-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L9C/FwY4EJ6vaoTkCcRziwQNyDhu7EQX7xjGmAdYFPgZGWRpAsdy8YWkXGO7AIGn v+XnlyUXyYGIEQwsxuiiUw== 0000950136-96-000433.txt : 19960612 0000950136-96-000433.hdr.sgml : 19960612 ACCESSION NUMBER: 0000950136-96-000433 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19960607 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES /NY/ CENTRAL INDEX KEY: 0000727920 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 135570651 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 033-88456 FILM NUMBER: 96578343 BUSINESS ADDRESS: STREET 1: 787 SEVENTH AVE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125541234 POS AM 1 POST-EFFECTIVE AMENDMENT Registration No. 33-88456 - ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------ POST-EFFECTIVE AMENDMENT NO. 4 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 The Equitable Life Assurance Society of the United States (Exact name of registrant as specified in its charter) New York (State or other jurisdiction of incorporation or organization) 13-5570651 (I.R.S. Employer Identification No.) 787 Seventh Avenue, New York, New York 10019 (212)554-1234 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Jonathan E. Gaines, Vice President and Associate General Counsel The Equitable Life Assurance Society of the United States 787 Seventh Avenue, New York, New York 10019 (212)554-1234 (Name, address, including zip code, and telephone to: Peter E. Panarites Freedman, Levy, Kroll & Simonds 1050 Connecticut Avenue, N.W., Suite 825 Washington, D.C. 20036 (202)457-5100 NOTE This Post-Effective Amendment No.4 to the Form S-3 Registration Statement No. 33-88456 ("Registration Statement") of The Equitable Life Assurance society of the United States ("Equitable Life") is being filed for the purpose of including in the Registration Statement two prospectuses of Equitable Life, and related exhibits, contained in a Form N-4 Registration Statement (filed by Equitable Life contemporaneously herewith) for units of interest in certain flexible premium annuity contracts ("Contracts") the variable investment options of which are to be funded through Equitable Life's Separate Account No. 49. The two prospectuses describe Rollover IRA and Accumulator annuity products of Equitable Life. In additional to Separate Account No. 49, each prospectus also relates to market value adjustment interests ("Interests") under the Contracts that have been registered under the Securities Act of 1933 pursuant to the Registration Statement in connection with existing Rollover IRA and Accumulator annuity products of Equitable Life, the variable investment options of which are funded through Equitable Life's Separate Account No. 45, and Equitable Life's existing Assured Payment Plan and Assured Growth Plan products. Separate prospectuses, each dated May 1,1996, for each of such four existing products, are contained in Post-Effective Amendment No. 3 to the Registration Statement. The Interests described in each of such May 1,1996 prospectuses, and the Interests described in the Rollover IRA and Accumulator prospectuses contained in this Post-Effective Amendment No. 4, are identical. For purposes of the continued effectiveness of the aforesaid four May 1,1996 prospectuses, this Post-Effective Amendment No. 4 shall not be deemed to amend, delete or supersede such prospectuses as previously filed as part of the Registration Statement. INCOME MANAGER(SM) PROSPECTUS FOR ROLLOVER IRA AND CHOICE INCOME PLAN DATED JULY , 1996 COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES Issued By: The Equitable Life Assurance Society of the United States This prospectus describes individual retirement annuity (IRA) certificates The Equitable Life Assurance Society of the United States (EQUITABLE LIFE, WE, OUR and US) offers under a combination variable and fixed deferred annuity contract (ROLLOVER IRA) issued on a group basis or as individual contracts. Enrollment under a group contract will be evidenced by issuance of a certificate. Certificates and individual contracts each will be referred to as "Certificates." Under the Rollover IRA we will accept only initial contributions that are rollover contributions or that are direct transfers from other individual retirement arrangements, as described in this prospectus. A minimum initial contribution of $10,000 is required to put a Certificate into effect. The Rollover IRA is designed to provide retirement income. Contributions accumulate on a tax-deferred basis and can be distributed under a number of different methods which are designed to be responsive to the owner's (CERTIFICATE OWNER, YOU and YOUR) objectives. The distribution methods include the Choice Income Plan featuring the IRA ASSURED PAYMENT OPTION, IRA Assured Payment Option Plus (IRA APO PLUS), and a variety of payout options, including variable annuities and fixed annuities. The IRA Assured Payment Option and IRA APO Plus are also available for election in the application if you are interested in receiving distributions rather than accumulating funds. The Rollover IRA offers investment options (INVESTMENT OPTIONS) that permit you to create your own strategies. These Investment Options include 9 variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the GUARANTEED PERIOD ACCOUNT.
Investment Funds - ------------------------------------------------------------------------------ Guarantee Periods Asset Allocation Series: Equity Series: Fixed Income Series: Expiration Dates: - ---------------------------- ---------------------- ------------------------ ---------------------- o Conservative Investors o Growth & Income o Money Market February 15, o Growth Investors o Common Stock o Intermediate o 1997 through 2006 o Global Government o 1997 through 2011 o International Securities o Aggressive Stock
We invest each Investment Fund in Class B shares of a corresponding portfolio (PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are purchased by separate accounts of insurance companies. The prospectus for the Trust, which accompanies this prospectus, describes the investment objectives, policies and risks of the Portfolios. Amounts allocated to a Guarantee Period accumulate on a fixed basis and are credited with interest at a rate we set (GUARANTEED RATE) for the entire period. On each business day (BUSINESS DAY) we will determine the Guaranteed Rates available for amounts newly allocated to Guarantee Periods. A market value adjustment (positive or negative) will be made for withdrawals, transfers, surrender and certain other transactions from a Guarantee Period before its expiration date (EXPIRATION DATE). Each Guarantee Period has its own Guaranteed Rates. This prospectus provides information about the Rollover IRA that prospective investors should know before investing. You should read it carefully and retain it for future reference. The prospectus is not valid unless accompanied by a current prospectus for the Trust, which you should also read carefully. Registration statements relating to Separate Account No. 49 (SEPARATE ACCOUNT) and interests under the Guarantee Periods have been filed with the Securities and Exchange Commission (SEC). The statement of additional information (SAI), dated July , 1996, which is part of the registration statement for the Separate Account, is available free of charge upon request by writing to our Processing Office or calling 1-800-789-7771, our toll-free number. The SAI has been incorporated by reference into this prospectus. The Table of Contents for the SAI appears at the back of this prospectus. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE CERTIFICATES ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL INVESTED. Copyright 1996 The Equitable Life Assurance Society of the United States, New York, New York 10019. All rights reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1995 is incorporated herein by reference. All documents or reports filed by Equitable Life pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE ACT) after the date hereof and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified and superseded, to constitute a part of this prospectus. Equitable Life files its Exchange Act documents and reports, including its annual and quarterly reports on Form 10-K and Form 10-Q, electronically pursuant to EDGAR under CIK No. 0000727920. Equitable Life will provide without charge to each person to whom this prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (other than exhibits not specifically incorporated by reference into the text of such documents). Requests for such documents should be directed to The Equitable Life Assurance Society of the United States, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 PROSPECTUS TABLE OF CONTENTS
GENERAL TERMS PAGE 4 FEE TABLE PAGE 6 PART 1: SUMMARY PAGE 8 What is the Rollover IRA? 8 Investment Options 8 Contributions 8 Transfers 8 Free Look Period 8 Services We Provide 8 Death Benefits 9 Surrendering the Certificates 9 Distribution Methods 9 Taxes 10 Deductions from Annuity Account Value 10 Deductions from Investment Funds 10 Trust Charges to Portfolios 10 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS PAGE 11 Equitable Life 11 Separate Account No. 49 11 The Trust 11 The Trust's Investment Adviser 12 Investment Policies and Objectives of the Trust's Portfolios 13 PART 3: INVESTMENT PERFORMANCE PAGE 14 Performance Data for a Certificate 14 Rate of Return Data for Investment Funds 15 Communicating Performance Data 18 Money Market Fund and Intermediate Government Securities Fund Yield Information 19 PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 20 Guarantee Periods 20 Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date 21 Modal Payment Portion 22 Death Benefit Amount 22 Investments 22 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 24 Availability of the Certificates 24 Contributions Under the Certificates 24 Methods of Payment 24 Allocation of Contributions 25 Free Look Period 25 Annuity Account Value 26 Transfers Among Investment Options 26 Dollar Cost Averaging 27 Death Benefit 27 Cash Value 28 Surrendering the Certificates to Receive the Cash Value 28 When Payments are Made 28 Assignment 29 Distribution of the Certificates 29 PART 6: DISTRIBUTION METHODS UNDER THE CERTIFICATES PAGE 30 IRA Assured Payment Option 30 IRA APO Plus 33 Withdrawals 35 Income Annuity Options 38 PART 7: DEDUCTIONS AND CHARGES PAGE 39 Charges Deducted from the Annuity Account Value 39 Charges Deducted from the Investment Funds 40 Trust Charges to Portfolios 40 Sponsored Arrangements 40 Other Distribution Arrangements 41 PART 8: VOTING RIGHTS PAGE 42 Trust Voting Rights 42 Voting Rights of Others 42 Separate Account Voting Rights 42 Changes in Applicable Law 42 PART 9: TAX ASPECTS OF THE CERTIFICATES PAGE 43 Tax-Qualified Individual Retirement Annuities (IRAs) 43 Penalty Tax on Early Distributions 48 Tax Penalty for Insufficient Distributions 48 Tax Penalty for Excess Distributions or Accumulation 48 Federal and State Income Tax Withholding 48 Other Withholding 49 Impact of Taxes to Equitable Life 49 Transfers Among Investment Options 49 Tax Changes 49 PART 10: INDEPENDENT ACCOUNTANTS PAGE 50 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 51 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE PAGE 52 APPENDIX III: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT OPTION AND IRA APO PLUS PAGE 53 APPENDIX IV: IRS TAX DEDUCTION TABLE PAGE 54 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS PAGE 55
3 GENERAL TERMS ACCUMULATION UNIT--Contributions that are invested in an Investment Fund purchase Accumulation Units in that Investment Fund. ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an Investment Fund on a given date. ANNUITANT--The individual who is the measuring life for determining annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under the Certificate. See "Annuity Account Value" in Part 5. ANNUITY COMMENCEMENT DATE--The date on which amounts will be applied under an income annuity option. BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open for trading. For the purpose of determining the Transaction Date, our Business Day ends at 4:00 p.m. Eastern Time or the closing of the New York Stock Exchange, if earlier. CASH VALUE--The Annuity Account Value minus any applicable charges. CERTIFICATE--The Certificate issued under the terms of a group annuity contract and any individual contract, including any endorsements. CERTIFICATE OWNER--The person who owns a Rollover IRA Certificate and has the right to exercise all rights under the Certificate. The Certificate Owner must also be the Annuitant. CODE--The Internal Revenue Code of 1986, as amended. CONTRACT DATE--The date on which you are enrolled under the group annuity contract, or the effective date of the individual contract. This is usually the Business Day we receive the initial contribution at our Processing Office. CONTRACT YEAR--The 12-month period beginning on your Contract Date and each anniversary of that date. EXPIRATION DATE--The date on which a Guarantee Period ends. GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date that are available for investment under the Certificates. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods and the Modal Payment Portion of such Account. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. INVESTMENT FUNDS--The funds of the Separate Account that are available under the Certificates. INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each available Guarantee Period. IRA--An individual retirement annuity, as defined in Section 408(b) of the Code. IRA ASSURED PAYMENT OPTION--A distribution option which provides guaranteed lifetime income. The IRA Assured Payment Option may be elected in the application or elected as a distribution option at a later date. Under this option amounts are allocated to the Guaranteed Period Account and the Life Contingent Annuity. No amounts may be allocated to the Investment Funds. IRA APO PLUS--A distribution option which provides guaranteed lifetime income. IRA APO Plus may be elected in the application or as a distribution option at a later date. Under this option amounts are allocated to the Guaranteed Period Account, the Life Contingent Annuity and to the Investment Funds. The amount in the Investment Funds is then systematically converted to increase the guaranteed lifetime income. LIFE CONTINGENT ANNUITY--Provides guaranteed lifetime income beginning at a future date. Amounts may only be applied under the Life Contingent Annuity through election of the IRA Assured Payment Option and IRA APO Plus. MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date. MODAL PAYMENT PORTION--Under the IRA Assured Payment Option and IRA APO Plus, the portion of the Guaranteed Period Account from which payments, other than payments due on an Expiration Date, are made. PORTFOLIOS--The portfolios of the Trust that correspond to the Investment Funds of the Separate Account. PROCESSING DATE--The day when we deduct certain charges from the Annuity Account Value. If the 4 Processing Date is not a Business Day, it will be on the next succeeding Business Day. The Processing Date will be once each year on each anniversary of the Contract Date. PROCESSING OFFICE--The address to which all contributions, written requests (e.g., transfers, withdrawals, etc.) or other written communications must be sent. See "Services We Provide" in Part 1. SAI--The statement of additional information for the Separate Account under the Rollover IRA. SEPARATE ACCOUNT--Equitable Life's Separate Account No. 49. TRANSACTION DATE--The Business Day we receive a contribution or a transaction request providing all the information we need at our Processing Office. If your contribution or request reaches our Processing Office on a non-Business Day, or after the close of the Business Day, the Transaction Date will be the next following Business Day. Transaction requests must be made in a form acceptable to us. TRUST--The Hudson River Trust, a mutual fund in which the assets of separate accounts of insurance companies are invested. VALUATION PERIOD--Each Business Day together with any preceding non-business days. 5 FEE TABLE The purpose of this fee table is to assist you in understanding the various costs and expenses you may bear directly or indirectly under the Certificate so that you may compare them with other similar products. The table reflects both the charges of the Separate Account and the expenses of the Trust. Charges for applicable taxes such as state or local premium taxes may also apply. For a complete description of the charges under the Certificate, see "Part 7: Deductions and Charges." For a complete description of the Trust's charges and expenses, see the prospectus for the Trust. As explained in Part 4, the Guarantee Periods are not a part of the Separate Account and are not covered by the fee table and examples. The only charge shown in the Table which will be deducted from amounts allocated to the Guarantee Periods is the withdrawal charge. A market value adjustment (either positive or negative) also may be applicable as a result of a withdrawal, transfer or surrender of amounts from a Guarantee Period. See "Part 4: The Guaranteed Period Account." OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE) - ---------------------------------------------------------------- WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (percentage deducted upon surrender or for certain withdrawals. The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1")(1)
CONTRACT YEAR - ------------------------------- 1 .......................7.00% 2 .......................6.00 3 .......................5.00 4 .......................4.00 5 .......................3.00 6 .......................2.00 7 .......................1.00 8+ .......................0.00
Transfer Charge (2) ............................................................................ $0.00 Guaranteed Minimum Death Benefit Charge (percentage deducted annually on each Processing Date as a percentage of the guaranteed minimum death benefit then in effect)(3) .................... 0.20% SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT FUND) - ----------------------------------------------------------------------------------------------- Mortality and Expense Risk Charge .............................................................. 0.90% Asset Based Administrative Charge .............................................................. 0.35% ------- Total Separate Account Annual Expenses ........................................................ 1.25% =======
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH PORTFOLIO)
INVESTMENT PORTFOLIOS ----------------------------------------------------------- CONSERVATIVE GROWTH GROWTH & COMMON INVESTORS INVESTORS INCOME STOCK GLOBAL -------------- ----------- ---------- -------- -------- Investment Advisory Fee 0.55% 0.52% 0.55% 0.35% 0.53% Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% Other Expenses 0.04% 0.04% 0.05% 0.03% 0.08% -------------- ----------- ---------- -------- -------- TOTAL TRUST ANNUAL EXPENSES(5) 0.84% 0.81% 0.85% 0.63% 0.86% ============== =========== ========== ======== ========
INTERMEDIATE AGGRESSIVE MONEY GOVT. INTERNATIONAL STOCK MARKET SECURITIES --------------- ------------ -------- -------------- Investment Advisory Fee 0.90% 0.46% 0.40% 0.50% Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% Other Expenses 0.13% 0.03% 0.04% 0.07% --------------- ------------ -------- -------------- TOTAL TRUST ANNUAL EXPENSES(5) 1.28% 0.74% 0.69% 0.82% =============== ============ ======== ==============
6 - ------------ Notes: (1) Deducted upon a withdrawal with respect to amounts in excess of the 15% (10% under the IRA Assured Payment Option and IRA APO Plus) free corridor amount, and upon a surrender. See "Part 7: Deductions and Charges," "Withdrawal Charge." (2) We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. (3) See "Part 7: Deductions and Charges," "Guaranteed Minimum Death Benefit Charge." (4) The Class B shares of the Trust are subject to fees imposed under a distribution plan (herein, the "Rule 12b-1 Plan") adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Rule 12b-1 Plan provides that the Trust, on behalf of each Portfolio, may pay annually up to 0.25% of the average daily net assets of a Portfolio attributable to its Class B shares in respect of activities primarily intended to result in the sale of the Class B shares. The Rule 12b-1 Plan fee, which may be waived in the discretion of the Distributors may only be increased by action of the Board of Trustees of the Trust up to a maximum of 0.50% per annum. (5) Expenses shown for all Portfolios are estimated. The investment advisory fee for each Portfolio may vary from year to year depending upon the average daily net assets of the respective Portfolio of the Trust. The maximum investment advisory fees, however, cannot be increased without a vote of that Portfolio's shareholders. The other direct operating expenses will also fluctuate from year to year depending on actual expenses. See "Trust Charges to Portfolios" in Part 7. EXAMPLES The examples below show the expenses that a hypothetical Certificate Owner would pay in the two situations noted below assuming a $1,000 contribution invested in one of the Investment Funds listed, and a 5% annual return on assets.(1) These examples should not be considered a representation of past or future expenses for each Investment Fund or Portfolio. Actual expenses may be greater or less than those shown. Similarly, the annual rate of return assumed in the examples is not an estimate or guarantee of future investment performance. IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $91.16 $119.54 Growth Investors 90.86 118.64 EQUITY SERIES: Growth & Income 91.26 119.84 Common Stock 89.07 113.23 Global 91.36 120.14 International 95.53 132.67 Aggressive Stock 90.17 116.54 FIXED INCOME SERIES: Money Market 89.67 115.04 Intermediate Government Securities 90.96 118.94
IF YOU DO NOT SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $23.28 $71.93 Growth Investors 22.98 71.02 EQUITY SERIES: Growth & Income 23.38 72.23 Common Stock 21.19 65.62 Global 23.48 72.53 International 27.65 85.04 Aggressive Stock 22.29 68.93 FIXED INCOME SERIES: Money Market 21.79 67.43 Intermediate Government Securities 23.08 71.32 - ------------ Notes: (1) The amount accumulated could not be paid in the form of an annuity at the end of any of the periods shown in the examples. If the amount applied to purchase an annuity is less than $2,000, or the initial payment is less than $20 we may pay the amount to the payee in a single sum instead of as payments under an annuity form. See "Income Annuity Options" in Part 6. The examples do not reflect charges for applicable taxes such as state or local premium taxes that may also be deducted in certain jurisdictions.
