 101.6322224 2220.66406 2.14190 2139.67650 2.69228 2118.36460
8 1991 22.01 101.6322224 2236.92522 2.31798 2153.02663 2.91282 2130.96384
9 1991 22.65 101.6322224 2301.96984 2.33245 2213.29923 2.93015 2189.99720
10 1991 23.75 101.6322224 2413.76528 2.39774 2318.39064 3.01132 2293.34336
11 1991 22.82 101.6322224 2319.24732 2.51159 2225.09575 3.15342 2200.38744
12 1991 26.79 101.6322224 2722.72724 2.41052 2609.78559 3.02561 2580.16368
1 1992 27.52 101.6322224 2796.91876 2.82727 2678.07230 3.54781 2646.92268
2 1992 27.27 101.6322224 2771.51071 2.90124 2650.84263 3.63961 2619.23763
3 1992 24.23 101.6322224 2462.54875 2.87175 2352.46074 3.60154 2323.64920
4 1992 22.15 103.4290612 2290.95371 2.54850 2185.98834 3.19510 2158.53785
5 1992 22.15 103.4290612 2290.95371 2.36815 2183.62019 2.96806 2155.56978
6 1992 21.21 103.4290612 2193.73039 2.36559 2088.58629 2.96398 2061.12790
7 1992 22.06 103.4290612 2281.64509 2.26264 2170.02467 2.83412 2140.89438
8 1992 21.67 103.4290612 2241.30776 2.35086 2129.30982 2.94380 2100.10158
9 1992 22.87 103.4290612 2365.42263 2.30675 2244.91593 2.88771 2213.50930
10 1992 23.93 103.4290612 2475.05744 2.43199 2346.53338 3.04365 2313.05944
11 1992 25.96 103.4290612 2685.01843 2.54208 2543.04951 3.18053 2506.09749
12 1992 27.26 103.4290612 2819.47621 2.75497 2667.64293 3.44597 2628.14947
1 1993 26.52 103.4290612 2742.93870 2.88995 2592.33715 3.61379 2553.19192
2 1993 24.38 103.4290612 2521.60051 2.80837 2380.34321 3.51072 2343.65440
3 1993 24.96 103.4290612 2581.58937 2.57871 2434.39285 3.22260 2396.18732
4 1993 24.29 103.4290612 2512.29190 2.63726 2366.40931 3.29484 2328.57175
5 1993 26.36 103.4290612 2726.39005 2.56361 2565.51170 3.20186 2523.81136
6 1993 26.72 103.4290612 2763.62452 2.77930 2597.76973 3.47032 2554.80887
7 1993 26.72 103.4290612 2763.62452 2.81425 2594.95548 3.51295 2551.29592
8 1993 28.89 103.4290612 2988.06558 2.81120 2802.88730 3.50812 2754.98512
9 1993 30.17 103.4290612 3120.45478 3.03646 2924.03553 3.78820 2873.25926
10 1993 30.16 103.4290612 3119.42049 3.16771 2919.89864 3.95083 2868.35607
11 1993 29.06 103.4290612 3005.64852 3.16322 2810.24044 3.94409 2759.79688
12 1993 30.88 103.4290612 3193.88941 3.04443 2983.19868 3.79481 2928.84551
1 1994 30.54 103.4290612 3158.72353 3.23180 2947.12078 4.02726 2892.57060
2 1994 30.23 103.4290612 3126.66052 3.19271 2914.01296 3.97738 2859.23182
3 1994 28.11 103.4290612 2907.39091 3.15685 2706.49927 3.93154 2654.78518
4 1994 28.37 103.4290612 2934.28247 2.93204 2728.60066 3.65042 2675.68988
5 1994 25.48 111.8311656 2849.45810 2.95598 2646.76617 3.67916 2594.66175
6 1994 24.29 111.8311656 2716.37901 2.86733 2520.28613 3.56775 2469.91475
7 1994 24.74 111.8311656 2766.70304 2.73031 2564.24700 3.39622 2512.27653
8 1994 26.69 111.8311656 2984.77381 2.77793 2763.58231 3.45446 2706.83901
9 1994 26.52 111.8311656 2965.76251 2.99388 2742.98599 3.72199 2685.87600
10 1994 27.76 111.8311656 3104.43316 2.97157 2868.26867 3.69317 2807.76678
11 1994 26.40 111.8311656 2952.34277 3.10729 2724.64101 3.86077 2666.34971
12 1994 27.31 111.8311656 3054.10913 2.95169 2815.60687 3.66632 2754.59165
1 1995 26.84 111.8311656 3001.54849 3.05024 2764.10056 3.78766 2703.39799
2 1995 28.76 111.8311656 3216.26432 2.99444 2958.83611 3.71726 2893.06837
3 1995 29.59 111.8311656 3309.08419 3.20541 3041.02132 3.97807 2972.58288
4 1995 30.89 111.8311656 3454.46471 3.29444 3171.33039 4.08740 3099.09223
5 1995 32.07 111.8311656 3586.42548 3.43561 3289.03980 4.26136 3213.21640
6 1995 36.02 111.8311656 4028.15859 3.56313 3690.58136 4.41828 3604.56378
7 1995 41.18 111.8311656 4605.20740 3.99813 4215.27284 4.95640 4115.97466
8 1995 41.72 111.8311656 4665.59623 4.56655 4265.98185 5.65960 4164.28850
9 1995 42.83 111.8311656 4789.72882 4.62148 4374.86085 5.72604 4269.35729
10 1995 40.83 111.8311656 4566.06649 4.73943 4165.83186 5.87051 4064.12385
11 1995 40.76 111.8311656 4558.23831 4.51298 4154.17687 5.58831 4051.56790
12 1995 39.41 111.8311656 4407.26624 4.50036 4012.08723 5.57104 3911.80607
1 1996 39.55 111.8311656 4422.92260 4.34643 4021.99334 5.37886 3920.32350
2 1996 41.24 111.8311656 4611.91727 4.35716 4189.49885 5.39058 4082.45117
3 1996 40.87 111.8311656 4570.53974 4.53862 4147.37258 5.61351 4040.21043
4 1996 44.02 111.8311656 4922.80791 4.49299 4462.53273 5.55542 4346.04877
5 1996 45.10 112.2370145 5061.88935 4.83441 4583.77586 5.97596 4462.85938
6 1996 42.33 112.2370145 4750.99282 4.96576 4297.27885 6.13658 4182.61814
7 1996 37.34 112.2370145 4190.93012 4.65539 3786.04607 5.75124 3683.80608
8 1996 39.67 112.2370145 4452.44237 4.10155 4018.19217 5.06536 3908.60864
9 1996 42.45 112.2370145 4764.46127 4.35304 4295.42658 5.37447 4177.14222
10 1996 40.49 112.2370145 4544.47672 4.65338 4092.44491 5.74371 3978.53164
11 1996 41.18 112.2370145 4621.92026 4.43348 4157.75178 5.47061 4040.86015
12 1996 40.91 112.2370145 4591.61626 4.50423 4125.98691 5.55632 4008.80961
</TABLE>
SURRENDER CHARGE = 0.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 359.16%
GROSS ANNUAL RETURN = 20.22%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 4125.99 4125.99
TOTAL RETURN 312.60% 312.60%
AVERAGE ANNUAL RETURN 18.68% 18.68%
WITH DEATH BENEFIT CHARGE
ERV 4008.81 4008.81
TOTAL RETURN 300.88% 300.88%
AVERAGE ANNUAL RETURN 18.27% 18.27%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 36.02 111.8311656 4028.15859 1000.00000 1000.00000
7 1995 41.18 111.8311656 4605.20740 1.08333 1142.17041 1.37503 1141.87871
8 1995 41.72 111.8311656 4665.59623 1.23735 1155.91053 1.57012 1155.28223
9 1995 42.83 111.8311656 4789.72882 1.25224 1185.41238 1.58855 1184.43106
10 1995 40.83 111.8311656 4566.06649 1.28420 1128.77388 1.62863 1127.49395
11 1995 40.76 111.8311656 4558.23831 1.22284 1125.61585 1.55034 1124.01060
12 1995 39.41 111.8311656 4407.26624 1.21942 1087.11524 1.54555 1085.23702
1 1996 39.55 111.8311656 4422.92260 1.17771 1089.79940 1.49224 1087.59998
2 1996 41.24 111.8311656 4611.91727 1.18062 1135.18669 1.49549 1132.57842
3 1996 40.87 111.8311656 4570.53974 1.22979 1123.77216 1.55733 1120.85974
4 1996 44.02 111.8311656 4922.80791 1.21742 1209.16796 1.54122 1205.70727
5 1996 45.10 112.2370145 5061.88935 1.30993 1242.02000 1.65789 1238.11358
6 1996 42.33 112.2370145 4750.99282 1.34552 1164.39076 1.70245 1160.36735
7 1996 37.34 112.2370145 4190.93012 1.26142 1025.86712 1.59554 1021.98388
8 1996 39.67 112.2370145 4452.44237 1.11136 1088.76943 1.40526 1084.34997
9 1996 42.45 112.2370145 4764.46127 1.17950 1163.88887 1.49102 1158.84819
10 1996 40.49 112.2370145 4544.47672 1.26088 1108.88895 1.59345 1103.74844
11 1996 41.18 112.2370145 4621.92026 1.20130 1126.58451 1.51769 1121.03999
12 1996 40.91 112.2370145 4591.61626 1.22047 1117.97750 1.54147 1112.14833
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 13.99%
GROSS ANNUAL RETURN = 8.68%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1117.98 1060.96
TOTAL RETURN 11.80% 6.10%
AVERAGE ANNUAL RETURN 7.35% 3.83%
WITH DEATH BENEFIT CHARGE
ERV 1112.15 1055.43
TOTAL RETURN 11.21% 5.54%
AVERAGE ANNUAL RETURN 6.99% 3.49%
<PAGE>
Federated Government Bond
12/1996
Assume ($10000 @ $10.00 on 3/28/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
3/94 0.0000000000 10.00 0.000 100.000000
4/94 0.0240000000 9.99 0.240 100.240240
5/94 0.0190000000 9.97 0.191 100.431270
6/94 0.0290000000 9.98 0.292 100.723104
7/94 0.0320000000 9.96 0.324 101.046713
8/94 0.0310000000 9.97 0.314 101.360900
9/94 0.0290000000 9.97 0.295 101.655731
10/94 0.0300000000 9.98 0.306 101.961309
11/94 0.0360000000 9.97 0.368 102.329475
12/94 0.0380000000 9.97 0.390 102.719497
1/95 0.0350000000 9.97 0.361 103.080097
2/95 0.0390000000 9.98 0.403 103.482915
3/95 0.0420000000 9.97 0.436 103.918851
4/95 0.0400000000 9.98 0.417 104.335359
5/95 0.0400000000 9.98 0.418 104.753537
6/95 0.0400000000 9.98 0.420 105.173391
7/95 0.0400000000 9.99 0.421 105.594505
8/95 0.0520000000 9.96 0.551 106.145802
9/95 0.0520000000 10.07 0.548 106.693923
10/95 0.0520000000 10.12 0.548 107.242153
11/95 0.0530000000 10.17 0.559 107.801035
12/95 0.0530000000 10.22 0.559 108.360082
1/96 0.0490000000 10.28 0.517 108.876584
2/96 0.0490000000 10.21 0.523 109.399107
3/96 0.0893000000 10.04 0.973 110.372148
4/96 0.0480000000 9.98 0.531 110.902996
5/96 0.0480000000 9.94 0.536 111.438544
6/96 0.0480000000 9.83 0.544 111.982700
7/96 0.0440000000 9.87 0.499 112.481913
8/96 0.0440000000 9.98 0.496 112.977826
9/96 0.0480000000 9.89 0.548 113.526151
10/96 0.0480000000 10.02 0.544 114.069989
11/96 0.0480000000 10.21 0.536 114.606263
12/96 0.0480000000 10.11 0.544 115.150387
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.29 108.3600819 1115.02524 1000.00000 1000.00000
1 1996 10.32 108.8765842 1123.60635 1.08333 1006.61255 1.37503 1006.32085
2 1996 10.17 109.3991065 1112.58891 1.09050 995.65179 1.38372 995.06973
3 1996 10.03 110.3721484 1107.03265 1.07862 989.60089 1.36825 988.73210
4 1996 9.94 110.9029964 1102.37578 1.07207 984.36595 1.35954 983.21334
5 1996 9.87 111.4385441 1099.89843 1.06640 981.08740 1.35195 979.65183
6 1996 9.94 111.9826997 1113.10804 1.06284 991.80726 1.34705 990.07023
7 1996 9.92 112.4819134 1115.82058 1.07446 993.14975 1.36138 991.12157
8 1996 9.85 112.9778256 1112.83158 1.07591 989.41344 1.36283 987.10378
9 1996 9.96 113.5261508 1130.72046 1.07186 1004.24650 1.35730 1001.61427
10 1996 10.11 114.0699886 1153.24758 1.08793 1023.16597 1.37725 1020.19199
11 1996 10.21 114.6062628 1170.12994 1.10843 1037.03564 1.40280 1033.72375
12 1996 10.09 115.1503875 1161.86741 1.12346 1028.58945 1.42140 1025.00300
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.20%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1028.59 967.39
TOTAL RETURN 2.86% -3.26%
WITH DEATH BENEFIT CHARGE
ERV 1025.00 964.02
TOTAL RETURN 2.50% -3.60%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.29 108.3600819 1115.02524 1000.00000 1000.00000
1 1996 10.32 108.8765842 1123.60635 1.08333 1006.61255 1.37503 1006.32085
2 1996 10.17 109.3991065 1112.58891 1.09050 995.65179 1.38372 995.06973
3 1996 10.03 110.3721484 1107.03265 1.07862 989.60089 1.36825 988.73210
4 1996 9.94 110.9029964 1102.37578 1.07207 984.36595 1.35954 983.21334
5 1996 9.87 111.4385441 1099.89843 1.06640 981.08740 1.35195 979.65183
6 1996 9.94 111.9826997 1113.10804 1.06284 991.80726 1.34705 990.07023
7 1996 9.92 112.4819134 1115.82058 1.07446 993.14975 1.36138 991.12157
8 1996 9.85 112.9778256 1112.83158 1.07591 989.41344 1.36283 987.10378
9 1996 9.96 113.5261508 1130.72046 1.07186 1004.24650 1.35730 1001.61427
10 1996 10.11 114.0699886 1153.24758 1.08793 1023.16597 1.37725 1020.19199
11 1996 10.21 114.6062628 1170.12994 1.10843 1037.03564 1.40280 1033.72375
12 1996 10.09 115.1503875 1161.86741 1.12346 1028.58945 1.42140 1025.00300
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.20%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1028.59 967.39
TOTAL RETURN 2.86% -3.26%
WITH DEATH BENEFIT CHARGE
ERV 1025.00 964.02
TOTAL RETURN 2.50% -3.60%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
4 1994 9.97 100.2402402 999.39520 1.08333 998.31186 1.37503 998.02016
5 1994 9.98 100.4312698 1002.30407 1.08150 1000.13608 1.37231 999.55273
6 1994 9.99 100.7231041 1006.22381 1.08348 1002.96386 1.37442 1002.08729
7 1994 9.97 101.0467125 1007.43572 1.08654 1003.08530 1.37790 1001.91631
8 1994 9.98 101.3608999 1011.58178 1.08668 1006.12678 1.37767 1004.66199
9 1994 9.97 101.6557310 1013.50764 1.08997 1006.95228 1.38144 1005.19323
10 1994 9.99 101.9613093 1018.59348 1.09086 1010.91436 1.38217 1008.85517
11 1994 9.98 102.3294745 1021.24816 1.09516 1012.45387 1.38721 1010.09726
12 1994 9.98 102.7194966 1025.14058 1.09682 1015.21595 1.38892 1012.55826
1 1995 9.99 103.0800966 1029.77017 1.09982 1018.70090 1.39230 1015.73873
2 1995 9.99 103.4829147 1033.79432 1.10359 1021.57820 1.39667 1018.31137
3 1995 9.99 103.9188507 1038.14932 1.10671 1024.77503 1.40021 1021.20094
4 1995 9.99 104.3353591 1042.31024 1.11017 1027.77217 1.40419 1023.88974
5 1995 9.99 104.7535369 1046.48783 1.11342 1030.77808 1.40788 1026.58563
6 1995 9.99 105.1733908 1050.68217 1.11668 1033.79278 1.41159 1029.28861
7 1995 10.01 105.5945055 1057.00100 1.11994 1038.89009 1.41531 1034.06347
8 1995 10.07 106.1458021 1068.88823 1.12546 1049.44817 1.42187 1044.27086
9 1995 10.11 106.6939234 1078.67557 1.13690 1057.92060 1.43591 1052.39688
10 1995 10.16 107.2421530 1089.58027 1.14608 1067.46941 1.44708 1061.58885
11 1995 10.23 107.8010354 1102.80459 1.15643 1079.26895 1.45972 1073.01371
12 1995 10.29 108.3600819 1115.02524 1.16921 1090.05958 1.47543 1083.42881
1 1996 10.32 108.8765842 1123.60635 1.18090 1097.26766 1.48975 1090.27700
2 1996 10.17 109.3991065 1112.58891 1.18871 1085.31977 1.49917 1078.08721
3 1996 10.03 110.3721484 1107.03265 1.17576 1078.72393 1.48241 1071.22084
4 1996 9.94 110.9029964 1102.37578 1.16862 1073.01753 1.47296 1065.24166
5 1996 9.87 111.4385441 1099.89843 1.16244 1069.44372 1.46474 1061.38301
6 1996 9.94 111.9826997 1113.10804 1.15856 1081.12900 1.45944 1072.67062
7 1996 9.92 112.4819134 1115.82058 1.17122 1082.59239 1.47496 1073.80966
8 1996 9.85 112.9778256 1112.83158 1.17281 1078.51960 1.47652 1069.45667
9 1996 9.96 113.5261508 1130.72046 1.16840 1094.68851 1.47054 1085.17776
10 1996 10.11 114.0699886 1153.24758 1.18591 1115.31187 1.49216 1105.30539
11 1996 10.21 114.6062628 1170.12994 1.20825 1130.43063 1.51983 1119.96609
12 1996 10.09 115.1503875 1161.86741 1.22463 1121.22379 1.53999 1110.51778
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 16.19%
GROSS ANNUAL RETURN = 5.58%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1121.22 1073.57
TOTAL RETURN 12.12% 7.36%
AVERAGE ANNUAL RETURN 4.23% 2.60%
WITH DEATH BENEFIT CHARGE
ERV 1110.52 1063.32
TOTAL RETURN 11.05% 6.33%
AVERAGE ANNUAL RETURN 3.87% 2.25%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 9.99 105.1733908 1050.68217 1000.00000 1000.00000
7 1995 10.01 105.5945055 1057.00100 1.08333 1004.93069 1.37503 1004.63899
8 1995 10.07 106.1458021 1068.88823 1.08867 1015.14365 1.38141 1014.55593
9 1995 10.11 106.6939234 1078.67557 1.09974 1023.33913 1.39505 1022.45072
10 1995 10.16 107.2421530 1089.58027 1.10862 1032.57581 1.40590 1031.38113
11 1995 10.23 107.8010354 1102.80459 1.11862 1043.98964 1.41818 1042.48090
12 1995 10.29 108.3600819 1115.02524 1.13099 1054.42754 1.43345 1052.59963
1 1996 10.32 108.8765842 1123.60635 1.14230 1061.40000 1.44736 1059.25296
2 1996 10.17 109.3991065 1112.58891 1.14985 1049.84267 1.45651 1047.41003
3 1996 10.03 110.3721484 1107.03265 1.13733 1043.46243 1.44022 1040.73904
4 1996 9.94 110.9029964 1102.37578 1.13042 1037.94257 1.43105 1034.93000
5 1996 9.87 111.4385441 1099.89843 1.12444 1034.48558 1.42306 1031.18115
6 1996 9.94 111.9826997 1113.10804 1.12069 1045.78889 1.41791 1042.14756
7 1996 9.92 112.4819134 1115.82058 1.13294 1047.20445 1.43299 1043.25420
8 1996 9.85 112.9778256 1112.83158 1.13447 1043.26478 1.43451 1039.02508
9 1996 9.96 113.5261508 1130.72046 1.13020 1058.90517 1.42869 1054.29882
10 1996 10.11 114.0699886 1153.24758 1.14715 1078.85438 1.44970 1073.85371
11 1996 10.21 114.6062628 1170.12994 1.16876 1093.47894 1.47658 1088.09724
12 1996 10.09 115.1503875 1161.86741 1.18460 1084.57305 1.49617 1078.91778
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 10.58%
GROSS ANNUAL RETURN = 6.61%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1084.57 1029.26
TOTAL RETURN 8.46% 2.93%
AVERAGE ANNUAL RETURN 5.30% 1.85%
WITH DEATH BENEFIT CHARGE
ERV 1078.92 1023.89
TOTAL RETURN 7.89% 2.39%
AVERAGE ANNUAL RETURN 4.95% 1.51%
<PAGE>
Federated Prime Money
12/1996
Assume ($10000 @ $10.00 on 11/21/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
10/94 0.0000000000 1.00 0.000 100.000000
11/94 0.0012659720 1.00 0.127 100.126597
12/94 0.0037707980 1.00 0.378 100.504154
1/95 0.0037829400 1.00 0.380 100.884356
2/95 0.0038735110 1.00 0.391 101.275132
3/95 0.0044113260 1.00 0.447 101.721890
4/95 0.0042677160 1.00 0.434 102.156010
5/95 0.0045457280 1.00 0.464 102.620383
6/95 0.0043985090 1.00 0.451 103.071760
7/95 0.0043850150 1.00 0.452 103.523731
8/95 0.0043262630 1.00 0.448 103.971602
9/95 0.0041606740 1.00 0.433 104.404194
10/95 0.0042481520 1.00 0.444 104.847719
11/95 0.0041265140 1.00 0.433 105.280375
12/95 0.0042405070 1.00 0.446 105.726817
1/96 0.0039644280 1.00 0.419 106.145963
2/96 0.0036463730 1.00 0.387 106.533011
3/96 0.0038803070 1.00 0.413 106.946392
4/96 0.0037531920 1.00 0.401 107.347782
5/96 0.0038792420 1.00 0.416 107.764210
6/96 0.0037639920 1.00 0.406 108.169834
7/96 0.0039246140 1.00 0.425 108.594359
8/96 0.0039447460 1.00 0.428 109.022736
9/96 0.0035630470 1.00 0.388 109.411189
10/96 0.0039363050 1.00 0.431 109.841865
11/96 0.0038677480 1.00 0.425 110.266705
12/96 0.0039950720 1.00 0.441 110.707229
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 1.00 105.7268168 105.72682 1000.00000 1000.00000
1 1996 1.00 106.1459631 106.14596 1.08333 1002.88109 1.37503 1002.58939
2 1996 1.00 106.5330109 106.53301 1.08645 1005.45152 1.37859 1004.86662
3 1996 1.00 106.9463917 106.94639 1.08924 1008.26374 1.38173 1007.38408
4 1996 1.00 107.3477820 107.34778 1.09229 1010.95566 1.38519 1009.77980
5 1996 1.00 107.7642101 107.76421 1.09520 1013.78220 1.38848 1012.30850
6 1996 1.00 108.1698337 108.16983 1.09826 1016.49981 1.39196 1014.72686
7 1996 1.00 108.5943585 108.59436 1.10121 1019.38797 1.39528 1017.31399
8 1996 1.00 109.0227357 109.02274 1.10434 1022.30486 1.39884 1019.92820
9 1996 1.00 109.4111888 109.41119 1.10750 1024.83988 1.40244 1022.15981
10 1996 1.00 109.8418646 109.84186 1.11024 1027.76372 1.40550 1024.77784
11 1996 1.00 110.2667053 110.26671 1.11341 1030.62544 1.40910 1027.33232
12 1996 1.00 110.7072287 110.70723 1.11651 1033.62635 1.41262 1030.02397
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.71%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1033.63 972.13
TOTAL RETURN 3.36% -2.79%
WITH DEATH BENEFIT CHARGE
ERV 1030.02 968.74
TOTAL RETURN 3.00% -3.13%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 1.00 105.7268168 105.72682 1000.00000 1000.00000
1 1996 1.00 106.1459631 106.14596 1.08333 1002.88109 1.37503 1002.58939
2 1996 1.00 106.5330109 106.53301 1.08645 1005.45152 1.37859 1004.86662
3 1996 1.00 106.9463917 106.94639 1.08924 1008.26374 1.38173 1007.38408
4 1996 1.00 107.3477820 107.34778 1.09229 1010.95566 1.38519 1009.77980
5 1996 1.00 107.7642101 107.76421 1.09520 1013.78220 1.38848 1012.30850
6 1996 1.00 108.1698337 108.16983 1.09826 1016.49981 1.39196 1014.72686
7 1996 1.00 108.5943585 108.59436 1.10121 1019.38797 1.39528 1017.31399
8 1996 1.00 109.0227357 109.02274 1.10434 1022.30486 1.39884 1019.92820
9 1996 1.00 109.4111888 109.41119 1.10750 1024.83988 1.40244 1022.15981
10 1996 1.00 109.8418646 109.84186 1.11024 1027.76372 1.40550 1024.77784
11 1996 1.00 110.2667053 110.26671 1.11341 1030.62544 1.40910 1027.33232
12 1996 1.00 110.7072287 110.70723 1.11651 1033.62635 1.41262 1030.02397
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.71%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1033.63 972.13
TOTAL RETURN 3.36% -2.79%
WITH DEATH BENEFIT CHARGE
ERV 1030.02 968.74
TOTAL RETURN 3.00% -3.13%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10 1994 1.00 100.0000000 100.00000 1000.00000 1000.00000
11 1994 1.00 100.1265972 100.12660 1.08333 1000.18264 1.37503 999.89094
12 1994 1.00 100.5041544 100.50415 1.08353 1002.87059 1.37488 1002.28644
1 1995 1.00 100.8843556 100.88436 1.08644 1005.57795 1.37818 1004.69985
2 1995 1.00 101.2751322 101.27513 1.08938 1008.38369 1.38150 1007.21007
3 1995 1.00 101.7218898 101.72189 1.09242 1011.73959 1.38495 1010.26826
4 1995 1.00 102.1560100 102.15601 1.09605 1014.96135 1.38915 1013.19064
5 1995 1.00 102.6203834 102.62038 1.09954 1018.47555 1.39317 1016.40316
6 1995 1.00 103.0717601 103.07176 1.10335 1021.85197 1.39759 1019.47623
7 1995 1.00 103.5237313 103.52373 1.10701 1025.22580 1.40181 1022.54484
8 1995 1.00 103.9716022 103.97160 1.11066 1028.55054 1.40603 1025.56260
9 1995 1.00 104.4041941 104.40419 1.11426 1031.71574 1.41018 1028.41945
10 1995 1.00 104.8477190 104.84772 1.11769 1034.98093 1.41411 1031.37422
11 1995 1.00 105.2803746 105.28037 1.12123 1038.13057 1.41817 1034.21203
12 1995 1.00 105.7268168 105.72682 1.12464 1041.40812 1.42208 1037.17554
1 1996 1.00 106.1459631 106.14596 1.12819 1044.40852 1.42615 1039.86119
2 1996 1.00 106.5330109 106.53301 1.13144 1047.08538 1.42984 1042.22307
3 1996 1.00 106.9463917 106.94639 1.13434 1050.01405 1.43309 1044.83413
4 1996 1.00 107.3477820 107.34778 1.13752 1052.81744 1.43668 1047.31891
5 1996 1.00 107.7642101 107.76421 1.14055 1055.76102 1.44010 1049.94161
6 1996 1.00 108.1698337 108.16983 1.14374 1058.59116 1.44370 1052.44988
7 1996 1.00 108.5943585 108.59436 1.14681 1061.59891 1.44715 1055.13318
8 1996 1.00 109.0227357 109.02274 1.15007 1064.63658 1.45084 1057.84457
9 1996 1.00 109.4111888 109.41119 1.15336 1067.27658 1.45457 1060.15915
10 1996 1.00 109.8418646 109.84186 1.15622 1070.32149 1.45775 1062.87451
11 1996 1.00 110.2667053 110.26671 1.15951 1073.30171 1.46149 1065.52395
12 1996 1.00 110.7072287 110.70723 1.16274 1076.42688 1.46513 1068.31566
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 10.71%
GROSS ANNUAL RETURN = 4.94%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1076.43 1030.68
TOTAL RETURN 7.64% 3.07%
AVERAGE ANNUAL RETURN 3.55% 1.44%
WITH DEATH BENEFIT CHARGE
ERV 1068.32 1022.91
TOTAL RETURN 6.83% 2.29%
AVERAGE ANNUAL RETURN 3.18% 1.08%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 1.00 103.0717601 103.07176 1000.00000 1000.00000
7 1995 1.00 103.5237313 103.52373 1.08333 1003.30168 1.37503 1003.00998
8 1995 1.00 103.9716022 103.97160 1.08691 1006.55532 1.37917 1005.97009
9 1995 1.00 104.4041941 104.40419 1.09043 1009.65283 1.38324 1008.77237
10 1995 1.00 104.8477190 104.84772 1.09379 1012.84820 1.38710 1011.67069
11 1995 1.00 105.2803746 105.28037 1.09725 1015.93048 1.39108 1014.45428
12 1995 1.00 105.7268168 105.72682 1.10059 1019.13795 1.39491 1017.36117
1 1996 1.00 106.1459631 106.14596 1.10407 1022.07418 1.39891 1019.99552
2 1996 1.00 106.5330109 106.53301 1.10725 1024.69380 1.40253 1022.31228
3 1996 1.00 106.9463917 106.94639 1.11008 1027.55984 1.40571 1024.87345
4 1996 1.00 107.3477820 107.34778 1.11319 1030.30328 1.40924 1027.31076
5 1996 1.00 107.7642101 107.76421 1.11616 1033.18391 1.41259 1029.88336
6 1996 1.00 108.1698337 108.16983 1.11928 1035.95353 1.41612 1032.34371
7 1996 1.00 108.5943585 108.59436 1.12228 1038.89696 1.41951 1034.97576
8 1996 1.00 109.0227357 109.02274 1.12547 1041.86968 1.42313 1037.63535
9 1996 1.00 109.4111888 109.41119 1.12869 1044.45321 1.42678 1039.90571
10 1996 1.00 109.8418646 109.84186 1.13149 1047.43301 1.42990 1042.56919
11 1996 1.00 110.2667053 110.26671 1.13472 1050.34950 1.43357 1045.16801
12 1996 1.00 110.7072287 110.70723 1.13788 1053.40784 1.43714 1047.90640
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 7.41%
GROSS ANNUAL RETURN = 4.65%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1053.41 999.68
TOTAL RETURN 5.34% -0.03%
AVERAGE ANNUAL RETURN 3.36% -0.02%
WITH DEATH BENEFIT CHARGE
ERV 1047.91 994.46
TOTAL RETURN 4.79% -0.55%
AVERAGE ANNUAL RETURN 3.02% -0.35%
<PAGE>
Fidelity Asset Manager Growth
12/1996
Assume ($10000 @ $10.00 on 1/ 3/1995)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/95 0.5300000000 11.72 4.522 104.522184
2/96 0.4200000000 11.62 3.778 108.300095
12/96 0.5400000000 13.21 4.427 112.727199
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.78 104.5221843 1231.27133 1000.00000 1000.00000
1 1996 12.05 104.5221843 1259.49232 1.08333 1021.83687 1.37503 1021.54517
2 1996 11.67 108.3000946 1263.86210 1.10699 1024.27512 1.40466 1023.68474
3 1996 11.88 108.3000946 1286.60512 1.10963 1041.59718 1.40760 1040.69820
4 1996 12.16 108.3000946 1316.92915 1.12840 1065.01821 1.43099 1063.79545
5 1996 12.35 108.3000946 1337.50617 1.15377 1080.50535 1.46275 1078.95450
6 1996 12.40 108.3000946 1342.92117 1.17055 1083.70932 1.48360 1081.83914
7 1996 12.09 108.3000946 1309.34814 1.17402 1055.44257 1.48756 1053.30559
8 1996 12.18 108.3000946 1319.09515 1.14340 1062.15606 1.44833 1059.69825
9 1996 12.68 108.3000946 1373.24520 1.15067 1104.60786 1.45712 1101.74270
10 1996 13.05 108.3000946 1413.31623 1.19666 1135.64345 1.51493 1132.37641
11 1996 13.90 108.3000946 1505.37131 1.23028 1208.38228 1.55706 1204.57567
12 1996 13.10 112.7271991 1476.72631 1.30908 1184.07946 1.65633 1179.99803
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 19.94%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1184.08 1113.63
TOTAL RETURN 18.41% 11.36%
WITH DEATH BENEFIT CHARGE
ERV 1180.00 1109.79
TOTAL RETURN 18.00% 10.98%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.78 104.5221843 1231.27133 1000.00000 1000.00000
1 1996 12.05 104.5221843 1259.49232 1.08333 1021.83687 1.37503 1021.54517
2 1996 11.67 108.3000946 1263.86210 1.10699 1024.27512 1.40466 1023.68474
3 1996 11.88 108.3000946 1286.60512 1.10963 1041.59718 1.40760 1040.69820
4 1996 12.16 108.3000946 1316.92915 1.12840 1065.01821 1.43099 1063.79545
5 1996 12.35 108.3000946 1337.50617 1.15377 1080.50535 1.46275 1078.95450
6 1996 12.40 108.3000946 1342.92117 1.17055 1083.70932 1.48360 1081.83914
7 1996 12.09 108.3000946 1309.34814 1.17402 1055.44257 1.48756 1053.30559
8 1996 12.18 108.3000946 1319.09515 1.14340 1062.15606 1.44833 1059.69825
9 1996 12.68 108.3000946 1373.24520 1.15067 1104.60786 1.45712 1101.74270
10 1996 13.05 108.3000946 1413.31623 1.19666 1135.64345 1.51493 1132.37641
11 1996 13.90 108.3000946 1505.37131 1.23028 1208.38228 1.55706 1204.57567
12 1996 13.10 112.7271991 1476.72631 1.30908 1184.07946 1.65633 1179.99803
