<PAGE>
As filed with the Securities and Exchange Commission on April 29, 1997
Registration No. 33-83120
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM N-4
REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933 /X/
--
Pre-Effective Amendment No. ___ / /
--
Post-Effective Amendment No. 2 /X/
--
REGISTRATION STATEMENT UNDER THE INVESTMENT /X/
--
COMPANY ACT OF 1940
Amendment No. 3 /X/
--
--------------------------
PIA VARIABLE ANNUITY ACCOUNT I
(Exact Name of Registrant)
--------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
(Name of Depositor)
--------------------------
600 Dresher Road
Horsham, Pennsylvania 19044
(Address of Principal Executive Offices of Depositor)
Depositor's Telephone Number: (215) 956-9177
--------------------------
Richard F. Plush
Vice President, Products and Programs
The Penn Insurance and Annuity Company
600 Dresher Road
Horsham, Pennsylvania 19044
(Name and Address of Agent for Service)
Copy to:
Richard W. Grant
C. Ronald Rubley
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
--------------------------
It is proposed that this filing will become effective (check appropriate
box)
x immediately upon filing pursuant to paragraph (b) of Rule 485
---
on (date) pursuant to paragraph (b) of Rule 485
---
60 days after filing pursuant to paragraph (a) of Rule 485
---
on (date) pursuant to paragraph (a) of Rule 485
---
The registrant has registered an indefinite amount of securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, as amended. The Rule
24f-2 Notice for the fiscal year ending December 31, 1996 was filed on February
11, 1997.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Location in Statement
Form N-4 Item Number Location in Prospectus of Additional Information
- -------------------- ---------------------- -------------------------
<S> <C> <C>
Item 1. Cover Page Cover Page N/A
Item 2. Definitions Special Terms N/A
Item 3. Synopsis or Highlights Cover Page; Expenses N/A
Item 4. Condensed Financial Information Performance Information N/A
Item 5. General Description of Registrant, The Penn Insurance and Annuity N/A
Depositor and Portfolio Companies Company; The Separate Account
Item 6. Deductions and Expenses The Contract - Charges N/A
Item 7. General Description of Variable The Contract N/A
Annuity Contracts
Item 8. Annuity Period The Contract - Annuity Payments N/A
Item 9. Death Benefit The Contract - Death Benefit N/A
Item 10. Purchases and Contract Value The Contract - Purchases; The Contract N/A
-Accumulations Units
Item 11. Redemptions The Contract - Withdrawals N/A
Item 12. Taxes Federal Income Tax Considerations N/A
Item 13. Legal Proceedings N/A N/A
Item 14. Table of Contents of Statement of Statement of Additional Information N/A
Additional Information Contents
Item 15. Cover Page N/A Cover Page
Item 16. Table of Contents N/A Cover Page
Item 17. General Information and History N/A N/A
Item 18. Services N/A Administrative and
Recordkeeping Services;
Custodian; Auditors
Item 19. Purchase of Securities Being The Contract - Purchases; Distribution of Contracts
Offered The Contract - Transfers;
The Contract - Charges
Item 20. Underwriters N/A Distribution of Contracts
Item 21. Calculation of Performance Data N/A Performance Data
Item 22. Annuity Payments N/A Variable Annuity Payments
Item 23. Financial Statements N/A Financial Statements
</TABLE>
<PAGE>
May 1, 1997 The Penn Insurance and Annuity Company
Philadelphia, PA
Pennant
Profile Of Pia Variable Annuity Account I
This profile is a summary of some of the more important points that you should
consider and know before purchasing the Contract. The Contract is more fully
described in the prospectus which accompanies this Profile. Please read the
prospectus carefully.
1. The Annuity Contract
------------------------------------------
The Contract offered in this prospectus is a combination variable and
fixed annuity contract between you, the owner, and The Penn Insurance and
Annuity Company. The Contract provides a means for you to invest in one or
more of the available investment funds listed in Section 4, and/or one or
more of the fixed interest accounts guaranteed and funded by The Penn
Insurance and Annuity Company through its general account.
You determine (1) the amount and frequency of purchase payments, (2) the
investment funds, (3) transfers between the investment funds, (4) the type
of annuity to be paid after the accumulation period, (5) the beneficiary to
whom death benefits are to be paid, and (6) the amount and frequency of
withdrawals.
Purchase payments and investment gains allocated to the variable
accounts vary up and down with the investment experience of the underlying
investment funds. The investment risk is high or low, depending on the
variable account selected. Refer to section 8 to see calendar year
performance of the investment funds which will show you the range of
historical returns.
2. Annuity Payments
------------------------------------------
You may choose (1) an annuity for a specified number of years, (2) a
life annuity, (3) a life annuity with payments guaranteed for 10 or 20
years, (4) a joint and survivor life annuity or (5) another form of an
annuity that we may agree upon. You may select any one of these as a
variable annuity (except for a specified number of years), a fixed annuity,
or a combination of both.
3. Purchase
------------------------------------------
The Contract may be purchased by individuals, corporations and other
business associations. It may be purchased under retirement plans that
qualify for special tax treatment under the Internal Revenue Code
(Qualified Plan), or as a Non-Qualified Plan. The minimum initial purchase
payment is $5,000 for all Non-Qualified Plans and $2,000 for Qualified
Plans. For both Plans, the minimum subsequent purchase payment is $250.
4. Investment Options
------------------------------------------
<TABLE>
<S> <C> <C>
Independence Capital T. Rowe Price Associates, Inc. Neuberger & Berman Management
Management, Inc. Flexibly Managed Fund Incorporated
Growth Equity Fund High Yield Bond Fund AMT Limited Maturity Bond Portfolio
Quality Bond Fund AMT Balanced Portfolio
Money Market Fund American Century Investment AMT Partners Portfolio
Management, Inc.
OpCap Advisors VP Capital Appreciation Portfolio Fidelity Investments
Value Equity Fund VIP Equity Income Portfolio
Small Capitalization Fund ICMI/Robertson Stephens VIP Growth Portfolio
Emerging Growth Fund VIP II Asset Manager Portfolio
Morgan Stanley Asset Management VIP II Index 500 Portfolio
Emerging Markets Equity (Int'l) Portfolio Vontobel USA, Inc.
International Equity Fund
</TABLE>
<PAGE>
5. Expenses
------------------------------------------
Each year we deduct a contract administration charge of the lesser of
$30 or 2% of the variable account value, unless the variable account value is
greater than $50,000. We deduct a daily mortality and expense risk charge equal
to an annual rate of 1.25% of the daily net asset value of the variable account
and a daily administration charge equal to an annual rate of 0.15% of the daily
net asset value of the variable account. The investment funds underlying the
variable accounts also incur expenses, which range from 0.28% to 1.75% of the
fund's average daily value.
A contingent deferred sales charge may be deducted if you make a full or
partial withdrawal. No deferred sales charge will be made on the portion of the
first withdrawal of each contract year that does not exceed 15% of total
purchase payments. The following table shows the schedule of the contingent
deferred sales charge that will apply:
<TABLE>
<CAPTION>
---------------------------------------------------------
Number of Full Contract
Years Since Purchase Payment Applicable Charge
---------------------------------------------------------
<S> <C>
1 6.0%
2 5.0%
3 4.0%
4 3.0%
5 2.0%
6 1.0%
7 and later No Charge
---------------------------------------------------------
</TABLE>
The following table is designed to help you understand the charges in
your Contract. The column "Total Annual Charges" shows the annual percentage
charge for contract administration (which is represented as .05%), insurance
charges and investment charges. The next columns show you two examples of the
charges, in dollars, you would pay under your Contract. The examples assume that
you invested $1,000 in a Contract which earns 5% annually and that you withdraw
your money at the end of the applicable period. The premium tax is assumed to be
0% in both examples.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
Examples
Total Annual
Total Total Expenses at the
Annual Annual Total End of:
Insurance Portfolio Annual
Fund Charges Charges Charges 1 year 10 Years
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Equity 1.45% 0.80% 2.25% $75 $255
Value Equity 1.45 0.78 2.23 75 259
Flexibly Managed 1.45 0.77 2.22 75 258
Small Capitalization 1.45 0.99 2.44 77 279
Emerging Growth 1.45 1.15 2.60 84 349
International Equity 1.45 1.17 2.62 79 302
Quality Bond 1.45 0.77 2.22 75 252
High Yield Bond 1.45 0.84 2.29 76 266
Money Market 1.45 0.73 2.18 74 248
VP Capital Appreciation 1.45 1.00 2.45 77 279
AMT Limited Maturity Bond 1.45 0.78 2.23 75 254
AMT Balanced 1.45 1.09 2.54 78 283
AMT Partners 1.45 0.95 2.40 76 272
VIP Equity Income 1.45 0.56 2.01 73 239
VIP Growth 1.45 0.67 2.12 74 249
VIP II Asset Manager 1.45 0.73 2.18 75 258
VIP II Index 500 1.45 0.28 1.73 70 202
Emerging Markets Equtiy(Int'l) 1.45 1.75 3.20 84 349
----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
6. Taxes
--------------------------------
Your gains under the Contract are not taxed until you take them out. If
you take money out, earnings come out first and are taxed as income. If you
are younger than 59 1/2 when you take money out, you may be charged a 10%
federal tax penalty on the earnings. Payments during the income phase are
considered partly a return of your original investment. That part of each
payment is not taxable as income.
7. Withdrawals
--------------------------------
You may withdraw all or part of your money at any time during the
accumulation phase. Once in each contract year on or after the last day of
the first contract year you may withdraw up to 15% of the total purchase
payments free of the contingent deferred sales charge. A premature
withdrawal charge may be deducted from the money earned on the fixed
interest accounts if you take the money prior to maturity of your fixed
interest account.
8. Performance
--------------------------------
The value of your Contract will fluctuate depending upon the investment
performance of the fund(s) you choose. The following chart shows total
returns for each fund for the time periods shown. These numbers reflect the
insurance company charges and the investment charges of the fund, but do
not reflect any withdrawal charges, which would reduce the performance if
they were applied. Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Calendar Year
Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence Capital
Growth Equity 18.22% 24.83% -9.32% 10.96% 4.55% 32.86% -12.38% 29.34% 5.38% 3.82%
Quality Bond 2.82 18.64 -6.49 10.25 5.22 14.01 6.44 11.33 0.53 n/a
OpCap Advisors
Value Equity 23.58 35.73 1.61 5.69 13.38 25.87 -9.37 11.36 20.94 n/a
Small Capitalization 18.25 n/a n/a n/a n/a n/a n/a n/a n/a n/a
T. Rowe Price
Flexibility Managed 14.85 20.70 2.77 14.28 8.12 19.88 -2.26 19.44 10.72 21.84
High Yield Bond 12.43 14.95 -8.51 18.26 14.33 35.10 -1.99 -1.99 10.13 -2.11
ICMI/Robertson Stephens
Emerging Growth n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Vontobel
International Equity 15.37 12.36 -7.51 36.40 n/a n/a n/a n/a n/a n/a
American Century
VP Captial
Appreciation -5.54 29.46 -2.41 8.94 -2.58 39.89 -2.67 27.00 -8.40 n/a
Neuberger & Berman
AMT Limited Maturity
Bond 3.00 9.56 -1.40 5.30 3.86 9.79 6.81 9.23 0.23
AMT Balanced 5.54 22.22 -4.57 5.13 6.70 20.96 0.52 n/a n/a n/a
AMT Partners 28.32 35.16 n/a n/a n/a n/a n/a n/a n/a n/a
Fidelity Investments
VIP Equity Income 12.84 32.56 5.14 16.80 15.41 29.57 -16.51 15.67 14.44 -2.55
Vip Growth 13.26 33.68 -1.26 17.87 7.94 43.45 -13.01 29.64 7.72 2.18
VIP II Asset Manager 13.17 15.49 -7.26 19.71 10.30 20.85 5.23 n/a n/a n/a
VIP II Index 500 21.52 35.87 0.07 8.68 n/a n/a n/a n/a n/a n/a
Morgan Stanley
Emerging Markets
Equity (Int'l) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
</TABLE>
<PAGE>
9. DEATH BENEFIT
--------------------------------
If you die prior to the Annuity Date we will pay the beneficiary the
greatest of (1) the Contract Value for the period that proof of death is
received, (2) the sum of the Fixed Account Value (if any) on the date that
proof of death is received and the net purchase payments and transfers
allocated to the Separate Account, or (3) if the contract owner dies before
age 80, an enhanced death benefit.
If you die after the Annuity Date, the beneficiary may elect to have the
payments continue for the specified or guaranteed period of to receive in
lump sum the present value of the remaining payments.
10. OTHER INFORMATION
--------------------------------
Free Look. If you cancel your Contract within 10 days after receiving it
---------
(or whatever period is required in your state), we will send your money
back without assessing a withdrawal charge. You will receive whatever your
Contract is worth on the day we receive your request. This may be more or
less than your original payment.
No Probate. In most cases, when you die, the person you choose as your
----------
beneficiary will receive the death benefit without going through probate.
Systematic Withdrawals. You can arrange to have up to 15% of the total
----------------------
purchase payments automatically sent to you on a modal basis while your
Contract is still in the accumulation phase. Of course, you'll have to pay
taxes on money you receive.
Disability and Medically Related Surrenders. Under certain circumstances,
-------------------------------------------
you will have the ability to withdraw your money free from the contingent
deferred sales charge if you become disabled.
Dollar Cost Averaging. You can arrange to have a regular amount of money
---------------------
automatically invested in the investment funds monthly or quarterly.
Automatic Asset Rebalancing. You can elect to have your investments
---------------------------
automatically rebalanced on a quarterly basis to maintain a specified
percentage allocation among your selected investment funds, which will not
include the fixed interest accounts.
11. INQUIRIES
--------------------------------
If you need more information, please contact us at:
The Penn Insurance and Annuity Company
Customer Service Group
Philadelphia, PA 19172
215-956-9177
<PAGE>
PART A
------
Information Required in a Prospectus
------------------------------------
<PAGE>
PENNANT
Prospectuses
PIA Variable Annuity Account I
May 1, 1997
Penn Series Funds, Inc.
May 1, 1997
Investment Advisers:
T. Rowe Price Associates, Inc.
OpCap Advisors
Independence Capital Management, Inc.
Vontobel USA, Inc.
Roberston Stephens Investment Management, Inc.
American Century Variable Portfolios, Inc.
May 1, 1997
Investment Adviser:
American Century Investment Management, Inc.
Neuberger & Berman Advisers Management Trust
May 1, 1997
Investment Adviser:
Neuberger & Berman Management Incorporated
Fidelity Investments'
Variable Insurance Products Fund
Variable Insurance Products Fund II
April 30, 1997
Investment Adviser:
Fidelity Management & Research Company
Morgan Stanley Universal Funds, Inc.
May 1, 1997
Investment Adviser:
Morgan Stanley Asset Management
<PAGE>
No offering is made hereby in any jurisdiction in which such offering may
not lawfully be made.
No person is authorized to make any representations in connection with
this offering other than those representations contained in the Prospectuses.
<PAGE>
PROSPECTUS -- MAY 1, 1997
INDIVIDUAL VARIABLE AND FIXED ANNUITY CONTRACT -- FLEXIBLE PURCHASE PAYMENTS
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I
THE PENN INSURANCE AND ANNUITY COMPANY [LOGO OF PENNANT APPEARS HERE]
PHILADELPHIA, PENNSYLVANIA 19172 . TELEPHONE (215) 956-9177
- -------------------------------------------------------------------------------
This prospectus describes a combination variable and fixed annuity contract
offered by The Penn Insurance and Annuity Company (the "Company"). Through PIA
Variable Annuity Account I (the "Separate Account"), you may allocate amounts
invested under the Contract among one or more of the following funds:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUNDS MANAGERS
- --------------------------------------------------------------------------------------------
<S> <C>
PENN SERIES FUNDS, INC.
Growth Equity Fund Independence Capital Management, Inc.
(a subsidiary of The Penn Mutual Life Insurance Company)
Value Equity Fund OpCap Advisors
Small Capitalization Fund OpCap Advisors
Emerging Growth Fund Independence Capital Management, Inc. /
Robertson Stephens Investment Management, Inc.
Flexibly Managed Fund T. Rowe Price Associates, Inc.
International Equity Fund Vontobel USA, Inc. (a subsidiary of Vontobel Holding Ltd.)
Quality Bond Fund Independence Capital Management, Inc.
High Yield Bond Fund T. Rowe Price Associates, Inc.
Money Market Fund Independence Capital Management, Inc.
- --------------------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Capital Appreciation Portfolio American Century Investment Management, Inc.
- --------------------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Balanced Portfolio Neuberger & Berman Management Incorporated
Limited Maturity Bond Portfolio Neuberger & Berman Management Incorporated
Partners Fund Portfolio Neuberger & Berman Management Incorporated
- --------------------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCT FUND
Equity-Income Portfolio Fidelity Management and Research Company
Growth Portfolio Fidelity Management and Research Company
- --------------------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio Fidelity Management and Research Company
Index 500 Portfolio Fidelity Management and Research Company
- --------------------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
Emerging Markets Equity
(International) Portfolio Morgan Stanley Asset Management Inc.
- --------------------------------------------------------------------------------------------
</TABLE>
In addition, you may also invest in fixed interest options in the Fixed Ac-
count. The fixed interest options are funded through and are backed by the
Company's general account.
For many persons, a combination variable and fixed annuity contract may be an
attractive long-term investment vehicle. Its benefits include the manner in
which earnings on accumulated funds are taxed, the availability of multiple in-
vestment options, and the provision of annuity and death benefit guarantees.
The Contract is not intended as a short-term investment vehicle. Early with-
drawals of purchase payments from the Contract may be subject to a contingent
deferred sales charge of up to 6%, and withdrawals by an owner before age 59
1/2 may be subject to a 10% additional income tax.
For contracts sold in some states, not all Funds or fixed interest options
are available. Also, in some states, the number of years during which purchase
payments may be made to the Company is limited.
A Contract may be returned within ten days of receipt for a full refund of
the Contract Value (or purchase payments, if required under applicable law).
Longer free look periods apply in some states.
This prospectus sets forth concisely the information a prospective investor
should know before investing. It should be retained for future reference.
A statement of additional information dated the same as this prospectus has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. It is available, at no charge by writing The Penn Insur-
ance and Annuity Company, Customer Service Group, Philadelphia, PA 19172. Or,
you can call (215) 956-9177. The table of contents of the statement of addi-
tional information is at the end of this prospectus.
THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR
EACH APPLICABLE FUND.
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.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
SPECIAL TERMS.............................................................. 3
- --------------------------------------------------------------------------------
EXPENSES................................................................... 4
- --------------------------------------------------------------------------------
EXAMPLES OF FEES AND EXPENSES.............................................. 5
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION............................................ 6
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY..................................... 10
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT....................................................... 10
Penn Series Funds, Inc................................................... 10
American Century Variable Portfolios, Inc................................ 11
Neuberger & Berman Advisers Management Trust............................. 11
Fidelity Investments' Variable Insurance Products Fund................... 11
Fidelity Investments' Variable Insurance Products Fund II................ 11
Morgan Stanley Universal Funds, Inc. .................................... 12
Voting Rights............................................................ 12
- --------------------------------------------------------------------------------
THE CONTRACT............................................................... 12
Purchases................................................................ 13
Accumulation Units....................................................... 13
Annuity Payments......................................................... 13
Death Benefit............................................................ 14
Transfers................................................................ 14
Dollar Cost Averaging................................................... 15
Automatic Rebalancing................................................... 15
Withdrawals.............................................................. 15
Systematic Withdrawals.................................................. 15
403(b) Withdrawals...................................................... 15
Deferment of Payments and Transfers...................................... 15
Charges.................................................................. 16
Administration Charges.................................................. 16
Mortality and Expense Risk Charge....................................... 16
Contingent Deferred Sales Charge........................................ 16
Free Withdrawals........................................................ 16
Premium Taxes........................................................... 17
Performance Information.................................................. 17
- --------------------------------------------------------------------------------
THE FIXED INTEREST OPTIONS................................................. 17
General Information...................................................... 18
Loans Under Section 403(b) Contracts..................................... 18
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS.......................................... 19
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION CONTENTS............................... 21
- --------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL TERMS
As used in this prospectus, the following terms have the indicated meanings:
ACCUMULATION UNIT: A unit of measure used to compute the Variable Account
Value under the Contract prior to the Annuity Date.
ANNUITANT: The person during whose life annuity payments are made.
ANNUITY DATE: The date on which annuity payments start.
ANNUITY UNIT: A unit of measure used to calculate the amount of each
variable annuity payment.
BENEFICIARY: The person(s) named by the Contract Owner to receive the death
benefit payable upon the death of the Contract Owner or Annuitant.
CONTRACT: The combination variable and fixed annuity Contract described in
this prospectus.
CONTRACT OWNER: The person specified in the Contract as the Contract Owner.
CONTRACT VALUE: The sum of the Variable Account Value and the Fixed Account
Value.
FIXED ACCOUNT VALUE: The value of amounts held under the Contract in all
fixed interest options.
SEPARATE ACCOUNT: PIA Variable Annuity Account I, a separate account of The
Penn Insurance and Annuity Company that is registered as a unit investment
trust under the Investment Company Act of 1940.
VARIABLE ACCOUNT VALUE: The value of amounts held under the Contract in all
subaccounts of the Separate Account.
VALUATION PERIOD: The period from one valuation of Separate Account assets
to the next. Valuation is performed on each day the New York Stock Exchange
is open for trading.
WE: A reference to "we" or "us" denotes The Penn Insurance and Annuity
Company.
YOU: A reference to "you" denotes the Contract Owner or prospective Contract
Owner.
3
<PAGE>
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchase Payments................................... None
Maximum Contingent Deferred Sales Charge..... 6% of purchase payments withdrawn*
Exchange Fee.............................................................. None
MAXIMUM ANNUAL CONTRACT ADMINISTRATION CHARGE............................. $30
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF VARIABLE ACCOUNT VALUE)
Mortality and Expense Risk Charge......................................... 1.25%
Contract Administration Charge............................................ 0.15%
-----
Total Separate Account Annual Expenses.................................... 1.40%
</TABLE>
- -----------------------
*See Charges in this prospectus for information on the decline in the percent-
age charge over time and free withdrawals.
- -------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.**
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
ADMINISTRATIVE
MANAGEMENT AND CORPORATE TOTAL
FEES (AFTER SERVICES FEES ACCOUNTING OTHER FUND
WAIVER) (AFTER WAIVER) FEES EXPENSES EXPENSES
----------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Growth Equity........... 0.50% 0.15% 0.08% 0.07% 0.80%
Value Equity............ 0.50% 0.15% 0.07% 0.06% 0.78%
Small Capitalization.... 0.50% 0.15% 0.27% 0.07% 0.99%
Emerging Growth......... 0.80% 0.15% 0.07% 0.13% 1.15%
Flexibly Managed........ 0.50% 0.15% 0.06% 0.06% 0.77%
Int'l Equity............ 0.75% 0.15% 0.09% 0.18% 1.17%
Quality Bond............ 0.45% 0.15% 0.08% 0.09% 0.77%
High Yield Bond......... 0.50% 0.15% 0.08% 0.11% 0.84%
Money Market............ 0.40% 0.15% 0.08% 0.10% 0.73%
</TABLE>
- -----------------------
** The expenses presented are for the last fiscal year, except expenses for
the Emerging Growth Fund, a new Fund, are estimated. In the absence of vol-
untary fee waivers by the investment adviser, the total expenses of the
Growth Equity and Quality Bond Funds would have been 0.81% and 0.78% re-
spectively. In the absence of fee waivers by the investment adviser and ad-
ministrator of the Fund, the total expenses of the Money Market and Small
Capitalization Funds would have been 0.74% and 1.06%, respectively.
- -------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT 12B-1 OTHER TOTAL FUND
FEES FEES EXPENSES EXPENSES
---------- ----- -------- ----------
<S> <C> <C> <C> <C>
Capital Appreciation....................... 1.00% None None 1.00%
</TABLE>
- -------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST***
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT,
ADVISORY AND
ADMINISTRATION OTHER TOTAL FUND
FEES EXPENSES EXPENSES
-------------- -------- ----------
<S> <C> <C> <C>
Limited Maturity Bond........................ 0.65% 0.13% 0.78%
Balanced..................................... 0.85% 0.24% 1.09%
Partners Fund................................ 0.84% 0.11% 0.95%
</TABLE>
- -----------------------
*** Neuberger & Berman Advisers Management Trust (the "Trust") is divided into
portfolios ("Portfolios"), each of which invests all of its net investable
assets in a corresponding series ("Series") of Advisers Managers Trust.
Expenses in the table reflect expenses of the Portfolios and include each
Portfolio's pro rata portion of the operating expenses of each Portfolio's
corresponding Series. The Portfolios pay Neuberger & Berman Management
Inc. ("NBMI") an administration fee based on the Portfolio's net asset
value. Each Portfolio's corresponding Series pays NBMI a management fee
based on the Series' average daily net assets. Accordingly, this table
combines management fees at the Series level and administration fees at
the Portfolio's level in a unified fee rate. Total Annual Expenses for
each portfolio have been restated based upon current administration fees
for the Portfolio and management fees for its corresponding Series. See
"Expenses" in the Trust's Prospectus.
4
<PAGE>
- -------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND++
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity-Income.................................... 0.51% 0.05% 0.56%
Growth........................................... 0.61% 0.06% 0.67%
</TABLE>
- -----------------------
++ The expenses presented are for the last fiscal year. A portion of the bro-
kerage commissions the fund paid was used to reduce its expenses. Without
this reduction, total expenses would have been 0.58% for the Equity Income
Portfolio and 0.69% for the Growth Portfolio.
- -------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEE EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
++Asset Manager.................................. 0.64% 0.09% 0.73%
+++Index 500..................................... 0.13% 0.15% 0.28%
</TABLE>
- -----------------------
++ The expenses presented are for the last fiscal year. A portion of the bro-
kerage commissions the fund paid was used to reduce its expenses. Without
this reduction, total expenses would have been 0.74% for the Asset Manager
Portfolio.
+++ The expenses presented are for the last fiscal year. In the absence of
voluntary fee waivers by the investment adviser, total expenses would have
been 0.43% for the Index 500 Portfolio.
- -------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEE EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Emerging Markets Equity (International).......... 1.25% 0.50% 1.75%
</TABLE>
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses that you will bear directly and indirectly. The
table shows Contract expenses and underlying fund expenses. See the
prospectuses of Penn Series Funds, Inc., American Century Variable Portfolios,
Inc., Neuberger & Berman Advisers Management Trust, Fidelity Investments'
Variable Insurance Products Fund, Fidelity Investments' Variable Insurance
Products Fund II and Morgan Stanley Universal Funds, Inc. for additional
information on fund expenses.
Premium taxes may be applicable, but are not reflected in the tables above
or the examples below. See Charges in this prospectus.
- -------------------------------------------------------------------------------
EXAMPLES OF FEES AND EXPENSES
The following examples illustrate the cumulative dollar amount of all the
above expenses that would be incurred on each $1,000 invested.
If you make a single purchase payment and surrender your Contract at the end
of the applicable period, you would pay the following expenses on each $1,000
invested, assuming a 5% annual return on assets.
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund.................... $74 $104 $135 $248
Penn Series Quality Bond Fund.................... $75 $105 $137 $252
Penn Series High Yield Bond Fund ................ $76 $109 $144 $266
Penn Series Growth Equity Fund................... $75 $106 $138 $255
Penn Series Value Equity Fund.................... $75 $107 $140 $259
Penn Series Flexibly Managed Fund................ $75 $107 $140 $258
Penn Series International Equity Fund............ $79 $120 $161 $302
Penn Series Small Capitalization Fund............ $77 $113 $150 $279
Penn Series Emerging Growth...................... $84 $134 $185 $349
American Century Capital Appreciation Portfolio.. $77 $113 $150 $279
Neuberger & Berman Limited Maturity Bond
Portfolio....................................... $75 $106 $138 $254
Neuberger & Berman Balanced Portfolio............ $78 $114 $152 $283
Neuberger & Berman Partners Portfolio............ $76 $111 $147 $272
Fidelity's Equity Income Portfolio............... $73 $102 $131 $239
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Fidelity's Growth Portfolio...................... $74 $104 $135 $249
Fidelity's Asset Manager Portfolio............... $75 $107 $140 $258
Fidelity's Index 500............................. $70 $ 91 $113 $202
Morgan Stanley Emerging Markets Equity
(International) Portfolio....................... $84 $134 $185 $349
</TABLE>
If you make a single purchase payment and either you do not surrender your
Contract or you annuitize your Contract at the end of the period,* you would
pay the following expenses on each $1,000 invested, assuming a 5% annual return
on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund........................... $22 $67 $115 $248
Penn Series Quality Bond Fund........................... $22 $68 $117 $252
Penn Series High Yield Bond Fund........................ $24 $72 $124 $266
Penn Series Growth Equity Fund.......................... $22 $69 $119 $255
Penn Series Value Equity Fund........................... $23 $70 $121 $259
Penn Series Flexibly Managed Fund....................... $23 $70 $120 $258
Penn Series International Equity Fund................... $27 $83 $142 $302
Penn Series Small Capitalization Fund................... $25 $76 $131 $279
Penn Series Emerging Growth............................. $32 $98 $166 $349
American Century Capital Appreciation Portfolio......... $25 $76 $131 $279
Neuberger & Berman Limited Maturity Bond Portfolio...... $22 $69 $118 $254
Neuberger & Berman Balanced Portfolio................... $25 $78 $133 $283
Neuberger & Berman Partners Portfolio................... $24 $74 $127 $272
Fidelity's Equity Income Portfolio...................... $21 $65 $111 $239
Fidelity's Growth Portfolio............................. $22 $67 $116 $249
Fidelity's Asset Manager Portfolio...................... $23 $70 $120 $258
Fidelity's Index 500.................................... $17 $54 $ 93 $202
Morgan Stanley Emerging Markets Equity (International)
Portrfolio............................................. $32 $98 $166 $349
</TABLE>
- -----------------------
* You may not annuitize your Contract until after the second Contract anniver-
sary.
The examples are based upon fund data for the fiscal year ended December 31,
1996.
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES UNDER YOUR CONTRACT; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
The following tables show Accumulation Unit values and the number of Accumu-
lation Units outstanding for each of the subaccounts of the Separate Account
for the specified periods. The financial data included in the tables should be
read in conjunction with the financial statements and the related notes in-
cluded in the Statement of Additional Information.
- --------------------------------------------------------------------------------
PENN SERIES GROWTH EQUITY FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period .................. $11.747 $10.000
Accumulation Unit Value, end of period......................... $13.873 $11.747
Number of Accumulation Units outstanding, end of period........ 140,629 13,923
- -------------------------------------------------------------------------------
</TABLE>
(a)For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
6
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES VALUE EQUITY FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value beginning of period.................... $12.640 $10.000
Accumulation Unit Value, end of period......................... $15.604 $12.640
Number of Accumulation Units outstanding, end of period........ 916,524 177,701
- -------------------------------------------------------------------------------
</TABLE>
(a)For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES FLEXIBLY MANAGED FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1996 1995(A)
--------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period.................. $11.649 $10.000
Accumulation Unit Value, end of period........................ $13.367 $11.649
Number of Accumulation Units outstanding, end of period....... 2,989,155 591,562
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES INTERNATIONAL EQUITY FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $11.880 $10.000
Accumulation Unit Value, end of period......................... $13.688 $11.880
Number of Accumulation Units outstanding, end of period........ 525,885 54,604
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES QUALITY BOND FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $11.229 $10.000
Accumulation Unit Value, end of period......................... $11.531 $11.229
Number of Accumulation Units outstanding, end of period........ 275,302 64,152
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES HIGH YIELD BOND FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value beginning of period.................... $10.967 $10.000
Accumulation Unit Value end of period.......................... $12.315 $10.967
Number of Accumulation Units outstanding, end of period........ 290,291 57,255
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
7
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES SMALL CAPITALIZATION FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $11.145 $10.000
Accumulation Unit Value, end of period......................... $13.161 $11.145
Number of Accumulation Units outstanding, end of period........ 353,352 55,394
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES MONEY MARKET FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $10.310 $10.000
Accumulation Unit Value, end of period......................... $10.673 $10.310
Number of Accumulation Units outstanding, end of period........ 609,075 186,641
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995
- --------------------------------------------------------------------------------
AMERICAN CENTURY CAPITAL APPRECIATION PORTFOLIO SUBACCOUNT (A)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(B)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $12.817 $10.000
Accumulation Unit Value, end of period......................... $12.092 $12.817
Number of Accumulation Units outstanding, end of period........ 314,124 71,869
- -------------------------------------------------------------------------------
</TABLE>
(a) TCI Growth Portfolio Subaccount prior to May 1, 1997
(b) For the period March 1, 1995 (date subaccount was established) through De-
cember 31,1995
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN LIMITED MATURITY BOND PORTFOLIO SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $10.690 $10.000
Accumulation Unit Value, end of period......................... $10.995 $10.690
Number of Accumulation Units outstanding, end of period........ 214,093 51,495
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN BALANCED PORTFOLIO SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period................... $11.653 $10.000
Accumulation Unit Value, end of period......................... $12.282 $11.653
Number of Accumulation Units outstanding, end of period........ 228,709 69,633
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995
8
<PAGE>
- --------------------------------------------------------------------------------
FIDELITY INVESTMENT'S EQUITY INCOME FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1996 1995(A)
--------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period.................. $12.600 $10.000
Accumulation Unit Value, end of period........................ $14.199 $12.600
Number of Accumulation Units outstanding, end of period....... 1,134,707 246,915
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' GROWTH FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1996 1995(A)
--------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period.................. $13.077 $10.000
Accumulation Unit Value, end of period........................ $14.791 $13.077
Number of Accumulation Units outstanding, end of period....... 1,007,942 223,746
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' ASSET MANAGER FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------
1996 1995(A)
------- -------
<S> <C> <C>
Accumulation Unit Value, beginning of period.................... $11.475 $10.000
Accumulation Unit Value, end of period.......................... $12.968 $11.475
Number of Accumulation Units outstanding, end of period......... 196,768 51,476
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period March 1, 1995 (date subaccount was established) through De-
cember 31, 1995.
The financial statements of the Separate Account for the year ended December
31, 1996 are included in the statement of additional information referred to on
the cover page of this prospectus.
In advertisements of the Contracts, Penn Mutual may provide information on
total return performance and on annual changes in accumulation unit values. We
may also provide information on "yields" and "effective yields" on investments
in the Money Market Fund subaccount.
Information on total return performance will include average annual rates of
total return for one, five and ten year periods, or lesser periods depending on
how long the subaccount has been in existence. Average annual total return fig-
ures will show the average annual rates of increase or decrease in investments
in the subaccounts, assuming a $1,000 investment at the beginning of the peri-
od, withdrawal of the investment at the end of the period, and the deduction of
all applicable charges. We may also show average annual rates of total return,
assuming other amounts invested at the beginning of the period and no with-
drawal at the end of the period. Average annual total return figures which as-
sume no withdrawal at the end of the period will reflect all recurring charges,
but will not reflect the contingent deferred sales charge (if applicable, the
contingent deferred sales charge would reduce the amount that may be withdrawn
under the Contracts).
The "yield" on an investment in the Money Market Fund subaccount refers to
the income generated by the investment over a 7-day period. This income is then
annualized. That is, the amount of income generated by the investment during
that week is assumed to be generated each week 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.
9
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
The Penn Insurance and Annuity Company (the "Company") is a Delaware stock life
insurance company. The Company is a wholly-owned subsidiary of The Penn Mutual
Life Insurance Company ("Penn Mutual"), a Pennsylvania mutual life insurance
company that has been in the life insurance business since 1847. The Company is
licensed to sell insurance and annuities in 47 states and the District of
Columbia. The Company's financial statements appear in the statement of
additional information.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT
PIA Variable Annuity Account I was established as a separate account of the
Company on July 13, 1994. The Separate Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940.
The Separate Account is divided into subaccounts for investment in shares of
different mutual funds. Income, gains and losses, realized or unrealized, of a
subaccount are credited to or charged against the subaccount without regard to
any other income, gains or losses of the Company. Assets equal to the reserves
and other contract liabilities with respect to each subaccount are not charge-
able with liabilities arising out of any other business of the Company. The
Company is obligated to pay all benefits and make all payments provided under
the Contracts.
Amounts allocated or transferred to the Separate Account under the Contracts
are invested, at the direction of the Contract Owner, in one or more funds of
Penn Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger
& Berman Advisers Management Trust, Fidelity Investments' Variable Insurance
Products Fund, Fidelity Investments' Variable Insurance Products Fund II and
Morgan Stanley Universal Funds, Inc.
The mutual funds have shareholders other than the Separate Account. Shares of
Penn Series Funds, Inc. are also sold to Penn Mutual and other separate ac-
counts of Penn Mutual that fund benefits under variable annuity and variable
life insurance contracts. Shares of American Century Variable Portfolios, Inc.,
Neuberger & Berman Advisers Management Trust, Fidelity Investments' Variable
Insurance Products Fund, Fidelity Investments' Variable Insurance Products Fund
II and Morgan Stanley Universal Funds, Inc. are sold to variable annuity and
variable life separate accounts of Penn Mutual, such accounts of other insur-
ance companies and, in the case of Neuberger & Berman Advisers Management
Trust, directly to qualified pension and retirement plans. Each mutual fund
will monitor events to identify any material conflicts that might arise between
the Separate Account and its other shareholders. See the accompanying prospec-
tuses of the funds for information on their monitoring for conflicts.
- --------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.:
GROWTH EQUITY FUND - seeks long term growth of capital and increase of future
income by investing primarily in common stocks of well established growth
companies;
VALUE EQUITY FUND - seeks to maximize total return (capital appreciation and
income) primarily by investing in equity securities of companies believed to be
undervalued considering such factors as assets, earnings, growth potential and
cash flows;
SMALL CAPITALIZATION FUND - seeks capital appreciation through investment in
a diversified portfolio of securities consisting primarily of equity securities
of companies with market capitalizations under $1 billion;
EMERGING GROWTH FUND - seeks capital appreciation by investing primarily in
common stocks of emerging growth companies with above-average growth prospects.