7 PART 1: SUMMARY The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). WHAT IS THE ROLLOVER IRA? The Rollover Individual Retirement Annuity (IRA) is designed to provide for retirement income through the investment of rollover contributions, direct transfers from other individual retirement arrangements and additional IRA contributions. The Rollover IRA features a combination of Investment Options, consisting of Investment Funds providing variable returns and Guarantee Periods providing guaranteed interest. The Rollover IRA also makes available distribution methods under the Choice Income Plan which includes the IRA Assured Payment Option and IRA APO Plus (which can be applied for in the application or at a later date). Withdrawal options and fixed and variable income annuity options are also available. The Rollover IRA and/or the IRA Assured Payment Option and IRA APO Plus may not be available in all states. These Certificates are not available in Puerto Rico. INVESTMENT OPTIONS The Rollover IRA offers the following Investment Options which permit you to create your own strategy for retirement savings. All available Investment Options may be selected under a Certificate in most states. INVESTMENT FUNDS o Asset Allocation Series: the Conservative Investors and Growth Investors Funds o Equity Series: the Growth & Income, Common Stock, Global, International and Aggressive Stock Funds o Fixed Income Series: the Money Market and Intermediate Government Securities Funds GUARANTEE PERIODS o Guarantee Periods maturing in each of calendar years 1997 through 2006. o Guarantee Periods maturing in 1997 through 2011 under the IRA Assured Payment Option and IRA APO Plus. CONTRIBUTIONS o To put a Certificate into effect, you must contribute at least $10,000 in the form of either a rollover contribution or a direct custodian-to-custodian transfer from one or more other individual retirement arrangements. o Subsequent contributions may be made in an amount of at least $1,000. Subsequent contributions must not exceed $2,000 for any taxable year, except for additional rollover contributions or direct transfers, both of which are unlimited. TRANSFERS Under the Rollover IRA, you may make an unlimited number of transfers among the Investment Funds. However, there are restrictions for transfers to and from the Guaranteed Period Account and among the Guarantee Periods. Transfers from a Guarantee Period may result in a market value adjustment. Transfers among Investment Options are currently free of charge. Transfers among the Investment Options are not taxable. FREE LOOK PERIOD You have the right to examine the Rollover IRA Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You may cancel it by sending it to our Processing Office. Your refund will equal the Annuity Account Value, reflecting any investment gain or loss, and any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. SERVICES WE PROVIDE O REGULAR REPORTS o Statement of your Certificate values as of the last day of the calendar year; o Three additional reports of your Certificate values each year; o Annual and semi-annual statements of the Trust; and o Written confirmation of financial transactions. 8 o TOLL-FREE TELEPHONE SERVICES o Call 1-800-789-7771 for a recording of daily Accumulation Unit Values and Guaranteed Rates applicable to the Guarantee Periods. Also call during our regular business hours to speak to one of our customer service representatives. o PROCESSING OFFICE o FOR CONTRIBUTIONS SENT BY REGULAR MAIL: Equitable Life Income Management Group Post Office Box 13014 Newark, NJ 07188-0014 o FOR CONTRIBUTIONS SENT BY EXPRESS MAIL: Equitable Life c/o First Chicago National Processing Center 300 Harmon Meadow Boulevard, 3rd Floor Attn: Box 13014 Secaucus, NJ 07094 o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS) SENT BY REGULAR MAIL: Equitable Life Income Management Group P.O. Box 1547 Secaucus, NJ 07096-1547 o FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS) SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 DEATH BENEFITS If you die before the Annuity Commencement Date, the Rollover IRA provides a death benefit. The beneficiary will be paid the greater of the Annuity Account Value in the Investment Funds and the guaranteed minimum death benefit, plus any death benefit provided with respect to the Guaranteed Period Account. SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time before the Annuity Commencement Date while the Annuitant is living. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. DISTRIBUTION METHODS IRA ASSURED PAYMENT OPTION The IRA Assured Payment Option provides guaranteed lifetime income. You may elect to receive payments on a monthly, quarterly or annual basis during a fixed period. Payments during the fixed period represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates or, distributions from amounts in the Modal Payment Portion of the Guaranteed Period Account. During the fixed period you can take withdrawals from your Annuity Account Value. After the fixed period ends, payments are made out of the Life Contingent Annuity. The Life Contingent Annuity does not have a Cash Value or an Annuity Account Value. There is no death benefit under the Life Contingent Annuity and income is paid only if you (or a joint Annuitant) are living at the date annuity benefits begin. A $2.50 charge will be deducted from each payment made on a monthly or quarterly basis. IRA APO PLUS IRA APO Plus is a variation of the IRA Assured Payment Option. IRA APO Plus enables you to keep a portion of your Annuity Account Value in the Investment Funds while periodically converting such Annuity Account Value to increase the guaranteed lifetime income under the IRA Assured Payment Option. When you elect IRA APO Plus, a portion of your initial contribution or Annuity Account Value, as applicable, is allocated to the IRA Assured Payment Option to provide a minimum guaranteed lifetime income, and the remaining contribution or Annuity Account Value is allocated to the Investment Funds. Every three years during the fixed period, a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed payments under the IRA Assured Payment Option. WITHDRAWALS o Lump Sum Withdrawals--Before the Annuity Commencement Date while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. The minimum withdrawal amount is $1,000. o Substantially Equal Payment Withdrawals--If you are below age 59 1/2 , this withdrawal option is designed to allow you to withdraw funds annually and not have a 10% penalty tax apply. This is accomplished by distribution of substantially 9 equal periodic payments over your life expectancy or over the joint life expectancies of you and your spouse. If you change or stop such distributions before the later of age 59 1/2 or five years from the date of the first distribution, the 10% penalty tax may apply on all prior distributions. o Periodic Withdrawals--You may also withdraw funds under our Periodic Withdrawal option, where the minimum withdrawal amount is $250. These withdrawals are available if you are age 59 1/2 to 70 1/2 . o Minimum Distribution Withdrawals--You may also withdraw funds annually under our Minimum Distribution Withdrawals option, which is designed to meet the minimum distribution requirements set forth in the Code. The minimum withdrawal amount is $250. Withdrawals may be subject to a withdrawal charge and withdrawals from Guarantee Periods prior to their Expiration Date will result in a market value adjustment. Withdrawals may be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Certificates also provide income annuity options to which amounts may be applied at the Annuity Commencement Date. The income annuity options are offered on a fixed and variable basis. TAXES Generally, any earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Distributions prior to your attaining age 59 1/2 may be subject to tax penalty. DEDUCTIONS FROM ANNUITY ACCOUNT VALUE Withdrawal Charge A withdrawal charge will be imposed as a percentage of the initial and each subsequent contribution if (i) a Lump Sum Withdrawal or cumulative withdrawals during a Contract Year exceed the free corridor amount, or (ii) the Certificate is surrendered. The free corridor amount is 15% under the Rollover IRA and 10% under the IRA Assured Payment Option and IRA APO Plus. We determine the withdrawal charge separately for each contribution in accordance with the table below.
CONTRACT YEAR 1 2 3 4 5 6 7 8+ ------ ------ ------ ------ ------ ------ ------ ----- Percentage of Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For purposes of the table, for each contribution the Contract Year in which we receive that contribution is "Contract Year 1." Guaranteed Minimum Death Benefit Charge We deduct annually on each Processing Date an amount equal to 0.20% of the guaranteed minimum death benefit in effect on such Processing Date. Charges for State Premium and Other Applicable Taxes Generally, we deduct a charge for premium and other applicable taxes from the Annuity Account Value on the Annuity Commencement Date. The current tax charge that might be imposed varies by state and ranges from 0 to 2.25%. DEDUCTIONS FROM INVESTMENT FUNDS Mortality and Expense Risk Charge We charge each Investment Fund a daily asset based charge for mortality and expense risks equivalent to an annual rate of 0.90%. Asset Based Administrative Charge We charge each Investment Fund a daily asset based charge to cover the administrative expenses under the Certificate equivalent to an annual rate of 0.35%. TRUST CHARGES TO PORTFOLIOS Investment advisory fees and other expenses of the Trust are charged daily against the Trust's assets. These are reflected in the Portfolio's daily share price and in the daily Accumulation Unit Value for the Investment Funds. The Trust Class B shares held in the Investment Funds are subject to a distribution fee under a Rule 12b-1 Plan. We offer other deferred variable annuities that invest in Trust shares that are not subject to the Rule 12b-1 Plan fees and that bear different charges and expenses. For more information about the Plan, and the address for any inquiries about the Plan, see "The Trust" in the accompanying Trust prospectus. 10 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS EQUITABLE LIFE Equitable Life is a New York stock life insurance company that has been in business since 1859. For more than 100 years we have been among the largest life insurance companies in the United States. Equitable Life has been selling annuities since the turn of the century. Our home office is located at 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the Holding Company). The largest stockholder of the Holding Company is AXA S.A. AXA beneficially owns 60.6% of the outstanding common stock of the Holding Company plus convertible preferred stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA, a French company, is the holding company for an international group of insurance and related financial service companies. Equitable Life, the Holding Company and their subsidiaries managed approximately $195.3 billion of assets as of December 31, 1995. SEPARATE ACCOUNT NO. 49 Separate Account No. 49 is organized as a unit investment trust, a type of investment company, and is registered with the SEC under the Investment Company Act of 1940 (1940 Act). This registration does not involve any supervision by the SEC of the management or investment policies of the Separate Account. The Separate Account has several Investment Funds, each of which invests in shares of a corresponding Portfolio of the Trust. Because amounts allocated to the Investment Funds are invested in a mutual fund, investment return and principal will fluctuate and the Certificate Owner's Accumulation Units may be worth more or less than the original cost when redeemed. Under the New York Insurance Law, the portion of the Separate Account's assets equal to the reserves and other liabilities relating to the Certificates are not chargeable with liabilities arising out of any other business we may conduct. Income, gains or losses, whether or not realized, from assets of the Separate Account are credited to or charged against the Separate Account without regard to our other income gains or losses. We are the issuer of the Certificates, and the obligations set forth in the Certificates (other than those of Annuitants or Certificate Owners) are our obligations. In addition to contributions made under the Rollover IRA Certificates, we may allocate to the Separate Account monies received under other contracts, certificates, or agreements. Owners of all such contracts, certificates or agreements will participate in the Separate Account in proportion to the amounts they have in the Investment Funds that relate to their contracts, certificates or agreements. We may retain in the Separate Account assets that are in excess of the reserves and other liabilities relating to the Rollover IRA Certificates or to other contracts, certificates or agreements, or we may transfer the excess to our General Account. We reserve the right, subject to compliance with applicable law; (1) to add Investment Funds (or sub-funds of Investment Funds) to, or to remove Investment Funds (or sub-funds) from, the Separate Account, or to add other separate accounts; (2) to combine any two or more Investment Funds or sub-funds thereof; (3) to transfer the assets we determine to be the share of the class of contracts to which the Certificate belongs from any Investment Fund to another Investment Fund; (4) to operate the Separate Account or any Investment Fund as a management investment company under the 1940 Act, in which case charges and expenses that otherwise would be assessed against an underlying mutual fund would be assessed against the Separate Account; (5) to deregister the Separate Account under the 1940 Act, provided that such action conforms with the requirements of applicable law; (6) to restrict or eliminate any voting rights as to the Separate Account; and (7) to cause one or more Investment Funds to invest some or all of their assets in one or more other trusts or investment companies. If any changes are made that result in a material change in the underlying investment policy of an Investment Fund, you will be notified as required by law. THE TRUST The Trust is an open-end diversified management investment company, more commonly called a mu- 11 tual fund. As a "series" type of mutual fund, it issues several different series of stock, each of which relates to a different Portfolio of the Trust. The Trust commenced operations in January 1976 with a predecessor of its Common Stock Portfolio. The Trust does not impose a sales charge or "load" for buying and selling its shares. All dividend distributions to the Trust are reinvested in full and fractional shares of the Portfolio to which they relate. Each Investment Fund invests in Class B shares of a corresponding Portfolio of the Trust. More detailed information about the Trust, its investment objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan relating to the Class B shares, and all other aspects of its operations appears in its prospectus which accompanies this prospectus or in its statement of additional information. THE TRUST'S INVESTMENT ADVISER The Trust is advised by Alliance Capital Management L.P. (Alliance), which is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Alliance, a publicly-traded limited partnership, is indirectly majority-owned by Equitable Life. On December 31, 1995, Alliance was managing over $146.5 billion in assets. Alliance acts as an investment adviser to various separate accounts and general accounts of Equitable Life and other affiliated insurance companies. Alliance also provides management and consulting services to mutual funds, endowment funds, insurance companies, foreign entities, qualified and non-tax qualified corporate funds, public and private pension and profit-sharing plans, foundations and tax-exempt organizations. Alliance's record as an investment manager is based, in part, on its ability to provide a diversity of investment services to domestic, international and global markets. Alliance prides itself on its ability to attract and retain a quality, professional work force. Alliance employs more than 160 investment professionals, including 68 research analysts. Portfolio managers have an average investment experience of more than 16 years. Alliance's main office is located at 1345 Avenue of the Americas, New York, New York 10105. 12 INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS Each Portfolio has a different investment objective which it tries to achieve by following separate investment policies. The policies and objectives of each Portfolio will affect its return and its risks. There is no guarantee that these objectives will be achieved. The policies and objectives of the Trust's Portfolios are as follows:
Portfolio Investment Policy Objective - --------------------------- ---------------------------------------------------- ----------------------------- ASSET ALLOCATION SERIES: Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in equity securities; asset mix and security selection the adviser's opinion, undue are primarily based upon factors expected to reduce risk to principal risk. The Portfolio is generally expected to hold approximately 70% of its assets in fixed income securities and 30% in equity securities. Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent equity securities; asset mix and security selection with the adviser's based upon factors expected to increase possibility determination of reasonable of high long-term return. The Portfolio is generally risk expected to hold approximately 70% of its assets in equity securities and 30% in fixed income securities. EQUITY SERIES: Growth & Income Primarily income producing common stocks and High total return through a securities convertible into common stocks. combination of current income and capital appreciation Common Stock Primarily common stock and other equity-type Long-term growth of capital instruments. and increasing income Global Primarily equity securities of non-United States as Long-term growth of capital well as United States companies. International Primarily equity securities selected principally to Long-term growth of capital permit participation in non-United States companies with prospects for growth. Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital securities issued by medium and other smaller sized companies with strong growth potential. FIXED INCOME SERIES: Money Market Primarily high quality short-term money market High level of current income instruments. while preserving assets and maintaining liquidity Intermediate Government Primarily debt securities issued or guaranteed by High current income Securities the U.S. government, its agencies and consistent with relative instrumentalities. Each investment will have a final stability of principal maturity of not more than 10 years or a duration not exceeding that of a 10-year Treasury note.