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 19.94%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1184.08 1113.63
TOTAL RETURN 18.41% 11.36%
WITH DEATH BENEFIT CHARGE
ERV 1180.00 1109.79
TOTAL RETURN 18.00% 10.98%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
1 1995 10.02 100.0000000 1002.00000 1.08333 1000.91667 1.37503 1000.62497
2 1995 10.17 100.0000000 1017.00000 1.08433 1014.81612 1.37589 1014.22849
3 1995 10.31 100.0000000 1031.00000 1.09938 1027.68668 1.39460 1026.79574
4 1995 10.58 100.0000000 1058.00000 1.11333 1053.48658 1.41188 1052.27376
5 1995 10.73 100.0000000 1073.00000 1.14128 1067.28131 1.44691 1065.74566
6 1995 11.16 100.0000000 1116.00000 1.15622 1108.89592 1.46544 1106.98951
7 1995 11.57 100.0000000 1157.00000 1.20130 1148.43362 1.52215 1146.13633
8 1995 12.09 100.0000000 1209.00000 1.24414 1198.80448 1.57598 1196.07210
9 1995 12.27 100.0000000 1227.00000 1.29870 1215.35398 1.64464 1212.23499
10 1995 11.80 100.0000000 1180.00000 1.31663 1167.48344 1.66686 1164.13370
11 1995 12.01 100.0000000 1201.00000 1.26477 1186.99592 1.60072 1183.25061
12 1995 11.78 104.5221843 1231.27133 1.28591 1215.62836 1.62701 1211.44756
1 1996 12.05 104.5221843 1259.49232 1.31693 1242.17388 1.66578 1237.54840
2 1996 11.67 108.3000946 1263.86210 1.34569 1245.13789 1.70167 1240.14038
3 1996 11.88 108.3000946 1286.60512 1.34890 1266.19507 1.70523 1260.75129
4 1996 12.16 108.3000946 1316.92915 1.37171 1294.66634 1.73358 1288.73240
5 1996 12.35 108.3000946 1337.50617 1.40256 1313.49295 1.77205 1307.09679
6 1996 12.40 108.3000946 1342.92117 1.42295 1317.38778 1.79730 1310.59138
7 1996 12.09 108.3000946 1309.34814 1.42717 1283.02592 1.80211 1276.02449
8 1996 12.18 108.3000946 1319.09515 1.38994 1291.18703 1.75458 1283.76885
9 1996 12.68 108.3000946 1373.24520 1.39879 1342.79264 1.76522 1334.70350
10 1996 13.05 108.3000946 1413.31623 1.45469 1380.52039 1.83526 1371.81463
11 1996 13.90 108.3000946 1505.37131 1.49556 1468.94377 1.88629 1459.28025
12 1996 13.10 112.7271991 1476.72631 1.59136 1439.40057 2.00656 1429.50573
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 47.67%
GROSS ANNUAL RETURN = 21.62%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1439.40 1365.99
TOTAL RETURN 43.94% 36.60%
AVERAGE ANNUAL RETURN 20.07% 16.95%
WITH DEATH BENEFIT CHARGE
ERV 1429.51 1356.60
TOTAL RETURN 42.95% 35.66%
AVERAGE ANNUAL RETURN 19.65% 16.55%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 11.16 100.0000000 1116.00000 1000.00000 1000.00000
7 1995 11.57 100.0000000 1157.00000 1.08333 1035.65502 1.37503 1035.36332
8 1995 12.09 100.0000000 1209.00000 1.12196 1081.07935 1.42366 1080.47284
9 1995 12.27 100.0000000 1227.00000 1.17117 1096.00366 1.48569 1095.07360
10 1995 11.80 100.0000000 1180.00000 1.18734 1052.83411 1.50576 1051.62125
11 1995 12.01 100.0000000 1201.00000 1.14057 1070.43042 1.44601 1068.89053
12 1995 11.78 104.5221843 1231.27133 1.15963 1096.25109 1.46976 1094.36227
1 1996 12.05 104.5221843 1259.49232 1.18761 1120.18979 1.50478 1117.94049
2 1996 11.67 108.3000946 1263.86210 1.21354 1122.86272 1.53721 1120.28196
3 1996 11.88 108.3000946 1286.60512 1.21643 1141.85205 1.54042 1138.90085
4 1996 12.16 108.3000946 1316.92915 1.23701 1167.52738 1.56603 1164.17760
5 1996 12.35 108.3000946 1337.50617 1.26482 1184.50517 1.60078 1180.76709
6 1996 12.40 108.3000946 1342.92117 1.28321 1188.01753 1.62359 1183.92393
7 1996 12.09 108.3000946 1309.34814 1.28702 1157.03007 1.62793 1152.69790
8 1996 12.18 108.3000946 1319.09515 1.25345 1164.38975 1.58500 1159.69378
9 1996 12.68 108.3000946 1373.24520 1.26142 1210.92757 1.59462 1205.70564
10 1996 13.05 108.3000946 1413.31623 1.31184 1244.95037 1.65789 1239.23002
11 1996 13.90 108.3000946 1505.37131 1.34870 1324.69040 1.70398 1318.24217
12 1996 13.10 112.7271991 1476.72631 1.43508 1298.04840 1.81263 1291.34533
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 32.32%
GROSS ANNUAL RETURN = 19.49%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1298.05 1231.85
TOTAL RETURN 29.80% 23.18%
AVERAGE ANNUAL RETURN 18.04% 14.18%
WITH DEATH BENEFIT CHARGE
ERV 1291.35 1225.49
TOTAL RETURN 29.13% 22.55%
AVERAGE ANNUAL RETURN 17.66% 13.80%
<PAGE>
Fidelity Contrafund
12/1996
Assume ($10000 @ $10.00 on 1/ 3/1995)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/95 0.1800000000 13.64 1.320 101.319648
2/96 0.1300000000 13.78 0.956 102.275494
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 13.78 101.3196481 1396.18475 1000.00000 1000.00000
1 1996 13.89 101.3196481 1407.32991 1.08333 1006.89925 1.37503 1006.60755
2 1996 13.81 102.2754938 1412.42457 1.09081 1009.45351 1.38412 1008.86744
3 1996 14.26 102.2754938 1458.44854 1.09357 1041.25306 1.38723 1040.35424
4 1996 14.73 102.2754938 1506.51802 1.12802 1074.44403 1.43052 1073.21310
5 1996 14.90 102.2754938 1523.90486 1.16398 1085.68029 1.47570 1084.12342
6 1996 14.78 102.2754938 1511.63180 1.17615 1075.76040 1.49071 1073.90152
7 1996 14.09 102.2754938 1441.06171 1.16541 1024.37343 1.47665 1022.29009
8 1996 14.63 102.2754938 1496.29047 1.10974 1062.52286 1.40568 1060.06373
9 1996 15.25 102.2754938 1559.70128 1.15107 1106.40011 1.45762 1103.53020
10 1996 15.72 102.2754938 1607.77076 1.19860 1139.30039 1.51739 1136.02325
11 1996 16.66 102.2754938 1703.90973 1.23424 1206.19226 1.56207 1202.39132
12 1996 16.56 102.2754938 1693.68218 1.30671 1197.64550 1.65333 1193.52076
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 21.31%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1197.65 1126.39
TOTAL RETURN 19.76% 12.64%
WITH DEATH BENEFIT CHARGE
ERV 1193.52 1122.51
TOTAL RETURN 19.35% 12.25%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 13.78 101.3196481 1396.18475 1000.00000 1000.00000
1 1996 13.89 101.3196481 1407.32991 1.08333 1006.89925 1.37503 1006.60755
2 1996 13.81 102.2754938 1412.42457 1.09081 1009.45351 1.38412 1008.86744
3 1996 14.26 102.2754938 1458.44854 1.09357 1041.25306 1.38723 1040.35424
4 1996 14.73 102.2754938 1506.51802 1.12802 1074.44403 1.43052 1073.21310
5 1996 14.90 102.2754938 1523.90486 1.16398 1085.68029 1.47570 1084.12342
6 1996 14.78 102.2754938 1511.63180 1.17615 1075.76040 1.49071 1073.90152
7 1996 14.09 102.2754938 1441.06171 1.16541 1024.37343 1.47665 1022.29009
8 1996 14.63 102.2754938 1496.29047 1.10974 1062.52286 1.40568 1060.06373
9 1996 15.25 102.2754938 1559.70128 1.15107 1106.40011 1.45762 1103.53020
10 1996 15.72 102.2754938 1607.77076 1.19860 1139.30039 1.51739 1136.02325
11 1996 16.66 102.2754938 1703.90973 1.23424 1206.19226 1.56207 1202.39132
12 1996 16.56 102.2754938 1693.68218 1.30671 1197.64550 1.65333 1193.52076
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 21.31%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1197.65 1126.39
TOTAL RETURN 19.76% 12.64%
WITH DEATH BENEFIT CHARGE
ERV 1193.52 1122.51
TOTAL RETURN 19.35% 12.25%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
1 1995 9.87 100.0000000 987.00000 1.08333 985.91667 1.37503 985.62497
2 1995 10.37 100.0000000 1037.00000 1.06808 1034.79371 1.35527 1034.20004
3 1995 10.89 100.0000000 1089.00000 1.12103 1085.56205 1.42206 1084.63758
4 1995 11.48 100.0000000 1148.00000 1.17603 1143.19976 1.49141 1141.90982
5 1995 11.73 100.0000000 1173.00000 1.23847 1166.85676 1.57016 1165.20703
6 1995 12.50 100.0000000 1250.00000 1.26409 1242.18940 1.60220 1240.09327
7 1995 13.47 100.0000000 1347.00000 1.34571 1337.23759 1.70517 1334.61934
8 1995 13.64 100.0000000 1364.00000 1.44867 1352.66571 1.83515 1349.62794
9 1995 13.94 100.0000000 1394.00000 1.46539 1380.95104 1.85578 1377.45606
10 1995 13.65 100.0000000 1365.00000 1.49603 1350.72647 1.89405 1346.90618
11 1995 13.90 100.0000000 1390.00000 1.46329 1374.00176 1.85204 1369.72275
12 1995 13.78 101.3196481 1396.18475 1.48850 1378.62683 1.88341 1373.93387
1 1996 13.89 101.3196481 1407.32991 1.49351 1388.13832 1.88920 1383.01220
2 1996 13.81 102.2754938 1412.42457 1.50382 1391.65969 1.90169 1386.11714
3 1996 14.26 102.2754938 1458.44854 1.50763 1435.49940 1.90596 1429.37792
4 1996 14.73 102.2754938 1506.51802 1.55512 1481.25737 1.96544 1474.52382
5 1996 14.90 102.2754938 1523.90486 1.60470 1496.74797 2.02752 1489.51388
6 1996 14.78 102.2754938 1511.63180 1.62148 1483.07215 2.04813 1475.46967
7 1996 14.09 102.2754938 1441.06171 1.60666 1412.22870 2.02882 1404.55898
8 1996 14.63 102.2754938 1496.29047 1.52991 1464.82252 1.93132 1456.45746
9 1996 15.25 102.2754938 1559.70128 1.58689 1525.31287 2.00268 1516.17752
10 1996 15.72 102.2754938 1607.77076 1.65242 1570.67009 2.08479 1560.82082
11 1996 16.66 102.2754938 1703.90973 1.70156 1662.88901 2.14618 1652.00616
12 1996 16.56 102.2754938 1693.68218 1.80146 1651.10622 2.27156 1639.81859
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 69.37%
GROSS ANNUAL RETURN = 30.28%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1651.11 1566.90
TOTAL RETURN 65.11% 56.69%
AVERAGE ANNUAL RETURN 28.63% 25.29%
WITH DEATH BENEFIT CHARGE
ERV 1639.82 1556.19
TOTAL RETURN 63.98% 55.62%
AVERAGE ANNUAL RETURN 28.19% 24.86%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 12.50 100.0000000 1250.00000 1000.00000 1000.00000
7 1995 13.47 100.0000000 1347.00000 1.08333 1076.51667 1.37503 1076.22497
8 1995 13.64 100.0000000 1364.00000 1.16623 1088.93677 1.47985 1088.32777
9 1995 13.94 100.0000000 1394.00000 1.17968 1111.70731 1.49649 1110.76811
10 1995 13.65 100.0000000 1365.00000 1.20435 1087.37562 1.52734 1086.13296
11 1995 13.90 100.0000000 1390.00000 1.17799 1106.11293 1.49347 1104.53204
12 1995 13.78 101.3196481 1396.18475 1.19829 1109.83625 1.51877 1107.92784
1 1996 13.89 101.3196481 1407.32991 1.20232 1117.49329 1.52344 1115.24853
2 1996 13.81 102.2754938 1412.42457 1.21062 1120.32809 1.53350 1117.75233
3 1996 14.26 102.2754938 1458.44854 1.21369 1155.62039 1.53695 1152.63743
4 1996 14.73 102.2754938 1506.51802 1.25192 1192.45694 1.58491 1189.04267
5 1996 14.90 102.2754938 1523.90486 1.29183 1204.92734 1.63497 1201.13053
6 1996 14.78 102.2754938 1511.63180 1.30534 1193.91789 1.65159 1189.80540
7 1996 14.09 102.2754938 1441.06171 1.29341 1136.88677 1.63602 1132.62366
8 1996 14.63 102.2754938 1496.29047 1.23163 1179.22639 1.55740 1174.47412
9 1996 15.25 102.2754938 1559.70128 1.27750 1227.92295 1.61494 1222.63184
10 1996 15.72 102.2754938 1607.77076 1.33025 1264.43688 1.68116 1258.63179
11 1996 16.66 102.2754938 1703.90973 1.36981 1338.67589 1.73066 1332.16283
12 1996 16.56 102.2754938 1693.68218 1.45023 1329.19039 1.83177 1322.33488
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 35.49%
GROSS ANNUAL RETURN = 21.31%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1329.19 1261.40
TOTAL RETURN 32.92% 26.14%
AVERAGE ANNUAL RETURN 19.84% 15.91%
WITH DEATH BENEFIT CHARGE
ERV 1322.33 1254.90
TOTAL RETURN 32.23% 25.49%
AVERAGE ANNUAL RETURN 19.44% 15.53%
<PAGE>
Fidelity Equity Income Fund
12/1996
Assume ($10000 @ $10.00 on 10/ 9/1986)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
3/87 0.0700000000 11.62 0.602 100.602410
6/87 0.1200000000 11.72 1.030 101.632468
9/87 0.1200000000 11.80 1.034 102.666019
12/87 0.2300000000 9.45 2.499 105.164769
3/88 0.1400000000 10.60 1.389 106.553737
6/88 0.1400000000 10.89 1.370 107.923574
9/88 0.1400000000 10.87 1.390 109.313574
12/88 0.1100000000 10.95 1.098 110.411701
3/89 0.2200000000 11.56 2.101 112.512962
6/89 0.1300000000 12.49 1.171 113.684034
9/89 0.1300000000 12.93 1.143 114.827029
12/89 0.1300000000 12.03 1.241 116.067886
2/90 0.3900000000 11.20 4.042 120.109536
3/90 0.2000000000 11.05 2.174 122.283464
6/90 0.1300000000 11.24 1.414 123.697774
9/90 0.1300000000 9.67 1.663 125.360723
12/90 0.1300000000 9.57 1.703 127.063638
3/91 0.2300000000 10.60 2.757 129.820679
6/91 0.1200000000 11.10 1.403 131.224146
9/91 0.1200000000 11.38 1.384 132.607880
12/91 0.1200000000 11.18 1.423 134.031220
3/92 0.1200000000 12.33 1.304 135.335660
6/92 0.1000000000 12.45 1.087 136.422694
9/92 0.1000000000 12.56 1.086 137.508862
12/92 0.1000000000 13.29 1.035 138.543541
3/93 0.1000000000 14.36 0.965 139.508329
6/93 0.1000000000 14.40 0.969 140.477137
9/93 0.1000000000 15.18 0.925 141.402546
12/93 0.0900000000 15.29 0.832 142.234870
2/94 0.7700000000 15.04 7.282 149.516841
3/94 0.1000000000 14.97 0.999 150.515618
6/94 0.0900000000 14.96 0.906 151.421126
9/94 0.0900000000 15.79 0.863 152.284198
12/94 0.0900000000 15.34 0.893 153.177651
2/95 0.7800000000 15.11 7.907 161.084903
3/95 0.1000000000 15.60 1.033 162.117498
6/95 0.1000000000 16.78 0.966 163.083633
9/95 0.1000000000 18.32 0.890 163.973828
12/95 0.1000000000 19.01 0.863 164.836394
2/96 0.8900000000 18.86 7.779 172.614994
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 19.27 164.8363940 3176.39731 1000.00000 1000.00000
1 1996 19.83 164.8363940 3268.70569 1.08333 1027.97738 1.37503 1027.68568
2 1996 19.00 172.6149937 3279.68488 1.11364 1030.31659 1.41310 1029.72445
3 1996 19.20 172.6149937 3314.20788 1.11618 1040.04585 1.41591 1039.14775
4 1996 19.45 172.6149937 3357.36163 1.12672 1052.46140 1.42886 1051.24946
5 1996 19.66 172.6149937 3393.61078 1.14017 1062.68457 1.44550 1061.15421
6 1996 19.48 172.6149937 3362.54008 1.15124 1051.80377 1.45912 1049.97953
7 1996 18.53 172.6149937 3198.55583 1.13945 999.36998 1.44376 997.33041
8 1996 18.91 172.6149937 3264.14953 1.08265 1018.78170 1.37136 1016.41159
9 1996 19.72 172.6149937 3403.96768 1.10368 1061.31700 1.39760 1058.55145
10 1996 20.04 172.6149937 3459.20447 1.14976 1077.38942 1.45554 1074.27321
11 1996 21.38 172.6149937 3690.50857 1.16717 1148.26326 1.47716 1144.62869
12 1996 21.03 172.6149937 3630.09332 1.24395 1128.22173 1.57390 1124.31671
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.28%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1128.22 1061.09
TOTAL RETURN 12.82% 6.11%
WITH DEATH BENEFIT CHARGE
ERV 1124.32 1057.42
TOTAL RETURN 12.43% 5.74%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 19.27 164.8363940 3176.39731 1000.00000 1000.00000
1 1996 19.83 164.8363940 3268.70569 1.08333 1027.97738 1.37503 1027.68568
2 1996 19.00 172.6149937 3279.68488 1.11364 1030.31659 1.41310 1029.72445
3 1996 19.20 172.6149937 3314.20788 1.11618 1040.04585 1.41591 1039.14775
4 1996 19.45 172.6149937 3357.36163 1.12672 1052.46140 1.42886 1051.24946
5 1996 19.66 172.6149937 3393.61078 1.14017 1062.68457 1.44550 1061.15421
6 1996 19.48 172.6149937 3362.54008 1.15124 1051.80377 1.45912 1049.97953
7 1996 18.53 172.6149937 3198.55583 1.13945 999.36998 1.44376 997.33041
8 1996 18.91 172.6149937 3264.14953 1.08265 1018.78170 1.37136 1016.41159
9 1996 19.72 172.6149937 3403.96768 1.10368 1061.31700 1.39760 1058.55145
10 1996 20.04 172.6149937 3459.20447 1.14976 1077.38942 1.45554 1074.27321
11 1996 21.38 172.6149937 3690.50857 1.16717 1148.26326 1.47716 1144.62869
12 1996 21.03 172.6149937 3630.09332 1.24395 1128.22173 1.57390 1124.31671
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.28%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1128.22 1061.09
TOTAL RETURN 12.82% 6.11%
WITH DEATH BENEFIT CHARGE
ERV 1124.32 1057.42
TOTAL RETURN 12.43% 5.74%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 15.44 142.2348697 2196.10639 1000.00000 1000.00000
1 1994 16.12 142.2348697 2292.82610 1.08333 1042.95812 1.37503 1042.66642
2 1994 14.94 149.5168411 2233.78161 1.12987 1014.97015 1.43370 1014.38214
3 1994 14.22 150.5156176 2140.33208 1.09955 971.40966 1.39481 970.55098
4 1994 14.71 150.5156176 2214.08473 1.05236 1003.83063 1.33454 1002.66018
5 1994 14.85 150.5156176 2235.15692 1.08748 1012.29694 1.37869 1010.82414
6 1994 14.67 151.4211260 2221.34792 1.09665 1004.94622 1.38992 1003.18926
7 1994 15.16 151.4211260 2295.54427 1.08869 1037.42424 1.37942 1035.31787
8 1994 15.94 151.4211260 2413.65275 1.12388 1089.67707 1.42360 1087.16261
9 1994 15.59 152.2841976 2374.11064 1.18048 1070.64475 1.49488 1067.85708
10 1994 15.91 152.2841976 2422.84158 1.15987 1091.46092 1.46834 1088.30755
11 1994 15.39 152.2841976 2343.65380 1.18242 1054.60536 1.49646 1051.24102
12 1994 15.35 153.1776512 2351.27695 1.14249 1056.89316 1.44549 1053.21487
1 1995 15.59 153.1776512 2388.03958 1.14497 1072.27291 1.44821 1068.23387
2 1995 15.39 161.0849025 2479.09665 1.16163 1111.99755 1.46886 1107.49727
3 1995 15.82 162.1174981 2564.69882 1.20466 1149.18969 1.52285 1144.21584
4 1995 16.26 162.1174981 2636.03052 1.24496 1179.90703 1.57333 1174.46646
5 1995 16.75 162.1174981 2715.46809 1.27823 1214.18565 1.61493 1208.24443
6 1995 16.89 163.0836333 2754.48257 1.31537 1230.31509 1.66138 1223.94250
7 1995 17.54 163.0836333 2860.48693 1.33284 1276.33008 1.68296 1269.36212
8 1995 17.76 163.0836333 2896.36533 1.38269 1290.95609 1.74542 1283.53801
9 1995 18.25 163.9738278 2992.52236 1.39854 1332.41627 1.76491 1324.38555
10 1995 18.04 163.9738278 2958.08785 1.44345 1315.64090 1.82107 1307.32497
11 1995 18.82 163.9738278 3085.98744 1.42528 1371.10032 1.79762 1362.05249
12 1995 19.27 164.8363940 3176.39731 1.48536 1409.78395 1.87287 1400.08354
1 1996 19.83 164.8363940 3268.70569 1.52727 1449.22602 1.92516 1438.84581
2 1996 19.00 172.6149937 3279.68488 1.56999 1452.52380 1.97846 1441.70026
3 1996 19.20 172.6149937 3314.20788 1.57357 1466.23996 1.98239 1454.89367
4 1996 19.45 172.6149937 3357.36163 1.58843 1483.74320 2.00053 1471.83707
5 1996 19.66 172.6149937 3393.61078 1.60739 1498.15566 2.02382 1485.70454
6 1996 19.48 172.6149937 3362.54008 1.62300 1482.81607 2.04289 1470.05906
7 1996 18.53 172.6149937 3198.55583 1.60638 1408.89576 2.02138 1396.34589
8 1996 18.91 172.6149937 3264.14953 1.52630 1436.26209 1.92002 1423.06113
9 1996 19.72 172.6149937 3403.96768 1.55595 1496.22768 1.95676 1482.06046
10 1996 20.04 172.6149937 3459.20447 1.62091 1518.88632 2.03788 1504.07224
11 1996 21.38 172.6149937 3690.50857 1.64546 1618.80312 2.06815 1602.57579
12 1996 21.03 172.6149937 3630.09332 1.75370 1590.54890 2.20360 1574.13732
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 65.30%
GROSS ANNUAL RETURN = 18.24%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1590.55 1522.95
TOTAL RETURN 59.05% 52.30%
AVERAGE ANNUAL RETURN 16.73% 15.05%
WITH DEATH BENEFIT CHARGE
ERV 1574.14 1507.24
TOTAL RETURN 57.41% 50.72%
AVERAGE ANNUAL RETURN 16.33% 14.66%
<TABLE>
<CAPTION>
Return for 5 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1991 11.85 134.0312203 1588.26996 1000.00000 1000.00000
1 1992 12.01 134.0312203 1609.71496 1.08333 1012.41878 1.37503 1012.12708
2 1992 12.40 134.0312203 1661.98713 1.09679 1044.19820 1.39171 1043.60211
3 1992 12.13 135.3356604 1641.62156 1.13121 1030.27165 1.43499 1029.37908
4 1992 12.51 135.3356604 1693.04911 1.11613 1061.43114 1.41543 1060.21131
5 1992 12.61 135.3356604 1706.58268 1.14988 1068.76591 1.45783 1067.22839
6 1992 12.40 136.4226938 1691.64140 1.15783 1058.25095 1.46747 1056.41724
7 1992 12.78 136.4226938 1743.48203 1.14644 1089.53478 1.45261 1087.33871
8 1992 12.50 136.4226938 1705.28367 1.18033 1064.48358 1.49513 1062.02083
9 1992 12.53 137.5088618 1722.98604 1.15319 1074.38068 1.46031 1071.58524
10 1992 12.68 137.5088618 1743.61237 1.16391 1086.07847 1.47347 1082.94001
11 1992 13.14 137.5088618 1806.86644 1.17658 1124.30220 1.48908 1120.73740
12 1992 13.40 138.5435409 1856.48345 1.21799 1153.95783 1.54105 1149.97207
1 1993 13.80 138.5435409 1911.90087 1.25012 1187.15421 1.58125 1182.71835
2 1993 14.11 138.5435409 1954.84936 1.28608 1212.53608 1.62628 1207.66038
3 1993 14.43 139.5083288 2013.10519 1.31358 1247.35689 1.66057 1241.98890
4 1993 14.37 139.5083288 2004.73469 1.35130 1240.81907 1.70778 1235.11693
5 1993 14.63 139.5083288 2041.00685 1.34422 1261.92530 1.69833 1255.76588
6 1993 14.70 140.4771367 2065.01391 1.36709 1275.40144 1.72672 1268.80993
7 1993 14.90 140.4771367 2093.10934 1.38168 1291.37215 1.74466 1284.32800
8 1993 15.47 140.4771367 2173.18130 1.39899 1339.37465 1.76599 1331.69401
9 1993 15.31 141.4025460 2164.87298 1.45099 1332.80308 1.83112 1324.77167
10 1993 15.45 141.4025460 2184.66934 1.44387 1343.54683 1.82161 1335.06424
11 1993 15.18 141.4025460 2146.49065 1.45551 1318.61186 1.83576 1309.89726
12 1993 15.44 142.2348697 2196.10639 1.42850 1347.66283 1.80115 1338.37414
1 1994 16.12 142.2348697 2292.82610 1.45997 1405.55589 1.84031 1395.47777
2 1994 14.94 149.5168411 2233.78161 1.52269 1367.83755 1.91883 1357.62282
3 1994 14.22 150.5156176 2140.33208 1.48182 1309.13269 1.86678 1298.96034
4 1994 14.71 150.5156176 2214.08473 1.41823 1352.82523 1.78611 1341.93446
5 1994 14.85 150.5156176 2235.15692 1.46556 1364.23496 1.84520 1352.86090
6 1994 14.67 151.4211260 2221.34792 1.47792 1354.32867 1.86023 1342.64257
7 1994 15.16 151.4211260 2295.54427 1.46719 1398.09809 1.84618 1385.64267
8 1994 15.94 151.4211260 2413.65275 1.51461 1468.51729 1.90530 1455.03032
9 1994 15.59 152.2841976 2374.11064 1.59089 1442.86814 2.00072 1429.19231
10 1994 15.91 152.2841976 2422.84158 1.56311 1470.92131 1.96519 1456.56269
11 1994 15.39 152.2841976 2343.65380 1.59350 1421.25245 2.00282 1406.95380
12 1994 15.35 153.1776512 2351.27695 1.53969 1424.33563 1.93461 1409.59555
1 1995 15.59 153.1776512 2388.03958 1.54303 1445.06234 1.93824 1429.69659
2 1995 15.39 161.0849025 2479.09665 1.56548 1498.59776 1.96588 1482.24571
3 1995 15.82 162.1174981 2564.69882 1.62348 1548.72024 2.03814 1531.38890
4 1995 16.26 162.1174981 2636.03052 1.67778 1590.11685 2.10571 1571.87555
5 1995 16.75 162.1174981 2715.46809 1.72263 1636.31287 2.16138 1617.08311
6 1995 16.89 163.0836333 2754.48257 1.77267 1658.04992 2.22354 1638.09300
7 1995 17.54 163.0836333 2860.48693 1.79622 1720.06261 2.25243 1698.88145
8 1995 17.76 163.0836333 2896.36533 1.86340 1739.77354 2.33602 1717.85409
9 1995 18.25 163.9738278 2992.52236 1.88475 1795.64788 2.36211 1772.52337
10 1995 18.04 163.9738278 2958.08785 1.94529 1773.04035 2.43728 1749.68994
11 1995 18.82 163.9738278 3085.98744 1.92079 1847.78094 2.40588 1822.93584
12 1995 19.27 164.8363940 3176.39731 2.00176 1899.91344 2.50660 1873.83561
1 1996 19.83 164.8363940 3268.70569 2.05824 1953.06804 2.57659 1925.71403
2 1996 19.00 172.6149937 3279.68488 2.11582 1957.51234 2.64792 1929.53435
3 1996 19.20 172.6149937 3314.20788 2.12064 1975.99710 2.65317 1947.19206
4 1996 19.45 172.6149937 3357.36163 2.14066 1999.58556 2.67745 1969.86867
5 1996 19.66 172.6149937 3393.61078 2.16622 2019.00870 2.70864 1988.42854
6 1996 19.48 172.6149937 3362.54008 2.18726 1998.33611 2.73416 1967.48904
7 1996 18.53 172.6149937 3198.55583 2.16486 1898.71646 2.70536 1868.83324
8 1996 18.91 172.6149937 3264.14953 2.05694 1935.59703 2.56971 1904.58823
9 1996 19.72 172.6149937 3403.96768 2.09690 2016.41043 2.61887 1983.55140
10 1996 20.04 172.6149937 3459.20447 2.18444 2046.94664 2.72745 2013.01140
11 1996 21.38 172.6149937 3690.50857 2.21753 2181.60080 2.76796 2144.84600
12 1996 21.03 172.6149937 3630.09332 2.36340 2143.52363 2.94923 2106.78469
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 128.56%
GROSS ANNUAL RETURN = 17.98%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 2143.52 2088.86
TOTAL RETURN 114.35% 108.89%
AVERAGE ANNUAL RETURN 16.47% 15.87%
WITH DEATH BENEFIT CHARGE
ERV 2106.78 2053.06
TOTAL RETURN 110.68% 105.31%
AVERAGE ANNUAL RETURN 16.07% 15.47%
<TABLE>
<CAPTION>
Return for 10 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1986 10.02 100.0000000 1002.00000 1000.00000 1000.00000
1 1987 11.17 100.0000000 1117.00000 1.08333 1113.68713 1.37503 1113.39543
2 1987 11.43 100.0000000 1143.00000 1.20649 1138.40352 1.53096 1137.78057
3 1987 11.65 100.6024096 1172.01807 1.23327 1166.07163 1.56449 1165.10164
4 1987 11.36 100.6024096 1142.84337 1.26324 1135.78171 1.60205 1134.49706
5 1987 11.43 100.6024096 1149.88554 1.23043 1141.54993 1.55997 1139.92783
6 1987 11.55 101.6324684 1173.85501 1.23668 1164.10896 1.56744 1162.12229
7 1987 11.99 101.6324684 1218.57330 1.26112 1207.19485 1.59796 1204.79566
8 1987 12.32 101.6324684 1252.11201 1.30779 1239.11261 1.65663 1236.29854
9 1987 11.94 102.6660190 1225.83227 1.34237 1211.76333 1.69995 1208.65074
10 1987 9.61 102.6660190 986.62044 1.31274 973.98420 1.66194 971.12982
11 1987 9.18 102.6660190 942.47405 1.05515 929.34808 1.33534 926.34123
12 1987 9.42 105.1647686 990.65212 1.00679 975.84837 1.27375 972.42086
1 1988 10.09 105.1647686 1061.11252 1.05717 1044.19867 1.33711 1040.24744
2 1988 10.59 105.1647686 1113.69490 1.13122 1094.81169 1.43037 1090.36550
3 1988 10.27 106.5537373 1094.30688 1.18605 1074.56636 1.49929 1069.88433
4 1988 10.44 106.5537373 1112.42102 1.16411 1091.18962 1.47113 1086.12307
5 1988 10.58 106.5537373 1127.33854 1.18212 1104.64030 1.49346 1099.19448
6 1988 11.04 107.9235741 1191.47626 1.19669 1166.28996 1.51143 1160.21957
7 1988 11.02 107.9235741 1189.31779 1.26348 1162.91363 1.59534 1156.52238
8 1988 10.88 107.9235741 1174.20849 1.25982 1146.87995 1.59026 1140.23946
9 1988 11.01 109.3135742 1203.54245 1.24245 1174.28874 1.56787 1167.15695
10 1988 11.20 109.3135742 1224.31203 1.27215 1193.28134 1.60488 1185.69374
11 1988 11.02 109.3135742 1204.63559 1.29272 1172.81089 1.63037 1165.00758
12 1988 11.01 110.4117014 1215.63283 1.27055 1182.24706 1.60192 1174.04113
1 1989 11.69 110.4117014 1290.71279 1.28077 1253.98427 1.61435 1244.93796
2 1989 11.68 110.4117014 1289.60867 1.35848 1251.55309 1.71183 1242.16116
3 1989 11.66 112.5129621 1311.90114 1.35585 1271.83187 1.70801 1261.92543
4 1989 12.11 112.5129621 1362.53197 1.37782 1319.53847 1.73519 1308.89234
5 1989 12.47 112.5129621 1403.03664 1.42950 1357.33555 1.79977 1346.00266
6 1989 12.35 113.6840338 1403.99782 1.47045 1356.79498 1.85080 1345.07397
7 1989 13.07 113.6840338 1485.85032 1.46986 1434.42571 1.84952 1421.64172
8 1989 13.28 113.6840338 1509.72397 1.55396 1455.91914 1.95480 1442.52890