FLEXIBLY MANAGED FUND - seeks to maximize total return (capital appreciation
and income) by investing in common stocks, other equity securities, corporate
debt securities, and/or short term reserves, in proportions considered appro-
priate in light of the availability of attractively valued individual securi-
ties and current and expected economic and market conditions;
INTERNATIONAL EQUITY FUND - seeks to maximize capital appreciation by
investing in a carefully selected diversified portfolio consisting primarily of
equity securities. The investments will consist principally of equity
securities of European and Pacific Basin countries;
QUALITY BOND FUND - seeks the highest income over the long term consistent
with the preservation of principal through investment primarily in marketable
investment grade debt securities;
10
<PAGE>
HIGH YIELD BOND FUND - seeks high current income by investing primarily in a
diversified portfolio of long term high-yield/high-risk fixed income securities
in the medium to lower quality ranges; capital appreciation is a secondary
objective; such securities, which are commonly referred to as "junk" bonds,
generally involve greater risks of loss of income and principal than higher
rated securities (see accompanying Penn Series prospectuses);
MONEY MARKET FUND - seeks to preserve capital, maintain liquidity and achieve
the highest possible level of current income consistent therewith, by investing
in high quality money market instruments; an investment in the Fund is neither
insured nor guaranteed by the U.S. Government and there can be no assurance
that the fund will be able to maintain a stable net asset value of $1.00 per
share.
Independence Capital Management, Inc., Horsham, Pennsylvania is investment
adviser to the Growth Equity, Quality Bond and Money Market Funds. OpCap Advi-
sors, New York, New York, is investment adviser to the Value Equity and Small
Capitalization Funds. T. Rowe Price Associates, Baltimore, Maryland, is invest-
ment adviser to the Flexibly Managed and High Yield Bond Funds. Vontobel USA,
Inc., New York, New York, is investment adviser to the International Equity
Fund. Independence Capital Management, Inc. is also investment adviser, and
Robertson Stephens Investment Management, Inc., San Francisco, California, is
investment sub-adviser, to the Emerging Growth Fund. Morgan Stanley Asset Man-
agement Inc. is investment adviser to the Emerging Markets Equity (Internation-
al) Portfolio.
- --------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.:
CAPITAL APPRECIATION PORTFOLIO - seeks capital growth by investing primarily
in common stocks believed to have better-than-average prospects for apprecia-
tion.
American Century Investment Management, Inc., Kansas City, Missouri, is in-
vestment adviser to the Capital Appreciation Portfolio.
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
LIMITED MATURITY BOND PORTFOLIO - seeks highest current income consistent
with low risk to principal and liquidity, primarily by investing in a diversi-
fied portfolio of limited maturity debt securities. A secondary objective is
capital appreciation.
BALANCED PORTFOLIO - seeks long-term capital growth and reasonable current
income without undue risk to principal through investment of a portion of its
assets in common stock and a portion in debt securities.
PARTNERS PORTFOLIO - seeks capital growth by investing primarily in common
stocks of established companies, using the value oriented investment approach.
Neuberger & Berman reserves the right to make changes in the investment objec-
tive, but will notify shareholders thirty days in advance of any proposed mate-
rial change.
Neuberger & Berman Management Incorporated, New York, New York, is investment
adviser to the Limited Maturity Bond Portfolio, the Balanced Portfolio and the
Partners Portfolio.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND:
EQUITY-INCOME PORTFOLIO - seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the fund will
also consider the potential for capital appreciation. The fund's goal is to
achieve a yield which exceeds the composite yield on the securities comprising
the Standard & Poor's 500 Composite Stock Price Index.
GROWTH PORTFOLIO - seeks to achieve capital appreciation. The fund normally
purchases common stocks, although its investments are not restricted to any one
type of security. Capital appreciation may also be found in other types of se-
curities, including bonds and preferred stocks.
Fidelity Management & Research Company, Boston, Massachusetts, is investment
adviser to the Equity-Income Portfolio and the Growth Portfolio.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II:
ASSET MANAGER PORTFOLIO - seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks, bonds and
short-term fixed income investments.
INDEX 500 PORTFOLIO - seeks to match the total return of the S&P 500 while
keeping expenses low. The S&P 500 is an index of 500 common stocks, most of
which trade on the New York Stock Exchange.
11
<PAGE>
Fidelity Management & Research Company, Boston, Massachusetts, is investment
adviser to the Asset Manager Portfolio and the Index 500 Portfolio.
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.:
EMERGING MARKETS EQUITY (INTERNATIONAL) PORTFOLIO - seeks long term capital
appreciation by investing primarily in equity securities of emerging market
country issuers. The Portfolio will focus on economies which are developing
strongly and in which the markets are becoming more sophisticated.
Morgan Stanley Asset Management Inc., New York, New York, is investment ad-
viser to the Emerging Markets Equity (International) Portfolio.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON THE MUTUAL FUNDS IN WHICH THE SUBACCOUNTS INVEST, SEE
THE PROSPECTUSES FOR PENN SERIES FUNDS, INC., AMERICAN CENTURY VARIABLE
PORTFOLIOS, INC., NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST, FIDELITY
INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND, FIDELITY INVESTMENTS' VARIABLE
INSURANCE PRODUCTS FUND II, AND MORGAN STANLEY UNIVERSAL FUNDS, INC. YOU SHOULD
READ THE PROSPECTUSES FOR THE FUNDS IN WHICH YOU ARE INTERESTED BEFORE
INVESTING.
- --------------------------------------------------------------------------------
VOTING RIGHTS
Under the Investment Company Act of 1940 as currently interpreted, Contract
Owners have the right to instruct the Company as to the voting of the shares of
the mutual funds held in the subaccounts of the Separate Account pursuant to
the Contracts. The number of shares of a fund for which voting instructions may
be given prior to the Contract Annuity Date is determined by dividing the
Contract Owner's interest in the applicable subaccount of the Separate Account
by the net asset value per share of the fund. The number of shares of a fund
for which voting instructions may be given after the Contract Annuity Date is
determined by dividing the reserve allocated to the applicable subaccount by
the net asset value per share of the fund. Should the applicable law, or
interpretations thereof, change so as to permit us to vote shares of the mutual
funds in our own right, we may elect to do so. Further, we reserve the right to
modify the manner in which we calculate the weight to be given to pass-through
voting instructions where such a change is necessary to comply with federal law
or interpretations thereof.
- --------------------------------------------------------------------------------
THE CONTRACT
The Contract described in this prospectus is a combination variable and fixed
annuity contract. The Contract provides for investment, through subaccounts of
the Separate Account, in one or more of the available funds of Penn Series
Funds, Inc., American Century Variable Portfolios, Inc., Neuberger & Berman Ad-
visers Management Trust, Fidelity Investments' Variable Insurance Products
Fund, Fidelity Investments' Variable Insurance Products Fund II and Morgan
Stanley Universal Funds, Inc. It also provides for investment in one or more
fixed interest accounts. The fixed interest accounts are guaranteed and funded
by the Company through its general account. See THE FIXED INTEREST OPTIONS in
this prospectus.
As the Contract Owner, you determine, within Contract limits (1) the amount
and frequency of the purchase payments to be made to the Company, (2) the in-
vestment options to which the purchase payments are to be allocated, (3) trans-
fers among investment options, (4) the form of annuity to be paid after the ac-
cumulation period and the person to whom it is to be paid, (5) the beneficiary
to whom death benefits are to be paid, and (6) the amount and frequency of
withdrawals from the Contract Value. Currently, for Contracts sold in Oregon,
New Jersey and Washington, purchase payments may be made only during the first
three contract years.
During the variable annuity payout period, you (or the beneficiary in the
event of your death or the Annuitant's death) may transfer Annuity Unit values
among subaccounts of the Separate Account.
Upon the earlier of the death of the Contract Owner (other than a trustee) or
Annuitant prior to the Annuity Date, the beneficiary may elect to receive a
death benefit in a lump sum or in the form of an annuity. A spousal beneficiary
may elect to become the Owner of the Contract.
The Contract may be amended at any time to conform to applicable laws or gov-
ernmental regulations. If, in our judgment, investment in any of the mutual
funds becomes inappropriate to the purposes of the Contract, we may, with ap-
proval of the Securities and Exchange Commission and the governing state insur-
ance department, substitute another fund for existing and future investments.
12
<PAGE>
Contract Owner inquiries may be made by writing The Penn Insurance and Annu-
ity Company, Customer Service Group, Philadelphia, PA 19172. Or, you can call
(215) 956-9177.
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PURCHASES
To purchase a Contract, your completed application, together with a check for
the first purchase payment, should be forwarded to our administrative office.
Normally, a completed application form received at our administrative office
will be accepted within two business days. If an incomplete application is not
completed and acted upon within five business days, the purchase payment will
be returned to you unless you request that we retain it while you complete the
application. All subsequent purchase payments are sent directly to our adminis-
trative office.
The minimum initial purchase payment is $5,000 for all non-qualified
contracts and $2,000 for individual retirement annuities under Section 408 of
the Internal Revenue Code and for tax deferred annuities under Section 403(b)
of the Code. For all Contracts, the minimum subsequent purchase payment that
will be accepted is $250. We may, in our discretion, reduce the minimum
requirements for initial and subsequent purchase payments. We will accept total
purchase payments under your Contract of up to $1 million. Total purchase
payments in excess of $1 million require our prior approval.
Purchase payments allocated to the Separate Account are credited in the form
of Accumulation Units of the subaccount selected. The number of Accumulation
Units credited is determined by dividing the purchase payment allocated to the
Separate Account by the value of the Accumulation Unit at the end of the valua-
tion period in which the purchase payment is received at our administrative of-
fice or, in a case of the first purchase payment, is accepted by us.
The principal underwriter of the Contract (under federal securities laws) is
Hornor, Townsend & Kent, Inc., 600 Dresher Road, Horsham, PA 19044, a wholly-
owned subsidiary of Penn Mutual.
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ACCUMULATION UNITS
For each subaccount of the Separate Account the value of an Accumulation Unit
will be $10 when the subaccount commences operation. The value of an
Accumulation Unit may increase or decrease from one valuation period to the
next.
The value of an Accumulation Unit for a valuation period is determined by
multiplying the value of an Accumulation Unit for the prior valuation period by
the net investment factor for the subaccount for the current valuation period.
The net investment factor is a measure of (1) investment performance of mu-
tual fund shares held in the subaccount, (2) any taxes on income or gains from
investments held in the subaccount and (3) the mortality and expense risk
charge at an annual rate of 1.25% and contract administration charge at an an-
nual rate of 0.15% assessed against the subaccount. Under current law, no taxes
are levied against income or gain from investments held in a subaccount.
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ANNUITY PAYMENTS
You may choose one of the following forms of annuity: (1) an annuity for a
specified number of years, (2) a life annuity, (3) a life annuity with payments
guaranteed for 10 or 20 years, (4) a joint and survivor life annuity or (5)
such other form of annuity as we may agree upon. You may select any one of
these forms of annuity as a variable annuity (except for a specified number of
years), a fixed annuity, or a combination of both.
The level of the variable annuity payments is determined by various factors,
including the amount accumulated and applied under the Contract to the variable
annuity, the form of annuity chosen, the expected duration of the annuity
period, the performance of the applicable investment options, and the annuity
purchase rates and charges specified in the Contract.
The variable annuity purchase rates assume an annual net investment return of
3%. If the annual net investment return during the annuity payout period is
greater than 3%, the level of the annuity payment increases. If the annual net
investment return is less than 3%, the level of the annuity payments decreases.
The level of fixed annuity payments under a Contract is determined by various
factors, including the amount accumulated and applied under the Contract to the
fixed annuity, the form of annuity chosen, the expected duration of the annuity
period, and current annuity purchase rates for single premium nonparticipating
fixed annuity contracts issued by the Company.
Unless you specify otherwise, you or such other person you designate will re-
ceive a life annuity with payments guaranteed for 10 years, except for tax de-
ferred annuities under Section 403(b) of the Code and pension or profit sharing
plans under Section 401 of the Code. Annuitants under those Contracts will re-
ceive a joint and survivor annuity. Unless you specify otherwise, the annuity
will be split between fixed and variable in the same proportions as the Con-
tract Value on the Annuity Date.
13
<PAGE>
Unless you specify otherwise, the Annuity Date will be the later of (1) the
first day of the next month after the Annuitant's 85th birthday or (2) 10 years
after the contract date, unless state law requires an earlier Annuity Date. The
Annuity Date under the Contract may not be earlier than the second contract an-
niversary and must be on the first day of a month.
You may change the Annuity Date or annuity option by giving written notice at
our administrative office at least 30 days prior to the current Annuity Date.
If the Contract Value of a Contract is less than $5,000, we may elect to pay
such amount in a lump sum in place of an annuity. Annuity payments are gener-
ally monthly, starting with the Annuity Date, but may also be made quarterly,
semiannually or annually at your request. However, if any payment would be less
than $50, we may change the frequency of annuity payments so that payments are
at least $50 each.
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DEATH BENEFIT
If the Contract Owner or the Annuitant dies prior to the Annuity Date, we
will pay the beneficiary the greater of (1) the Contract Value for the valua-
tion period in which proof of death and any other required information needed
to make payment is received at our administrative office; or (2) the sum of the
Fixed Account Value on the date the above information is received at our admin-
istrative office and the net purchase payments and transfers allocated to the
Separate Account (i.e., all purchase payments and transfers to the Separate Ac-
count minus all prior withdrawals and transfers made from the Separate Ac-
count). The death benefit generally will be paid within 7 days after the Com-
pany has sufficient information to make the payment. For a discussion of the
tax treatment of a death benefit, see FEDERAL INCOME TAX CONSIDERATIONS in this
prospectus.
If the Contract Owner dies before the age of 80 and if permitted by state
law, an enhanced death benefit will be paid to the beneficiary, if it is
greater than the Contract Value as of the receipt of proof of death and the
necessary information to make a death benefit payment. The enhanced death bene-
fit is the sum of: (1) the Fixed Account Value, and (2) the net purchase pay-
ments allocated to the Separate Account (as defined in the previous paragraph)
plus interest accumulated at an annual interest rate of 5% through the Contract
Owner's attained age 69, and interest accumulated at an annual interest rate of
3% for years subsequent to attained age 70.
If the beneficiary is the Contract Owner's surviving spouse, the surviving
spouse has the right to become the Contract Owner rather than receive the death
benefit.
Within one year of the date of death, the beneficiary may elect to receive
the death benefit in single sum or in the form of an annuity. If payment is to
be received in a single sum, it must be paid within five years of the date of
death (until paid out, the death benefit will be allocated to subaccounts of
the Separate Account and/or fixed interest options as directed by the benefi-
ciary). If an annuity is selected, payments must commence within one year of
the date of death and must be made over the beneficiary's life or over a period
not longer than the beneficiary's life expectancy. If an election is not made
within one year of the date of death, the death benefit will be paid to the
beneficiary in a single sum.
If the Annuitant dies on or after the Annuity Date and the annuity is for a
specified number of years or for life with payments guaranteed for 10 or 20
years, the beneficiary may elect to have the payments continue for the speci-
fied or guaranteed period or to receive in lump sum the present value of the
remaining payments.
You may designate a beneficiary in your application. You may change the bene-
ficiary at any time before your death or the death of the Annuitant, whichever
occurs first.
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TRANSFERS
Prior to the Annuity Date, you may transfer amounts from one subaccount of
the Separate Account to another subaccount of the Separate Account. Within cer-
tain additional limitations stated in the Contract, you may also transfer
amounts from the subaccounts of the Separate Account to a fixed interest option
of the Fixed Account prior to the Annuity Date. Transfers may be made from the
Fixed Account to the Variable Account or to another fixed interest option
within the Fixed Account only at the completion of the interest period or
within the 25 days thereafter.
After the Annuity Date and during an annuity payout period, you may transfer
amounts (upon which the annuity payments are based) from one subaccount of the
Separate Account to another. Upon your death or the death of the Annuitant, a
beneficiary who is receiving annuity payments may transfer amounts among the
subaccounts of the Separate Account.
The minimum amount that may be transferred is $250 or, if less, the amount
held in the subaccount or fixed interest option. In the case of partial trans-
fers, the amount remaining in the subaccount or fixed interest option must be
at least $250.
14
<PAGE>
A written request for transfer (or, if authorized in writing, a telephone
request for transfer) must be received at our administrative office and all
other administrative requirements for transfer must be met to make the
transfer. The Separate Account and the Company will not be liable for following
transfer instructions communicated by telephone that we reasonably believe to
be genuine. We require certain personal identifying information to process a
telephone transfer.
DOLLAR COST AVERAGING: If you have a Contract Value of at least $10,000, you
may elect to have flat dollar amounts ($100 minimum) transferred monthly or
quarterly from one source account to other accounts ($50 minimum per account).
These transfers may be made only from one of the following accounts: Money Mar-
ket Subaccount, Limited Maturity Bond Subaccount, Quality Bond Subaccount, or
One Year Fixed Interest Option. The dollar cost averaging term may run from 12
to 60 months, or until you give notice of a change in allocation or cancella-
tion of the feature.
AUTOMATIC REBALANCING: You may elect to have your investments in subaccounts
of the Separate Account automatically rebalanced. We will transfer funds under
your Contract on a quarterly (calendar) basis among the subaccounts to maintain
a specified percentage allocation among your selected variable investment op-
tions. Dollar cost averaging and automatic rebalancing may not be in effect at
the same time.
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WITHDRAWALS
Prior to the Annuity Date and prior to the earlier of the death of the Con-
tract Owner and Annuitant, you may withdraw all or part of your Contract Value.
Withdrawals will be based on values at the end of the valuation period in which
a proper written request for withdrawal (and the Contract, in case of a full
withdrawal) is received at our administrative office. Payment will normally be
made within seven days of receipt of the written request and the Contract, if
required. A withdrawal may result in certain tax consequences, including an ad-
ditional 10% tax under certain circumstances. For a discussion of the tax
treatment of withdrawals, see FEDERAL INCOME TAX CONSIDERATIONS in this pro-
spectus.
The minimum withdrawal is $500 or, at the time of the first withdrawal in
each Contract Year, 15% of total purchase payments if less. A partial with-
drawal may be made from a subaccount of the Separate Account only if the amount
remaining in the subaccount is at least $250. If you request a partial with-
drawal without specifying allocation of the withdrawal among investment op-
tions, it will be taken pro rata from the variable subaccounts; if the partial
withdrawal exhausts your Variable Account Value, then any remaining withdrawal
will be taken from the fixed interest options beginning with the One Year Fixed
Interest Option and continuing with the other fixed interest options in order
of ascending duration.
SYSTEMATIC WITHDRAWALS: You may make a request for a systematic withdrawal if
there is no previous withdrawal in the current contract year. The maximum value
of a systematic withdrawal request is 15% of total purchase payments at the
time of the request. A level systematic withdrawal will begin one modal period
after the date of receipt of the request. The systematic withdrawals may be
made on a monthly, quarterly, semiannual or annual basis. The minimum Contract
Value that is eligible for a systematic withdrawal is $25,000, and the minimum
amount of each withdrawal payment is $50. Payments can be made of either a
fixed dollar amount or of a fixed percentage of purchase payments. The latter
option provides a convenient way to take advantage of the ability to withdraw a
limited percentage of purchase payments without incurring a contingent deferred
sales charge. See FREE WITHDRAWALS below. For a discussion of the tax treatment
of withdrawals, see FEDERAL INCOME TAX CONSIDERATIONS in this prospectus.
403(B) WITHDRAWALS: With respect to Contracts qualifying under Section 403(b)
of the Internal Revenue Code, there are certain restrictions on withdrawals.
Withdrawals may be made only if the Contract Owner is over the age of 59 1/2,
leaves the employment of the employer, dies, or becomes disabled as defined in
the Code. Withdrawals (other than withdrawals attributable to income earned on
purchase payments) may also be possible in the case of hardship as defined in
the Code. The restrictions do not apply to transfers among subaccounts and may
also not apply to transfers to other investments qualifying under Section
403(b). For a discussion of the tax treatment of withdrawals under Section
403(b) Contracts, see FEDERAL INCOME TAX CONSIDERATIONS in this prospectus.
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DEFERMENT OF PAYMENTS AND TRANSFERS
We reserve the right to defer a withdrawal, a transfer of values or annuity
payments funded by the Separate Account if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings); (b) trading on the
Exchange is restricted; (c) an emergency exists such that it is not reasonably
practical to dispose of securities held in the Separate Account or to determine
the value of its assets; or (d) the Securities and Exchange Commission by order
so permits for the protection of investors. Conditions described in (b) and (c)
will be decided by, or in accordance with rules of, the Commission.
15
<PAGE>
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CHARGES
ADMINISTRATION CHARGES: Charges are assessed to reimburse us for the expenses
we incur in administering the Contract and the Separate Account. First, on each
Contract Anniversary prior to the Annuity Date (and any other date the Variable
Account Value is reduced to zero through withdrawal or transfer), we deduct
from the Variable Account Value a contract administration charge of $30 or, if
less, 2% of the Variable Account Value. We will not, however, deduct this
charge if the Variable Account Value is greater than $50,000. The charge is
made by canceling Accumulation Units credited to the Contract, with the charge
allocated pro rata among the subaccounts comprising the Variable Account Value.
Second, we deduct from the Separate Account a daily administration charge equal
to an effective annual rate of 0.15% of the daily net asset value of the
Separate Account. These administration charges are guaranteed not to increase
and are intended to cover our average anticipated administration expenses over
the periods the Contracts are in force.
MORTALITY AND EXPENSE RISK CHARGE: We deduct a daily mortality and expense
risk charge equal to an effective annual rate of 1.25% of the daily net asset
value of the Separate Account. This charge is to compensate us for the mortali-
ty-related guarantees we make under the Contract (e.g., the death benefit and
the guarantee that the annuity factors will never be decreased even if mortal-
ity experience is substantially different than originally assumed), and for the
risk that our administration charges will be insufficient to cover administra-
tion expenses over the life of the Contracts. The mortality and expense risk
charge is assessed during both the accumulation and variable annuity pay-out
phases of the Contract.
CONTINGENT DEFERRED SALES CHARGE: A contingent deferred sales charge may be
deducted in the event of full or partial withdrawal from the Contract Value
prior to the Annuity Date. This charge is made to cover sales expenses that we
have incurred. Sales expenses which are not covered by the deferred sales
charge are paid from the surplus of the Company, which may include proceeds
from the mortality and expense risk charge.
A contingent deferred sales charge, if applicable, will be imposed only on a
withdrawal of a purchase payment in cases where the purchase payment was made
within seven years of the date of the withdrawal. The following table shows the
schedule of the contingent deferred sales charge that will be applied to with-
drawal of a purchase payment, after allowing for the free withdrawals which are
described in the next subsection. Purchase payments will be treated as with-
drawn on a first-in, first-out basis.
<TABLE>
<CAPTION>
NUMBER OF FULL CONTRACT
YEARS SINCE PURCHASE PAYMENT APPLICABLE CHARGE
<S> <C>
0 6%
---------------------------------------------
1 6%
---------------------------------------------
2 5%
---------------------------------------------
3 4%
---------------------------------------------
4 3%
---------------------------------------------
5 2%
---------------------------------------------
6 1%
---------------------------------------------
7+ 0%
---------------------------------------------
</TABLE>
The contingent deferred sales charge may be reduced on Contracts sold to a
trustee, employer or similar party pursuant to a retirement plan or to a group
of individuals, if such sales are expected to involve reduced sales expenses.
The amount of reduction will depend upon such factors as the size of the group,
any prior or existing relationship with the purchaser or group, the total
amount of purchase payments and other relevant factors that might tend to re-
duce expenses incurred in connection with such sales. The reduction will not be
unfairly discriminatory to any Contract Owner.
FREE WITHDRAWALS:
Seven-Year-Old Purchase Payments. You may withdraw any purchase payment which
was made more than 7 years before the withdrawal without incurring a contingent
deferred sales charge.
15% Withdrawals. On the last day of the first contract year and once each
contract year thereafter, you may withdraw, without incurring a contingent de-
ferred sales charge, 15% of total purchase payments. You may take the 15% free
withdrawal on a single sum basis or systematically, but not both. The 15% free
withdrawal amount will be applied to purchase payments on a first-in, first-out
basis. With respect to any withdrawal in excess of the 15% free withdrawal in a
contract year, the contingent deferred sales charge schedule set forth above
will apply to the remainder of the purchase payments so withdrawn
16
<PAGE>
on a first-in, first-out basis. This 15% free withdrawal applies only to the
first withdrawal request made in a contract year (after the first contract
year) and the amount is not cumulative from year to year.
Medically Related Withdrawal. Subject to applicable state law, after the
first contract year and before the Annuity Date, you may withdraw, without in-
curring a contingent deferred sales charge, up to the lesser of $500,000 or
your Contract Value if certain medically related contingencies occur. This free
withdrawal is available if you are (1) first confined in a nursing home or hos-
pital while this Contract is in force and remain confined for at least 90 days
in a row or (2) first diagnosed as having a fatal illness (an illness expected
to result in death within 2 years for 80% of diagnosed cases) while this Con-
tract is in force. The precise terms and conditions of this benefit are set
forth in the Contract. It is not available if your age at issue is greater than
75. The medically related contingencies that must be met for free withdrawal
vary in some states.
Disability Related Withdrawal. You may withdraw, without incurring a contin-
gent deferred sales charge, part or all of your Contract Value if you (you or
the Annuitant for qualified Contracts) become totally disabled as defined in
the Contract.
Other Withdrawals. There is no contingent deferred sales charge imposed upon
minimum distributions under qualified contracts which are required by the In-
ternal Revenue Code.
PREMIUM TAXES:
Some states and municipalities impose premium taxes on purchase payments re-
ceived by insurance companies. Generally, any premium taxes payable will be de-
ducted upon annuitization, although we reserve the right to deduct such taxes
when due in jurisdictions that impose such taxes on purchase payments. Current-
ly, state premium taxes on purchase payments range from 0% to 3 1/2%.
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PERFORMANCE INFORMATION
The Company may advertise total return performance and annual changes in ac-
cumulation unit values. We may also provide information on "yields" and "effec-
tive yields" on investments in the Money Market Fund subaccount.
Information on total return performance will include average annual rates of
total return for one, five and ten year periods, or lesser periods depending on
how long the underlying fund portfolio has been in existence. Such figures are
based on the hypothetical assumption that the Separate Account invested in the
underlying portfolios from the date those portfolios were first available to
other insurance company separate accounts. Average annual total return figures
will show the average annual rates of increase or decrease in investments in
the subaccounts, assuming a hypothetical $1,000 investment at the beginning of
the period, withdrawal of the investment at the end of the period, and the de-
duction of all applicable fund and Contract charges. We may also show average
annual rates of total return, assuming other amounts invested at the beginning
of the period and no withdrawal at the end of the period. Average annual total
return figures which assume no withdrawals at the end of the period will re-
flect all recurring charges, but will not reflect the contingent deferred sales
charge (if applicable, the contingent deferred sales charge would reduce the
amount that may be withdrawn under the Contracts).
The "yield" on an investment in the Money Market Fund subaccount refers to
the income generated by the investment over a 7-day period. This income is then
annualized. That is, the amount of income generated by the investment during
that week is assumed to be generated each week 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 rein-
vestment.
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THE FIXED INTEREST OPTIONS
BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE COMPANY'S
GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940. THE GENERAL ACCOUNT AND ANY INTERESTS HELD IN
THE GENERAL ACCOUNT ARE THEREFORE NOT SUBJECT TO THE PROVISIONS OF THESE ACTS.
HENCE THIS PROSPECTUS GENERALLY DISCUSSES ONLY THE VARIABLE PORTION OF THE
CONTRACT. THE COMPANY HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING
TO THE FIXED ACCOUNT. DISCLOSURE REGARDING THE FIXED ACCOUNT, HOWEVER, MAY BE
SUBJECT TO GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS
RELATING TO THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN THIS
PROSPECTUS.
17
<PAGE>
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GENERAL INFORMATION
Subject to the laws of your state, you may allocate or transfer all or part
of the amount credited to your Contract to one or more of the following fixed
interest options in the Fixed Account: (1) the One Year Fixed Interest Option;
(2) the Three Year Fixed Interest Option; (3) the Five Year Fixed Interest Op-
tion; and (4) the Seven Year Fixed Interest Option. We periodically declare an
effective annual interest rate applicable to allocations to the various fixed
interest options. For each amount allocated to the One Year Fixed Interest Op-
tion, the Three Year Fixed Interest Option, the Five Year Fixed Interest Option
or the Seven Year Fixed Interest Option, we credit interest at an effective an-
nual interest rate declared by us in the month in which the allocation is made.
The declared rate of interest will apply through the end of the 12-month, 36-
month, 60-month or 84-month period, as applicable, which begins on the first
day of the calendar month in which the allocation is made. We guarantee an ef-
fective annual rate of interest on allocations to all fixed interest options of
not less than 3%. In addition, we guarantee that the rate credited in the One
Year Fixed Interest Option will at least equal the increase in the cost of liv-
ing as calculated by the Company; the Company uses for this purpose a six-month
average of the relative change by month in the Consumer Price Index published
by the Bureau of Labor Statistics.
You may transfer amounts in the Fixed Account to subaccounts of the Separate
Account or to another fixed interest option within the Fixed Account, subject
to the conditions and limitations in the fixed account provisions of your
Contract. A premature withdrawal charge in an amount specified in the Contract
will be deducted from the interest earned on any amount that is withdrawn from
the Three Year Fixed Interest Option, the Five Year Fixed Interest Option or
the Seven Year Fixed Interest Option prior to the expiration of the period for
which the interest rate is guaranteed. Amounts not withdrawn or reallocated
within 25 days after the end of an interest period are rolled over and treated
as a new allocation to the same fixed interest option. The premature withdrawal
charge is not applicable to amounts withdrawn to effect an annuity or to meet
the minimum distribution requirement under the tax laws. Nor will the premature
withdrawal charge be applied to amounts withdrawn due to the death, total
disability, or defined medical confinement or terminal illness of the owner or
annuitant, as specified in the Contract. In no event will the premature
withdrawal charge be greater than the total amount of interest credited to the
applicable fixed interest option. In accordance with state law, we may defer a
withdrawal or transfer from the Fixed Account for up to six months if we
reasonably determine that investment conditions are such that an orderly sale
of assets in the Company's general account is not feasible.
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LOANS UNDER SECTION 403(B) CONTRACTS
Subject to compliance with applicable state law, Contract Owners qualifying
under Section 403(b) of the Code may be able to borrow against a portion of the
amount credited under their Contract, provided the loan privilege has been ap-
proved in the applicable state. The loan will be made from the general account
of the Company. Because this prospectus generally is limited to describing the
variable portion of the Contract, you should review the Contract loan endorse-
ment or consult your Company representative for a complete description of the
terms of the loan privilege, including minimum and maximum loan amounts, repay-
ment terms, and restrictions on prepayments. The following paragraphs describe
how exercise of the loan privilege may relate to the Variable Account Value.
First, at the time a Contract loan is made and in accordance with your
direction, an amount equal to the initial loan amount will be transferred from
the Contract's investment options to an account in the Company's general
account called the "Restricted Account." Amounts transferred from investment
options to the Restricted Account will not participate in the investment
experience of those investment options. Amounts transferred to the Restricted
Account will generally earn interest at a rate 2 1/2 percentage points less
than the rate of interest charged on the loan.
Second, on your Contract Anniversary, the accrued interest in the Restricted
Account will be transferred to your investment options in accordance with your
current payment allocation instructions.
Third, loan repayments, which are due quarterly, will result in the transfer
of an amount equal to the principal portion of the repayment from the Re-
stricted Account to the Money Market subaccount. You may then transfer amounts
from the Money Market subaccount to the other investment options offered under
the Contract.
Fourth, if a payment or the entire loan is in default as defined in the
Contract, the Company will report the amount of the default to the Internal
Revenue Service as a taxable distribution and, if you are then under age 59
1/2, as a premature distribution. Subject to restrictions in Section 403(b) of
the Code, the amount of any missed payment, plus interest, or the entire loan
balance, plus interest, if the entire loan is in default, plus any applicable
contingent deferred sales charge, will be withdrawn by us from your investment
options in accordance with your direction in the Loan Request and Agreement. We
will use the net proceeds from the withdrawal to repay the loan. If a
withdrawal is restricted under the Code, the outstanding loan
18
<PAGE>
balance will continue to accrue interest and the amount due will be withdrawn
when a withdrawal becomes permissible. Thus, when an event takes place which
makes withdrawal from the Contract permissible under the Code, such as
attainment of age 59 1/2, disability, or death, we will check the Contract to
determine if there is an outstanding loan balance for which one or more
payments have been missed. If so, we will withdraw from your investment
options, in accordance with your direction in the Loan Request and Agreement,
funds necessary to pay the overdue amount, plus any applicable contingent
deferred sales charge. While a loan balance is outstanding, any withdrawal or
death benefit proceeds must first be used to pay the loan.
Loans are subject to the terms of your Contract, your Section 403(b) plan and
the Code, and, in the case of plans subject to the Employee Retirement Income
Security Act of 1974, the ERISA regulations on plan loans, all of which may
impose restrictions. The Company reserves the right to suspend, modify or
terminate the availability of loans. Where there is a plan fiduciary, it is the
responsibility of the fiduciary to ensure that any Contract loans comply with
plan qualification requirements, including ERISA.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS
The following brief discussion of federal income tax considerations is based on
the law in effect on the date of this prospectus, which may be changed by
legislative, judicial or administration action. The summary is general in
nature and does not consider any applicable state or local tax laws. For
further information, you should consult qualified tax counsel.
Under current law, no federal income taxes are imposed on increases in the
value of a Contract until distribution occurs, either in the form of a with-
drawal or death benefit or as annuity payment under an annuity option.
For a withdrawal or death benefit, the taxable portion is generally the
amount in excess of the cost basis of the Contract. Amounts withdrawn by the
Contract owner or received as a death benefit by the designated beneficiary are
treated first as taxable income to the extent of the excess of the Contract
Value over the purchase payments made under the Contract. Such taxable portion
is taxed at ordinary income tax rates. Designation of a beneficiary who is ei-
ther 37 1/2 years younger than the Contract Owner or a grandchild of the Con-
tract Owner may have Generation Skipping Transfer Tax consequences under Sec-
tion 2601 of the Internal Revenue Code.
For annuity payments, the taxable portion is generally determined by a for-
mula that establishes the ratio of the cost basis of the Contract (as adjusted
for any refund feature) to the expected return under the Contract. The taxable
portion, which is the amount of the annuity payment in excess of the cost ba-
sis, is taxed at ordinary income tax rates.
An additional income tax of 10% may be imposed on the taxable portion of an
early withdrawal or distribution unless one of several exceptions apply. There
will be no additional income tax on early withdrawals which are part of a
series of substantially equal periodic payments (not less frequently than
annually) made for life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of the taxpayer and a beneficiary, or on
withdrawals made on or after age 59 1/2. There also will be no additional tax
on distributions made after death or on withdrawals attributable to total and
permanent disability. Further, there will be no additional tax on distributions
within certain other exceptions to the general rule.
The transfer of a Contract may result in the transferor incurring tax. If the
transfer is for less than adequate consideration the taxable portion would be
the Contract Value at the time of transfer over the investment in the Contract
at such time. This rule does not apply to transfers between spouses or to
transfers incident to a divorce.
Subject to certain exceptions, a Contract must be held by or on behalf of a
natural person in order to be treated as an annuity contract under federal in-
come tax law and to be accorded the tax treatment described in the preceding
paragraphs. If a contract is not treated as an annuity contract for federal in-
come tax purposes, the income on the Contract is treated as ordinary income re-
ceived or accrued by the Contract Owner during the taxable year.
Section 817(h) of the Code provides that the investments of a separate ac-
count underlying a variable annuity contract which is not purchased under a
qualified retirement plan or certain other types of plans (or the investments
of a mutual fund, the shares of which are owned by the variable annuity sepa-
rate account) must be "adequately diversified" in order for the Contract to be
treated as an annuity contract for tax purposes. The Treasury Department has
issued regulations prescribing such diversification requirements. The Separate
Account, through each of the available funds of the Penn Series Funds, Inc.,
American Century Variable Portfolios, Inc., Neuberger & Berman Advisers Manage-
ment Trust, Variable Insurance Products Fund, Variable Insurance Products
Fund II, and Morgan Stanley Universal Funds, Inc. intends to comply with those
requirements. The requirements are briefly discussed in the accompanying pro-
spectuses for the underlying funds.
The Treasury Department has indicated that in regulations or revenue rulings
under Section 817(d) (relating to the definition of a variable contract), it
will provide guidance on the extent to which contract owners may direct their
investments to particular subaccounts without being treated as owners of the
underlying shares. It is possible that when such regulations or rulings are
issued, the Contracts may need to be modified to comply with them.
19
<PAGE>
The Contracts may be used in connection with retirement plans that qualify
for special tax treatment under the Code. The plans include individual retire-
ment annuities qualified under Section 408(b) of the Code (referred to as
IRAs), tax deferred annuities qualified under Section 403(b) of the Code, pen-
sion or profit sharing plans for self-employed individuals qualified under Sec-
tion 401 of the Code (referred to as H.R. 10 or Keogh plans) and corporate pen-
sion or profit sharing plans qualified under Section 401 of the Code, or annu-
ity plans qualified under Section 403(a) of the Code. Special provisions are
required in some Contracts for qualification under the Code.
For some types of qualified retirement plans, there may be no cost basis in
the Contract. In this case, the total payments received may be taxable. Before
purchasing a contract under a qualified retirement plan, the tax law provisions
applicable to the particular plan should be considered.