13 PART 3: INVESTMENT PERFORMANCE This Part presents performance data for each of the Investment Funds calculated by two methods. The first method, used in calculating values for the two tables in "Performance Data for a Certificate," reflects all applicable fees and charges other than the charge for tax such as premium taxes. The second method, used in preparing rates of return for the three tables in "Rate of Return Data for Investment Funds," reflects all fees and charges other than the withdrawal charge, the guaranteed minimum death benefit charge and the charge for tax such as premium taxes. These additional charges would effectively reduce the rates of return credited to a particular Certificate. The Separate Account was recently established and has had no prior operations, and no Certificates have been issued prior to the date of this prospectus. The calculations of investment performance shown below are based on the actual investment results of the Portfolios of the Trust, from which certain fees and charges applicable under the Rollover IRA have been deducted. The investment results of the Portfolios of the Trust have been adjusted to reflect the Rule 12b-1 Plan fee relating to the Class B shares. The results shown are not an estimate or guarantee of future investment performance, and do not reflect the actual experience of amounts invested under a particular Certificate. See "Part 4: The Guaranteed Period Account" for information on the Guaranteed Period Account. PERFORMANCE DATA FOR A CERTIFICATE The standardized performance data in the following tables illustrate the average annual total return of the Investment Funds over the periods shown, assuming a single initial contribution of $1,000 and the surrender of the Certificate at the end of each period. These tables (which reflect the first calculation method described above) are prepared in a manner prescribed by the SEC for use when we advertise the performance of the Separate Account. An Investment Fund's average annual total return is the annual rate of growth of the Investment Fund that would be necessary to achieve the ending value of a contribution kept in the Investment Fund for the period specified. Each calculation assumes that the $1,000 contribution was allocated to only one Investment Fund, no transfers or subsequent contributions were made and no amounts were allocated to any other Investment Option under the Certificate. In order to calculate annualized rates of return, we divide the Cash Value of a Certificate which is surrendered on December 31, 1995 by the $1,000 contribution made at the beginning of each period illustrated. The result of that calculation is the total growth rate for the period. Then we annualize that growth rate to obtain the average annual percentage increase (decrease) during the period shown. When we "annualize," we assume that a single rate of return applied each year during the period will produce the ending value, taking into account the effect of compounding. GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995
LENGTH OF INVESTMENT PERIOD ---------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* - ---------------------- -------- -------- -------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors $1,116 $1,168 $1,463 -- $ 1,589 Growth Investors 1,175 1,293 2,002 -- 2,272 EQUITY SERIES: Growth & Income 1,152 -- -- -- 1,134 Common Stock 1,235 1,491 2,093 $3,476 11,291 Global 1,100 1,524 1,947 -- 2,129 International -- -- -- -- 1,031 Aggressive Stock 1,227 1,357 2,439 -- 5,175
14 GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995 (CONTINUED)
LENGTH OF INVESTMENT PERIOD --------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* - ----------------------------- ------- -------- -------- -------- ------------ FIXED INCOME SERIES: Money Market $ 972 $1,028 $1,115 $1,516 $2,210 Intermediate Govt. Securities 1,046 1,090 -- -- 1,282
- ------------ * See footnote below. AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995
LENGTH OF INVESTMENT PERIOD -------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* - ----------------------------- -------- ------- ------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors 11.61% 5.31% 7.90% -- 6.84% Growth Investors 17.49 8.95 14.89 -- 12.44 EQUITY SERIES: Growth & Income 15.22 -- -- -- 4.28 Common Stock 23.47 14.24 15.91 13.27% 12.89 Global 10.04 15.07 14.26 -- 8.76 International -- -- -- -- 3.05 Aggressive Stock 22.67 10.72 19.52 -- 17.87 FIXED INCOME SERIES: Money Market (2.83) 0.92 2.20 4.25 5.43 Intermediate Govt. Securities 4.64 2.93 -- -- 5.09
- ------------ * The "Since Inception" dates are as follows: Conservative Investors (October 2, 1989); Growth Investors (October 2, 1989); Growth & Income (October 1, 1993); Common Stock (January 13, 1976); Global (August 27, 1987); International (April 3, 1995); Aggressive Stock (January 27, 1986); Money Market (July 13, 1981); and Intermediate Govt. Securities (April 1, 1991). The "Since Inception" numbers for the International Fund are unannualized. RATE OF RETURN DATA FOR INVESTMENT FUNDS The following tables (which reflect the second calculation method described above) provide you with information on rates of return on an annualized, cumulative and year-by-year basis. All rates of return presented are time-weighted and include reinvestment of investment income, including interest and dividends. Cumulative rates of return reflect performance over a stated period of time. Annualized rates of return represent the annual rate of growth that would have produced the same cumulative return, if performance had been constant over the entire period. Performance data of the Money Market and Common Stock Funds for the periods prior to March 22, 1985, reflect the investment results of two open-end management separate accounts (the "predecessor separate accounts") which were reorganized in unit investment trust form. The "Since Inception" figures for these Funds are based on the date of inception of the predecessor separate accounts. This performance data has been adjusted to reflect the maximum investment advisory fee payable for the corresponding Portfolio of the Trust and the Rule 12b-1 Plan fee, as well as an assumed charge of 0.06% for direct operating expenses. Performance data for the remaining Investment Funds reflect (i) the investment results of the corre- 15 sponding Portfolios of the Trust from the date of inception of those Portfolios and (ii) the actual investment advisory fee, Rule 12b-1 Plan fee, and direct operating expenses of the relevant Portfolio. The performance data for all periods has also been adjusted to reflect the Separate Account mortality and expense risk charge, and the asset based administrative charge equal to a total of 1.25% relating to the Certificates, as well as the Trust's expenses. BENCHMARKS Market indices are not subject to any charges for investment advisory fees, brokerage commission or other operating expenses typically associated with a managed portfolio. Nor do they reflect other charges such as the mortality and expense risk charge and the asset based administrative charge under the Certificates. Comparisons with these benchmarks, therefore, are of limited use. We include them because they are widely known and may help you to understand the universe of securities from which each Portfolio is likely to select its holdings. Benchmark data reflect the reinvestment of dividend income. PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS: Asset Allocation Series: CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite Index and 30% Standard & Poor's 500 Index. GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index and 70% Standard & Poor's 500 Index. Equity Series: GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25% Value Line Convertible Index. COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index. GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index. INTERNATIONAL: April 1, 1995; Morgan Stanley Capital International Europe, Australia, Far East Index. AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap Total Return Index and 50% Russell 2000 Small Stock Index. Fixed Income Series: MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index. INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate Government Bond Index. The Lipper Variable Insurance Products Performance Analysis Survey (Lipper) records the performance of a large group of variable annuity products, including managed separate accounts of insurance companies. According to Lipper Analytical Services, Inc., the data are presented net of investment management fees, direct operating expenses and asset-based charges applicable under insurance policies or annuity contracts. Lipper data provide a more accurate picture than market benchmarks of the Rollover IRA performance relative to other variable annuity products. ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS 18.61% 6.94% 8.50% -- -- 8.01% Lipper Income 21.25 9.65 11.99 -- -- 9.79 Benchmark 24.11 10.41 11.73 -- -- 10.55 GROWTH INVESTORS 24.49 10.48 15.37 -- -- 14.30 Lipper Flexible Portfolio 21.58 9.32 11.43 -- -- 9.44 Benchmark 32.05 13.35 14.70 -- -- 11.97 EQUITY SERIES: GROWTH & INCOME 22.22 -- -- -- -- 8.02 Lipper Growth & Income 31.18 -- -- -- -- 12.76 Benchmark 34.93 -- -- -- -- 15.45
16 ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- COMMON STOCK 30.47% 15.64% 16.39% 13.44% 12.66% 13.07% Lipper Growth 31.08 12.09 15.53 12.05 12.26 12.25 Benchmark 37.54 15.30 16.57 14.87 14.79 14.24 GLOBAL 17.04 16.45 14.76 -- -- 9.71 Lipper Global 13.87 13.45 9.10 -- -- 2.52 Benchmark 20.72 15.83 11.74 -- -- 6.75 INTERNATIONAL -- -- -- -- -- 10.05** Lipper International -- -- -- -- -- 12.21** Benchmark -- -- -- -- -- 9.17** AGGRESSIVE STOCK 29.67 12.21 19.93 -- -- 18.18 Lipper Small Company Growth 28.19 15.26 25.72 -- -- 16.06 Benchmark 29.69 13.67 20.16 -- -- 13.58 FIXED INCOME SERIES: MONEY MARKET 4.17 2.68 2.92 4.44 -- 5.84 Lipper Money Market 4.35 2.88 3.10 4.71 -- 6.27 Benchmark 5.74 4.34 4.47 5.77 -- 7.09 INTERMEDIATE GOVERNMENT SECURITIES 11.64 4.62 -- -- -- 6.05 Lipper Gen. U.S. Government 15.47 6.27 -- -- -- 7.87 Benchmark 14.41 6.74 -- -- -- 8.17
- ------------ * See footnotes on next page. ** Unannualized. CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS 18.61% 22.30% 50.40% -- -- 61.83% Lipper Income 21.25 31.95 76.42 -- -- 79.42 Benchmark 24.11 34.58 74.09 -- -- 87.24 GROWTH INVESTORS 24.49 34.85 104.38 -- -- 130.44 Lipper Flexible Portfolio 21.58 30.92 72.73 -- -- 76.92 Benchmark 32.05 45.64 98.56 -- -- 102.72 EQUITY SERIES: GROWTH & INCOME 22.22 -- -- -- -- 18.94 Lipper Growth & Income 31.18 -- -- -- -- 31.42 Benchmark 34.93 -- -- -- -- 38.14 COMMON STOCK 30.47 54.65 113.57 252.92% 497.69% 1,061.89 Lipper Growth 31.08 41.29 107.30 215.49 483.45 920.87 Benchmark 37.54 53.30 115.25 300.11 692.18 1,327.94 GLOBAL 17.04 57.90 99.01 -- -- 116.63 Lipper Global 13.87 46.36 55.44 -- -- 23.09 Benchmark 20.72 55.39 74.20 -- -- 72.38 INTERNATIONAL -- -- -- -- -- 10.05** Lipper International -- -- -- -- -- 12.21** Benchmark -- -- -- -- -- 9.17** AGGRESSIVE STOCK 29.67 41.30 148.10 -- -- 424.83 Lipper Small Company Growth 28.19 55.24 268.67 -- -- 337.96 Benchmark 29.69 46.89 150.49 -- -- 254.09
- ------------ * See footnotes on next page. ** Unannualized. 17 CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- FIXED INCOME SERIES: MONEY MARKET 4.17% 8.25% 15.50% 54.44% -- 127.26% Lipper Money Market 4.35 8.87 16.48 58.55 -- 140.42 Benchmark 5.74 13.58 24.45 75.23 -- 170.07 INTERMEDIATE GOVERNMENT SECURITIES 11.64 14.51 -- -- -- 32.21 Lipper Gen. U.S. Government 15.47 20.05 -- -- -- 43.43 Benchmark 14.41 21.60 -- -- -- 45.17
YEAR-BY-YEAR RATES OF RETURN*
1983 1984 1985 1986 ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- -- -- GROWTH INVESTORS -- -- -- -- EQUITY SERIES: GROWTH & INCOME -- -- -- -- COMMON STOCK*** 24.24% (3.43)% 31.44% 15.62% GLOBAL -- -- -- -- INTERNATIONAL -- -- -- -- AGGRESSIVE STOCK -- -- -- 33.40 FIXED INCOME SERIES: MONEY MARKET*** 7.33 9.20 6.85 5.02 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- --
(RESTUBBED TABLE CONTINUED FROM ABOVE)
1987 1988 1989 1990 1991 1992 1993 1994 1995 ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- 2.70% 4.77% 18.09% 4.13% 9.15% (5.53)% 18.61% GROWTH INVESTORS -- -- 3.44 9.00 46.68 3.33 13.55 (4.60) 24.49 EQUITY SERIES: GROWTH & INCOME -- -- -- -- -- -- (0.64) (2.06) 22.22 COMMON STOCK*** 5.83% 20.61% 23.72 (9.49) 35.83 1.67 22.96 (3.60) 30.47 GLOBAL (13.72) 9.23 24.85 (7.48) 28.60 (2.00) 30.14 3.66 17.04 INTERNATIONAL -- -- -- -- -- -- -- -- 10.05 AGGRESSIVE STOCK 5.69 (0.38) 41.36 6.54 84.08 (4.61) 15.00 (5.25) 29.67 FIXED INCOME SERIES: MONEY MARKET*** 5.04 5.71 7.56 6.61 4.60 2.01 1.42 2.46 4.17 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- -- 11.01 4.01 8.89 (5.80) 11.64 - ------------ * Returns do not reflect the withdrawal charge and the guaranteed minimum death benefit charge. ** Unannualized. *** Prior to 1982 the Year-by-Year Rates of Return were: 1976
*** Prior to 1982 the Year-by-Year Rates of Return were: 1976 1977 1978 1979 1980 1981 1982 COMMON STOCK 7.83% (10.60)% 6.62% 27.90% 47.88% (7.27)% 15.82% MONEY MARKET - - - - - 5.54 11.33
COMMUNICATING PERFORMANCE DATA In reports or other communications or in advertising material, we may describe general economic and market conditions affecting the Separate Account and the Trust and may compare the performance of the Investment Funds with (1) that of other insurance company separate accounts or mutual funds included in the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc., VARDS or similar investment services that monitor the performance of insurance company separate accounts or mutual funds, (2) other appropriate indices of investment securities and averages for peer universes of funds which are shown under "Benchmarks" and "Fund Inception Dates and Comparative Benchmarks" in this Part 3, or (3) data developed by us derived from such indices or averages. The Morningstar Variable Annuity/Life Report consists of nearly 700 variable life and annuity funds, all of which report their data net of investment management fees, direct operating expenses and separate account charges. VARDS is a monthly reporting service that monitors approximately 760 variable life and variable annuity funds on performance and account information. Advertisements or other communications furnished to present or prospective Certificate Owners may also include evaluations of an Investment Fund or Portfolio by financial publications that are nationally recognized such as Barron's, Morningstar's Variable Annuity Sourcebook, Business Week, Chicago Tribune, Forbes, Fortune, Institutional Investor, Investment Adviser, Investment Dealer's Digest, Investment Management Weekly, Los Angeles Times, Money, Money Management Letter, Kiplinger's Personal Finance, Financial Planning, 18 National Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York Times, and The Wall Street Journal. MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD INFORMATION The current yield and effective yield of the Money Market Fund and Intermediate Government Securities Fund may appear in reports and promotional material to current or prospective Certificate Owners. Money Market Fund Current yield for the Money Market Fund will be based on net changes in a hypothetical investment over a given seven-day period, exclusive of capital changes, and then "annualized" (assuming that the same seven-day result would occur each week for 52 weeks). "Effective yield" is calculated in a manner similar to that used to calculate current yield, but when annualized, any income earned by the investment is assumed to be reinvested. The "effective yield" will be slightly higher than the "current yield" because any earnings are compounded weekly. Money Market Fund yields and effective yields assume the deduction of all Certificate charges and expenses other than the withdrawal charge, guaranteed minimum death benefit charge and any charge for tax such as premium tax. See "Part 5: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. Intermediate Government Securities Fund Current yield for the Intermediate Government Securities Fund will be based on net changes in a hypothetical investment over a given 30-day period, exclusive of capital changes, and then "annualized" (assuming that the 30-day result would occur each month for 12 months). "Effective yield" is calculated in a manner similar to that used to calculate current yield, but when annualized, any income earned by the investment is assumed to be reinvested. The "effective yield" will be higher than the "current yield" because any earnings are compounded monthly. Intermediate Government Securities Fund yields and effective yields assume the deduction of all Certificate charges and expenses other than the withdrawal charge, guaranteed minimum death benefit charge and any charge for tax such as premium tax. See "Part 5: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. 19 PART 4: THE GUARANTEED PERIOD ACCOUNT GUARANTEE PERIODS Each amount allocated to a Guarantee Period and held to the Period's Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed Rate for each allocation is the annual interest rate applicable to new allocations to that Guarantee Period, which was in effect on the Transaction Date for the allocation. We may establish different Guaranteed Rates under different classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT to refer to the amount allocated to and accumulated in each Guarantee Period. The Guaranteed Period Amount is reduced or increased by any market value adjustment as a result of withdrawals, transfers or charges (see below). Your Guaranteed Period Account contains the Guarantee Periods to which you have allocated Annuity Account Value. On the Expiration Date of a Guarantee Period, its Guaranteed Period Amount and its value in the Guaranteed Period Account are equal. We call the Guaranteed Period Amount on an Expiration Date the Guarantee Period's Maturity Value. We report the Annuity Account Value in your Guaranteed Period Account to reflect any market value adjustment that would apply if all Guaranteed Period Amounts were withdrawn as of the calculation date. The Annuity Account Value in the Guaranteed Period Account with respect to the Guarantee Periods on any Business Day, therefore, will be the sum of the present value of the Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect for new allocations to such Guarantee Period on such date. Guarantee Periods and Expiration Dates We currently offer Guarantee Periods ending on February 15th for each of the maturity years 1997 through 2006. Not all of these Guarantee Periods will be available to Annuitants ages 71 and above. See "Allocation of Contributions" in Part 5. As Guarantee Periods expire we expect to add maturity years so that generally 10 are available in all states at any time under the Rollover IRA. The Guarantee Periods are not available for investment under the Rollover IRA in the state of Maryland. Under the IRA Assured Payment Option and IRA APO Plus, in addition to the Guarantee Periods above, Guarantee Periods ending on February 15th for each of the maturity years 2007 through 2011 are also available. We will not accept allocations to a Guarantee Period if, on the Transaction Date: o Such Transaction Date and the Expiration Date for such Guarantee Period fall within the same calendar year. o The Guaranteed Rate is 3%. o The Guarantee Period has an Expiration Date beyond the February 15th immediately following the Annuity Commencement Date. Guaranteed Rates and Price Per $100 of Maturity Value Because the Maturity Value of a contribution allocated to a Guarantee Period can be determined at the time it is made, you can determine the amount required to be allocated to a Guarantee Period in order to produce a target Maturity Value (assuming no transfers or withdrawals are made and no charges are allocated to the Guarantee Period). The required amount is the present value of that Maturity Value at the Guaranteed Rate on the Transaction Date for the contribution, which may also be expressed as the price per $100 of Maturity Value on such Transaction Date. Guaranteed Rates for new allocations as of July , 1996 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED FEBRUARY 15TH OF RATE AS OF PRICE PER $100 OF MATURITY YEAR JULY , 1996 MATURITY VALUE - -------------------- -------------- ------------------ 1997 x.xx% $xx.xx 1998 x.xx xx.xx 1999 x.xx xx.xx 2000 x.xx xx.xx 2001 x.xx xx.xx 2002 x.xx xx.xx 2003 x.xx xx.xx 2004 x.xx xx.xx 2005 x.xx xx.xx 2006 x.xx xx.xx
20 Available under the IRA Assured Payment Option and IRA APO Plus
2007 x.xx% $xx.xx 2008 x.xx xx.xx 2009 x.xx xx.xx 2010 x.xx xx.xx 2011 x.xx xx.xx