9 1989 13.00 114.8270287 1492.75137 1.57725 1437.97418 1.98353 1424.32820
10 1989 12.25 114.8270287 1406.63110 1.55781 1353.45633 1.95850 1340.19692
11 1989 12.32 114.8270287 1414.66899 1.46624 1359.72412 1.84282 1346.01237
12 1989 12.29 116.0678861 1426.47432 1.47303 1369.59790 1.85081 1355.39395
1 1990 11.46 116.0678861 1330.13797 1.48373 1275.61895 1.86371 1261.99427
2 1990 11.14 120.1095357 1338.02023 1.38192 1281.79621 1.73528 1267.73743
3 1990 10.96 122.2834639 1340.22676 1.38861 1282.52141 1.74318 1268.08488
4 1990 10.58 122.2834639 1293.75905 1.38940 1236.66503 1.74366 1222.37478
5 1990 11.28 122.2834639 1379.35747 1.33972 1317.14625 1.68081 1301.56943
6 1990 11.04 123.6977744 1365.62343 1.42691 1302.60473 1.78970 1286.82021
7 1990 10.77 123.6977744 1332.22503 1.41116 1269.33639 1.76942 1253.57964
8 1990 9.91 123.6977744 1225.84494 1.37511 1166.60294 1.72371 1151.75579
9 1990 9.02 125.3607228 1130.75372 1.26382 1074.84341 1.58370 1060.82810
10 1990 8.79 125.3607228 1101.92075 1.16441 1046.27168 1.45867 1032.31949
11 1990 9.42 125.3607228 1180.89801 1.13346 1120.12698 1.41947 1104.88878
12 1990 9.51 127.0636375 1208.37519 1.21347 1144.97667 1.51926 1129.07812
1 1991 10.02 127.0636375 1273.17765 1.24039 1205.13881 1.55252 1188.07553
2 1991 10.71 127.0636375 1360.85156 1.30557 1286.82185 1.63364 1268.25548
3 1991 10.70 129.8206787 1389.08126 1.39406 1312.12181 1.74389 1292.82046
4 1991 10.75 129.8206787 1395.57230 1.42147 1316.83176 1.77767 1297.08401
5 1991 11.34 129.8206787 1472.16650 1.42657 1387.67781 1.78353 1366.48927
6 1991 10.76 131.2241455 1411.97181 1.50332 1329.43442 1.87897 1308.73659
7 1991 11.37 131.2241455 1492.01853 1.44022 1403.36177 1.79956 1381.13121
8 1991 11.61 131.2241455 1523.51233 1.52031 1431.46387 1.89910 1408.38528
9 1991 11.41 132.6078799 1513.05591 1.55075 1420.08846 1.93658 1396.78244
10 1991 11.60 132.6078799 1538.25141 1.53843 1442.19743 1.92062 1418.12112
11 1991 11.10 132.6078799 1471.94747 1.56238 1378.47137 1.94996 1355.04525
12 1991 11.85 134.0312203 1588.26996 1.49334 1485.91345 1.86323 1460.26616
1 1992 12.01 134.0312203 1609.71496 1.60974 1504.36668 2.00791 1477.97492
2 1992 12.40 134.0312203 1661.98713 1.62973 1551.58815 2.03226 1523.93685
3 1992 12.13 135.3356604 1641.62156 1.68089 1530.89450 2.09546 1503.16745
4 1992 12.51 135.3356604 1693.04911 1.65847 1577.19480 2.06691 1548.19070
5 1992 12.61 135.3356604 1706.58268 1.70863 1588.09364 2.12881 1558.43751
6 1992 12.40 136.4226938 1691.64140 1.72043 1572.46932 2.14290 1542.65036
7 1992 12.78 136.4226938 1743.48203 1.70351 1618.95438 2.12120 1587.80393
8 1992 12.50 136.4226938 1705.28367 1.75387 1581.73047 2.18328 1550.83308
9 1992 12.53 137.5088618 1722.98604 1.71354 1596.43670 2.13245 1564.79966
10 1992 12.68 137.5088618 1743.61237 1.72947 1613.81860 2.15165 1581.38065
11 1992 13.14 137.5088618 1806.86644 1.74830 1670.61577 2.17445 1636.57490
12 1992 13.40 138.5435409 1856.48345 1.80983 1714.68146 2.25034 1679.26531
1 1993 13.80 138.5435409 1911.90087 1.85757 1764.00841 2.30905 1727.08359
2 1993 14.11 138.5435409 1954.84936 1.91101 1801.72368 2.37480 1763.50559
3 1993 14.43 139.5083288 2013.10519 1.95187 1853.46438 2.42488 1813.63436
4 1993 14.37 139.5083288 2004.73469 2.00792 1843.74975 2.49381 1803.59946
5 1993 14.63 139.5083288 2041.00685 1.99740 1875.11178 2.48001 1833.75242
6 1993 14.70 140.4771367 2065.01391 2.03137 1895.13615 2.52147 1852.80021
7 1993 14.90 140.4771367 2093.10934 2.05306 1918.86725 2.54766 1875.46071
8 1993 15.47 140.4771367 2173.18130 2.07877 1990.19481 2.57882 1944.62771
9 1993 15.31 141.4025460 2164.87298 2.15604 1980.43002 2.67393 1934.51924
10 1993 15.45 141.4025460 2184.66934 2.14547 1996.39430 2.66003 1949.54913
11 1993 15.18 141.4025460 2146.49065 2.16276 1959.34309 2.68069 1912.79865
12 1993 15.44 142.2348697 2196.10639 2.12262 2002.51033 2.63016 1954.38248
1 1994 16.12 142.2348697 2292.82610 2.16939 2088.53440 2.68734 2037.76898
2 1994 14.94 149.5168411 2233.78161 2.26258 2032.48822 2.80200 1982.49067
3 1994 14.22 150.5156176 2140.33208 2.20186 1945.25787 2.72599 1896.82783
4 1994 14.71 150.5156176 2214.08473 2.10736 2010.18120 2.60820 1959.58149
5 1994 14.85 150.5156176 2235.15692 2.17770 2027.13507 2.69449 1975.53699
6 1994 14.67 151.4211260 2221.34792 2.19606 2012.41518 2.71643 1960.61552
7 1994 15.16 151.4211260 2295.54427 2.18012 2077.45275 2.69591 2023.40710
8 1994 15.94 151.4211260 2413.65275 2.25057 2182.08959 2.78225 2124.73155
9 1994 15.59 152.2841976 2374.11064 2.36393 2143.97718 2.92158 2087.00117
10 1994 15.91 152.2841976 2422.84158 2.32264 2185.66176 2.86970 2126.96922
11 1994 15.39 152.2841976 2343.65380 2.36780 2111.85813 2.92465 2054.52703
12 1994 15.35 153.1776512 2351.27695 2.28785 2116.43947 2.82504 2058.38469
1 1995 15.59 153.1776512 2388.03958 2.29281 2147.23757 2.83035 2087.73756
2 1995 15.39 161.0849025 2479.09665 2.32617 2226.78657 2.87071 2164.47326
3 1995 15.82 162.1174981 2564.69882 2.41235 2301.26423 2.97622 2236.23539
4 1995 16.26 162.1174981 2636.03052 2.49304 2362.77601 3.07490 2295.35668
5 1995 16.75 162.1174981 2715.46809 2.55967 2431.41931 3.15619 2361.37175
6 1995 16.89 163.0836333 2754.48257 2.63404 2463.71867 3.24696 2392.05178
7 1995 17.54 163.0836333 2860.48693 2.66903 2555.86416 3.28915 2480.81909
8 1995 17.76 163.0836333 2896.36533 2.76885 2585.15290 3.41121 2508.52420
9 1995 18.25 163.9738278 2992.52236 2.80058 2668.17734 3.44930 2588.35591
10 1995 18.04 163.9738278 2958.08785 2.89053 2634.58450 3.55908 2555.01301
11 1995 18.82 163.9738278 3085.98744 2.85413 2745.64255 3.51323 2661.97152
12 1995 19.27 164.8363940 3176.39731 2.97445 2823.10693 3.66030 2736.29874
1 1996 19.83 164.8363940 3268.70569 3.05837 2902.09007 3.76250 2812.05504
2 1996 19.00 172.6149937 3279.68488 3.14393 2908.69391 3.86667 2817.63373
3 1996 19.20 172.6149937 3314.20788 3.15108 2936.16066 3.87434 2843.41869
4 1996 19.45 172.6149937 3357.36163 3.18084 2971.21108 3.90980 2876.53257
5 1996 19.66 172.6149937 3393.61078 3.21881 3000.07218 3.95533 2903.63492
6 1996 19.48 172.6149937 3362.54008 3.25008 2969.35450 3.99259 2873.05767
7 1996 18.53 172.6149937 3198.55583 3.21680 2821.32832 3.95055 2728.99394
8 1996 18.91 172.6149937 3264.14953 3.05644 2876.12966 3.75246 2781.20574
9 1996 19.72 172.6149937 3403.96768 3.11581 2996.21137 3.82425 2896.51299
10 1996 20.04 172.6149937 3459.20447 3.24590 3041.58554 3.98280 2939.53243
11 1996 21.38 172.6149937 3690.50857 3.29505 3241.66996 4.04195 3132.04604
12 1996 21.03 172.6149937 3630.09332 3.51181 3185.09059 4.30667 3076.46640
</TABLE>
SURRENDER CHARGE = 0.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 262.28%
GROSS ANNUAL RETURN = 13.74%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 3185.09 3185.09
TOTAL RETURN 218.51% 218.51%
AVERAGE ANNUAL RETURN 12.28% 12.28%
WITH DEATH BENEFIT CHARGE
ERV 3076.47 3076.47
TOTAL RETURN 207.65% 207.65%
AVERAGE ANNUAL RETURN 11.89% 11.89%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
9 1986 10.00 100.0000000 1000.00000 1000.00000 1000.00000
10 1986 10.11 100.0000000 1011.00000 1.08333 1009.91667 1.37503 1009.62497
11 1986 10.33 100.0000000 1033.00000 1.09408 1030.79902 1.38827 1030.20678
12 1986 10.02 100.0000000 1002.00000 1.11670 998.74837 1.41657 997.87403
1 1987 11.17 100.0000000 1117.00000 1.08198 1112.29320 1.37211 1111.02838
2 1987 11.43 100.0000000 1143.00000 1.20498 1136.97866 1.52770 1135.36168
3 1987 11.65 100.6024096 1172.01807 1.23173 1164.61213 1.56116 1162.62468
4 1987 11.36 100.6024096 1142.84337 1.26166 1134.36013 1.59865 1132.08516
5 1987 11.43 100.6024096 1149.88554 1.22889 1140.12113 1.55665 1137.50438
6 1987 11.55 101.6324684 1173.85501 1.23513 1162.65193 1.56411 1159.65165
7 1987 11.99 101.6324684 1218.57330 1.25954 1205.68389 1.59456 1202.23430
8 1987 12.32 101.6324684 1252.11201 1.30616 1237.56169 1.65311 1233.67021
9 1987 11.94 102.6660190 1225.83227 1.34069 1210.24664 1.69634 1206.08119
10 1987 9.61 102.6660190 986.62044 1.31110 972.76514 1.65840 969.06523
11 1987 9.18 102.6660190 942.47405 1.05383 928.18487 1.33250 924.37186
12 1987 9.42 105.1647686 990.65212 1.00553 974.62696 1.27104 970.35352
1 1988 10.09 105.1647686 1061.11252 1.05585 1042.89172 1.33427 1038.03590
2 1988 10.59 105.1647686 1113.69490 1.12980 1093.44139 1.42733 1088.04741
3 1988 10.27 106.5537373 1094.30688 1.18456 1073.22140 1.49610 1067.60979
4 1988 10.44 106.5537373 1112.42102 1.16266 1089.82385 1.46800 1083.81400
5 1988 10.58 106.5537373 1127.33854 1.18064 1103.25770 1.49028 1096.85763
6 1988 11.04 107.9235741 1191.47626 1.19520 1164.83019 1.50822 1157.75298
7 1988 11.02 107.9235741 1189.31779 1.26190 1161.45809 1.59195 1154.06365
8 1988 10.88 107.9235741 1174.20849 1.25825 1145.44448 1.58688 1137.81535
9 1988 11.01 109.3135742 1203.54245 1.24090 1172.81897 1.56453 1164.67561
10 1988 11.20 109.3135742 1224.31203 1.27055 1191.78780 1.60147 1183.17299
11 1988 11.02 109.3135742 1204.63559 1.29110 1171.34296 1.62690 1162.53081
12 1988 11.01 110.4117014 1215.63283 1.26895 1180.76732 1.59852 1171.54516
1 1989 11.69 110.4117014 1290.71279 1.27916 1252.41475 1.61091 1242.29126
2 1989 11.68 110.4117014 1289.60867 1.35678 1249.98661 1.70819 1239.52037
3 1989 11.66 112.5129621 1311.90114 1.35415 1270.24001 1.70438 1259.24262
4 1989 12.11 112.5129621 1362.53197 1.37609 1317.88690 1.73150 1306.10967
5 1989 12.47 112.5129621 1403.03664 1.42771 1355.63667 1.79594 1343.14110
6 1989 12.35 113.6840338 1403.99782 1.46861 1355.09677 1.84686 1342.21439
7 1989 13.07 113.6840338 1485.85032 1.46802 1432.63034 1.84559 1418.61935
8 1989 13.28 113.6840338 1509.72397 1.55202 1454.09687 1.95065 1439.46213
9 1989 13.00 114.8270287 1492.75137 1.57527 1436.17437 1.97931 1421.30012
10 1989 12.25 114.8270287 1406.63110 1.55586 1351.76230 1.95433 1337.34770
11 1989 12.32 114.8270287 1414.66899 1.46441 1358.02225 1.83890 1343.15079
12 1989 12.29 116.0678861 1426.47432 1.47119 1367.88367 1.84688 1352.51242
1 1990 11.46 116.0678861 1330.13797 1.48187 1274.02234 1.85975 1259.31131
2 1990 11.14 120.1095357 1338.02023 1.38019 1280.19187 1.73159 1265.04226
3 1990 10.96 122.2834639 1340.22676 1.38687 1280.91617 1.73948 1265.38898
4 1990 10.58 122.2834639 1293.75905 1.38766 1235.11718 1.73995 1219.77605
5 1990 11.28 122.2834639 1379.35747 1.33804 1315.49767 1.67723 1298.80233
6 1990 11.04 123.6977744 1365.62343 1.42512 1300.97434 1.78590 1284.08447
7 1990 10.77 123.6977744 1332.22503 1.40939 1267.74765 1.76566 1250.91457
8 1990 9.91 123.6977744 1225.84494 1.37339 1165.14278 1.72005 1149.30719
9 1990 9.02 125.3607228 1130.75372 1.26224 1073.49811 1.58034 1058.57282
10 1990 8.79 125.3607228 1101.92075 1.16296 1044.96214 1.45557 1030.12481
11 1990 9.42 125.3607228 1180.89801 1.13204 1118.72499 1.41646 1102.53983
12 1990 9.51 127.0636375 1208.37519 1.21195 1143.54358 1.51603 1126.67774
1 1991 10.02 127.0636375 1273.17765 1.23884 1203.63042 1.54922 1185.54972
2 1991 10.71 127.0636375 1360.85156 1.30393 1285.21122 1.63017 1265.55921
3 1991 10.70 129.8206787 1389.08126 1.39231 1310.47952 1.74019 1290.07197
4 1991 10.75 129.8206787 1395.57230 1.41969 1315.18357 1.77389 1294.32645
5 1991 11.34 129.8206787 1472.16650 1.42478 1385.94095 1.77974 1363.58416
6 1991 10.76 131.2241455 1411.97181 1.50144 1327.77046 1.87497 1305.95426
7 1991 11.37 131.2241455 1492.01853 1.43842 1401.60527 1.79573 1378.19497
8 1991 11.61 131.2241455 1523.51233 1.51841 1429.67220 1.89506 1405.39110
9 1991 11.41 132.6078799 1513.05591 1.54881 1418.31103 1.93246 1393.81292
10 1991 11.60 132.6078799 1538.25141 1.53650 1440.39233 1.91654 1415.10624
11 1991 11.10 132.6078799 1471.94747 1.56042 1376.74603 1.94582 1352.16446
12 1991 11.85 134.0312203 1588.26996 1.49147 1484.05363 1.85927 1457.16169
1 1992 12.01 134.0312203 1609.71496 1.60772 1502.48376 2.00365 1474.83280
2 1992 12.40 134.0312203 1661.98713 1.62769 1549.64614 2.02794 1520.69701
3 1992 12.13 135.3356604 1641.62156 1.67878 1528.97838 2.09101 1499.97176
4 1992 12.51 135.3356604 1693.04911 1.65639 1575.22073 2.06251 1544.89930
5 1992 12.61 135.3356604 1706.58268 1.70649 1586.10594 2.12429 1555.12432
6 1992 12.40 136.4226938 1691.64140 1.71828 1570.50116 2.13835 1539.37073
7 1992 12.78 136.4226938 1743.48203 1.70138 1616.92805 2.11669 1584.42831
8 1992 12.50 136.4226938 1705.28367 1.75167 1579.75072 2.17864 1547.53606
9 1992 12.53 137.5088618 1722.98604 1.71140 1594.43855 2.12791 1561.47295
10 1992 12.68 137.5088618 1743.61237 1.72731 1611.79869 2.14708 1578.01869
11 1992 13.14 137.5088618 1806.86644 1.74612 1668.52477 2.16983 1633.09559
12 1992 13.40 138.5435409 1856.48345 1.80757 1712.53531 2.24556 1675.69525
1 1993 13.80 138.5435409 1911.90087 1.85525 1761.80052 2.30414 1723.41186
2 1993 14.11 138.5435409 1954.84936 1.90862 1799.46858 2.36975 1759.75644
3 1993 14.43 139.5083288 2013.10519 1.94942 1851.14453 2.41972 1809.77864
4 1993 14.37 139.5083288 2004.73469 2.00541 1841.44205 2.48851 1799.76506
5 1993 14.63 139.5083288 2041.00685 1.99490 1872.76483 2.47474 1829.85393
6 1993 14.70 140.4771367 2065.01391 2.02883 1892.76414 2.51611 1848.86122
7 1993 14.90 140.4771367 2093.10934 2.05049 1916.46553 2.54225 1871.47355
8 1993 15.47 140.4771367 2173.18130 2.07617 1987.70382 2.57334 1940.49349
9 1993 15.31 141.4025460 2164.87298 2.15335 1977.95125 2.66824 1930.40652
10 1993 15.45 141.4025460 2184.66934 2.14278 1993.89555 2.65437 1945.40445
11 1993 15.18 141.4025460 2146.49065 2.16005 1956.89072 2.67500 1908.73210
12 1993 15.44 142.2348697 2196.10639 2.11996 2000.00392 2.62457 1950.22752
1 1994 16.12 142.2348697 2292.82610 2.16667 2085.92033 2.68163 2033.43675
2 1994 14.94 149.5168411 2233.78161 2.25975 2029.94429 2.79604 1978.27596
3 1994 14.22 150.5156176 2140.33208 2.19911 1942.82313 2.72020 1892.79524
4 1994 14.71 150.5156176 2214.08473 2.10472 2007.66519 2.60266 1955.41548
5 1994 14.85 150.5156176 2235.15692 2.17497 2024.59784 2.68876 1971.33707
6 1994 14.67 151.4211260 2221.34792 2.19331 2009.89638 2.71065 1956.44731
7 1994 15.16 151.4211260 2295.54427 2.17739 2074.85255 2.69018 2019.10541
8 1994 15.94 151.4211260 2413.65275 2.24776 2179.35842 2.77634 2120.21444
9 1994 15.59 152.2841976 2374.11064 2.36097 2141.29371 2.91537 2082.56427
10 1994 15.91 152.2841976 2422.84158 2.31973 2182.92612 2.86360 2122.44735
11 1994 15.39 152.2841976 2343.65380 2.36484 2109.21486 2.91844 2050.15917
12 1994 15.35 153.1776512 2351.27695 2.28498 2113.79047 2.81904 2054.00863
1 1995 15.59 153.1776512 2388.03958 2.28994 2144.55002 2.82433 2083.29910
2 1995 15.39 161.0849025 2479.09665 2.32326 2223.99946 2.86461 2159.87166
3 1995 15.82 162.1174981 2564.69882 2.40933 2298.38389 2.96990 2231.48123
4 1995 16.26 162.1174981 2636.03052 2.48992 2359.81869 3.06836 2290.47682
5 1995 16.75 162.1174981 2715.46809 2.55647 2428.37607 3.14948 2356.35155
6 1995 16.89 163.0836333 2754.48257 2.63074 2460.63501 3.24006 2386.96636
7 1995 17.54 163.0836333 2860.48693 2.66569 2552.66516 3.28216 2475.54495
8 1995 17.76 163.0836333 2896.36533 2.76539 2581.91724 3.40396 2503.19116
9 1995 18.25 163.9738278 2992.52236 2.79708 2664.83776 3.44197 2582.85315
10 1995 18.04 163.9738278 2958.08785 2.88691 2631.28697 3.55151 2549.58114
11 1995 18.82 163.9738278 3085.98744 2.85056 2742.20602 3.50576 2656.31226
12 1995 19.27 164.8363940 3176.39731 2.97072 2819.57344 3.65252 2730.48146
1 1996 19.83 164.8363940 3268.70569 3.05454 2898.45773 3.75450 2806.07670
2 1996 19.00 172.6149937 3279.68488 3.14000 2905.05330 3.85845 2811.64353
3 1996 19.20 172.6149937 3314.20788 3.14714 2932.48567 3.86610 2837.37367
4 1996 19.45 172.6149937 3357.36163 3.17686 2967.49221 3.90148 2870.41716
5 1996 19.66 172.6149937 3393.61078 3.21478 2996.31719 3.94692 2897.46189
6 1996 19.48 172.6149937 3362.54008 3.24601 2965.63796 3.98411 2866.94965
7 1996 18.53 172.6149937 3198.55583 3.21277 2817.79705 3.94215 2723.19219
8 1996 18.91 172.6149937 3264.14953 3.05261 2872.52981 3.74448 2775.29299
9 1996 19.72 172.6149937 3403.96768 3.11191 2992.46122 3.81612 2890.35510
10 1996 20.04 172.6149937 3459.20447 3.24183 3037.77860 3.97433 2933.28308
11 1996 21.38 172.6149937 3690.50857 3.29093 3237.61259 4.03336 3125.38741
12 1996 21.03 172.6149937 3630.09332 3.50741 3181.10403 4.29751 3069.92593
</TABLE>
SURRENDER CHARGE = 0.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 263.01%
GROSS ANNUAL RETURN = 13.43%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 3181.10 3181.10
TOTAL RETURN 218.11% 218.11%
AVERAGE ANNUAL RETURN 11.98% 11.98%
WITH DEATH BENEFIT CHARGE
ERV 3069.93 3069.93
TOTAL RETURN 206.99% 206.99%
AVERAGE ANNUAL RETURN 11.59% 11.59%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 16.89 163.0836333 2754.48257 1000.00000 1000.00000
7 1995 17.54 163.0836333 2860.48693 1.08333 1037.40098 1.37503 1037.10928
8 1995 17.76 163.0836333 2896.36533 1.12385 1049.28900 1.42606 1048.69143
9 1995 18.25 163.9738278 2992.52236 1.13673 1082.98783 1.44199 1082.06517
10 1995 18.04 163.9738278 2958.08785 1.17324 1069.35281 1.48788 1068.12613
11 1995 18.82 163.9738278 3085.98744 1.15847 1114.43022 1.46871 1112.84026
12 1995 19.27 164.8363940 3176.39731 1.20730 1145.87228 1.53019 1143.91284
1 1996 19.83 164.8363940 3268.70569 1.24136 1177.93079 1.57292 1175.58285
2 1996 19.00 172.6149937 3279.68488 1.27609 1180.61122 1.61647 1177.91502
3 1996 19.20 172.6149937 3314.20788 1.27900 1191.75971 1.61967 1188.69445
4 1996 19.45 172.6149937 3357.36163 1.29107 1205.98634 1.63449 1202.53775
5 1996 19.66 172.6149937 3393.61078 1.30649 1217.70079 1.65353 1213.86792
6 1996 19.48 172.6149937 3362.54008 1.31918 1205.23278 1.66911 1201.08507
7 1996 18.53 172.6149937 3198.55583 1.30567 1145.15036 1.65153 1140.85906
8 1996 18.91 172.6149937 3264.14953 1.24058 1167.39370 1.56872 1162.68626
9 1996 19.72 172.6149937 3403.96768 1.26468 1216.13373 1.59873 1210.89059
10 1996 20.04 172.6149937 3459.20447 1.31748 1234.55067 1.66501 1228.87492
11 1996 21.38 172.6149937 3690.50857 1.33743 1315.76304 1.68974 1309.35545
12 1996 21.03 172.6149937 3630.09332 1.42541 1292.79801 1.80041 1286.12032
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 31.79%
GROSS ANNUAL RETURN = 19.19%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1292.80 1226.87
TOTAL RETURN 29.28% 22.69%
AVERAGE ANNUAL RETURN 17.74% 13.88%
WITH DEATH BENEFIT CHARGE
ERV 1286.12 1220.53
TOTAL RETURN 28.61% 22.05%
AVERAGE ANNUAL RETURN 17.35% 13.51%
<PAGE>
MFS Emerging Growth
12/1996
Assume ($10000 @ $10.00 on 7/24/1995)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/95 0.3276700000 11.30 2.900 102.899735
12/96 0.1128000000 13.27 0.875 103.774421
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.41 102.8997345 1174.08597 1000.00000 1000.00000
1 1996 11.61 102.8997345 1194.66592 1.08333 1016.44515 1.37503 1016.15345
2 1996 12.07 102.8997345 1241.99980 1.10115 1055.61659 1.39724 1055.01724
3 1996 12.19 102.8997345 1254.34776 1.14358 1064.96795 1.45068 1064.05554
4 1996 13.05 102.8997345 1342.84154 1.15372 1138.94733 1.46311 1137.66115
5 1996 13.42 102.8997345 1380.91444 1.23386 1170.00547 1.56432 1168.35236
6 1996 13.13 102.8997345 1351.07351 1.26751 1143.45468 1.60652 1141.49828
7 1996 12.18 102.8997345 1253.31877 1.23874 1059.48312 1.56960 1057.33741
8 1996 12.51 102.8997345 1287.27568 1.14777 1087.04055 1.45387 1084.53061
9 1996 13.58 102.8997345 1397.37839 1.17763 1178.83922 1.49127 1175.80096
10 1996 13.38 102.8997345 1376.79845 1.27708 1160.20074 1.61677 1156.86754
11 1996 13.97 102.8997345 1437.50929 1.25688 1210.10368 1.59073 1206.28965
12 1996 13.24 103.7744210 1373.97333 1.31095 1155.30779 1.65869 1151.31460
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 17.02%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1155.31 1086.57
TOTAL RETURN 15.53% 8.66%
WITH DEATH BENEFIT CHARGE
ERV 1151.31 1082.81
TOTAL RETURN 15.13% 8.28%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.41 102.8997345 1174.08597 1000.00000 1000.00000
1 1996 11.61 102.8997345 1194.66592 1.08333 1016.44515 1.37503 1016.15345
2 1996 12.07 102.8997345 1241.99980 1.10115 1055.61659 1.39724 1055.01724
3 1996 12.19 102.8997345 1254.34776 1.14358 1064.96795 1.45068 1064.05554
4 1996 13.05 102.8997345 1342.84154 1.15372 1138.94733 1.46311 1137.66115
5 1996 13.42 102.8997345 1380.91444 1.23386 1170.00547 1.56432 1168.35236
6 1996 13.13 102.8997345 1351.07351 1.26751 1143.45468 1.60652 1141.49828
7 1996 12.18 102.8997345 1253.31877 1.23874 1059.48312 1.56960 1057.33741
8 1996 12.51 102.8997345 1287.27568 1.14777 1087.04055 1.45387 1084.53061
9 1996 13.58 102.8997345 1397.37839 1.17763 1178.83922 1.49127 1175.80096
10 1996 13.38 102.8997345 1376.79845 1.27708 1160.20074 1.61677 1156.86754
11 1996 13.97 102.8997345 1437.50929 1.25688 1210.10368 1.59073 1206.28965
12 1996 13.24 103.7744210 1373.97333 1.31095 1155.30779 1.65869 1151.31460
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 17.02%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1155.31 1086.57
TOTAL RETURN 15.53% 8.66%
WITH DEATH BENEFIT CHARGE
ERV 1151.31 1082.81
TOTAL RETURN 15.13% 8.28%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 10.07 100.0000000 1007.00000 1.08333 1005.91667 1.37503 1005.62497
8 1995 10.37 100.0000000 1037.00000 1.08974 1034.79465 1.38277 1034.20123
9 1995 10.87 100.0000000 1087.00000 1.12103 1083.56729 1.42206 1082.64423
10 1995 11.06 100.0000000 1106.00000 1.17386 1101.33342 1.48867 1100.07942
11 1995 11.69 100.0000000 1169.00000 1.19311 1162.87449 1.51265 1161.22953
12 1995 11.41 102.8997345 1174.08597 1.25978 1166.67403 1.59673 1164.68496
1 1996 11.61 102.8997345 1194.66592 1.26390 1185.86016 1.60148 1183.49864
2 1996 12.07 102.8997345 1241.99980 1.28468 1231.56047 1.62735 1228.76271
3 1996 12.19 102.8997345 1254.34776 1.33419 1242.47046 1.68959 1239.28949
4 1996 13.05 102.8997345 1342.84154 1.34601 1328.78028 1.70406 1325.01684
5 1996 13.42 102.8997345 1380.91444 1.43951 1365.01500 1.82194 1360.76242
6 1996 13.13 102.8997345 1351.07351 1.47877 1334.03889 1.87109 1329.48588
7 1996 12.18 102.8997345 1253.31877 1.44521 1236.07144 1.82809 1231.46498
8 1996 12.51 102.8997345 1287.27568 1.33908 1268.22199 1.69331 1263.13649
9 1996 13.58 102.8997345 1397.37839 1.37391 1375.32110 1.73685 1369.43769
10 1996 13.38 102.8997345 1376.79845 1.48993 1353.57608 1.88302 1347.38622
11 1996 13.97 102.8997345 1437.50929 1.46637 1411.79654 1.85270 1404.94741
12 1996 13.24 103.7744210 1373.97333 1.52945 1347.86760 1.93185 1340.91880
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 37.40%
GROSS ANNUAL RETURN = 24.72%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1347.87 1279.13
TOTAL RETURN 34.79% 27.91%
AVERAGE ANNUAL RETURN 23.07% 18.67%
WITH DEATH BENEFIT CHARGE
ERV 1340.92 1272.53
TOTAL RETURN 34.09% 27.25%
AVERAGE ANNUAL RETURN 22.62% 18.24%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 10.07 100.0000000 1007.00000 1.08333 1005.91667 1.37503 1005.62497
8 1995 10.37 100.0000000 1037.00000 1.08974 1034.79465 1.38277 1034.20123
9 1995 10.87 100.0000000 1087.00000 1.12103 1083.56729 1.42206 1082.64423
10 1995 11.06 100.0000000 1106.00000 1.17386 1101.33342 1.48867 1100.07942
11 1995 11.69 100.0000000 1169.00000 1.19311 1162.87449 1.51265 1161.22953
12 1995 11.41 102.8997345 1174.08597 1.25978 1166.67403 1.59673 1164.68496
1 1996 11.61 102.8997345 1194.66592 1.26390 1185.86016 1.60148 1183.49864
2 1996 12.07 102.8997345 1241.99980 1.28468 1231.56047 1.62735 1228.76271
3 1996 12.19 102.8997345 1254.34776 1.33419 1242.47046 1.68959 1239.28949
4 1996 13.05 102.8997345 1342.84154 1.34601 1328.78028 1.70406 1325.01684
5 1996 13.42 102.8997345 1380.91444 1.43951 1365.01500 1.82194 1360.76242
6 1996 13.13 102.8997345 1351.07351 1.47877 1334.03889 1.87109 1329.48588
7 1996 12.18 102.8997345 1253.31877 1.44521 1236.07144 1.82809 1231.46498
8 1996 12.51 102.8997345 1287.27568 1.33908 1268.22199 1.69331 1263.13649
9 1996 13.58 102.8997345 1397.37839 1.37391 1375.32110 1.73685 1369.43769
10 1996 13.38 102.8997345 1376.79845 1.48993 1353.57608 1.88302 1347.38622
11 1996 13.97 102.8997345 1437.50929 1.46637 1411.79654 1.85270 1404.94741
12 1996 13.24 103.7744210 1373.97333 1.52945 1347.86760 1.93185 1340.91880
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 37.40%
GROSS ANNUAL RETURN = 22.39%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1347.87 1279.13
TOTAL RETURN 34.79% 27.91%
AVERAGE ANNUAL RETURN 20.90% 16.95%
WITH DEATH BENEFIT CHARGE
ERV 1340.92 1272.53
TOTAL RETURN 34.09% 27.25%
AVERAGE ANNUAL RETURN 20.51% 16.56%
<PAGE>
MFS High Income
12/1996
Assume ($10000 @ $10.00 on 7/26/1995)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/95 0.2343800000 10.26 2.284 102.284405
12/96 0.6346600000 10.87 5.972 108.256422
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.29 102.2844055 1052.50653 1000.00000 1000.00000
1 1996 10.48 102.2844055 1071.94057 1.08333 1017.38120 1.37503 1017.08950
2 1996 10.51 102.2844055 1075.00910 1.10216 1019.19138 1.39853 1018.60248
3 1996 10.42 102.2844055 1065.80350 1.10412 1009.35965 1.40061 1008.47930
4 1996 10.51 102.2844055 1075.00910 1.09347 1016.98425 1.38669 1015.80308
5 1996 10.57 102.2844055 1081.14617 1.10173 1021.68833 1.39676 1020.20538
6 1996 10.59 102.2844055 1083.19185 1.10683 1022.51468 1.40282 1020.73294
7 1996 10.71 102.2844055 1095.46598 1.10772 1032.99353 1.40354 1030.89578
8 1996 10.90 102.2844055 1114.90002 1.11908 1050.20020 1.41752 1047.76680
9 1996 11.18 102.2844055 1143.53965 1.13772 1076.04010 1.44071 1073.24119
10 1996 11.19 102.2844055 1144.56250 1.16571 1075.83686 1.47574 1072.72542
11 1996 11.41 102.2844055 1167.06507 1.16549 1095.82277 1.47503 1092.34061
12 1996 10.87 108.2564221 1176.74731 1.18714 1103.72682 1.50200 1099.90091