Generally, under a nonqualified annuity or individual retirement annuity
qualified under Section 408(b), unless the Contract Owner elects to the
contrary, any amounts that are received under the Contract that the Company
believes are includable in gross income for tax purposes will be subject to
withholding to meet federal income tax obligations. The same treatment will
apply to distributions from a qualified plan or Section 403(b) annuity that are
payable as an annuity for the life or life expectancy of one or more
individuals, or for a period of at least 10 years, or are required minimum
distributions. Other distributions from a qualified plan or a Section 403(b)
annuity are subject to mandatory withholding, unless an election is made to
receive the distribution as a direct rollover to another eligible retirement
plan.
20
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
VARIABLE ANNUITY PAYMENTS................................................... B-2
First Variable Annuity Payments........................................... B-2
Subsequent Variable Annuity Payments...................................... B-2
Annuity Units............................................................. B-2
Value of Annuity Units.................................................... B-2
Net Investment Factor..................................................... B-2
Assumed Interest Rate..................................................... B-3
Valuation Period.......................................................... B-3
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
PERFORMANCE DATA............................................................ B-4
Average Annual Total Return .............................................. B-4
Annual Changes in Accumulation Unit Values................................ B-7
Yields (Money Market Fund)................................................ B-7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ADMINISTRATION AND RECORDKEEPING SERVICES................................... B-8
DISTRIBUTION OF CONTRACTS AND CERTIFICATES ................................. B-8
CUSTODIAN .................................................................. B-8
INDEPENDENT ACCOUNTANTS..................................................... B-8
LEGAL MATTERS .............................................................. B-8
FINANCIAL STATEMENTS........................................................ B-9
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE>
The Penn Insurance and Annuity Company
Philadelphia, PA 19172
- ------------------------------------------------
PI 1339 5/97
<PAGE>
PART B
------
Information Required in a Statement
-----------------------------------
of Additional Information
-------------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION -- MAY 1, 1997
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I [LOGO OF PENNANT APPEARS HERE]
THE PENN INSURANCE AND ANNUITY COMPANY
PHILADELPHIA, PENNSYLVANIA 19172 . TELEPHONE (215) 956-9177
- --------------------------------------------------------------------------------
This statement of additional information is not a prospectus. It should be read
in conjunction with the current prospectus for PIA Variable Annuity Account I,
dated May 1, 1997. To obtain a prospectus you may write to The Penn Insurance
and Annuity Company, Customer Service Group, Philadelphia, PA 19172. Or you may
call (215) 956-9177. Terms used in this statement of additional information
have the same meaning as the prospectus.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
VARIABLE ANNUITY PAYMENTS................................................... B-2
First Variable Annuity Payments........................................... B-2
Subsequent Variable Annuity Payments...................................... B-2
Annuity Units............................................................. B-2
Value of Annuity Units.................................................... B-2
Net Investment Factor..................................................... B-2
Assumed Interest Rate..................................................... B-3
Valuation Period.......................................................... B-3
- --------------------------------------------------------------------------------
PERFORMANCE DATA............................................................ B-4
Average Annual Total Return............................................... B-4
Annual Changes in Accumulation Unit Values................................ B-7
Yields (Money Market Fund)................................................ B-7
- --------------------------------------------------------------------------------
ADMINISTRATION AND RECORDKEEPING SERVICES................................... B-8
- --------------------------------------------------------------------------------
DISTRIBUTION OF CONTRACTS................................................... B-8
- --------------------------------------------------------------------------------
CUSTODIAN................................................................... B-8
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS..................................................... B-8
- --------------------------------------------------------------------------------
LEGAL MATTERS............................................................... B-8
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS........................................................ B-9
- --------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY PAYMENTS
- --------------------------------------------------------------------------------
FIRST VARIABLE ANNUITY PAYMENT
When a variable annuity is effected, we will first deduct applicable premium
taxes, if any, from the Contract Value. The dollar amount of the first monthly
annuity payment will be determined by applying the net Contract Value to the
annuity table set forth in the contract for the annuity option chosen. The
annuity tables show the amount of the first monthly income payment under each
annuity option for each $1,000 of value applied, based on the Annuitant's age
at the Annuity Date. The annuity tables are based on the 1983 Individual
Annuity Mortality Tables with interest at 3%.
- --------------------------------------------------------------------------------
SUBSEQUENT VARIABLE ANNUITY PAYMENTS
The dollar amount of subsequent variable annuity payments will vary in
accordance with the investment experience of the subaccount(s) of the Separate
Account applicable to the annuity. Each subsequent variable annuity payment
will equal the number of annuity units credited, multiplied by the value of the
annuity unit for the valuation period. The Company guarantees that the amount
of each subsequent annuity payment will not be affected by variations in
expense or mortality experience.
- --------------------------------------------------------------------------------
ANNUITY UNITS
For each subaccount selected, the number of annuity units is the amount of
the first annuity payment allocated to the subaccount divided by the value of
an annuity unit for the subaccount on the Annuity Date. The number of your
annuity units will not change as a result of investment experience.
- --------------------------------------------------------------------------------
VALUE OF ANNUITY UNITS
The value of an annuity unit for each subaccount was arbitrarily set at $10
when the subaccount was established. The value may increase or decrease from
one valuation period to the next. For a valuation period, the value of an
annuity unit for a subaccount is the value of an annuity unit for the
subaccount for the last prior valuation period multiplied by the net investment
factor for the subaccount for the valuation period. The result is then
multiplied by a factor to neutralize an assumed interest rate of 3% built into
the annuity tables.
- --------------------------------------------------------------------------------
NET INVESTMENT FACTOR
For any subaccount the net investment factor for a valuation period is
determined by dividing (a) by (b) and subtracting (c):
WHERE (A) IS:
The net asset value per share of the mutual fund held in the subaccount, as
of the end of the valuation period
plus
The per share amount of any dividend or capital gain distributions by the
mutual fund if the "ex-dividend" date occurs in the valuation period
plus or minus
A per share charge or credit, as we may determine as of the end of the
valuation period, for provision for taxes (if applicable).
WHERE (B) IS:
The net asset value per share of the mutual fund held in the subaccount as
of the end of the last prior valuation period
plus or minus
The per share charge or credit for provision for taxes as of the end of the
last prior valuation period (if applicable).
WHERE (C) IS:
The sum of the mortality and expense risk charge and the daily
administration charge. On an annual basis, the sum of such charges equals
1.40% of the daily net asset value of the subaccount.
B-2
<PAGE>
- --------------------------------------------------------------------------------
ASSUMED INTEREST RATE
A 3% assumed annual interest rate is included in the annuity tables in the
contracts. A higher assumption would mean a higher first annuity payment but
more slowly rising or more rapidly falling subsequent payments. A lower
assumption would have the opposite effect. If the actual net investment rate is
3% on an annual basis, annuity payments will be level.
- --------------------------------------------------------------------------------
VALUATION PERIOD
Valuation period is the period from one valuation of underlying fund assets
to the next. Valuation is performed each day the New York Stock Exchange is
open for trading.
B-3
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE DATA
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
Although the Separate Account was not available until the effective date of
this registration statement, the returns calculated below reflect a
hypothetical return as if the Separate Account had invested in the underlying
funds for the indicated periods.
- --------------------------------------------------------------------------------
TABLE 1
Table 1 shows the average annual rates of total return on hypothetical
investments of $1,000, through the Separate Account, in funds of Penn Series
Funds, Inc., American Century Variable Portfolios, Inc., Neuberger and Berman
Advisers Management Trust, Variable Insurance Products Fund and Variable
Insurance Products Fund II for the periods ended December 31, 1996 and assume
withdrawal of the investments at the end of the period.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
----------------------------------------------
FIVE TEN FROM
ONE YEAR YEARS YEARS INCEPTION
INCEPTION ENDED ENDED ENDED THROUGH
FUND (MANAGER) DATE* 12/31/96 12/31/96 12/31/96 12/31/96
- -------------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Growth Equity (a)
(Independence Capital)......... 06/01/83 12.00% 8.66% 10.35% 10.22%
Value Equity (a)
(OpCap)........................ 03/17/87 16.76% 14.50% N/A 11.59%
Small-Cap Fund
(OpCap)........................ 03/01/95 11.87% N/A N/A 12.67%
Flexibly Managed (a)
(T. Rowe Price)................ 07/31/84 8.30% 10.98% 13.03% 13.24%
International Equity (a)
(Vontobel)..................... 11/01/92 9.09% N/A N/A 11.92%
Quality Bond (a)
(Independence Capital)......... 03/17/87 -2.65% 5.17% N/A 6.55%
High Yield Bond (a)
(T. Rowe Price)................ 08/06/84 6.46% 9.24% 7.86% 8.84%
Capital Appreciation Portfolio
(b)
(American Century Investment
Management)................... 11/20/87 -10.65% 4.09% N/A 9.09%
Balanced Portfolio (c)
(Neuberger & Berman)........... 02/28/89 -0.09% 6.05% N/A 8.58%
Limited Maturity Bond Portfolio
(c)
(Neuberger & Berman)........... 09/10/84 -2.45% 3.44% 5.15% 6.76%
Partners Portfolio (c)
(Neuberger & Berman)........... 03/22/94 21.60% N/A N/A 18.52%
Equity-Income Portfolio (d)
(Fidelity Investments)......... 10/09/86 6.55% 15.47% 11.79% 11.47%
Growth Portfolio (d)
(Fidelity Investments)......... 10/09/86 6.89% 12.79% 13.25% 12.92%
Asset Manager Portfolio (e)
(Fidelity Investments)......... 09/06/89 7.15% 9.25% N/A 10.07%
Index 500 (e)
(Fidelity Investments)......... 08/27/92 15.16% N/A N/A 15.10%
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Variable Insurance Products Fund
(e) Variable Insurance Products Fund II
B-4
<PAGE>
The average annual rates of total return shown in Table 1 are computed by
finding the average annual compounded rates of return over the periods shown
that would equate the initial amount invested to the withdrawal value, in
accordance with the following formula: P(1 + T)n = ERV. In the formula, P is a
hypothetical investment payment of $1,000; T is the average annual total
return; n is the number of years; and ERV is the withdrawal value at the end of
the periods shown. The $30 annual contract administration charge is reflected
assuming an anticipated average Contract Value and assuming that the Contract
Value is allocated equally across all available subaccounts by an average
contract owner.
- --------------------------------------------------------------------------------
TABLE 2
Table 2 below shows the average annual rates of return on hypothetical
initial investments of $1,000, through the Separate Account, in funds of the
Penn Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger
and Berman Advisers Management Trust, Variable Insurance Products Fund and
Variable Insurance Products Fund II for the periods ended December 31, 1996 and
assumes the investments are not withdrawn at the end of the period.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
----------------------------------------------
FIVE TEN FROM
ONE YEAR YEARS YEARS INCEPTION
INCEPTION ENDED ENDED ENDED THROUGH
FUND (MANAGER) DATE* 12/31/96 12/31/96 12/31/96 12/31/96
- -------------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Growth Equity (a)
(Independence Capital)......... 06/01/83 18.03% 9.03% 10.35% 10.22%
Value Equity (a)
(OpCap)........................ 03/17/87 23.06% 14.89% N/A 11.59%
Small-Cap Fund
(OpCap)........................ 03/01/95 17.89% N/A N/A 15.92%
Flexibly Managed (a)
(T. Rowe Price)................ 07/31/84 14.15% 11.36% 13.03% 13.24%
International Equity (a)
(Vontobel)..................... 11/01/92 14.97% N/A N/A 12.61%
Quality Bond (a)
(Independence Capital)......... 03/17/87 2.59% 5.53% N/A 6.55%
High Yield Bond (a)
(T. Rowe Price)................ 08/06/84 12.19% 9.61% 7.86% 8.84%
Captial Appreciation
Portfolio(b)
(American Century Investment
Management)................... 11/20/87 -5.83% 4.45% N/A 9.09%
Balanced Portfolio (c)
(Neuberger & Berman)........... 02/28/89 5.29% 6.42% N/A 8.58%
Limited Maturity Bond Portfolio
(c)
(Neuberger & Berman)........... 09/10/84 2.79% 3.80% 5.15% 6.76%
Partners Portfolio (c)
(Neuberger & Berman)........... 03/22/94 28.15% N/A N/A 20.39%
Equity-Income Portfolio (d)
(Fidelity Investments)......... 10/09/86 12.30% 15.87% 11.79% 11.49%
Growth Portfolio (d)
(Fidelity Investments)......... 10/09/86 12.66% 13.18% 13.25% 12.92%
Asset Manager Portfolio (e)
(Fidelity Investments)......... 09/06/89 12.91% 9.63% N/A 10.07%
Index 500 (e)
(Fidelity Investments)......... 08/27/92 21.36% N/A N/A 15.79%
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Variable Insurance Products Fund
(e) Variable Insurance Products Fund II
B-5
<PAGE>
- --------------------------------------------------------------------------------
TABLE 3
Table 3 below shows the average annual rates of return on hypothetical
initial investments of $10,000, through the Separate Account, in funds of the
Penn Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger
and Berman Advisers Management Trust, Variable Insurance Products Fund, and
Variable Insurance Products Fund II for the periods ended December 31, 1996 and
assumes the investments are not withdrawn at the end of the period.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
----------------------------------------------
FIVE TEN FROM
ONE YEAR YEARS YEARS INCEPTION
INCEPTION ENDED ENDED ENDED THROUGH
FUND (MANAGER) DATE* 12/31/96 12/31/96 12/31/96 12/31/96
- -------------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Growth Equity (a)
(Independence Capital)......... 06/01/83 18.08% 9.08% 10.39% 10.25%
Value Equity (a)
(OpCap)........................ 03/17/87 23.40% 15.18% N/A 11.84%
Small-Cap Fund
(OpCap)........................ 03/01/95 18.06% N/A N/A 16.09%
Flexibly Managed (a)
(T. Rowe Price)................ 07/31/84 14.68% 11.82% 13.34% 13.52%
International Equity (a)
(Vontobel)..................... 11/01/92 15.20% N/A N/A 12.83%
Quality Bond (a)
(Independence Capital)......... 03/17/87 2.67% 5.61% N/A 6.61%
High Yield Bond (a)
(T. Rowe Price)................ 08/06/84 12.27% 9.68% 7.92% 8.89%
Capital Appreciation Portfolio
(b)
(American Century Investment
Management)................... 11/20/87 -5.68% 4.60% N/A 9.21%
Balanced Portfolio (c)
(Neuberger & Berman)........... 02/28/89 5.38% 6.50% N/A 8.65%
Limited Maturity Bond Portfolio
(c)
(Neuberger & Berman)........... 09/10/84 2.84% 3.84% 5.19% 6.79%
Partners Portfolio (c)
(Neuberger & Berman)........... 03/22/94 28.30% N/A N/A 20.54%
Equity-Income Portfolio (d)
(Fidelity Investments)......... 10/09/86 12.64% 16.14% 12.05% 11.75%
Growth Portfolio (d)
(Fidelity Investments)......... 10/09/86 13.05% 13.51% 13.51% 13.19%
Asset Manager Portfolio (e)
(Fidelity Investments)......... 09/06/89 12.99% 9.69% N/A 10.14%
Index 500 (e)
(Fidelity Investments)......... 08/27/92 21.51% N/A N/A 15.93%
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Variable Insurance Products Fund
(e) Variable Insurance Products Fund II
The average annual rates of total return shown in Tables 2 and 3 are computed
by finding the average annual compounded rates of return over the periods shown
that would equate the initial amount invested to the Contract Value at the end
of the periods shown, in accordance with the following formula: P(1 + T)n = FV.
In the formula, P is a hypothetical investment of $1,000 in Table 2 and $10,000
in Table 3; T is the average annual total return; n is the number of years; and
FV is the Contract Value at the end of the periods shown. The $30 annual
contract administrative charge is reflected assuming an anticipated average
Contract Value and assuming that the average Contract Value is allocated
equally across all available subaccounts by an average contract owner. The
average annual rates of total returns reflect all recurring charges, but do not
reflect the contingent deferred sales charge ranging from 6% to 1% which, if
applicable, would reduce the amount that may be withdrawn under the Contract.
B-6
<PAGE>
- --------------------------------------------------------------------------------
ANNUAL CHANGES IN ACCUMULATION UNIT VALUES
- --------------------------------------------------------------------------------
TABLE 4
Table 4 shows the changes in values of accumulation units issued for each of
the Funds of the Penn Series Funds, Inc., American Century Variable Portfolios,
Inc. and Neuberger and Berman Advisers Management Trust for each of the
calendar years 1995 and 1996 for which the investment option was offered.
Accumulation unit values do not reflect the $30 annual contract or account
administration charge or the contingent deferred sales charge that may be
applicable to a withdrawal from the Contract.
<TABLE>
<CAPTION>
ANNUAL RATE OF CHANGE IN
ACCUMULATION UNIT VALUES
------------------------
FUND (MANAGER) 1996 1995
- -------------- ------------ ------------
<S> <C> <C>
Growth Equity(a)................................... 18.10% 11.75%
(Independence Capital Management)
Value Equity (a)................................... 23.45% 12.64%
(OpCap)
Small Capitalization (a)........................... 18.09% 11.15%
(OpCap)
Flexibly Managed (a)............................... 14.75% 11.65%
(T. Rowe Price Associates, Inc.)
International Equity (a)........................... 16.90% 11.71%
(Vontobel USA, Inc.)
Quality Bond (a)................................... 2.69% 11.23%
(Independence Capital Management, Inc.)
High Yield Bond (a)................................ 12.29% 10.97%
(T. Rowe Price Associates, Inc.)
Money Market (a)................................... 3.52% 10.31%
(Independence Capital Management, Inc.)
Capital Appreciation Portfolio (b)................. -5.66% 12.82%
(AmericanCenturyInvestment Management, Inc.)
Balanced Portfolio (c)............................. 5.40% 11.65%
(Neuberger & Berman)
Limited Maturity Bond (c).......................... 2.85% 10.69%
(Neuberger & Berman)
Equity Income (d).................................. 12.69% 12.60%
(Fidelity Investors Research)
Growth (d)......................................... 13.11% 13.08%
(Fidelity Investors Research)
Asset Manager (e).................................. 13.01% 11.48%
(Fidelity Investors Research)
</TABLE>
- -----------------------
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Fidelity Investments' Variable Insurance Products Fund
(e) Fidelity Investments' Variable Insurance Products Fund II
- --------------------------------------------------------------------------------
YIELDS (MONEY MARKET FUND)
From time to time, advertisements and sales literature may quote the current
or effective yield of the Money Market subaccount.
The "yield" and "effective yield" of the Money Market Fund subaccount for the
seven days ended December 31, 1996 were 2.98% and 3.02%, respectively.
The yield is computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical preexisting account having a balance of
one accumulation unit of the subaccount at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from contract owner
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with
B-7
<PAGE>
the resulting figure carried to at least the nearest hundredth of 1%. The
hypothetical charge reflects deductions from contract owners' accounts in
proportion to the length of the base period. The $30 annual contract
administrative charge is reflected assuming an anticipated average Contract
Value and assuming that the average Contract Value is allocated equally across
all available subaccounts by an average contract owner.
The effective yield is obtained by taking the base period return as computed
above, and then compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula: Effective Yield = [(base period return +
1)/365/7/] -1.
The yields do not reflect the contingent deferred sales charge ranging from
6% to 1%. The deferred sales charge may or may not be applicable to a
withdrawal from a Contract, depending on when the withdrawal is made.
THE YIELDS ON AMOUNTS HELD IN THE MONEY MARKET SUBACCOUNT NORMALLY WILL
FLUCTUATE ON A DAILY BASIS. THEREFORE, THE STATED YIELDS FOR ANY GIVEN PERIOD
ARE NOT AN INDICATION OR REPRESENTATION OF FUTURE YIELDS.
--------------------------------
THE PERFORMANCE INFORMATION SET FORTH ABOVE IS FOR PAST PERFORMANCE OF THE
FUNDS, ASSUMING THE SEPARATE ACCOUNT HAD INVESTED IN THE FUNDS FROM THEIR
INCEPTION, AND IS NOT AN INDICATION OR REPRESENTATION OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
ADMINISTRATIVE AND RECORDKEEPING SERVICES
The Company performs all data processing, recordkeeping and other related
services with respect to the Contracts and the Separate Accounts.
- --------------------------------------------------------------------------------
DISTRIBUTION OF CONTRACTS
Hornor, Townsend & Kent, Inc., a wholly owned subsidiary of Penn Mutual,
serves as principal underwriter of the Contracts. The address of Hornor,
Townsend & Kent, Inc. is 600 Dresher Road, Horsham, PA 19044. For 1996, the
Company paid Hornor, Townsend & Kent, Inc. underwriting commissions of
$115,189.71.
The Contracts will be distributed by Hornor, Townsend & Kent, Inc. through
broker-dealers. Total commissions on purchase payments made under the Contract
will not exceed 6 1/2% and trailer commissions based on a percentage of
Contract Value may be paid. The offering of the Contracts is continuous, and
the Company does not anticipate discontinuing the offering of the Contract,
although we reserve the right to do so.
- --------------------------------------------------------------------------------
CUSTODIAN
The Company is custodian of the assets held in the Separate Account.
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
The statement of assets and liabilities of the PIA Variable Annuity Account
I--Pennant as of December 31, 1996, and the related statement of operations for
the year ended December 31, 1996 and statements of changes in net assets for
the year ended December 31, 1996 and the period from March 1, 1995
(commencement of operations) to December 31, 1995 and the statutory statements
of financial condition of The Penn Insurance and Annuity Company (wholly-owned
subsidiary of The Penn Mutual Life Insurance Co.) as of December 31, 1996 and
1995, and the related statutory statements of operations, surplus and cash
flows for the three years in the period ended December 31, 1996 included in
this statement of additional information have been audited by Coopers & Lybrand
L.L.P., independent accountants. The reports and the financial statements have
been included upon the authority of said firm as experts in accounting and
auditing.
- --------------------------------------------------------------------------------
LEGAL MATTERS
Morgan, Lewis & Bockius LLP of Philadelphia, Pennsylvania, has provided
advice on certain matters relating to the federal securities laws and the
offering of the Contracts.
B-8
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements of the Separate Account and PIA are set forth on the
following pages. The financial statements of PIA should be distinguished from
the financial statements of the Separate Account and should be considered only
as bearing upon the PIA's ability to meet its obligations under the contracts.
B-9
<PAGE>
- -----------------------------------------------------
THIS PAGE LEFT INTENTIONALLY BLANK
B-10
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PENN INSURANCE AND ANNUITY COMPANY
AND CONTRACT OWNERS OF
PIA VARIABLE ANNUITY ACCOUNT I--PENNANT:
We have audited the accompanying statement of assets and liabilities of the PIA
Variable Annuity Account I -- Pennant [comprising, respectively, Money Market
Fund, Quality Bond Fund, High Yield Bond Fund, Growth Equity Fund, Value Equity
Fund, Flexibly Managed Fund, Small Capitalization Fund, International Equity
Fund, Balanced Portfolio, Limited Maturity Bond Portfolio, Capital Appreciation
Portfolio (formerly TCI Growth Portfolio) Equity Income Portfolio, Growth
Portfolio, and Asset Manager Portfolio] as of December 31, 1996, and the
related statement of operations for the year then ended, and the statements of
changes in net assets for the year then ended, and the period from March 1,
1995 (commencement of operations) to December 31, 1995. These financial
statements are the responsibility of the management of PIA Variable Annuity
Account I -- Pennant. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1996 by
correspondence with the transfer agents. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PIA Variable Annuity Account I
- -- Pennant as of December 31, 1996, the results of its operations for the year
then ended and its changes in net assets for the year then ended, and the
period from March 1, 1995 (commencement of operations) to December 31, 1995 in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 7, 1997
B-11
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1996
<TABLE>
<CAPTION>
MONEY MARKET QUALITY BOND HIGH YIELD GROWTH EQUITY VALUE EQUITY
TOTAL FUND+ FUND+ BOND FUND+ FUND+ FUND+
------------ ------------ ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT IN COMMON
STOCK
Number of shares....... 6,439,409 317,555 401,355 90,939 740,468
Identified cost........ $120,313,780 $6,439,409 $3,252,896 $3,608,351 $2,028,822 $13,335,520
ASSETS AND LIABILITIES:
Investments at value... $123,818,302 $6,439,409 $3,175,549 $3,576,077 $1,951,545 $14,305,846
Dividends receivable... 23,767 23,767 0 0 0 0
Due (to) from The Penn
Insurance and Annuity
Company............... (3,258) 36,883 (1,116) (1,213) (657) (4,833)
------------ ---------- ---------- ---------- ---------- -----------
NET ASSETS:
Net assets.............. $123,838,811 $6,500,059 $3,174,433 $3,574,864 $1,950,888 $14,301,013
============ ========== ========== ========== ========== ===========
Variable annuity
accumulation units..... 609,075 275,302 290,291 140,629 916,524
Accumulation unit
values................. $ 10.67 $ 11.53 $ 12.31 $ 13.87 $ 15.60
- -------------------------------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
MONEY MARKET QUALITY BOND HIGH YIELD GROWTH EQUITY VALUE EQUITY
TOTAL FUND+ FUND+ BOND FUND+ FUND+ FUND+
------------ ------------ ------------ ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 2,571,806 $ 205,870 $ 197,082 $ 258,939 $ 8,634 $ 157,643
EXPENSE:
Mortality and expense
risk charges.......... 996,483 59,958 35,358 25,846 10,798 107,878
------------ ---------- ---------- ---------- ---------- -----------
Net investment income
(loss)................ 1,575,323 145,912 161,724 233,093 (2,164) 49,765
------------ ---------- ---------- ---------- ---------- -----------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS:
Realized gains (losses)
from redemption of
fund shares........... 15,807 0 2,695 1,786 2,878 393
Capital gains
distributions......... 3,695,481 0 0 0 191,675 588,656
------------ ---------- ---------- ---------- ---------- -----------
Net realized gains .... 3,711,288 0 2,695 1,786 194,553 589,049
Net change in
unrealized
appreciation
(depreciation) of
investments........... 3,418,393 0 (68,697) 5,814 (60,566) 978,790
------------ ---------- ---------- ---------- ---------- -----------
Net realized and
unrealized gains
(losses) on
investments........... 7,129,681 0 (66,002) 7,600 133,987 1,567,839
------------ ---------- ---------- ---------- ---------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULT-
ING FROM OPERATIONS... $ 8,705,004 $ 145,912 $ 95,722 $ 240,693 $ 131,823 $ 1,617,604
============ ========== ========== ========== ========== ===========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Newberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-12
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLEXIBLY SMALL LIMITED
MANAGED CAPITALIZATION INTERNATIONAL BALANCED MATURITY BOND
FUND+ FUND+ EQUITY FUND+ PORTFOLIO++ PORTFOLIO++
- ----------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
2,132,887 371,261 461,282 176,501 167,602
$39,636,827 $4,412,700 $7,095,334 $2,818,813 $2,384,306
$39,970,310 $4,651,904 $7,200,610 $2,809,896 $2,354,807
0 0 0 0 0
(13,842) (1,583) (2,437) (951) (794)
- ----------- ---------- ---------- ---------- ----------
$39,956,468 $4,650,321 $7,198,173 $2,808,945 $2,354,013
=========== ========== ========== ========== ==========
2,989,155 353,352 525,885 228,709 214,093
$ 13.37 $ 13.16 $ 13.69 $ 12.28 $ 11.00
- ----------------------------------------------------------------------------------
<CAPTION>
FLEXIBLY SMALL LIMITED
MANAGED CAPITALIZATION INTERNATIONAL BALANCED MATURITY BOND
FUND+ FUND+ EQUITY FUND+ PORTFOLIO++ PORTFOLIO++
- ----------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
$ 1,289,292 $ 25,077 $ 237,789 $ 25,158 $ 127,744
307,844 32,749 51,216 26,708 26,896
- ----------- ---------- ---------- ---------- ----------
981,448 (7,672) 186,573 (1,550) 100,848
- ----------- ---------- ---------- ---------- ----------
(378) 699 (657) 1,146 5,295
1,681,884 171,265 316,770 139,905 0
- ----------- ---------- ---------- ---------- ----------
1,681,506 171,964 316,113 141,051 5,295
515,156 239,195 75,846 (20,603) (41,435)
- ----------- ---------- ---------- ---------- ----------
2,196,662 411,159 391,959 120,448 (36,140)
- ----------- ---------- ---------- ---------- ----------
$ 3,178,110 $ 403,487 $ 578,532 $ 118,898 $ 64,708
=========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-13
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1996 (CONT'D.)
<TABLE>
<CAPTION>
CAPITAL
APPRECIATION EQUITY-INCOME GROWTH ASSET MANAGER
PORTFOLIO+++ PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT IN COMMON
STOCK
Number of shares....... 371,088 766,365 478,908 150,771
Identified cost........ $4,129,318 $14,725,428 $14,103,919 $2,342,136
ASSETS AND LIABILITIES:
Investments at value... $3,799,945 $16,116,657 $14,913,195 $2,552,552
Dividends receivable... 0 0 0 0
Due (to) from The Penn
Insurance and Annuity
Company............... (1,471) (5,519) (4,854) (871)
---------- ----------- ----------- ----------
NET ASSETS:
Net assets............. $3,798,474 $16,111,138 $14,908,341 $2,551,681
========== =========== =========== ==========
Variable annuity accu-
mulation units........ 314,124 1,134,707 1,007,942 196,768
Accumulation unit val-
ues................... $ 12.09 $ 14.20 $ 14.79 $ 12.97
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1996 (CONT'D.)
<CAPTION>
CAPITAL
APPRECIATION EQUITY-INCOME GROWTH ASSET MANAGER
PORTFOLIO+++ PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 0 $ 5,848 $ 9,451 $ 23,279
EXPENSE:
Mortality and expense
risk charges.......... 34,186 133,245 122,771 21,030
---------- ----------- ----------- ----------
Net investment income
(loss)................ (34,186) (127,397) (113,320) 2,249
---------- ----------- ----------- ----------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON IN-
VESTMENTS:
Realized gains (losses)
from redemption of
fund shares........... 963 823 (53) 217
Capital gains distribu-
tions................. 179,861 167,629 238,641 19,195
---------- ----------- ----------- ----------
Net realized gains..... 180,824 168,452 238,588 19,412
Net change in
unrealized apprecia-
tion (depreciation) of
investments........... (347,536) 1,191,851 777,104 173,474
---------- ----------- ----------- ----------
Net realized and
unrealized gains
(losses) on invest-
ments................. (166,712) 1,360,303 1,015,692 192,886
---------- ----------- ----------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ (200,898) $ 1,232,906 $ 902,372 $ 195,135
========== =========== =========== ==========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Newberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-14
<PAGE>
- -----------------------------------------------------
THIS PAGE LEFT INTENTIONALLY BLANK
B-15
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE
PERIOD OF MARCH 1, 1995 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY MARKET QUALITY BOND HIGH YIELD
TOTAL FUND+ FUND+ BOND FUND+
------------------------- ------------------------ --------------------- --------------------
1996 1995 1996 1995 1996 1995 1996 1995
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 1,575,323 $ 311,547 $ 145,912 $ 19,878 $ 161,724 $ 36,970 $ 233,093 $ 53,798
Net realized gain
(loss) from investment
transactions.......... 3,711,288 382,361 0 0 2,695 251 1,786 100
Net change in
unrealized
appreciation
(depreciation) of
investments........... 3,418,393 86,124 0 0 (68,697) (8,650) 5,814 (38,089)
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
Net increase (decrease)
in net assets resulting
from operations........ 8,705,004 780,032 145,912 19,878 95,722 28,571 240,693 15,809
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
VARIABLE ANNUITY ACTIVI-
TIES:
Purchase payments under
variable annuity
contracts............. 109,076,182 21,438,030 11,766,041 2,982,737 4,014,585 756,991 3,257,266 589,034
Surrender benefits..... (688,028) 0 (32,079) 0 (16,374) 0 (19,834) 0
Net transfers.......... (14,062,219) 562,648 (7,241,862) (1,078,058) (1,122,806) (65,223) (449,170) 25,706
Contract administration
charges............... (13,544) (425) (518) (30) (350) (6) (317) 0
Annuity benefits....... (1,928,380) (30,489) (61,612) (350) (516,677) 0 (81,701) (2,622)
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
Net increase in net
assets derived from
annuity activities..... 92,384,011 21,969,764 4,429,970 1,904,299 2,358,378 691,762 2,706,244 612,118
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
Total increase in net
assets................ 101,089,015 22,749,796 4,575,882 1,924,177 2,454,100 720,333 2,946,937 627,927
NET ASSETS:
Beginning of period.... 22,749,796 0 1,924,177 0 720,333 0 627,927 0
------------ ----------- ----------- ----------- ----------- -------- ---------- --------
END OF PERIOD.......... $123,838,811 $22,749,796 $ 6,500,059 $ 1,924,177 $ 3,174,433 $720,333 $3,574,864 $627,927
============ =========== =========== =========== =========== ======== ========== ========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997.)
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-16
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH EQUITY VALUE EQUITY FLEXIBLY MANAGED SMALL CAPITALIZATION
FUND+ FUND+ FUND+ FUND+
- --------------------- ----------------------- ----------------------- -----------------------
1996 1995 1996 1995 1996 1995 1996 1995
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (2,164) $ 200 $ 49,765 $ 22,723 $ 981,448 $ 173,659 $ (7,672) $ 2,459
194,553 20,551 589,049 114,332 1,681,506 234,228 171,964 12,282
(60,566) (16,711) 978,790 (8,464) 515,156 (181,674) 239,195 9
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ---------
131,823 4,040 1,617,604 128,591 3,178,110 226,213 403,487 14,750
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ---------
1,879,023 145,157 11,131,936 1,864,128 31,724,973 6,004,397 3,865,977 520,095
(1,444) 0 (65,906) 0 (258,353) 0 (11,107) 0
(218,969) 14,361 (394,988) 254,805 (1,157,006) 671,116 (170,367) 84,113
(142) 0 (1,463) (45) (4,084) (134) (483) (3)
(2,961) 0 (232,319) (1,330) (418,180) (10,584) (54,544) (1,597)
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ---------
1,655,507 159,518 10,437,260 2,117,558 29,887,350 6,664,795 3,629,476 602,608
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ---------
1,787,330 163,558 12,054,864 2,246,149 33,065,460 6,891,008 4,032,963 617,358
163,558 0 2,246,149 0 6,891,008 0 617,358 0
- ---------- -------- ----------- ---------- ----------- ---------- ----------- ---------
$1,950,888 $163,558 $14,301,013 $2,246,149 $39,956,468 $6,891,008 $4,650,321 $617,358
========== ======== =========== ========== =========== ========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-17
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE
PERIOD OF MARCH 1, 1995 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1995
(CONT'D.)
<TABLE>
<CAPTION>
CAPITAL
INTERNATIONAL BALANCED LIMITED MATURITY APPRECIATION
EQUITY FUND+ PORTFOLIO++ BOND PORTFOLIO++ PORTFOLIO+++
------------------- -------------------- --------------------- --------------------
1996 1995 1996 1995 1996 1995 1996 1995
---------- -------- ---------- -------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 186,573 $ 11,505 $ (1,550) $ (3,044) $ 100,848 $ (1,802) $ (34,186) $ (3,426)
Net realized gain
(loss) from investment
transactions.......... 316,113 21 141,051 120 5,295 146 180,824 (78)
Net change in
unrealized
appreciation
(depreciation) of
investments........... 75,846 29,429 (20,603) 11,684 (41,435) 11,936 (347,536) 18,162
---------- -------- ---------- -------- ----------- -------- ---------- --------
Net increase (decrease)
in net assets resulting
from operations........ 578,532 40,955 118,898 8,760 64,708 10,280 (200,898) 14,658
---------- -------- ---------- -------- ----------- -------- ---------- --------
VARIABLE ANNUITY ACTIVI-
TIES:
Purchase payments under
variable annuity
contracts............. 6,480,324 562,944 2,287,512 744,910 3,179,899 584,013 3,313,766 851,970
Surrender benefits..... (16,812) 0 (15,249) 0 (21,881) 0 (29,264) 0
Net transfers.......... (395,700) 48,183 (364,312) 59,538 (1,384,520) (43,455) (195,208) 57,677
Contract administration
charges............... (515) (3) (584) 0 (204) 0 (558) (45)
Annuity benefits....... (96,239) (3,496) (28,754) (1,774) (34,487) (340) (10,505) (3,119)
---------- -------- ---------- -------- ----------- -------- ---------- --------
Net increase in net
assets derived from
annuity activities..... 5,971,058 607,628 1,878,613 802,674 1,738,807 540,218 3,078,231 906,483
---------- -------- ---------- -------- ----------- -------- ---------- --------
Total increase in net
assets................ 6,549,590 648,583 1,997,511 811,434 1,803,515 550,498 2,877,333 921,141
NET ASSETS:
Beginning of period.... 648,583 0 811,434 0 550,498 0 921,141 0
---------- -------- ---------- -------- ----------- -------- ---------- --------
END OF PERIOD.......... $7,198,173 $648,583 $2,808,945 $811,434 $ 2,354,013 $550,498 $3,798,474 $921,141
========== ======== ========== ======== =========== ======== ========== ========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997.)
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-18
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INCOME GROWTH ASSET MANAGER
PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
- ------------------------ -------------------------- -----------------------
1996 1995 1996 1995 1996 1995
- ----------- ---------- ----------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
$ (127,397) $ 12,367 $ (113,320) $ (10,704) $ 2,249 $ (3,036)
168,452 191 238,588 111 19,412 106
1,191,851 199,378 777,104 32,172 173,474 36,942
- ----------- ---------- ----------- ---------- ---------- --------
1,232,906 211,936 902,372 21,579 195,135 34,012
- ----------- ---------- ----------- ---------- ---------- --------
12,524,113 2,621,032 11,793,923 2,667,181 1,856,844 543,441
(86,153) 0 (104,034) 0 (9,538) 0
(465,915) 279,515 (434,169) 240,417 (67,227) 13,953
(1,784) (44) (2,059) (70) (483) (45)
(203,041) (1,427) (173,601) (3,198) (13,759) (652)
- ----------- ---------- ----------- ---------- ---------- --------
11,767,220 2,899,076 11,080,060 2,904,330 1,765,837 556,697
- ----------- ---------- ----------- ---------- ---------- --------
13,000,126 3,111,012 11,982,432 2,925,909 1,960,972 590,709
3,111,012 0 2,925,909 0 590,709 0
- ----------- ---------- ----------- ---------- ---------- --------
$16,111,138 $3,111,012 $14,908,341 $2,925,909 $2,551,681 $590,709
=========== ========== =========== ========== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-19
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 1.