Allocation Among Guarantee Periods The same approach as described above may also be used to determine the amount which you would need to allocate to each Guarantee Period in order to create a series of constant Maturity Values for two or more years. For example, if you wish to have $100 mature on February 15th of each of years 1997 through 2001, then according to the above table the lump sum contribution you would have to make as of July , 1996 would be $ (i.e., the sum of the price per $100 of Maturity Value for each maturity year from 1997 through 2001). The above table is provided to illustrate the use of present value calculations. It does not take into account the potential for charges to be deducted or withdrawals or transfers from Guarantee Periods. Actual calculations will also be based on Guaranteed Rates on each actual Transaction Date, which may differ. Options at Expiration Date Under the Rollover IRA, we will notify you on or before December 31st prior to the Expiration Date of each Guarantee Period in which you have any Guaranteed Period Amount. You may elect one of the following options to be effective at the Expiration Date, subject to the restrictions set forth on the prior page and under "Allocation of Contributions" in Part 5: (a) to transfer the Maturity Value into any Guarantee Period we are then offering, or into any of our Investment Funds; or (b) to withdraw the Maturity Value (subject to any withdrawal charges which may apply). If we have not received your election as of the Expiration Date, the Maturity Value in the expired Guarantee Period will be transferred into the Guarantee Period with the earliest Expiration Date. MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR SURRENDER PRIOR TO THE EXPIRATION DATE Any withdrawal (including transfers, surrender and deductions) from a Guarantee Period prior to its Expiration Date will cause any remaining Guaranteed Period Amount for that Guarantee Period to be increased or decreased by a market value adjustment. The amount of the adjustment will depend on two factors: (a) the difference between the Guaranteed Rate applicable to the amount being withdrawn and the Guaranteed Rate on the Transaction Date for new allocations to a Guarantee Period with the same Expiration Date, and (b) the length of time remaining until the Expiration Date. In general, if interest rates have risen between the time when an amount was originally allocated to a Guarantee Period and the time it is withdrawn, the market value adjustment will be negative, and vice versa; and the longer the period of time remaining until the Expiration Date, the greater the impact of the interest rate difference. Therefore, it is possible that a significant rise in interest rates could result in a substantial reduction in your Annuity Account Value in the Guaranteed Period Account related to longer term Guarantee Periods. The market value adjustment (positive or negative) resulting from a withdrawal of all funds from a Guarantee Period will be determined for each contribution allocated to that Period as follows: (1) We determine the present value of the Maturity Value on the Transaction Date as follows: (a) We determine the Guaranteed Period Amount that would be payable on the Expiration Date, using the applicable Guaranteed Rate. (b) We determine the period remaining in your Guarantee Period (based on the Transaction Date) and convert it to fractional years based on a 365 day year. For example three years and 12 days becomes 3.0329. (c) We determine the current Guaranteed Rate which applies on the Transaction Date to new allocations to the same Guarantee Period. (d) We determine the present value of the Guaranteed Period Amount payable at the Expiration Date, using the period determined in (b) and the rate determined in (c). (2) We determine the Guaranteed Period Amount as of the current date. (3) We subtract (2) from the result in (1)(d). The result is the market value adjustment applicable to such Guarantee Period, which may be positive or negative. The market value adjustment (positive or negative) resulting from a withdrawal of a portion of the amount in a Guarantee Period will be a percentage of the market value adjustment that would be ap- 21 plicable upon a withdrawal of all funds from a Guarantee Period. This percentage is determined by (i) dividing the amount of the withdrawal or transfer from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal or transfer. See Appendix I for an example. The Guaranteed Rate for new allocations to a Guarantee Period is the rate we have in effect for this purpose even if new allocations to that Guarantee Period would not be accepted at the time. This rate will not be less than 3%. If we do not have a Guaranteed Rate in effect for a Guarantee Period to which the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at the next closest Expiration Date. If we are no longer offering new Guarantee Periods, the "current Guaranteed Rate" will be determined in accordance with our procedures then in effect. For purposes of calculating the market value adjustment only, we reserve the right to add up to 0.25% to the current rate in (1)(c) above. MODAL PAYMENT PORTION Under the IRA Assured Payment Option and IRA APO Plus, a portion of your contributions or Annuity Account Value is allocated to the Modal Payment Portion of the Guaranteed Period Account for payments to be made prior to the Expiration Date of the earliest Guarantee Period we then offer. Such amount will accumulate interest beginning on the Transaction Date at an interest rate we set. Interest will be credited daily. Such rate will not be less than 3%. Upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be held in the Modal Payment Portion of the Guaranteed Period Account. Amounts from an expired Guarantee Period held in the Modal Payment Portion of the Guaranteed Period Account will be credited with interest at a rate equal to the Guaranteed Rate applicable to the expired Guarantee Period, beginning on the Expiration Date of such Guarantee Period. There is no market value adjustment with respect to amounts held in the Modal Payment Portion of the Guaranteed Period Account. DEATH BENEFIT AMOUNT The death benefit provided with respect to the Guaranteed Period Account is equal to the Annuity Account Value in the Guaranteed Period Account or, if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period, plus any amounts in the Modal Payment Portion of the Guaranteed Period Account. See "Annuity Account Value" in Part 5. INVESTMENTS Amounts allocated to Guarantee Periods or the Modal Payment Portion of the Guaranteed Period Account will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. This separate account provides an additional measure of assurance that full payment of amounts due under the Guarantee Periods and the Modal Payment Portion of the Guaranteed Period Account will be made. Under the New York Insurance Law, the portion of the separate account's assets equal to the reserves and other contract liabilities relating to the Certificates are not chargeable with liabilities arising out of any other business we may conduct. Investments purchased with amounts allocated to the Guaranteed Period Account are the property of Equitable Life. Any favorable investment performance on the assets held in the separate account accrues solely to Equitable Life's benefit. Certificate Owners do not participate in the performance of the assets held in this separate account. Equitable Life may, subject to applicable state law, transfer all assets allocated to the separate account to its general account. Regardless of whether assets supporting Guaranteed Period Accounts are held in a separate account or our general account, all benefits relating to the Annuity Account Value in the Guaranteed Period Account are guaranteed by Equitable Life. Equitable Life has no specific formula for establishing the Guaranteed Rates for the Guarantee Periods. Equitable Life expects the rates to be influenced by, but not necessarily correspond to, among other things, the yields on the fixed income securities to be acquired with amounts that are allocated to the Guarantee Periods at the time that the Guaranteed Rates are established. Our current plans are to invest such amounts in fixed income obligations, including corporate bonds, mortgage backed and asset backed securities and government and agency issues having durations in the aggregate consistent with those of the Guarantee Periods. Although the foregoing generally describes Equitable Life's plans for investing the assets supporting Equitable Life's obligations under the fixed portion of the Certificates, Equitable Life is not obligated to invest those assets according to any particular plan except as may be required by state insurance laws, nor will the Guaranteed Rates Equitable Life establishes be determined by the performance of the nonunitized separate account. General Account Our general account supports all of our policy and contract guarantees, including those applicable to 22 the Guaranteed Period Account, as well as our general obligations. Amounts applied under the Life Contingent Annuity become part of the general account. See "IRA Assured Payment Option," "Life Contingent Annuity," in Part 6. The general account is subject to regulation and supervision by the Insurance Department of the State of New York and to the insurance laws and regulations of all jurisdictions where we are authorized to do business. Because of applicable exemptions and exclusionary provisions, interests in the general account have not been registered under the Securities Act of 1933 (1933 Act), nor is the general account an investment company under the 1940 Act. Accordingly, neither the general account nor the Life Contingent Annuity is subject to regulation under the 1933 Act or the 1940 Act. However, the market value adjustment interests under the Certificates are registered under the 1933 Act. We have been advised that the staff of the SEC has not made a review of the disclosure that is included in the prospectus for your information that relates to the general account (other than market value adjustment interests) and the Life Contingent Annuity. The disclosure, however, may be subject to certain generally applicable provisions of the Federal securities laws relating to the accuracy and completeness of statements made in prospectuses. 23 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE The provisions discussed in this Part 5 apply when your Certificate is operating primarily to accumulate Annuity Account Value. Different rules may apply when you elect the IRA Assured Payment Option or IRA APO Plus in the application or as later elected as a distribution option under your Rollover IRA as discussed in Part 6. The provisions of your Certificate may be restricted by applicable laws or regulations. AVAILABILITY OF THE CERTIFICATES The Rollover IRA Certificates are available for issue ages 20 through 78. These Certificates may not be available in all states. These Certificates are not available in Puerto Rico. CONTRIBUTIONS UNDER THE CERTIFICATES Your initial contribution must be at least $10,000. We will only accept initial contributions which are either rollover contributions under Sections 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code, or direct custodian-to-custodian transfers from other individual retirement arrangements. See "Part 9: Tax Aspects of the Certificates." You may make subsequent contributions in an amount of at least $1,000. Subsequent contributions may be "regular" IRA contributions (limited to a maximum of $2,000 a year), rollover contributions as described above, or direct transfers as described above. Rollover contributions and direct transfers are not subject to the $2,000 annual limit. We may refuse to accept any contribution if the sum of all contributions under a Certificate would then total more than $1,500,000. We may also refuse to accept any contribution if the sum of all contributions under all Equitable annuity accumulation certificates/contracts you own would then total more than $2,500,000. "Regular" IRA contributions may no longer be made for the taxable year in which you attain age 70 1/2 and thereafter. Rollover and direct transfer contributions may be made until you attain age 78. However, any amount contributed after you attain age 70 1/2 must be net of your required minimum distribution for the year in which the rollover or direct transfer contribution is made. See "Part 9: Tax Aspects of the Certificates." For the consequences of making a "regular" IRA contribution to your Certificate, also see Part 9. Contributions are credited as of the Transaction Date. METHODS OF PAYMENT Except as indicated below, all contributions must be made by check. All contributions made by check must be drawn on a bank or credit union in the U.S., in U.S. dollars and made payable to Equitable Life. All checks are accepted subject to collection. All contributions should be sent to Equitable Life at our Processing Office address designated for contributions. Wire Transmittals We will accept, by agreement with broker-dealers who use wire transmittals, transmittal of initial contributions by wire order from the broker-dealer to the Processing Office. Such transmittals must be accompanied by essential information we require to allocate the contribution. Contributions accepted by wire order will be invested at the value next determined following receipt for contributions allocated to the Investment Funds. Contributions allocated to the Guaranteed Period Account will receive the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on the date contributions are received. Wire orders not accompanied by complete information, may be retained for a period not exceeding five Business Days while an attempt is made to obtain the required information. If the required information cannot be obtained within those five Business Days, the Processing Office will inform the broker-dealer, on behalf of the applicant, of the reasons for the delay and return the contribution immediately to the applicant, unless the applicant specifically consents to our retaining the contribution until the required information is received by the Processing Office. Notwithstanding the acceptance by us of the wire order and the essential information, however, a Certificate will not be issued until the receipt and acceptance of a properly completed application. During the time from receipt of the initial contribution until a signed application is received from the Certificate Owner, no other financial transactions may be requested. 24 If an application is not received within ten days of receipt of the initial contribution via wire order, or if an incomplete application is received and cannot be completed within ten days of receipt of the initial contribution, the amount of the initial contribution will be returned to the applicant with immediate notification to the broker-dealer. In no event will less than the full amount of the initial contribution be returned to the applicant. After your Certificate has been issued, subsequent contributions may be transmitted by wire. ALLOCATION OF CONTRIBUTIONS You have two options from which to choose for allocation of your contributions: Self-Directed Allocation and Principal Assurance. Self-Directed Allocation You design your own investment program by allocating your contributions among the Investment Options in any way you choose. Your contributions may be allocated to one or up to all of the available Investment Options at any time. We allocate contributions among the Investment Options according to your allocation percentages. Allocations must be in whole percentages. Allocation percentages can be changed at any time by writing to our Processing Office, or by telephone. The change will be effective on the Transaction Date and will remain in effect for future contributions unless another change is requested. Allocation of the initial contribution is subject to the provisions for the free look period. See "Free Look Period" below. Allocation of any contribution to the Guaranteed Period Account is subject to the following restrictions: o No more than 60% of any contribution may be allocated to the Guaranteed Period Account. o If you are between ages 71 through 74 (inclusive), allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 and above, allocations may be made only to Guarantee Periods with maturities of five years or less; however, in no event may allocations be made to Guarantee Periods with maturities beyond the February 15th immediately following the Annuity Commencement Date. Principal Assurance This option is designed to assure that your Maturity Value in a specified Guarantee Period equals your initial contribution while at the same time allowing you to invest in the Investment Funds. The maturity year you select for such specified Guarantee Period may not be later than 10 years nor earlier than seven years. However, in no event may you elect a year beyond the year in which you will attain age 70 1/2 . In order to accomplish this strategy, we will allocate a portion (equal to the present value) of your initial contribution to a Guarantee Period based on the year you select. See "Guaranteed Rates and Price Per $100 of Maturity Value" in Part 4. You may allocate the balance of your contribution to the Investment Funds in any way you choose. Such allocations to the Investment Funds must be in whole percentages. Allocation of the portion of your initial contribution to the Investment Funds is subject to the provisions for the free look period. See "Free Look Period" below. Principal Assurance may only be elected at issue of your Certificate and assumes no withdrawals or transfers of the amount allocated to the specified Guarantee Period. Subsequent contributions must be allocated under "Self-Directed Allocation" described above. Allocations to the Investment Funds A contribution allocated to an Investment Fund purchases Accumulation Units in that Investment Fund based on the Accumulation Unit Value for that Investment Fund computed on the Transaction Date. Allocations to the Guaranteed Period Account Contributions allocated to the Guaranteed Period Account will have the Guaranteed Rate for the specified Guarantee Period offered on the Transaction Date. FREE LOOK PERIOD You have the right to examine the Rollover IRA Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You cancel it by sending it to our Processing Office. The free look is extended if your state requires a refund period of longer than 10 days. Your refund will equal the Annuity Account Value reflecting any investment gain or loss, and any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. Some states or Federal income tax regulations may require that we calculate the refund differently. In those states that require that we calculate the refund differently, we may require that any portion of your initial contribution that you request to have allocated to the Investment Funds, be allocated to the Money Market Fund until the end of the free look period. If the IRA Assured Payment Option or IRA APO Plus is elected in the application for the Certificate, 25 your refund will include any amount applied under the Life Contingent Annuity. See "IRA Assured Payment Option," "Life Contingent Annuity" in Part 6. We follow these same procedures if you change your mind before a Certificate has been issued, but after a contribution has been made. See "Part 9: Tax Aspects of the Certificates" for possible consequences of canceling your Certificate during the free look period. If you cancel your Certificate during the free look period, we may require that you wait six months before you may apply for a Certificate with us again. ANNUITY ACCOUNT VALUE The Annuity Account Value is the sum of the Annuity Account Values in the Investment Funds and the Guaranteed Period Account. Annuity Account Value in Investment Funds The Annuity Account Value in an Investment Fund on any Business Day is equal to the number of Accumulation Units in that Investment Fund times the Accumulation Unit Value for the Investment Fund for that date. The number of Accumulation Units in an Investment Fund at any time is equal to the sum of Accumulation Units purchased by contributions and transfers less the sum of Accumulation Units redeemed for withdrawals, transfers or deductions for charges. The number of Accumulation Units purchased or sold in any Investment Fund equals the dollar amount of the transaction divided by the Accumulation Unit Value for that Investment Fund for the applicable Transaction Date. The number of Accumulation Units will not vary because of any later change in the Accumulation Unit Value. The Accumulation Unit Value varies with the investment performance of the correspond- ing Portfolios of the Trust, which in turn reflects the investment income and realized and unrealized capital gains and losses of the Portfolios, as well as the Trust fees and expenses. The Accumulation Unit Value is also stated after deduction of the Separate Account asset charges relating to the Certificates. A description of the computation of the Accumulation Unit Value is found in the SAI. Annuity Account Value in Guaranteed Period Account The Annuity Account Value in the Guaranteed Period Account on any Business Day will be the sum of the present value of the Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect for new allocations to such Guarantee Period on such date. (This is equivalent to the Guaranteed Period Amount increased or decreased by the full market value adjustment.) The Annuity Account Value, therefore, may be higher or lower than the contributions (less withdrawals) accumulated at the Guaranteed Rate. At the Expiration Date the Annuity Account Value in the Guaranteed Period Account will equal the Maturity Value. While the IRA Assured Payment Option or IRA APO Plus is in effect, the Annuity Account Value will include any amount in the Modal Payment Portion of the Guaranteed Period Account. However, amounts held in the Modal Payment Portion of the Guaranteed Period Account are not subject to a market value adjustment. See "Part 4: The Guaranteed Period Account." TRANSFERS AMONG INVESTMENT OPTIONS At any time prior to the Annuity Commencement Date, you may transfer all or portions of your Annuity Account Value among the Investment Options, subject to the following restrictions. o Transfers are permitted to or from a Guarantee Period once per quarter during each Contract Year. Such transfers may be made at any time during each quarter. o Transfers out of a Guarantee Period other than at the Expiration Date will result in a market value adjustment. See "Part 4: The Guaranteed Period Account." o Transfers to Guarantee Periods are subject to the restrictions set forth under "Guarantee Periods and Expiration Dates" in Part 4 and are limited based on your attained age. See "Allocation of Contributions" above. Transfer requests must be made directly to our Processing Office. Your request for a transfer should specify your Certificate number, the amounts or percentages to be transferred and the Investment Options to and from which the amounts are to be transferred. Your transfer request may be in writing or by telephone. For telephone transfer requests, procedures have been established by Equitable Life that are considered to be reasonable and are designed to confirm that instructions communicated by telephone are genuine. Such procedures include requiring certain personal identification information prior to acting on telephone instructions and providing written confirmation. In light of the procedures established, Equitable Life will not be liable for following telephone instructions that it reasonably believes to be genuine. We may restrict, in our sole discretion, the use of an agent acting under a power of attorney, such as a market timer, on behalf of more than one Certificate 26 Owner to effect transfers. Any agreements to use market timing services to effect transfers are subject to our rules then in effect and must be on a form satisfactory to us. A transfer request will be effective on the Transaction Date and the transfer to or from Investment Funds will be made at the Accumulation Unit Value next computed after the Transaction Date. All transfers will be confirmed in writing. DOLLAR COST AVERAGING If you have at least $10,000 of Annuity Account Value in the Money Market Fund, you may choose to have a specified dollar amount transferred from the Money Market Fund to other Investment Funds on a monthly basis. The main objective of dollar cost averaging is to attempt to shield your investment from short term price fluctuations. Since the same dollar amount is transferred to other Investment Funds each month, more Accumulation Units are purchased in an Investment Fund if the value per Accumulation Unit is low and fewer Accumulation Units are purchased if the value per Accumulation Unit is high. Therefore, a lower average value per Accumulation Unit may be achieved over the long term. This plan of investing allows you to take advantage of market fluctuations but does not assure a profit or protect against a loss in declining markets. The dollar cost averaging option may be elected at the time you apply for the Certificate or at a later date. The minimum amount that may be transferred each month is $250. The maximum amount which may be transferred is equal to the Annuity Account Value in the Money Market Fund at the time the option is elected, divided by 12. The transfer date will be the same calendar day each month as the Contract Date. If, on any transfer date, the Annuity Account Value in the Money Market Fund is equal to or less than the amount you have elected to have transferred, the entire amount will be transferred and the dollar cost averaging option will end. You may change the transfer amount once each Contract Year, or cancel this option by sending us satisfactory notice to our Processing Office at least seven calendar days before the next transfer date. DEATH BENEFIT Generally, upon receipt of proof satisfactory to us of your death prior to the Annuity Commencement Date, we will pay the death benefit to the beneficiary named in your Certificate. You designate the beneficiary at the time you apply for the Certificate. While the Certificate is in effect, you may change your beneficiary by writing to our Processing Office. The change will be effective on the date the written submission was signed. The death benefit payable will be determined as of the date we receive such proof of death and any required instructions as to the method of payment. The death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the guaranteed minimum death benefit defined below; and (2) the death benefit provided with respect to the Guaranteed Period Account. See "Part 4: The Guaranteed Period Account." Guaranteed Minimum Death Benefit (GMDB) Applicable to Certificates issued in all states except - ----------------------------------------------------------------------------- New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see below) is credited to and becomes part of the GMDB on each Processing Date. Interest will be calculated at the applicable effective annual GMDB interest rate for your "attained age" (your age at issue of the Certificate plus the number of Contract Years that have elapsed since the Contract Date, see table below) taking into account contributions, transfers and withdrawals during the Contract Year, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on an interest rate of 3% for Annuitant attained ages 70 and under and 0% for ages 71 and over.