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 11.80%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1103.73 1038.06
TOTAL RETURN 10.37% 3.81%
WITH DEATH BENEFIT CHARGE
ERV 1099.90 1034.46
TOTAL RETURN 9.99% 3.45%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.29 102.2844055 1052.50653 1000.00000 1000.00000
1 1996 10.48 102.2844055 1071.94057 1.08333 1017.38120 1.37503 1017.08950
2 1996 10.51 102.2844055 1075.00910 1.10216 1019.19138 1.39853 1018.60248
3 1996 10.42 102.2844055 1065.80350 1.10412 1009.35965 1.40061 1008.47930
4 1996 10.51 102.2844055 1075.00910 1.09347 1016.98425 1.38669 1015.80308
5 1996 10.57 102.2844055 1081.14617 1.10173 1021.68833 1.39676 1020.20538
6 1996 10.59 102.2844055 1083.19185 1.10683 1022.51468 1.40282 1020.73294
7 1996 10.71 102.2844055 1095.46598 1.10772 1032.99353 1.40354 1030.89578
8 1996 10.90 102.2844055 1114.90002 1.11908 1050.20020 1.41752 1047.76680
9 1996 11.18 102.2844055 1143.53965 1.13772 1076.04010 1.44071 1073.24119
10 1996 11.19 102.2844055 1144.56250 1.16571 1075.83686 1.47574 1072.72542
11 1996 11.41 102.2844055 1167.06507 1.16549 1095.82277 1.47503 1092.34061
12 1996 10.87 108.2564221 1176.74731 1.18714 1103.72682 1.50200 1099.90091
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 11.80%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1103.73 1038.06
TOTAL RETURN 10.37% 3.81%
WITH DEATH BENEFIT CHARGE
ERV 1099.90 1034.46
TOTAL RETURN 9.99% 3.45%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 9.97 100.0000000 997.00000 1.08333 995.91667 1.37503 995.62497
8 1995 9.93 100.0000000 993.00000 1.07891 990.84210 1.36902 990.26147
9 1995 10.08 100.0000000 1008.00000 1.07341 1004.73609 1.36164 1003.85846
10 1995 10.30 100.0000000 1030.00000 1.08846 1025.57639 1.38034 1024.38773
11 1995 10.35 100.0000000 1035.00000 1.11104 1029.44388 1.40857 1027.95191
12 1995 10.29 102.2844055 1052.50653 1.11523 1045.74120 1.41347 1043.92576
1 1996 10.48 102.2844055 1071.94057 1.13289 1063.91743 1.43543 1061.76593
2 1996 10.51 102.2844055 1075.00910 1.15258 1065.81042 1.45996 1063.34537
3 1996 10.42 102.2844055 1065.80350 1.15463 1055.52897 1.46214 1052.77752
4 1996 10.51 102.2844055 1075.00910 1.14349 1063.50233 1.44760 1060.42300
5 1996 10.57 102.2844055 1081.14617 1.15213 1068.42158 1.45812 1065.01868
6 1996 10.59 102.2844055 1083.19185 1.15746 1069.28573 1.46444 1065.56942
7 1996 10.71 102.2844055 1095.46598 1.15839 1080.24389 1.46519 1076.17866
8 1996 10.90 102.2844055 1114.90002 1.17026 1098.23762 1.47978 1093.79075
9 1996 11.18 102.2844055 1143.53965 1.18976 1125.25947 1.50400 1120.38413
10 1996 11.19 102.2844055 1144.56250 1.21903 1125.04693 1.54057 1119.84570
11 1996 11.41 102.2844055 1167.06507 1.21880 1145.94702 1.53983 1140.32250
12 1996 10.87 108.2564221 1176.74731 1.24144 1154.21262 1.56798 1148.21490
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 17.67%
GROSS ANNUAL RETURN = 12.03%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1154.21 1095.35
TOTAL RETURN 15.42% 9.53%
AVERAGE ANNUAL RETURN 10.53% 6.56%
WITH DEATH BENEFIT CHARGE
ERV 1148.21 1089.66
TOTAL RETURN 14.82% 8.97%
AVERAGE ANNUAL RETURN 10.13% 6.18%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 9.97 100.0000000 997.00000 1.08333 995.91667 1.37503 995.62497
8 1995 9.93 100.0000000 993.00000 1.07891 990.84210 1.36902 990.26147
9 1995 10.08 100.0000000 1008.00000 1.07341 1004.73609 1.36164 1003.85846
10 1995 10.30 100.0000000 1030.00000 1.08846 1025.57639 1.38034 1024.38773
11 1995 10.35 100.0000000 1035.00000 1.11104 1029.44388 1.40857 1027.95191
12 1995 10.29 102.2844055 1052.50653 1.11523 1045.74120 1.41347 1043.92576
1 1996 10.48 102.2844055 1071.94057 1.13289 1063.91743 1.43543 1061.76593
2 1996 10.51 102.2844055 1075.00910 1.15258 1065.81042 1.45996 1063.34537
3 1996 10.42 102.2844055 1065.80350 1.15463 1055.52897 1.46214 1052.77752
4 1996 10.51 102.2844055 1075.00910 1.14349 1063.50233 1.44760 1060.42300
5 1996 10.57 102.2844055 1081.14617 1.15213 1068.42158 1.45812 1065.01868
6 1996 10.59 102.2844055 1083.19185 1.15746 1069.28573 1.46444 1065.56942
7 1996 10.71 102.2844055 1095.46598 1.15839 1080.24389 1.46519 1076.17866
8 1996 10.90 102.2844055 1114.90002 1.17026 1098.23762 1.47978 1093.79075
9 1996 11.18 102.2844055 1143.53965 1.18976 1125.25947 1.50400 1120.38413
10 1996 11.19 102.2844055 1144.56250 1.21903 1125.04693 1.54057 1119.84570
11 1996 11.41 102.2844055 1167.06507 1.21880 1145.94702 1.53983 1140.32250
12 1996 10.87 108.2564221 1176.74731 1.24144 1154.21262 1.56798 1148.21490
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 17.67%
GROSS ANNUAL RETURN = 10.90%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1154.21 1095.35
TOTAL RETURN 15.42% 9.53%
AVERAGE ANNUAL RETURN 9.55% 5.96%
WITH DEATH BENEFIT CHARGE
ERV 1148.21 1089.66
TOTAL RETURN 14.82% 8.97%
AVERAGE ANNUAL RETURN 9.19% 5.61%
<PAGE>
MFS Research
12/1996
Assume ($10000 @ $10.00 on 7/26/1995)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/95 0.1712900000 10.82 1.583 101.583087
12/96 0.1927500000 13.18 1.486 103.068682
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.89 101.5830869 1106.23982 1000.00000 1000.00000
1 1996 11.12 101.5830869 1129.60393 1.08333 1020.03696 1.37503 1019.74526
2 1996 11.54 101.5830869 1172.26882 1.10504 1057.45850 1.40218 1056.85864
3 1996 11.52 101.5830869 1170.23716 1.14558 1054.48023 1.45322 1053.57378
4 1996 11.98 101.5830869 1216.96538 1.14235 1095.44386 1.44870 1094.19486
5 1996 12.37 101.5830869 1256.58278 1.18673 1129.91849 1.50455 1128.31101
6 1996 12.21 101.5830869 1240.32949 1.22408 1114.07946 1.55147 1112.16538
7 1996 11.60 101.5830869 1178.36381 1.20692 1057.21419 1.52926 1055.07339
8 1996 11.96 101.5830869 1214.93372 1.14532 1088.87897 1.45076 1086.36629
9 1996 12.68 101.5830869 1288.07354 1.17962 1153.25059 1.49379 1150.27248
10 1996 12.79 101.5830869 1299.24768 1.24935 1162.00578 1.58166 1158.66952
11 1996 13.55 101.5830869 1376.45083 1.25884 1229.79498 1.59321 1225.92610
12 1996 13.13 103.0686817 1353.29179 1.33228 1207.77117 1.68569 1203.61398
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.33%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1207.77 1135.91
TOTAL RETURN 20.78% 13.59%
WITH DEATH BENEFIT CHARGE
ERV 1203.61 1132.00
TOTAL RETURN 20.36% 13.20%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.89 101.5830869 1106.23982 1000.00000 1000.00000
1 1996 11.12 101.5830869 1129.60393 1.08333 1020.03696 1.37503 1019.74526
2 1996 11.54 101.5830869 1172.26882 1.10504 1057.45850 1.40218 1056.85864
3 1996 11.52 101.5830869 1170.23716 1.14558 1054.48023 1.45322 1053.57378
4 1996 11.98 101.5830869 1216.96538 1.14235 1095.44386 1.44870 1094.19486
5 1996 12.37 101.5830869 1256.58278 1.18673 1129.91849 1.50455 1128.31101
6 1996 12.21 101.5830869 1240.32949 1.22408 1114.07946 1.55147 1112.16538
7 1996 11.60 101.5830869 1178.36381 1.20692 1057.21419 1.52926 1055.07339
8 1996 11.96 101.5830869 1214.93372 1.14532 1088.87897 1.45076 1086.36629
9 1996 12.68 101.5830869 1288.07354 1.17962 1153.25059 1.49379 1150.27248
10 1996 12.79 101.5830869 1299.24768 1.24935 1162.00578 1.58166 1158.66952
11 1996 13.55 101.5830869 1376.45083 1.25884 1229.79498 1.59321 1225.92610
12 1996 13.13 103.0686817 1353.29179 1.33228 1207.77117 1.68569 1203.61398
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.33%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1207.77 1135.91
TOTAL RETURN 20.78% 13.59%
WITH DEATH BENEFIT CHARGE
ERV 1203.61 1132.00
TOTAL RETURN 20.36% 13.20%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 10.00 100.0000000 1000.00000 1.08333 998.91667 1.37503 998.62497
8 1995 10.10 100.0000000 1010.00000 1.08216 1007.82367 1.37314 1007.23807
9 1995 10.40 100.0000000 1040.00000 1.09181 1036.66722 1.38499 1035.77105
10 1995 10.47 100.0000000 1047.00000 1.12306 1042.52173 1.42422 1041.31837
11 1995 10.81 100.0000000 1081.00000 1.12940 1075.24691 1.43185 1073.70202
12 1995 10.89 101.5830869 1106.23982 1.16485 1099.18755 1.47638 1097.29506
1 1996 11.12 101.5830869 1129.60393 1.19079 1121.21192 1.50882 1118.96143
2 1996 11.54 101.5830869 1172.26882 1.21465 1162.34521 1.53861 1159.68576
3 1996 11.52 101.5830869 1170.23716 1.25921 1159.07154 1.59461 1156.08130
4 1996 11.98 101.5830869 1216.96538 1.25566 1204.09825 1.58965 1200.65462
5 1996 12.37 101.5830869 1256.58278 1.30444 1241.99233 1.65094 1238.09009
6 1996 12.21 101.5830869 1240.32949 1.34549 1224.58227 1.70242 1220.37358
7 1996 11.60 101.5830869 1178.36381 1.32663 1162.07667 1.67805 1157.72682
8 1996 11.96 101.5830869 1214.93372 1.25892 1196.88220 1.59191 1192.06436
9 1996 12.68 101.5830869 1288.07354 1.29662 1267.63869 1.63913 1262.18830
10 1996 12.79 101.5830869 1299.24768 1.37328 1277.26228 1.73555 1271.40234
11 1996 13.55 101.5830869 1376.45083 1.38370 1351.77532 1.74822 1345.20265
12 1996 13.13 103.0686817 1353.29179 1.46442 1327.56703 1.84970 1320.71967
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 35.33%
GROSS ANNUAL RETURN = 23.51%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1327.57 1259.86
TOTAL RETURN 32.76% 25.99%
AVERAGE ANNUAL RETURN 21.87% 17.49%
WITH DEATH BENEFIT CHARGE
ERV 1320.72 1253.36
TOTAL RETURN 32.07% 25.34%
AVERAGE ANNUAL RETURN 21.43% 17.07%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1995 10.00 100.0000000 1000.00000 1.08333 998.91667 1.37503 998.62497
8 1995 10.10 100.0000000 1010.00000 1.08216 1007.82367 1.37314 1007.23807
9 1995 10.40 100.0000000 1040.00000 1.09181 1036.66722 1.38499 1035.77105
10 1995 10.47 100.0000000 1047.00000 1.12306 1042.52173 1.42422 1041.31837
11 1995 10.81 100.0000000 1081.00000 1.12940 1075.24691 1.43185 1073.70202
12 1995 10.89 101.5830869 1106.23982 1.16485 1099.18755 1.47638 1097.29506
1 1996 11.12 101.5830869 1129.60393 1.19079 1121.21192 1.50882 1118.96143
2 1996 11.54 101.5830869 1172.26882 1.21465 1162.34521 1.53861 1159.68576
3 1996 11.52 101.5830869 1170.23716 1.25921 1159.07154 1.59461 1156.08130
4 1996 11.98 101.5830869 1216.96538 1.25566 1204.09825 1.58965 1200.65462
5 1996 12.37 101.5830869 1256.58278 1.30444 1241.99233 1.65094 1238.09009
6 1996 12.21 101.5830869 1240.32949 1.34549 1224.58227 1.70242 1220.37358
7 1996 11.60 101.5830869 1178.36381 1.32663 1162.07667 1.67805 1157.72682
8 1996 11.96 101.5830869 1214.93372 1.25892 1196.88220 1.59191 1192.06436
9 1996 12.68 101.5830869 1288.07354 1.29662 1267.63869 1.63913 1262.18830
10 1996 12.79 101.5830869 1299.24768 1.37328 1277.26228 1.73555 1271.40234
11 1996 13.55 101.5830869 1376.45083 1.38370 1351.77532 1.74822 1345.20265
12 1996 13.13 103.0686817 1353.29179 1.46442 1327.56703 1.84970 1320.71967
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 35.33%
GROSS ANNUAL RETURN = 21.21%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1327.57 1259.86
TOTAL RETURN 32.76% 25.99%
AVERAGE ANNUAL RETURN 19.74% 15.82%
WITH DEATH BENEFIT CHARGE
ERV 1320.72 1253.36
TOTAL RETURN 32.07% 25.34%
AVERAGE ANNUAL RETURN 19.35% 15.44%
<PAGE>
MFS World Government
12/1996
Assume ($10000 @ $10.00 on 6/14/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/94 0.2600000000 9.86 2.637 102.636917
12/95 1.0600000000 10.15 10.719 113.355649
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.17 113.3556490 1152.82695 1000.00000 1000.00000
1 1996 10.13 113.3556490 1148.29272 1.08333 994.98353 1.37503 994.69183
2 1996 9.95 113.3556490 1127.88871 1.07790 976.22577 1.36773 975.64941
3 1996 9.94 113.3556490 1126.75515 1.05758 974.18706 1.34155 973.32731
4 1996 10.01 113.3556490 1134.69005 1.05537 979.99216 1.33836 978.84337
5 1996 10.04 113.3556490 1138.09072 1.06166 981.86754 1.34594 980.43103
6 1996 10.10 113.3556490 1144.89206 1.06369 986.67159 1.34813 984.94205
7 1996 10.27 113.3556490 1164.16252 1.06889 1002.21003 1.35433 1000.16595
8 1996 10.29 113.3556490 1166.42963 1.08573 1003.07603 1.37526 1000.73844
9 1996 10.34 113.3556490 1172.09741 1.08667 1006.86340 1.37605 1004.22506
10 1996 10.52 113.3556490 1192.50143 1.09077 1023.30023 1.38084 1020.32589
11 1996 10.66 113.3556490 1208.37122 1.10858 1035.80972 1.40298 1032.50139
12 1996 10.58 113.3556490 1199.30277 1.12213 1026.91416 1.41972 1023.33306
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.03%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1026.91 965.81
TOTAL RETURN 2.69% -3.42%
WITH DEATH BENEFIT CHARGE
ERV 1023.33 962.44
TOTAL RETURN 2.33% -3.76%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 10.17 113.3556490 1152.82695 1000.00000 1000.00000
1 1996 10.13 113.3556490 1148.29272 1.08333 994.98353 1.37503 994.69183
2 1996 9.95 113.3556490 1127.88871 1.07790 976.22577 1.36773 975.64941
3 1996 9.94 113.3556490 1126.75515 1.05758 974.18706 1.34155 973.32731
4 1996 10.01 113.3556490 1134.69005 1.05537 979.99216 1.33836 978.84337
5 1996 10.04 113.3556490 1138.09072 1.06166 981.86754 1.34594 980.43103
6 1996 10.10 113.3556490 1144.89206 1.06369 986.67159 1.34813 984.94205
7 1996 10.27 113.3556490 1164.16252 1.06889 1002.21003 1.35433 1000.16595
8 1996 10.29 113.3556490 1166.42963 1.08573 1003.07603 1.37526 1000.73844
9 1996 10.34 113.3556490 1172.09741 1.08667 1006.86340 1.37605 1004.22506
10 1996 10.52 113.3556490 1192.50143 1.09077 1023.30023 1.38084 1020.32589
11 1996 10.66 113.3556490 1208.37122 1.10858 1035.80972 1.40298 1032.50139
12 1996 10.58 113.3556490 1199.30277 1.12213 1026.91416 1.41972 1023.33306
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 4.03%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1026.91 965.81
TOTAL RETURN 2.69% -3.42%
WITH DEATH BENEFIT CHARGE
ERV 1023.33 962.44
TOTAL RETURN 2.33% -3.76%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
6 1994 10.02 100.0000000 1002.00000 1.08333 1000.91667 1.37503 1000.62497
7 1994 9.92 100.0000000 992.00000 1.08433 989.84315 1.37589 989.26280
8 1994 9.90 100.0000000 990.00000 1.07233 986.77517 1.36027 985.90805
9 1994 9.94 100.0000000 994.00000 1.06901 989.69313 1.35566 988.53586
10 1994 10.16 100.0000000 1016.00000 1.07217 1010.52564 1.35927 1009.05565
11 1994 10.06 100.0000000 1006.00000 1.09474 999.48479 1.38749 997.73651
12 1994 9.82 102.6369168 1007.89452 1.08278 1000.28427 1.37192 998.24356
1 1995 9.91 102.6369168 1017.13185 1.08364 1008.36820 1.37262 1006.01981
2 1995 10.12 102.6369168 1038.68560 1.09240 1028.64385 1.38331 1025.95478
3 1995 10.64 102.6369168 1092.05680 1.11436 1080.38470 1.41072 1077.26110
4 1995 10.69 102.6369168 1097.18864 1.17042 1084.29128 1.48127 1080.84215
5 1995 10.88 102.6369168 1116.68966 1.17465 1102.38841 1.48619 1098.56643
6 1995 10.91 102.6369168 1119.76876 1.19425 1104.23383 1.51057 1100.08500
7 1995 10.89 102.6369168 1117.71602 1.19625 1101.01332 1.51265 1096.55569
8 1995 10.73 102.6369168 1101.29412 1.19276 1083.64405 1.50780 1078.93688
9 1995 10.86 102.6369168 1114.63692 1.17395 1095.59906 1.48357 1090.52524
10 1995 11.02 102.6369168 1131.05882 1.18690 1110.55358 1.49951 1105.09240
11 1995 11.21 102.6369168 1150.55984 1.20310 1128.49796 1.51954 1122.62618
12 1995 10.17 113.3556490 1152.82695 1.22254 1129.49906 1.54365 1123.29460
1 1996 10.13 113.3556490 1148.29272 1.22362 1123.83296 1.54457 1117.33196
2 1996 9.95 113.3556490 1127.88871 1.21749 1102.64609 1.53637 1095.94172
3 1996 9.94 113.3556490 1126.75515 1.19453 1100.34337 1.50696 1093.33331
4 1996 10.01 113.3556490 1134.69005 1.19204 1106.90023 1.50337 1099.52947
5 1996 10.04 113.3556490 1138.09072 1.19914 1109.01847 1.51189 1101.31288
6 1996 10.10 113.3556490 1144.89206 1.20144 1114.44463 1.51434 1106.38009
7 1996 10.27 113.3556490 1164.16252 1.20731 1131.99529 1.52131 1123.48101
8 1996 10.29 113.3556490 1166.42963 1.22633 1132.97344 1.54482 1124.12408
9 1996 10.34 113.3556490 1172.09741 1.22739 1137.25126 1.54571 1128.04059
10 1996 10.52 113.3556490 1192.50143 1.23202 1155.81665 1.55109 1146.12657
11 1996 10.66 113.3556490 1208.37122 1.25213 1169.94611 1.57596 1159.80324
12 1996 10.58 113.3556490 1199.30277 1.26744 1159.89858 1.59477 1149.50451
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 19.93%
GROSS ANNUAL RETURN = 7.39%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1159.90 1110.60
TOTAL RETURN 15.99% 11.06%
AVERAGE ANNUAL RETURN 5.99% 4.20%
WITH DEATH BENEFIT CHARGE
ERV 1149.50 1100.65
TOTAL RETURN 14.95% 10.07%
AVERAGE ANNUAL RETURN 5.62% 3.84%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.91 102.6369168 1119.76876 1000.00000 1000.00000
7 1995 10.89 102.6369168 1117.71602 1.08333 997.08349 1.37503 996.79179
8 1995 10.73 102.6369168 1101.29412 1.08017 981.35378 1.37062 980.77592
9 1995 10.86 102.6369168 1114.63692 1.06313 992.18031 1.34860 991.30998
10 1995 11.02 102.6369168 1131.05882 1.07486 1005.72320 1.36308 1004.55183
11 1995 11.21 102.6369168 1150.55984 1.08953 1021.97372 1.38129 1020.49039
12 1995 10.17 113.3556490 1152.82695 1.10714 1022.88033 1.40321 1021.09800
1 1996 10.13 113.3556490 1148.29272 1.10812 1017.74908 1.40404 1015.67784
2 1996 9.95 113.3556490 1127.88871 1.10256 998.56213 1.39659 996.23367
3 1996 9.94 113.3556490 1126.75515 1.08178 996.47677 1.36985 993.86257
4 1996 10.01 113.3556490 1134.69005 1.07952 1002.41470 1.36659 999.49501
5 1996 10.04 113.3556490 1138.09072 1.08595 1004.33299 1.37434 1001.11616
6 1996 10.10 113.3556490 1144.89206 1.08803 1009.24695 1.37657 1005.72236
7 1996 10.27 113.3556490 1164.16252 1.09335 1025.14093 1.38290 1021.26746
8 1996 10.29 113.3556490 1166.42963 1.11057 1026.02674 1.40428 1021.85202
9 1996 10.34 113.3556490 1172.09741 1.11153 1029.90076 1.40508 1025.41221
10 1996 10.52 113.3556490 1192.50143 1.11573 1046.71368 1.40998 1041.85273
11 1996 10.66 113.3556490 1208.37122 1.13394 1059.50939 1.43258 1054.28511
12 1996 10.58 113.3556490 1199.30277 1.14780 1050.41029 1.44968 1044.92335
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 7.10%
GROSS ANNUAL RETURN = 4.46%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1050.41 996.84
TOTAL RETURN 5.04% -0.32%
AVERAGE ANNUAL RETURN 3.18% -0.20%
WITH DEATH BENEFIT CHARGE
ERV 1044.92 991.63
TOTAL RETURN 4.49% -0.84%
AVERAGE ANNUAL RETURN 2.83% -0.53%
<PAGE>
Scudder International
12/1996
Assume ($10000 @ $10.00 on 5/ 1/1987)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/87 0.1020000000 5.26 1.939 101.939163
1/90 0.0350000000 8.34 0.428 102.366966
2/91 0.2000000000 8.44 2.426 104.792723
2/92 0.0900000000 8.23 1.146 105.938695
2/93 0.2550000000 8.12 3.327 109.265587
2/94 0.0700000000 11.01 0.695 109.960282
2/95 0.0500000000 10.18 0.540 110.500362
2/96 0.2750000000 11.89 2.556 113.056090
4/96 0.0100000000 12.52 0.090 113.146390
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.82 110.5003621 1306.11428 1000.00000 1000.00000
1 1996 12.04 110.5003621 1330.42436 1.08333 1017.52919 1.37503 1017.23749
2 1996 11.84 113.0560895 1338.58410 1.10232 1022.66756 1.39874 1022.07766
3 1996 12.09 113.0560895 1366.84812 1.10789 1043.15316 1.40539 1042.25330
4 1996 12.48 113.1463899 1412.06695 1.13008 1076.53324 1.43313 1075.30057
5 1996 12.48 113.1463899 1412.06695 1.16624 1075.36700 1.47857 1073.82199
6 1996 12.61 113.1463899 1426.77598 1.16498 1085.40376 1.47654 1083.53110
7 1996 12.14 113.1463899 1373.59717 1.17585 1043.77273 1.48989 1041.65583
8 1996 12.33 113.1463899 1395.09499 1.13075 1058.97779 1.43231 1056.52620
9 1996 12.61 113.1463899 1426.77598 1.14723 1081.87872 1.45276 1079.06593
10 1996 12.55 113.1463899 1419.98719 1.17204 1075.55897 1.48375 1072.44784
11 1996 13.11 113.1463899 1483.34917 1.16519 1122.38685 1.47465 1118.82744
12 1996 13.25 113.1463899 1499.18967 1.21592 1133.15676 1.53842 1129.23683
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.78%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1133.16 1065.73
TOTAL RETURN 13.32% 6.57%
WITH DEATH BENEFIT CHARGE
ERV 1129.24 1062.05
TOTAL RETURN 12.92% 6.20%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.82 110.5003621 1306.11428 1000.00000 1000.00000
1 1996 12.04 110.5003621 1330.42436 1.08333 1017.52919 1.37503 1017.23749
2 1996 11.84 113.0560895 1338.58410 1.10232 1022.66756 1.39874 1022.07766
3 1996 12.09 113.0560895 1366.84812 1.10789 1043.15316 1.40539 1042.25330
4 1996 12.48 113.1463899 1412.06695 1.13008 1076.53324 1.43313 1075.30057
5 1996 12.48 113.1463899 1412.06695 1.16624 1075.36700 1.47857 1073.82199
6 1996 12.61 113.1463899 1426.77598 1.16498 1085.40376 1.47654 1083.53110
7 1996 12.14 113.1463899 1373.59717 1.17585 1043.77273 1.48989 1041.65583
8 1996 12.33 113.1463899 1395.09499 1.13075 1058.97779 1.43231 1056.52620
9 1996 12.61 113.1463899 1426.77598 1.14723 1081.87872 1.45276 1079.06593
10 1996 12.55 113.1463899 1419.98719 1.17204 1075.55897 1.48375 1072.44784
11 1996 13.11 113.1463899 1483.34917 1.16519 1122.38685 1.47465 1118.82744
12 1996 13.25 113.1463899 1499.18967 1.21592 1133.15676 1.53842 1129.23683
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.78%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1133.16 1065.73
TOTAL RETURN 13.32% 6.57%
WITH DEATH BENEFIT CHARGE
ERV 1129.24 1062.05
TOTAL RETURN 12.92% 6.20%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 10.85 109.2655872 1185.53162 1000.00000 1000.00000
1 1994 11.31 109.2655872 1235.79379 1.08333 1041.31298 1.37503 1041.02128
2 1994 11.08 109.9602821 1218.35993 1.12809 1025.49465 1.43144 1024.90371
3 1994 10.72 109.9602821 1178.77422 1.11095 991.06438 1.40928 990.19432
4 1994 10.95 109.9602821 1204.06509 1.07365 1011.25423 1.36155 1010.07761
5 1994 10.86 109.9602821 1194.16866 1.09553 1001.84703 1.38889 1000.38671
6 1994 10.86 109.9602821 1194.16866 1.08533 1000.76169 1.37557 999.01114
7 1994 11.12 109.9602821 1222.75834 1.08416 1023.63684 1.37367 1021.55486
8 1994 11.42 109.9602821 1255.74642 1.10894 1050.14400 1.40467 1047.71013
9 1994 11.12 109.9602821 1222.75834 1.13766 1021.41937 1.44064 1018.74646
10 1994 11.37 109.9602821 1250.24841 1.10654 1043.27640 1.40081 1040.24912
11 1994 10.76 109.9602821 1183.17264 1.13022 986.17445 1.43038 983.00942
12 1994 10.69 109.9602821 1175.47542 1.06836 978.69046 1.35167 975.26271
1 1995 10.18 109.9602821 1119.39567 1.06025 930.93871 1.34102 927.39372
2 1995 10.14 110.5003621 1120.47367 1.00852 930.82671 1.27520 927.01162
3 1995 10.39 110.5003621 1148.09876 1.00840 952.76769 1.27467 948.59227
4 1995 10.93 110.5003621 1207.76896 1.03216 1001.25377 1.30435 996.58915
5 1995 10.94 110.5003621 1208.87396 1.08469 1001.08514 1.37034 996.13060
6 1995 11.09 110.5003621 1225.44902 1.08451 1013.72666 1.36971 1008.41899
7 1995 11.75 110.5003621 1298.37925 1.09820 1072.95845 1.38661 1067.04649
8 1995 11.53 110.5003621 1274.06917 1.16237 1051.70664 1.46722 1045.60053
9 1995 11.82 110.5003621 1306.11428 1.13935 1077.01958 1.43774 1070.46150
10 1995 11.55 110.5003621 1276.27918 1.16677 1051.25084 1.47192 1044.53742
11 1995 11.66 110.5003621 1288.43422 1.13886 1060.12390 1.43627 1053.04912
12 1995 11.82 110.5003621 1306.11428 1.14847 1073.52259 1.44798 1066.05121
1 1996 12.04 110.5003621 1330.42436 1.16298 1092.34057 1.46586 1084.42726
2 1996 11.84 113.0560895 1338.58410 1.18337 1097.85673 1.49112 1089.58713
3 1996 12.09 113.0560895 1366.84812 1.18934 1119.84848 1.49822 1111.09540
4 1996 12.48 113.1463899 1412.06695 1.21317 1155.68275 1.52779 1146.32548
5 1996 12.48 113.1463899 1412.06695 1.25199 1154.43076 1.57624 1144.74924
6 1996 12.61 113.1463899 1426.77598 1.25063 1165.20545 1.57407 1155.09964
7 1996 12.14 113.1463899 1373.59717 1.26231 1120.51360 1.58830 1110.45846
8 1996 12.33 113.1463899 1395.09499 1.21389 1136.83658 1.52692 1126.31104
9 1996 12.61 113.1463899 1426.77598 1.23157 1161.42125 1.54872 1150.33954
10 1996 12.55 113.1463899 1419.98719 1.25821 1154.63685 1.58176 1143.28433
11 1996 13.11 113.1463899 1483.34917 1.25086 1204.90764 1.57205 1192.72735
12 1996 13.25 113.1463899 1499.18967 1.30532 1216.46937 1.64004 1203.82429
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 26.46%
GROSS ANNUAL RETURN = 8.14%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1216.47 1164.77
TOTAL RETURN 21.65% 16.48%
AVERAGE ANNUAL RETURN 6.75% 5.22%
WITH DEATH BENEFIT CHARGE
ERV 1203.82 1152.66
TOTAL RETURN 20.38% 15.27%
AVERAGE ANNUAL RETURN 6.38% 4.85%
<TABLE>
<CAPTION>
Return for 5 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1991 8.47 104.7927232 887.59437 1000.00000 1000.00000
1 1992 8.54 104.7927232 894.92986 1.08333 1007.18113 1.37503 1006.88943
2 1992 8.38 105.9386947 887.76626 1.09111 998.02789 1.38451 997.44513
3 1992 8.04 105.9386947 851.74711 1.08120 956.45392 1.37152 955.60448
4 1992 8.15 105.9386947 863.61224 1.03616 968.74149 1.31399 967.60239
5 1992 8.55 105.9386947 905.77584 1.04947 1014.98828 1.33049 1013.51255
6 1992 8.53 105.9386947 903.65707 1.09957 1011.51447 1.39361 1009.74815
7 1992 8.26 105.9386947 875.05362 1.09581 978.40121 1.38844 976.39817
8 1992 8.53 105.9386947 903.65707 1.05993 1009.32291 1.34258 1006.97175
9 1992 8.40 105.9386947 889.88504 1.09343 992.84706 1.38462 990.24055
10 1992 8.13 105.9386947 861.28159 1.07558 959.85854 1.36161 957.04977
11 1992 8.10 105.9386947 858.10343 1.03985 955.27678 1.31598 952.20225
12 1992 8.12 105.9386947 860.22220 1.03488 956.60060 1.30931 953.24406
1 1993 8.14 105.9386947 862.34097 1.03632 957.92045 1.31074 954.28121
2 1993 8.15 109.2655872 890.51454 1.03775 988.17894 1.31217 984.14638
3 1993 8.62 109.2655872 941.86936 1.07053 1044.09542 1.35323 1039.54760
4 1993 9.00 109.2655872 983.39028 1.13110 1088.99172 1.42941 1083.94511
5 1993 9.17 109.2655872 1001.96543 1.17974 1108.38182 1.49046 1102.92917
6 1993 9.02 109.2655872 985.57560 1.20075 1089.05051 1.51656 1083.37123
7 1993 9.24 109.2655872 1009.61403 1.17980 1114.43292 1.48967 1108.30525
8 1993 9.86 109.2655872 1077.35869 1.20730 1188.00358 1.52396 1181.14810
9 1993 10.03 109.2655872 1095.93384 1.28700 1207.19940 1.62412 1199.88860