The significant accounting policies of PIA Variable Annuity Account I -
Pennant (Account I) are as follows:
GENERAL - Account I was established by The Penn Insurance and Annuity
Company (PIA) under the provisions of the Delaware Insurance Law. PIA has
structured Account I as a unit investment trust registered under the
Investment Company Act of 1940. Account I offers a combination fixed and
variable annuity contract. Account I offers units to variable annuity
contractholders to provide for the accumulation of value and for the
payment of annuities. The preparation of the accompanying financial
statements requires management to make estimates and assumptions that
affect the reported values of assets and liabilities as of December 31,
1996 and the reported amounts from operations and contract transactions
during 1996. Actual results could differ from those estimates.
INVESTMENTS - Assets of Account I are invested in shares of Penn Series
Funds, Inc. (Penn Series): Money Market, Quality Bond, High Yield Bond,
Growth Equity, Value Equity, Flexibly Managed, International Equity and
Small Capitalization Funds; Neuberger and
- --------------------------------------------------------------------------------
NOTE 2.
For the year ended December 31, 1996 and the period of March 1, 1995
(commencement of operations) to December 31, 1995 share transactions of
Account I were as follows:
<TABLE>
<CAPTION>
MONEY QUALITY HIGH YIELD
MARKET FUND+ BOND FUND+ BOND FUND+
----------------------- -------------------- --------------------
1996 1995 1996 1995 1996 1995
----------- ---------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 10,282,841 2,926,149 370,651 71,618 352,468 71,558
Shares received from
reinvestment of:
Net investment income. 205,661 20,254 19,708 3,898 29,062 6,638
Capital gains
distribution......... 0 0 0 0 0 0
----------- ---------- ---------- -------- ---------- --------
Total shares acquired... 10,488,502 2,946,403 390,359 75,516 381,530 78,196
Shares redeemed......... (6,031,688) (963,808) (143,163) (5,157) (54,589) (3,782)
----------- ---------- ---------- -------- ---------- --------
Net increase in shares
owned.................. 4,456,814 1,982,595 247,196 70,359 326,941 74,414
Shares owned beginning
of period.............. 1,982,595 0 70,359 0 74,414 0
----------- ---------- ---------- -------- ---------- --------
Shares owned end of
period................. 6,439,409 1,982,595 317,555 70,359 401,355 74,414
=========== ========== ========== ======== ========== ========
Cost of shares acquired. $10,488,502 $2,946,403 $3,986,768 $782,534 $3,432,734 $699,733
=========== ========== ========== ======== ========== ========
Proceeds from shares
redeemed............... $ 6,031,688 $ 963,808 $1,465,728 $ 53,662 $ 492,310 $ 33,692
=========== ========== ========== ======== ========== ========
<CAPTION>
INTERNATIONAL BALANCED LIMITED MATURITY
EQUITY FUND+ PORTFOLIO++ BOND PORTFOLIO++
----------------------- -------------------- --------------------
1996 1995 1996 1995 1996 1995
----------- ---------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 397,567 44,056 143,911 47,329 210,617 39,251
Shares received from
reinvestment of:
Net investment income. 15,233 1,001 1,649 0 9,484 0
Capital gains
distribution......... 20,293 0 9,168 0 0 0
----------- ---------- ---------- -------- ---------- --------
Total shares acquired... 433,093 45,057 154,728 47,329 220,101 39,251
Shares redeemed......... (16,642) (226) (24,550) (1,006) (89,930) (1,820)
----------- ---------- ---------- -------- ---------- --------
Net increase in shares
owned.................. 416,451 44,831 130,178 46,323 130,171 37,431
Shares owned beginning
of period.............. 44,831 0 46,323 0 37,431 0
----------- ---------- ---------- -------- ---------- --------
Shares owned end of
period................. 461,282 44,831 176,501 46,323 167,602 37,431
=========== ========== ========== ======== ========== ========
Cost of shares acquired. $ 6,739,747 $ 622,422 $2,404,027 $817,479 $3,066,457 $564,630
=========== ========== ========== ======== ========== ========
Proceeds from shares
redeemed............... $ 263,036 $ 3,162 $ 384,261 $ 17,697 $1,226,113 $ 26,108
=========== ========== ========== ======== ========== ========
</TABLE>
The cost of shares redeemed is determined on a last-in, first-out basis.
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth Port-
folio changed to Capital Appreciation Portfolio as of May 1, 1997.)
++++ Investment in Fidelity Investments' Insurance Product Funds I and II.
B-20
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTE 1., CONT'D.
Berman Advisers Management Trust (AMT): Limited Maturity Bond and Balanced
Portfolios; American Century Variable Portfolios, Inc. (American Century):
Capital Appreciation Portfolio; Fidelity Investments' Variable Insurance
Product (Fidelity): Equity-Income, Growth, and Asset Manager Portfolios.
Penn Series, AMT, American Century and Fidelity are open-end diversified
investment companies. The shares are carried at market value as determined
by the underlying net asset value of the respective Funds. Dividend income
is recorded on the ex-dividend date. Investment transactions are accounted
for on a trade date basis.
Federal Income Taxes - PIA is taxed under federal law as a life insurance
company. Account I is part of PIA's total operations and is not taxed
separately. Under existing federal law, no taxes are payable on investment
income and realized gains of Account I.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH VALUE FLEXIBLY SMALL CAPITALIZATION
EQUITY FUND+ EQUITY FUND+ MANAGED FUND+ FUND+
- ----------------------- ----------------------- ----------------------- -----------------------
1996 1995 1996 1995 1996 1995 1996 1995
- ----------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
87,775 10,560 572,530 131,244 1,634,579 373,372 311,668 55,344
402 31 8,160 1,931 68,799 11,390 2,001 426
8,932 1,012 30,469 7,014 89,748 13,456 13,697 1,120
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
97,109 11,603 611,159 140,189 1,793,126 398,218 327,366 56,890
(14,349) (3,424) (8,687) (2,193) (56,349) (2,108) (12,444) (551)
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
82,760 8,179 602,472 137,996 1,736,777 396,110 314,922 56,339
8,179 0 137,996 0 396,110 0 56,339 0
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
90,939 8,179 740,468 137,996 2,132,887 396,110 371,261 56,339
=========== ========= =========== ========== =========== ========== =========== =========
$2,164,719 $ 252,011 $11,237,711 $2,290,813 $33,613,754 $7,109,671 $ 3,945,543 $ 623,629
=========== ========= =========== ========== =========== ========== =========== =========
$ 319,074 $ 72,031 $ 157,626 $ 35,919 $ 1,050,538 $ 35,781 $ 151,010 $ 6,173
=========== ========= =========== ========== =========== ========== =========== =========
<CAPTION>
CAPITAL APPRECIATION EQUITY-INCOME GROWTH ASSET MANAGER
PORTFOLIO+++ PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
- ----------------------- ----------------------- ----------------------- -----------------------
1996 1995 1996 1995 1996 1995 1996 1995
- ----------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
295,733 76,984 612,447 162,829 378,280 101,293 115,146 42,510
16,825 0 310 1,291 340 0 1,542 0
0 0 8,888 0 8,590 0 1,271 0
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
312,558 76,984 621,645 164,120 387,210 101,293 117,959 42,510
(17,870) (584) (16,755) (2,645) (8,522) (1,073) (4,605) (5,093)
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
294,688 76,400 604,890 161,475 378,688 100,220 113,354 37,417
76,400 0 161,475 0 100,220 0 37,417 0
- ----------- --------- ----------- ---------- ----------- ---------- ----------- ---------
371,088 76,400 766,365 161,475 478,908 100,220 150,771 37,417
=========== ========= =========== ========== =========== ========== =========== =========
$3,421,152 $ 910,433 $12,146,093 $2,958,084 $11,470,781 $2,925,304 $ 1,862,667 $ 627,916
=========== ========= =========== ========== =========== ========== =========== =========
$ 196,004 $ 7,130 $ 333,741 $ 46,023 $ 261,057 $ 31,167 $ 74,623 $ 74,146
=========== ========= =========== ========== =========== ========== =========== =========
</TABLE>
B-21
<PAGE>
- --------------------------------------------------------------------------------
PIA VARIABLE ANNUITY ACCOUNT I - PENNANT
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 3.
Operations are charged for mortality and expense risks assumed by PIA and
for administering the separate account at an annual rate of 1.25% and 0.15%
respectively, of the average account value of Account I.
As reimbursement for expenses incurred in administering the contract, PIA
receives $30 per year for each annuity contract prior to the contract's
anniversary date. The $30 charge is waived on certain contracts.
If a policy is surrendered within the first 7 years, a contingent deferred
sales charge will be assessed. This charge will be deducted before any
surrender proceeds are paid. See original contract documents for specific
charges assessed.
B-22
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF
THE PENN INSURANCE AND ANNUITY COMPANY
WILMINGTON, DELAWARE
We have audited the accompanying statutory statements of financial condition of
The Penn Insurance and Annuity Company (a wholly-owned subsidiary of The Penn
Mutual Life Insurance Company) as of December 31, 1996 and 1995 and the related
statutory statements of operations, changes in capital and surplus and cash
flows for the three years in the period ended December 31, 1996. These
statutory financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Insurance Department of the State of Delaware (SAP), which
practices differ from generally accepted accounting principles (GAAP). The
effects on the financial statements of the variances between SAP and GAAP are
described in Note 1 to the financial statements.
In our report dated January 26, 1996, we expressed our opinion that the 1995
and 1994 financial statements, prepared using SAP, presented fairly, in all
material respects, the financial position of The Penn Insurance and Annuity
Company as of December 31, 1995, and the results of its operations, and its
cash flows for the two years then ended in conformity with GAAP. As described
in Note 1 to the financial statements, financial statements of wholly-owned
stock life insurance subsidiaries of mutual life insurance companies issued or
reissued after 1996, which are prepared in accordance with SAP, are no longer
considered to be presented in conformity with GAAP. Accordingly, our present
opinion on the 1995 and 1994 financial statements 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 second
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with GAAP, the financial position of The Penn Insurance
and Annuity Company as of December 31, 1996 and 1995, or the results of its
operations or its cash flows for the three years in the period ended December
31, 1996.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of The Penn Insurance and
Annuity Company as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the three years in the period ended December
31, 1996, on the basis of accounting described in Note 1.
As discussed in Note 2 to the financial statements, during 1995, the Company
changed its accounting method for certain components of the federal income tax
expense.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 28, 1997
B-23
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
DECEMBER 31, 1996 1995
- --------------------------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C>
ASSETS
Bonds..................................................... $ 562,231 $413,987
Stocks
Preferred................................................ 3,577 3,577
Common--affiliated....................................... 495 1,940
Mortgage loans............................................ 11,190 90,395
Real estate............................................... 3,041 5,087
Policy loans.............................................. 246,729 234,442
Cash and short-term investments........................... 35,385 22,722
---------- --------
Total Cash and Invested Assets........................... 862,648 772,150
Investment income due and accrued......................... 20,224 14,257
Other assets.............................................. 910 10,016
Separate account assets................................... 143,346 28,216
---------- --------
TOTAL ASSETS............................................. $1,027,128 $824,639
========== ========
LIABILITIES
Reserves and funds for payment of future life and annuity
benefits................................................. $ 768,876 $708,720
Policy claims in process.................................. 3,973 3,623
Interest maintenance reserve.............................. 890 1,744
Asset valuation reserve................................... 3,966 5,436
Other liabilities......................................... 23,975 11,299
Separate account liabilities.............................. 143,346 28,216
---------- --------
TOTAL LIABILITIES........................................ 945,026 759,038
---------- --------
CAPITAL AND SURPLUS
Common stock, $2 par value; 1,000 shares authorized, is-
sued and outstanding..................................... 2,000 2,000
Capital contributed in excess of par value................ 103,369 103,369
Accumulated deficit....................................... (23,267) (39,768)
---------- --------
TOTAL CAPITAL AND SURPLUS................................ 82,102 65,601
---------- --------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS............... $1,027,128 $824,639
========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-24
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1996 1995 1994
- --------------------------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C> <C>
INCOME
Premium and annuity considerations.................... $190,527 $ 78,904 $35,916
Net investment income................................. 64,571 58,898 50,515
Other income.......................................... 5,987 34,940 2,461
-------- -------- -------
TOTAL INCOME......................................... 261,085 172,742 88,892
-------- -------- -------
BENEFITS AND EXPENSES
Benefits paid to policyholders and beneficiaries...... 55,594 48,029 44,456
Increase in reserves and funds for the payment of fu-
ture life and annuity benefits....................... 60,155 66,086 18,728
Commissions........................................... 9,690 5,398 5,008
Operating expenses.................................... 8,396 6,330 5,718
Net transfers to separate accounts.................... 100,281 27,388 --
-------- -------- -------
TOTAL BENEFITS AND EXPENSES.......................... 234,116 153,231 73,910
-------- -------- -------
INCOME FROM OPERATIONS BEFORE FEDERAL INCOME TAXES... 26,969 19,511 14,982
Federal income tax expense............................ 9,614 7,644 4,292
-------- -------- -------
INCOME FROM OPERATIONS............................... 17,355 11,867 10,690
Net realized capital losses, net of taxes............. 1,438 1,591 4,646
-------- -------- -------
NET INCOME........................................... $ 15,917 $ 10,276 $ 6,044
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-25
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1996 1995 1994
- --------------------------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C> <C>
COMMON STOCK
Beginning of year................................ $ 2,000 $ 2,000 $ 2,000
-------- -------- --------
END OF YEAR...................................... 2,000 2,000 2,000
-------- -------- --------
CAPITAL CONTRIBUTED IN EXCESS OF PAR VALUE
Beginning of year................................ 103,369 103,369 103,369
-------- -------- --------
END OF YEAR...................................... 103,369 103,369 103,369
-------- -------- --------
ACCUMULATED DEFICIT
Beginning of year................................ (39,768) (48,846) (59,087)
Net income....................................... 15,917 10,276 6,044
Change in non-admitted assets.................... 619 (71) 117
Change in asset valuation reserve................ 1,470 767 2,505
Change in net unrealized capital gains and loss-
es.............................................. (1,505) 123 774
Change in accounting method...................... -- (2,017) --
Other............................................ -- -- 801
-------- -------- --------
END OF YEAR...................................... (23,267) (39,768) (48,846)
-------- -------- --------
TOTAL CAPITAL AND SURPLUS........................ $ 82,102 $ 65,601 $ 56,523
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-26
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1996 1995 1994
- ------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C> <C>
CASH PROVIDED
Net cash from operations:
Premium and annuity con-
siderations............. $190,541 $78,404 $35,640
Net investment income.... 58,076 60,655 51,409
Other income............. 23,310 37,000 3,414
-------- ------- -------
271,927 176,059 90,463
Benefits to policyhold-
ers..................... 54,341 48,225 42,330
Commissions.............. 9,747 5,312 4,915
Operating expenses and
taxes................... 17,441 13,488 11,222
Transfers to separate ac-
counts.................. 104,991 27,388 --
Net increase in policy
loans................... 11,651 33,911 10,391
-------- ------- -------
NET CASH FROM OPERATIONS. 73,756 47,735 21,605
-------- ------- -------
Investments sold, matured
or repaid:
Bonds.................... 165,045 73,341 76,309
Stocks................... -- 7,270 27,169
Mortgage loans........... 71,902 11,317 11,866
Real estate.............. 2,849 753 1,538
-------- ------- -------
Total investments sold,
matured or repaid...... 239,796 92,681 116,882
Taxes on realized invest-
ment gains............... 630 (373) 89
Other cash provided....... 10,208 674 28
-------- ------- -------
TOTAL CASH PROVIDED...... 324,390 140,717 138,604
-------- ------- -------
CASH APPLIED
Cost of investments ac-
quired:
Bonds.................... 311,166 99,407 115,155
Stocks................... -- 1 25,005
Mortgage loans........... 561 20,459 2,554
-------- ------- -------
Total cost of invest-
ments acquired......... 311,727 119,867 142,714
Other cash applied........ -- 286 61
-------- ------- -------
TOTAL CASH APPLIED....... 311,727 120,153 142,775
-------- ------- -------
Net change in cash and
short-term investments... 12,663 20,564 (4,171)
CASH AND SHORT-TERM IN-
VESTMENTS:
Beginning of year........ 22,722 2,158 6,329
-------- ------- -------
END OF YEAR.............. $ 35,385 $22,722 $ 2,158
======== ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-27
<PAGE>
- -------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(IN THOUSANDS OF DOLLARS)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF OPERATIONS
The Penn Insurance and Annuity Company (the "Company"), is a wholly owned
subsidiary of The Penn Mutual Life Insurance Company ("Penn Mutual"). The
Company currently concentrates primarily in the sale of individual annuity
products, both fixed and variable. The Company sells its products through Penn
Mutual's distribution systems, which consist of a network of career agents,
independent agents and independent marketing organizations. Additionally, it
has a significant amount of universal life insurance business in force,
although the Company no longer sells these products. The Company is licensed
to do business in forty-seven states and the District of Columbia.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in conformity with
accounting principles prescribed or permitted by the Insurance Department of
the State of Delaware (SAP). Prescribed SAP include state laws, regulations,
and general administrative rules, as well as a variety of publications of the
National Association of Insurance Commissioners (NAIC). Permitted SAP
encompass all accounting practices which are not prescribed. These principles
were considered to be in conformity with generally accepted accounting
principles (GAAP) prior to the issuance of Financial Accounting Standards
Board Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises," (FIN No. 40) and
Statement of Financial Accounting Standards (SFAS) No. 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises
for Certain Long-Duration Participating Contracts." Effective for fiscal years
beginning after December 15, 1995, in accordance with FIN No. 40, the
financial statements of mutual life insurance companies which are prepared on
the basis of SAP can no longer be described as prepared in conformity with
GAAP. Therefore, as required by generally accepted auditing standards, the
opinion expressed by our independent accountants on the 1995 and 1994
financial statements is different from that expressed in their previous
report.
In financial statements prepared in conformity with SAP, the accounting
treatment of certain items is different than for financial statements issued
in conformity with GAAP. Significant differences include:
. Policy acquisition costs, such as commissions and other costs incurred in
connection with acquiring new and renewal business, are expensed when in-
curred; under GAAP, such costs are deferred and amortized over the ex-
pected premium paying period.
. Premiums for universal life and investment-type products are recognized
as revenue when due; under GAAP, they are accounted for as deposits and
excluded from revenue.
. Policy reserves are based on statutory mortality and interest require-
ments and without consideration of withdrawals and are reported net of
reinsurance reserve credits; under GAAP, the reserves are based on ex-
pected investment yield, mortality and withdrawals and are reported gross
of reinsurance reserve credits. Changes in reserves on account of change
in valuation basis during the year are charged directly to surplus rather
than reflected in the net gain from operations, as is the case under
GAAP.
. No provision is made for deferred income taxes; under GAAP, deferred
taxes result from temporary differences between the tax basis of assets
and liabilities and their reported amounts in the financial statements.
. An asset valuation reserve (AVR) is established as a liability to offset
potential investment losses and changes in the AVR are charged or cred-
ited to surplus; under GAAP, reserves are established for invested assets
based on evaluation of impairment and are recorded through realized
gains/(losses).
. An interest maintenance reserve (IMR) is established as a liability to
capture gains and losses, net of tax, on the sale of fixed maturities re-
sulting from changes in the general level of interest rates; no such re-
serve is required under GAAP.
. Investments in bonds and preferred stocks are generally carried at amor-
tized cost; under GAAP, investments in bonds and preferred stocks, other
than those classified as held to maturity, are carried at fair value.
. Certain assets, designated as nonadmitted, are excluded from assets by a
direct charge to surplus; under GAAP, such assets are carried on the
statement of financial condition with appropriate valuation allowances.
B-28
<PAGE>
- -------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
. In accordance with Delaware Insurance Laws and Regulations, the Company's
subsidiary is not consolidated for statutory filing purposes; under GAAP,
majority-owned subsidiaries are consolidated.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period.
VALUATION OF INVESTMENTS
Bonds and stocks are carried in the accompanying statements of financial
condition at values prescribed by the NAIC. In general, bonds are stated at
amortized cost, preferred stocks at cost and common stocks at market value.
The Company's wholly-owned subsidiary, Penn Assurance and Reinsurance Co.,
Ltd. (PAR), is carried on the equity basis. Changes in PAR's equity are
charged or credited directly to capital and surplus. Real estate is carried at
cost less encumbrances and accumulated depreciation. Real estate acquired
through foreclosure is recorded at the lower of cost or market value at the
time of foreclosure. Real estate is depreciated using the straight-line
method. Mortgage loans are carried at the unpaid principal amount, less any
unamortized discount. Policy loans are carried at the unpaid principal balance
less amounts unsecured by cash surrender values. Cash and short-term
investments include cash on deposit and securities purchased with a maturity
date of less than one year. Short-term investments are valued at cost, which
approximates market. Certain assets which are considered to be non-admitted
for statutory purposes have been excluded from the Statements of Financial
Condition by a direct charge to capital and surplus.
Financial instruments utilized to hedge the Company's assets are recorded
using a valuation method consistent with the valuation method of the assets
hedged. Gains and losses on financial futures contracts used as hedges against
interest rate fluctuations are deferred and recognized in the Statements of
Operations over the remaining life of the hedged securities. Changes in the
market value of financial futures contracts used as hedges against market
fluctuations of equity securities are reported as unrealized gains or losses.
They are recognized as realized gains or losses when the hedged securities are
sold.
Statutory accounting principles require insurance companies to hold an Asset
Valuation Reserve (AVR) and an Interest Maintenance Reserve (IMR). The purpose
of the AVR is to maintain consistent and prescribed valuation reserves for
invested assets. Changes in the AVR are recorded directly to capital and
surplus. The purpose of the IMR is to defer recognition of realized gains and
losses which result from interest rate movements and to amortize these gains
and losses into income over the original expected life of the investment sold.
Amortization of gains and losses included in the IMR are reflected as a
component of net investment income.
Realized gains and losses are determined on the specific identification method
and are presented in the Statements of Operations net of taxes and excluding
net gains and losses transferred to the IMR. Unrealized gains and losses are
accounted for as direct increases or decreases in capital and surplus.
RESERVES AND FUNDS FOR THE PAYMENT OF FUTURE LIFE AND ANNUITY BENEFITS
Reserves and funds for the payment of future life and annuity benefits are
developed using actuarial methods based on statutory mortality and interest
requirements. Reserves for life insurance are computed principally on a
modified preliminary term or CRVM methods using the 1958 and 1980
Commissioners' Standard Ordinary Mortality Tables and assumed interest rates
ranging from 4% to 6%. Reserves for annuity contracts were based principally
on the 1949, 1971 and 1983 Individual Annuity Mortality Tables and assumed
interest rates ranging from 4.5% to 13.25%. Policy claims in process include
provisions for payments to be made on reported claims and claims incurred but
not reported. Any adjustments that are made to the reserve balances are
reflected in the Statements of Operations in the year in which such
adjustments are made. All policies are non-participating.
REVENUE AND RELATED EXPENSE RECOGNITION
Premiums are recognized as income over the premium payment period of the
related policies. Annuity considerations are recognized as income as they are
received. Premium and annuity considerations are recorded net of reinsurance
premiums. Benefits are reported net of the amounts received from reinsurers.
Commissions and other expenses related to the acquisition of new policies are
charged to operations as incurred.
B-29
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
FEDERAL INCOME TAXES
The Company files a consolidated federal income tax return with its parent,
Penn Mutual. The federal income tax provision or benefit is recorded to the
extent the Company's results increase or decrease the consolidated tax
liability of Penn Mutual. The resulting tax liability or receivable is paid to
or received from Penn Mutual. The provision for federal income taxes is
computed in accordance with the section of the Internal Revenue Code applicable
to life insurance companies and is based on income which is currently taxable.
In accordance with statutory accounting practices, no deferred taxes are
provided for temporary differences between pre-tax accounting income and
taxable income.
SEPARATE ACCOUNTS
Separate Account assets and liabilities represent segregated funds administered
and invested by the Company primarily for the benefit of variable annuity and
pension contractholders. The value of the assets in the Separate Accounts
reflects the actual investment performance of the respective accounts and is
not guaranteed by the Company. The carrying value for Separate Account assets
and liabilities approximates the estimated fair value of the underlying assets.
NOTE 2 - ACCOUNTING CHANGE:
The Company's parent, Penn Mutual, is required by the Internal Revenue Code
(IRC) to include the Differential Earnings Amount (DEA) in each year's taxable
income. This amount, which is allocated to the Company by Penn Mutual, is
computed by multiplying the Company's average taxable equity base by a rate
that represents the difference between stock and mutual companies' earnings
rates. Under the IRC, the enacted DEA rate for the current year is an Internal
Revenue Service (IRS) estimate and is recomputed in the following year to
reflect the actual industry results.
Prior to 1995, the Company recorded its portion of the federal income tax
expense for the DEA based on the enacted IRS rates for the current year along
with any adjustment to the DEA related to the recomputation of the prior year's
estimate. The portion of the Company's federal income tax expense associated
with the DEA was recorded directly to surplus.
In 1995, the Company changed its method of accounting for the DEA to record the
tax based on management's best estimate of the final DEA rates. The impact of
this accounting change resulted in a $2,017 direct charge to surplus in 1995.
In addition, in 1995 the Company began recording the portion of its federal
income tax expense associated with the DEA in the Statements of Operations.
NOTE 3 - INVESTMENTS:
DEBT SECURITIES
The following summarizes the statement value and estimated fair value of the
Company's investment in debt securities as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------------------------------
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
United States Government............. $ 3,670 $ 85 $ -- $ 3,755
Other governmental units............. 10,075 477 -- 10,552
Public utility....................... 20,415 245 147 20,513
Industrial and other................. 309,689 4,836 2,417 312,108
Mortgage and other asset-backed secu-
rities.............................. 218,382 2,165 884 219,663
-------- ------ ------ --------
TOTAL............................... $562,231 $7,808 $3,448 $566,591
======== ====== ====== ========
</TABLE>
B-30
<PAGE>
- -------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------------------------------
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
United States Government............. $ 3,376 $ 173 $ -- $ 3,549
Other governmental units............. 4,718 544 -- 5,262
Public utility....................... 26,355 844 3 27,196
Industrial and other................. 301,111 12,354 231 313,234
Mortgage and other asset-backed secu-
rities.............................. 78,427 1,148 1,186 78,389
-------- ------- ------ --------
TOTAL............................... $413,987 $15,063 $1,420 $427,630
======== ======= ====== ========
</TABLE>
The following summarizes the statement value and estimated fair value of the
Company's investment in debt securities as of December 31, 1996, by
contractual maturity.
<TABLE>
<CAPTION>
STATEMENT ESTIMATED
VALUE FAIR VALUE
--------- ----------
<S> <C> <C>
Maturity:
Within one year........................................... $ 23,893 $ 23,970
After one year through five years......................... 158,766 160,625
After five years through ten years........................ 108,761 110,253
After ten years through twenty years...................... 25,151 24,555
After twenty years........................................ 27,278 27,525
Mortgage and other asset-backed securities................ 218,382 219,663
-------- --------
TOTAL.................................................... $562,231 $566,591
======== ========
</TABLE>
Expected maturities may differ from contractual maturities because certain
borrowers have the right to call or prepay obligations with or without call or
prepayment penalties. Mortgage and other asset-backed securities consist of
commercial and residential mortgage pass-through holdings and securities
backed by credit card receivables, auto loans, home equity and manufactured
housing loans. These securities follow a structured principal repayment
schedule and are of high credit quality. These securities are rated investment
grade, other than $5,552 in commercial mortgage-backed securities retained
from the securitization of the Company's commercial mortgage loan portfolio.
The mortgage and other asset-backed securities portfolio is represented
separately in the maturity schedule due to the potential for prepayment. The
weighted average life of this portfolio is 5.5 years.
During 1996, 1995 and 1994, proceeds from dispositions of investments in debt
securities amounted to $165,045, $73,341 and $76,309, respectively. The gross
gains realized on those dispositions were $2,138, $2,307 and $205 and gross
losses realized on those dispositions were $363, $133 and $799 during 1996,
1995 and 1994, respectively. Net realized losses, net of taxes, transferred to
the IMR for 1996 were $570. Net realized gains, net of taxes, transferred to
the IMR were $1,413 for 1995. Net realized losses, net of taxes, transferred
to the IMR for 1994 were $70. Amortization of the IMR included in net
investment income amounted to $284 and $33 in 1996 and 1995, respectively.
Amortization of the IMR deducted from net investment income amounted to $36 in
1994.
The Company's investment portfolio of debt securities is comprised
predominantly of investment grade securities. As of December 31, 1996 and
1995, debt securities totaling $22,746 and $10,081, respectively, were
classified by the NAIC as less than investment grade. The Company held no debt
securities which were non-income producing for the preceding twelve months as
of December 31, 1996 and 1995.
MORTGAGE LOANS
On August 29, 1996, in conjunction with its parent, the Company securitized
the majority of its mortgage loan portfolio, by transferring mortgage loans
with a principal value of $65,852 and a book value of $65,821 to a trust which
qualifies as a REMIC (Real Estate Mortgage Investment Conduit) under the
Internal Revenue Code. The trust issued sixteen classes of Commercial Mortgage
Pass-Through Certificates with a total par value of $65,651. The certificates
evidence the entire beneficial ownership
B-31
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
interest in the trust. The cash flow from the mortgages will be used to repay
the certificates over an average life of 4.28. The actual date on which the
principal amount of the notes may be paid in full could be substantially
earlier or later based on the performance of the mortgages. The cash flows of
the assets of the trust will be the sole source of payments on the notes. The
Company has not guaranteed these certificates or the mortgage loans held by the
trust. As a result of this transaction, the Company recognized a loss of $2,354
upon the transfer of the mortgages to the trust, representing the difference
between the fair market value of the certificates and the book value of the
mortgage loans transferred to the trust. This loss was deferred through the
Interest Maintenance Reserve (IMR), net of related taxes, and will be amortized
into income over the remaining life of the mortgages sold.
Included in the Company's bond portfolio are the highest quality classes of
certificates with a par value of $60,071 and a fair market value of $61,683 at
the time of the securitization, which the Company retained. The Company sold
the lowest rated classes of certificates with a par value of $5,581 and a fair
market value of $2,086.
The mortgage loans which were not included in the securitization were retained
by the Company and had a book value of $19,075 and an estimated fair value of
$16,400 on the date of the securitization. Loans the Company intends to dispose
of within a period of 6 to 24 months were written down to their estimated net
realizable value. These loans had a book value of $16,389 and an estimated net
realizable value of $13,668, which resulted in a credit-related realized loss
of $2,721. The Company intends to hold mortgage loans with a book value of
$2,686 on the date of the securitization through their remaining terms. The
Company has discontinued the origination of commercial mortgage loans.
The following summarizes the statement value of mortgage loans by property type
and geographic concentration as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
PROPERTY TYPE
Retail.......................................................... $ -- $28,391
Office buildings................................................ 11,190 20,586
Dwellings....................................................... -- 22,110
Other........................................................... -- 19,308
------- -------
TOTAL.......................................................... $11,190 $90,395
======= =======
GEOGRAPHIC CONCENTRATION
Northeast....................................................... $ 5,884 $17,068
West............................................................ -- 28,534
Midwest......................................................... 5,306 33,680
South........................................................... -- 11,113
------- -------
TOTAL.......................................................... $11,190 $90,395
======= =======
</TABLE>
The Company's investments included $2,663 of mortgage loans delinquent over 60
days and no mortgage loans which were non-income producing for the preceding
twelve months as of December 31, 1996. The Company's investments did not
include any mortgage loans delinquent over 60 days as of December 31, 1995. As
of December 31, 1996 and 1995, there were no restructured mortgage loans in the
mortgage loan portfolio. Restructured mortgage loans include commercial loans
for which the basic terms, such as interest rate, amortization, maturity date,
or collateral have been changed as a result of actual or anticipated
delinquency. Restructures do not include mortgages refinanced prior to or upon
maturity at or above current market terms.
REAL ESTATE
The Company's investments include $3,041 and $5,087 of foreclosed real estate
as of December 31, 1996 and 1995, respectively.
B-32
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
NOTE 4 - RESERVES AND FUNDS FOR THE PAYMENT OF FUTURE LIFE AND ANNUITY
BENEFITS:
The following summarizes the withdrawal characteristics of the Company's
reserves and deposit funds as of December 31, 1996.
<TABLE>
<CAPTION>
STATEMENT
VALUE
---------
<S> <C>
Total policyholders' reserves and funds, including separate account
liabilities......................................................... $912,222
Amounts not subject to discretionary withdrawal...................... (65,900)
--------
Amounts subject to discretionary withdrawal......................... $846,322
========
</TABLE>
Of the total reserves and deposit funds which are subject to discretionary
withdrawal, $398,971, which is net of applicable policy loans, may be withdrawn
without the policyholder incurring surrender charges or market value
adjustments to the funds.
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table summarizes the Company's investment in financial
instruments as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
-------------------- --------------------
STATEMENT ESTIMATED STATEMENT ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS:
Debt securities
Bonds................................ $562,231 $566,592 $413,987 $427,630
Equity securities
Non-redeemable preferred stocks...... 3,577 3,973 3,577 3,973
Mortgage loans
Commercial........................... 11,190 11,297 90,234 90,529
Residential.......................... -- -- 161 163
Separate account assets............... 143,346 143,346 28,216 28,216
FINANCIAL LIABILITIES:
Investment-type contracts
Individual annuities................. 41,727 43,040 21,777 22,767
Separate account liabilities.......... 143,346 143,346 28,216 28,216
</TABLE>
The estimated fair values for the Company's investments in debt and equity
securities are based on quoted market prices, where available. In situations
where market prices are not readily available, primarily private placements,
fair values are estimated using a formula pricing method based on fair values
of securities with similar characteristics. The fair value of currently
performing mortgage loans is estimated by discounting the cash flows associated
with the investments, using an interest rate currently offered for similar
loans to borrowers with similar credit ratings. Loans with similar credit
quality, characteristics and time to maturity are aggregated for purposes of
estimating fair value. Assumptions regarding credit risk, cash flows and
discount rates are determined using the available market and borrower-specific
information. The estimated fair value for non-performing loans is based on the
estimated fair value of the underlying real estate, which is based on recent
appraisals or other estimation techniques. The statement values of policy loans
and cash and short-term investments approximate their fair values. The
resulting estimated fair values may not be indicative of the value negotiated
in an actual sale.
The Company is exposed to interest rate risk on its interest sensitive
products. The Company's investment strategy is designed to minimize interest
risk by managing the duration of both assets and liabilities and anticipated
cash flows of the Company's assets and liabilities.
The fair value of the Company's liabilities for individual annuities is
estimated by discounting the cash flows associated with the contracts, using an
interest rate currently offered for similar contracts with maturities similar
to those remaining for the contracts being valued.
B-33
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
Currently, disclosure of estimated fair values is not required for all the
Company's assets and liabilities. Therefore, presentation of the estimated fair
value of a significant portion of assets without a corresponding valuation of
liabilities associated with insurance contracts can be misinterpreted. The
continuing management of the relationship between the maturities of the
Company's investments and the amounts due under insurance contracts reduces the
Company's exposure to changing interest rates.
NOTE 6 - FEDERAL INCOME TAXES:
The provision for federal income taxes differs from the normal relationship of
federal income tax to pre-tax income principally due to the mutual company DEA,
treatment of policy acquisition costs and differences in policy reserve
valuation methods.
NOTE 7 - REINSURANCE:
The Company has assumed and ceded reinsurance on certain life and annuity
contracts under various agreements. The Company remains primarily liable as the
direct insurer on all risks reinsured, and performs due diligence to ensure
that amounts due from reinsurers are collectable. The table below includes the
reinsurance amounts recorded in the accompanying financial statements, which
are presented net of reinsurance activity.
<TABLE>
<CAPTION>
ASSUMED CEDED TO
GROSS FROM OTHER OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996:
Life insurance in-force............ $3,235,176 $3,063,179 $3,466,292 $2,832,063
Premium and annuity considerations. 195,811 18,650 23,934 190,527
Reserves and funds for the payment
of future life and annuity bene-
fits.............................. 526,157 245,580 2,861 768,876
DECEMBER 31, 1995:
Life insurance in-force............ $3,427,165 $3,226,701 $3,638,470 $3,015,396
Premium and annuity considerations. 81,965 19,826 22,887 78,904
Reserves and funds for the payment
of future life and annuity bene-
fits.............................. 466,707 244,689 2,676 708,720
</TABLE>
During 1994, the Company had gross premiums of $57,429, assumed premiums of
$19,625 and ceded premiums of $41,138.
The Company assumes and cedes certain risks under reinsurance agreements with
Penn Mutual. Net life insurance in-force assumed from Penn Mutual totaled
$327,897 and $342,694 as of December 31, 1996 and 1995, respectively. The
Company maintained reserves related to these policies of $243,426 and $242,691,
as of December 31, 1996 and 1995, respectively. Net premium and annuity
considerations assumed in connection with these agreements were $7,160 and
$8,799 in 1996 and 1995, respectively. Net premium and annuity considerations
ceded in 1994 were $10,069.
The Company's intercompany yearly renewable term (YRT) reinsurance treaty with
Penn Mutual, which covers certain universal life insurance products, was
modified in 1995 to provide an experience refund to be paid to the Company by
Penn Mutual in the amount of 75% of any reinsurance gain that is generated on
the products covered by the reinsurance agreement. As a result of the change to
this reinsurance treaty, $4,461 and $2,257 was received by the Company from
Penn Mutual as an experience rating refund in 1996 and 1995, respectively.
During 1995, the Company recaptured its single premium immediate annuity
business which it had previously ceded entirely to Penn Mutual. The transaction
resulted in the transfer of approximately $31,000 of invested assets and
policyholder liabilities from Penn Mutual to the Company.