GMDB INTEREST RATE TABLE ATTAINED AGE RATE - ----------------- -------- 20 through 70 6% 71 through 85 0% - ----------------- --------
Applicable to Certificates issued in New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB calculated on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. Addi- 27 tionally, on each Processing Date the GMDB is reset at the greater of the current GMDB and the current Annuity Account Value in the Investment Funds. On no date, however, will the GMDB be greater than (a) the portion of the initial contribution allocated to the Investment Funds, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds, plus (d) interest (described above) that is credited on each Processing Date. See Appendix II for an example of the calculation of the GMDB. How Withdrawals and Transfers Affect the GMDB Withdrawals and transfers out of the Investment Funds generally reduce the GMDB on a dollar-for- dollar basis as of the date of the withdrawal or transfer. However, if at any time the sum of withdrawals and transfers out of the Investment Funds in a Contract Year, calculated as a percentage of the Annuity Account Value as of the date of such withdrawal or transfer, exceed the current GMDB interest rate, the transaction that caused the excess and all additional withdrawals and/or transfers out of the Investment Funds in that Contract Year will cause a percentage reduction in the GMDB as of the date of the withdrawal or transfer, rather than a dollar-for-dollar reduction. This means that if the GMDB interest rate is 6% and you withdraw 5% of the Annuity Account Value in the Investment Funds, your GMDB will be reduced by the dollar amount of the withdrawal as of the date of the withdrawal. If you withdraw 10% of your Annuity Account Value, your GMDB will be reduced by 10% as of the date of the withdrawal. You should consider the timing of your withdrawals and transfers as they relate to the affect on the GMDB. How Payment is Made We will pay the death benefit to the beneficiary in the form of the income annuity option you have chosen under your Certificate. If no income annuity option has been chosen at the time of your death, the beneficiary will receive the death benefit in a lump sum. However, subject to Equitable Life's rules then in effect and any other applicable requirements under the Code, the beneficiary may elect to apply the death benefit amount to one or more income annuity options offered by Equitable Life. See "Income Annuity Options" in Part 6. If you elect to have your spouse be both the sole primary beneficiary and the successor Annuitant/ Certificate Owner, then no death benefit is payable until your surviving spouse's death. CASH VALUE The Cash Value under the Certificate fluctuates daily with the investment performance of the Investment Funds you have selected and reflects any upward or downward market value adjustment. See "Part 4: The Guaranteed Period Account." We do not guarantee any minimum Cash Value except for amounts in a Guarantee Period held to the Expiration Date. On any date before the Annuity Commencement Date while the Certificate is in effect, the Cash Value is equal to the Annuity Account Value, less any withdrawal charge. The free corridor amount will not apply when calculating the withdrawal charge applicable upon a surrender. See "Part 7: Deductions and Charges." SURRENDERING THE CERTIFICATES TO RECEIVE THE CASH VALUE You may surrender a Certificate to receive the Cash Value at any time while you are living and before the Annuity Commencement Date. For a surrender to be effective, we must receive your written request and the Certificate at our Processing Office. The Cash Value will be determined on the Transaction Date. All benefits under the Certificate will be terminated as of that date. You may receive the Cash Value in a single sum payment or apply it under one or more of the income annuity options. See "Income Annuity Options" in Part 6. We will usually pay the Cash Value within seven calendar days, but we may delay payment as described in "When Payments are Made" below. For the tax consequences of surrenders, see "Part 9: Tax Aspects of the Certificates." WHEN PAYMENTS ARE MADE Under applicable law, application of proceeds from the Investment Funds to a variable annuity, payment of a death benefit from the Investment Funds, payment of any portion of the Annuity Account Value (less any applicable withdrawal charge) from the Investment Funds, and, upon surrender, payment of the Cash Value from the Investment Funds will be made within seven calendar days after the Transaction Date. Payments or application of proceeds from the Investment Funds can be deferred for any period during which (1) the New York Stock Exchange is closed or trading on it is restricted, (2) sales of securities or determination of the fair value of an Investment Fund's assets is not reasonably practicable because of an emergency, or (3) the SEC, by order, permits us to defer payment in order to protect persons with interest in the Investment Funds. 28 We can defer payment of any portion of the Annuity Account Value in the Guaranteed Period Account for up to six months while you are living. We may also defer payments for any amount attributable to a contribution made in the form of a check for a reasonable amount of time (not to exceed 15 days) to permit the check to clear. ASSIGNMENT The Certificates are not assignable or transferrable except through surrender to us. They may not be borrowed against or used as collateral for a loan or other obligation. DISTRIBUTION OF THE CERTIFICATES As the distributor of the Certificates, Equitable Distributors, Inc. (EDI), an indirect wholly owned subsidiary of Equitable Life, has responsibility for sales and marketing functions for the Certificates. EDI also serves as the principal underwriter of the Separate Account under the 1940 Act. EDI is registered with the SEC as a broker-dealer under the Exchange Act and is a member of the National Association of Securities Dealers, Inc. EDI's principal business address is 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI, as well as by unaffiliated broker- dealers with which EDI has entered into selling agreements. Broker-dealer sales compensation (including for EDI and its affiliates) will not exceed six percent of total contributions made under a Certificate. EDI may also receive compensation and reimbursement for its marketing services under the terms of its distribution agreement with Equitable Life. Broker-dealers receiving sales compensation will generally pay a portion thereof to their registered representatives as commissions related to sales of the Certificates. The offering of the Certificates is intended to be continuous. 29 PART 6: DISTRIBUTION METHODS UNDER THE CERTIFICATES The provisions discussed in this Part 6 apply when you elect the IRA Assured Payment Option or IRA APO Plus in the application or as a distribution option at a later date, as well as to other distribution methods under your Certificate. The Rollover IRA Certificates offer several distribution methods specifically designed to provide retirement income. The Choice Income Plan which includes the IRA Assured Payment Option and IRA APO Plus, may be elected in the application or as a distribution option at a later date. In addition, the Certificates provide for Lump Sum Withdrawals, Substantially Equal Payment Withdrawals, Periodic Withdrawals and Minimum Distribution Withdrawals. Fixed and variable income annuity options are also available for amounts to be applied at the Annuity Commencement Date. The IRA Assured Payment Option and IRA APO Plus may not be available in all states. The Certificates are subject to the Code's minimum distribution requirements. Generally, distributions from these Certificates must commence by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 . Subsequent distributions must be made by December 31st of each calendar year. If you do not commence minimum distributions in the calendar year in which you attain age 70 1/2 , and wait until the three month period (January 1 to April 1) in the next calendar year to commence minimum distributions, then you must take two required minimum distributions in that calendar year. If the required minimum distribution is not made, a penalty tax in an amount equal to 50% of the difference between the amount required to be withdrawn and the amount actually withdrawn may apply. See "Part 9: Tax Aspects of the Certificates" for a discussion of various special rules concerning the minimum distribution requirements. For IRA retirement benefits subject to minimum distribution requirements, we will send a form outlining the distribution options available before you reach age 70 1/2 (if you have not annuitized before that time). IRA ASSURED PAYMENT OPTION The IRA Assured Payment Option is designed to provide you with guaranteed payments for your life (SINGLE LIFE) or for the lifetime of you and a joint Annuitant you designate (JOINT AND SURVIVOR) through a series of distributions from the Annuity Account Value that are followed by Life Contingent Annuity payments. Payments you receive during the fixed period are designed to pay out the entire Annuity Account Value by the end of the fixed period and to meet or exceed minimum distribution requirements, if applicable. See "Minimum Distribution Withdrawals" below. The fixed period ends with the distribution of the Maturity Value of the last Guarantee Period, or distribution of the final amount in the Modal Payment Portion of the Guaranteed Period Account. The fixed period may also be referred to as the "liquidity period" as during this period, you have access to the Cash Value through Lump Sum Withdrawals or surrender of the Certificate, with lifetime income continuing in reduced amounts. After the fixed period, the payments are made under the Life Contingent Annuity described below. You may elect the IRA Assured Payment Option at any time if your initial contribution or Annuity Account Value is at least $25,000 at the time of election, by submitting a written request satisfactory to us. The IRA Assured Payment Option may be elected at ages 59 1/2 through 83. If you are over age 70 1/2 , the availability of this option may be restricted under certain limited circumstances. See "Tax Considerations for the IRA Assured Payment Option and IRA APO Plus" in Part 9. The IRA Assured Payment Option with level payments (described below) may be elected at ages as young as 45, subject to restrictions described below under "Election Restrictions under Joint and Survivor." Also, there are tax considerations that should be taken into account before electing level payments under the IRA Assured Payment Option if you are under age 59 1/2 . See "Penalty Tax on Early Distributions" in Part 9. The IRA Assured Payment Option with increasing payments (described below) may be elected at ages as young 53 1/2 provided payments do not start before you attain age 59 1/2 . Once the IRA Assured Payment Option is elected, all amounts currently held under your Rollover IRA must be allocated to the Guarantee Periods, the Modal Payment Portion of the Guaranteed Period Account, if applicable, and the Life Contingent Annuity. See "Allocation of Contributions or Annuity Account Value" below. Subsequent contributions may be made according to the rules set forth below and in "Tax-Free Transfers and Rollovers" in Part 9. Subsequent Contributions under the IRA Assured Payment Option Subsequent "regular" IRA contributions may no longer be made for the taxable year in which you attain age 70 1/2 and thereafter. Subsequent rollover and direct transfer contributions may be made at any time until within seven years of the end of the fixed period while the IRA Assured Payment Option 30 is in effect. However, any amount contributed after you attain age 70 1/2 must be net of your required minimum distribution for the year in which the rollover or direct transfer contribution is made. Payments You may elect to receive monthly, quarterly or annual payments. However, all payments are made on the 15th of the month. Payments to be made on an Expiration Date during the fixed period represent distributions of the Maturity Values of serially maturing Guarantee Periods on their Expiration Dates. Payments to be made monthly, quarterly or annually on dates other than an Expiration Date represent distributions from amounts in the Modal Payment Portion of the Guaranteed Period Account. See "Part 4: The Guaranteed Period Account." A $2.50 charge will be deducted from each payment made on a monthly or quarterly basis under the IRA Assured Payment Option. You have a choice of receiving level payments during the fixed period and then under the Life Contingent Annuity. Or, you may elect to receive payments that increase. During the fixed period, payments are designed to increase by 10% every three years on each third anniversary of the payment start date. After the end of the fixed period, your first payment under the Life Contingent Annuity will be 10% greater than the final payment made under the fixed period. Thereafter, payments will increase annually on each anniversary of the payment start date under the Life Contingent Annuity based on the annual increase in the Consumer Price Index, but in no event greater than 3% in any year. Payments will generally start one payment mode from the date the IRA Assured Payment Option goes into effect. Or you may choose to defer the date payments will start generally for a period of up to 60 months. Deferral of the payment start date permits you to lock in rates at a time when you may consider current rates to be high, while permitting you to delay receiving payments if you have no immediate need to receive income under your Certificate. In making this decision, you should consider that the amount of income you purchase is based on the rates applicable on the Transaction Date, so if rates rise during the interim, your payments may be less than they would have been if you had elected the IRA Assured Payment Option at a later date. Deferral of the payment start date is not available above age 80. Before you elect to defer the date your payments will start, you should consider the consequences of this decision on the requirement under the Code that you take minimum distributions each calendar year with respect to the value of your IRA. See "Required Minimum Distributions" in Part 9. The ability to defer the payment start date may not be available in all states. Required minimum distributions will be calculated based on the Annuity Account Value in each Guarantee Period and the deemed value of the Life Contingent Annuity for tax purposes. If at any time your payment under the IRA Assured Payment Option would be less than the minimum amount required to be distributed under minimum distribution rules, we will notify you of the difference. You will have the option to have an additional amount withdrawn under your Certificate and such withdrawal will be treated as a Lump Sum Withdrawal; however, no withdrawal charge will apply. An adjustment will be made to future scheduled payments. Or, you may take the amount from other IRA funds you may have. See "Lump Sum Withdrawals" below and "Required Minimum Distributions" in Part 9. See Appendix III for an example of payments purchased under an IRA Assured Payment Option. Fixed Period If you elect level payments, you may select a fixed period of not less than seven years nor more than 15 years. The maximum fixed period available based on your age at issue of the Certificate (or attained age if the IRA Assured Payment Option is elected after issue) is as follows:
AGE* MAXIMUM FIXED PERIOD - ----------------- ----------------------------------- 45 through 70 15 years 71 through 78 85 less your issue/attained age 79 through 83 7 years
The minimum and maximum fixed period will be reduced by each year you defer the date payments will start. If you elect increasing payments, you do not have a choice as to the fixed period. Based on your age at issue of the Certificate (or your attained age if the IRA Assured Payment Option is elected after issue), your fixed period will be as follows:
AGE* FIXED PERIOD - ----------------- ---------------- 59 1/2 through 70 15 years 71 through 75 12 years 76 through 80 9 years 81 through 83 6 years
If you elect increasing payments and defer the date payments will start, your fixed period will be as follows:
FIXED PERIOD BASED ON DEFERRAL PERIOD --------------------------- AGE* 1-36 MONTHS 37-60 MONTHS - ----------------- ------------- ------------ 53 1/2 through 70 12 years 9 years 71 through 75 9 years 9 years 76 through 80 6 years 6 years 81 through 83 N/A N/A
* For joint and survivor, the fixed period is based on the age of the younger Annuitant. 31 Allocation of Contributions or Annuity Account Value If the IRA Assured Payment Option is elected in the application, then based on the amount of your initial contribution, your age and sex (and the age and sex of the joint Annuitant, if applicable), the mode of payment, the form of payments and the fixed period you select, your entire contribution will be allocated by us. A portion of the initial contribution will be allocated among the Guarantee Periods and the Modal Payment Portion of the Guaranteed Period Account, if applicable, to provide fixed period payments and a portion will be applied under the Life Contingent Annuity in order to provide the payments for life. If the IRA Assured Payment Option is elected any time after issue of the Rollover IRA Certificate or if you cancel IRA APO Plus (discussed below) and elect the IRA Assured Payment Option, then based on your Annuity Account Value and the information you provide as described above, your entire Annuity Account Value, including any amounts currently invested in the Investment Funds, will be allocated by us among the Guarantee Periods, the Modal Payment Portion of the Guaranteed Period Account, if applicable, and applied under the Life Contingent Annuity. While the IRA Assured Payment Option is in effect, no amounts may be allocated to the Investment Funds. If amounts in the Guarantee Periods are transferred, a market value adjustment may apply. If you elect the IRA Assured Payment Option in the application and your initial contribution will come from multiple sources, your application must also indicate that contributions are to be allocated to the Money Market Fund under the Rollover IRA described in Part 5. Election of the IRA Assured Payment Option must include your instructions to apply your Annuity Account Value, on the date the last such contribution is received, under the IRA Assured Payment Option as described above. Any subsequent contributions made while the IRA Assured Payment Option is in effect must be allocated to the Guarantee Periods and applied to the Life Contingent Annuity. We will determine the allocation of such contributions, such that your payments will be increased and the fixed period and date that payments are to start under the Life Contingent Annuity will remain the same. Life Contingent Annuity The Life Contingent Annuity provides lifetime payments starting after the end of the fixed period. The portion of your contributions or Annuity Account Value applied under the Life Contingent Annuity does not have a Cash Value or an Annuity Account Value and, therefore, does not provide for transfers or withdrawals. Once the fixed period has ended and payments have begun under the Life Contingent Annuity, subsequent amounts may no longer be applied under the Life Contingent Annuity. THERE IS NO DEATH BENEFIT PROVIDED UNDER THE LIFE CONTINGENT ANNUITY AND ANNUITY INCOME IS PAID ONLY IF YOU (OR A JOINT ANNUITANT) ARE LIVING AT THE DATE ANNUITY BENEFITS BEGIN. BENEFITS ARE ONLY PAID DURING YOUR LIFETIME AND, IF APPLICABLE, THE LIFETIME OF A JOINT ANNUITANT. CONSEQUENTLY, YOU SHOULD CONSIDER THE POSSIBILITY THAT NO AMOUNTS WILL BE PAID UNDER THE LIFE CONTINGENT ANNUITY IF YOU (OR A JOINT ANNUITANT) DO NOT SURVIVE TO THE DATE PAYMENTS ARE TO START UNDER SUCH ANNUITY. You may elect to have the Life Contingent Annuity provide level or increasing payments on a Single Life or a Joint and 100% to Survivor basis. If you elect increasing payments, the payments will increase annually based on the increase in the Consumer Price Index, but in no event greater than 3% per year. The Life Contingent Annuity may also provide payments on a