10 1993 10.34 109.2655872 1129.80617 1.30780 1243.20284 1.64989 1235.32401
11 1993 9.93 109.2655872 1085.00728 1.34680 1192.56076 1.69861 1184.64253
12 1993 10.85 109.2655872 1185.53162 1.29194 1301.75784 1.62892 1292.76900
1 1994 11.31 109.2655872 1235.79379 1.41024 1355.53733 1.77760 1345.80004
2 1994 11.08 109.9602821 1218.35993 1.46850 1334.94570 1.85052 1324.96375
3 1994 10.72 109.9602821 1178.77422 1.44619 1290.12582 1.82187 1280.09252
4 1994 10.95 109.9602821 1204.06509 1.39764 1316.40812 1.76017 1305.79702
5 1994 10.86 109.9602821 1194.16866 1.42611 1304.16222 1.79551 1293.26893
6 1994 10.86 109.9602821 1194.16866 1.41284 1302.74938 1.77829 1291.49064
7 1994 11.12 109.9602821 1222.75834 1.41131 1332.52728 1.77584 1320.63447
8 1994 11.42 109.9602821 1255.74642 1.44357 1367.03318 1.81592 1354.44718
9 1994 11.12 109.9602821 1222.75834 1.48095 1329.64067 1.86241 1317.00384
10 1994 11.37 109.9602821 1250.24841 1.44044 1358.09323 1.81092 1344.80182
11 1994 10.76 109.9602821 1183.17264 1.47127 1283.76032 1.84915 1270.80411
12 1994 10.69 109.9602821 1175.47542 1.39074 1274.01798 1.74740 1260.78940
1 1995 10.18 109.9602821 1119.39567 1.38019 1211.85677 1.73363 1198.90586
2 1995 10.14 110.5003621 1120.47367 1.31284 1211.71096 1.64854 1198.41189
3 1995 10.39 110.5003621 1148.09876 1.31269 1240.27281 1.64786 1226.31068
4 1995 10.93 110.5003621 1207.76896 1.34363 1303.38994 1.68622 1288.35957
5 1995 10.94 110.5003621 1208.87396 1.41201 1303.17042 1.77154 1287.76677
6 1995 11.09 110.5003621 1225.44902 1.41177 1319.62662 1.77072 1303.65281
7 1995 11.75 110.5003621 1298.37925 1.42960 1396.73207 1.79257 1379.44463
8 1995 11.53 110.5003621 1274.06917 1.51313 1369.06736 1.89678 1351.71995
9 1995 11.82 110.5003621 1306.11428 1.48316 1402.01868 1.85866 1383.85945
10 1995 11.55 110.5003621 1276.27918 1.51885 1368.47402 1.90285 1350.34560
11 1995 11.66 110.5003621 1288.43422 1.48251 1380.02459 1.85677 1361.34926
12 1995 11.82 110.5003621 1306.11428 1.49503 1397.46644 1.87190 1378.15797
1 1996 12.04 110.5003621 1330.42436 1.51392 1421.96289 1.89501 1401.91395
2 1996 11.84 113.0560895 1338.58410 1.54046 1429.14360 1.92768 1408.58447
3 1996 12.09 113.0560895 1366.84812 1.54824 1457.77153 1.93685 1436.38969
4 1996 12.48 113.1463899 1412.06695 1.57925 1504.41908 1.97508 1481.93404
5 1996 12.48 113.1463899 1412.06695 1.62979 1502.78929 2.03771 1479.89633
6 1996 12.61 113.1463899 1426.77598 1.62802 1516.81533 2.03491 1493.27701
7 1996 12.14 113.1463899 1373.59717 1.64322 1458.63736 2.05331 1435.56628
8 1996 12.33 113.1463899 1395.09499 1.58019 1479.88593 1.97395 1456.06000
9 1996 12.61 113.1463899 1426.77598 1.60321 1511.88921 2.00213 1487.12331
10 1996 12.55 113.1463899 1419.98719 1.63788 1503.05757 2.04484 1478.00254
11 1996 13.11 113.1463899 1483.34917 1.62831 1568.49796 2.03230 1541.92095
12 1996 13.25 113.1463899 1499.18967 1.69921 1583.54854 2.12019 1556.26673
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 68.90%
GROSS ANNUAL RETURN = 11.05%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1583.55 1543.17
TOTAL RETURN 58.35% 54.32%
AVERAGE ANNUAL RETURN 9.63% 9.06%
WITH DEATH BENEFIT CHARGE
ERV 1556.27 1516.58
TOTAL RETURN 55.63% 51.66%
AVERAGE ANNUAL RETURN 9.25% 8.69%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4 1987 6.00 100.0000000 600.00000 1000.00000 1000.00000
5 1987 5.96 100.0000000 596.00000 1.08333 992.25000 1.37503 991.95830
6 1987 6.37 100.0000000 637.00000 1.07494 1059.43387 1.36398 1058.83307
7 1987 6.75 100.0000000 675.00000 1.14772 1121.48629 1.45593 1120.54143
8 1987 7.17 100.0000000 717.00000 1.21494 1190.05271 1.54078 1188.72323
9 1987 7.23 100.0000000 723.00000 1.28922 1198.72209 1.63453 1197.03617
10 1987 5.31 100.0000000 531.00000 1.29862 879.09064 1.64596 877.50508
11 1987 5.04 100.0000000 504.00000 0.95235 833.43877 1.20660 831.67958
12 1987 5.26 101.9391635 536.20000 0.90289 885.78335 1.14359 883.67108
1 1988 5.16 101.9391635 526.00608 0.95960 867.98376 1.21508 865.65617
2 1988 5.46 101.9391635 556.58783 0.94032 917.50762 1.19031 914.79471
3 1988 5.71 101.9391635 582.07262 0.99397 958.52408 1.25787 955.42304
4 1988 5.94 101.9391635 605.51863 1.03840 996.09523 1.31374 992.59394
5 1988 5.89 101.9391635 600.42167 1.07910 986.63148 1.36485 982.87393
6 1988 5.83 101.9391635 594.30532 1.06885 975.51206 1.35148 971.51014
7 1988 5.82 101.9391635 593.28593 1.05680 972.78199 1.33586 968.50789
8 1988 5.49 101.9391635 559.64601 1.05385 916.57040 1.33173 912.26076
9 1988 5.57 101.9391635 567.80114 0.99295 928.93367 1.25439 924.29979
10 1988 5.86 101.9391635 597.36350 1.00634 976.29191 1.27094 971.15217
11 1988 6.10 101.9391635 621.82890 1.05765 1015.21891 1.33537 1009.59096
12 1988 6.14 101.9391635 625.90646 1.09982 1020.77627 1.38822 1014.82301
1 1989 6.49 101.9391635 661.58517 1.10584 1077.85800 1.39542 1071.27581
2 1989 6.68 101.9391635 680.95361 1.16768 1108.24548 1.47304 1101.16523
3 1989 6.72 101.9391635 685.03118 1.20060 1113.68108 1.51414 1106.24490
4 1989 7.00 101.9391635 713.57414 1.20649 1158.87797 1.52112 1150.81731
5 1989 7.02 101.9391635 715.61293 1.25545 1160.93360 1.58241 1152.52295
6 1989 6.97 101.9391635 710.51597 1.25768 1151.40717 1.58476 1142.72934
7 1989 7.60 101.9391635 774.73764 1.24736 1254.23248 1.57129 1244.44635
8 1989 7.64 101.9391635 778.81521 1.35875 1259.47495 1.71116 1249.28491
9 1989 7.94 101.9391635 809.39696 1.36443 1307.56634 1.71781 1296.62280
10 1989 7.54 101.9391635 768.62129 1.41653 1240.27745 1.78290 1229.51885
11 1989 7.93 101.9391635 808.37757 1.34363 1303.08610 1.69063 1291.42402
12 1989 8.46 101.9391635 862.40532 1.41168 1388.76593 1.77575 1375.96034
1 1990 8.43 102.3669657 862.95352 1.50450 1388.14422 1.89199 1374.94300
2 1990 8.32 102.3669657 851.69315 1.50382 1368.52701 1.89059 1355.11128
3 1990 8.53 102.3669657 873.19022 1.48257 1401.58659 1.86332 1387.45148
4 1990 8.43 102.3669657 862.95352 1.51839 1383.63694 1.90779 1369.27814
5 1990 8.87 102.3669657 907.99499 1.49894 1454.35630 1.88280 1438.86418
6 1990 9.02 102.3669657 923.35003 1.57555 1477.37527 1.97849 1461.21824
7 1990 9.27 102.3669657 948.94177 1.60049 1516.72199 2.00922 1499.70841
8 1990 8.40 102.3669657 859.88251 1.64312 1372.73280 2.06215 1356.89693
9 1990 7.46 102.3669657 763.65756 1.48713 1217.63033 1.86578 1203.18792
10 1990 8.03 102.3669657 822.00673 1.31910 1309.34733 1.65442 1293.46609
11 1990 7.82 102.3669657 800.50967 1.41846 1273.68691 1.77856 1257.86089
12 1990 7.78 102.3669657 796.41499 1.37983 1265.79206 1.72960 1249.69722
1 1991 7.99 102.3669657 817.91206 1.37127 1298.58741 1.71838 1281.71103
2 1991 8.45 104.7927232 885.49851 1.40680 1404.48667 1.76240 1385.86015
3 1991 8.23 104.7927232 862.44411 1.52153 1366.39862 1.90560 1347.87298
4 1991 8.25 104.7927232 864.53997 1.48027 1368.23889 1.85337 1349.29512
5 1991 8.44 104.7927232 884.45058 1.48226 1398.26759 1.85533 1378.51447
6 1991 7.92 104.7927232 829.95837 1.51479 1310.60361 1.89550 1291.68680
7 1991 8.23 104.7927232 862.44411 1.41982 1360.48267 1.77611 1340.46914
8 1991 8.08 104.7927232 846.72520 1.47386 1334.21265 1.84319 1314.19455
9 1991 8.41 104.7927232 881.30680 1.44540 1387.25861 1.80706 1366.06128
10 1991 8.26 104.7927232 865.58789 1.50286 1361.01273 1.87838 1339.81795
11 1991 8.05 104.7927232 843.58142 1.47443 1324.93628 1.84229 1303.91249
12 1991 8.47 104.7927232 887.59437 1.43535 1392.62804 1.79292 1370.14978
1 1992 8.54 104.7927232 894.92986 1.50868 1402.62868 1.88400 1379.58933
2 1992 8.38 105.9386947 887.76626 1.51951 1389.88163 1.89698 1366.64923
3 1992 8.04 105.9386947 851.74711 1.50571 1331.98454 1.87919 1309.32127
4 1992 8.15 105.9386947 863.61224 1.44298 1349.09657 1.80036 1325.76021
5 1992 8.55 105.9386947 905.77584 1.46152 1413.50115 1.82296 1388.66401
6 1992 8.53 105.9386947 903.65707 1.53129 1408.66342 1.90946 1383.50621
7 1992 8.26 105.9386947 875.05362 1.52605 1362.54896 1.90237 1337.81174
8 1992 8.53 105.9386947 903.65707 1.47609 1405.61139 1.83954 1379.70212
9 1992 8.40 105.9386947 889.88504 1.52275 1382.66666 1.89714 1356.77787
10 1992 8.13 105.9386947 861.28159 1.49789 1336.72592 1.86561 1311.30154
11 1992 8.10 105.9386947 858.10343 1.44812 1330.34523 1.80308 1304.65971
12 1992 8.12 105.9386947 860.22220 1.44121 1332.18883 1.79395 1306.08714
1 1993 8.14 105.9386947 862.34097 1.44320 1334.02687 1.79591 1307.50819
2 1993 8.15 109.2655872 890.51454 1.44520 1376.16570 1.79787 1348.42795
3 1993 8.62 109.2655872 941.86936 1.49085 1454.03656 1.85413 1424.33592
4 1993 9.00 109.2655872 983.39028 1.57521 1516.56041 1.95851 1485.16716
5 1993 9.17 109.2655872 1001.96543 1.64294 1543.56361 2.04215 1511.17816
6 1993 9.02 109.2655872 985.57560 1.67219 1516.64228 2.07792 1484.38086
7 1993 9.24 109.2655872 1009.61403 1.64303 1551.99053 2.04107 1518.54420
8 1993 9.86 109.2655872 1077.35869 1.68132 1654.44710 2.08805 1618.34981
9 1993 10.03 109.2655872 1095.93384 1.79232 1681.17973 2.22528 1644.02711
10 1993 10.34 109.2655872 1129.80617 1.82128 1731.31914 2.26059 1692.57892
11 1993 9.93 109.2655872 1085.00728 1.87560 1660.79356 2.32735 1623.13770
12 1993 10.85 109.2655872 1185.53162 1.79919 1812.86447 2.23187 1771.28717
1 1994 11.31 109.2655872 1235.79379 1.96394 1887.75930 2.43558 1843.94764
2 1994 11.08 109.9602821 1218.35993 2.04507 1859.08281 2.53549 1815.39880
3 1994 10.72 109.9602821 1178.77422 2.01401 1796.66539 2.49623 1753.91849
4 1994 10.95 109.9602821 1204.06509 1.94639 1833.26686 2.41170 1789.13751
5 1994 10.86 109.9602821 1194.16866 1.98604 1816.21288 2.46012 1771.97215
6 1994 10.86 109.9602821 1194.16866 1.96756 1814.24531 2.43652 1769.53562
7 1994 11.12 109.9602821 1222.75834 1.96543 1855.71485 2.43317 1809.46703
8 1994 11.42 109.9602821 1255.74642 2.01036 1903.76874 2.48808 1855.79551
9 1994 11.12 109.9602821 1222.75834 2.06242 1851.69489 2.55178 1804.49253
10 1994 11.37 109.9602821 1250.24841 2.00600 1891.31872 2.48124 1842.57992
11 1994 10.76 109.9602821 1183.17264 2.04893 1787.80062 2.53361 1741.19198
12 1994 10.69 109.9602821 1175.47542 1.93678 1774.23317 2.39420 1727.47033
1 1995 10.18 109.9602821 1119.39567 1.92209 1687.66572 2.37533 1642.68060
2 1995 10.14 110.5003621 1120.47367 1.82830 1687.46267 2.25874 1642.00380
3 1995 10.39 110.5003621 1148.09876 1.82808 1727.23869 2.25781 1680.22931
4 1995 10.93 110.5003621 1207.76896 1.87118 1815.13738 2.31037 1765.24559
5 1995 10.94 110.5003621 1208.87396 1.96640 1814.83168 2.42727 1764.43336
6 1995 11.09 110.5003621 1225.44902 1.96607 1837.74904 2.42615 1786.19962
7 1995 11.75 110.5003621 1298.37925 1.99089 1945.12824 2.45608 1890.04577
8 1995 11.53 110.5003621 1274.06917 2.10722 1906.60160 2.59888 1852.05880
9 1995 11.82 110.5003621 1306.11428 2.06549 1952.49053 2.54664 1896.09473
10 1995 11.55 110.5003621 1276.27918 2.11520 1905.77530 2.60719 1850.17573
11 1995 11.66 110.5003621 1288.43422 2.06459 1921.86095 2.54405 1865.25240
12 1995 11.82 110.5003621 1306.11428 2.08202 1946.15095 2.56478 1888.28284
1 1996 12.04 110.5003621 1330.42436 2.10833 1980.26540 2.59645 1920.83209
2 1996 11.84 113.0560895 1338.58410 2.14529 1990.26545 2.64121 1929.97171
3 1996 12.09 113.0560895 1366.84812 2.15612 2030.13351 2.65378 1968.06902
4 1996 12.48 113.1463899 1412.06695 2.19931 2095.09620 2.70616 2030.47161
5 1996 12.48 113.1463899 1412.06695 2.26969 2092.82651 2.79197 2027.67964
6 1996 12.61 113.1463899 1426.77598 2.26723 2112.35956 2.78813 2046.01318
7 1996 12.14 113.1463899 1373.59717 2.28839 2031.33929 2.81334 1966.94083
8 1996 12.33 113.1463899 1395.09499 2.20062 2060.93064 2.70461 1995.02030
9 1996 12.61 113.1463899 1426.77598 2.23267 2105.49931 2.74322 2037.58168
10 1996 12.55 113.1463899 1419.98719 2.28096 2093.20012 2.80174 2025.08486
11 1996 13.11 113.1463899 1483.34917 2.26763 2184.33424 2.78456 2112.66265
12 1996 13.25 113.1463899 1499.18967 2.36636 2205.29410 2.90498 2132.31852
</TABLE>
SURRENDER CHARGE = 0.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 149.86%
GROSS ANNUAL RETURN = 9.93%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 2205.29 2205.29
TOTAL RETURN 120.53% 120.53%
AVERAGE ANNUAL RETURN 8.52% 8.52%
WITH DEATH BENEFIT CHARGE
ERV 2132.32 2132.32
TOTAL RETURN 113.23% 113.23%
AVERAGE ANNUAL RETURN 8.15% 8.15%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 11.09 110.5003621 1225.44902 1000.00000 1000.00000
7 1995 11.75 110.5003621 1298.37925 1.08333 1058.42974 1.37503 1058.13804
8 1995 11.53 110.5003621 1274.06917 1.14663 1037.46570 1.45498 1036.87112
9 1995 11.82 110.5003621 1306.11428 1.12392 1062.43589 1.42573 1061.52454
10 1995 11.55 110.5003621 1276.27918 1.15097 1037.01608 1.45963 1035.81689
11 1995 11.66 110.5003621 1288.43422 1.12343 1045.76898 1.42428 1044.25753
12 1995 11.82 110.5003621 1306.11428 1.13292 1058.98624 1.43589 1057.15107
1 1996 12.04 110.5003621 1330.42436 1.14724 1077.54941 1.45362 1075.37370
2 1996 11.84 113.0560895 1338.58410 1.16735 1082.99088 1.47867 1080.49049
3 1996 12.09 113.0560895 1366.84812 1.17324 1104.68484 1.48571 1101.81919
4 1996 12.48 113.1463899 1412.06695 1.19674 1140.03390 1.51504 1136.75515
5 1996 12.48 113.1463899 1412.06695 1.23504 1138.79886 1.56308 1135.19207
6 1996 12.61 113.1463899 1426.77598 1.23370 1149.42765 1.56093 1145.45606
7 1996 12.14 113.1463899 1373.59717 1.24521 1105.34096 1.57504 1101.18757
8 1996 12.33 113.1463899 1395.09499 1.19745 1121.44291 1.51417 1116.90781
9 1996 12.61 113.1463899 1426.77598 1.21490 1145.69468 1.53579 1140.73570
10 1996 12.55 113.1463899 1419.98719 1.24117 1139.00215 1.56855 1133.73939
11 1996 13.11 113.1463899 1483.34917 1.23392 1188.59223 1.55893 1182.76962
12 1996 13.25 113.1463899 1499.18967 1.28764 1199.99742 1.62635 1193.77392
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.34%
GROSS ANNUAL RETURN = 13.68%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1200.00 1138.80
TOTAL RETURN 20.00% 13.88%
AVERAGE ANNUAL RETURN 12.29% 8.62%
WITH DEATH BENEFIT CHARGE
ERV 1193.77 1132.89
TOTAL RETURN 19.38% 13.29%
AVERAGE ANNUAL RETURN 11.92% 8.26%
<PAGE>
T. Rowe Price Personal Strategy Bal
12/1996
Assume ($10000 @ $10.00 on 12/31/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
3/95 0.0900000000 10.70 0.841 100.841121
6/95 0.1000000000 11.39 0.885 101.726469
9/95 0.1100000000 11.76 0.952 102.677992
12/95 0.1000000000 12.39 0.829 103.506709
1/96 0.0800000000 12.47 0.664 104.170746
3/96 0.0800000000 12.56 0.664 104.834254
6/96 0.1100000000 12.59 0.916 105.750200
9/96 0.1100000000 12.96 0.898 106.647771
12/96 0.3400000000 13.51 2.684 109.331727
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 12.43 103.5067091 1286.58839 1000.00000 1000.00000
1 1996 12.62 104.1707457 1314.63481 1.08333 1020.71573 1.37503 1020.42403
2 1996 12.59 104.1707457 1311.50969 1.10578 1017.18353 1.40312 1016.59518
3 1996 12.55 104.8342537 1315.66988 1.10195 1019.30815 1.39785 1018.42203
4 1996 12.62 104.8342537 1323.00828 1.10425 1023.88928 1.40036 1022.70211
5 1996 12.72 104.8342537 1333.49171 1.10921 1030.89330 1.40625 1029.39968
6 1996 12.67 105.7502003 1339.85504 1.11680 1034.69585 1.41546 1032.89645
7 1996 12.42 105.7502003 1313.41749 1.12092 1013.15867 1.42027 1011.09543
8 1996 12.59 105.7502003 1331.39502 1.09759 1025.92880 1.39029 1023.54461
9 1996 12.97 106.6477714 1383.22160 1.11142 1064.75321 1.40741 1061.98023
10 1996 13.19 106.6477714 1406.68411 1.15348 1081.66031 1.46026 1078.53352
11 1996 13.85 106.6477714 1477.07163 1.17180 1134.61253 1.48302 1131.01806
12 1996 13.44 109.3317272 1469.41841 1.22916 1127.50454 1.55519 1123.60267
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.21%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1127.50 1060.42
TOTAL RETURN 12.75% 6.04%
WITH DEATH BENEFIT CHARGE
ERV 1123.60 1056.75
TOTAL RETURN 12.36% 5.67%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 12.43 103.5067091 1286.58839 1000.00000 1000.00000
1 1996 12.62 104.1707457 1314.63481 1.08333 1020.71573 1.37503 1020.42403
2 1996 12.59 104.1707457 1311.50969 1.10578 1017.18353 1.40312 1016.59518
3 1996 12.55 104.8342537 1315.66988 1.10195 1019.30815 1.39785 1018.42203
4 1996 12.62 104.8342537 1323.00828 1.10425 1023.88928 1.40036 1022.70211
5 1996 12.72 104.8342537 1333.49171 1.10921 1030.89330 1.40625 1029.39968
6 1996 12.67 105.7502003 1339.85504 1.11680 1034.69585 1.41546 1032.89645
7 1996 12.42 105.7502003 1313.41749 1.12092 1013.15867 1.42027 1011.09543
8 1996 12.59 105.7502003 1331.39502 1.09759 1025.92880 1.39029 1023.54461
9 1996 12.97 106.6477714 1383.22160 1.11142 1064.75321 1.40741 1061.98023
10 1996 13.19 106.6477714 1406.68411 1.15348 1081.66031 1.46026 1078.53352
11 1996 13.85 106.6477714 1477.07163 1.17180 1134.61253 1.48302 1131.01806
12 1996 13.44 109.3317272 1469.41841 1.22916 1127.50454 1.55519 1123.60267
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.21%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1127.50 1060.42
TOTAL RETURN 12.75% 6.04%
WITH DEATH BENEFIT CHARGE
ERV 1123.60 1056.75
TOTAL RETURN 12.36% 5.67%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
1 1995 10.17 100.0000000 1017.00000 1.08333 1015.91667 1.37503 1015.62497
2 1995 10.49 100.0000000 1049.00000 1.10058 1046.78200 1.39652 1046.18518
3 1995 10.65 100.8411215 1073.95794 1.13401 1070.55316 1.43854 1069.63762
4 1995 10.86 100.8411215 1095.13458 1.15977 1090.50290 1.47079 1089.25828
5 1995 11.23 100.8411215 1132.44579 1.18138 1126.47493 1.49777 1124.87152
6 1995 11.39 101.7264694 1158.66449 1.22035 1151.33504 1.54674 1149.36811
7 1995 11.61 101.7264694 1181.04431 1.24728 1172.32601 1.58042 1169.98796
8 1995 11.63 101.7264694 1183.07884 1.27002 1173.07550 1.60877 1170.39467
9 1995 11.82 102.6779925 1213.65387 1.27083 1202.12118 1.60933 1199.03256
10 1995 11.90 102.6779925 1221.86811 1.30230 1208.95506 1.64871 1205.49913
11 1995 12.27 102.6779925 1259.85897 1.30970 1245.23472 1.65760 1241.32344
12 1995 12.43 103.5067091 1286.58839 1.34900 1270.30487 1.70686 1265.95275
1 1996 12.62 104.1707457 1314.63481 1.37616 1296.62016 1.74073 1291.80860
2 1996 12.59 104.1707457 1311.50969 1.40467 1292.13319 1.77628 1286.96146
3 1996 12.55 104.8342537 1315.66988 1.39981 1294.83211 1.76961 1289.27417
4 1996 12.62 104.8342537 1323.00828 1.40273 1300.65155 1.77279 1294.69255
5 1996 12.72 104.8342537 1333.49171 1.40904 1309.54878 1.78025 1303.17135
6 1996 12.67 105.7502003 1339.85504 1.41868 1314.37918 1.79190 1307.59810
7 1996 12.42 105.7502003 1313.41749 1.42391 1287.02040 1.79799 1279.99904
8 1996 12.59 105.7502003 1331.39502 1.39427 1303.24235 1.76004 1295.75911
9 1996 12.97 106.6477714 1383.22160 1.41185 1352.56119 1.78171 1344.41679
10 1996 13.19 106.6477714 1406.68411 1.46527 1374.03836 1.84862 1365.37247
11 1996 13.85 106.6477714 1477.07163 1.48854 1441.30382 1.87743 1431.81542
12 1996 13.44 109.3317272 1469.41841 1.56141 1432.27451 1.96879 1422.42789
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 46.94%
GROSS ANNUAL RETURN = 21.22%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1432.27 1359.23
TOTAL RETURN 43.23% 35.92%
AVERAGE ANNUAL RETURN 19.68% 16.59%
WITH DEATH BENEFIT CHARGE
ERV 1422.43 1349.88
TOTAL RETURN 42.24% 34.99%
AVERAGE ANNUAL RETURN 19.27% 16.18%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 11.39 101.7264694 1158.66449 1000.00000 1000.00000
7 1995 11.61 101.7264694 1181.04431 1.08333 1018.23186 1.37503 1017.94016
8 1995 11.63 101.7264694 1183.07884 1.10308 1018.88283 1.39970 1018.29401
9 1995 11.82 102.6779925 1213.65387 1.10379 1044.11066 1.40019 1043.21022
10 1995 11.90 102.6779925 1221.86811 1.13112 1050.04627 1.43445 1048.83642
11 1995 12.27 102.6779925 1259.85897 1.13755 1081.55722 1.44218 1080.00511
12 1995 12.43 103.5067091 1286.58839 1.17169 1103.33208 1.48504 1101.43368
1 1996 12.62 104.1707457 1314.63481 1.19528 1126.18840 1.51451 1123.92939
2 1996 12.59 104.1707457 1311.50969 1.22004 1122.29121 1.54544 1119.71217
3 1996 12.55 104.8342537 1315.66988 1.21582 1124.63538 1.53964 1121.72433
4 1996 12.62 104.8342537 1323.00828 1.21835 1129.68989 1.54241 1126.43855
5 1996 12.72 104.8342537 1333.49171 1.22383 1137.41764 1.54889 1133.81548
6 1996 12.67 105.7502003 1339.85504 1.23220 1141.61312 1.55903 1137.66693
7 1996 12.42 105.7502003 1313.41749 1.23675 1117.85046 1.56433 1113.65456
8 1996 12.59 105.7502003 1331.39502 1.21100 1131.94015 1.53131 1127.36650
9 1996 12.97 106.6477714 1383.22160 1.22627 1174.77637 1.55017 1169.70079
10 1996 13.19 106.6477714 1406.68411 1.27267 1193.43051 1.60838 1187.93314
11 1996 13.85 106.6477714 1477.07163 1.29288 1251.85439 1.63345 1245.74138
12 1996 13.44 109.3317272 1469.41841 1.35618 1244.01192 1.71294 1237.57382
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 26.82%
GROSS ANNUAL RETURN = 16.31%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1244.01 1180.57
TOTAL RETURN 24.40% 18.06%
AVERAGE ANNUAL RETURN 14.89% 11.13%
WITH DEATH BENEFIT CHARGE
ERV 1237.57 1174.46
TOTAL RETURN 23.76% 17.45%
AVERAGE ANNUAL RETURN 14.52% 10.77%
<PAGE>
T. Rowe Price Equity Income Fund
12/1996
Assume ($10000 @ $10.00 on 3/31/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
6/94 0.0900000000 10.10 0.891 100.891089
9/94 0.1000000000 10.52 0.959 101.850130
12/94 0.1000000000 10.43 0.977 102.826641
1/95 0.2600000000 10.54 2.537 105.363162
3/95 0.1100000000 10.95 1.058 106.421604
6/95 0.1100000000 11.57 1.012 107.433392
9/95 0.1100000000 12.27 0.963 108.396527
12/95 0.1100000000 13.15 0.907 109.303266
1/96 0.0100000000 13.39 0.082 109.384897
3/96 0.1000000000 13.76 0.795 110.179845
6/96 0.1100000000 13.92 0.871 111.050519
9/96 0.1000000000 14.32 0.775 111.826012
12/96 0.1800000000 15.46 1.302 113.127996
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 13.21 109.3032661 1443.89615 1000.00000 1000.00000
1 1996 13.57 109.3848966 1484.35305 1.08333 1026.93593 1.37503 1026.64423
2 1996 13.62 109.3848966 1489.82229 1.11251 1029.60726 1.41167 1029.01533
3 1996 13.70 110.1798450 1509.46388 1.11541 1042.06603 1.41493 1041.16678
4 1996 13.78 110.1798450 1518.27826 1.12890 1047.02219 1.43164 1045.81494
5 1996 14.01 110.1798450 1543.61963 1.13427 1063.36361 1.43803 1061.83246
6 1996 13.99 111.0505191 1553.59676 1.15198 1069.08465 1.46005 1067.23552
7 1996 13.59 111.0505191 1509.17655 1.15817 1037.35936 1.46748 1035.25380
8 1996 13.88 111.0505191 1541.38120 1.12381 1058.37200 1.42351 1055.92180
9 1996 14.37 111.8260115 1606.93979 1.14657 1102.24048 1.45193 1099.38072
10 1996 14.70 111.8260115 1643.84237 1.19409 1126.35880 1.51169 1123.11577
11 1996 15.55 111.8260115 1738.89448 1.22022 1190.26817 1.54432 1186.51352
12 1996 15.26 113.1279961 1726.33322 1.28946 1180.38057 1.63150 1176.31100
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 19.56%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1180.38 1110.15
TOTAL RETURN 18.04% 11.01%
WITH DEATH BENEFIT CHARGE
ERV 1176.31 1106.32
TOTAL RETURN 17.63% 10.63%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 13.21 109.3032661 1443.89615 1000.00000 1000.00000
1 1996 13.57 109.3848966 1484.35305 1.08333 1026.93593 1.37503 1026.64423
2 1996 13.62 109.3848966 1489.82229 1.11251 1029.60726 1.41167 1029.01533
3 1996 13.70 110.1798450 1509.46388 1.11541 1042.06603 1.41493 1041.16678
4 1996 13.78 110.1798450 1518.27826 1.12890 1047.02219 1.43164 1045.81494
5 1996 14.01 110.1798450 1543.61963 1.13427 1063.36361 1.43803 1061.83246
6 1996 13.99 111.0505191 1553.59676 1.15198 1069.08465 1.46005 1067.23552
7 1996 13.59 111.0505191 1509.17655 1.15817 1037.35936 1.46748 1035.25380
8 1996 13.88 111.0505191 1541.38120 1.12381 1058.37200 1.42351 1055.92180
9 1996 14.37 111.8260115 1606.93979 1.14657 1102.24048 1.45193 1099.38072
10 1996 14.70 111.8260115 1643.84237 1.19409 1126.35880 1.51169 1123.11577
11 1996 15.55 111.8260115 1738.89448 1.22022 1190.26817 1.54432 1186.51352
12 1996 15.26 113.1279961 1726.33322 1.28946 1180.38057 1.63150 1176.31100
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 19.56%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1180.38 1110.15
TOTAL RETURN 18.04% 11.01%
WITH DEATH BENEFIT CHARGE
ERV 1176.31 1106.32
TOTAL RETURN 17.63% 10.63%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
4 1994 10.16 100.0000000 1016.00000 1.08333 1014.91667 1.37503 1014.62497
5 1994 10.35 100.0000000 1035.00000 1.09949 1032.79691 1.39514 1032.20411
6 1994 10.08 100.8910891 1016.98218 1.11886 1013.69858 1.41932 1012.81564
7 1994 10.36 100.8910891 1045.23168 1.09817 1040.75870 1.39266 1039.55676
8 1994 10.82 100.8910891 1091.64158 1.12749 1085.84251 1.42943 1084.28526
9 1994 10.50 101.8501299 1069.42636 1.17633 1062.56897 1.49093 1060.72881
10 1994 10.65 101.8501299 1084.70388 1.15112 1076.59741 1.45854 1074.42354
11 1994 10.41 101.8501299 1060.25985 1.16631 1051.16975 1.47737 1048.73381
12 1994 10.42 102.8266412 1071.45360 1.13877 1061.12876 1.44204 1058.36383
1 1995 10.57 105.3631618 1113.68862 1.14956 1101.80723 1.45529 1098.62759
2 1995 10.87 105.3631618 1145.29757 1.19362 1131.88534 1.51065 1128.29842
3 1995 10.90 106.4216045 1159.99549 1.22621 1145.18493 1.55145 1141.22674
4 1995 11.18 106.4216045 1189.79354 1.24062 1173.36190 1.56922 1168.97343
5 1995 11.58 106.4216045 1232.36218 1.27114 1214.07151 1.60738 1209.18979
6 1995 11.55 107.4333916 1240.85567 1.31524 1221.12370 1.66268 1215.86090
7 1995 11.80 107.4333916 1267.71402 1.32288 1246.23206 1.67185 1240.50639
8 1995 11.99 107.4333916 1288.12636 1.35008 1264.94843 1.70574 1258.77490
9 1995 12.33 108.3965271 1336.52918 1.37036 1311.10994 1.73086 1304.34395
10 1995 12.40 108.3965271 1344.11694 1.42037 1317.13302 1.79352 1309.95547
11 1995 12.90 108.3965271 1398.31520 1.42689 1368.81633 1.80123 1360.97502
12 1995 13.21 109.3032661 1443.89615 1.48288 1411.95281 1.87139 1403.46740
1 1996 13.57 109.3848966 1484.35305 1.52962 1449.98507 1.92981 1440.86170