NOTE 8 - RELATED PARTIES:
Penn Mutual has undertaken to provide sufficient financial support so that the
Company will have adequate capital and surplus as required by applicable laws
to meet its obligations to its policyholders under the terms of the Company's
policies and contracts.
B-34
<PAGE>
- --------------------------------------------------------------------------------
THE PENN INSURANCE AND ANNUITY COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
Under the terms of an expense allocation agreement, the Company reimbursed Penn
Mutual for services and facilities provided on behalf of the Company, including
direct and allocated expenses. For 1996, 1995 and 1994, the total expenses
incurred under this agreement were $8,915, $6,738 and $5,391, respectively.
During 1996, the Company took part in an intercompany sale of securities with
Penn Mutual. The Company sold $98,000 of securities to Penn Mutual in exchange
for securities with a fair market value of $27,000 and $71,000 in cash. The
resulting gain of $499 was deferred into the IMR and will be amortized into
income over the remaining life of the securities.
State insurance laws limit the amount of dividends that the Company may pay to
Penn Mutual.
NOTE 9 - COMMITMENTS AND CONTINGENCIES:
The Company is a respondent in a number of proceedings, some of which involve
extra-contractual damage in addition to other damages. In addition, insurance
companies are subject to assessments, up to statutory limits, by state guaranty
funds for losses of policyholders of insolvent insurance companies. In the
opinion of management, the outcome of the proceedings and assessments are not
likely to have a material adverse effect on the financial position of the
Company.
The Company, in the ordinary course of business, extends commitments relating
to its investment activities. As of December 31, 1996, the Company had no
outstanding commitments relating to these investment activities.
B-35
<PAGE>
PART C
------
Other Information
-----------------
<PAGE>
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements included in Part B:
Financial Statements of Penn Variable Annuity Account I:
Report of Independent Accountants
Statement of Assets and Liabilities - December 31, 1996
Statement of Operations - For the year ended December 31, 1996
Statements of Changes in Net Assets - For the years ended
December 31, 1996
Notes to Financial Statements
Financial Statements of The Penn Insurance and Annuity Company:
Report of Independent Accountants
Statements of Financial Condition at December 31, 1996 and 1995
Statements of Operations for the years ended December 31, 1996,
1995 and 1994 Statements of Changes in Stockholders' Equity for
the years ended December 31, 1996, 1995 and 1994
Statements of Cash Flows for the years ended December 31, 1996,
1995 and 1994
Notes to Financial Statements
(b) Exhibits
1. Resolution of Board of Directors of The Penn
Insurance and Annuity Company authorizing
the establishment of the Registrant./(a)/
2. Not applicable.
3. (a) Sales Support Agreement between The Penn Insurance
and Annuity Company and Hornor, Townsend & Kent
Inc./(b)/
(b) Agent's Agreement between the Company, Hornor,
Townsend & Kent, Inc. and Agent, relating to
broker-dealer supervision./(b)/
(c) Distribution Agreement between The Penn Insurance
and Annuity Company and Hornor, Townsend & Kent,
Inc./(b)/
C-1
<PAGE>
4. Individual Variable and Fixed Annuity Contract./(b)/
5. Application for Individual Variable and Fixed Annuity
Contract./(b)/
6. (a) Charter of The Penn Insurance and Annuity Company./(a)/
(b) By-laws of The Penn Insurance and Annuity Company./(a)/
7. None.
8. (a) Fund Participation Agreement among The Penn Insurance
and Annuity Company, TCI Portfolios, Inc. (renamed
American Century Variable Portfolios, Inc., effective
May 1, 1997) and Investors Research Corporation
(renamed American Century Investment Management,
Inc. effective May 1, 1997)./(b)/
(b)(1) Sales Agreement between The Penn Insurance and Annuity
Company and Neuberger & Berman Advisers Management
Trust. /(c)/
(b)(2) Assignment and Modification Agreement between Neuberger
& Berman Management Trust, Neuberger & Berman Advisers
Management Trust and The Penn Insurance and Annuity
Company./(c)/
(b)(3) Amendment to Participation Agreement between The Penn
Insurance and Annuity Company and Neuberger & Berman
Advisers Management Trust. Filed herewith.
(c) Participation Agreement between The Penn Insurance and
Annuity Company and Variable Insurance Products
Fund./(b)/
(d) Participation Agreement between The Penn Insurance and
Annuity Company and Variable Insurance Products Fund
II./(b)/
(e) Sales Agreement between Penn Series Funds, Inc. and The
Penn Insurance and Annuity Company./(b)/
C-2
<PAGE>
(f) Participation Agreement between The Penn Insurance and
Annuity Company and Morgan Stanley Universal Funds, Inc.
Filed herewith.
9. Opinion of C. Ronald Rubley, Esq., Associate
General Counsel to The Penn Mutual Life Insurance
Company (parent of the Company), as to the legality of
the Contracts./(b)/
10. (a) Consent of Coopers & Lybrand L.L.P. Filed herewith.
(b) Consent of Morgan, Lewis & Bockius LLP. Filed herewith.
11. None.
12. None.
13. Schedule for Computation of Performance Quotations.
Filed herewith.
14. (a) Powers of Attorney of Directors. Filed herewith.
_____________
/(a)/ Filed as exhibit and incorporated herein by reference to Exhibit 1 to
this Registration Statement filed on August 22, 1994.
/(b)/ Filed as exhibit and incorporated herein by reference to Pre-Effective
Amendment No. 1 to this Registration Statement filed on February 28,
1995.
/(C)/ Filed as exhibit and incorporated herein by reference to Post-Effective
Amendment No. 1 to this Registration Statement on April 29, 1996.
Item 25. Directors and Officers of the Depositor
---------------------------------------
The following table sets forth all of the directors and officers of the
Depositor.
DIRECTORS
- --------------------------------------
Robert E. Chappell Nancy S. Brodie
L. Stockton Illoway Richard J. Liburdi
C-3
<PAGE>
Ernest K. Noll Rudoph C. Sander
Daniel J. Toran
OFFICERS
- --------
Robert E. Chappell L. Stockton Illoway
President and Chairman of the Board Vice President
Richard J. Liburdi Nancy S. Brodie
Vice President Executive Vice President and
Chief Financial Officer
Richard F. Plush James A. Clary
Vice President Vice President
George J. Limbach Robert P. Davis
Vice President Vice President and Valuation Actuary
Patrick J. Fillette Franklin L. Best, Jr.
Vice President Secretary and Counsel
Steven M. Herzberg James D. Benson
Treasurer Controller
Alicia Bolton Peter R. Schaefer
Assistant Controller Actuary
Thomas F. Gumina Joseph D. Burns
Medical Director Claims Officer
Barbara J. Henderson Ronald M. Pappas
Investment Officer Investment Officer
Peter M. Sherman Lawrence N. Saltzman
Senior Vice President and Assistant Treasurer
Chief Investment Officer
The business address of the directors and officers, except Messrs. Noll and
Sander, is The Penn Mutual Life Insurance Company, Philadelphia, PA 19172.
The address of Mr. Noll
C-4
<PAGE>
is 421 Keats Road, Huntingdon Valley, PA 19006. The business address of
Mr. Sander is Janney Montgomery Scott Inc., 1801 Market Street, Philadelphia,
PA 19103.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
-------------------------------------------------------------------
Registrant
----------
The Penn Insurance and Annuity Company is a wholly owned subsidiary
of The Penn Mutual Life Insurance Company ("Penn Mutual").
Penn Mutual is the owner of 100% of the outstanding common stock of
Penn Series Funds, Inc. (registered investment company), a Maryland
corporation. For further information on the ownership of the
outstanding common stock of Penn Series, see "General Information" in
the Prospectus and "Ownership of Shares" in the Statement of
Additional Information, both of which are included in this Post-
Effective Amendment and are incorporated herein by reference.
Penn Mutual is the record and beneficial owner of all of the
outstanding common stock of Independence Capital Management, Inc., a
Pennsylvania corporation and registered investment adviser.
Penn Mutual is the record and beneficial owner of all of the
outstanding common stock of Penn Janney Fund, Inc. Penn Janney Fund,
Inc. is a Pennsylvania corporation and invests in new businesses.
Penn Mutual is the record and beneficial owner of 100% of the
outstanding common stock of Independence Square Properties, Inc., a
holding corporation incorporated in Delaware.
Independence Square Properties, Inc. is the record and beneficial
owner of 100% of the outstanding common stock of the following
corporations: Penn Glenside Corp., Penn Wayne Corp., St. James Realty
Corp., Investors' Mortgage Corp., and Christie Street Properties,
Inc., all Pennsylvania corporations; and Indepro Corp., Economic
Resources Associates, Inc. and WPI Investment Company, both Delaware
corporations.
Indepro Corp. is the record and beneficial owner of 100% of the
outstanding common stock of Indepro Property Fund I Corp., Indepro
Property Fund II Corp., Commons One Corp. and West Hazleton, Inc.,
all Delaware corporations.
C-5
<PAGE>
Independence Square Properties, Inc. also is the record and
beneficial owner of 100% of the outstanding common stock of the
following corporations: Hornor, Townsend and Kent, Inc. (registered
broker-dealer and investment adviser), a Pennsylvania corporation;
Penn Tallahassee Corp. (real estate investment), both Florida
corporations.
Independence Square Properties, Inc. also is the record and
beneficial owner of 100% of the outstanding common stock of Janney
Montgomery Scott Inc. (registered broker-dealer and investment
adviser), a Delaware corporation.
Janney Montgomery Scott Inc. is the record and beneficial owner of
100% of the outstanding common stock of the following corporations:
Addison Capital Management, Inc. (investment adviser), a Pennsylvania
corporation; JMS Resources, Inc. (oil and gas development), a
Pennsylvania corporation; and JMS Investor Services, Inc. (insurance
sales), a Delaware corporation.
Item 27. Number of Contract Owners
-------------------------
As of March 1, 1997, there were:
1,662 owners of qualified individual variable annuity contracts
13,603 owners of nonqualified individual variable annuity
contracts
Item 28. Indemnification
---------------
Article 4.1 of the By-laws of The Penn Insurance and Annuity Company
provides as follows: "The Company shall indemnify any person who was
or is a party or threatened to be made a party to any threatened,
pending or completed action, suit or proceeding either civil,
criminal, administrative or investigative by reason of the fact that
he is or was a Director, Officer or employee of the Company or is or
was serving at the request of the Company as a director, officer or
employee of another enterprise against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding to the extent that such person is not otherwise
indemnified and the power to do so has been or may be granted by
statute. For this purpose the Board of Directors may, and on request
of any such person shall be required to, determine in each case
whether or not the applicable standards in any such statute have been
met, or such determination shall be made by independent legal
counsel, if the Board so directs or if the Board is not empowered by
statute to make such determination." Article 4.2 further provides
that the foregoing indemnification provision is not exclusive, and
Article 4.3 authorizes the Board to purchase
C-6
<PAGE>
the Company's expense insurance and to give other indemnification to
the extent permitted by law.
Selling Agreements entered into by The Penn Insurance and Annuity
Company ("PIA") and its affiliate, Hornor, Townsend & Kent, Inc.
("HTK") with securities brokers and insurance agents generally
provide for indemnification of PIA and HTK and their directors and
officers in the event of liability resulting from unauthorized acts
of the brokers and insurance agents.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
Item 29. Principal Underwriters
----------------------
Hornor, Townsend & Kent, Inc. serves as principal underwriter of the
securities of the Securities Registrant.
Hornor, Townsend & Kent, Inc. serves as principal underwriter for
Addison Capital Shares, Inc., a registered investment company, and
for variable annuity and variable life insurance contracts issued by
Penn Mutual and funded through Variable Annuity Account III and
Variable Life Account I.
Hornor, Townsend & Kent, Inc. - Directors and Officers
------------------------------------------------------
John J. Gray, Director and Chairman of the Board
Harold E. Maude, Jr., Director
Daniel J. Toran, Director
Norman T. Wilde, Jr., Director
Ronald C. Zimmerman, President and Chief Executive Officer
C-7
<PAGE>
Michael D. Sweeney, Assistant Vice President, Director of Compliance
and Secretary
C. Ray Smith, Executive Vice President, Sales and Marketing
Laura M. Ritzko, Assistant Secretary
Joseph R. Englert, Assistant Vice President, Director of Operations
Henry Buck, Assistant Vice President and Assistant Treasurer
Barbara S. Wood, Senior Vice President, Finance and Treasurer
Bruce Ohrenich, Vice President, Sales
William H. Pentz, Counsel
Constance Flavillo, Assistant Secretary
The principal business address of Messrs. Gray and Wilde is Janney,
Montgomery, Scott Inc., 1801 Market Street, Philadelphia,
Pennsylvania.
The principal business address of the other directors and officers is
Hornor, Townsend & Kent, Inc., 600 Dresher Road, Horsham,
Pennsylvania.
Commissions and Other Compensation Received By Each Principal
--------------------------------------------------------------
Underwriter During Last Fiscal Year
-----------------------------------
Net Underwriting Compensation
Name of Principal Discounts and on Broker Other
Underwriter Commissions Redemption Commissions Commissions
- ----------------- ---------------- ------------ ----------- -----------
Hornor, Townsend and $115,189.71 $0 $0 $0
Kent, Inc.
Item 30. Location of Accounts and Records
--------------------------------
The name and address of the person who maintains physical possession
of each account, book or other documents required by Section 31(a) of
the Investment Company Act of 1940 is as follows:
The Penn Insurance and Annuity Company
600 Dresher Road
Horsham, Pennsylvania 19044
Item 31. Management Services
-------------------
See "Administrative and Recordkeeping Services" in Part B of this
Registration Statement.
C-8
<PAGE>
Item 32. Undertakings
------------
The Penn Insurance and Annuity Company hereby undertakes:
--------------------------------------------------------
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract or account offered by the prospectus, a space that an
applicant can check to request a statement of additional
information, or (2) a post card or similar written
communication affixed to or included in the prospectus that the
applicant can remove to send for a statement of additional
information;
(c) to deliver any statement of additional information and any
financial statements required to be made available under Form
N-4 promptly upon written or oral request.
Restrictions on withdrawals under Section 403(b) contracts are imposed in
reliance upon, and in compliance with, a no-action letter issued by the Chief of
the Office of Insurance Products and Legal Compliance of the Securities and
Exchange Commission to the American Council of Life Insurance on November 28,
1988.
C-9
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it meets the requirements of
Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment
No. 2 of this Registration Statement and has caused this Post-Effective
Amendment No. 2 to be signed on its behalf, in the Township of Horsham and
Commonwealth of Pennsylvania on this 28th day of April, 1997.
PIA VARIABLE ANNUITY ACCOUNT I
(Registrant)
By: /s/ Robert E. Chappell
------------------------------------------
Robert E. Chappell
Chairman of the Board
and President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons, in the capacities indicated,
on the 28th day of April, 1997.
Signature Title
- --------- -----
/s/ Robert E. Chappell Chairman of the Board and
- ---------------------- President
Robert E. Chappell (Principal Executive Officer)
/s/ Nancy S. Brodie Executive Vice President,
- ------------------- Chief Financial Officer and
Nancy S. Brodie Director
(Principal Financial Officer)
/s/ James D. Benson Controller
- ------------------- (Principal Accounting Officer)
James D. Benson
*L. Stockton Illoway Director
*Richard J. Liburdi Director
*Ernest K. Noll Director
*Rudolph C. Sander Director
*Daniel J. Toran Director
*By : /s/ Robert E. Chappell
---------------------------------------
Robert E. Chappell, attorney-in-fact
<PAGE>
EXHIBIT INDEX
-------------
EX-99.B 8(b)(3) Amendment to Participation Agreement between The Penn
Insurance and Annuity Company and Neuberger & Berman Advisers
Management Trust.
EX-99.B 8(f) Participation Agreement between The Penn Insurance and
Annuity Company and Morgan Stanley Universal Funds, Inc.
EX-99.B 10(a) Consent of Coopers & Lybrand L.L.P.
EX-99.B 10(b) Consent of Morgan, Lewis & Bockius LLP.
EX-99.B 13 Schedule for Computation of Performance Quotations.
EX-99.B 14(a) Powers of Attorney of Directors.
C-11
<PAGE>
AMENDMENT TO FUND PARTICIPATION AGREEMENT
THIS AGREEMENT dated as of April 30, 1997 is made by and between
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST, a Delaware Business Trust
("TRUST"), ADVISERS MANAGERS TRUST, a New York Common Law Trust, NEUBERGER &
BERMAN MANAGEMENT INCORPORATED, a New York Corporation and THE PENN INSURANCE
and ANNUITY COMPANY("LIFE COMPANY"), a life insurance company organized under
the laws of the State of Pennsylvania.
WHEREAS, the parties hereto have previously entered into a Sales
Agreement dated March 10, 1995, and a subsequent Assignment and Modification
Agreement dated May 1, 1995 (together the "FUND PARTICIPATION AGREEMENT"), and
the parties at that time only contemplated making available two series of the
trust, the Limited Maturity Bond Portfolio and Balanced Portfolio, and
WHEREAS, the LIFE COMPANY desires to invest in additional series of the
TRUST;
NOW THEREFORE, it is hereby agreed by and between the parties as
follows:
1. TRUST will hereby make available to the Separate Accounts of LIFE
COMPANY shares of the selected series of the TRUST as listed on Appendix B,
which Appendix may from time to time be updated by the parties hereto, for
investment of purchase payments of Variable Contracts, allocated to the
designated Separate Accounts.
2. Terms used herein but not defined herein are to have the same
meaning as in the FUND PARTICIPATION AGREEMENT. All other terms of the FUND
PARTICIPATION AGREEMENT will remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Amendment to the FUND PARTICIPATION AGREEMENT.
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
By
--------------------
Name:
Title:
ADVISERS MANAGERS TRUST
By:
-------------------
Name:
Title:
NEUBERGER & BERMAN MANAGEMENT INC.
By:
-------------------
Name:
Title:
THE PENN INSURANCE and ANNUTIY COMPANY
By:
-------------------
Name:
Title:
<PAGE>
SCHEDULE A
Separate Accounts Selected Portfolios
- ----------------- -------------------
PIA Variable Annuity Account Limited Maturity Portfolio
Balanced Portfolio
Partners Portfolio
<PAGE>
EXHIBIT 99.B8(f)
PARTICIPATION AGREEMENT
Among
MORGAN STANLEY UNIVERSAL FUNDS, INC.,
MORGAN STANLEY ASSET MANAGEMENT INC.
MILLER ANDERSON & SHERRERD, LLP
and
THE PENN INSURANCE AND ANNUITY COMPANY
DATED AS OF
MARCH , 1997
<PAGE>
TABLE OF CONTENTS
- -----------------
Page
----
ARTICLE I. Purchase of Fund Shares 2
ARTICLE II. Representations and Warranties 4
ARTICLE III. Prospectuses, Reports to Shareholders
and Proxy Statements, Voting 6
ARTICLE IV. Sales Material and Information 8
ARTICLE V. Fees and Expenses 9
ARTICLE VI. Diversification 10
ARTICLE VII. Potential Conflicts 10
ARTICLE VIII. Indemnification 12
ARTICLE IX. Applicable Law 18
ARTICLE X. Termination 18
ARTICLE XI. Notices 20
ARTICLE XII. Miscellaneous 21
SCHEDULE A Separate Accounts and Contracts A-1
SCHEDULE B Proxy Voting Procedures B-1
<PAGE>
THIS AGREEMENT, made and entered into as of the day of March,
----
1997 by and among The Penn Insurance and Annuity Company (hereinafter the
"Company"), a Delaware life insurance company, on its own behalf and on
behalf of each separate 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 MORGAN STANLEY UNIVERSAL FUNDS, INC.
(hereinafter the "Fund"), a Maryland corporation, and MORGAN STANLEY ASSET
MANAGEMENT INC. and MILLER ANDERSON & SHERRERD, LLP (hereinafter
collectively the "Advisers" and individually the "Adviser"), a Delaware
corporation and a Pennsylvania limited liability partnership, respectively.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established by insurance companies for individual and group life
insurance policies and annuity contracts with variable accumulation and/or
pay-out provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products") and (ii) the investment vehicle for certain
qualified pension and retirement plans (hereinafter "Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Insurance Contracts enter into participation
agreements with the Fund and the Advisers (the "Participating Insurance
Companies");
WHEREAS, shares of the Fund are divided into several series of shares, each
representing the interest in a particular managed portfolio of securities and
other assets, any one or more of which may be made available under this
Agreement, as may be amended from time to time by mutual agreement of the
parties hereto (each such series hereinafter referred to as a "Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated September 19, 1996 (File No. 812-10118), granting
Participating Insurance Companies and Variable Insurance Product 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 Product separate accounts of both affiliated and unaffiliated life
insurance companies and Qualified Plans (hereinafter the "Shared Funding
Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
<PAGE>
WHEREAS, each Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, each Adviser manages certain Portfolios of the Fund; and
WHEREAS, Morgan Stanley & Co. Incorporation (the "Underwriter") is
registered as a broker/dealer under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), is a member in good standing of the
National Association of Securities Dealers, Inc. (hereinafter "NASD") and serves
as principal underwriter of the shares of the Fund; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority 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 Variable
Insurance Product; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Variable Insurance Products and
the Underwriter is authorized to sell such shares to each such 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. Purchase of Fund Shares
1.1. The Fund agrees to make available for purchase by the Company shares
of the Fund and shall execute orders placed for each Account on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
such order. 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. 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.
2
<PAGE>
1.2. The Fund, so long as this Agreement is in effect, agrees to make its
shares available indefinitely for purchase at the applicable net asset value per
share by the Company and its Accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the Securities and Exchange Commission
and the Fund shall use reasonable efforts to calculate such net asset value on
each day which the New York Stock Exchange is open for trading. Notwithstanding
the foregoing, the Board of Directors of the Fund (hereinafter the "Board") may
refuse to permit the Fund 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 agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Portfolio will be sold to the general public.
1.4. The Fund will not make its shares available for purchase by any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus. The Variable Insurance Products issued
by the Company, under which amounts may be invested in the Fund (hereinafter the
"Contracts"), are listed on Schedule A attached hereto and incorporated herein
by reference, as such Schedule A may be amended from time to time by mutual
written agreement of all of the parties hereto. The Company will give the Fund
and the Adviser 45 days written notice of its intention to make available in the
future, as a funding vehicle under the Contracts, any other investment company.
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
purposes of Section 2.10 and 2.11, upon receipt by the Fund of the federal funds
so wired, such funds shall
3
<PAGE>
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. Eastern time) 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 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 Section 2932 of the Delaware 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 Maryland 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
4
<PAGE>
accordance with the laws of the various states only if and to the extent deemed
advisable by the Fund.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.4. The Company represents that the Contracts are currently treated as
life insurance policies or annuity contracts, under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that it
will notify the Fund immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.5. The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have a board of directors, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Maryland and the Fund represents that their respective operations are
and shall at all times remain in material compliance with the laws of the State
of Maryland to the extent required to perform this Agreement.
2.7. 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.
2.8. Each Adviser represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.9. The Fund represents and warrants that its directors, officers,
employees, 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 of related provisions as may be
5
<PAGE>
promulgated from time to time. The aforesaid blanket fidelity 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, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage, in an amount not less $5 million. The aforesaid
includes coverage for larceny and embezzlement is issued by a reputable bonding
company. The Company agrees to make all reasonable efforts to see that this
bond or another bond containing these provisions is always in effect, and agrees
to notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting
3.1. The Fund or its designee shall provide the Company with as many
printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the statement of additional information for the
Fund and the statement of additional information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2. Except as provided in this Section 3.2., all expenses of printing and
distributing Fund prospectuses and statements of additional information shall be
the expense of the Company. For prospectuses and statements of additional
information provided by the Company to its existing owners of Contracts in order
to update disclosure as required by the 1933 Act and/or the 1940 Act, the cost
of printing shall be borne by the Fund. If the Company chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies of
the Fund's prospectus, the Fund will reimburse the Company in an amount equal to
the product of x and y where x is the number of such prospectuses distributed to
owners of the Contracts, and y is the Fund's per unit cost of typesetting and
printing the Fund's prospectus. The same procedures shall be followed with
respect to the Fund's statement of additional information. The Company agrees
to provide the Fund or its designee with such information as may be reasonably
requested by the Fund to assure that the Fund's expenses do not include the
6
<PAGE>
cost of printing any prospectuses or statements of additional information other
than those actually distributed to existing owners of the Contracts.
3.3. The Fund's statement of additional information shall be obtainable
from the Fund, the Company or such other person as the Fund may designate, as
agreed upon by the parties.
3.4. The Fund, at its expense, shall provide the Company with copies of
its proxy statements, reports to shareholders, and other communications (except
for prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.
3.5. 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. The Fund and the Company shall follow the procedures, and shall have the
corresponding responsibilities, for the handling of proxy and voting instruction
solicitation, as set forth in Schedule B attached hereto and incorporated herein
by reference. Participating Insurance Companies shall be responsible for
ensuring 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, which standards will also be provided to the other Participating
Insurance Companies.
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 and with whatever rules the Commission may promulgate with respect
thereto.
7
<PAGE>
3.7. The Fund shall use reasonable efforts to provide Fund prospectuses,
reports to shareholders, proxy materials and other Fund communications (or
camera-ready equivalents) to the Company sufficiently in advance of the
Company's mailing dates to enable the Company to complete, at reasonable cost,
the printing, assembling and/or distribution of the communications in accordance
with applicable laws and regulations.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Adviser(s) is named, at least ten Business
Days prior to its use. No such material shall be used if the Fund or its
designee reasonably objects to such use within ten Business Days after receipt
of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.
4.3. The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its separate account(s)
is named at least ten Business Days prior to its use.
No such material shall be used if the Company or its designee
reasonably objects to such use within ten Business Days after receipt of such
material.
4.4. The Fund and the Advisers 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
8
<PAGE>
relate to the Fund or its shares, contemporaneously with the filing of such
document with the Securities and Exchange COmmission or other regulatory
authorities.
4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the investment
in the Fund under the Contracts, contemporaneously with the filing of such
document with the Securities and Exchange Commission 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, 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, 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 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.
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
9
<PAGE>
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, proxy materials and reports to owners of Contracts issued by the
Company.
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 within the grace period afforded by Regulation
817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by Variable Insurance Product owners; or (f) a decision by a
Participating Insurance Company 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.
10
<PAGE>
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 directors), 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 policy
----
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
(at the Company's expense); 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.
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.
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.
11
<PAGE>
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 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
------------------------------
8.1(a) The Company agrees to indemnify and hold harmless the Fund and each
member of the Board and officers, and each Adviser and each director and officer
of each Adviser, and each person, if any, who controls the Fund or the Adviser
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" and individually, "Indemnified Party," 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
12
<PAGE>
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 and
other than statements or representations authorized by the Fund or an
Adviser) or unlawful 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 or as a result 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
and in conformity with information furnished to the Fund by or on
behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms of
this Agreement; or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Company, as limited by and in accordance
with the provisions of Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims,
damages, liabilities or litigation incurred or assessed against an
Indemnified Party as such may arise from such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations or duties under
this Agreement.
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 served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any
designated agent), but failure to
13
<PAGE>
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 Parities, 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 Advisers
-------------------------------
8.2(a). Each Adviser agrees, with respect to each Portfolio that it
manages, 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"
and individually, "Indemnified Party," 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, at common law or otherwise, insofar as such losses, claims,
damages, liabilities of expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of shares of the Portfolio that it
manages 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
14
<PAGE>
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 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 Portfolio 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 Fund or
persons under its control and other than statements or
representations authorized by the Company) or unlawful conduct
of the Fund, Adviser(s) or Underwriter or persons under their
control, with respect to the sale or distribution of the
Contracts or Portfolio shares; or
(iii) arise out of or as a result 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; 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). An Adviser 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
15
<PAGE>
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.
8.2(c). An 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, 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). The Company agrees promptly to notify the Adviser 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 (hereinafter
collectively, the "Indemnified Parties" and individually, "Indemnified Party,"
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
16
<PAGE>
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; 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;
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 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.
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 agrees 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
17
<PAGE>
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 State of New York.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities
and Exchange Commission may grant (including, but not limited to, the Shared
Funding Exemptive Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty (60) days advance
notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Adviser with the respect to any Portfolio based upon the Company's determination
that shares of such Portfolio is not reasonably available to meet requirements
of the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Adviser 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
Adviser with respect to any Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if the Company reasonably believes
that the Fund may fail to so qualify; or
18
<PAGE>
(e) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such Portfolio fails to
meet the diversification requirements specified in Article VI hereof; or
(f) termination by either the Fund by written notice to the Company if the
Fund shall determine, in its 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
Adviser, if the Company shall determine, in its sole judgment exercised in good
faith, that either 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
(h) termination by the Fund or the Adviser by written notice to the
Company, if the Company gives the Fund and the Adviser the written notice
specified in Section 1.6 hereof and at the time such notice was given there was
no notice of termination outstanding under any other provision of this
Agreement; provided, however any termination under this Section 10.1(h) shall be
effective forty five (45) days after the notice specified in Section 1.6 was
given.
10.2 Notwithstanding any termination of this Agreement, the Fund 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 direct reallocation of
investments in the Fund, redemption of investments in the Fund and/or
investment 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 distinct from Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state
19
<PAGE>
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) as permitted by an order of the Securities and
Exchange Commission pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory
to the Fund) 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 90
days prior written notice of its intention to do so.
ARTICLE. Notices
Any notices 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:
Morgan Stanley Universal Funds, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Harold J. Schaaff, Jr., Esq.
If to Adviser:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Harold J. Schaaff, Jr., Esq.
If to Adviser:
Miller Anderson & Sherrerd, LLP
One Tower Bridge
West Conshohocken, Pennsylvania 19428
Attention: Douglas Kugler
If to the Company:
20
<PAGE>
The Penn Insurance and Annuity Company
Philadelphia, Pennsylvania 19172
Attention: James B. McElwain
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
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
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may
21
<PAGE>
request in order to ascertain whether the insurance operations of the Company
are being conducted in a manner consistent with the California Insurance
Regulations and any other applicable law or regulations.
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto; provided, however, that an Adviser may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Adviser, if such assignee is duly licensed and registered to
perform the obligations of the Adviser under this Agreement.
12.9 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:
(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under 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:
(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 (without exhibits) and financial
reports of the Company filed with the Securities and Exchange Commission or
any state insurance regulator, as soon as practical after the filing
thereof;
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or special audit made
by them of the books of the Company, as soon as practical after the receipt
thereof.
22
<PAGE>
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 above.
THE PENN INSURANCE AND ANNUITY COMPANY
By: /s/ James B. McElwain
---------------------------------
Name: James B. McElwain
Title: Assistant Vice President
MORGAN STANLEY UNIVERSAL FUNDS, INC.
By:
---------------------------------
Name:
Title:
MORGAN STANLEY ASSET MANAGEMENT INC.
By:
----------------------------------
Name:
Title:
MILLER ANDERSON & SHERRERD, LLP
By:
----------------------------------
Name:
Title:
23
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------
Name of Separate Account and Form Number and Name of Contract
Date Established by Board of Directors Funded by Separate Account
-------------------------------------- --------------------------
PIA Variable Annuity Account I-July 13, Pennant
1994
A-1
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURES
-----------------------
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. 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 Company to perform the steps delineated below.
. The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of voting
instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Fund will inform
the Company of the Record, Mailing and Meeting dates. This will be done
verbally approximately two months before meeting.
. 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 this Step #2. The Company will use its best efforts to call in
the number of Customers to the Fund, as soon as possible, but no later than
two weeks after the Record Date.
. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Fund will provide the last Annual
Report to the Company pursuant to the terms of Section 3.3 of the Agreement
to which this Schedule relates.
. 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 Fund or its
affiliate 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:
B-1
<PAGE>
. name (legal name as found on account registration)
. fund or account number
. address
. coding to state number of units
. 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.)
. During this time, the Fund will develop, produce and 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 Company).
Contents of envelope sent to Customers by the Company will include:
. Voting Instruction Card(s)
. One proxy notice and statement (one document)
. return envelope (postage pre-paid by Company) addressed to the
Company on its tabulation agent
. "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.)
. cover letter - optional, supplied by Company and reviewed and
approved in advance by the Fund.
. 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 the Fund.
. Package mailed by the Company.
* The fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including,) the meeting, counting backwards. ---
. 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.
B-2
<PAGE>
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 the Fund in the past.
. Signatures on Card checked against legal name on account registration which
was printed on the Card.
Note: For Example, it the account registration is under "John A. Smith,
Trustee," then that is the exact legal name to be printed on the Card and
is the signature needed on the Card.
. 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 and 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 been "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.
. 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.
. 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.) The Fund must review
------
and approve tabulation format.
. Final tabulation in shares is verbally given by the Company to the Fund on
the morning of the meeting not later than 10:00 a.m. Eastern time. The Fund
may request an earlier deadline if reasonable and if required to calculate
the vote in time for the meeting.
. 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.
The Fund will provide a standard form for each Certification.
. 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, the Fund will be
permitted reasonable access to such Cards.
B-3
<PAGE>
All approvals and "signing-off may be done orally, but must always be followed
up in writing.
B-4
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to Post-Effective Amendment No.
2 and Amendment No. 3 to the Registration Statement on Form N-4 (File No. 33-
83120), filed on behalf of The Penn Insurance and Annuity Company and PIA
Variable Annuity Account I under the Securities Act of 1933 and the Investment
Company Act of 1940:
1. The inclusion in the Statement of Additional Information of our report
dated January 28, 1997 on our audits of the statutory financial
statements of The Penn Insurance and Annuity Company as of December 31,
1996 and 1995 and for the three years in the period ended December 31,
1996.
2. The inclusion in the Statement of Additional Information of our report
dated April 7, 1997 on our audit of the financial statements of PIA
Variable Annuity Account I - Pennant as of December 31, 1996 and for the
year ended December 31, 1996 and the period from March 1, 1995
(commencement of operations) to December 31, 1995.