Joint and one-half to Survivor or a Joint and two-thirds to Survivor basis. Payments under the Life Contingent Annuity will be made to you during your lifetime (and the lifetime of the joint Annuitant, if applicable) on the same payment mode and date as the payments that were made during the fixed period. Election Restrictions under Joint and Survivor Election of the IRA Assured Payment Option with a Joint and Survivor form of the Life Contingent Annuity is subject to the following restrictions: (i) the joint Annuitant must be your spouse; (ii) neither you nor the joint Annuitant can be over age 83; (iii) under level payments if you elect the Joint and 100% to Survivor form, only the longest fixed period is permitted; (iv) if you or the joint Annuitant is under age 59 1/2 , only the Joint and 100% to Survivor form is permitted; and (v) the fixed period may be limited by the minimum distribution rules. See "Required Minimum Distributions" in Part 9. Withdrawals under the IRA Assured Payment Option While the IRA Assured Payment Option is in effect, if you take a Lump Sum Withdrawal as described under "Lump Sum Withdrawals" below (or if a Lump Sum Withdrawal is made to satisfy minimum distribution requirements under the Certificate), such withdrawals will be taken from all remaining Guarantee Periods to which your Annuity Account Value is allocated and the Modal Payment Portion of the Guaranteed Period Account, if applicable, such that 32 the amount of the payments and the length of the fixed period will be reduced, and the date payments are to start under the Life Contingent Annuity will be accelerated. Additional amounts above the amount of the requested withdrawal will be withdrawn from the Guaranteed Period Account and applied to the Life Contingent Annuity to the extent necessary to achieve this result. As a result, the same pattern of payments will continue in reduced amounts for your life, and if applicable, the life of your joint Annuitant. If you have elected increasing payments, the first reduction in your payments will take place no later than the date of the next planned increase. Substantially Equal Payment Withdrawals, Periodic Withdrawals and Minimum Distribution Withdrawals may not be elected while the IRA Assured Payment Option is in effect. See "Substantially Equal Payment Withdrawals," "Periodic Withdrawals" and "Minimum Distribution Withdrawals," below. Death Benefit Once you have elected the IRA Assured Payment Option, if a death benefit becomes payable during the fixed period we will pay the death benefit amount, as described under "Death Benefit" in Part 5, to the designated beneficiary. Unless you have elected a Joint and Survivor form under the Life Contingent Annuity, no payment will be made under the Life Contingent Annuity. The death benefit payable relates only to the Guarantee Periods under the Certificate; a death benefit is never payable under the Life Contingent Annuity. If you have elected a Joint and Survivor form of annuity under the Life Contingent Annuity, payments will be made to you or the joint Annuitant, if living on the date payments are to start. The designated beneficiary and the joint Annuitant must be your spouse. Termination of the IRA Assured Payment Option The IRA Assured Payment Option will be terminated if: (i) you cancel such option at any time by sending a written request satisfactory to us; (ii) you submit a subsequent contribution and you do not want it applied under the IRA Assured Payment Option; (iii) you request a transfer of your Annuity Account Value as described under "Transfers Among Investment Options" in Part 5, while the IRA Assured Payment Option is in effect; or (iv) you request a change in the date the payments are to start under the Life Contingent Annuity. Once the IRA Assured Payment Option is terminated, in order to receive distributions from your Annuity Account Value you must utilize the withdrawal options described under "Withdrawals" below. Although the Life Contingent Annuity will continue in effect and payments will be made if you or your joint Annuitant, if applicable, are living on the date payments are to start, additional Life Contingent Annuity payments may not be purchased. You may elect to start the IRA Assured Payment Option again by submitting a written request satisfactory to us, but no sooner than three years after the Option was terminated. If you elected the IRA Assured Payment Option at age 70 1/2 or older and subsequently terminate this Option, required minimum distributions must continue to be made with respect to your Certificate. If you elected the IRA Assured Payment Option at age 79 (may apply beginning at older ages in some states) or above and subsequently terminate this Option, annuity payments must commence no later than the calendar year in which you attain age 90 (may be limited to age 85 in some states). Before terminating the IRA Assured Payment Option, you should consider the implications this may have under the minimum distribution requirements. See "Tax Considerations for the IRA Assured Payment Option and IRA APO Plus" in Part 9. Income Annuity Options and Surrendering the Certificates If you elect an annuity benefit as described under "Income Annuity Options" below, or surrender the Certificate for its Cash Value as described under "Surrendering the Certificates to Receive the Cash Value" in Part 5, once we receive your returned Certificate, your Certificate will be returned to you with a notation that the Life Contingent Annuity is still in effect. Thereafter, no subsequent contributions will be accepted under the Certificate and no amounts may be applied under the Life Contingent Annuity. Withdrawal Charge While the IRA Assured Payment Option is in effect, withdrawal charges will not apply to the level or increasing payments made during the fixed period. Except as necessary to meet minimum distribution requirements under the Certificate, Lump Sum Withdrawals will be subject to a withdrawal charge and will have a 10% free corridor available. Upon termination of the IRA Assured Payment Option, the free corridor will apply as described under "Withdrawal Charge" in Part 7. IRA APO PLUS IRA APO Plus is a variation of the IRA Assured Payment Option. IRA APO Plus is available at ages 59 1/2 through 83. It may also be elected at ages as young as 53 1/2 provided payments under IRA APO Plus do not start before you attain age 59 1/2 . Except 33 as indicated below, all provisions of the IRA Assured Payment Option apply to IRA APO Plus. IRA APO Plus enables you to keep a portion of your Annuity Account Value in the Investment Funds while periodically converting such Annuity Account Value to increase the guaranteed lifetime income under the IRA Assured Payment Option. When you elect IRA APO Plus, a portion of your initial contribution or Annuity Account Value as applicable is allocated by us to the IRA Assured Payment Option to provide a minimum guaranteed lifetime income through allocation of amounts to the Guarantee Periods and the Modal Payment Portion of the Guaranteed Period Account, if applicable, and application of amounts to the Life Contingent Annuity. The remaining Annuity Account Value remains in the Investment Funds. Periodically during the fixed period (as described below), a portion of the remaining Annuity Account Value in the Investment Funds is applied to increase the guaranteed level payments under the IRA Assured Payment Option. IRA APO Plus allows you to remain invested in the Investment Funds for longer than would be possible if you applied your entire Annuity Account Value all at once to the IRA Assured Payment Option or to an income annuity option, while utilizing an "exit strategy" to provide retirement income. If IRA APO Plus is elected in the application, we may require that the portion of the initial contribution to be allocated to the Investment Funds, be allocated to the Money Market Fund until the end of the free look period. See "Free Look Period" in Part 5. The fixed period under IRA APO Plus will be based on your age (or the age of the younger Annuitant if Joint and Survivor is elected) at issue of the Certificate (or attained age if IRA APO Plus is elected after issue) and will be the same as the periods indicated for increasing payments under "IRA Assured Payment Option" above. You may elect to defer the payment start date as described in "Payments" under "IRA Assured Payment Option," above. The fixed period will also be as indicated for deferral of the payment start date for increasing payments under the IRA Assured Payment Option. You elect IRA APO Plus in the application or at a later date by submitting the proper form. IRA APO Plus may not be elected if the IRA Assured Payment Option is already in effect. The amount applied under IRA APO Plus is either the initial contribution if IRA APO Plus is elected at issue of the Certificate, or the Annuity Account Value if IRA APO Plus is elected after issue of the Certificate. Out of a portion of the amount applied, level payments are provided under the IRA Assured Payment Option equal to the initial payment that would have been provided on the Transaction Date by the allocation of the entire amount to increasing payments as described in "Payments" under "IRA Assured Payment Option," above. The difference between the amount required for level payments and the amount required for increasing payments is allocated to the Investment Funds in accordance with your instructions. If you have Annuity Account Value in the Guaranteed Period Account at the time this option is elected, a market value adjustment may apply as a result of such amounts being transferred to effect the IRA Assured Payment Option. On the third February 15th following the date the first payment is made (if payments are to be made on February 15th, the date of the first payment will be counted as the first February 15th) during the fixed period while you are living, a portion of the Annuity Account Value in the Investment Funds is taken pro rata from the Annuity Account Value in each Investment Fund and is applied to increase the level payments under the IRA Assured Payment Option. If a deferral period of three years or more is elected, a portion of the Annuity Account Value in the Investment Funds will be applied on the February 15th prior to the date the first payment is made, to increase the initial level payments. If payments are to be made on February 15th, the date of the first payment will be counted as the first February 15th. The amount applied is the amount which provides for level payments equal to the initial payment that would have been provided by the allocation of the entire Annuity Account Value to increasing payments, as described in the preceding paragraph. This process is repeated each third year during the fixed period. The first increased payment will be reflected in the payment made following three full years of payments and then every three years thereafter. On the Transaction Date immediately following the last payment during the fixed period, the remaining Annuity Account Value in the Investment Funds is first applied to the Life Contingent Annuity to change the level payments previously purchased to increasing payments. If there is any Annuity Account Value remaining after the increasing payments are purchased, this balance is applied to the Life Contingent Annuity to further increase such increasing payments. If the Annuity Account Value in the Investment Funds is insufficient to purchase the increasing payments, then the level payments previously purchased will be increased to the extent possible. 34 While IRA APO Plus provides a minimum guaranteed lifetime payment under the IRA Assured Payment Option, the total amount of income that can be provided over time will depend on the investment performance of the Investment Funds in which you have Annuity Account Value, as well as the current Guaranteed Rates and the cost of the Life Contingent Annuity, which may vary. Consequently, the aggregate amount of guaranteed lifetime income under IRA APO Plus may be more or less than the amount that could have been purchased by application at the outset of the entire initial contribution or Annuity Account Value to the IRA Assured Payment Option. See Appendix III for an example of the payments purchased under IRA Assured Payment Option and IRA APO Plus. In calculating your required minimum distributions your Annuity Account Value in the Investment Funds, the Annuity Account Value in each Guarantee Period, any amount in the Model Payment Portion of the Guaranteed Period Account, and the deemed value of the Life Contingent Annuity for tax purposes will be taken into account as described in "Payments" under "IRA Assured Payment Option," above. Also see "Required Minimum Distributions" in Part 9. Allocation of Subsequent Contributions under IRA APO Plus Any subsequent contributions you make may only be allocated to the Investment Funds, where it is later applied by us under the IRA Assured Payment Option. Subsequent contributions will be allocated among the Investment Funds according to your allocation percentages. Allocation percentages can be changed at any time by writing to our Processing Office. Subsequent Contributions may no longer be made after the end of the fixed period. Transfers Among Investment Options under IRA APO Plus While IRA APO Plus is in effect, you may transfer all or a portion of your Annuity Account Value in the Investment Funds, among the Investment Funds in any way you choose. However, you may not transfer Annuity Account Value from the Investment Funds to the Guaranteed Period Account. Withdrawals under IRA APO Plus While IRA APO Plus is in effect, if you take a Lump Sum Withdrawal as described under "Lump Sum Withdrawals" below (or if a Lump Sum Withdrawal is made to satisfy minimum distribution requirements under the Certificate), such withdrawals will be taken on a pro rata basis from your Annuity Account Value in the Investment Funds unless you specify otherwise. If there is insufficient value in the Investment Funds the excess will be taken from the Guarantee Periods and the Modal Payment Portion of the Guaranteed Period Account, if applicable, as described under "Withdrawals under the IRA Assured Payment Option" above. A Lump Sum Withdrawal taken to satisfy minimum distribution requirements under the Certificate will not be subject to a withdrawal charge. Death Benefit Once you have elected IRA APO Plus, if a death benefit becomes payable during the fixed period we will pay the death benefit amount as described under "Death Benefit" in Part 5, to the designated beneficiary. Unless you have elected Joint and Survivor under the Life Contingent Annuity, no payment will be made under the Life Contingent Annuity. The death benefit relates only to the Investment Funds and the Guarantee Periods under the Certificate; a death benefit is never payable under the Life Contingent Annuity. Termination of IRA APO Plus You may terminate IRA APO Plus at any time by submitting a request satisfactory to us. In connection with the termination, you may either (i) elect to terminate IRA APO Plus at any time and have your Certificate operate under the Rollover IRA rules (see "Part 5: Provisions of the Certificates and Services We Provide") or (ii) elect the IRA Assured Payment Option with level or increasing payments. In the latter case your remaining Annuity Account Value in the Investment Funds will be allocated to the Guaranteed Period Account and applied under the Life Contingent Annuity. A market value adjustment may apply for any amounts allocated from a Guarantee Period. At least 45 days prior to the end of each three year period, we will send you a quote indicating how much future income could be provided under the IRA Assured Payment Option. The quote would be based on your current Annuity Account Value, current Guaranteed Rates for the Guarantee Periods and current purchase rates under the Life Contingent Annuity as of the date of the quote. The actual amount of future income would depend on the rates in effect on the Transaction Date. WITHDRAWALS The Rollover IRA is an annuity contract, even though you may elect to receive your benefits in a non- annuity form. You may take withdrawals from your Certificate before the Annuity Commencement Date and while you are alive. Four withdrawal options are available: Lump Sum Withdrawals, Substantially Equal Payment Withdrawals, Periodic Withdrawals and Minimum Distribution Withdrawals. Withdrawals may result in withdrawal charges. See 35 "Part 7: Deductions and Charges." Special withdrawal rules may apply under the IRA Assured Payment Option and IRA APO Plus. Amounts withdrawn from the Guaranteed Period Account, other than at the Expiration Date, will result in a market value adjustment. See "Market Value Adjustment for Withdrawals, Transfers or Surrender Prior to the Expiration Date" in Part 4. Withdrawals may be taxable and subject to tax penalty. See "Part 9: Tax Aspects of the Certificates." As a deterrent to early withdrawal (generally prior to age 59 1/2 ) the Code provides certain penalties. We may also be required to withhold income taxes from the amount distributed. These rules are outlined in "Part 9: Tax Aspects of the Certificates." LUMP SUM WITHDRAWALS You may take a Lump Sum Withdrawal once per Contract Year at any time during such Contract Year. The minimum amount of such withdrawal is $1,000. A request to withdraw more than 90% of the Cash Value as of the Transaction Date will result in the termination of the Certificate and will be treated as a surrender of the Certificate for its Cash Value. See "Surrendering the Certificates to Receive the Cash Value," in Part 5. Unless you are also utilizing Minimum Distribution Withdrawals described below, the limitation on your ability to take more than one Lump Sum Withdrawal per Contract Year should be discussed with your tax adviser. This limitation may affect your ability to meet minimum distribution requirements in the initial year in which you are required by the Code to begin taking minimum distributions. To make a Lump Sum Withdrawal, you must submit a request satisfactory to us which specifies the Investment Options from which the Lump Sum Withdrawal will be taken. If we have received the information we require, the requested withdrawal will become effective on the Transaction Date and proceeds will usually be mailed within seven calendar days thereafter, but we may delay payment as described in "When Payments Are Made" in Part 5. If we receive only partially completed information, our Processing Office will contact you for specific instructions before your request can be processed. Lump Sum Withdrawals in excess of the 15% free corridor amount may be subject to a withdrawal charge. While either the IRA Assured Payment Option or IRA APO Plus is in effect, Lump Sum Withdrawals that exceed the 10% free corridor amount may be subject to a withdrawal charge. See "Withdrawal Charge" in Part 7. SUBSTANTIALLY EQUAL PAYMENT WITHDRAWALS Substantially Equal Payment Withdrawals provide distributions from the Annuity Account Value of the amounts necessary so that the 10% penalty tax, normally applicable to distributions made prior to age 59 1/2 , does not apply. See "Penalty Tax on Early Distributions," in Part 9. Once distributions begin, they should not be changed or stopped until the later of age 59 1/2 or five years from the date of the first distribution. If you change or stop the distributions or take a Lump Sum Withdrawal, you may be liable for the 10% penalty tax that would have otherwise been due on all prior distributions made under this option and for any interest thereon. Substantially Equal Payment Withdrawals may be elected at any time if you are below age 59 1/2 . You can elect this option by submitting the proper form. You select the day and the month when the first withdrawal will be made, but it may not be sooner than 28 days after the issue of the Certificate. In no event may you elect to receive the first payment in the same Contract Year in which a Lump Sum Withdrawal was taken. We will calculate the amount of the distribution under a method we select and payments will be made quarterly or annually as you select. These payments will continue to be made until we receive written notice from you to cancel this option. Such notice must be received at our Processing Office at least seven calendar