2 1996 13.62 109.3848966 1489.82229 1.57082 1453.75687 1.98123 1444.18947
3 1996 13.70 110.1798450 1509.46388 1.57490 1471.34807 1.98581 1461.24363
4 1996 13.78 110.1798450 1518.27826 1.59396 1478.34592 2.00926 1467.76718
5 1996 14.01 110.1798450 1543.61963 1.60154 1501.41924 2.01823 1490.24724
6 1996 13.99 111.0505191 1553.59676 1.62654 1509.49707 2.04914 1497.83026
7 1996 13.59 111.0505191 1509.17655 1.63529 1464.70247 2.05957 1452.94496
8 1996 13.88 111.0505191 1541.38120 1.58676 1494.37132 1.99785 1481.95182
9 1996 14.37 111.8260115 1606.93979 1.61890 1556.31155 2.03773 1542.94500
10 1996 14.70 111.8260115 1643.84237 1.68600 1590.36548 2.12160 1576.25637
11 1996 15.55 111.8260115 1738.89448 1.72290 1680.60249 2.16740 1665.23304
12 1996 15.26 113.1279961 1726.33322 1.82065 1666.64167 2.28975 1650.91414
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 72.63%
GROSS ANNUAL RETURN = 21.93%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1666.64 1595.81
TOTAL RETURN 66.66% 59.58%
AVERAGE ANNUAL RETURN 20.38% 18.50%
WITH DEATH BENEFIT CHARGE
ERV 1650.91 1580.75
TOTAL RETURN 65.09% 58.08%
AVERAGE ANNUAL RETURN 19.97% 18.09%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 11.55 107.4333916 1240.85567 1000.00000 1000.00000
7 1995 11.80 107.4333916 1267.71402 1.08333 1020.56169 1.37503 1020.26999
8 1995 11.99 107.4333916 1288.12636 1.10561 1035.88885 1.40291 1035.29516
9 1995 12.33 108.3965271 1336.52918 1.12221 1073.69134 1.42357 1072.77399
10 1995 12.40 108.3965271 1344.11694 1.16317 1078.62375 1.47510 1077.38925
11 1995 12.90 108.3965271 1398.31520 1.16851 1120.94813 1.48145 1119.35092
12 1995 13.21 109.3032661 1443.89615 1.21436 1156.27337 1.53914 1154.29931
1 1996 13.57 109.3848966 1484.35305 1.25263 1187.41867 1.58720 1185.05472
2 1996 13.62 109.3848966 1489.82229 1.28637 1190.50746 1.62949 1187.79168
3 1996 13.70 110.1798450 1509.46388 1.28972 1204.91320 1.63325 1201.81809
4 1996 13.78 110.1798450 1518.27826 1.30532 1210.64387 1.65254 1207.18347
5 1996 14.01 110.1798450 1543.61963 1.31153 1229.53902 1.65992 1225.67247
6 1996 13.99 111.0505191 1553.59676 1.33200 1236.15411 1.68534 1231.90923
7 1996 13.59 111.0505191 1509.17655 1.33917 1199.47101 1.69392 1194.99274
8 1996 13.88 111.0505191 1541.38120 1.29943 1223.76735 1.64315 1218.84980
9 1996 14.37 111.8260115 1606.93979 1.32575 1274.49132 1.67596 1269.01440
10 1996 14.70 111.8260115 1643.84237 1.38070 1302.37869 1.74494 1296.41176
11 1996 15.55 111.8260115 1738.89448 1.41091 1376.27539 1.78261 1369.59173
12 1996 15.26 113.1279961 1726.33322 1.49096 1364.84262 1.88323 1357.81498
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 39.12%
GROSS ANNUAL RETURN = 23.36%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1364.84 1295.24
TOTAL RETURN 36.48% 29.52%
AVERAGE ANNUAL RETURN 21.87% 17.88%
WITH DEATH BENEFIT CHARGE
ERV 1357.81 1288.57
TOTAL RETURN 35.78% 28.86%
AVERAGE ANNUAL RETURN 21.47% 17.49%
<PAGE>
T. Rowe Price Internat. Stock Fund
12/1996
Assume ($10000 @ $10.00 on 3/31/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
1/95 0.0500000000 9.73 0.514 100.513875
1/96 0.1000000000 11.31 0.889 101.402591
12/96 0.1600000000 12.47 1.301 102.703667
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.26 100.5138746 1131.78623 1000.00000 1000.00000
1 1996 11.45 101.4025915 1161.05967 1.08333 1024.78148 1.37503 1024.48978
2 1996 11.52 101.4025915 1168.15785 1.11018 1029.93634 1.40871 1029.34433
3 1996 11.72 101.4025915 1188.43837 1.11576 1046.70142 1.41538 1045.79951
4 1996 12.06 101.4025915 1222.91525 1.13393 1075.93255 1.43801 1074.70040
5 1996 12.02 101.4025915 1218.85915 1.16559 1071.19836 1.47775 1069.65813
6 1996 12.17 101.4025915 1234.06954 1.16046 1083.40559 1.47082 1081.53580
7 1996 11.78 101.4025915 1194.52253 1.17369 1047.51307 1.48715 1045.38974
8 1996 11.96 101.4025915 1212.77499 1.13481 1062.38441 1.43745 1059.92599
9 1996 12.23 101.4025915 1240.15369 1.15092 1085.21709 1.45743 1082.39665
10 1996 12.17 101.4025915 1234.06954 1.17565 1078.71739 1.48833 1075.59812
11 1996 12.71 101.4025915 1288.82694 1.16861 1125.41299 1.47898 1121.84493
12 1996 12.64 102.7036672 1298.17435 1.21920 1132.35602 1.54257 1128.43871
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.70%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1132.36 1064.98
TOTAL RETURN 13.24% 6.50%
WITH DEATH BENEFIT CHARGE
ERV 1128.44 1061.30
TOTAL RETURN 12.84% 6.13%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 11.26 100.5138746 1131.78623 1000.00000 1000.00000
1 1996 11.45 101.4025915 1161.05967 1.08333 1024.78148 1.37503 1024.48978
2 1996 11.52 101.4025915 1168.15785 1.11018 1029.93634 1.40871 1029.34433
3 1996 11.72 101.4025915 1188.43837 1.11576 1046.70142 1.41538 1045.79951
4 1996 12.06 101.4025915 1222.91525 1.13393 1075.93255 1.43801 1074.70040
5 1996 12.02 101.4025915 1218.85915 1.16559 1071.19836 1.47775 1069.65813
6 1996 12.17 101.4025915 1234.06954 1.16046 1083.40559 1.47082 1081.53580
7 1996 11.78 101.4025915 1194.52253 1.17369 1047.51307 1.48715 1045.38974
8 1996 11.96 101.4025915 1212.77499 1.13481 1062.38441 1.43745 1059.92599
9 1996 12.23 101.4025915 1240.15369 1.15092 1085.21709 1.45743 1082.39665
10 1996 12.17 101.4025915 1234.06954 1.17565 1078.71739 1.48833 1075.59812
11 1996 12.71 101.4025915 1288.82694 1.16861 1125.41299 1.47898 1121.84493
12 1996 12.64 102.7036672 1298.17435 1.21920 1132.35602 1.54257 1128.43871
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 14.70%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1132.36 1064.98
TOTAL RETURN 13.24% 6.50%
WITH DEATH BENEFIT CHARGE
ERV 1128.44 1061.30
TOTAL RETURN 12.84% 6.13%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
4 1994 10.23 100.0000000 1023.00000 1.08333 1021.91667 1.37503 1021.62497
5 1994 10.23 100.0000000 1023.00000 1.10708 1020.80959 1.40477 1020.22020
6 1994 10.10 100.0000000 1010.00000 1.10588 1006.73155 1.40284 1005.85269
7 1994 10.41 100.0000000 1041.00000 1.09063 1036.54060 1.38308 1035.34231
8 1994 10.79 100.0000000 1079.00000 1.12292 1073.25490 1.42363 1071.71216
9 1994 10.52 100.0000000 1052.00000 1.16269 1045.23597 1.47364 1043.42088
10 1994 10.73 100.0000000 1073.00000 1.13234 1064.96861 1.43474 1062.81489
11 1994 10.32 100.0000000 1032.00000 1.15372 1023.12178 1.46141 1020.74266
12 1994 10.18 100.0000000 1018.00000 1.10838 1008.13384 1.40356 1005.49182
1 1995 9.66 100.5138746 970.96403 1.09214 960.46158 1.38258 957.65120
2 1995 9.72 100.5138746 976.99486 1.04050 965.38668 1.31680 962.28254
3 1995 10.10 100.5138746 1015.19013 1.04584 1002.08230 1.32317 998.57947
4 1995 10.46 100.5138746 1051.37513 1.08559 1036.71449 1.37308 1032.79932
5 1995 10.52 100.5138746 1057.40596 1.12311 1041.53812 1.42013 1037.30347
6 1995 10.52 100.5138746 1057.40596 1.12833 1040.40979 1.42633 1035.87714
7 1995 11.05 100.5138746 1110.67831 1.12711 1091.69876 1.42437 1086.64050
8 1995 10.84 100.5138746 1089.57040 1.18267 1069.76887 1.49417 1064.49525
9 1995 10.97 100.5138746 1102.63720 1.15892 1081.43929 1.46372 1075.79762
10 1995 10.82 100.5138746 1087.56012 1.17156 1065.48050 1.47926 1059.60827
11 1995 10.90 100.5138746 1095.60123 1.15427 1072.20409 1.45700 1065.98572
12 1995 11.26 100.5138746 1131.78623 1.16155 1106.45478 1.46577 1099.72682
1 1996 11.45 101.4025915 1161.05967 1.19866 1133.87437 1.51216 1126.65889
2 1996 11.52 101.4025915 1168.15785 1.22836 1139.57799 1.54919 1131.99757
3 1996 11.72 101.4025915 1188.43837 1.23454 1158.12779 1.55653 1150.09377
4 1996 12.06 101.4025915 1222.91525 1.25464 1190.47071 1.58142 1181.87685
5 1996 12.02 101.4025915 1218.85915 1.28968 1185.23254 1.62512 1176.33174
6 1996 12.17 101.4025915 1234.06954 1.28400 1198.73930 1.61750 1189.39392
7 1996 11.78 101.4025915 1194.52253 1.29863 1159.02584 1.63546 1149.64313
8 1996 11.96 101.4025915 1212.77499 1.25561 1175.48031 1.58080 1165.62904
9 1996 12.23 101.4025915 1240.15369 1.27344 1200.74363 1.60278 1190.34063
10 1996 12.17 101.4025915 1234.06954 1.30081 1193.55202 1.63676 1182.86410
11 1996 12.71 101.4025915 1288.82694 1.29301 1245.21858 1.62648 1233.72296
12 1996 12.64 102.7036672 1298.17435 1.34899 1252.90073 1.69641 1240.97432
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 29.82%
GROSS ANNUAL RETURN = 9.94%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1252.90 1199.65
TOTAL RETURN 25.29% 19.97%
AVERAGE ANNUAL RETURN 8.53% 6.83%
WITH DEATH BENEFIT CHARGE
ERV 1240.97 1188.23
TOTAL RETURN 24.10% 18.82%
AVERAGE ANNUAL RETURN 8.16% 6.46%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 10.52 100.5138746 1057.40596 1000.00000 1000.00000
7 1995 11.05 100.5138746 1110.67831 1.08333 1049.29689 1.37503 1049.00519
8 1995 10.84 100.5138746 1089.57040 1.13674 1028.21877 1.44242 1027.62693
9 1995 10.97 100.5138746 1102.63720 1.11390 1039.43590 1.41302 1038.53785
10 1995 10.82 100.5138746 1087.56012 1.12606 1024.09696 1.42802 1022.90922
11 1995 10.90 100.5138746 1095.60123 1.10944 1030.55940 1.40653 1029.06578
12 1995 11.26 100.5138746 1131.78623 1.11644 1063.47978 1.41500 1061.63828
1 1996 11.45 101.4025915 1161.05967 1.15210 1089.83439 1.45979 1087.63757
2 1996 11.52 101.4025915 1168.15785 1.18065 1095.31648 1.49554 1092.79134
3 1996 11.72 101.4025915 1188.43837 1.18659 1113.14580 1.50262 1110.26079
4 1996 12.06 101.4025915 1222.91525 1.20591 1144.23252 1.52665 1140.94308
5 1996 12.02 101.4025915 1218.85915 1.23959 1139.19780 1.56883 1135.59002
6 1996 12.17 101.4025915 1234.06954 1.23413 1152.17995 1.56147 1148.19980
7 1996 11.78 101.4025915 1194.52253 1.24819 1114.00898 1.57881 1109.82576
8 1996 11.96 101.4025915 1212.77499 1.20684 1129.82434 1.52605 1125.25800
9 1996 12.23 101.4025915 1240.15369 1.22398 1154.10643 1.54727 1149.11372
10 1996 12.17 101.4025915 1234.06954 1.25028 1147.19414 1.58007 1141.89613
11 1996 12.71 101.4025915 1288.82694 1.24279 1196.85396 1.57015 1190.99352
12 1996 12.64 102.7036672 1298.17435 1.29659 1204.23774 1.63766 1197.99373
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.77%
GROSS ANNUAL RETURN = 13.93%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1204.24 1142.82
TOTAL RETURN 20.42% 14.28%
AVERAGE ANNUAL RETURN 12.54% 8.86%
WITH DEATH BENEFIT CHARGE
ERV 1197.99 1136.90
TOTAL RETURN 19.80% 13.69%
AVERAGE ANNUAL RETURN 12.17% 8.50%
<PAGE>
T. Rowe Price Limited Term Bond
12/1996
Assume ($10000 @ $10.00 on 5/13/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
5/94 0.0101080000 5.00 0.202 100.202160
6/94 0.0227390860 4.99 0.457 100.658774
7/94 0.0254802850 5.04 0.509 101.167666
8/94 0.0310070990 5.04 0.622 101.790070
9/94 0.0333695090 5.01 0.678 102.468051
10/94 0.0289283280 4.98 0.595 103.063278
11/94 0.0311052550 4.93 0.650 103.713543
12/94 0.0273000000 4.92 0.575 104.289027
1/95 0.0280000000 4.94 0.591 104.880139
2/95 0.0287000000 4.96 0.607 105.487006
3/95 0.0301000000 4.97 0.639 106.125871
4/95 0.0262000000 4.98 0.558 106.684204
5/95 0.0283000000 5.02 0.601 107.285631
6/95 0.0295000000 5.01 0.632 107.917352
7/95 0.0254251330 5.00 0.549 108.466115
8/95 0.0274278140 5.00 0.595 109.061113
9/95 0.0286146590 5.00 0.624 109.685262
10/95 0.0264917600 5.01 0.580 110.265253
11/95 0.0261262300 5.04 0.572 110.836844
12/95 0.0265365700 5.06 0.581 111.418114
1/96 0.0242378560 5.07 0.533 111.950764
2/96 0.0235427380 4.99 0.528 112.478946
3/96 0.0239636480 4.94 0.546 113.024575
4/96 0.0235631940 4.90 0.544 113.568089
5/96 0.0250830810 4.87 0.585 114.153025
6/96 0.0220828540 4.89 0.516 114.668531
7/96 0.0238193190 4.88 0.560 115.228229
8/96 0.0255629680 4.86 0.606 115.834315
9/96 0.0221304100 4.89 0.524 116.358540
10/96 0.0240874040 4.94 0.567 116.925903
11/96 0.0247578130 4.97 0.582 117.508364
12/96 0.0241618420 4.93 0.576 118.084270
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 5.06 111.4181142 563.77566 1000.00000 1000.00000
1 1996 5.07 111.9507643 567.59038 1.08333 1005.68304 1.37503 1005.39134
2 1996 4.99 112.4789462 561.26994 1.08949 993.39471 1.38245 992.81330
3 1996 4.94 113.0245749 558.34140 1.07618 987.13529 1.36515 986.26795
4 1996 4.90 113.5680892 556.48364 1.06940 982.78141 1.35615 981.63020
5 1996 4.87 114.1530250 555.92523 1.06468 980.73056 1.34977 979.29540
6 1996 4.89 114.6685311 560.72912 1.06246 988.14283 1.34656 986.41117
7 1996 4.88 115.2282291 562.31376 1.07049 989.86487 1.35635 987.84245
8 1996 4.86 115.8343146 562.95477 1.07235 989.92092 1.35832 987.61023
9 1996 4.89 116.3585397 568.99326 1.07241 999.46681 1.35800 996.84576
10 1996 4.94 116.9259031 577.61396 1.08276 1013.52678 1.37070 1010.57807
11 1996 4.97 117.5083638 584.01657 1.09799 1023.66331 1.38958 1020.39032
12 1996 4.93 118.0842702 582.15545 1.10897 1019.29218 1.40307 1015.73552
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 3.26%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1019.29 958.64
TOTAL RETURN 1.93% -4.14%
WITH DEATH BENEFIT CHARGE
ERV 1015.74 955.30
TOTAL RETURN 1.57% -4.47%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 5.06 111.4181142 563.77566 1000.00000 1000.00000
1 1996 5.07 111.9507643 567.59038 1.08333 1005.68304 1.37503 1005.39134
2 1996 4.99 112.4789462 561.26994 1.08949 993.39471 1.38245 992.81330
3 1996 4.94 113.0245749 558.34140 1.07618 987.13529 1.36515 986.26795
4 1996 4.90 113.5680892 556.48364 1.06940 982.78141 1.35615 981.63020
5 1996 4.87 114.1530250 555.92523 1.06468 980.73056 1.34977 979.29540
6 1996 4.89 114.6685311 560.72912 1.06246 988.14283 1.34656 986.41117
7 1996 4.88 115.2282291 562.31376 1.07049 989.86487 1.35635 987.84245
8 1996 4.86 115.8343146 562.95477 1.07235 989.92092 1.35832 987.61023
9 1996 4.89 116.3585397 568.99326 1.07241 999.46681 1.35800 996.84576
10 1996 4.94 116.9259031 577.61396 1.08276 1013.52678 1.37070 1010.57807
11 1996 4.97 117.5083638 584.01657 1.09799 1023.66331 1.38958 1020.39032
12 1996 4.93 118.0842702 582.15545 1.10897 1019.29218 1.40307 1015.73552
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 3.26%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1019.29 958.64
TOTAL RETURN 1.93% -4.14%
WITH DEATH BENEFIT CHARGE
ERV 1015.74 955.30
TOTAL RETURN 1.57% -4.47%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4 1994 5.00 100.0000000 500.00000 1000.00000 1000.00000
5 1994 5.00 100.2021600 501.01080 1.08333 1000.93827 1.37503 1000.64657
6 1994 4.99 100.6587743 502.28728 1.08435 1002.40412 1.37592 1001.82011
7 1994 5.04 101.1676661 509.88504 1.08594 1016.48086 1.37754 1015.59641
8 1994 5.04 101.7900700 513.02195 1.10119 1021.63327 1.39648 1020.44809
9 1994 5.01 102.4680510 513.36494 1.10677 1021.20952 1.40315 1019.72716
10 1994 4.98 103.0632777 513.25512 1.10631 1019.88476 1.40216 1018.10688
11 1994 4.93 103.7135434 511.30777 1.10488 1014.91032 1.39993 1012.84412
12 1994 4.92 104.2890271 513.10201 1.09949 1017.37228 1.39269 1015.00563
1 1995 4.94 104.8801389 518.10789 1.10215 1026.19571 1.39567 1023.51245
2 1995 4.96 105.4870059 523.21555 1.11171 1035.20054 1.40736 1032.19518
3 1995 4.97 106.1258708 527.44558 1.12147 1042.44834 1.41930 1039.12085
4 1995 4.98 106.6842037 531.28733 1.12932 1048.91190 1.42883 1045.26067
5 1995 5.02 107.2856306 538.57387 1.13632 1062.16126 1.43727 1058.15900
6 1995 5.01 107.9173524 540.66594 1.15067 1065.13651 1.45500 1060.81438
7 1995 5.00 108.4661150 542.33058 1.15390 1067.26203 1.45866 1062.62183
8 1995 5.00 109.0611127 545.30556 1.15620 1071.96036 1.46114 1066.98977
9 1995 5.00 109.6852620 548.42631 1.16129 1076.93383 1.46715 1071.62893
10 1995 5.01 110.2652532 552.42892 1.16668 1083.62699 1.47353 1077.97653
11 1995 5.04 110.8368435 558.61769 1.17393 1094.59276 1.48225 1088.57068
12 1995 5.06 111.4181142 563.77566 1.18581 1103.51382 1.49682 1097.12511
1 1996 5.07 111.9507643 567.59038 1.19547 1109.78513 1.50858 1103.04009
2 1996 4.99 112.4789462 561.26994 1.20227 1096.22479 1.51672 1089.24041
3 1996 4.94 113.0245749 558.34140 1.18758 1089.31744 1.49774 1082.05933
4 1996 4.90 113.5680892 556.48364 1.18009 1084.51287 1.48787 1076.97114
5 1996 4.87 114.1530250 555.92523 1.17489 1082.24972 1.48087 1074.40958
6 1996 4.89 114.6685311 560.72912 1.17244 1090.42927 1.47735 1082.21647
7 1996 4.88 115.2282291 562.31376 1.18130 1092.32956 1.48808 1083.78677
8 1996 4.86 115.8343146 562.95477 1.18336 1092.39141 1.49024 1083.53199
9 1996 4.89 116.3585397 568.99326 1.18342 1102.92544 1.48989 1093.66452
10 1996 4.94 116.9259031 577.61396 1.19484 1118.44080 1.50383 1108.73058
11 1996 4.97 117.5083638 584.01657 1.21164 1129.62660 1.52454 1119.49585
12 1996 4.93 118.0842702 582.15545 1.22376 1124.80300 1.53934 1114.38895
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 16.43%
GROSS ANNUAL RETURN = 5.94%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1124.80 1077.00
TOTAL RETURN 12.48% 7.70%
AVERAGE ANNUAL RETURN 4.56% 2.85%
WITH DEATH BENEFIT CHARGE
ERV 1114.39 1067.03
TOTAL RETURN 11.44% 6.70%
AVERAGE ANNUAL RETURN 4.19% 2.49%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 5.01 107.9173524 540.66594 1000.00000 1000.00000
7 1995 5.00 108.4661150 542.33058 1.08333 1001.99554 1.37503 1001.70384
8 1995 5.00 109.0611127 545.30556 1.08550 1006.40655 1.37738 1005.82137
9 1995 5.00 109.6852620 548.42631 1.09027 1011.07587 1.38304 1010.19458
10 1995 5.01 110.2652532 552.42892 1.09533 1017.35973 1.38905 1016.17828
11 1995 5.04 110.8368435 558.61769 1.10214 1027.65491 1.39728 1026.16509
12 1995 5.06 111.4181142 563.77566 1.11329 1036.03041 1.41101 1034.22912
1 1996 5.07 111.9507643 567.59038 1.12237 1041.91821 1.42210 1039.80500
2 1996 4.99 112.4789462 561.26994 1.12874 1029.18713 1.42977 1026.79643
3 1996 4.94 113.0245749 558.34140 1.11495 1022.70218 1.41188 1020.02703
4 1996 4.90 113.5680892 556.48364 1.10793 1018.19143 1.40257 1015.23053
5 1996 4.87 114.1530250 555.92523 1.10304 1016.06668 1.39598 1012.81582
6 1996 4.89 114.6685311 560.72912 1.10074 1023.74602 1.39266 1020.17515
7 1996 4.88 115.2282291 562.31376 1.10906 1025.53011 1.40277 1021.65543
8 1996 4.86 115.8343146 562.95477 1.11099 1025.58817 1.40481 1021.41526
9 1996 4.89 116.3585397 568.99326 1.11105 1035.47801 1.40448 1030.96691
10 1996 4.94 116.9259031 577.61396 1.12177 1050.04456 1.41761 1045.16926
11 1996 4.97 117.5083638 584.01657 1.13755 1060.54631 1.43714 1055.31738
12 1996 4.93 118.0842702 582.15545 1.14893 1056.01769 1.45110 1050.50325
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 7.67%
GROSS ANNUAL RETURN = 4.81%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1056.02 1002.16
TOTAL RETURN 5.60% 0.22%
AVERAGE ANNUAL RETURN 3.53% 0.14%
WITH DEATH BENEFIT CHARGE
ERV 1050.50 996.93
TOTAL RETURN 5.05% -0.31%
AVERAGE ANNUAL RETURN 3.18% -0.20%
<PAGE>
T. Rowe Price New American Growth
12/1996
Assume ($10000 @ $10.00 on 3/31/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
1/95 0.0200000000 10.31 0.194 100.193986
1/96 0.4000000000 14.88 2.693 102.887373
12/96 0.1400000000 17.53 0.822 103.709064
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 15.23 100.1939864 1525.95441 1000.00000 1000.00000
1 1996 15.14 102.8873732 1557.71483 1.08333 1019.73014 1.37503 1019.43844
2 1996 15.59 102.8873732 1604.01415 1.10471 1048.93446 1.40176 1048.33703
3 1996 16.19 102.8873732 1665.74657 1.13635 1088.16762 1.44150 1087.24205
4 1996 16.47 102.8873732 1694.55504 1.17885 1105.80823 1.49499 1104.55050
5 1996 16.82 102.8873732 1730.56562 1.19796 1128.10953 1.51879 1126.50425
6 1996 16.84 102.8873732 1732.62336 1.22212 1128.22880 1.54898 1126.29475
7 1996 15.65 102.8873732 1610.18739 1.22225 1047.28017 1.54869 1045.15634
8 1996 16.45 102.8873732 1692.49729 1.13455 1099.68071 1.43712 1097.14574
9 1996 17.38 102.8873732 1788.18255 1.19132 1160.65979 1.50861 1157.66421
10 1996 17.27 102.8873732 1776.86493 1.25738 1152.05646 1.59183 1148.74540
11 1996 17.98 102.8873732 1849.91497 1.24806 1198.17146 1.57956 1194.39277
12 1996 17.67 103.7090635 1832.53915 1.29802 1185.61929 1.64233 1181.53179
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 20.09%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1185.62 1115.07
TOTAL RETURN 18.56% 11.51%
WITH DEATH BENEFIT CHARGE
ERV 1181.53 1111.23
TOTAL RETURN 18.15% 11.12%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 15.23 100.1939864 1525.95441 1000.00000 1000.00000
1 1996 15.14 102.8873732 1557.71483 1.08333 1019.73014 1.37503 1019.43844
2 1996 15.59 102.8873732 1604.01415 1.10471 1048.93446 1.40176 1048.33703
3 1996 16.19 102.8873732 1665.74657 1.13635 1088.16762 1.44150 1087.24205
4 1996 16.47 102.8873732 1694.55504 1.17885 1105.80823 1.49499 1104.55050
5 1996 16.82 102.8873732 1730.56562 1.19796 1128.10953 1.51879 1126.50425
6 1996 16.84 102.8873732 1732.62336 1.22212 1128.22880 1.54898 1126.29475
7 1996 15.65 102.8873732 1610.18739 1.22225 1047.28017 1.54869 1045.15634
8 1996 16.45 102.8873732 1692.49729 1.13455 1099.68071 1.43712 1097.14574
9 1996 17.38 102.8873732 1788.18255 1.19132 1160.65979 1.50861 1157.66421
10 1996 17.27 102.8873732 1776.86493 1.25738 1152.05646 1.59183 1148.74540
11 1996 17.98 102.8873732 1849.91497 1.24806 1198.17146 1.57956 1194.39277
12 1996 17.67 103.7090635 1832.53915 1.29802 1185.61929 1.64233 1181.53179
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 20.09%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1185.62 1115.07
TOTAL RETURN 18.56% 11.51%
WITH DEATH BENEFIT CHARGE
ERV 1181.53 1111.23
TOTAL RETURN 18.15% 11.12%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3 1994 10.00 100.0000000 1000.00000 1000.00000 1000.00000
4 1994 10.12 100.0000000 1012.00000 1.08333 1010.91667 1.37503 1010.62497
5 1994 9.98 100.0000000 998.00000 1.09516 995.83649 1.38964 995.25435
6 1994 9.67 100.0000000 967.00000 1.07882 963.82487 1.36851 962.97112
7 1994 9.79 100.0000000 979.00000 1.04414 974.74133 1.32412 973.59701
8 1994 10.45 100.0000000 1045.00000 1.05597 1039.39826 1.33873 1037.89404
9 1994 10.22 100.0000000 1022.00000 1.12601 1015.39553 1.42714 1013.62330
10 1994 10.37 100.0000000 1037.00000 1.10001 1029.19859 1.39377 1027.10658
11 1994 9.95 100.0000000 995.00000 1.11497 986.39959 1.41231 984.09498
12 1994 10.10 100.0000000 1010.00000 1.06860 1000.20134 1.35316 997.57742
1 1995 10.37 100.1939864 1039.01164 1.08355 1027.84797 1.37170 1024.86052
2 1995 10.66 100.1939864 1068.06790 1.11350 1055.47852 1.40922 1052.11182
3 1995 11.37 100.1939864 1139.20563 1.14344 1124.63432 1.44669 1120.74012
4 1995 11.23 100.1939864 1125.17847 1.21835 1109.56822 1.54105 1105.39928
5 1995 11.55 100.1939864 1157.24054 1.20203 1139.98345 1.51996 1135.37778
6 1995 12.48 100.1939864 1250.42095 1.23498 1230.53934 1.56118 1225.23663
7 1995 13.43 100.1939864 1345.60524 1.33308 1322.87712 1.68474 1316.81910
8 1995 13.76 100.1939864 1378.66925 1.43312 1353.94955 1.81067 1347.36511
9 1995 14.36 100.1939864 1438.78565 1.46678 1411.52127 1.85267 1404.26383
10 1995 14.58 100.1939864 1460.82832 1.52915 1431.61710 1.93091 1423.84671
11 1995 15.05 100.1939864 1507.91950 1.55092 1476.21570 1.95784 1467.78791
12 1995 15.23 100.1939864 1525.95441 1.59923 1492.27220 2.01826 1483.32459
1 1996 15.14 102.8873732 1557.71483 1.61663 1521.71495 2.03962 1512.15811
2 1996 15.59 102.8873732 1604.01415 1.64852 1565.29573 2.07927 1555.02410
3 1996 16.19 102.8873732 1665.74657 1.69574 1623.84229 2.13821 1612.73287
4 1996 16.47 102.8873732 1694.55504 1.75916 1650.16688 2.21756 1638.40692
5 1996 16.82 102.8873732 1730.56562 1.78768 1683.44649 2.25286 1670.97145
6 1996 16.84 102.8873732 1732.62336 1.82373 1683.62448 2.29764 1670.66069
7 1996 15.65 102.8873732 1610.18739 1.82393 1562.82709 2.29721 1550.30610
8 1996 16.45 102.8873732 1692.49729 1.69306 1641.02295 2.13172 1627.42325
9 1996 17.38 102.8873732 1788.18255 1.77777 1732.02034 2.23776 1717.19179
10 1996 17.27 102.8873732 1776.86493 1.87636 1719.18183 2.36120 1703.96229
11 1996 17.98 102.8873732 1849.91497 1.86245 1787.99796 2.34300 1771.67217
12 1996 17.67 103.7090635 1832.53915 1.93700 1769.26672 2.43611 1752.59516
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 83.25%
GROSS ANNUAL RETURN = 24.61%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1769.27 1694.07
TOTAL RETURN 76.93% 69.41%
AVERAGE ANNUAL RETURN 23.03% 21.10%
WITH DEATH BENEFIT CHARGE
ERV 1752.60 1678.11
TOTAL RETURN 75.26% 67.81%
AVERAGE ANNUAL RETURN 22.60% 20.68%
<TABLE>
<CAPTION>
Return for Product Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1995 12.48 100.1939864 1250.42095 1000.00000 1000.00000
7 1995 13.43 100.1939864 1345.60524 1.08333 1075.03846 1.37503 1074.74676
8 1995 13.76 100.1939864 1378.66925 1.16462 1100.28952 1.47781 1099.67747
9 1995 14.36 100.1939864 1438.78565 1.19198 1147.07529 1.51209 1146.11643
10 1995 14.58 100.1939864 1460.82832 1.24266 1163.40620 1.57595 1162.09937
11 1995 15.05 100.1939864 1507.91950 1.26036 1199.64933 1.59793 1197.96281
12 1995 15.23 100.1939864 1525.95441 1.29962 1212.69768 1.64724 1210.64336
1 1996 15.14 102.8873732 1557.71483 1.31376 1236.62438 1.66467 1234.17639
2 1996 15.59 102.8873732 1604.01415 1.33968 1272.04038 1.69703 1269.16227
3 1996 16.19 102.8873732 1665.74657 1.37804 1319.61835 1.74514 1316.26237
4 1996 16.47 102.8873732 1694.55504 1.42959 1341.01107 1.80990 1337.21673
5 1996 16.82 102.8873732 1730.56562 1.45276 1368.05581 1.83872 1363.79489
6 1996 16.84 102.8873732 1732.62336 1.48206 1368.20045 1.87526 1363.54126
7 1996 15.65 102.8873732 1610.18739 1.48222 1270.03423 1.87491 1265.31159
8 1996 16.45 102.8873732 1692.49729 1.37587 1333.58024 1.73985 1328.25221
9 1996 17.38 102.8873732 1788.18255 1.44471 1407.52943 1.82639 1401.51849
10 1996 17.27 102.8873732 1776.86493 1.52482 1397.09619 1.92713 1390.72099
11 1996 17.98 102.8873732 1849.91497 1.51352 1453.01974 1.91229 1445.98368
12 1996 17.67 103.7090635 1832.53915 1.57410 1437.79777 1.98828 1430.41362
</TABLE>
SURRENDER CHARGE = 6.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 46.55%