3. The reference to our firm under the heading of "Experts" in the
Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 28, 1997
<PAGE>
Exhibit 10(b)
[LETTERHEAD OF MORGAN, LEWIS & BOCKIUS LLP APPEARS HERE]
April 28, 1997
Board of Directors
The Penn Insurance and Annuity Company
Philadelphia, PA 19172
Re: PIA Variable Annuity Account I
SEC Registration No. 33-83120
-----------------------------
Dear Ladies and Gentlemen:
We hereby consent to the reference to our name under the caption "Legal Matters"
in the Prospectus filed as part of this Post-Effective Amendment No. 2. In
giving this consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
Morgan, Lewis & Bockius LLP
<PAGE>
<TABLE>
<CAPTION>
Table 1 Pennant
Five Ten From
One Year Years Years Inception
inception default Ended Ended Ended Through
fund date amount 12/31/96 12/31/96 12/31/96 12/31/96
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALFND 2/28/89 $1,000.00 -0.09% 6.05% 0.00% 8.58%
- ----------------------------------------------------------------------------
FIDASM 9/5/89 $1,000.00 7.15% 9.25% 0.00% 10.07%
- ----------------------------------------------------------------------------
FIDEQI 10/9/86 $1,000.00 6.55% 15.47% 11.79% 11.49%
- ----------------------------------------------------------------------------
FIDGAO 10/9/86 $1,000.00 6.89% 12.79% 13.25% 12.92%
- ----------------------------------------------------------------------------
FIDIND 8/27/92 $1,000.00 15.16% 0.00% 0.00% 15.10%
- ----------------------------------------------------------------------------
FLEXMN 7/31/84 $1,000.00 8.30% 10.98% 13.03% 13.24%
- ----------------------------------------------------------------------------
GROWEQ 6/1/83 $1,000.00 12.00% 8.66% 10.35% 10.22%
- ----------------------------------------------------------------------------
HIBOND 8/6/84 $1,000.00 6.46% 9.24% 7.86% 8.84%
- ----------------------------------------------------------------------------
INTLEQ 11/1/92 $1,000.00 9.09% 0.00% 0.00% 11.92%
- ----------------------------------------------------------------------------
LIMMAT 9/10/84 $1,000.00 -2.45% 3.44% 5.15% 6.76%
- ----------------------------------------------------------------------------
PARTNR 3/24/94 $1,000.00 21.60% 0.00% 0.00% 18.52%
- ----------------------------------------------------------------------------
QUALBD 3/17/87 $1,000.00 -2.65% 5.17% 0.00% 6.55%
- ----------------------------------------------------------------------------
SMLCAP 3/1/95 $1,000.00 11.87% 0.00% 0.00% 12.67%
- ----------------------------------------------------------------------------
TCIGRO 11/20/87 $1,000.00 -10.65% 4.09% 0.00% 9.09%
- ----------------------------------------------------------------------------
VALUEQ 3/17/87 $1,000.00 16.76% 14.50% 0.00% 11.59%
- ----------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 Pennant table 2
Pennant
Five Ten From
One Year Years Years Inception
inception default Ended Ended Ended through
fund date amount 12/31/96 12/31/96 12/31/96 12/31/96
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALFND 2/28/89 $1,000.00 5.29% 6.42% 0.00% 8.58%
- -----------------------------------------------------------------------------------------------------------
FIDASM 9/6/89 $1,000.00 12.91% 9.63% 0.00% 10.07%
- -----------------------------------------------------------------------------------------------------------
FIDEDI 10/9/86 $1,000.00 12.30% 15.87% 11.79% 11.49%
- -----------------------------------------------------------------------------------------------------------
FIDGRO 10/9/86 $1,000.00 12.66% 13.18% 13.25% 12.92%
- -----------------------------------------------------------------------------------------------------------
FIDIND 8/27/92 $1,000.00 21.36% 0.00% 0.00% 15.79%
- -----------------------------------------------------------------------------------------------------------
FLEXMN 7/31/84 $1,000.00 14.15% 11.36% 13.03% 13.24%
- -----------------------------------------------------------------------------------------------------------
GROWEQ 6/1/83 $1,000.00 18.03% 9.03% 10.35% 10.22%
- -----------------------------------------------------------------------------------------------------------
HIBOND 8/6/84 $1,000.00 12.19% 9.61% 7.86% 8.84%
- -----------------------------------------------------------------------------------------------------------
INTELQ 11/1/92 $1,000.00 14.97% 0.00% 0.00% 12.61%
- -----------------------------------------------------------------------------------------------------------
LIMMAT 9/10/84 $1,000.00 2.79% 3.80% 5.15% 6.76%
- -----------------------------------------------------------------------------------------------------------
PARTNR 3/24/94 $1,000.00 28.15% 0.00% 0.00% 20.39%
- -----------------------------------------------------------------------------------------------------------
QUALBD 3/17/87 $1,000.00 2.59% 5.53% 0.00% 6.55%
- -----------------------------------------------------------------------------------------------------------
SMLCAP 3/1/95 $1,000.00 17.89% 0.00% 0.00% 15.92%
- -----------------------------------------------------------------------------------------------------------
TCIGRO 11/20/87 $1,000.00 5.83% 4.45% 0.00% 9.09%
- -----------------------------------------------------------------------------------------------------------
VALUEQ 3/17/87 $1,000.00 23.06% 14.89% 0.00% 11.59%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 Pennant Table 3
Pennant
One Five Ten From
Year Years Years Inception
Inception default Ended Ended Ended Through
Fund date amount 12/31/96 12/31/96 12/31/96 12/31/96
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALFND 2/26/89 $10,000.00 5.38% 6.50% 0.00% 8.65%
- -----------------------------------------------------------------------------
FIDASM 9/6/89 $10,000.00 12.99% 9.69% 0.00% 10.14%
- -----------------------------------------------------------------------------
FIDEQI 10/9/86 $10,000.00 12.64% 16.14% 12.05% 11.75%
- -----------------------------------------------------------------------------
FIDGRO 10/9/86 $10,000.00 13.05% 13.51% 13.51% 13.19%
- -----------------------------------------------------------------------------
FIDIND 8/27/92 $10,000.00 21.51% 0.00% 0.00% 15.93%
- -----------------------------------------------------------------------------
FLEXMN 7/31/84 $10,000.00 14.68% 11.82% 13.34% 13.52%
- -----------------------------------------------------------------------------
GROWEQ 6/1/83 $10,000.00 18.08% 9.08% 10.39% 10.25%
- -----------------------------------------------------------------------------
HIBOND 8/6/84 $10,000.00 12.27% 9.68% 7.92% 8.89%
- -----------------------------------------------------------------------------
INTLEQ 11/1/92 $10,000.00 15.20% 0.00% 0.00% 12.83%
- -----------------------------------------------------------------------------
LIMMAT 9/10/84 $10,000.00 2.84% 3.84% 5.19% 6.79%
- -----------------------------------------------------------------------------
PARTNR 3/24/94 $10,000.00 28.30% 0.00% 0.00% 20.54%
- -----------------------------------------------------------------------------
QUALBO 3/17/87 $10,000.00 2.67% 5.61% 0.00% 6.61%
- -----------------------------------------------------------------------------
SMLCAP 3/1/95 $10,000.00 18.06% 0.00% 0.00% 16.09%
- -----------------------------------------------------------------------------
TCIGRO 11/20/87 $10,000.00 -5.68% 4.60% 0.00% 9.21%
- -----------------------------------------------------------------------------
VALUEQ 3/17/87 $10,000.00 23.40% 15.18% 0.00% 11.84%
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table 1A 1 YR -Tbl 1A
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN BALFND Q 12/31/95 11.653880 1000.000000 85.808332 0.000000 85.808332 1000.000000 -0.09%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/96 12.281752 1053.876649 85.808332 4.457647 81.350685 999.128940 -0.09%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/95 11.476196 1000.000000 87.136888 0.000000 87.136888 1000.000000 7.15%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/96 12.967956 1129.987323 87.136888 4.508756 82.628131 1071.517970 7.15%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/95 12.600495 1000.000000 79.361962 0.000000 79.361962 1000.000000 6.55%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/96 14.198506 1126.821288 79.361962 4.318615 75.043346 1065.503402 6.55%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/95 13.077900 1000.000000 76.464876 0.000000 76.464876 1000.000000 6.89%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/96 14.790873 1130.982268 76.464876 4.198542 72.266334 1068.882172 6.89%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/95 8.228840 1000.000000 121.523811 0.000000 121.523811 1000.000000 15.16%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/96 10.000000 1215.238114 121.523811 6.364714 115.159097 1151.590970 15.16%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/95 11.649728 1000.000000 85.838914 0.000000 85.838914 1000.000000 8.30%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/96 13.367143 1147.421038 85.838914 4.822158 81.016756 1082.962566 8.30%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/95 11.747874 1000.000000 85.121785 0.000000 85.121785 1000.000000 12.00%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/96 13.872617 1180.861916 85.121785 4.384462 80.737323 1120.037958 12.00%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/95 10.968126 1000.000000 91.173278 0.000000 91.173278 1000.000000 6.46%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/96 12.314743 1122.775486 91.173278 4.722920 86.450358 1064.613936 6.46%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/95 11.878760 1000.000000 84.183871 0.000000 84.183871 1000.000000 9.09%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/96 13.687743 1152.287192 84.183871 4.484059 79.699812 1090.910545 9.09%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/95 10.691231 1000.000000 93.534599 0.000000 93.534599 1000.000000 -2.45%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/96 10.995296 1028.440598 93.534599 4.818467 88.716132 975.460127 -2.45%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/95 7.793312 1000.000000 128.315150 0.000000 128.315150 1000.000000 21.60%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/96 10.000000 1283.151502 128.315150 6.711073 121.604078 1216.040776 21.60%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/95 11.229457 1000.000000 89.051501 0.000000 89.051501 1000.000000 -2.65%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/96 11.530715 1026.827477 89.051501 4.621413 84.430087 973.539276 -2.65%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 4.715581 85.005384 1118.720077 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/95 12.818022 1000.000000 78.015157 0.000000 78.015157 1000.000000 -10.65%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/96 12.092262 943.379720 78.015157 4.121013 73.894144 893.547354 -10.65%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/95 12.641006 1000.000000 79.107628 0.000000 79.107628 1000.000000 16.76%
- ------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/96 15.603540 1234.359038 79.107628 4.277383 74.830245 1167.616727 16.76%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - 1 YR. Tbl. 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN BALFND Q 12/31/95 11.653880 1000.000000 85.808332 0.000000 85.808332 1000.000000 5.29%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/96 12.281752 1053.876649 85.808332 0.081422 85.726910 1052.876649 5.29%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/95 11.476196 1000.000000 87.136888 0.000000 87.136888 1000.000000 12.91%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/96 12.967956 1129.987323 87.136888 0.064775 87.072112 1129.147323 12.91%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/95 12.600495 1000.000000 79.361962 0.000000 79.361962 1000.000000 12.30%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/96 14.198506 1126.821288 79.361962 0.271155 79.090806 1122.971288 12.30%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/95 13.077900 1000.000000 76.464876 0.000000 76.464876 1000.000000 12.66%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/96 14.790873 1130.982268 76.464876 0.298833 76.166043 1126.562268 12.66%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/95 8.228840 1000.000000 121.523811 0.000000 121.523811 1000.000000 21.36%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/96 10.000000 1215.238114 121.523811 0.167000 121.356811 1213.568114 21.36%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/95 11.649728 1000.000000 85.838914 0.000000 85.838914 1000.000000 14.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/96 13.367143 1147.421038 85.838914 0.444373 85.394541 1141.481038 14.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/95 11.747874 1000.000000 85.121785 0.000000 85.121785 1000.000000 18.03%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/96 13.872617 1180.861916 85.121785 0.043251 85.078534 1180.261916 18.03%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/95 10.968126 1000.000000 91.173278 0.000000 91.173278 1000.000000 12.19%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/96 12.314743 1122.775486 91.173278 0.073083 91.100195 1121.875486 12.19%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/95 11.878760 1000.000000 84.183871 0.000000 84.183871 1000.000000 14.97%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/96 13.687743 1152.287192 84.183871 0.190682 83.993189 1149.677192 14.97%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/95 10.691231 1000.000000 93.534599 0.000000 93.534599 1000.000000 2.79%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/96 10.995296 1028.440598 93.534599 0.048202 93.486396 1027.910598 2.79%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/95 7.793312 1000.000000 128.315150 0.000000 128.315150 1000.000000 28.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/96 10.000000 1283.151502 128.315150 0.167000 128.148150 1281.481502 28.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/95 11.229457 1000.000000 89.051501 0.000000 89.051501 1000.000000 2.59%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/96 11.530715 1026.827477 89.051501 0.079787 88.971714 1025.907477 2.59%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 17.89%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 0.139811 89.581154 1178.939849 17.89%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/95 12.818022 1000.000000 78.015157 0.000000 78.015157 1000.000000 -5.83%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/96 12.092262 943.379720 78.015157 0.142240 77.872917 941.659720 -5.83%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/95 12.641006 1000.000000 79.107628 0.000000 79.107628 1000.000000 23.06%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/96 15.603540 1234.359038 79.107628 0.242894 78.864734 1230.569038 23.06%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - 1YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 1yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN BALFND Q 12/31/95 11.653880 10000.000000 858.083316 0.000000 858.083316 10000.000000 5.38%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/96 12.281752 10538.766488 858.083316 0.081422 858.001895 10537.766488 5.38%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/95 11.476196 10000.000000 871.368875 0.000000 871.368875 10000.000000 12.99%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/96 12.967956 11299.873233 871.368875 0.064775 871.304100 11299.033233 12.99%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/95 12.600495 10000.000000 793.619616 0.000000 793.619616 10000.000000 12.64%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/96 14.198506 11268.212876 793.619616 0.271155 793.348460 11264.362876 12.64%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/95 13.077900 10000.000000 764.648759 0.000000 764.648759 10000.000000 13.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/96 14.790873 11309.822678 764.648759 0.298833 764.349926 11305.402678 13.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/95 8.228840 10000.000000 1215.238114 0.000000 1215.238114 10000.000000 21.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/96 10.000000 12152.381138 1215.238114 0.167000 1215.071114 12150.711138 21.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/95 11.649728 10000.000000 858.389140 0.000000 858.389140 10000.000000 14.68%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/96 13.367143 11474.210385 858.389140 0.444373 857.944767 11468.270385 14.68%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/95 11.747874 10000.000000 851.217846 0.000000 851.217846 10000.000000 18.08%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/96 13.872617 11808.619160 851.217846 0.043251 851.174595 11808.019160 18.08%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/95 10.968126 10000.000000 911.732779 0.000000 911.732779 10000.000000 12.27%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/96 12.314743 11227.754860 911.732779 0.073083 911.659696 11226.854860 12.27%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/95 11.878760 10000.000000 841.838710 0.000000 841.838710 10000.000000 15.20%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/96 13.687743 11522.871916 841.838710 0.190682 841.648029 11520.261916 15.20%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/95 10.691231 10000.000000 935.345986 0.000000 935.345986 10000.000000 2.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/96 10.995296 10284.405977 935.345986 0.048202 935.297783 10283.875977 2.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/95 7.793312 10000.000000 1283.151502 0.000000 1283.151502 10000.000000 28.30%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/96 10.000000 12831.515022 1283.151502 0.167000 1282.984502 12829.845022 28.30%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/95 11.229457 10000.000000 890.515009 0.000000 890.515009 10000.000000 2.67%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/96 11.530715 10268.274771 890.515009 0.079787 890.435222 10267.354771 2.67%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/95 11.145667 10000.000000 897.209651 0.000000 897.209651 10000.000000 18.06%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/96 13.160579 11807.798492 897.209651 0.139811 897.069840 11805.958492 18.06%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/95 12.818022 10000.000000 780.151571 0.000000 780.151571 10000.000000 -5.68%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/96 12.092262 9433.797196 780.151571 0.142240 780.009331 9432.077196 -5.68%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/95 12.641006 10000.000000 791.076280 0.000000 791.076280 10000.000000 23.40%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/96 15.603540 12343.590376 791.076280 0.242894 790.833386 12339.800376 23.40%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A Pennant Pennant - 5YR - Tbl 1a
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN BALFND Q 12/31/91 8.958110 1000.000000 111.630690 0.000000 111.630690 1000.000000 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/92 9.544854 1065.498638 111.630690 0.104768 111.525921 1064.498638 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/93 9.981206 1113.163196 111.525921 0.100188 111.425733 1112.163196 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/94 9.548559 1063.955187 111.425733 0.104728 111.321005 1062.955187 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/95 11.653880 1297.321637 111.321005 0.085808 111.235197 1296.321637 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/96 12.281752 1366.163103 111.235197 1.972420 109.262777 1341.938330 6.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/91 8.159166 1000.000000 122.561546 0.000000 122.561546 1000.000000 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/92 8.987776 1101.555723 122.561546 0.093460 122.468086 1100.715723 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/93 10.744669 1315.879045 122.468086 0.078178 122.389908 1315.039045 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/94 9.949957 1217.774317 122.389908 0.084422 122.305485 1216.934317 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/95 11.476196 1403.601718 122.305485 0.073195 122.232290 1402.761718 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/96 12.967956 1585.102960 122.232290 2.142724 120.089566 1557.316209 9.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/91 6.705724 1000.000000 149.126328 0.000000 149.126328 1000.000000 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/92 7.728908 1152.583673 149.126328 0.498130 148.628199 1148.733673 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/93 9.015770 1339.997654 148.628199 0.427030 148.201169 1336.147654 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/94 9.518617 1410.670167 148.201169 0.404471 147.796699 1406.820167 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/95 12.600495 1862.311561 147.796699 0.305544 147.491155 1858.461561 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/96 14.198506 2094.154049 147.491155 2.778505 144.712650 2054.703431 15.47%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/91 7.830958 1000.000000 127.698297 0.000000 127.698297 1000.000000 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/92 8.441505 1077.965812 127.698297 0.523603 127.174694 1073.545812 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/93 9.936599 1263.683933 127.174694 0.444820 126.729873 1259.263933 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/94 9.796554 1241.516048 126.729873 0.451179 126.278694 1237.096048 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/95 13.077900 1651.460137 126.278694 0.337975 125.940720 1647.040137 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/96 14.790873 1862.773189 125.940720 2.439825 123.500894 1826.686045 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/92 5.568748 1000.000000 179.573577 0.000000 179.573577 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/93 6.052134 1086.803353 179.573577 0.275936 179.297642 1085.133353 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/94 6.056296 1085.879590 179.297642 0.275746 179.021896 1084.209590 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/95 8.228840 1473.142535 179.021896 0.202945 178.818951 1471.472535 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/96 10.000000 1788.189508 178.818951 3.206922 175.612029 1756.120286 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/91 7.625445 1000.000000 131.139888 0.000000 131.139888 1000.000000 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/92 8.238463 1080.391112 131.139888 0.721008 130.418879 1074.451112 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/93 9.407267 1226.885219 130.418879 0.631427 129.787453 1220.945219 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/94 9.660523 1253.814670 129.787453 0.614874 129.172579 1247.874670 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/95 11.649728 1504.825411 129.172579 0.509883 128.662696 1498.885411 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/96 13.367143 1719.852654 128.662696 2.631639 126.031057 1684.675159 10.98%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/91 8.975410 1000.000000 111.415523 0.000000 111.415523 1000.000000 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/92 9.378029 1044.858006 111.415523 0.063979 111.351544 1044.258006 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/93 10.397651 1157.794490 111.351544 0.057705 111.293838 1157.194490 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/94 9.420707 1048.466643 111.293838 0.063689 111.230149 1047.866643 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/95 11.747874 1306.717775 111.230149 0.051073 111.179076 1306.117775 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/96 13.872617 1542.344738 111.179076 1.933295 109.245781 1515.524877 8.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/91 7.752279 1000.000000 128.994325 0.000000 128.994325 1000.000000 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/92 8.851986 1141.855963 128.994325 0.101672 128.892653 1140.955963 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/93 10.454800 1347.546912 128.892653 0.086085 128.806568 1346.646912 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/94 9.553762 1230.587299 128.806568 0.094204 128.712365 1229.687299 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/95 10.968126 1411.733434 128.712365 0.082056 128.630309 1410.833434 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/96 12.314743 1584.049195 128.630309 2.259798 126.370510 1556.220358 9.24%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/92 8.411030 1000.000000 118.891503 0.000000 118.891503 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/93 11.456448 1362.074324 118.891503 0.227819 118.663684 1359.464324 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/94 10.584417 1255.985913 118.663684 0.246589 118.417095 1253.375913 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/95 11.878760 1406.648251 118.417095 0.219720 118.197375 1404.038251 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/96 13.687743 1617.855293 118.197375 2.200037 115.997338 1587.741753 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Pennant Pennant - 5YR - Tbl 1a
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN LIMMAT Q 12/31/91 9.102169 1000.000000 109.863924 0.000000 109.863924 1000.000000 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/92 9.439952 1037.110166 109.863924 0.056144 109.807779 1036.580166 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/93 9.925608 1089.908973 109.807779 0.053397 109.754382 1089.378973 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/94 9.772495 1072.574150 109.754382 0.054234 109.700148 1072.044150 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/95 10.691231 1172.829625 109.700148 0.049573 109.650575 1172.299625 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/96 10.995296 1205.640527 109.650575 1.912262 107.738313 1184.614638 3.44%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/94 5.766024 1000.000000 173.429733 0.000000 173.429733 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/95 7.793312 1351.592016 173.429733 0.214286 173.215446 1349.922016 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/96 10.000000 1732.154462 173.215446 3.111663 170.103784 1701.037836 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/91 8.770907 1000.000000 114.013294 0.000000 114.013294 1000.000000 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/92 9.216454 1050.798281 114.013294 0.099821 113.913473 1049.878281 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/93 10.148405 1156.040056 113.913473 0.090655 113.822818 1155.120056 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/94 9.477839 1078.794344 113.822818 0.097069 113.725750 1077.874344 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/95 11.229457 1277.078414 113.725750 0.081927 113.643822 1276.158414 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/96 11.530715 1310.394525 113.643822 2.011732 111.632090 1287.197818 5.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 1.665068 88.055897 1158.866592 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/91 9.648771 1000.000000 103.640142 0.000000 103.640142 1000.000000 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/92 9.386697 972.838613 103.640142 0.183238 103.456904 971.118613 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/93 10.185124 1053.721399 103.456904 0.168874 103.288031 1052.001399 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/94 9.926047 1025.241846 103.288031 0.173281 103.114749 1023.521846 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/95 12.818022 1321.727123 103.114749 0.134186 102.980563 1320.007123 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/96 12.092262 1245.267949 102.980563 1.892909 101.087654 1222.378394 4.09%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/91 7.680989 1000.000000 130.191568 0.000000 130.191568 1000.000000 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/92 8.699744 1132.633311 130.191568 0.435645 129.755923 1128.843311 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/93 9.186022 1191.940761 129.755923 0.412583 129.343339 1188.150761 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/94 9.323905 1205.985009 129.343339 0.406482 128.936857 1202.195009 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/95 12.641006 1629.891587 128.936857 0.299818 128.637039 1626.101587 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/96 15.603540 2007.193190 128.637039 2.429723 126.207316 1969.280906 14.50%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - 5 YR - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN BALFND Q 12/31/91 8.958110 1000.000000 111.630690 0.000000 111.630690 1000.000000 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/92 9.544854 1065.498638 111.630690 0.104768 111.525921 1064.498638 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/93 9.981206 1113.163196 111.525921 0.100188 111.425733 1112.163196 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/94 9.548559 1063.955187 111.425733 0.104728 111.321005 1062.955187 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/95 11.653880 1297.321637 111.321005 0.085808 111.235197 1296.321637 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/96 12.281752 1366.163103 111.235197 0.081422 111.153775 1365.163103 6.42%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/91 8.159166 1000.000000 122.561546 0.000000 122.561546 1000.000000 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/92 8.987776 1101.555723 122.561546 0.093460 122.468086 1100.715723 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/93 10.744669 1315.879045 122.468086 0.078178 122.389908 1315.039045 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/94 9.949957 1217.774317 122.389908 0.084422 122.305485 1216.934317 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/95 11.476196 1403.601718 122.305485 0.073195 122.232290 1402.761718 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/96 12.967956 1585.102960 122.232290 0.064775 122.167515 1584.262960 9.63%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/91 6.705724 1000.000000 149.126328 0.000000 149.126328 1000.000000 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/92 7.728908 1152.583673 149.126328 0.498130 148.628199 1148.733673 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/93 9.015770 1339.997654 148.628199 0.427030 148.201169 1336.147654 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/94 9.518617 1410.670167 148.201169 0.404471 147.796699 1406.820167 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/95 12.600495 1862.311561 147.796699 0.305544 147.491155 1858.461561 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/96 14.198506 2094.154049 147.491155 0.271155 147.220000 2090.304049 15.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/91 7.830958 1000.000000 127.698297 0.000000 127.698297 1000.000000 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/92 8.441505 1077.965812 127.698297 0.523603 127.174694 1073.545812 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/93 9.936599 1263.683933 127.174694 0.444820 126.729873 1259.263933 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/94 9.796554 1241.516048 126.729873 0.451179 126.278694 1237.096048 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/95 13.077900 1651.460137 126.278694 0.337975 125.940720 1647.040137 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/96 14.790873 1862.773189 125.940720 0.298833 125.641887 1858.353189 13.18%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/92 5.568748 1000.000000 179.573577 0.000000 179.573577 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/93 6.052134 1086.803353 179.573577 0.275936 179.297642 1085.133353 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/94 6.056296 1085.879590 179.297642 0.275746 179.021896 1084.209590 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/95 8.228840 1473.142535 179.021896 0.202945 178.818951 1471.472535 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/96 10.000000 1788.189508 178.818951 0.167000 178.651951 1786.519508 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/91 7.625445 1000.000000 131.139888 0.000000 131.139888 1000.000000 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/92 8.238463 1080.391112 131.139888 0.721008 130.418879 1074.451112 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/93 9.407267 1226.885219 130.418879 0.631427 129.787453 1220.945219 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/94 9.660523 1253.814670 129.787453 0.614874 129.172579 1247.874670 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/95 11.649728 1504.825411 129.172579 0.509883 128.662696 1498.885411 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/96 13.367143 1719.852654 128.662696 0.444373 128.218323 1713.912654 11.36%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/91 8.975410 1000.000000 111.415523 0.000000 111.415523 1000.000000 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/92 9.378029 1044.858006 111.415523 0.063979 111.351544 1044.258006 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/93 10.397651 1157.794490 111.351544 0.057705 111.293838 1157.194490 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/94 9.420707 1048.466643 111.293838 0.063689 111.230149 1047.866643 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/95 11.747874 1306.717775 111.230149 0.051073 111.179076 1306.117775 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/96 13.872617 1542.344738 111.179076 0.043251 111.135825 1541.744738 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/91 7.752279 1000.000000 128.994325 0.000000 128.994325 1000.000000 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/92 8.851986 1141.855963 128.994325 0.101672 128.892653 1140.955963 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/93 10.454800 1347.546912 128.892653 0.086085 128.806568 1346.646912 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/94 9.553762 1230.587299 128.806568 0.094204 128.712365 1229.687299 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/95 10.968126 1411.733434 128.712365 0.082056 128.630309 1410.833434 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/96 12.314743 1584.049195 128.630309 0.073083 128.557226 1583.149195 9.61%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/92 8.411030 1000.000000 118.891503 0.000000 118.891503 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/93 11.456448 1362.074324 118.891503 0.227819 118.663684 1359.464324 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant 1 - 5 YR - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN INTLEQ Q 12/31/94 10.584417 1255.985913 118.663684 0.246589 118.417095 1253.375913 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/95 11.878760 1406.648251 118.417095 0.219720 118.197375 1404.038251 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/96 13.687743 1617.855293 118.197375 0.190682 118.006694 1615.245293 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/91 9.102169 1000.000000 109.863924 0.000000 109.863924 1000.000000 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/92 9.439952 1037.110166 109.863924 0.056144 109.807779 1036.580166 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/93 9.925608 1089.908973 109.807779 0.053397 109.754382 1089.378973 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/94 9.772495 1072.574150 109.754382 0.054234 109.700148 1072.044150 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/95 10.691231 1172.829625 109.700148 0.049573 109.650575 1172.299625 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/96 10.995296 1205.640527 109.650575 0.048202 109.602372 1205.110527 3.80%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/94 5.766024 1000.000000 173.429733 0.000000 173.429733 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/95 7.793312 1351.592016 173.429733 0.214286 173.215446 1349.922016 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/96 10.000000 1732.154462 173.215446 0.167000 173.048446 1730.484462 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/91 8.770907 1000.000000 114.013294 0.000000 114.013294 1000.000000 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/92 9.216454 1050.798281 114.013294 0.099821 113.913473 1049.878281 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/93 10.148405 1156.040056 113.913473 0.090655 113.822818 1155.120056 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/94 9.477839 1078.794344 113.822818 0.097069 113.725750 1077.874344 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/95 11.229457 1277.078414 113.725750 0.081927 113.643822 1276.158414 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/96 11.530715 1310.394525 113.643822 0.079787 113.564035 1309.474525 5.53%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 0.139811 89.581154 1178.939849 0.00%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/91 9.648771 1000.000000 103.640142 0.000000 103.640142 1000.000000 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/92 9.386697 972.838613 103.640142 0.183238 103.456904 971.118613 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/93 10.185124 1053.721399 103.456904 0.168874 103.288031 1052.001399 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/94 9.926047 1025.241846 103.288031 0.173281 103.114749 1023.521846 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/95 12.818022 1321.727123 103.114749 0.134186 102.980563 1320.007123 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/96 12.092262 1245.267949 102.980563 0.142240 102.838323 1243.547949 4.45%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/91 7.680989 1000.000000 130.191568 0.000000 130.191568 1000.000000 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/92 8.699744 1132.633311 130.191568 0.435645 129.755923 1128.843311 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/93 9.186022 1191.940761 129.755923 0.412583 129.343339 1188.150761 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/94 9.323905 1205.985009 129.343339 0.406482 128.936857 1202.195009 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/95 12.641006 1629.891587 128.936857 0.299818 128.637039 1626.101587 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/96 15.603540 2007.193190 128.637039 0.242894 128.394146 2003.403190 14.89%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - 5YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN BALFND Q 12/31/91 8.958110 10000.000000 1116.306900 0.000000 1116.306900 10000.000000 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/92 9.544854 10654.986375 1116.306900 0.104768 1116.202131 10653.986375 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/93 9.981206 11141.043408 1116.202131 0.100188 1116.101943 11140.043408 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/94 9.548559 10657.165251 1116.101943 0.104728 1115.997215 10656.165251 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/95 11.653880 13005.697623 1115.997215 0.085808 1115.911407 13004.697623 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/96 12.281752 13705.347150 1115.911407 0.081422 1115.829985 13704.347150 6.50%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/91 8.159166 10000.000000 1225.615461 0.000000 1225.615461 10000.000000 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/92 8.987776 11015.557227 1225.615461 0.093460 1225.522001 11014.717227 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/93 10.744669 13167.828252 1225.522001 0.078178 1225.443823 13166.988252 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/94 9.949957 12193.113341 1225.443823 0.084422 1225.359400 12192.273341 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/95 11.476196 14062.464646 1225.359400 0.073195 1225.286205 14061.624646 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/96 12.967956 15889.457596 1225.286205 0.064775 1225.221430 15888.617596 9.69%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/91 6.705724 10000.000000 1491.263285 0.000000 1491.263285 10000.000000 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/92 7.728908 11525.836733 1491.263285 0.498130 1490.765155 11521.986733 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/93 9.015770 13440.395762 1490.765155 0.427030 1490.338126 13436.545762 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/94 9.518617 14185.957817 1490.338126 0.404471 1489.933655 14182.107817 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/95 12.600495 18773.901570 1489.933655 0.305544 1489.628111 18770.051570 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/96 14.198506 21150.493678 1489.628111 0.271155 1489.356956 21146.643678 16.14%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/91 7.830958 10000.000000 1276.982969 0.000000 1276.982969 10000.000000 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/92 8.441505 10779.658121 1276.982969 0.523603 1276.459366 10775.238121 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/93 9.936599 12683.664860 1276.459366 0.444820 1276.014546 12679.244860 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/94 9.796554 12500.545403 1276.014546 0.451179 1275.563367 12496.125403 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/95 13.077900 16681.690155 1275.563367 0.337975 1275.225392 16677.270155 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/96 14.790873 18861.696820 1275.225392 0.298833 1274.926559 18857.276820 13.51%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/92 5.568748 10000.000000 1795.735774 0.000000 1795.735774 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/93 6.052134 10868.033533 1795.735774 0.275936 1795.459838 10866.363533 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/94 6.056296 10873.836237 1795.459838 0.275746 1795.184092 10872.166237 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/95 8.228840 14772.282665 1795.184092 0.202945 1794.981147 14770.612665 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/96 10.000000 17949.811474 1794.981147 0.167000 1794.814147 17948.141474 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/91 7.625445 10000.000000 1311.398876 0.000000 1311.398876 10000.000000 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/92 8.238463 10803.911116 1311.398876 0.721008 1310.677867 10797.971116 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/93 9.407267 12329.896650 1310.677867 0.631427 1310.046441 12323.956650 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/94 9.660523 12655.733772 1310.046441 0.614874 1309.431567 12649.793772 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/95 11.649728 15254.521592 1309.431567 0.509883 1308.921684 15248.581592 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/96 13.367143 17496.543326 1308.921684 0.444373 1308.477311 17490.603326 11.82%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/91 8.975410 10000.000000 1114.155231 0.000000 1114.155231 10000.000000 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/92 9.378029 10448.580065 1114.155231 0.063979 1114.091251 10447.980065 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/93 10.397651 11583.932015 1114.091251 0.057705 1114.033546 11583.332015 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/94 9.420707 10494.983626 1114.033546 0.063689 1113.969857 10494.383626 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/95 11.747874 13086.777516 1113.969857 0.051073 1113.918784 13086.177516 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/96 13.872617 15452.968653 1113.918784 0.043251 1113.875533 15452.368653 9.08%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/91 7.752279 10000.000000 1289.943254 0.000000 1289.943254 10000.000000 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/92 8.851986 11418.559626 1289.943254 0.101672 1289.841582 11417.659626 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/93 10.454800 13485.035772 1289.841582 0.086085 1289.755497 13484.135772 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/94 9.553762 12322.017058 1289.755497 0.094204 1289.661293 12321.117058 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/95 10.968126 14145.167564 1289.661293 0.082056 1289.579237 14144.267564 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/96 12.314743 15880.836888 1289.579237 0.073083 1289.506154 15879.936888 9.68%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/92 8.411030 10000.000000 1188.915032 0.000000 1188.915032 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/93 11.456448 13620.743238 1188.915032 0.227819 1188.687213 13618.133238 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - 5 YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN INTLEQ Q 12/31/94 10.584417 12581.561140 1188.687213 0.246589 1188.440624 12578.951140 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/95 11.878760 14117.200942 1188.440624 0.219720 1188.220904 14114.590942 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/96 13.687743 16264.062357 1188.220904 0.190682 1188.030222 16261.452357 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/91 9.102169 10000.000000 1098.639236 0.000000 1098.639236 10000.000000 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/92 9.439952 10371.101657 1098.639236 0.056144 1098.583092 10370.571657 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/93 9.925608 10904.105127 1098.583092 0.053397 1098.529695 10903.575127 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/94 9.772495 10735.375950 1098.529695 0.054234 1098.475461 10734.845950 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/95 10.691231 11744.054901 1098.475461 0.049573 1098.425888 11743.524901 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/96 10.995296 12077.517769 1098.425888 0.048202 1098.377685 12076.987769 3.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN MNYMKT Q 12/31/96 10.672808 10000.000000 936.960545 0.000000 936.960545 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/94 5.766024 10000.000000 1734.297325 0.000000 1734.297325 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/95 7.793312 13515.920156 1734.297325 0.214286 1734.083039 13514.250156 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/96 10.000000 17340.830389 1734.083039 0.167000 1733.916039 17339.160389 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/91 8.770907 10000.000000 1140.132942 0.000000 1140.132942 10000.000000 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/92 9.216454 10507.982812 1140.132942 0.099821 1140.033120 10507.062812 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/93 10.148405 11569.517818 1140.033120 0.090655 1139.942466 11568.597818 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/94 9.477839 10804.191159 1139.942466 0.097069 1139.845397 10803.271159 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/95 11.229457 12799.844874 1139.845397 0.081927 1139.763470 12798.924874 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/96 11.530715 13142.287737 1139.763470 0.079787 1139.683683 13141.367737 5.61%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/95 11.145667 10000.000000 897.209651 0.000000 897.209651 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/96 13.160579 11807.798492 897.209651 0.139811 897.069840 11805.958492 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/91 9.648771 10000.000000 1036.401424 0.000000 1036.401424 10000.000000 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/92 9.386697 9728.386133 1036.401424 0.183238 1036.218186 9726.666133 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/93 10.185124 10554.010711 1036.218186 0.168874 1036.049312 10552.290711 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/94 9.926047 10283.874163 1036.049312 0.173281 1035.876030 10282.154163 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/95 12.818022 13277.881746 1035.876030 0.134186 1035.741844 13276.161746 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/96 12.092262 12524.461745 1035.741844 0.142240 1035.599605 12522.741745 4.60%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/91 7.680989 10000.000000 1301.915678 0.000000 1301.915678 10000.000000 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/92 8.699744 11326.333106 1301.915678 0.435645 1301.480033 11322.543106 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/93 9.186022 11955.424214 1301.480033 0.412583 1301.067449 11951.634214 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/94 9.323905 12131.029297 1301.067449 0.406482 1300.660967 12127.239297 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/95 12.641006 16441.663092 1300.660967 0.299818 1300.361149 16437.873092 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/96 15.603540 20290.237210 1300.361149 0.242894 1300.118256 20286.447210 15.18%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN BALFND Q 12/31/89 7.365810 1000.000000 135.762394 0.000000 135.762394 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/90 7.405018 1005.322972 135.762394 0.135044 135.627351 1004.322972 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/91 8.958110 1214.964725 135.627351 0.111631 135.515720 1213.964725 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/92 9.544854 1293.477761 135.515720 0.104768 135.410951 1292.477761 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/93 9.981206 1351.564600 135.410951 0.100188 135.310763 1350.564600 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/94 9.548559 1292.022804 135.310763 0.104728 135.206035 1291.022804 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/95 11.653880 1575.674910 135.206035 0.085808 135.120227 1574.674910 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/96 12.281752 1659.513117 135.120227 0.081422 135.038805 1658.513117 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/89 6.415215 1000.000000 155.879421 0.000000 155.879421 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/90 6.751165 1052.367691 155.879421 0.124423 155.754998 1051.527691 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/91 8.159166 1270.830885 155.754998 0.102952 155.652046 1269.990885 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/92 8.987776 1398.965727 155.652046 0.093460 155.558586 1398.125727 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/93 10.744669 1671.425518 155.558586 0.078178 155.480408 1670.585518 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/94 9.949957 1547.023372 155.480408 0.084422 155.395985 1546.183372 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/95 11.476196 1783.354785 155.395985 0.073195 155.322790 1782.514785 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/96 12.967956 2014.219111 155.322790 0.064775 155.258015 2013.379111 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/86 4.537328 1000.000000 220.394029 0.000000 220.394029 1000.000000 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/87 4.423567 974.927755 220.394029 0.870338 219.523691 971.077755 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/88 5.352534 1175.008019 219.523691 0.719285 218.804405 1171.158019 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/89 6.193601 1355.187184 218.804405 0.621609 218.182796 1351.337184 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/90 5.173663 1128.804260 218.182796 0.744154 217.438643 1124.954260 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/91 6.705724 1458.083524 217.438643 0.574136 216.864506 1454.233524 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/92 7.728908 1676.125817 216.864506 0.498130 216.366376 1672.275817 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/93 9.015770 1950.709484 216.366376 0.427030 215.939347 1946.859484 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/94 9.518617 2055.443937 215.939347 0.404471 215.534876 2051.593937 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/95 12.600495 2715.846130 215.534876 0.305544 215.229333 2711.996130 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/96 14.198506 3055.934971 215.229333 0.271155 214.958177 3052.084971 11.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/86 4.149882 1000.000000 240.970707 0.000000 240.970707 1000.000000 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/87 4.242140 1022.231475 240.970707 1.041927 239.928780 1017.811475 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/88 4.834827 1160.014144 239.928780 0.914200 239.014580 1155.594144 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/89 6.270101 1498.645557 239.014580 0.704933 238.309647 1494.225557 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/90 5.457380 1300.546302 238.309647 0.809912 237.499735 1296.126302 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/91 7.830958 1859.850447 237.499735 0.564426 236.935308 1855.430447 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/92 8.441505 2000.090589 236.935308 0.523603 236.411705 1995.670589 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/93 9.936599 2349.128310 236.411705 0.444820 235.966885 2344.708310 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/94 9.796554 2311.662328 235.966885 0.451179 235.515706 2307.242328 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/95 13.077900 3080.050846 235.515706 0.337975 235.177731 3075.630846 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/96 14.790873 3478.483950 235.177731 0.298833 234.878898 3474.063950 13.25%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/92 5.568748 1000.000000 179.573577 0.000000 179.573577 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/93 6.052134 1086.803353 179.573577 0.275936 179.297642 1085.133353 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/94 6.056296 1085.879590 179.297642 0.275746 179.021896 1084.209590 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/95 8.228840 1473.142535 179.021896 0.202945 178.818951 1471.472535 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/96 10.000000 1788.189508 178.818951 0.167000 178.651951 1786.519508 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/86 3.804915 1000.000000 262.817960 0.000000 262.817960 1000.000000 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/87 4.637999 1218.949438 262.817960 1.280725 261.537236 1213.009438 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/88 5.439985 1422.758639 261.537236 1.091915 260.445321 1416.818639 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/89 6.500886 1693.125341 260.445321 0.913722 259.531599 1687.185341 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/90 6.357921 1650.081406 259.531599 0.934268 258.597332 1644.141406 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/91 7.625445 1971.919730 258.597332 0.778971 257.818361 1965.979730 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/92 8.238463 2124.027026 257.818361 0.721008 257.097352 2118.087026 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/93 9.407267 2418.583440 257.097352 0.631427 256.465926 2412.643440 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/94 9.660523 2477.594974 256.465926 0.614874 255.851052 2471.654974 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Pennant Pennant - 10yr - Tbl 1a