days prior to the next scheduled withdrawal date. A Lump Sum Withdrawal taken while Substantially Equal Payment Withdrawals are in effect will cancel such withdrawals. You may elect to start receiving Substantially Equal Payment Withdrawals again, but in no event can the payments start in the same Contract Year in which a Lump Sum Withdrawal was taken. We will calculate a new distribution amount. Unless you specify otherwise, Substantially Equal Payment Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount of the withdrawal or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first. Substantially Equal Payment Withdrawals are not subject to a withdrawal charge. PERIODIC WITHDRAWALS This option may be elected if you are age 59 1/2 to 70 1/2 . Periodic Withrawals provide level percentage or level amount payouts. You may choose to receive Periodic Withdrawals on a quarterly or annual frequency. You select a dollar amount or percentage of the Annuity Account Value to be withdrawn, subject 36 to a maximum of 2.5% quarterly and 10.0% annually, but in no event may any payment be less than $250. If at the time a Periodic Withdrawal is to be made, the withdrawal amount would be less than $250, no payment will be made and your Periodic Withdrawal election will terminate. You select the date of the month when the withdrawals will be made, but you may not choose a date later than the 28th day of the month. If no date is selected, withdrawals will be made on the same calendar day of the month as the Contract Date. The commencement of payments under the Periodic Withdrawal option may not be elected to start sooner than 28 days after issue of the Certificate. You may elect Periodic Withdrawals at any time by completing the proper form and sending it to our Processing Office. You may change the payment frequency of your Periodic Withdrawals once each Contract Year or cancel this withdrawal option at any time by sending notice in a form satisfactory to us. The notice must be received at our Processing Office at least seven calendar days prior to the next scheduled withdrawal date. You may also change the amount or percentage of your Periodic Withdrawals once in each Contract Year. However, you may not change the amount or percentage in any Contract Year where you have previously taken another withdrawal under the Lump Sum Withdrawal option described above. Unless you specify otherwise, Periodic Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount of the withdrawal required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first. Periodic Withdrawals are not subject to a withdrawal charge, except to the extent that, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, the Periodic Withdrawal exceeds the 15% free corridor amount. See "Withdrawal Charge" in Part 7. MINIMUM DISTRIBUTION WITHDRAWALS Minimum Distribution Withdrawals provide distributions from the Annuity Account Value of the amounts necessary to meet minimum distribution requirements set forth in the Code. This option may be elected in the year in which you attain age 70 1/2 . You can elect Minimum Distribution Withdrawals by submitting the proper election form. The minimum amount we will pay out is $250. You may elect Minimum Distribution Withdrawals for each Certificate you own, subject to our rules then in effect. Currently, Minimum Distribution Withdrawal payments will be made annually. Unless you specify otherwise, Minimum Distributions Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount of the withdrawal required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first. Minimum Distribution Withdrawals are not subject to a withdrawal charge, except to the extent that, when added to a Lump Sum Withdrawal previously taken in the same Contract Year, the Minimum Distribution Withdrawal exceeds the 15% free corridor amount. See "Withdrawal Charge" in Part 7. Example - ------- The chart below illustrates the pattern of payments, under Minimum Distribution Withdrawals for a male who purchases the Rollover IRA at age 70 with a single contribution of $100,000, with payments commencing at the end of the first Contract Year. PATTERN OF MINIMUM DISTRIBUTION WITHDRAWALS $100,000 SINGLE CONTRIBUTION FOR A SINGLE LIFE-MALE AGE 70 [THE FOLLOWING TABLE WAS REPRESENTED AS AN AREA GRAPH IN THE PROSPECTUS] Assumes 6.0% Rate of Return Amount Age Withdrawn - --- --------- 70 $6,250 75 7,653 80 8,667 85 8,770 90 6,931 95 3,727 100 1,179 [END OF GRAPHICALLY REPRESENTED DATA] Payments are calculated each year based on the Annuity Account Value at the end of each year, using the recalculation method of determining payments. (See "Part 1--Minimum Distribution Withdrawals" in the SAI.) Payments are made annually, and it is further assumed that no Lump Sum Withdrawals are taken. This example assumes an annual rate of return of 6.0% compounded annually for both the Investment Funds and the Guaranteed Period Account. This rate of return is for illustrative purposes only and is not intended to represent an expected or guaranteed rate of return. Your investment results will vary. In addition, this example does not reflect any charges that may be applicable under the Rollover IRA. Such charges would effectively reduce the actual return. 37 INCOME ANNUITY OPTIONS Income annuity options provide periodic payments over a specified period of time which may be fixed or may be based on your life. Annuity forms of payment are calculated as of the Annuity Commencement Date, which is on file with our Processing Office. You can change the Annuity Commencement Date by writing to our Processing Office any time before the Annuity Commencement Date. However, you may not choose a date later than the 28th day of any month. Also, no Annuity Commencement Date will be later than the Processing Date which follows your 85th birthday unless the IRA Assured Payment Option or IRA APO Plus is in effect. Also, if the IRA Assured Payment Option or IRA APO Plus was elected after age 78 (may apply beginning at older ages in some states) and you subsequently terminate the option, the Annuity Commencement Date must commence no later than the calendar year in which you attain age 90 (may be limited to age 85 in some states). Before the Annuity Commencement Date, we will send you a letter advising that annuity benefits are available. Unless you otherwise elect, we will pay you a fixed annuity benefit on the "normal form" indicated for your Certificate as of your Annuity Commencement Date. The amount applied to provide the annuity benefit will be (1) the Annuity Account Value for any life annuity form or (2) the Cash Value for any period certain only annuity form except that if the period certain is more than five years, the amount applied will be no less than 95% of the Annuity Account Value. Amounts in the Guarantee Periods that are applied to an income annuity option prior to an Expiration Date will result in a market value adjustment. See "Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date" in Part 4. ANNUITY FORMS o Life Annuity: An annuity which guarantees payments for the rest of your life. Payments end with the last monthly payment before your death. Because there is no death benefit associated with this annuity form, it provides the highest monthly payment of any of the life income annuity options, so long as you are living. o Life Annuity-Period Certain: This annuity form also guarantees payments for the rest of your life. In addition, if you die before a specific period of time (the "certain period") has ended, payments will continue to your beneficiary for the balance of the certain period. Certain periods may be 5, 10, 15 or 20 years. A life annuity with a certain period of 10 years is the normal form of annuity under the Certificates. o Life Annuity-Refund Certain: This annuity form guarantees payments to you for the rest of your life. In addition, if you die before the amount applied to purchase this annuity option has been recovered, payments will continue to your beneficiary until that amount has been recovered. This option is available only as a fixed annuity. o Period Certain Annuity: This annuity form guarantees payments for a specific period of time, usually 5, 10, 15 or 20 years, and does not involve life contingencies. o Joint and Survivor Life Annuity: This annuity form guarantees life income to you and, after your death, continuation of income to the survivor. The life annuity-period certain and the life annuity- refund certain are available on either a single life or joint and survivor life basis. The income annuity options outlined above are available in both fixed and variable form, unless otherwise indicated. Fixed annuity payments are guaranteed by us and will be based either on the tables of guaranteed annuity payments in your Certificate or on our then current annuity rates, whichever is more favorable for you. Variable income annuities may be funded through the Common Stock Fund through the purchase of annuity units. The amount of each variable annuity payment may fluctuate, depending upon the performance of the Common Stock Fund. That is because the annuity unit value rises and falls depending on whether the actual rate of net investment return (after deduction of charges) is higher or lower than the assumed base rate. See "Annuity Unit Values" in the SAI. Variable income annuities may also be available by separate prospectus through the Common Stock or other Funds of other separate accounts we offer. For all Annuitants, the normal form of annuity provides for fixed payments. We may offer other forms not outlined here. Your registered representative can provide details. For each income annuity option, we will issue a separate written agreement putting the option into effect. Before we pay any annuity benefit, we require the return of the Certificate. The amount of the annuity payments will depend on the amount applied to purchase the annuity, the type of annuity chosen and, in the case of a life income annuity option, your age (or your and the joint Annuitant's ages) and in certain instances, the sex of the Annuitant(s). Once an income annuity option is chosen and payments have commenced, no change can be made. If, at the time you elect an income annuity option, the amount to be applied is less than $2,000 or the initial payment under the option elected is less than $20 monthly, we reserve the right to pay the Annuity Account Value in a single sum rather than as payments under the annuity form chosen. 38 PART 7: DEDUCTIONS AND CHARGES CHARGES DEDUCTED FROM THE ANNUITY ACCOUNT VALUE We allocate the entire amount of each contribution to the Investment Options you select, subject to certain restrictions. We then periodically deduct certain amounts from your Annuity Account Value. The charges described below and under "Charges Deducted from the Investment Funds" below will not be increased by us for the life of the Certificates. We may reduce certain charges under sponsored arrangements. See "Sponsored Arrangements" below. Charges are deducted proportionately from all the Investment Funds in which your Annuity Account Value is invested on a pro rata basis, except as noted below. Withdrawal Charge A withdrawal charge will be imposed as a percentage of each contribution made to the extent that (i) a Lump Sum Withdrawal or cumulative withdrawals during a Contract Year exceed the free corridor amount, or (ii) if the Certificate is surrendered to receive its Cash Value. We determine the withdrawal charge separately for each contribution in accordance with the table below.
CONTRACT YEAR 1 2 3 4 5 6 7 8+ ------ ------ ------ ------ ------ ------ ------ ----- Percentage of Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
If the IRA Assured Payment Option or IRA APO Plus is in effect, the withdrawal charge will be imposed as a percentage of contributions (less withdrawals), less the amount applied under the Life Contingent Annuity. The applicable withdrawal charge percentage is determined by the Contract Year in which the excess withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For purposes of the table, for each contribution, the Contract Year in which we receive that contribution is "Contract Year 1." The withdrawal charge is deducted from the Investment Options from which each such withdrawal is made in proportion to the amount being withdrawn from each Investment Option. Free Corridor Amount The free corridor amount is 15% of the Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during that Contract Year. While either the IRA Assured Payment Option or IRA APO Plus is in effect, the free corridor amount is 10% of the Annuity Account Value at the beginning of the Contract Year. There is no withdrawal charge if a Lump Sum Withdrawal is taken to satisfy minimum distribution requirements under the Certificate. A free corridor amount is not applicable to a surrender. For purposes of calculating the withdrawal charge, (1) we treat contributions as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn up to the free corridor amount are not considered a withdrawal of any contributions. The withdrawal charge is to help cover sales expenses. Transfer Charge Currently there is no charge for transfers. We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. Guaranteed Minimum Death Benefit Charge We deduct a charge for providing a minimum death benefit guarantee with respect to the Investment Funds annually on each Processing Date. The charge is equal to 0.20% of the GMDB in effect at such Processing Date. If the amount collected from this charge exceeds the cost of providing the benefits, it will be to our profit, and may be used to pay distribution expenses not recovered from sales charges under the Certificates. Charges for State Premium and Other Applicable Taxes We deduct a charge for applicable taxes, such as state or local premium taxes, that might be imposed in your state. Generally we deduct this charge from the amount applied to provide an income annuity option. In certain states, however, we may deduct the charge for taxes from contributions. The current tax charge that might be imposed varies by state and ranges from 0% to 2.25%. 39 CHARGES DEDUCTED FROM THE INVESTMENT FUNDS Mortality and Expense Risk Charge We will deduct a daily charge from the assets in each Investment Fund to compensate us for mortality and expense risks. The daily charge is at the rate of 0.002477%, which is equivalent to an annual rate of 0.90%, on the assets in each Investment Fund. Approximately 0.60% of this annual charge is allocated to the mortality risk and 0.30% is allocated to the expense risk. We will realize a gain from this charge to the extent it is not needed to provide for benefits and expenses under the Certificate. We will use any gain for any lawful purpose including payment of distribution expenses not recovered from sales charges under the Certificate. The mortality risk assumed is the risk that Annuitants as a group will live for a longer time than our actuarial tables predict. As a result, we would be paying more in annuity income than we planned. We also assume a risk that the mortality assumptions reflected in our guaranteed annuity payment tables, shown in each Certificate, will differ from actual mortality experience. Lastly, we assume a mortality risk to the extent that the guaranteed minimum death benefit charge is insufficient to pay any amount by which such death benefit exceeds the Cash Value of the Certificate. The expense risk assumed is the risk that it will cost us more to issue and administer the Certificates than we expect. Asset Based Administrative Charge We will deduct a daily charge from the assets in each Investment Fund, to compensate us for administrative expenses under the Certificates. The daily charge is at a rate of 0.000969% (equivalent to an annual rate of 0.35%) on the assets in each Investment Fund. The asset based administrative charge is not designed to produce a profit for Equitable Life. TRUST CHARGES TO PORTFOLIOS Investment advisory fees charged daily against the Trust's assets, the Rule 12b-1 Plan fee, direct operating expenses of the Trust (such as trustees' fees, expenses of independent auditors and legal counsel, bank and custodian charges and liability insurance), and certain investment-related expenses of the Trust (such as brokerage commissions and other expenses related to the purchase and sale of securities), are reflected in each Portfolio's daily share price. The maximum investment advisory fees paid annually by the Portfolios cannot be changed without a vote by shareholders. They are as follows:
DAILY AVERAGE NET ASSETS ------------------------------------- FIRST NEXT OVER $350 $400 $750 MILLION MILLION MILLION ----------- ----------- ----------- ASSET ALLOCATION SERIES: Conservative Investors ... .550% .525% .500% Growth Investors .......... .550% .525% .500% EQUITY SERIES: Common Stock .............. .400% .375% .350% Global .................... .550% .525% .500% Aggressive Stock .......... .500% .475% .450% FIXED INCOME SERIES: Money Market .............. .400% .375% .350% Intermediate Govt. Securities ................ .500% .475% .450% FIRST NEXT OVER $500 $500 $1 MILLION MILLION BILLION ----------- ----------- ----------- EQUITY SERIES: Growth & Income ........... .550% .525% .500% FIRST NEXT OVER $500 $1 $1.5 MILLION BILLION BILLION ----------- ----------- ----------- EQUITY SERIES: International ............. .900% .850% .800%