GROSS ANNUAL RETURN = 27.51%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1437.80 1364.47
TOTAL RETURN 43.78% 36.45%
AVERAGE ANNUAL RETURN 25.97% 21.85%
WITH DEATH BENEFIT CHARGE
ERV 1430.41 1357.46
TOTAL RETURN 43.04% 35.75%
AVERAGE ANNUAL RETURN 25.56% 21.45%
<PAGE>
Fidelity Index 500
12/1996
Assume ($10000 @ $10.00 on 8/27/1992)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/92 0.5500000000 52.28 1.052 101.052028
2/93 0.1500000000 54.16 0.280 101.331898
12/93 1.8200000000 55.63 3.315 104.647089
2/94 0.1000000000 56.17 0.186 104.833393
2/95 1.0800000000 57.65 1.964 106.797315
2/96 3.2500000000 75.06 4.624 111.421499
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 75.71 106.7973146 8085.62469 1000.00000 1000.00000
1 1996 78.30 106.7973146 8362.22973 1.08333 1033.12615 1.37503 1032.83445
2 1996 75.75 111.4214989 8440.17854 1.11922 1041.63725 1.42018 1041.04187
3 1996 76.53 111.4214989 8527.08731 1.12844 1051.23458 1.43147 1050.33004
4 1996 77.60 111.4214989 8646.30831 1.13884 1064.79352 1.44424 1063.57093
5 1996 79.58 111.4214989 8866.92288 1.15353 1090.80870 1.46245 1089.24600
6 1996 79.92 111.4214989 8904.80619 1.18171 1094.28739 1.49775 1092.40197
7 1996 76.38 111.4214989 8510.37408 1.18548 1044.63122 1.50209 1042.51271
8 1996 77.95 111.4214989 8685.30584 1.13168 1064.97206 1.43349 1062.50819
9 1996 82.31 111.4214989 9171.10357 1.15372 1123.38573 1.46098 1120.47679
10 1996 84.58 111.4214989 9424.03037 1.21700 1153.15021 1.54069 1149.83735
11 1996 90.92 111.4214989 10130.44268 1.24925 1238.33951 1.58106 1234.44651
12 1996 89.13 111.4214989 9930.99819 1.34153 1212.61800 1.69741 1208.44577
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.82%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1212.62 1140.47
TOTAL RETURN 21.26% 14.05%
WITH DEATH BENEFIT CHARGE
ERV 1208.45 1136.54
TOTAL RETURN 20.84% 13.65%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 75.71 106.7973146 8085.62469 1000.00000 1000.00000
1 1996 78.30 106.7973146 8362.22973 1.08333 1033.12615 1.37503 1032.83445
2 1996 75.75 111.4214989 8440.17854 1.11922 1041.63725 1.42018 1041.04187
3 1996 76.53 111.4214989 8527.08731 1.12844 1051.23458 1.43147 1050.33004
4 1996 77.60 111.4214989 8646.30831 1.13884 1064.79352 1.44424 1063.57093
5 1996 79.58 111.4214989 8866.92288 1.15353 1090.80870 1.46245 1089.24600
6 1996 79.92 111.4214989 8904.80619 1.18171 1094.28739 1.49775 1092.40197
7 1996 76.38 111.4214989 8510.37408 1.18548 1044.63122 1.50209 1042.51271
8 1996 77.95 111.4214989 8685.30584 1.13168 1064.97206 1.43349 1062.50819
9 1996 82.31 111.4214989 9171.10357 1.15372 1123.38573 1.46098 1120.47679
10 1996 84.58 111.4214989 9424.03037 1.21700 1153.15021 1.54069 1149.83735
11 1996 90.92 111.4214989 10130.44268 1.24925 1238.33951 1.58106 1234.44651
12 1996 89.13 111.4214989 9930.99819 1.34153 1212.61800 1.69741 1208.44577
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.82%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1212.62 1140.47
TOTAL RETURN 21.26% 14.05%
WITH DEATH BENEFIT CHARGE
ERV 1208.45 1136.54
TOTAL RETURN 20.84% 13.65%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 55.74 104.6470890 5833.02874 1000.00000 1000.00000
1 1994 57.62 104.6470890 6029.76527 1.08333 1032.64469 1.37503 1032.35299
2 1994 55.96 104.8333932 5866.47669 1.11870 1003.56154 1.41952 1002.97692
3 1994 53.53 104.8333932 5611.73154 1.08719 958.89582 1.37913 958.04465
4 1994 54.17 104.8333932 5678.82491 1.03880 969.32149 1.31734 968.18160
5 1994 55.01 104.8333932 5766.88496 1.05010 983.30240 1.33128 981.86366
6 1994 53.67 104.8333932 5626.40822 1.06524 958.28469 1.35010 956.59614
7 1994 55.44 104.8333932 5811.96332 1.03814 988.85013 1.31535 986.82868
8 1994 57.65 104.8333932 6043.64512 1.07125 1027.19732 1.35692 1024.80962
9 1994 56.25 104.8333932 5896.87837 1.11280 1001.13958 1.40915 998.51351
10 1994 57.50 104.8333932 6027.92011 1.08457 1022.30255 1.37299 1019.32971
11 1994 55.41 104.8333932 5808.81832 1.10749 984.03658 1.40161 980.87768
12 1994 56.22 104.8333932 5893.73337 1.06604 997.35549 1.34874 993.86771
1 1995 57.71 104.8333932 6049.93512 1.08047 1022.70795 1.36660 1018.84160
2 1995 58.82 106.7973146 6281.81804 1.10793 1060.79854 1.40094 1056.49099
3 1995 60.54 106.7973146 6465.50942 1.14920 1090.66895 1.45271 1085.93193
4 1995 62.32 106.7973146 6655.60864 1.18156 1121.55530 1.49319 1116.36736
5 1995 64.77 106.7973146 6917.26207 1.21502 1164.43223 1.53504 1158.72032
6 1995 66.24 106.7973146 7074.25412 1.26147 1189.59836 1.59328 1183.42500
7 1995 68.45 106.7973146 7310.27618 1.28873 1227.99882 1.62725 1221.28098
8 1995 68.62 106.7973146 7328.43173 1.33033 1229.71831 1.67930 1222.63481
9 1995 71.49 106.7973146 7634.94002 1.33219 1279.81851 1.68116 1272.08979
10 1995 71.25 106.7973146 7609.30866 1.38647 1274.13555 1.74917 1266.07007
11 1995 74.35 106.7973146 7940.38034 1.38031 1328.19131 1.74089 1319.41434
12 1995 75.71 106.7973146 8085.62469 1.43887 1351.04753 1.81424 1341.73465
1 1996 78.30 106.7973146 8362.22973 1.46363 1395.80253 1.84493 1385.78977
2 1996 75.75 111.4214989 8440.17854 1.51212 1407.30143 1.90551 1396.80194
3 1996 76.53 111.4214989 8527.08731 1.52458 1420.26788 1.92065 1409.26421
4 1996 77.60 111.4214989 8646.30831 1.53862 1438.58665 1.93779 1427.02997
5 1996 79.58 111.4214989 8866.92288 1.55847 1473.73439 1.96221 1461.47909
6 1996 79.92 111.4214989 8904.80619 1.59655 1478.43427 2.00958 1465.71357
7 1996 76.38 111.4214989 8510.37408 1.60164 1411.34643 2.01540 1398.77542
8 1996 77.95 111.4214989 8685.30584 1.52896 1438.82787 1.92336 1425.60405
9 1996 82.31 111.4214989 9171.10357 1.55873 1517.74752 1.96025 1503.38253
10 1996 84.58 111.4214989 9424.03037 1.64423 1557.96074 2.06720 1542.77661
11 1996 90.92 111.4214989 10130.44268 1.68779 1673.05554 2.12137 1656.29964
12 1996 89.13 111.4214989 9930.99819 1.81248 1638.30455 2.27747 1621.41355
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 70.25%
GROSS ANNUAL RETURN = 19.41%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1638.30 1568.68
TOTAL RETURN 63.83% 56.87%
AVERAGE ANNUAL RETURN 17.89% 16.19%
WITH DEATH BENEFIT CHARGE
ERV 1621.41 1552.50
TOTAL RETURN 62.14% 55.25%
AVERAGE ANNUAL RETURN 17.48% 15.79%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7 1992 50.00 100.0000000 5000.00000 1000.00000 1000.00000
8 1992 50.07 100.0000000 5007.00000 1.08333 1000.31667 1.37503 1000.02497
9 1992 50.65 100.0000000 5065.00000 1.08368 1010.82044 1.37507 1010.23397
10 1992 50.76 100.0000000 5076.00000 1.09506 1011.92065 1.38911 1011.03886
11 1992 52.49 100.0000000 5249.00000 1.09625 1045.31264 1.39021 1044.10683
12 1992 52.60 101.0520275 5315.33665 1.13242 1057.39084 1.43568 1055.86652
1 1993 52.98 101.0520275 5353.73642 1.14551 1063.88427 1.45185 1062.04261
2 1993 53.57 101.3318984 5428.34980 1.15254 1077.55876 1.46034 1075.38362
3 1993 54.75 101.3318984 5547.92144 1.16736 1100.12707 1.47869 1097.59268
4 1993 53.40 101.3318984 5411.12337 1.19180 1071.80884 1.50923 1069.01953
5 1993 54.79 101.3318984 5551.97471 1.16113 1098.54686 1.46994 1095.37613
6 1993 54.93 101.3318984 5566.16118 1.19009 1100.16378 1.50618 1096.66887
7 1993 54.68 101.3318984 5540.82820 1.19184 1093.96482 1.50796 1090.16970
8 1993 56.75 101.3318984 5750.58523 1.18513 1134.19351 1.49902 1129.94082
9 1993 56.29 101.3318984 5703.97256 1.22871 1123.77133 1.55371 1119.22812
10 1993 57.44 101.3318984 5820.50424 1.21742 1145.51247 1.53898 1140.55488
11 1993 56.88 101.3318984 5763.75838 1.24097 1133.10355 1.56830 1127.86697
12 1993 55.74 104.6470890 5833.02874 1.22753 1145.49396 1.55085 1139.87111
1 1994 57.62 104.6470890 6029.76527 1.24095 1182.88825 1.56736 1176.74935
2 1994 55.96 104.8333932 5866.47669 1.28146 1149.57368 1.61807 1143.26441
3 1994 53.53 104.8333932 5611.73154 1.24537 1098.40936 1.57203 1092.04742
4 1994 54.17 104.8333932 5678.82491 1.18994 1110.35190 1.50160 1103.60224
5 1994 55.01 104.8333932 5766.88496 1.20288 1126.36696 1.51749 1119.19802
6 1994 53.67 104.8333932 5626.40822 1.22023 1097.70932 1.53893 1090.39631
7 1994 55.44 104.8333932 5811.96332 1.18919 1132.72184 1.49933 1124.85750
8 1994 57.65 104.8333932 6043.64512 1.22712 1176.64832 1.54672 1168.15089
9 1994 56.25 104.8333932 5896.87837 1.27470 1146.79933 1.60625 1138.17671
10 1994 57.50 104.8333932 6027.92011 1.24237 1171.04140 1.56503 1161.90449
11 1994 55.41 104.8333932 5808.81832 1.26863 1127.20796 1.59766 1118.07413
12 1994 56.22 104.8333932 5893.73337 1.22114 1142.46468 1.53739 1132.88109
1 1995 57.71 104.8333932 6049.93512 1.23767 1171.50578 1.55775 1161.34811
2 1995 58.82 106.7973146 6281.81804 1.26913 1215.13832 1.59689 1204.26356
3 1995 60.54 106.7973146 6465.50942 1.31640 1249.35469 1.65590 1237.82244
4 1995 62.32 106.7973146 6655.60864 1.35347 1284.73481 1.70205 1272.51491
5 1995 64.77 106.7973146 6917.26207 1.39180 1333.85008 1.74975 1320.79182
6 1995 66.24 106.7973146 7074.25412 1.44500 1362.67773 1.81613 1348.95197
7 1995 68.45 106.7973146 7310.27618 1.47623 1406.66523 1.85485 1392.10291
8 1995 68.62 106.7973146 7328.43173 1.52389 1408.63489 1.91419 1393.64610
9 1995 71.49 106.7973146 7634.94002 1.52602 1466.02437 1.91631 1450.01840
10 1995 71.25 106.7973146 7609.30866 1.58819 1459.51457 1.99382 1443.15670
11 1995 74.35 106.7973146 7940.38034 1.58114 1521.43511 1.98439 1503.96229
12 1995 75.71 106.7973146 8085.62469 1.64822 1547.61678 2.06800 1529.40456
1 1996 78.30 106.7973146 8362.22973 1.67658 1598.88336 2.10298 1579.62172
2 1996 75.75 111.4214989 8440.17854 1.73212 1612.05528 2.17203 1592.17419
3 1996 76.53 111.4214989 8527.08731 1.74639 1626.90827 2.18929 1606.37956
4 1996 77.60 111.4214989 8646.30831 1.76248 1647.89232 2.20883 1626.63024
5 1996 79.58 111.4214989 8866.92288 1.78522 1688.15384 2.23667 1665.89780
6 1996 79.92 111.4214989 8904.80619 1.82883 1693.53752 2.29066 1670.72456
7 1996 76.38 111.4214989 8510.37408 1.83467 1616.68881 2.29730 1594.42370
8 1996 77.95 111.4214989 8685.30584 1.75141 1648.16863 2.19239 1625.00488
9 1996 82.31 111.4214989 9171.10357 1.78552 1738.57061 2.23444 1713.66231
10 1996 84.58 111.4214989 9424.03037 1.88345 1784.63461 2.35634 1758.56649
11 1996 90.92 111.4214989 10130.44268 1.93335 1916.47500 2.41809 1887.96812
12 1996 89.13 111.4214989 9930.99819 2.07618 1876.66796 2.59602 1848.20247
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 98.62%
GROSS ANNUAL RETURN = 17.11%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1876.67 1828.81
TOTAL RETURN 87.67% 82.88%
AVERAGE ANNUAL RETURN 15.59% 14.90%
WITH DEATH BENEFIT CHARGE
ERV 1848.20 1801.07
TOTAL RETURN 84.82% 80.11%
AVERAGE ANNUAL RETURN 15.18% 14.50%
<PAGE>
Scudder Discovery
12/1996
Assume ($10000 @ $10.00 on 5/ 1/1996)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
eturn for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4 1996 6.00 100.0000000 600.00000 1000.00000 1000.00000
5 1996 6.12 100.0000000 612.00000 1.08333 1018.91667 1.37503 1018.62497
6 1996 6.10 100.0000000 610.00000 1.10383 1014.48305 1.40064 1013.89548
7 1996 5.87 100.0000000 587.00000 1.09902 975.13302 1.39414 974.27250
8 1996 6.05 100.0000000 605.00000 1.05639 1003.97849 1.33966 1002.80832
9 1996 6.23 100.0000000 623.00000 1.08764 1032.76129 1.37889 1031.26504
10 1996 6.21 100.0000000 621.00000 1.11882 1028.32702 1.41802 1026.53638
11 1996 6.33 100.0000000 633.00000 1.11402 1047.08405 1.41152 1044.96131
12 1996 6.33 100.0000000 633.00000 1.13434 1045.94971 1.43686 1043.52445
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 5.50%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1045.95 983.72
TOTAL RETURN 4.59% -1.63%
WITH DEATH BENEFIT CHARGE
ERV 1043.52 981.43
TOTAL RETURN 4.35% -1.86%
<PAGE>
Scudder Growth & Income
12/1996
Assume ($10000 @ $10.00 on 5/ 2/1994)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
10/94 0.0350000000 6.35 0.551 100.551181
1/95 0.0450000000 6.29 0.719 101.270546
2/95 0.0400000000 6.43 0.630 101.900534
4/95 0.0400000000 6.75 0.604 102.504389
7/95 0.0500000000 7.24 0.708 103.212292
10/95 0.0500000000 7.40 0.697 103.909672
1/96 0.0550000000 8.04 0.711 104.620497
2/96 0.1050000000 8.25 1.332 105.952031
4/96 0.0500000000 8.36 0.634 106.585715
7/96 0.0550000000 8.02 0.731 107.316664
10/96 0.0650000000 8.78 0.794 108.111150
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 7.98 103.9096721 829.19918 1000.00000 1000.00000
1 1996 8.17 104.6204970 854.74946 1.08333 1029.72986 1.37503 1029.43816
2 1996 8.18 105.9520306 866.68761 1.11554 1042.99640 1.41551 1042.40065
3 1996 8.30 105.9520306 879.40185 1.12991 1057.16716 1.43334 1056.25926
4 1996 8.36 106.5857150 891.05658 1.14526 1070.03255 1.45239 1068.80548
5 1996 8.45 106.5857150 900.64929 1.15920 1080.39284 1.46964 1078.84212
6 1996 8.45 106.5857150 900.64929 1.17043 1079.22241 1.48344 1077.35867
7 1996 8.11 107.3166644 870.33815 1.16916 1041.73227 1.48140 1039.61901
8 1996 8.33 107.3166644 893.94781 1.12854 1068.86280 1.42951 1066.39125
9 1996 8.71 107.3166644 934.72815 1.15793 1116.46452 1.46632 1113.57183
10 1996 8.81 108.1111500 952.45923 1.20950 1136.43350 1.53120 1133.16424
11 1996 9.38 108.1111500 1014.08259 1.23114 1208.72871 1.55814 1204.92093
12 1996 9.37 108.1111500 1013.00148 1.30946 1206.13063 1.65681 1201.97956
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.17%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1206.13 1134.37
TOTAL RETURN 20.61% 13.44%
WITH DEATH BENEFIT CHARGE
ERV 1201.98 1130.46
TOTAL RETURN 20.20% 13.05%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 7.98 103.9096721 829.19918 1000.00000 1000.00000
1 1996 8.17 104.6204970 854.74946 1.08333 1029.72986 1.37503 1029.43816
2 1996 8.18 105.9520306 866.68761 1.11554 1042.99640 1.41551 1042.40065
3 1996 8.30 105.9520306 879.40185 1.12991 1057.16716 1.43334 1056.25926
4 1996 8.36 106.5857150 891.05658 1.14526 1070.03255 1.45239 1068.80548
5 1996 8.45 106.5857150 900.64929 1.15920 1080.39284 1.46964 1078.84212
6 1996 8.45 106.5857150 900.64929 1.17043 1079.22241 1.48344 1077.35867
7 1996 8.11 107.3166644 870.33815 1.16916 1041.73227 1.48140 1039.61901
8 1996 8.33 107.3166644 893.94781 1.12854 1068.86280 1.42951 1066.39125
9 1996 8.71 107.3166644 934.72815 1.15793 1116.46452 1.46632 1113.57183
10 1996 8.81 108.1111500 952.45923 1.20950 1136.43350 1.53120 1133.16424
11 1996 9.38 108.1111500 1014.08259 1.23114 1208.72871 1.55814 1204.92093
12 1996 9.37 108.1111500 1013.00148 1.30946 1206.13063 1.65681 1201.97956
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 22.17%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1206.13 1134.37
TOTAL RETURN 20.61% 13.44%
WITH DEATH BENEFIT CHARGE
ERV 1201.98 1130.46
TOTAL RETURN 20.20% 13.05%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4 1994 6.00 100.0000000 600.00000 1000.00000 1000.00000
5 1994 6.15 100.0000000 615.00000 1.08333 1023.91667 1.37503 1023.62497
6 1994 6.06 100.0000000 606.00000 1.10924 1007.82328 1.40752 1007.23757
7 1994 6.19 100.0000000 619.00000 1.09181 1028.35144 1.38499 1027.45999
8 1994 6.53 100.0000000 653.00000 1.11405 1083.72196 1.41279 1082.48281
9 1994 6.45 100.0000000 645.00000 1.17403 1069.27109 1.48845 1067.73270
10 1994 6.43 100.5511811 646.54409 1.15838 1070.67249 1.46817 1068.82062
11 1994 6.17 100.5511811 620.40079 1.15990 1026.21946 1.46966 1024.13271
12 1994 6.26 100.5511811 629.45039 1.11174 1040.07689 1.40822 1037.66322
1 1995 6.30 101.2705457 638.00444 1.12675 1053.08448 1.42682 1050.33793
2 1995 6.43 101.9005335 655.22043 1.14084 1080.36020 1.44425 1077.23613
3 1995 6.58 101.9005335 670.50551 1.17039 1104.39261 1.48124 1100.88482
4 1995 6.72 102.5043885 688.82949 1.19643 1133.37770 1.51375 1129.45672
5 1995 6.97 102.5043885 714.45559 1.22783 1174.31422 1.55304 1169.92216
6 1995 7.09 102.5043885 726.75611 1.27217 1193.25980 1.60868 1188.45561
7 1995 7.20 103.2122918 743.12850 1.29270 1218.84890 1.63417 1213.59501
8 1995 7.28 103.2122918 751.38548 1.32042 1231.07124 1.66873 1225.41066
9 1995 7.56 103.2122918 780.28493 1.33366 1277.08647 1.68498 1270.85686
10 1995 7.38 103.9096721 766.85338 1.38351 1253.71965 1.74747 1247.23332
11 1995 7.73 103.9096721 803.22177 1.35820 1311.81971 1.71499 1304.66896
12 1995 7.98 103.9096721 829.19918 1.42114 1352.82482 1.79396 1345.06998
1 1996 8.17 104.6204970 854.74946 1.46556 1393.04412 1.84952 1384.66637
2 1996 8.18 105.9520306 866.68761 1.50913 1410.99141 1.90396 1402.10182
3 1996 8.30 105.9520306 879.40185 1.52857 1430.16198 1.92794 1420.74262
4 1996 8.36 106.5857150 891.05658 1.54934 1447.56659 1.95357 1437.61817
5 1996 8.45 106.5857150 900.64929 1.56820 1461.58224 1.97677 1451.11815
6 1996 8.45 106.5857150 900.64929 1.58338 1459.99886 1.99534 1449.12281
7 1996 8.11 107.3166644 870.33815 1.58167 1409.28127 1.99259 1398.36033
8 1996 8.33 107.3166644 893.94781 1.52672 1445.98413 1.92279 1434.37086
9 1996 8.71 107.3166644 934.72815 1.56648 1510.38091 1.97231 1497.83204
10 1996 8.81 108.1111500 952.45923 1.63625 1537.39545 2.05957 1524.18521
11 1996 9.38 108.1111500 1014.08259 1.66551 1635.19820 2.09581 1620.70297
12 1996 9.37 108.1111500 1013.00148 1.77146 1631.68345 2.22852 1616.74662
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 68.83%
GROSS ANNUAL RETURN = 21.71%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1631.68 1562.34
TOTAL RETURN 63.17% 56.23%
AVERAGE ANNUAL RETURN 20.16% 18.22%
WITH DEATH BENEFIT CHARGE
ERV 1616.75 1548.03
TOTAL RETURN 61.67% 54.80%
AVERAGE ANNUAL RETURN 19.75% 17.81%
<PAGE>
Pioneer Capital Growth
12/1996
Assume ($10000 @ $10.00 on 7/25/1990)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/91 0.3600000000 10.65 3.380 103.380282
12/92 0.6600000000 13.44 5.077 108.456992
2/93 0.2550000000 8.12 3.406 111.862969
12/93 1.6600000000 14.42 12.877 124.740398
12/94 0.9470000000 15.56 7.592 132.332246
12/95 1.9626000000 18.40 14.115 146.447206
12/96 0.9472000000 19.64 7.063 153.510078
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 18.70 146.4472063 2738.56276 1000.00000 1000.00000
1 1996 18.88 146.4472063 2764.92326 1.08333 1008.54234 1.37503 1008.25064
2 1996 18.99 146.4472063 2781.03245 1.09259 1013.32579 1.38638 1012.73860
3 1996 19.18 146.4472063 2808.85742 1.09777 1022.36661 1.39255 1021.47877
4 1996 20.70 146.4472063 3031.45717 1.10756 1102.28080 1.40457 1101.02559
5 1996 21.46 146.4472063 3142.75705 1.19414 1141.55688 1.51395 1139.93578
6 1996 20.57 146.4472063 3012.41903 1.23669 1092.97697 1.56745 1091.09233
7 1996 19.06 146.4472063 2791.28375 1.18406 1011.55979 1.50029 1009.49727
8 1996 19.66 146.4472063 2879.15208 1.09586 1042.30737 1.38809 1039.88769
9 1996 20.11 146.4472063 2945.05332 1.12917 1065.03570 1.42988 1062.25992
10 1996 19.85 146.4472063 2906.97705 1.15379 1050.11218 1.46064 1047.06543
11 1996 20.49 146.4472063 3000.70326 1.13762 1082.83208 1.43975 1079.38497
12 1996 19.92 153.5100777 3057.92075 1.17307 1102.30648 1.48419 1098.48252
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 11.66%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1102.31 1036.72
TOTAL RETURN 10.23% 3.67%
WITH DEATH BENEFIT CHARGE
ERV 1098.48 1033.12
TOTAL RETURN 9.85% 3.31%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 18.70 146.4472063 2738.56276 1000.00000 1000.00000
1 1996 18.88 146.4472063 2764.92326 1.08333 1008.54234 1.37503 1008.25064
2 1996 18.99 146.4472063 2781.03245 1.09259 1013.32579 1.38638 1012.73860
3 1996 19.18 146.4472063 2808.85742 1.09777 1022.36661 1.39255 1021.47877
4 1996 20.70 146.4472063 3031.45717 1.10756 1102.28080 1.40457 1101.02559
5 1996 21.46 146.4472063 3142.75705 1.19414 1141.55688 1.51395 1139.93578
6 1996 20.57 146.4472063 3012.41903 1.23669 1092.97697 1.56745 1091.09233
7 1996 19.06 146.4472063 2791.28375 1.18406 1011.55979 1.50029 1009.49727
8 1996 19.66 146.4472063 2879.15208 1.09586 1042.30737 1.38809 1039.88769
9 1996 20.11 146.4472063 2945.05332 1.12917 1065.03570 1.42988 1062.25992
10 1996 19.85 146.4472063 2906.97705 1.15379 1050.11218 1.46064 1047.06543
11 1996 20.49 146.4472063 3000.70326 1.13762 1082.83208 1.43975 1079.38497
12 1996 19.92 153.5100777 3057.92075 1.17307 1102.30648 1.48419 1098.48252
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 11.66%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1102.31 1036.72
TOTAL RETURN 10.23% 3.67%
WITH DEATH BENEFIT CHARGE
ERV 1098.48 1033.12
TOTAL RETURN 9.85% 3.31%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 14.62 124.7403981 1823.70462 1000.00000 1000.00000
1 1994 15.94 124.7403981 1988.36195 1.08333 1089.20394 1.37503 1088.91224
2 1994 15.97 124.7403981 1992.10416 1.17997 1090.07392 1.49729 1089.46435
3 1994 15.28 124.7403981 1906.03328 1.18091 1041.79526 1.49805 1040.89489
4 1994 15.43 124.7403981 1924.74434 1.12861 1050.89370 1.43127 1049.68183
5 1994 15.50 124.7403981 1933.47617 1.13847 1054.52273 1.44335 1053.00049
6 1994 15.41 124.7403981 1922.24953 1.14240 1047.25729 1.44791 1045.43838
7 1994 15.70 124.7403981 1958.42425 1.13453 1065.83105 1.43751 1063.67492
8 1994 16.40 124.7403981 2045.74253 1.15465 1112.19753 1.46259 1109.63733
9 1994 16.76 124.7403981 2090.64907 1.20488 1135.40674 1.52579 1132.46944
10 1994 17.26 124.7403981 2153.01927 1.23002 1168.04923 1.55718 1164.69714
11 1994 16.74 124.7403981 2088.15426 1.26539 1131.59348 1.60150 1128.00627
12 1994 15.83 132.3322462 2094.81946 1.22589 1133.97953 1.55105 1130.05572
1 1995 16.15 132.3322462 2137.16578 1.22848 1155.67420 1.55386 1151.34568
2 1995 16.54 132.3322462 2188.77535 1.25198 1182.33014 1.58314 1177.56594
3 1995 17.08 132.3322462 2260.23477 1.28086 1219.65015 1.61919 1214.39207
4 1995 17.87 132.3322462 2364.77724 1.32129 1274.74125 1.66983 1268.89143
5 1995 18.31 132.3322462 2423.00343 1.38097 1304.74731 1.74477 1298.38965
6 1995 18.81 132.3322462 2489.16955 1.41348 1338.96320 1.78533 1332.06007
7 1995 19.61 132.3322462 2595.03535 1.45054 1394.45952 1.83163 1386.88172
8 1995 20.04 132.3322462 2651.93821 1.51066 1423.52599 1.90701 1415.38568
9 1995 20.50 132.3322462 2712.81105 1.54215 1454.65958 1.94620 1445.92837
10 1995 19.41 132.3322462 2568.56890 1.57588 1375.73839 1.98820 1367.05910
11 1995 20.27 132.3322462 2682.37463 1.49038 1435.20292 1.87975 1425.74972
12 1995 18.70 146.4472063 2738.56276 1.55480 1463.71154 1.96045 1453.65467
1 1996 18.88 146.4472063 2764.92326 1.58569 1476.21506 1.99882 1465.64824
2 1996 18.99 146.4472063 2781.03245 1.59923 1483.21666 2.01532 1472.17219
3 1996 19.18 146.4472063 2808.85742 1.60682 1496.44981 2.02429 1484.87738
4 1996 20.70 146.4472063 3031.45717 1.62115 1613.42114 2.04176 1600.51100
5 1996 21.46 146.4472063 3142.75705 1.74787 1670.90998 2.20076 1657.07296
6 1996 20.57 146.4472063 3012.41903 1.81015 1599.80301 2.27853 1586.07146
7 1996 19.06 146.4472063 2791.28375 1.73312 1480.63175 2.18090 1467.46042
8 1996 19.66 146.4472063 2879.15208 1.60402 1525.63733 2.01781 1511.63759
9 1996 20.11 146.4472063 2945.05332 1.65277 1558.90505 2.07855 1544.15909
10 1996 19.85 146.4472063 2906.97705 1.68881 1537.06132 2.12327 1522.07155
11 1996 20.49 146.4472063 3000.70326 1.66515 1584.95381 2.09290 1569.05300
12 1996 19.92 153.5100777 3057.92075 1.71703 1613.45872 2.15750 1596.81425
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 67.68%
GROSS ANNUAL RETURN = 18.80%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1613.46 1544.89
TOTAL RETURN 61.35% 54.49%
AVERAGE ANNUAL RETURN 17.29% 15.60%
WITH DEATH BENEFIT CHARGE
ERV 1596.81 1528.95
TOTAL RETURN 59.68% 52.89%
AVERAGE ANNUAL RETURN 16.88% 15.20%
<TABLE>
<CAPTION>
Return for 5 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1991 11.36 103.3802817 1174.40000 1000.00000 1000.00000
1 1992 12.80 103.3802817 1323.26761 1.08333 1125.67723 1.37503 1125.38553
2 1992 13.45 103.3802817 1390.46479 1.21948 1181.62104 1.54744 1180.98657
3 1992 13.45 103.3802817 1390.46479 1.28009 1180.34095 1.62390 1179.36268
4 1992 13.27 103.3802817 1371.85634 1.27870 1163.26587 1.62166 1161.95772
5 1992 13.18 103.3802817 1362.55211 1.26020 1154.11614 1.59773 1152.47934
6 1992 12.37 103.3802817 1278.81408 1.25029 1081.93762 1.58470 1080.06701
7 1992 12.53 103.3802817 1295.35493 1.17210 1094.75986 1.48513 1092.55203
8 1992 12.19 103.3802817 1260.20563 1.18599 1063.86770 1.50230 1061.40347
9 1992 12.07 103.3802817 1247.80000 1.15252 1052.24232 1.45947 1049.49540
10 1992 12.42 103.3802817 1283.98310 1.13993 1081.61480 1.44309 1078.48507
11 1992 13.68 103.3802817 1414.24225 1.17175 1190.17209 1.48295 1186.41365
12 1992 13.97 108.4569920 1515.14418 1.28935 1273.79793 1.63136 1269.42933
1 1993 14.67 108.4569920 1591.06407 1.37995 1336.24465 1.74551 1331.29159
2 1993 14.61 111.8629689 1634.31798 1.44760 1371.12356 1.83057 1365.65287
3 1993 14.96 111.8629689 1673.47001 1.48538 1402.48508 1.87782 1396.49090
4 1993 14.73 111.8629689 1647.74153 1.51936 1379.40345 1.92022 1373.10056
5 1993 15.07 111.8629689 1685.77494 1.49435 1409.74869 1.88806 1402.90661
6 1993 15.09 111.8629689 1688.01220 1.52723 1410.09239 1.92904 1402.83942
7 1993 14.95 111.8629689 1672.35139 1.52760 1395.48242 1.92895 1387.89539
8 1993 15.38 111.8629689 1720.45246 1.51177 1434.10827 1.90840 1425.90639
9 1993 15.75 111.8629689 1761.84176 1.55362 1467.05531 1.96067 1458.24906
10 1993 16.17 111.8629689 1808.82421 1.58931 1504.58747 2.00514 1495.13056
11 1993 16.08 111.8629689 1798.75654 1.62997 1494.58318 2.05585 1484.75302
12 1993 14.62 124.7403981 1823.70462 1.61913 1513.69335 2.04158 1503.30440
1 1994 15.94 124.7403981 1988.36195 1.63983 1648.72077 2.06709 1636.96657
2 1994 15.97 124.7403981 1992.10416 1.78611 1650.03765 2.25088 1637.79655
3 1994 15.28 124.7403981 1906.03328 1.78754 1576.95856 2.25202 1564.78187
4 1994 15.43 124.7403981 1924.74434 1.70837 1590.73080 2.15163 1577.99132