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN FLEXMN Q 12/31/95 11.649728 2980.595166 255.851052 0.509883 255.341169 2974.655166 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/96 13.367143 3413.181920 255.341169 0.444373 254.896796 3407.241920 13.03%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/86 5.158375 1000.000000 193.859500 0.000000 193.859500 1000.000000 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/87 5.355589 1038.231807 193.859500 0.112032 193.747468 1037.631807 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/88 5.950681 1152.929376 193.747468 0.100829 193.646639 1152.329376 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/89 7.708737 1492.771011 193.646639 0.077834 193.568805 1492.171011 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/90 6.755130 1307.582444 193.568805 0.088821 193.479984 1306.982444 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/91 8.975410 1736.562182 193.479984 0.066849 193.413135 1735.962182 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/92 9.378029 1813.833985 193.413135 0.063979 193.349155 1813.233985 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/93 10.397651 2010.377037 193.349155 0.057705 193.291450 2009.777037 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/94 9.420707 1820.942115 193.291450 0.063689 193.227760 1820.342115 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/95 11.747874 2270.015383 193.227760 0.051073 193.176687 2269.415383 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/96 13.872617 2679.866197 193.176687 0.043251 193.133437 2679.266197 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/86 5.739456 1000.000000 174.232541 0.000000 174.232541 1000.000000 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/87 5.618674 978.955845 174.232541 0.160180 174.072360 978.055845 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/88 6.525979 1135.992568 174.072360 0.137910 173.934450 1135.092568 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/89 6.396748 1112.614845 173.934450 0.140696 173.793754 1111.714845 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/90 5.737681 997.173118 173.793754 0.156858 173.636896 996.273118 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/91 7.752279 1346.081660 173.636896 0.116095 173.520801 1345.181660 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/92 8.851986 1536.003700 173.520801 0.101672 173.419129 1535.103700 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/93 10.454800 1813.062307 173.419129 0.086085 173.333044 1812.162307 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/94 9.553762 1655.982648 173.333044 0.094204 173.238840 1655.082648 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/95 10.968126 1900.105427 173.238840 0.082056 173.156784 1899.205427 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/96 12.314743 2132.381296 173.156784 0.073083 173.083701 2131.481296 7.86%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/92 8.411030 1000.000000 118.891503 0.000000 118.891503 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/93 11.456448 1362.074324 118.891503 0.227819 118.663684 1359.464324 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/94 10.584417 1255.985913 118.663684 0.246589 118.417095 1253.375913 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/95 11.878760 1406.648251 118.417095 0.219720 118.197375 1404.038251 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/96 13.687743 1617.855293 118.197375 0.190682 118.006694 1615.245293 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/86 6.626619 1000.000000 150.906518 0.000000 150.906518 1000.000000 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/87 6.723442 1014.611222 150.906518 0.078829 150.827689 1014.081222 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/88 7.104860 1071.609617 150.827689 0.074597 150.753093 1071.079617 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/89 7.760881 1169.976812 150.753093 0.068291 150.684801 1169.446812 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/90 8.290079 1249.188908 150.684801 0.063932 150.620870 1248.658908 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/91 9.102169 1370.976609 150.620870 0.058228 150.562642 1370.446609 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/92 9.439952 1421.304110 150.562642 0.056144 150.506497 1420.774110 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/93 9.925608 1493.868494 150.506497 0.053397 150.453100 1493.338494 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/94 9.772495 1470.302168 150.453100 0.054234 150.398866 1469.772168 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/95 10.691231 1607.949021 150.398866 0.049573 150.349293 1607.419021 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/96 10.995296 1653.134979 150.349293 0.048202 150.301090 1652.604979 5.15%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/94 5.766024 1000.000000 173.429733 0.000000 173.429733 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/95 7.793312 1351.592016 173.429733 0.214286 173.215446 1349.922016 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/96 10.000000 1732.154462 173.215446 0.167000 173.048446 1730.484462 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/87 6.121631 1000.000000 163.355158 0.000000 163.355158 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/88 6.490498 1060.256327 163.355158 0.141746 163.213412 1059.336327 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/89 7.226374 1179.441160 163.213412 0.127311 163.086101 1178.521160 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/90 7.692775 1254.584681 163.086101 0.119593 162.966508 1253.664681 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/91 8.770907 1429.364088 162.966508 0.104892 162.861616 1428.444088 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/92 9.216454 1501.006593 162.861616 0.099821 162.761795 1500.086593 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/93 10.148405 1651.772610 162.761795 0.090655 162.671140 1650.852610 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/94 9.477839 1541.770874 162.671140 0.097069 162.574071 1540.850874 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/95 11.229457 1825.618544 162.574071 0.081927 162.492144 1824.698544 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Pennant Pennant - 10 yr - Tbl 1a
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN QUALBD Q 12/31/96 11.530715 1873.650603 162.492144 0.079787 162.412357 1872.730603 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 0.139811 89.581154 1178.939849 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/87 5.768019 1000.000000 173.369748 0.000000 173.369748 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/88 5.577805 967.022647 173.369748 0.308365 173.061383 965.302647 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/89 7.084750 1226.096632 173.061383 0.242775 172.818608 1224.376632 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/90 6.896673 1191.873427 172.818608 0.249396 172.569212 1190.153427 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/91 9.648771 1665.080811 172.569212 0.178261 172.390951 1663.360811 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/92 9.386697 1618.181625 172.390951 0.183238 172.207713 1616.461625 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/93 10.185124 1753.956913 172.207713 0.168874 172.038839 1752.236913 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/94 9.926047 1707.665606 172.038839 0.173281 171.865558 1705.945606 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/95 12.818022 2202.976503 171.865558 0.134186 171.731372 2201.256503 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/96 12.092262 2076.620743 171.731372 0.142240 171.589132 2074.900743 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/87 4.724564 1000.000000 211.659743 0.000000 211.659743 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/88 6.039898 1278.403256 211.659743 0.627494 211.032249 1274.613256 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/89 6.728437 1419.917189 211.032249 0.563281 210.468968 1416.127189 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/90 6.100284 1283.920476 210.468968 0.621283 209.847685 1280.130476 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/91 7.680989 1611.837761 209.847685 0.493426 209.354259 1608.047761 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/92 8.699744 1821.328459 209.354259 0.435645 208.918614 1817.538459 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/93 9.186022 1919.130985 208.918614 0.412583 208.506031 1915.340985 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/94 9.323905 1944.090422 208.506031 0.406482 208.099549 1940.300422 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/95 12.641006 2630.587643 208.099549 0.299818 207.799731 2626.797643 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/96 15.603540 3242.411410 207.799731 0.242894 207.556837 3238.621410 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - 10YR - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN BALFND Q 12/31/89 7.365810 1000.000000 135.762394 0.000000 135.762394 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/90 7.405018 1005.322972 135.762394 0.135044 135.627351 1004.322972 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/91 8.958110 1214.964725 135.627351 0.111631 135.515720 1213.964725 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/92 9.544854 1293.477761 135.515720 0.104768 135.410951 1292.477761 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/93 9.981206 1351.564600 135.410951 0.100188 135.310763 1350.564600 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/94 9.548559 1292.022804 135.310763 0.104728 135.206035 1291.022804 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/95 11.653880 1575.674910 135.206035 0.085808 135.120227 1574.674910 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/96 12.281752 1659.513117 135.120227 0.081422 135.038805 1658.513117 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/89 6.415215 1000.000000 155.879421 0.000000 155.879421 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/90 6.751165 1052.367691 155.879421 0.124423 155.754998 1051.527691 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/91 8.159166 1270.830885 155.754998 0.102952 155.652046 1269.990885 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/92 8.987776 1398.965727 155.652046 0.093460 155.558586 1398.125727 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/93 10.744669 1671.425518 155.558586 0.078178 155.480408 1670.585518 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/94 9.949957 1547.023372 155.480408 0.084422 155.395985 1546.183372 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/95 11.476196 1783.354785 155.395985 0.073195 155.322790 1782.514785 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/96 12.967956 2014.219111 155.322790 0.064775 155.258015 2013.379111 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/86 4.537328 1000.000000 220.394029 0.000000 220.394029 1000.000000 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/87 4.423567 974.927755 220.394029 0.870338 219.523691 971.077755 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/88 5.352534 1175.008019 219.523691 0.719285 218.804405 1171.158019 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/89 6.193601 1355.187184 218.804405 0.621609 218.182796 1351.337184 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/90 5.173663 1128.804260 218.182796 0.744154 217.438643 1124.954260 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/91 6.705724 1458.083524 217.438643 0.574136 216.864506 1454.233524 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/92 7.728908 1676.125817 216.864506 0.498130 216.366376 1672.275817 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/93 9.015770 1950.709484 216.366376 0.427030 215.939347 1946.859484 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/94 9.518617 2055.443937 215.939347 0.404471 215.534876 2051.593937 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/95 12.600495 2715.846130 215.534876 0.305544 215.229333 2711.996130 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/96 14.198506 3055.934971 215.229333 0.271155 214.958177 3052.084971 11.79%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/86 4.149882 1000.000000 240.970707 0.000000 240.970707 1000.000000 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/87 4.242140 1022.231475 240.970707 1.041927 239.928780 1017.811475 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/88 4.834827 1160.014144 239.928780 0.914200 239.014580 1155.594144 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/89 6.270101 1498.645557 239.014580 0.704933 238.309647 1494.225557 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/90 5.457380 1300.546302 238.309647 0.809912 237.499735 1296.126302 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/91 7.830958 1859.850447 237.499735 0.564426 236.935308 1855.430447 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/92 8.441505 2000.090589 236.935308 0.523603 236.411705 1995.670589 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/93 9.936599 2349.128310 236.411705 0.444820 235.966885 2344.708310 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/94 9.796554 2311.662328 235.966885 0.451179 235.515706 2307.242328 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/95 13.077900 3080.050846 235.515706 0.337975 235.177731 3075.630846 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/96 14.790873 3478.483950 235.177731 0.298833 234.878898 3474.063950 13.25%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/92 5.568748 1000.000000 179.573577 0.000000 179.573577 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/93 6.052134 1086.803353 179.573577 0.275936 179.297642 1085.133353 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/94 6.056296 1085.879590 179.297642 0.275746 179.021896 1084.209590 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/95 8.228840 1473.142535 179.021896 0.202945 178.818951 1471.472535 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/96 10.000000 1788.189508 178.818951 0.167000 178.651951 1786.519508 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/86 3.804915 1000.000000 262.817960 0.000000 262.817960 1000.000000 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/87 4.637999 1218.949438 262.817960 1.280725 261.537236 1213.009438 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/88 5.439985 1422.758639 261.537236 1.091915 260.445321 1416.818639 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/89 6.500886 1693.125341 260.445321 0.913722 259.531599 1687.185341 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/90 6.357921 1650.081406 259.531599 0.934268 258.597332 1644.141406 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/91 7.625445 1971.919730 258.597332 0.778971 257.818361 1965.979730 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/92 8.238463 2124.027026 257.818361 0.721008 257.097352 2118.087026 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/93 9.407267 2418.583440 257.097352 0.631427 256.465926 2412.643440 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/94 9.660523 2477.594974 256.465926 0.614874 255.851052 2471.654974 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - 10 YR - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN FLEXMN Q 12/31/95 11.649728 2980.595166 255.851052 0.509883 255.341169 2974.655166 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/96 13.367143 3413.181920 255.341169 0.444373 254.896796 3407.241920 13.03%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/86 5.158375 1000.000000 193.859500 0.000000 193.859500 1000.000000 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/87 5.355589 1038.231807 193.859500 0.112032 193.747468 1037.631807 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/88 5.950681 1152.929376 193.747468 0.100829 193.646639 1152.329376 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/89 7.708737 1492.771011 193.646639 0.077834 193.568805 1492.171011 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/90 6.755130 1307.582444 193.568805 0.088821 193.479984 1306.982444 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/91 8.975410 1736.562182 193.479984 0.066849 193.413135 1735.962182 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/92 9.378029 1813.833985 193.413135 0.063979 193.349155 1813.233985 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/93 10.397651 2010.377037 193.349155 0.057705 193.291450 2009.777037 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/94 9.420707 1820.942115 193.291450 0.063689 193.227760 1820.342115 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/95 11.747874 2270.015383 193.227760 0.051073 193.176687 2269.415383 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/96 13.872617 2679.866197 193.176687 0.043251 193.133437 2679.266197 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/86 5.739456 1000.000000 174.232541 0.000000 174.232541 1000.000000 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/87 5.618674 978.955845 174.232541 0.160180 174.072360 978.055845 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/88 6.525979 1135.992568 174.072360 0.137910 173.934450 1135.092568 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/89 6.396748 1112.614845 173.934450 0.140696 173.793754 1111.714845 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/90 5.737681 997.173118 173.793754 0.156858 173.636896 996.273118 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/91 7.752279 1346.081660 173.636896 0.116095 173.520801 1345.181660 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/92 8.851986 1536.003700 173.520801 0.101672 173.419129 1535.103700 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/93 10.454800 1813.062307 173.419129 0.086085 173.333044 1812.162307 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/94 9.553762 1655.982648 173.333044 0.094204 173.238840 1655.082648 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/95 10.968126 1900.105427 173.238840 0.082056 173.156784 1899.205427 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/96 12.314743 2132.381296 173.156784 0.073083 173.083701 2131.481296 7.86%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/92 8.411030 1000.000000 118.891503 0.000000 118.891503 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/93 11.456448 1362.074324 118.891503 0.227819 118.663684 1359.464324 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/94 10.584417 1255.985913 118.663684 0.246589 118.417095 1253.375913 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/95 11.878760 1406.648251 118.417095 0.219720 118.197375 1404.038251 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/96 13.687743 1617.855293 118.197375 0.190682 118.006694 1615.245293 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/86 6.626619 1000.000000 150.906518 0.000000 150.906518 1000.000000 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/87 6.723442 1014.611222 150.906518 0.078829 150.827689 1014.081222 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/88 7.104860 1071.609617 150.827689 0.074597 150.753093 1071.079617 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/89 7.760881 1169.976812 150.753093 0.068291 150.684801 1169.446812 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/90 8.290079 1249.188908 150.684801 0.063932 150.620870 1248.658908 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/91 9.102169 1370.976609 150.620870 0.058228 150.562642 1370.446609 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/92 9.439952 1421.304110 150.562642 0.056144 150.506497 1420.774110 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/93 9.925608 1493.868494 150.506497 0.053397 150.453100 1493.338494 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/94 9.772495 1470.302168 150.453100 0.054234 150.398866 1469.772168 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/95 10.691231 1607.949021 150.398866 0.049573 150.349293 1607.419021 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/96 10.995296 1653.134979 150.349293 0.048202 150.301090 1652.604979 5.15%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN MNYMKT Q 12/31/96 10.672808 1000.000000 93.696054 0.000000 93.696054 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/94 5.766024 1000.000000 173.429733 0.000000 173.429733 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/95 7.793312 1351.592016 173.429733 0.214286 173.215446 1349.922016 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/96 10.000000 1732.154462 173.215446 0.167000 173.048446 1730.484462 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/87 8.121631 1000.000000 163.355158 0.000000 163.355158 1000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/88 6.490498 1060.256327 163.355158 0.141746 163.213412 1059.336327 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/89 7.226374 1179.441160 163.213412 0.127311 163.086101 1178.521160 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/90 7.692775 1254.584681 163.086101 0.119593 162.966508 1253.664681 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/91 8.770907 1429.364088 162.966508 0.104892 162.861616 1428.444088 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/92 9.216454 1501.006593 162.861616 0.099821 162.761795 1500.086593 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/93 10.148405 1651.772610 162.761795 0.090655 162.671140 1650.852610 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/94 9.477839 1541.770874 162.671140 0.097069 162.574071 1540.850874 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - 10 YR - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- ----------------------------------------------------------------------------------------------------------------------------------
method system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN QUALBD Q 12/31/95 11.229457 1825.618544 162.574071 0.081927 162.492144 1824.698544 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/96 11.530715 1873.650603 162.492144 0.079787 162.412357 1872.730603 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/95 11.145667 1000.000000 89.720965 0.000000 89.720965 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/96 13.160579 1180.779849 89.720965 0.139811 89.581154 1178.939849 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/87 5.768019 1000.000000 173.369748 0.000000 173.369748 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/88 5.577805 967.022647 173.369748 0.308365 173.061383 965.302647 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/89 7.084750 1226.096632 173.061383 0.242775 172.818608 1224.376632 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/90 6.896673 1191.873427 172.818608 0.249396 172.569212 1190.153427 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/91 9.648771 1665.080811 172.569212 0.178261 172.390951 1663.360811 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/92 9.386697 1618.181625 172.390951 0.183238 172.207713 1616.461625 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/93 10.185124 1753.956913 172.207713 0.168874 172.038839 1752.236913 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/94 9.926047 1707.665606 172.038839 0.173281 171.865558 1705.945606 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/95 12.818022 2202.976503 171.865558 0.134186 171.731372 2201.256503 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/96 12.092262 2076.620743 171.731372 0.142240 171.589132 2074.900743 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/87 4.724564 1000.000000 211.659743 0.000000 211.659743 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/88 6.039898 1278.403256 211.659743 0.627494 211.032249 1274.613256 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/89 6.728437 1419.917189 211.032249 0.563281 210.468968 1416.127189 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/90 6.100284 1283.920476 210.468968 0.621283 209.847685 1280.130476 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/91 7.680989 1611.837761 209.847685 0.493426 209.354259 1608.047761 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/92 8.699744 1821.328459 209.354259 0.435645 208.918614 1817.538459 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/93 9.186022 1919.130985 208.918614 0.412583 208.506031 1915.340985 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/94 9.323905 1944.090422 208.506031 0.406482 208.099549 1940.300422 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/95 12.641006 2630.587643 208.099549 0.299818 207.799731 2626.797643 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/96 15.603540 3242.411410 207.799731 0.242894 207.556837 3238.621410 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - 10YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 10yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN BALFND Q 12/31/89 7.365810 10000.000000 1357.623941 0.000000 1357.623941 10000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/90 7.405018 10053.229719 1357.623941 0.135044 1357.488897 10052.229719 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/91 8.958110 12160.534866 1357.488897 0.111631 1357.377267 12159.534866 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/92 9.544854 12955.967833 1357.377267 0.104768 1357.272498 12954.967833 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/93 9.981206 13547.216402 1357.272498 0.100188 1357.172310 13546.216402 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/94 9.548559 12959.039874 1357.172310 0.104728 1357.067582 12958.039874 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/95 11.653880 15815.102752 1357.067582 0.085808 1356.981774 15814.102752 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/96 12.281752 16666.113613 1356.981774 0.081422 1356.900352 16665.113613 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/89 6.415215 10000.000000 1558.794210 0.000000 1558.794210 10000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/90 6.751165 10523.676915 1558.794210 0.124423 1558.669787 10522.836915 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/91 8.159166 12717.445534 1558.669787 0.102952 1558.566836 12716.605534 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/92 8.987776 14008.049600 1558.566836 0.093460 1558.473375 14007.209600 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/93 10.744669 16745.280564 1558.473375 0.078178 1558.395197 16744.440564 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/94 9.949957 15505.965200 1558.395197 0.084422 1558.310775 15505.125200 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/95 11.476196 17883.479878 1558.310775 0.073195 1558.237580 17882.639878 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/96 12.967956 20207.156370 1558.237580 0.064775 1558.172805 20206.316370 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/86 4.537328 10000.000000 2203.940293 0.000000 2203.940293 10000.000000 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/87 4.423567 9749.277548 2203.940293 0.870338 2203.069954 9745.427548 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/88 5.352534 11792.006835 2203.069954 0.719285 2202.350669 11788.156835 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/89 6.193601 13640.481305 2202.350669 0.621609 2201.729059 13636.631305 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/90 5.173663 11391.004171 2201.729059 0.744154 2200.984906 11387.154171 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/91 6.705724 14759.197307 2200.984906 0.574136 2200.410770 14755.347307 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/92 7.728908 17006.772400 2200.410770 0.498130 2199.912640 17002.922400 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/93 9.015770 19833.906379 2199.912640 0.427030 2199.485610 19830.056379 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/94 9.518617 20936.061120 2199.485610 0.404471 2199.081140 20932.211120 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/95 12.600495 27709.510904 2199.081140 0.305544 2198.775596 27705.660904 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/96 14.198506 31219.328493 2198.775596 0.271155 2198.504441 31215.478493 12.05%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/86 4.149882 10000.000000 2409.707071 0.000000 2409.707071 10000.000000 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/87 4.242140 10222.314755 2409.707071 1.041927 2408.665144 10217.894755 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/88 4.834827 11645.479273 2408.665144 0.914200 2407.750944 11641.059273 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/89 6.270101 15096.841602 2407.750944 0.704933 2407.046011 15092.421602 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/90 5.457380 13136.164760 2407.046011 0.809912 2406.236099 13131.744760 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/91 7.830958 18843.133827 2406.236099 0.564426 2405.671672 18838.713827 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/92 8.441505 20307.489450 2405.671672 0.523603 2405.148069 20303.069450 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/93 9.936599 23898.991897 2405.148069 0.444820 2404.703249 23894.571897 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/94 9.796554 23557.805230 2404.703249 0.451179 2404.252070 23553.385230 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/95 13.077900 31442.568142 2404.252070 0.337975 2403.914095 31438.148142 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/96 14.790873 35555.988081 2403.914095 0.298833 2403.615262 35551.568081 13.51%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/92 5.568748 10000.000000 1795.735774 0.000000 1795.735774 10000.000000 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/93 6.052134 10868.033533 1795.735774 0.275936 1795.459838 10866.363533 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/94 6.056296 10873.836237 1795.459838 0.275746 1795.184092 10872.166237 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/95 8.228840 14772.282665 1795.184092 0.202945 1794.981147 14770.612665 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/96 10.000000 17949.811474 1794.981147 0.167000 1794.814147 17948.141474 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/86 3.804915 10000.000000 2628.179605 0.000000 2628.179605 10000.000000 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/87 4.637999 12189.494378 2628.179605 1.280725 2626.898880 12183.554378 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/88 5.439985 14290.290503 2626.898880 1.091915 2625.806965 14284.350503 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/89 6.500886 17070.071738 2625.806965 0.913722 2624.893243 17064.131738 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/90 6.357921 16688.863875 2624.893243 0.934268 2623.958976 16682.923875 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/91 7.625445 20008.854852 2623.958976 0.778971 2623.180005 20002.914852 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/92 8.238463 21610.971412 2623.180005 0.721008 2622.458997 21605.031412 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/93 9.407267 24670.171977 2622.458997 0.631427 2621.827570 24664.231977 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/94 9.660523 25328.225540 2621.827570 0.614874 2621.212696 25322.285540 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant 10YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of unis fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN FLEXMN Q 12/31/95 11.649728 30536.414942 2621.212696 0.509883 2620.702813 30530.474942 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/96 13.367143 35031.309263 2620.702813 0.444373 2620.258440 35025.369263 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/86 5.158375 10000.000000 1938.595003 0.000000 1938.595003 10000.000000 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/87 5.355589 10382.318075 1938.595003 0.112032 1938.482971 10381.718075 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/88 5.950681 11535.293783 1938.482971 0.100829 1938.382142 11534.693783 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/89 7.708737 14942.478138 1938.382142 0.077834 1938.304308 14941.878138 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/90 6.755130 13093.497582 1938.304308 0.088821 1938.215487 13092.897582 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/91 8.975410 17396.278663 1938.215487 0.066849 1938.148638 17395.678663 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/92 9.378029 18176.014129 1938.148638 0.063979 1938.084658 18175.414129 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/93 10.397651 20151.527884 1938.084658 0.057705 1938.026953 20150.927884 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/94 9.420707 18257.584081 1938.026953 0.063689 1937.963263 18256.984081 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/95 11.747874 22766.948235 1937.963263 0.051073 1937.912190 22766.348235 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/96 13.872817 26883.913596 1937.912190 0.043251 1937.868940 26883.313596 10.39%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/86 5.739456 10000.000000 1742.325405 0.000000 1742.325405 10000.000000 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/87 5.618674 9789.558453 1742.325405 0.160180 1742.165225 9788.658453 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/88 6.525979 11369.333672 1742.165225 0.137910 1742.027315 11368.433672 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/89 6.396748 11143.309740 1742.027315 0.140696 1741.886618 11142.409740 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/90 5.737681 9994.389753 1741.886618 0.156858 1741.729760 9993.489753 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/91 7.752279 13502.375044 1741.729760 0.116095 1741.613665 13501.475044 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/92 8.851986 15416.739783 1741.613665 0.101672 1741.511993 15415.839783 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/93 10.454800 18207.159587 1741.511993 0.086085 1741.425908 18206.259587 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/94 9.553762 16637.168670 1741.425908 0.094204 1741.331705 16636.268670 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/95 10.968126 19099.145545 1741.331705 0.082056 1741.249649 19098.245545 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/96 12.314743 21443.041923 1741.249649 0.073083 1741.176566 21442.141923 7.92%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/92 8.411030 10000.000000 1188.915032 0.000000 1188.915032 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/93 11.456448 13620.743238 1188.915032 0.227819 1188.687213 13618.133238 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/94 10.584417 12581.561140 1188.687213 0.246589 1188.440624 12578.951140 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/95 11.878760 14117.200942 1188.440624 0.219720 1188.220904 14114.590942 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/96 13.687743 16264.062357 1188.220904 0.190682 1188.030222 16261.452357 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/86 6.626619 10000.000000 1509.065181 0.000000 1509.065181 10000.000000 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/87 6.723442 10146.112218 1509.065181 0.078829 1508.986352 10145.582218 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/88 7.104860 10721.136775 1508.986352 0.074597 1508.911755 10720.606775 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/89 7.760881 11710.484573 1508.911755 0.068291 1508.843464 11709.954573 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/90 8.290079 12508.431517 1508.843464 0.063932 1508.779532 12507.901517 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/91 9.102169 13733.166287 1508.779532 0.058228 1508.721304 13732.636287 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/92 9.439952 14242.256696 1508.721304 0.056144 1508.665160 14241.726696 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/93 9.925608 14974.418983 1508.865160 0.053397 1508.611763 14973.888983 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/94 9.772495 14742.900910 1508.611763 0.054234 1508.557529 14742.370910 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/95 10.691231 16128.337020 1508.557529 0.049573 1508.507956 16127.807020 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/96 10.995296 16586.491491 1508.507956 0.048202 1508.459753 16585.961491 5.19%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN MNYMKT Q 12/31/96 10.672808 10000.000000 936.960545 0.000000 936.960545 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/94 5.766024 10000.000000 1734.297325 0.000000 1734.297325 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/95 7.793312 13515.920156 1734.297325 0.214286 1734.083039 13514.250156 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/96 10.000000 17340.830389 1734.083039 0.167000 1733.916039 17339.160389 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/87 6.121631 10000.000000 1633.551581 0.000000 1633.551581 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/88 6.490498 10602.563271 1633.551581 0.141746 1633.409836 10601.643271 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/89 7.226374 11803.630367 1633.409836 0.127311 1633.282524 11802.710367 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/90 7.692775 12564.474970 1633.282524 0.119593 1633.162931 12563.554970 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/91 8.770907 14324.320187 1633.162931 0.104892 1633.058039 14323.400187 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/92 9.216454 15051.004298 1633.058039 0.099821 1632.958218 15050.084298 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/93 10.148405 16571.921342 1632.958218 0.090655 1632.867563 16571.001342 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/94 9.477839 15476.055871 1632.867563 0.097069 1632.770495 15475.135871 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Diversifier - 10YR - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return for
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 10yr
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN QUALBD Q 12/31/95 11.229457 18335.126059 1632.770495 0.081927 1632.688567 18334.206059 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/96 11.530715 18826.066552 1632.688567 0.079787 1632.608780 18825.146552 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/95 11.145667 10000.000000 897.209651 0.000000 897.209651 10000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/96 13.160579 11807.798492 897.209651 0.139811 897.069840 11805.958492 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/87 5.768019 10000.000000 1733.697479 0.000000 1733.697479 10000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/88 5.577805 9670.226468 1733.697479 0.308365 1733.389114 9668.506468 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/89 7.084750 12280.628526 1733.389114 0.242775 1733.146339 12278.908526 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/90 6.896673 11952.943562 1733.146339 0.249396 1732.896944 11951.223562 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/91 9.648771 16720.325775 1732.896944 0.178261 1732.718682 16718.605775 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/92 9.386697 16264.505259 1732.718682 0.183238 1732.535444 16262.785259 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/93 10.185124 17646.088336 1732.535444 0.168874 1732.366571 17644.368336 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/94 9.926047 17195.552002 1732.366571 0.173281 1732.193289 17193.832002 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/95 12.818022 22203.291690 1732.193289 0.134186 1732.059103 22201.571690 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/96 12.092262 20944.512475 1732.059103 0.142240 1731.916863 20942.792475 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/87 4.724564 10000.000000 2116.597426 0.000000 2116.597426 10000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/88 6.039898 12784.032558 2116.597426 0.627494 2115.969932 12780.242558 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/89 6.728437 14237.170379 2115.969932 0.563281 2115.406651 14233.380379 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/90 6.100284 12904.581345 2115.406651 0.621283 2114.785368 12900.791345 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/91 7.680989 16243.643151 2114.785368 0.493426 2114.291942 16239.853151 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/92 8.699744 18393.798638 2114.291942 0.435645 2113.856297 18390.008638 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/93 9.186022 19417.930451 2113.856297 0.412583 2113.443714 19414.140451 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/94 9.323905 19705.548410 2113.443714 0.406482 2113.037232 19701.758410 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/95 12.641006 26710.916325 2113.037232 0.299818 2112.737414 26707.126325 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/96 15.603540 32966.182746 2112.737414 0.242894 2112.494520 32962.392746 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Penant Penant - Inception - Tbl 1A
Average
$30 contract # of units Annual Total
Beginning # of unis fee & deferred at end of Ending return from
- ---------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN BALFND q 2/28/89 6.402692 1000.000000 156.184305 0.000000 156.184305 1000.000000 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/90 7.127999 1113.281570 156.184305 0.140292 156.044013 1112.281570 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/91 7.988449 1246.549641 156.044013 0.125181 155.918832 1245.549641 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/92 9.152294 1427.014994 155.918832 0.109262 155.809570 1426.014994 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/93 9.392281 1463.407266 155.809570 0.106470 155.703100 1462.407266 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/94 10.094085 1571.680324 155.703100 0.099068 155.604032 1570.680324 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND q 2/28/95 9.973464 1551.911210 155.604032 0.100266 155.503766 1550.911210 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 2/28/96 11.945190 1857.522028 155.503766 0.083716 155.420050 1856.522028 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 12/31/96 12.281752 1908.830511 155.420050 0.081422 155.338628 1907.830511 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN BALFND Q 2/28/97 12.869790 1999.175527 155.338628 0.077701 155.260927 1998.175527 8.58%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/89 6.392017 1000.000000 156.445141 0.000000 156.445141 1000.000000 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/90 6.379732 998.078071 156.445141 0.131667 156.313474 997.238071 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/91 7.862493 1229.013594 156.313474 0.106836 156.206638 1228.173594 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/92 8.695734 1358.331369 156.206638 0.096599 156.110038 1357.491369 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/93 10.064653 1571.193367 156.110038 0.083460 156.026578 1570.353367 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM q 9/6/94 10.400201 1622.707773 156.026578 0.080768 155.945810 1621.867773 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 9/6/95 11.066582 1725.787098 155.945810 0.075904 155.869906 1724.947098 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 9/6/96 11.902432 1855.230959 155.869906 0.070574 155.799332 1854.390959 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDASM Q 12/31/96 12.967956 2020.398887 155.799332 0.064775 155.734557 2019.558887 10.07%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/86 4.542707 1000.000000 220.133062 0.000000 220.133062 1000.000000 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/87 5.371647 1182.477100 220.133062 0.716726 219.416335 1178.627100 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/88 5.393455 1183.412132 219.416335 0.713828 218.702507 1179.562132 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/89 6.592083 1441.705080 218.702507 0.584034 218.118473 1437.855080 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/90 4.840596 1055.823410 218.118473 0.795357 217.323117 1051.973410 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/91 6.256874 1359.763359 217.323117 0.615323 216.707794 1355.913359 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/92 7.000715 1517.109501 216.707794 0.549944 216.157850 1513.259501 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/93 8.979943 1941.085170 216.157850 0.428733 215.729116 1937.235170 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI q 10/9/94 9.524197 2054.646604 215.729116 0.404234 215.324883 2050.796604 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 10/9/95 11.784016 2537.391866 215.324883 0.326714 214.998169 2533.541866 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 10/9/96 13.498713 2902.198581 214.998169 0.285212 214.712957 2898.348581 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDEQI Q 12/31/96 14.198506 3048.603206 214.712957 0.271155 214.441802 3044.753206 11.49%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/86 4.150654 1000.000000 240.925888 0.000000 240.925888 1000.000000 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/87 5.223288 1258.425299 240.925888 0.846210 240.079678 1254.005299 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/88 4.908182 1178.354752 240.079678 0.900537 239.179140 1173.934752 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/89 6.447561 1542.122098 239.179140 0.685531 238.493610 1537.702098 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/90 5.071896 1209.614786 238.493610 0.871469 237.622141 1205.194786 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/91 6.909447 1641.837589 237.622141 0.639704 236.982437 1637.417589 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/92 7.281259 1725.530503 236.982437 0.607038 236.375399 1721.110503 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/93 9.912135 2342.984867 236.375399 0.445918 235.929481 2338.564867 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO q 10/9/94 9.388262 2214.967782 235.929481 0.470801 235.458680 2210.547782 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 10/9/95 12.759168 3004.256861 235.458680 0.346418 235.112263 2999.836861 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 10/9/96 14.728437 3462.836152 235.112263 0.300100 234.812163 3458.416152 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDGRO Q 12/31/96 14.790873 3473.076884 234.812163 0.298833 234.513330 3468.656884 12.92%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 8/27/92 5.255877 1000.000000 190.263204 0.000000 190.263204 1000.000000 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 8/27/93 5.945388 1131.188572 190.263204 0.280890 189.982314 1129.518572 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 8/27/94 6.210579 1179.900172 189.982314 0.268896 189.713418 1178.230172 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 8/27/95 7.458051 1414.892350 189.713418 0.223919 189.489499 1413.222350 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 8/27/96 8.973145 1700.316753 189.489499 0.186111 189.303388 1698.646753 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FIDIND Q 12/31/96 10.000000 1893.033884 189.303388 4.994236 184.309152 1843.091520 15.10%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/84 2.755418 1000.000000 362.921343 0.000000 362.921343 1000.000000 13.24%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/85 3.152745 1144.198448 362.921343 1.884072 361.037270 1138.258448 13.24%
- ---------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/86 3.821619 1379.746891 361.037270 1.554315 359.482955 1373.806891 13.24%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Pennant Pennant - Inception - Tbl 1a
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN FLEXMN q 7/31/87 4.756778 1709.980612 359.482955 1.248744 358.234211 1704.040612 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/88 5.214443 1867.991872 358.234211 1.139144 357.095067 1862.051872 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/89 6.479420 2313.768919 357.095067 0.916749 356.178318 2307.828919 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/90 6.554032 2334.404095 356.178318 0.906312 355.272006 2328.464095 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/91 7.383192 2623.041432 355.272006 0.804530 354.467476 2617.101432 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/92 8.064706 2858.675979 354.467476 0.736543 353.730933 2852.735979 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/93 8.811342 3116.844228 353.730933 0.674131 353.056802 3110.904228 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN q 7/31/94 9.461836 3340.565559 353.056802 0.627785 352.429017 3334.625559 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 7/31/95 11.071102 3901.777594 352.429017 0.536532 351.892485 3895.837594 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 7/31/96 12.125138 4266.744941 351.892485 0.489891 351.402594 4260.804941 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN FLEXMN Q 12/31/96 13.367143 4697.248719 351.402594 0.444373 350.958220 4691.308719 13.24%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/83 3.679564 1000.000000 271.771329 0.000000 271.771329 1000.000000 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/84 3.378781 918.255804 271.771329 0.177579 271.593751 917.655804 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/85 4.140589 1124.558096 271.593751 0.144907 271.448844 1123.958096 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/86 5.326260 1445.807118 271.448844 0.112649 271.336194 1445.207118 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/87 6.031310 1636.512702 271.336194 0.099481 271.236713 1635.912702 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/88 5.802547 1573.863778 271.236713 0.103403 271.133311 1573.263778 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/89 6.988377 1894.781791 271.133311 0.085857 271.047454 1894.181791 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/90 7.936197 2151.085989 271.047454 0.075603 270.971851 2150.485989 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/91 8.112479 2198.253449 270.971851 0.073960 270.897891 2197.653449 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/92 8.769114 2375.534485 270.897891 0.068422 270.829469 2374.934485 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/93 9.586086 2596.194578 270.829469 0.062591 270.766878 2595.594578 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ q 6/1/94 9.444207 2557.178444 270.766878 0.063531 270.703347 2556.578444 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 6/1/95 10.236038 2770.929746 270.703347 0.058616 270.644730 2770.329746 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 6/1/96 12.986256 3514.661755 270.644730 0.046203 270.598528 3514.061755 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN GROWEQ Q 12/31/96 13.872617 3753.909737 270.598528 0.043251 270.555277 3753.309737 10.22%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/84 4.274745 1000.000000 233.932082 0.000000 233.932082 1000.000000 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/85 4.949967 1157.956089 233.932082 0.181819 233.750263 1157.056089 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/86 5.513970 1288.891938 233.750263 0.163222 233.587041 1287.991938 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/87 5.818893 1359.218000 233.587041 0.154669 233.432373 1358.318000 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/88 6.267419 1463.018488 233.432373 0.143600 233.288773 1462.118488 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/89 6.884597 1606.099186 233.288773 0.130727 233.158046 1605.199186 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/90 6.549305 1527.023159 233.158046 0.137419 233.020627 1526.123159 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/91 7.201615 1678.124844 233.020627 0.124972 232.895655 1677.224844 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/92 8.565493 1994.866104 232.895655 0.105073 232.790582 1993.966104 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/93 9.917575 2308.718061 232.790582 0.090748 232.699834 2307.818061 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND q 8/6/94 9.944338 2314.045806 232.699834 0.090504 232.609331 2313.145806 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 8/6/95 10.548141 2453.596018 232.609331 0.085323 232.524008 2452.696018 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 8/6/96 11.558502 2687.629207 232.524008 0.077865 232.446143 2686.729207 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN HIBOND Q 12/31/96 12.314743 2862.514510 232.446143 0.073083 232.373060 2861.614510 8.84%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ q 11/1/92 8.268342 1000.000000 120.943231 0.000000 120.943231 1000.000000 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ q 11/1/93 10.753055 1300.509219 120.943231 0.242722 120.700510 1297.899219 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ q 11/1/94 11.363818 1371.618625 120.700510 0.229676 120.470833 1369.008625 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 11/1/95 11.249363 1355.220136 120.470833 0.232013 120.238820 1352.610136 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 11/1/96 13.004892 1563.692871 120.238820 0.200694 120.038127 1561.082871 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN INTLEQ Q 12/31/96 13.687743 1643.051026 120.038127 3.251654 116.786473 1598.543225 11.92%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/84 4.892696 1000.000000 204.386293 0.000000 204.386293 1000.000000 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/85 5.670945 1159.063428 204.386293 0.093459 204.292835 1158.533428 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/86 6.518318 1331.645660 204.292835 0.081309 204.211525 1331.115660 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/87 6.721697 1372.647996 204.211525 0.078849 204.132676 1372.117996 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/88 7.042462 1437.596614 204.132676 0.075258 204.057418 1437.066614 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/89 7.569360 1544.584060 204.057418 0.070019 203.987399 1544.054060 6.76%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A-Pennant
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a PENN LIMMAT q 9/10/90 8.050673 1642.235847 203.987399 0.065833 203.921566 1641.705847 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/91 8.707241 1775.594222 203.921566 0.060869 203.860697 1775.064222 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/92 9.480589 1932.719484 203.860697 0.055904 203.804794 1932.189484 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/93 9.954736 2028.822916 203.804794 0.053241 203.751553 2028.292916 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT q 9/10/94 9.807571 1998.307818 203.751553 0.054040 203.697513 1997.777818 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 9/10/95 10.400679 2118.592443 203.697513 0.050958 203.646554 2118.062443 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 9/10/96 10.704658 2179.966719 203.646554 0.049511 203.597043 2179.436719 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN LIMMAT Q 12/31/96 10.995296 2238.609756 203.597043 0.048202 203.548841 2238.079756 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 3/22/94 5.946313 1000.000000 168.171437 0.000000 168.171437 1000.000000 18.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 3/22/95 6.148692 1034.034367 168.171437 0.271602 167.899834 1032.364367 18.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 3/22/96 8.443044 1417.585688 167.899834 0.197796 167.702038 1415.915688 18.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN PARTNR Q 12/31/96 10.000000 1677.020382 167.702038 7.294337 160.407702 1604.077016 18.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/87 6.153024 1000.000000 162.521713 0.000000 162.521713 1000.000000 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/88 6.336540 1029.825335 162.521713 0.145190 162.376523 1028.905335 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/89 6.478625 1051.976603 162.376523 0.142005 162.234518 1051.056603 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/90 7.130900 1156.878123 162.234518 0.129016 162.105502 1155.958123 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/91 7.812288 1266.414867 162.105502 0.117763 161.987739 1265.494867 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/92 8.512054 1378.848379 161.987739 0.108082 161.879657 1377.928379 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/93 9.638590 1560.291640 161.879657 0.095450 161.784207 1559.371640 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD q 3/17/94 9.880534 1598.514358 161.784207 0.093112 161.691095 1597.594358 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 3/17/95 10.046136 1624.370726 161.691095 0.091577 161.599517 1623.450726 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 3/17/96 11.020544 1780.914589 161.599517 0.083480 161.516037 1779.994589 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN QUALBD Q 12/31/96 11.530715 1862.395387 161.516037 0.079787 161.436250 1861.475387 6.55%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 3/1/95 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 12.67%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 3/1/96 11.555014 1155.501400 100.000000 0.159238 99.840762 1153.661400 12.67%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN SMLCAP Q 12/31/96 13.160579 1313.962233 99.840762 5.231690 94.609071 1245.110159 12.67%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/87 5.409667 1000.000000 184.854262 0.000000 184.854262 1000.000000 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/88 5.329299 985.143633 184.854262 0.322744 184.531518 983.423633 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/89 7.050619 1301.061425 184.531518 0.243950 184.287567 1299.341425 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/90 6.369260 1173.775432 184.287567 0.270047 184.017520 1172.055432 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/91 8.534217 1570.445451 184.017520 0.201542 183.815979 1568.725451 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/92 9.166839 1685.011483 183.815979 0.187633 183.628346 1683.291483 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/93 9.960345 1829.001677 183.628346 0.172685 183.455661 1827.281677 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO q 11/20/94 9.995646 1833.757846 183.455661 0.172075 183.283586 1832.037846 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 11/20/95 12.613669 2311.878490 183.283586 0.136360 183.147226 2310.158490 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 11/20/96 12.359675 2263.640193 183.147226 0.139162 183.008064 2261.920193 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN TCIGRO Q 12/31/96 12.092262 2212.981458 183.008064 0.142240 182.865824 2211.261458 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/87 5.197559 1000.000000 192.398008 0.000000 192.398008 1000.000000 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/88 5.435785 1045.834208 192.398008 0.697231 191.700777 1042.044208 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/89 6.322311 1211.991931 191.700777 0.599464 191.101313 1208.201931 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/90 6.612748 1263.704823 191.101313 0.573135 190.528177 1259.914823 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/91 6.968546 1327.704367 190.528177 0.543872 189.984305 1323.914367 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/92 8.044809 1528.387445 189.984305 0.471111 189.513194 1524.597445 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/93 8.767314 1661.521675 189.513194 0.432287 189.080906 1657.731675 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ q 3/17/94 9.332653 1764.626485 189.080906 0.406101 188.674805 1760.836485 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 3/17/95 10.147961 1914.664563 188.674805 0.373474 188.301331 1910.874563 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 3/17/96 13.407878 2524.721273 188.301331 0.282670 188.018661 2520.931273 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
1a PENN VALUEQ Q 12/31/96 15.603540 2933.756704 188.018661 0.242894 187.775768 2929.966704 11.59%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - inception - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN BALFND q 2/28/89 6.402692 1000.000000 156.184305 0.000000 156.184305 1000.000000 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/90 7.127999 1113.281570 156.184305 0.140292 156.044013 1112.281570 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/91 7.988449 1246.549641 156.044013 0.125181 155.918832 1245.549641 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/92 9.152294 1427.014994 155.918832 0.109262 155.809570 1426.014994 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/93 9.392281 1463.407266 155.809570 0.106470 155.703100 1462.407266 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/94 10.094085 1571.680324 155.703100 0.099068 155.604032 1570.680324 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND q 2/28/95 9.973464 1551.911210 155.604032 0.100266 155.503766 1550.911210 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 2/28/96 11.945190 1857.522028 155.503766 0.083716 155.420050 1856.522028 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 12/31/96 12.281752 1908.830511 155.420050 0.081422 155.338628 1907.830511 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN BALFND Q 2/28/97 12.869790 1999.175527 155.338628 0.077701 155.260927 1998.175527 8.58%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/89 6.392017 1000.000000 156.445141 0.000000 156.445141 1000.000000 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/90 6.379732 998.078071 156.445141 0.131667 156.313474 997.238071 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/91 7.862493 1229.013594 156.313474 0.106836 156.206638 1228.173594 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/92 8.695734 1358.331369 156.206638 0.096599 156.110038 1357.491369 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/93 10.064653 1571.193367 156.110038 0.083460 156.026578 1570.353367 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM q 9/6/94 10.400201 1622.707773 156.026578 0.080768 155.945810 1621.867773 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 9/6/95 11.066582 1725.787098 155.945810 0.075904 155.869906 1724.947098 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 9/6/96 11.902432 1855.230959 155.869906 0.070574 155.799332 1854.390959 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDASM Q 12/31/96 12.967956 2020.398887 155.799332 0.064775 155.734557 2019.558887 10.07%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/86 4.542707 1000.000000 220.133062 0.000000 220.133062 1000.000000 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/87 5.371647 1182.477100 220.133062 0.716726 219.416335 1178.627100 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/88 5.393455 1183.412132 219.416335 0.713828 218.702507 1179.562132 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/89 6.592083 1441.705080 218.702507 0.584034 218.118473 1437.855080 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/90 4.840596 1055.823410 218.118473 0.795357 217.323117 1051.973410 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/91 6.256874 1359.763359 217.323117 0.615323 216.707794 1355.913359 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/92 7.000715 1517.109501 216.707794 0.549944 216.157850 1513.259501 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/93 8.979943 1941.085170 216.157850 0.428733 215.729116 1937.235170 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI q 10/9/94 9.524197 2054.646604 215.729116 0.404234 215.324883 2050.796604 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 10/9/95 11.784016 2537.391866 215.324883 0.326714 214.998169 2533.541866 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 10/9/96 13.498713 2902.198581 214.998169 0.285212 214.712957 2898.348581 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDEQI Q 12/31/96 14.198506 3048.603206 214.712957 0.271155 214.441802 3044.753206 11.49%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/86 4.150654 1000.000000 240.925888 0.000000 240.925888 1000.000000 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/87 5.223288 1258.425299 240.925888 0.846210 240.079678 1254.005299 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/88 4.908182 1178.354752 240.079678 0.900537 239.179140 1173.934752 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/89 6.447561 1542.122098 239.179140 0.685531 238.493610 1537.702098 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/90 5.071896 1209.614786 238.493610 0.871469 237.622141 1205.194786 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/91 6.909447 1641.837589 237.622141 0.639704 236.982437 1637.417589 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/92 7.281259 1725.530503 236.982437 0.607038 236.375399 1721.110503 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/93 9.912135 2342.984867 236.375399 0.445918 235.929481 2338.564867 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO q 10/9/94 9.388262 2214.967782 235.929481 0.470801 235.458680 2210.547782 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 10/9/95 12.759168 3004.256861 235.458680 0.346418 235.112263 2999.836861 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 10/9/96 14.728437 3462.836152 235.112263 0.300100 234.812163 3458.416152 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDGRO Q 12/31/96 14.790873 3473.076884 234.812163 0.298833 234.513330 3468.656884 12.92%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 8/27/92 5.255877 1000.000000 190.263204 0.000000 190.263204 1000.000000 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 8/27/93 5.945388 1131.188572 190.263204 0.280890 189.982314 1129.518572 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 8/27/94 6.210579 1179.900172 189.982314 0.268896 189.713418 1178.230172 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 8/27/95 7.458051 1414.892350 189.713418 0.223919 189.489499 1413.222350 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 8/27/96 8.973145 1700.316753 189.489499 0.186111 189.303388 1698.646753 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FIDIND Q 12/31/96 10.000000 1893.033884 189.303388 0.167000 189.136388 1891.363884 15.79%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/84 2.755418 1000.000000 362.921343 0.000000 362.921343 1000.000000 13.24%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/85 3.152745 1144.198448 362.921343 1.884072 361.037270 1138.258448 13.24%
- -----------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/86 3.821619 1379.746891 361.037270 1.554315 359.482955 1373.806891 13.24%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - inception - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN FLEXMN q 7/31/87 4.756778 1709.980612 359.482955 1.248744 358.234211 1704.040612 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/88 5.214443 1867.991872 358.234211 1.139144 357.095067 1862.051872 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/89 6.479420 2313.768919 357.095067 0.916749 356.178318 2307.828919 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/90 6.554032 2334.404095 356.178318 0.906312 355.272006 2328.464095 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/91 7.383192 2623.041432 355.272006 0.804530 354.467476 2617.101432 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/92 8.064706 2858.675979 354.467476 0.736543 353.730933 2852.735979 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/93 8.811342 3116.844228 353.730933 0.674131 353.056802 3110.904228 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN q 7/31/94 9.461836 3340.565559 353.056802 0.627785 352.429017 3334.625559 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 7/31/95 11.071102 3901.777594 352.429017 0.536532 351.892485 3895.837594 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 7/31/96 12.125138 4266.744941 351.892485 0.489891 351.402594 4260.804941 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN FLEXMN Q 12/31/96 13.367143 4697.248719 351.402594 0.444373 350.958220 4691.308719 13.24%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/83 3.679564 1000.000000 271.771329 0.000000 271.771329 1000.000000 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/84 3.378781 918.255804 271.771329 0.177579 271.593751 917.655804 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/85 4.140589 1124.558096 271.593751 0.144907 271.448844 1123.958096 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/86 5.326260 1445.807118 271.448844 0.112649 271.336194 1445.207118 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/87 6.031310 1636.512702 271.336194 0.099481 271.236713 1635.912702 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/88 5.802547 1573.863778 271.236713 0.103403 271.133311 1573.263778 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/89 6.988377 1894.781791 271.133311 0.085857 271.047454 1894.181791 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/90 7.936197 2151.085989 271.047454 0.075603 270.971851 2150.485989 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/91 8.112479 2198.253449 270.971851 0.073960 270.897891 2197.653449 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/92 8.769114 2375.534485 270.897891 0.068422 270.829469 2374.934485 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/93 9.586086 2596.194578 270.829469 0.062591 270.766878 2595.594578 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ q 6/1/94 9.444207 2557.178444 270.766878 0.063531 270.703347 2556.578444 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 6/1/95 10.236038 2770.929746 270.703347 0.058616 270.644730 2770.329746 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 6/1/96 12.986256 3514.661755 270.644730 0.046203 270.598528 3514.061755 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN GROWEQ Q 12/31/96 13.872617 3753.909737 270.598528 0.043251 270.555277 3753.309737 10.22%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/84 4.274745 1000.000000 233.932082 0.000000 233.932082 1000.000000 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/85 4.949967 1157.956089 233.932082 0.181819 233.750263 1157.056089 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/86 5.513970 1288.891938 233.750263 0.163222 233.587041 1287.991938 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/87 5.818893 1359.218000 233.587041 0.154669 233.432373 1358.318000 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/88 6.267419 1463.018488 233.432373 0.143600 233.288773 1462.118488 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/89 6.884597 1606.099186 233.288773 0.130727 233.158046 1605.199186 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/90 6.549305 1527.023159 233.158046 0.137419 233.020627 1526.123159 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/91 7.201615 1678.124844 233.020627 0.124972 232.895655 1677.224844 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/92 8.565493 1994.866104 232.895655 0.105073 232.790582 1993.966104 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/93 9.917575 2308.718061 232.790582 0.090748 232.699834 2307.818061 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND q 8/6/94 9.944338 2314.045806 232.699834 0.090504 232.609331 2313.145806 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 8/6/95 10.548141 2453.596018 232.609331 0.085323 232.524008 2452.696018 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 8/6/96 11.558502 2687.629207 232.524008 0.077865 232.446143 2686.729207 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN HIBOND Q 12/31/96 12.314743 2862.514510 232.446143 0.073083 232.373060 2861.614510 8.84%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ q 11/1/92 8.268342 1000.000000 120.943231 0.000000 120.943231 1000.000000 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ q 11/1/93 10.753055 1300.509219 120.943231 0.242722 120.700510 1297.899219 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ q 11/1/94 11.363818 1371.618625 120.700510 0.229676 120.470833 1369.008625 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 11/1/95 11.249363 1355.220136 120.470833 0.232013 120.238820 1352.610136 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 11/1/96 13.004892 1563.692871 120.238820 0.200694 120.038127 1561.082871 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN INTLEQ Q 12/31/96 13.687743 1643.051026 120.038127 0.190682 119.847445 1640.441026 12.61%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/84 4.892696 1000.000000 204.386293 0.000000 204.386293 1000.000000 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/85 5.670945 1159.063428 204.386293 0.093459 204.292835 1158.533428 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/86 6.518318 1331.645660 204.292835 0.081309 204.211525 1331.115660 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/87 6.721697 1372.647996 204.211525 0.078849 204.132676 1372.117996 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/88 7.042462 1437.596614 204.132676 0.075258 204.057418 1437.066614 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/89 7.569360 1544.584060 204.057418 0.070019 203.987399 1544.054060 6.76%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Pennant Pennant - inception - Tbl 2
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- ---------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 PENN LIMMAT q 9/10/90 8.050673 1642.235847 203.987399 0.065833 203.921566 1641.705847 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/91 8.707241 1775.594222 203.921566 0.060869 203.860697 1775.064222 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/92 9.480589 1932.719484 203.860697 0.055904 203.804794 1932.189484 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/93 9.954736 2028.822916 203.804794 0.053241 203.751553 2028.292916 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT q 9/10/94 9.807571 1998.307818 203.751553 0.054040 203.697513 1997.777818 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 9/10/95 10.400679 2118.592443 203.697513 0.050958 203.646554 2118.062443 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 9/10/96 10.704658 2179.966719 203.646554 0.049511 203.597043 2179.436719 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN LIMMAT Q 12/31/96 10.995296 2238.609756 203.597043 0.048202 203.548841 2238.079756 6.76%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 3/22/94 5.946313 1000.000000 168.171437 0.000000 168.171437 1000.000000 20.39%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 3/22/95 6.148692 1034.034367 168.171437 0.271602 167.899834 1032.364367 20.39%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 3/22/96 8.443044 1417.585688 167.899834 0.197796 167.702038 1415.915688 20.39%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN PARTNR Q 12/31/96 10.000000 1677.020382 167.702038 0.167000 167.535038 1675.350382 20.39%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/87 6.153024 1000.000000 162.521713 0.000000 162.521713 1000.000000 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/88 6.336540 1029.825335 162.521713 0.145190 162.376523 1028.905335 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/89 6.478625 1051.976603 162.376523 0.142005 162.234518 1051.056603 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/90 7.130900 1156.878123 162.234518 0.129016 162.105502 1155.958123 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/91 7.812288 1266.414867 162.105502 0.117763 161.987739 1265.494867 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/92 8.512054 1378.848379 161.987739 0.108082 161.879657 1377.928379 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/93 9.638590 1560.291640 161.879657 0.095450 161.784207 1559.371640 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD q 3/17/94 9.880534 1598.514358 161.784207 0.093112 161.691095 1597.594358 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 3/17/95 10.046136 1624.370726 161.691095 0.091577 161.599517 1623.450726 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 3/17/96 11.020544 1780.914589 161.599517 0.083480 161.516037 1779.994589 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN QUALBD Q 12/31/96 11.530715 1862.395387 161.516037 0.079787 161.436250 1861.475387 6.55%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 3/1/95 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 15.92%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 3/1/96 11.555014 1155.501400 100.000000 0.159238 99.840762 1153.661400 15.92%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN SMLCAP Q 12/31/96 13.160579 1313.962233 99.840762 0.139811 99.700950 1312.122233 15.92%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/87 5.409667 1000.000000 184.854262 0.000000 184.854262 1000.000000 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/88 5.329299 985.143633 184.854262 0.322744 184.531518 983.423633 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/89 7.050619 1301.061425 184.531518 0.243950 184.287567 1299.341425 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/90 6.369260 1173.775432 184.287567 0.270047 184.017520 1172.055432 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/91 8.534217 1570.445451 184.017520 0.201542 183.815979 1568.725451 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/92 9.166839 1685.011483 183.815979 0.187633 183.628346 1683.291483 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/93 9.960345 1829.001677 183.628346 0.172685 183.455661 1827.281677 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO q 11/20/94 9.995646 1833.757846 183.455661 0.172075 183.283586 1832.037846 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 11/20/95 12.613669 2311.878490 183.283586 0.136360 183.147226 2310.158490 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 11/20/96 12.359675 2263.640193 183.147226 0.139162 183.008064 2261.920193 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN TCIGRO Q 12/31/96 12.092262 2212.981458 183.008064 0.142240 182.865824 2211.261458 9.09%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/87 5.197559 1000.000000 192.398008 0.000000 192.398008 1000.000000 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/88 5.435785 1045.834208 192.398008 0.697231 191.700777 1042.044208 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/89 6.322311 1211.991931 191.700777 0.599464 191.101313 1208.201931 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/90 6.612748 1263.704823 191.101313 0.573135 190.528177 1259.914823 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/91 6.968546 1327.704367 190.528177 0.543872 189.984305 1323.914367 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/92 8.044809 1528.387445 189.984305 0.471111 189.513194 1524.597445 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/93 8.767314 1661.521675 189.513194 0.432287 189.080906 1657.731675 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ q 3/17/94 9.332653 1764.626485 189.080906 0.406101 188.674805 1760.836485 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 3/17/95 10.147961 1914.664563 188.674805 0.373474 188.301331 1910.874563 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 3/17/96 13.407878 2524.721273 188.301331 0.282670 188.018661 2520.931273 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
2 PENN VALUEQ Q 12/31/96 15.603540 2933.756704 188.018661 0.242894 187.775768 2929.966704 11.59%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - inception - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $100 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN BALFND q 2/28/89 6.402692 10000.000000 1561.843050 0.000000 1561.843050 10000.000000 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/90 7.127999 11132.815697 1561.843050 0.140292 1561.702758 11131.815697 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/91 7.988449 12475.582835 1561.702758 0.125181 1561.577577 12474.582835 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/92 9.152294 14292.017090 1561.577577 0.109262 1561.468315 14291.017090 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/93 9.392281 14665.749187 1561.468315 0.106470 1561.361845 14664.749187 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/94 10.094085 15760.519175 1561.361845 0.099068 1561.262777 15759.519175 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND q 2/28/95 9.973464 15571.198097 1561.262777 0.100266 1561.162511 15570.198097 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 2/28/96 11.945190 18648.382810 1561.162511 0.083716 1561.078795 18647.382810 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 12/31/96 12.281752 19172.782611 1561.078795 0.081422 1560.997373 19171.782611 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN BALFND Q 2/28/97 12.869790 20089.708384 1560.997373 0.077701 1560.919672 20088.708384 8.65%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/89 6.392017 10000.000000 1564.451409 0.000000 1564.451409 10000.000000 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/90 6.379732 9980.780714 1564.451409 0.131667 1564.319742 9979.940714 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/91 7.862493 12299.453019 1564.319742 0.106836 1564.212905 12298.613019 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/92 8.695734 13601.979344 1564.212905 0.096599 1564.116306 13601.139344 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/93 10.064653 15742.287874 1564.116306 0.083460 1564.032846 15741.447874 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM q 9/6/94 10.400201 16266.255968 1564.032846 0.080768 1563.952078 16265.415968 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 9/6/95 11.066582 17307.603918 1563.952078 0.075904 1563.876174 17306.763918 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 9/6/96 11.902432 18613.929818 1563.876174 0.070574 1563.805600 18613.089818 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDASM Q 12/31/96 12.967956 20279.362216 1563.805600 0.064775 1563.740825 20278.522216 10.14%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/86 4.542707 10000.000000 2201.330616 0.000000 2201.330616 10000.000000 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/87 5.371647 11824.771001 2201.330616 0.716726 2200.613890 11820.921001 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/88 5.393455 11868.911989 2200.613890 0.713828 2199.900062 11865.061989 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/89 6.592083 14501.923800 2199.900062 0.584034 2199.316028 14498.073800 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/90 4.840596 10646.000368 2199.316028 0.795357 2198.520671 10642.150368 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/91 6.256874 13755.866828 2198.520671 0.615323 2197.905348 13752.016828 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/92 7.000715 15386.908940 2197.905348 0.549944 2197.355404 15383.058940 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/93 8.979943 19732.126282 2197.355404 0.428733 2196.926671 19728.276282 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI q 10/9/94 9.524197 20923.962411 2196.926671 0.404234 2196.522438 20920.112411 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 10/9/95 11.784016 25883.855549 2196.522438 0.326714 2196.195724 25880.005549 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 10/9/96 13.498713 29645.815768 2196.195724 0.285212 2195.910511 29641.965768 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDEQI Q 12/31/96 14.198506 31178.648573 2195.910511 0.271155 2195.639356 31174.798573 11.75%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/86 4.150654 10000.000000 2409.258878 0.000000 2409.258878 10000.000000 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/87 5.223288 12584.252988 2409.258878 0.846210 2408.412668 12579.832988 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/88 4.908182 11820.927705 2408.412668 0.900537 2407.512131 11816.507705 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/89 6.447561 15522.581322 2407.512131 0.685531 2406.826600 15518.161322 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/90 5.071896 12207.174207 2406.826600 0.871469 2405.955131 12202.754207 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/91 6.909447 16623.819464 2405.955131 0.639704 2405.315427 16619.399464 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/92 7.281259 17513.724604 2405.315427 0.607038 2404.708390 17509.304604 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/93 9.912135 23835.794193 2404.708390 0.445918 2404.262472 23831.374193 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO q 10/9/94 9.388262 22571.846000 2404.262472 0.470801 2403.791671 22567.426000 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 10/9/95 12.759168 30670.381766 2403.791671 0.346418 2403.445253 30665.961766 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 10/9/96 14.728437 35398.991996 2403.445253 0.300100 2403.145154 35394.571996 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDGRO Q 12/31/96 14.790873 35544.614767 2403.145154 0.298833 2402.846321 35540.194767 13.19%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 8/27/92 5.255877 10000.000000 1902.632044 0.000000 1902.632044 10000.000000 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 8/27/93 5.945388 11311.885723 1902.632044 0.280890 1902.351154 11310.215723 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 8/27/94 6.210579 11814.702128 1902.351154 0.268896 1902.082258 11813.032128 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 8/27/95 7.458051 14185.826487 1902.082258 0.223919 1901.858339 14184.156487 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 8/27/96 8.973145 17065.650645 1901.858339 0.186111 1901.672228 17063.980645 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FIDIND Q 12/31/96 10.000000 19016.722281 1901.672228 0.167000 1901.505228 19015.052281 15.93%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/84 2.755418 10000.000000 3629.213426 0.000000 3629.213426 10000.000000 13.52%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/85 3.152745 11441.984483 3629.213426 1.884072 3627.329354 11436.044483 13.52%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/86 3.821619 13862.270777 3627.329354 1.554315 3625.775039 13856.330777 13.52%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/87 4.756778 17247.006936 3625.775039 1.248744 3624.526294 17241.066936 13.52%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - inception - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $100 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN FLEXMN q 7/31/88 5.214443 18899.885763 3624.526294 1.139144 3623.387150 18893.945763 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/89 6.479420 23477.447170 3623.387150 0.916749 3622.470402 23471.507170 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/90 6.554032 23741.786932 3622.470402 0.906312 3621.564089 23735.846932 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/91 7.383192 26738.703012 3621.564089 0.804530 3620.759559 26732.763012 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/92 8.064706 29200.361342 3620.759559 0.736543 3620.023017 29194.421342 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/93 8.811342 31897.260847 3620.023017 0.674131 3619.348885 31891.320847 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN q 7/31/94 9.461836 34245.685581 3619.348885 0.627785 3618.721100 34239.745581 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 7/31/95 11.071102 40063.230411 3618.721100 0.536532 3618.184568 40057.290411 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 7/31/96 12.125138 43870.987201 3618.184568 0.489891 3617.694677 43865.047201 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN FLEXMN Q 12/31/96 13.367143 48358.242078 3617.694677 0.444373 3617.250304 48352.302078 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/83 3.679564 10000.000000 2717.713294 0.000000 2717.713294 10000.000000 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/84 3.378781 9182.558042 2717.713294 0.177579 2717.535715 9181.958042 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/85 4.140589 11252.198491 2717.535715 0.144907 2717.390809 11251.598491 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/86 5.326260 14473.529968 2717.390809 0.112649 2717.278159 14472.929968 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/87 6.031310 16388.746934 2717.278159 0.099481 2717.178678 16388.146934 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/88 5.802547 15766.556988 2717.178678 0.103403 2717.075275 15765.956988 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/89 6.988377 18987.946362 2717.075275 0.085857 2716.989419 18987.346362 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/90 7.936197 21562.563272 2716.989419 0.075603 2716.913816 21561.963272 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/91 8.112479 22040.906274 2716.913816 0.073960 2716.839855 22040.306274 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/92 8.769114 23824.278412 2716.839855 0.068422 2716.771433 23823.678412 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/93 9.586086 26043.204604 2716.771433 0.062591 2716.708843 26042.604604 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ q 6/1/94 9.444207 25657.160670 2716.708843 0.063531 2716.645312 25656.560670 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 6/1/95 10.236038 27807.684644 2716.645312 0.058616 2716.586695 27807.084644 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 6/1/96 12.986256 35278.290272 2716.586695 0.046203 2716.540493 35277.690272 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN GROWEQ Q 12/31/96 13.872617 37685.525819 2716.540493 0.043251 2716.497242 37684.925819 10.25%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/84 4.274745 10000.000000 2339.320825 0.000000 2339.320825 10000.000000 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/85 4.949967 11579.560886 2339.320825 0.181819 2339.139006 11578.660886 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/86 5.513970 12897.942303 2339.139006 0.163222 2338.975784 12897.042303 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/87 5.818893 13610.249816 2338.975784 0.154669 2338.821115 13609.349816 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/88 6.267419 14658.371895 2338.821115 0.143600 2338.677515 14657.471895 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/89 6.884597 16100.852207 2338.677515 0.130727 2338.546789 16099.952207 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/90 6.549305 15315.856177 2338.546789 0.137419 2338.409370 15314.956177 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/91 7.201615 16840.323993 2338.409370 0.124972 2338.284398 16839.423993 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/92 8.565493 20028.558641 2338.284398 0.105073 2338.179325 20027.658641 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/93 9.917575 23189.068819 2338.179325 0.090748 2338.088577 23188.168819 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND q 8/6/94 9.944338 23250.743083 2338.088577 0.090504 2337.998073 23249.843083 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 8/6/95 10.548141 24661.533334 2337.998073 0.085323 2337.912750 24660.633334 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 8/6/96 11.558502 27022.769198 2337.912750 0.077865 2337.834885 27021.869198 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN HIBOND Q 12/31/96 12.314743 28789.835789 2337.834885 0.073083 2337.761802 28788.935789 8.89%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ q 11/1/92 8.268342 10000.000000 1209.432314 0.000000 1209.432314 10000.000000 12.83%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ q 11/1/93 10.753055 13005.092194 1209.432314 0.242722 1209.189593 13002.482194 12.83%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ q 11/1/94 11.363818 13741.010457 1209.189593 0.229676 1208.959916 13738.400457 12.83%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 11/1/95 11.249363 13600.028950 1208.959916 0.232013 1208.727903 13597.418950 12.83%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 11/1/96 13.004892 15719.375837 1208.727903 0.200694 1208.527209 15716.765837 12.83%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN INTLEQ Q 12/31/96 13.687743 16542.009850 1208.527209 0.190682 1208.336528 16539.399850 12.83%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/84 4.892696 10000.000000 2043.862934 0.000000 2043.862934 10000.000000 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/85 5.670945 11590.634284 2043.862934 0.093459 2043.769475 11590.104284 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/86 6.518318 13321.939355 2043.769475 0.081309 2043.688165 13321.409355 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/87 6.721697 13737.052611 2043.688165 0.078849 2043.609316 13736.522611 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/88 7.042462 14392.040953 2043.609316 0.075258 2043.534059 14391.510953 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/89 7.569360 15468.244962 2043.534059 0.070019 2043.464039 15467.714962 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/90 8.050673 16451.260769 2043.464039 0.065833 2043.398206 16450.730769 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/91 8.707241 17792.360642 2043.398206 0.060869 2043.337338 17791.830642 6.79%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Pennant Pennant - Inception - Tbl 3
Average
$30 contract # of units Annual Total
Beginning # of units fee & deferred at end of Ending return from
amethod system fund qnonq accdate Unit values Value at $100 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 PENN LIMMAT q 9/10/92 9.480589 19372.041486 2043.337338 0.055904 2043.281434 19371.511486 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/93 9.954736 20340.327248 2043.281434 0.053241 2043.228193 20339.797248 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT q 9/10/94 9.807571 20039.105571 2043.228193 0.054040 2043.174153 20038.575571 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 9/10/95 10.400679 21250.398506 2043.174153 0.050958 2043.123195 21249.868506 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 9/10/96 10.704658 21870.935052 2043.123195 0.049511 2043.073684 21870.405052 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN LIMMAT Q 12/31/96 10.995296 22464.199901 2043.073684 0.048202 2043.025481 22463.669901 6.79%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 3/22/94 5.946313 10000.000000 1681.714367 0.000000 1681.714367 10000.000000 20.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 3/22/95 6.148692 10340.343672 1681.714367 0.271602 1681.442764 10338.673672 20.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 3/22/96 8.443044 14196.495240 1681.442764 0.197796 1681.244968 14194.825240 20.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN PARTNR Q 12/31/96 10.000000 16812.449681 1681.244968 0.167000 1681.077968 16810.779681 20.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/87 6.153024 10000.000000 1625.217129 0.000000 1625.217129 10000.000000 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/88 6.336540 10298.253347 1625.217129 0.145190 1625.071939 10297.333347 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/89 6.478625 10528.231693 1625.071939 0.142005 1624.929934 10527.311693 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/90 7.130900 11587.212866 1624.929934 0.129016 1624.800918 11586.292866 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/91 7.812288 12693.412714 1624.800918 0.117763 1624.683155 12692.492714 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/92 8.512054 13829.390746 1624.683155 0.108082 1624.575073 13828.470746 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/93 9.638590 15658.613050 1624.575073 0.095450 1624.479623 15657.693050 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD q 3/17/94 9.880534 16050.726148 1624.479623 0.093112 1624.386511 16049.806148 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 3/17/95 10.046136 16318.807803 1624.386511 0.091577 1624.294933 16317.887803 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 3/17/96 11.020544 17900.613780 1624.294933 0.083480 1624.211453 17899.693780 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN QUALBD Q 12/31/96 11.530715 18728.319362 1624.211453 0.079787 1624.131666 18727.399362 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 3/1/95 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 16.09%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 3/1/96 11.555014 11555.014000 1000.000000 0.159238 999.840762 11553.174000 16.09%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN SMLCAP Q 12/31/96 13.160579 13158.483333 999.840762 0.139811 999.700950 13156.643333 16.09%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/87 5.409667 10000.000000 1848.542618 0.000000 1848.542618 10000.000000 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/88 5.329299 9851.436327 1848.542618 0.322744 1848.219874 9849.716327 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/89 7.050619 13031.094161 1848.219874 0.243950 1847.975924 13029.374161 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/90 6.369260 11770.239133 1847.975924 0.270047 1847.705877 11768.519133 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/91 8.534217 15768.722905 1847.705877 0.201542 1847.504335 15767.002905 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/92 9.166839 16935.774793 1847.504335 0.187633 1847.316702 16934.054793 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/93 9.960345 18399.911680 1847.316702 0.172685 1847.144018 18398.191680 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO q 11/20/94 9.995646 18463.397711 1847.144018 0.172075 1846.971943 18461.677711 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 11/20/95 12.613669 23297.092737 1846.971943 0.136360 1846.835583 23295.372737 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 11/20/96 12.359675 22826.287580 1846.835583 0.139162 1846.696420 22824.567580 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN TCIGRO Q 12/31/96 12.092262 22330.736950 1846.696420 0.142240 1846.554181 22329.016950 9.21%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/87 5.197559 10000.000000 1923.980084 0.000000 1923.980084 10000.000000 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/88 5.435785 10458.342079 1923.980084 0.697231 1923.282852 10454.552079 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/89 6.322311 12159.592333 1923.282852 0.599464 1922.683388 12155.802333 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/90 6.612748 12714.220729 1922.683388 0.573135 1922.110253 12710.430729 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/91 6.968546 13394.313712 1922.110253 0.543872 1921.566380 13390.523712 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/92 8.044809 15458.634509 1921.566380 0.471111 1921.095269 15454.844509 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/93 8.767314 16842.845446 1921.095269 0.432287 1920.662981 16839.055446 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ q 3/17/94 9.332653 17924.881136 1920.662981 0.406101 1920.256880 17921.091136 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 3/17/95 10.147961 19486.691932 1920.256880 0.373474 1919.883406 19482.901932 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 3/17/96 13.407878 25741.562487 1919.883406 0.282670 1919.600737 25737.772487 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 PENN VALUEQ Q 12/31/96 15.603540 29952.566880 1919.600737 0.242894 1919.357843 29948.776880 11.84%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Daniel J. Toran, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and L. Stockton Illoway, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Daniel J. Toran
-------------------
Daniel J. Toran
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Rudolph C. Sander, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and L. Stockton Illoway, and each of them
severally, his true and lawful attorneys and agents, with power of substitution
and resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Rudolph C. Sander
---------------------
Rudolph C. Sander
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Ernest K. Noll, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and L. Stockton Illoway, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Ernest K. Noll
------------------
Ernest K. Noll
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Richard J. Liburdi, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and L. Stockton Illoway, and each of them
severally, his true and lawful attorneys and agents, with power of substitution
and resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Richard J. Liburdi
----------------------
Richard J. Liburdi
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
James D. Benson, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and L. Stockton Illoway, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ James D. Benson
-------------------
James D. Benson
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
L. Stockton Illoway, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and L. Stockton Illoway, and each of them
severally, his true and lawful attorneys and agents, with power of substitution
and resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ L. Stockton Illoway
-----------------------
L. Stockton Illoway
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Nancy S. Brodie, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and L. Stockton Illoway, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Nancy S. Brodie
-------------------
Nancy S. Brodie
<PAGE>
The Penn Insurance and Annuity Company
Power of Attorney
-----------------
Robert E. Chappell, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and L. Stockton Illoway, and each of them
severally, his true and lawful attorneys and agents, with power of substitution
and resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Insurance and Annuity
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 33-83120) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a director and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Robert E. Chappell
----------------------
Robert E. Chappell