5 1994 15.50 124.7403981 1933.47617 1.72329 1596.22405 2.16979 1582.98027
6 1994 15.41 124.7403981 1922.24953 1.72924 1585.22641 2.17665 1571.61212
7 1994 15.70 124.7403981 1958.42425 1.71733 1613.34137 2.16102 1599.02719
8 1994 16.40 124.7403981 2045.74253 1.74779 1683.52600 2.19872 1668.12268
9 1994 16.76 124.7403981 2090.64907 1.82382 1718.65763 2.29372 1702.44628
10 1994 17.26 124.7403981 2153.01927 1.86188 1768.06836 2.34092 1750.89433
11 1994 16.74 124.7403981 2088.15426 1.91541 1712.88554 2.40754 1695.73679
12 1994 15.83 132.3322462 2094.81946 1.85563 1716.49728 2.33169 1698.81773
1 1995 16.15 132.3322462 2137.16578 1.85954 1749.33636 2.33593 1730.82303
2 1995 16.54 132.3322462 2188.77535 1.89511 1789.68528 2.37994 1770.24006
3 1995 17.08 132.3322462 2260.23477 1.93883 1846.17633 2.43414 1825.60094
4 1995 17.87 132.3322462 2364.77724 2.00002 1929.56736 2.51026 1907.53006
5 1995 18.31 132.3322462 2423.00343 2.09036 1974.98733 2.62292 1951.87487
6 1995 18.81 132.3322462 2489.16955 2.13957 2026.77969 2.68389 2002.49177
7 1995 19.61 132.3322462 2595.03535 2.19568 2110.78411 2.75349 2084.90539
8 1995 20.04 132.3322462 2651.93821 2.28668 2154.78183 2.86681 2127.75552
9 1995 20.50 132.3322462 2712.81105 2.33435 2201.90854 2.92573 2173.67048
10 1995 19.41 132.3322462 2568.56890 2.38540 2082.44605 2.98887 2055.10596
11 1995 20.27 132.3322462 2682.37463 2.25598 2172.45713 2.82584 2143.33582
12 1995 18.70 146.4472063 2738.56276 2.35350 2215.61044 2.94716 2185.28546
1 1996 18.88 146.4472063 2764.92326 2.40024 2234.53692 3.00484 2203.31545
2 1996 18.99 146.4472063 2781.03245 2.42075 2245.13519 3.02963 2213.12293
3 1996 19.18 146.4472063 2808.85742 2.43223 2265.16614 3.04312 2232.22270
4 1996 20.70 146.4472063 3031.45717 2.45393 2442.22485 3.06938 2406.05522
5 1996 21.46 146.4472063 3142.75705 2.64574 2529.24534 3.30841 2491.08507
6 1996 20.57 146.4472063 3012.41903 2.74002 2421.61118 3.42532 2384.34821
7 1996 19.06 146.4472063 2791.28375 2.62341 2241.22243 3.27856 2206.03971
8 1996 19.66 146.4472063 2879.15208 2.42799 2309.34709 3.03338 2272.45145
9 1996 20.11 146.4472063 2945.05332 2.50179 2359.70421 3.12470 2321.34115
10 1996 19.85 146.4472063 2906.97705 2.55635 2326.63950 3.19192 2288.13686
11 1996 20.49 146.4472063 3000.70326 2.52053 2399.13405 3.14626 2358.76428
12 1996 19.92 153.5100777 3057.92075 2.59906 2442.28174 3.24338 2400.49788
</TABLE>
SURRENDER CHARGE = 3.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 160.38%
GROSS ANNUAL RETURN = 21.09%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 2442.28 2380.00
TOTAL RETURN 144.23% 138.00%
AVERAGE ANNUAL RETURN 19.55% 18.94%
WITH DEATH BENEFIT CHARGE
ERV 2400.50 2339.29
TOTAL RETURN 140.05% 133.93%
AVERAGE ANNUAL RETURN 19.14% 18.53%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 1990 10.00 100.0000000 1000.00000 1000.00000 1000.00000
7 1990 10.50 100.0000000 1050.00000 1.08333 1048.91667 1.37503 1048.62497
8 1990 9.16 100.0000000 916.00000 1.13633 913.91859 1.44189 913.35855
9 1990 8.30 100.0000000 830.00000 0.99008 827.12393 1.25590 826.35065
10 1990 7.50 100.0000000 750.00000 0.89605 746.50509 1.13626 745.56614
11 1990 8.17 100.0000000 817.00000 0.80871 812.38417 1.02518 811.14487
12 1990 8.57 100.0000000 857.00000 0.88008 851.27809 1.11535 849.74285
1 1991 9.18 100.0000000 918.00000 0.92222 910.94860 1.16842 909.05787
2 1991 10.07 100.0000000 1007.00000 0.98686 998.27811 1.24998 995.94095
3 1991 10.53 100.0000000 1053.00000 1.08147 1042.79822 1.36945 1040.06632
4 1991 10.55 100.0000000 1055.00000 1.12970 1043.64915 1.43013 1040.61162
5 1991 11.23 100.0000000 1123.00000 1.13062 1109.78691 1.43088 1106.25335
6 1991 10.76 100.0000000 1076.00000 1.20227 1062.13763 1.52114 1058.43310
7 1991 11.10 100.0000000 1110.00000 1.15065 1094.54895 1.45538 1090.42263
8 1991 11.37 100.0000000 1137.00000 1.18576 1119.98736 1.49937 1115.44705
9 1991 11.43 100.0000000 1143.00000 1.21332 1124.68426 1.53378 1119.79954
10 1991 11.58 100.0000000 1158.00000 1.21841 1138.22549 1.53976 1132.95531
11 1991 11.19 100.0000000 1119.00000 1.23308 1098.65839 1.55785 1093.24093
12 1991 11.36 103.3802817 1174.40000 1.19021 1151.86110 1.50324 1145.86240
1 1992 12.80 103.3802817 1323.26761 1.24785 1296.62381 1.57560 1289.53696
2 1992 13.45 103.3802817 1390.46479 1.40468 1361.06331 1.77316 1353.24810
3 1992 13.45 103.3802817 1390.46479 1.47449 1359.58883 1.86076 1351.38734
4 1992 13.27 103.3802817 1371.85634 1.47289 1339.92070 1.85820 1331.44366
5 1992 13.18 103.3802817 1362.55211 1.45158 1329.38149 1.83078 1320.58274
6 1992 12.37 103.3802817 1278.81408 1.44016 1246.24185 1.81585 1237.60817
7 1992 12.53 103.3802817 1295.35493 1.35010 1261.01130 1.70175 1251.91428
8 1992 12.19 103.3802817 1260.20563 1.36610 1225.42782 1.72142 1216.22232
9 1992 12.07 103.3802817 1247.80000 1.32755 1212.03699 1.67235 1202.57732
10 1992 12.42 103.3802817 1283.98310 1.31304 1245.87001 1.65358 1235.79549
11 1992 13.68 103.3802817 1414.24225 1.34969 1370.91293 1.69926 1359.46678
12 1992 13.97 108.4569920 1515.14418 1.48516 1467.23828 1.86931 1454.59133
1 1993 14.67 108.4569920 1591.06407 1.58951 1539.16823 2.00011 1525.47697
2 1993 14.61 111.8629689 1634.31798 1.66743 1579.34389 2.09758 1564.85027
3 1993 14.96 111.8629689 1673.47001 1.71096 1615.46800 2.15172 1600.18641
4 1993 14.73 111.8629689 1647.74153 1.75009 1588.88117 2.20031 1573.38430
5 1993 15.07 111.8629689 1685.77494 1.72129 1623.83467 2.16346 1607.53793
6 1993 15.09 111.8629689 1688.01220 1.75915 1624.23057 2.21042 1607.46094
7 1993 14.95 111.8629689 1672.35139 1.75958 1607.40192 2.21031 1590.33714
8 1993 15.38 111.8629689 1720.45246 1.74135 1651.89353 2.18677 1633.89251
9 1993 15.75 111.8629689 1761.84176 1.78955 1689.84394 2.24666 1670.95276
10 1993 16.17 111.8629689 1808.82421 1.83066 1733.07578 2.29762 1713.21389
11 1993 16.08 111.8629689 1798.75654 1.87750 1721.55222 2.35573 1701.32265
12 1993 14.62 124.7403981 1823.70462 1.86501 1743.56449 2.33938 1722.57998
1 1994 15.94 124.7403981 1988.36195 1.88886 1899.09732 2.36860 1875.73844
2 1994 15.97 124.7403981 1992.10416 2.05736 1900.61417 2.57920 1876.68948
3 1994 15.28 124.7403981 1906.03328 2.05900 1816.43722 2.58051 1793.02470
4 1994 15.43 124.7403981 1924.74434 1.96781 1832.30093 2.46547 1808.16092
5 1994 15.50 124.7403981 1933.47617 1.98499 1838.62838 2.48628 1813.87757
6 1994 15.41 124.7403981 1922.24953 1.99185 1825.96063 2.49414 1800.85123
7 1994 15.70 124.7403981 1958.42425 1.97812 1858.34516 2.47623 1832.26513
8 1994 16.40 124.7403981 2045.74253 2.01321 1939.18811 2.51943 1911.43906
9 1994 16.76 124.7403981 2090.64907 2.10079 1979.65487 2.62829 1950.76918
10 1994 17.26 124.7403981 2153.01927 2.14463 2036.56916 2.68237 2006.28398
11 1994 16.74 124.7403981 2088.15426 2.20628 1973.00621 2.75871 1943.08103
12 1994 15.83 132.3322462 2094.81946 2.13742 1977.16644 2.67180 1946.61136
1 1995 16.15 132.3322462 2137.16578 2.14193 2014.99250 2.67666 1983.28503
2 1995 16.54 132.3322462 2188.77535 2.18291 2061.46885 2.72708 2028.45152
3 1995 17.08 132.3322462 2260.23477 2.23326 2126.53869 2.78919 2091.88747
4 1995 17.87 132.3322462 2364.77724 2.30375 2222.59358 2.87641 2185.76697
5 1995 18.31 132.3322462 2423.00343 2.40781 2274.91107 3.00550 2236.58002
6 1995 18.81 132.3322462 2489.16955 2.46449 2334.56868 3.07537 2294.58002
7 1995 19.61 132.3322462 2595.03535 2.52912 2431.33010 3.15512 2389.01469
8 1995 20.04 132.3322462 2651.93821 2.63394 2482.00936 3.28497 2438.11504
9 1995 20.50 132.3322462 2712.81105 2.68884 2536.29279 3.35249 2490.72727
10 1995 19.41 132.3322462 2568.56890 2.74765 2398.68860 3.42483 2354.86864
11 1995 20.27 132.3322462 2682.37463 2.59858 2502.36885 3.23802 2455.96792
12 1995 18.70 146.4472063 2738.56276 2.71090 2552.07547 3.37704 2504.03644
1 1996 18.88 146.4472063 2764.92326 2.76475 2573.87615 3.44313 2524.69633
2 1996 18.99 146.4472063 2781.03245 2.78837 2586.08389 3.47154 2535.93435
3 1996 19.18 146.4472063 2808.85742 2.80159 2609.15675 3.48699 2557.82005
4 1996 20.70 146.4472063 3031.45717 2.82659 2813.10380 3.51709 2757.00820
5 1996 21.46 146.4472063 3142.75705 3.04753 2913.33931 3.79098 2854.44072
6 1996 20.57 146.4472063 3012.41903 3.15612 2789.35971 3.92495 2732.13495
7 1996 19.06 146.4472063 2791.28375 3.02181 2581.57693 3.75678 2527.81795
8 1996 19.66 146.4472063 2879.15208 2.79671 2660.04707 3.47583 2603.91666
9 1996 20.11 146.4472063 2945.05332 2.88172 2718.05148 3.58047 2659.93754
10 1996 19.85 146.4472063 2906.97705 2.94456 2679.96553 3.65750 2621.88999
11 1996 20.49 146.4472063 3000.70326 2.90330 2763.46918 3.60519 2702.81929
12 1996 19.92 153.5100777 3057.92075 2.99376 2813.16933 3.71647 2750.64026
</TABLE>
SURRENDER CHARGE = 1.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 205.79%
GROSS ANNUAL RETURN = 18.97%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 2813.17 2789.26
TOTAL RETURN 181.32% 178.93%
AVERAGE ANNUAL RETURN 17.44% 17.28%
WITH DEATH BENEFIT CHARGE
ERV 2750.64 2727.26
TOTAL RETURN 175.06% 172.73%
AVERAGE ANNUAL RETURN 17.03% 16.87%
<PAGE>
Pioneer Real Estate
12/1996
Assume ($10000 @ $10.00 on 10/25/1993)
DATE DIV PR/SH REINVEST NAV REINVEST SHARES SHARE BASIS
(incl cap gain)
100.000000
12/93 0.0700000000 11.55 0.606 100.606061
3/94 0.1200000000 12.56 0.961 101.567265
6/94 0.1100000000 12.43 0.899 102.466090
9/94 0.1800000000 11.70 1.576 104.042492
12/94 0.1950000000 10.96 1.851 105.893613
3/95 0.1600000000 10.85 1.562 107.455178
6/95 0.1718000000 11.37 1.624 109.078819
9/95 0.1800000000 12.07 1.627 110.705512
12/95 0.1787000000 11.72 1.688 112.393488
3/96 0.1500000000 12.03 1.401 113.794903
6/96 0.1600000000 12.30 1.480 115.275162
9/96 0.1400000000 13.37 1.207 116.482231
12/96 0.2893000000 14.67 2.297 118.779321
M and E Charge = 0.0010833
Death Benefit Charge = 0.0002917
<TABLE>
<CAPTION>
Return for YTD
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 12.02 112.3934876 1350.96972 1000.00000 1000.00000
1 1996 12.09 112.3934876 1358.83726 1.08333 1004.74029 1.37503 1004.44859
2 1996 12.20 112.3934876 1371.20055 1.08847 1012.79338 1.38115 1012.20635
3 1996 12.09 113.7949026 1375.78037 1.09719 1015.07893 1.39182 1014.19531
4 1996 12.14 113.7949026 1381.47012 1.09967 1018.17727 1.39455 1016.99511
5 1996 12.51 113.7949026 1423.57423 1.10303 1048.10601 1.39840 1046.59244
6 1996 12.33 115.2751615 1421.34274 1.13545 1045.32763 1.43910 1043.51278
7 1996 12.60 115.2751615 1452.46703 1.13244 1067.08557 1.43486 1064.92856
8 1996 13.30 115.2751615 1533.15965 1.15601 1125.21210 1.46431 1122.62695
9 1996 13.54 116.4822313 1577.16941 1.21898 1156.29264 1.54365 1153.30861
10 1996 13.80 116.4822313 1607.45479 1.25265 1177.24354 1.58584 1173.86902
11 1996 14.30 116.4822313 1665.69591 1.27535 1218.62194 1.61411 1214.78640
12 1996 15.52 118.7793212 1843.45507 1.32017 1347.35024 1.67037 1342.75518
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 36.45%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1347.35 1267.18
TOTAL RETURN 34.74% 26.72%
WITH DEATH BENEFIT CHARGE
ERV 1342.76 1262.86
TOTAL RETURN 34.28% 26.29%
<TABLE>
<CAPTION>
Return for 1 Year
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1995 12.02 112.3934876 1350.96972 1000.00000 1000.00000
1 1996 12.09 112.3934876 1358.83726 1.08333 1004.74029 1.37503 1004.44859
2 1996 12.20 112.3934876 1371.20055 1.08847 1012.79338 1.38115 1012.20635
3 1996 12.09 113.7949026 1375.78037 1.09719 1015.07893 1.39182 1014.19531
4 1996 12.14 113.7949026 1381.47012 1.09967 1018.17727 1.39455 1016.99511
5 1996 12.51 113.7949026 1423.57423 1.10303 1048.10601 1.39840 1046.59244
6 1996 12.33 115.2751615 1421.34274 1.13545 1045.32763 1.43910 1043.51278
7 1996 12.60 115.2751615 1452.46703 1.13244 1067.08557 1.43486 1064.92856
8 1996 13.30 115.2751615 1533.15965 1.15601 1125.21210 1.46431 1122.62695
9 1996 13.54 116.4822313 1577.16941 1.21898 1156.29264 1.54365 1153.30861
10 1996 13.80 116.4822313 1607.45479 1.25265 1177.24354 1.58584 1173.86902
11 1996 14.30 116.4822313 1665.69591 1.27535 1218.62194 1.61411 1214.78640
12 1996 15.52 118.7793212 1843.45507 1.32017 1347.35024 1.67037 1342.75518
</TABLE>
SURRENDER CHARGE = 7.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 36.45%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1347.35 1267.18
TOTAL RETURN 34.74% 26.72%
WITH DEATH BENEFIT CHARGE
ERV 1342.76 1262.86
TOTAL RETURN 34.28% 26.29%
<TABLE>
<CAPTION>
Return for 3 Years
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12 1993 11.95 100.6060606 1202.24242 1000.00000 1000.00000
1 1994 11.99 100.6060606 1206.26667 1.08333 1002.26395 1.37503 1001.97225
2 1994 12.66 100.6060606 1273.67273 1.08579 1057.18457 1.37775 1056.58461
3 1994 12.27 101.5672650 1246.23034 1.14528 1033.26133 1.45284 1032.36674
4 1994 12.35 101.5672650 1254.35572 1.11937 1038.87879 1.41954 1037.67820
5 1994 12.53 101.5672650 1272.63783 1.12545 1052.89489 1.42684 1051.37541
6 1994 12.02 102.4660904 1231.64241 1.14064 1017.83740 1.44568 1016.06183
7 1994 11.74 102.4660904 1202.95190 1.10266 993.02472 1.39712 990.99604
8 1994 12.01 102.4660904 1230.61775 1.07578 1014.78682 1.36265 1012.42461
9 1994 11.46 104.0424918 1192.32696 1.09935 982.11228 1.39212 979.53081
10 1994 10.95 104.0424918 1139.26528 1.06395 937.34176 1.34689 934.59223
11 1994 10.38 104.0424918 1079.96106 1.01545 887.53317 1.28510 884.65713
12 1994 11.38 105.8936127 1205.06931 0.96149 989.38809 1.21643 985.92393
1 1995 10.93 105.8936127 1157.41719 1.07184 949.19282 1.35568 945.58181
2 1995 11.05 105.8936127 1170.12442 1.02829 958.58567 1.30021 954.66310
3 1995 10.84 107.4551775 1164.81412 1.03847 953.19692 1.31269 949.01793
4 1995 10.64 107.4551775 1143.32309 1.03263 934.57763 1.30493 930.20344
5 1995 11.25 107.4551775 1208.87075 1.01246 987.14528 1.27906 982.25371
6 1995 11.47 109.0788186 1251.13405 1.06941 1020.58744 1.35063 1015.24363
7 1995 11.84 109.0788186 1291.49321 1.10564 1052.40398 1.39599 1046.59743
8 1995 11.91 109.0788186 1299.12873 1.14010 1057.48586 1.43911 1051.34598
9 1995 12.02 110.7055119 1330.68025 1.14561 1082.02307 1.44564 1075.43405
10 1995 11.53 110.7055119 1276.43455 1.17219 1036.74178 1.47876 1030.11480
11 1995 11.56 110.7055119 1279.75572 1.12314 1038.31615 1.41644 1031.37862
12 1995 12.02 112.3934876 1350.96972 1.12484 1094.97003 1.41818 1087.35311
1 1996 12.09 112.3934876 1358.83726 1.18622 1100.16051 1.49515 1092.19031
2 1996 12.20 112.3934876 1371.20055 1.19184 1108.97840 1.50180 1100.62572
3 1996 12.09 113.7949026 1375.78037 1.20139 1111.48101 1.51340 1102.78843
4 1996 12.14 113.7949026 1381.47012 1.20410 1114.87360 1.51637 1105.83280
5 1996 12.51 113.7949026 1423.57423 1.20778 1147.64467 1.52056 1138.01555
6 1996 12.33 115.2751615 1421.34274 1.24328 1144.60242 1.56481 1134.66687
7 1996 12.60 115.2751615 1452.46703 1.23999 1168.42673 1.56020 1157.95339
8 1996 13.30 115.2751615 1533.15965 1.26580 1232.07353 1.59222 1220.69191
9 1996 13.54 116.4822313 1577.16941 1.33475 1266.10578 1.67849 1254.05371
10 1996 13.80 116.4822313 1607.45479 1.37161 1289.04639 1.72437 1276.41014
11 1996 14.30 116.4822313 1665.69591 1.39647 1334.35451 1.75511 1320.90177
12 1996 15.52 118.7793212 1843.45507 1.44555 1475.30814 1.81628 1460.04903
</TABLE>
SURRENDER CHARGE = 5.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 53.33%
GROSS ANNUAL RETURN = 15.31%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1475.31 1412.61
TOTAL RETURN 47.53% 41.26%
AVERAGE ANNUAL RETURN 13.84% 12.20%
WITH DEATH BENEFIT CHARGE
ERV 1460.05 1398.00
TOTAL RETURN 46.00% 39.80%
AVERAGE ANNUAL RETURN 13.45% 11.82%
<TABLE>
<CAPTION>
Return for Inception
WITH DEATH BENEFIT CHARGE
FUND GROSS ADMIN/ ADMIN/
MONTH YEAR NAV SHARES VALUE MTHLY M&E ERV MTHLY M&E ERV
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10 1993 12.34 100.0000000 1234.00000 1000.00000 1000.00000
11 1993 11.81 100.0000000 1181.00000 1.08333 955.96691 1.37503 955.67521
12 1993 11.95 100.6060606 1202.24242 1.03563 972.12608 1.31409 971.55067
1 1994 11.99 100.6060606 1206.26667 1.05314 974.32692 1.33591 973.46681
2 1994 12.66 100.6060606 1273.67273 1.05552 1027.71669 1.33855 1026.52549
3 1994 12.27 101.5672650 1246.23034 1.11336 1004.46028 1.41151 1002.99660
4 1994 12.35 101.5672650 1254.35572 1.08817 1009.92116 1.37915 1008.15695
5 1994 12.53 101.5672650 1272.63783 1.09408 1023.54658 1.38625 1021.46449
6 1994 12.02 102.4660904 1231.64241 1.10884 989.46628 1.40455 987.15555
7 1994 11.74 102.4660904 1202.95190 1.07192 965.34522 1.35737 962.80288
8 1994 12.01 102.4660904 1230.61775 1.04579 986.50073 1.32389 983.62182
9 1994 11.46 104.0424918 1192.32696 1.06871 954.73696 1.35251 951.66382
10 1994 10.95 104.0424918 1139.26528 1.03430 911.21436 1.30857 908.00371
11 1994 10.38 104.0424918 1079.96106 0.98715 862.79414 1.24854 859.48923
12 1994 11.38 105.8936127 1205.06931 0.93469 961.80996 1.18183 957.87506
1 1995 10.93 105.8936127 1157.41719 1.04196 922.73509 1.31711 918.68064
2 1995 11.05 105.8936127 1170.12442 0.99963 931.86613 1.26322 927.50358
3 1995 10.84 107.4551775 1164.81412 1.00952 926.62758 1.27535 922.01901
4 1995 10.64 107.4551775 1143.32309 1.00385 908.52729 1.26781 903.73978
5 1995 11.25 107.4551775 1208.87075 0.98424 959.62967 1.24267 954.30926
6 1995 11.47 109.0788186 1251.13405 1.03960 992.13966 1.31221 986.36063
7 1995 11.84 109.0788186 1291.49321 1.07482 1023.06935 1.35628 1016.82244
8 1995 11.91 109.0788186 1299.12873 1.10833 1028.00958 1.39816 1021.43589
9 1995 12.02 110.7055119 1330.68025 1.11368 1051.86284 1.40451 1044.83867
10 1995 11.53 110.7055119 1276.43455 1.13952 1007.84372 1.43669 1000.80873
11 1995 11.56 110.7055119 1279.75572 1.09183 1009.37421 1.37615 1002.03659
12 1995 12.02 112.3934876 1350.96972 1.09349 1064.44892 1.37783 1056.41865
1 1996 12.09 112.3934876 1358.83726 1.15315 1069.49472 1.45261 1061.11823
2 1996 12.20 112.3934876 1371.20055 1.15862 1078.06682 1.45907 1069.31366
3 1996 12.09 113.7949026 1375.78037 1.16791 1080.49967 1.47034 1071.41484
4 1996 12.14 113.7949026 1381.47012 1.17054 1083.79770 1.47323 1074.37260
5 1996 12.51 113.7949026 1423.57423 1.17411 1115.65531 1.47730 1105.63978
6 1996 12.33 115.2751615 1421.34274 1.20863 1112.69786 1.52029 1102.38637
7 1996 12.60 115.2751615 1452.46703 1.20542 1135.85809 1.51582 1125.01039
8 1996 13.30 115.2751615 1533.15965 1.23051 1197.73080 1.54693 1185.96405
9 1996 13.54 116.4822313 1577.16941 1.29754 1230.81445 1.63074 1218.37672
10 1996 13.80 116.4822313 1607.45479 1.33338 1253.11561 1.67531 1240.09713
11 1996 14.30 116.4822313 1665.69591 1.35754 1297.16081 1.70517 1283.32301
12 1996 15.52 118.7793212 1843.45507 1.40526 1434.18551 1.76461 1418.51162
</TABLE>
SURRENDER CHARGE = 4.00%
FREE WITHDRAWAL AVAILABLE = 15.00% OF PRINCIPAL + 15.00% OF INTEREST
GROSS RETURN = 49.39%
GROSS ANNUAL RETURN = 13.44%
WITHOUT WITH
SURRENDER SURRENDER
CHARGE CHARGE
WITHOUT DEATH BENEFIT CHARGE
ERV 1434.19 1385.42
TOTAL RETURN 43.42% 38.54%
AVERAGE ANNUAL RETURN 11.99% 10.78%
WITH DEATH BENEFIT CHARGE
ERV 1418.51 1370.28
TOTAL RETURN 41.85% 37.03%
AVERAGE ANNUAL RETURN 11.61% 10.40%
EXHIBIT (14): POWERS OF ATTORNEY
MEMORANDUM
TO: JANE HEURTER
Senior Executive Vice President
and Secretary
FROM: TOM MCCUSKER
LARRY HARR
DATE: MAY 26, 1995
RE: POWER OF ATTORNEY DESIGNATION
On May 22nd and May 23rd, Messrs. Skutt and Weekly together with members of
United's Board of Directors each executed limited Power of Attorney in favor of
Tom McCusker or Larry Harr or "such person(s) as they may designate in writing
directed to the Corporate Secretary...." The Power is limited to signing
registration statements and amendments thereto and similar documents for
variable products.
We hereby designate the following person to have and exercise on our behalf all
power granted us under these limited Powers of Attorney.
Kenneth R. Reitz
A copy of each Power of Attorney and this memo will accompany each SEC
registration filing signed by our designee.
/S/ THOMAS J. MCCUSKER /S/ LAWRENCE F. HARR
Thomas J. McCusker Lawrence F. Harr
Senior Executive Vice President Executive Vice President
and General Counsel and Executive Counsel
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that THOMAS J. SKUTT, whose signature appears
below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr and such
person(s) as they may designate in writing directed to the Corporate Secretary
of United of Omaha Life Insurance Company, and each of them, as his/her
attorney-in-fact, each with the power of substitution, for him/her in any and
all capacities, to sign any registration statements and amendments thereto and
similar documents for United of Omaha Life Insurance Company variable annuity
and variable life insurance products, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and necessary regulatory authorities of any State, hereby
ratifying and confirming all that each of said attorneys-in-fact may do or cause
to be done by virtue hereof.
/S/ THOMAS J. SKUTT
THOMAS J. SKUTT
Chairman of the Board and
Chief Executive Officer
DATE: MAY 23, 1995
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that JOHN W. WEEKLY, whose signature appears
below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr and such
person(s) as they may designate in writing directed to the Corporate Secretary
of United of Omaha Life Insurance Company, and each of them, as his/her
attorney-in-fact, each with the power of substitution, for him/her in any and
all capacities, to sign any registration statements and amendments thereto and
similar documents for United of Omaha Life Insurance Company variable annuity
and variable life insurance products, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and necessary regulatory authorities of any State, hereby
ratifying and confirming all that each of said attorneys-in-fact may do or cause
to be done by virtue hereof.
/S/ JOHN W. WEEKLY
JOHN W. WEEKLY
President, DIRECTOR
DATE: MAY 23, 1995
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that JOHN A. STURGEON, whose signature
appears below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr
and such person(s) as they may designate in writing directed to the Corporate
Secretary of United of Omaha Life Insurance Company, and each of them, as
his/her attorney-in-fact, each with the power of substitution, for him/her in
any and all capacities, to sign any registration statements and amendments
thereto and similar documents for United of Omaha Life Insurance Company
variable annuity and variable life insurance products, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and necessary regulatory authorities of any
State, hereby ratifying and confirming all that each of said attorneys-in-fact
may do or cause to be done by virtue hereof.
/S/ JOHN A. STURGEON
JOHN A. STURGEON
Senior Exectuve Vice President &
General Comptroller (the corporation's
principal financial officer and principal
accounting officer)
DATE: JUNE 1, 1995
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that SAMUEL L. FOGGIE, Sr., whose signature
appears below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr
and such person(s) as they may designate in writing directed to the Corporate
Secretary of United of Omaha Life Insurance Company, and each of them, as
his/her attorney-in-fact, each with the power of substitution, for him/her in
any and all capacities, to sign any registration statements and amendments
thereto and similar documents for United of Omaha Life Insurance Company
variable annuity and variable life insurance products, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and necessary regulatory authorities of any
State, hereby ratifying and confirming all that each of said attorneys-in-fact
may do or cause to be done by virtue hereof.
/S/ SAMUEL L. FOGGIE SR.
SAMUEL L. FOGGIE
DIRECTOR
DATE: MAY 22, 1995
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that RICHARD J. SAMPSON, whose signature
appears below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr
and such person(s) as they may designate in writing directed to the Corporate
Secretary of United of Omaha Life Insurance Company, and each of them, as
his/her attorney-in-fact, each with the power of substitution, for him/her in
any and all capacities, to sign any registration statements and amendments
thereto and similar documents for United of Omaha Life Insurance Company
variable annuity and variable life insurance products, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and necessary regulatory authorities of any
State, hereby ratifying and confirming all that each of said attorneys-in-fact
may do or cause to be done by virtue hereof.
/S/ RICHARD J. SAMPSON
RICHARD J. SAMPSON
DIRECTOR
DATE: MAY 22, 1995
<PAGE>
POWER OF ATTORNEY
WITH RESPECT TO
UNITED OF OMAHA LIFE INSURANCE COMPANY
VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE PRODUCTS
Know all persons by these presents that OSCAR S. STRAUSS II, whose signature
appears below, constitutes and appoints Thomas J. McCusker and Lawrence F. Harr
and such person(s) as they may designate in writing directed to the Corporate
Secretary of United of Omaha Life Insurance Company, and each of them, as
his/her attorney-in-fact, each with the power of substitution, for him/her in
any and all capacities, to sign any registration statements and amendments
thereto and similar documents for United of Omaha Life Insurance Company
variable annuity and variable life insurance products, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and necessary regulatory authorities of any
State, hereby ratifying and confirming all that each of said attorneys-in-fact
may do or cause to be done by virtue hereof.
/S/ OSCAR S. STRAUSS II
OSCAR S. STRAUSS II
DIRECTOR
DATE: MAY 22, 1995