Investment advisory fees are established under the Trust's investment advisory agreements between the Trust and its investment adviser, Alliance. All of these fees and expenses are described more fully in the Trust prospectus. SPONSORED ARRANGEMENTS For certain sponsored arrangements, we may reduce the withdrawal charge or change the minimum initial contribution requirements. Under the IRA Assured Payment Option and IRA APO Plus, we may increase Guaranteed Rates and reduce purchase rates under the Life Contingent Annuity. We may also change the guaranteed minimum death benefit. Sponsored arrangements include those in which an employer allows us to sell Certificates to its employees or retirees on an individual basis. Our costs for sales, administration, and mortality generally vary with the size and stability of the sponsoring organization among other factors. We take all these factors into account when reducing charges. To qualify for reduced charges, a sponsored arrangement must meet certain requirements, including our requirements for size and number of years in existence. Sponsored arrangements that have been set up solely to buy Certificates or that have been in existence less than six months will not qualify for reduced charges. 40 We will make these and any similar reductions according to our rules in effect when a Certificate is approved for issue. We may change these rules from time to time. Any variation in the withdrawal charge will reflect differences in costs or services and will not be unfairly discriminatory. Sponsored arrangements may be governed by the Code, the Employee Retirement Income Security Act of 1974 (ERISA), or both. We make no representations as to the impact of those and other applicable laws on such programs. WE RECOMMEND THAT EMPLOYERS PURCHASING OR MAKING CERTIFICATES AVAILABLE FOR PURCHASE UNDER A SPONSORED ARRANGEMENT SEEK THE ADVICE OF THEIR OWN LEGAL AND BENEFITS ADVISERS. OTHER DISTRIBUTION ARRANGEMENTS The withdrawal charge may be reduced or eliminated when sales are made in a manner that results in savings of sales and administrative expenses, such as sales through persons who are compensated by clients for recommending investments and receive no commission or reduced commissions in connection with the sale of the Certificates. In no event will a reduction or elimination of the withdrawal charge be permitted where it would be unfairly discriminatory. 41 PART 8: VOTING RIGHTS TRUST VOTING RIGHTS As explained previously, contributions allocated to the Investment Funds are invested in shares of the corresponding Portfolios of the Trust. Since we own the assets of the Separate Account, we are the legal owner of the shares and, as such, have the right to vote on certain matters. Among other things, we may vote: o to elect the Trust's Board of Trustees, o to ratify the selection of independent auditors for the Trust, and o on any other matters described in the Trust's current prospectus or requiring a vote by shareholders under the 1940 Act. Because the Trust is a Massachusetts business trust, annual meetings are not required. Whenever a shareholder vote is taken, we will give Certificate Owners the opportunity to instruct us how to vote the number of shares attributable to their Certificates. If we do not receive instructions in time from all Certificate Owners, we will vote the shares of a Portfolio for which no instructions have been received in the same proportion as we vote shares of that Portfolio for which we have received instructions. We will also vote any shares that we are entitled to vote directly because of amounts we have in an Investment Fund in the same proportions that Certificate Owners vote. Each Trust share is entitled to one vote. Fractional shares will be counted. Voting generally is on a Portfolio-by-Portfolio basis except that shares will be voted on an aggregate basis when universal matters, such as election of Trustees and ratification of independent auditors, are voted upon. However, if the Trustees determine that shareholders in a Portfolio are not affected by a particular matter, then such shareholders generally would not be entitled to vote on that matter. VOTING RIGHTS OF OTHERS Currently, we control the Trust. Trust shares are held by other separate accounts of ours and by separate accounts of insurance companies affiliated and unaffiliated with us. Shares held by these separate accounts will probably be voted according to the instructions of the owners of insurance policies and contracts issued by those insurance companies. While this will dilute the effect of the voting instructions of the Rollover IRA Certificate Owners, we currently do not foresee any disadvantages arising out of this. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the Trust's response to any of those events insufficiently protects our Certificate Owners, we will see to it that appropriate action is taken to protect our Certificate Owners. SEPARATE ACCOUNT VOTING RIGHTS If actions relating to the Separate Account require Certificate Owner approval, Certificate Owners will be entitled to one vote for each Accumulation Unit they have in the Investment Funds. Each Certificate Owner who has elected a variable annuity payout may cast the number of votes equal to the dollar amount of reserves we are holding for that annuity in the Common Stock Fund divided by the Accumulation Unit Value for the Common Stock Fund. We will cast votes attributable to any amounts we have in the Investment Funds in the same proportion as votes cast by Certificate Owners. CHANGES IN APPLICABLE LAW The voting rights we describe in this prospectus are created under applicable Federal securities laws. To the extent that those laws or the regulations promulgated under those laws eliminate the necessity to submit matters for approval by persons having voting rights in separate accounts of insurance companies, we reserve the right to proceed in accordance with those laws or regulations. 42 PART 9: TAX ASPECTS OF THE CERTIFICATES TAX-QUALIFIED INDIVIDUAL RETIREMENT ANNUITIES (IRAS) Introduction The Rollover IRA Certificate is designed to qualify as an IRA under Section 408(b) of the Code. Your rights under the Rollover IRA cannot be forfeited. This prospectus contains the information which the Internal Revenue Service (IRS) requires to be disclosed to an individual before he or she purchases an IRA. This Part covers some of the special tax rules that apply to individual retirement arrangements. You should be aware that an IRA is subject to certain restrictions in order to qualify for its special treatment under the Federal tax law. This prospectus provides our general understanding of applicable Federal income tax rules, but does not provide detailed tax information and does not address issues such as state income and other taxes or Federal gift and estate taxes. Please consult a tax adviser when considering the tax aspects of the Rollover IRA Certificates. Further information on IRA tax matters can be obtained from any IRS district office. Additional information regarding IRAs, including a discussion of required distributions, can be found in IRS Publication 590, entitled "Individual Retirement Arrangements (IRAs)," which is generally updated annually. The Rollover IRA Certificate has been approved by the IRS as to form for use as an IRA. This IRS approval is a determination only as to the form of the annuity and does not represent a determination of the merits of the annuity as an investment. Cancellation You can cancel a Certificate issued as an IRA by following the directions in Part 5 under "Free Look Period." Since there may be adverse tax consequences if a Certificate is cancelled (and because we are required to report to the IRS certain distributions from cancelled IRAs), you should consult with a tax adviser before making any such decision. If you cancel this Certificate, you may establish a new individual retirement arrangement if at the time you meet the requirements for establishing an individual retirement arrangement. Contributions to IRAs Individuals may make three different types of contributions to purchase an IRA, or as later additions to an existing IRA: "regular" contributions out of earnings, tax-free "rollover" contributions from tax- qualified plans, or direct custodian-to-custodian transfers from other individual retirement arrangements ("direct transfers"). The initial contribution to the Certificate must be either a rollover or a direct custodian-to-custodian transfer. See "Tax-Free Transfers and Rollovers," discussed below. Any subsequent contributions you make may be any of rollovers, direct transfers or "regular" IRA contributions. See "Contributions Under the Certificates" in Part 5. The immediately following discussion relates to "regular" IRA contributions. For the reasons noted in "Tax-Free Transfers and Rollovers" below, you should consult with your tax adviser before making any subsequent contributions to an IRA which is intended to serve as a "conduit" IRA. Generally, $2,000 is the maximum amount of deductible and nondeductible contributions which may be made to all IRAs by an individual in any taxable year. The above limit may be less when the individual's earnings are below $2,000. This limit does not apply to rollover contributions or direct custodian- to-custodian transfers into an IRA. The amount of IRA contributions for a tax year that an individual can deduct depends on whether the individual (or the individual's spouse, if a joint return is filed) is covered by an employer-sponsored tax-favored retirement plan. If the individual's spouse does not work or elects to be treated as having no compensation, the individual and the individual's spouse may contribute up to $2,250 to individual retirement arrangements (but no more than $2,000 to any one individual retirement arrangement). The non-working spouse owns his or her individual retirement arrangements, even if the working spouse makes contributions to purchase the spousal individual retirement arrangements. If neither the individual nor the individual's spouse is covered during any part of the taxable year by an employer-sponsored tax-favored retirement plan (including a qualified plan, a tax sheltered account or annuity under Section 403(b) of the Code (TSA) or a simplified employee pension plan), then regardless of adjusted gross income (AGI), each working spouse may make deductible contributions to an IRA for each tax year (MAXIMUM PERMISSIBLE DOLLAR DEDUCTION) up to the lesser of $2,000 or 100% of compensation. In certain cases, individuals covered by a tax-favored retirement plan include persons eligible to participate in the plan although not actually participating. Whether or not a person is covered by a retirement plan will be reported on an employee's Form W-2. 43 If the individual is single and covered by a retirement plan during any part of the taxable year, the deduction for IRA contributions phases out with AGI between $25,000 and $35,000. If the individual is married and files a joint return, and either the individual or the spouse is covered by a tax-favored retirement plan during any part of the taxable year, the deduction for IRA contributions phases out with AGI between $40,000 and $50,000. If the individual is married, files a separate return and is covered by a tax-favored retirement plan during any part of the taxable year, the deduction for IRA contributions phases out with AGI between $0 and $10,000. Married individuals filing separate returns must take into account the retirement plan coverage of the other spouse, unless the couple has lived apart for the entire taxable year. If AGI is below the phase-out range, an individual is entitled to the Maximum Permissible Dollar Deduction. In computing the partial deduction for IRA contributions the individual must round the amount of the deduction to the nearest $10. The permissible deduction for IRA contributions is a minimum of $200 if AGI is less than the amount at which the deduction entirely phases out. If the individual (or the individual's spouse, unless the couple has lived apart the entire taxable year and their filing status is married, filing separately) is covered by a tax-favored retirement plan, the deduction for IRA contributions must be computed using one of two methods. Under the first method, the individual determines AGI and subtracts $25,000 if the individual is a single person, $40,000 if the individual is married and files a joint return with the spouse, or $0 if the individual is married and files a separate return. The resulting amount is the individual's Excess AGI. The individual then determines the limit on the deduction for IRA contributions using the following formula: Adjusted Maximum Dollar $10,000-Excess AGI Permissible Deduction $10,000 X Dollar Deduction = Limit Under the second method, the individual determines his or her Excess AGI and then refers to the table in Appendix IV originally prepared by the IRS to determine the deduction. Contributions may be made for a tax year until the deadline for filing a Federal income tax return for that tax year (without extensions). No contributions are allowed for the tax year in which an individual attains age 70 1/2 or any tax year after that. A working spouse age 70 1/2 or over, however, can contribute up to the lesser of $2,000 or 100% of "earned income" to a spousal individual retirement arrangement for a non-working spouse until the year in which the non-working spouse reaches age 70 1/2 . An individual not eligible to deduct part or all of the IRA contribution may still make nondeductible contributions on which earnings will accumulate on a tax-deferred basis. The deductible and nondeductible contributions may not, however, together exceed the lesser of the $2,000 limit (or $2,250 spousal limit) or 100% of compensation for each tax year. See "Excess Contributions" below. Individuals must keep their own records of deductible and nondeductible contributions in order to prevent double taxation on the distribution of previously taxed amounts. See "Distributions from IRA Certificates" below. An individual making nondeductible contributions in any taxable year, or receiving amounts from any IRA to which he or she has made nondeductible contributions, must file the required information with the IRS. Moreover, individuals making nondeductible IRA contributions must retain all income tax returns and records pertaining to such contributions until interest in such IRAs are fully distributed. Excess Contributions Excess contributions to an IRA are subject to a 6% excise tax for the year in which made and for each year thereafter until withdrawn. In the case of "regular" IRA contributions any contribution in excess of the lesser of $2,000 or 100% of compensation or earned income is an "excess contribution," (without regard to the deductibility or nondeductibility of IRA contributions under this limit). Also, any "regular" contributions made after you reach age 70 1/2 are excess contributions. In the case of rollover IRA contributions, excess contributions are amounts which are not eligible to be rolled over (for example, after tax contributions to a qualified plan or minimum distributions required to be made after age 70 1/2 ). An excess contribution (rollover or "regular") which is withdrawn, however, before the time for filing the individual's Federal income tax return for the tax year (including extensions) is not includable in income and therefore is not subject to the 10% penalty tax on early distributions (discussed below under "Penalty Tax on Early Distributions"), provided any earnings attributable to the excess contribution are also withdrawn and no tax deduction is taken for the excess contribution. The withdrawn earnings on the excess contribution, however, would be includable in the individual's gross income and would be subject to the 10% penalty tax. If excess contributions are not withdrawn before the time for filing the individual's Federal income tax return for 44 the year (including extensions), "regular" contributions may still be withdrawn after that time if the IRA contribution for the tax year did not exceed $2,250 and no tax deduction was taken for the excess contribution; in that event, the excess contribution would not be includable in gross income and would not be subject to the 10% penalty tax. Lastly, excess "regular" contributions may also be removed by underutilizing the allowable contribution limits for a later year. If excess rollover contributions are not withdrawn before the time for filing the individual's Federal tax return for the year (including extensions) and the excess contribution occurred as a result of incorrect information provided by the plan, any such excess amount can be withdrawn if no tax deduction was taken for the excess contribution. As above, excess rollover contributions withdrawn under those circumstances would not be includable in gross income and would not be subject to the 10% penalty tax. Tax-Free Transfers and Rollovers Rollover contributions may be made to an IRA from these sources: (i) qualified plans, (ii) TSAs (including 403(b)(7) custodial accounts) and (iii) other individual retirement arrangements. The rollover amount must be transferred to the Certificate either as a direct rollover of an "eligible rollover distribution" (described below) or as a rollover by the individual plan participant or owner of the individual retirement arrangement. In the latter cases, the rollover must be made within 60 days of the date the proceeds from another individual retirement arrangement or an eligible rollover distribution from a qualified plan or TSA were received. Generally the taxable portion of any distribution from a qualified plan or TSA is an eligible rollover distribution and may be rolled over tax-free to an IRA unless the distribution is (i) a required minimum distribution under Section 401(a)(9) of the Code; or (ii) one of a series of substantially equal periodic payments made (not less frequently than annually) (a) for the life (or life expectancy) of the plan participant or the joint lives (or joint life expectancies) of the plan participant and his or her designated beneficiary, or (b) for a specified period of ten years or more. Under some circumstances, amounts from a Certificate may be rolled over on a tax-free basis to a qualified plan. To get this "conduit" IRA treatment, the source of funds used to establish the IRA must be a rollover contribution from the qualified plan and the entire amount received from the IRA (including any earnings on the rollover contribution) must be rolled over into another qualified plan within 60 days of the date received. Similar rules apply in the case of a TSA. If you make a contribution to the Certificate which is from an eligible rollover distribution and you commingle such contribution with other contributions, you may not be able to roll over these eligible rollover distribution contributions and earnings to another qualified plan (or TSA, as the case may be) at a future date, unless the Code permits. Under the conditions and limitations of the Code, an individual may elect for each IRA to make a tax-free rollover once every 12-month period among individual retirement arrangements (including rollovers from retirement bonds purchased before 1983). Custodian-to-custodian transfers are not rollovers and can be made more frequently than once a year. The same tax-free treatment applies to amounts withdrawn from the Certificate and rolled over into other individual retirement arrangements unless the distribution was received under an inherited IRA. Tax-free rollovers are also available to the surviving spouse beneficiary of a deceased individual, or a spousal alternate payee of a qualified domestic relations order applicable to a qualified plan. In some cases, IRAs can be transferred on a tax-free basis between spouses or former spouses incidental to a judicial decree of divorce or separation. Distributions from IRA Certificates Income or gains on contributions under IRAs are not subject to Federal income tax until benefits are distributed to the individual. Distributions include withdrawals from your Certificate, surrender of your Certificate and annuity payments from your Certificate. Death benefits are also distributions. Except as discussed below, the amount of any distribution from an IRA is fully includable as ordinary income by the individual in gross income. If the individual makes non-deductible IRA contributions, those contributions are recovered tax-free when distributions are received. The individual must keep records of all nondeductible contributions. At the end of each tax year in which the individual has received a distribution, the individual determines a ratio of the total nondeductible IRA contributions (less any amounts previously withdrawn tax-free) to the total account balances of all IRAs held by the individual at the end of the tax year (including rollover IRAs) plus all IRA distributions made during such tax year. The resulting ratio is then multiplied by all distributions from the IRA during that tax year to determine the nontaxable portion of each distribution. In addition, a distribution (other than a required minimum distribution received after age 70 1/2 ) is not 45 taxable if (1) the amount received is a return of excess contributions which are withdrawn, as described under "Excess Contributions" above, (2) the entire amount received is rolled over to another individual retirement arrangement (see "Tax-Free Transfers and Rollovers" above) or (3) in certain limited circumstances, where the IRA acts as a "conduit," the entire amount is paid into a qualified plan or TSA that permits rollover contributions. Distributions from an IRA are not entitled to the special favorable five-year averaging method (or, in certain cases, favorable ten-year averaging and long- term capital gain treatment) available in certain cases to distributions from qualified plans. Required Minimum Distributions The minimum distribution rules require IRA owners to start taking annual distributions from their retirement plans by age 70 1/2 . The distribution requirements are designed to provide for distribution of the owner's interest in the IRA over the owner's life expectancy. Whether the correct amount has been distributed is calculated on a year by year basis; there are no provisions in the Code to allow amounts taken in excess of the required amount to be carried over or carried back and credited to other years. Generally, an individual must take the first required minimum distribution with respect to the calendar year in which the individual turns age 70 1/2 . The individual has the choice to take the first required minimum distribution during the calendar year he or she turns age 70 1/2 , or to delay taking it until the three month (January 1-April 1) period in the next calendar year. (Distributions must commence no later than the "Required Beginning Date," which is the April 1st of the calendar year following the calendar year in which the individual turns age 70 1/2 .) If the individual chooses to delay taking the first annual minimum distribution, then the individual will have to take two minimum distributions in that year--the delayed one for the first year and the one actually for that year. Once minimum distributions begin, they must be made at some time every year. There are two approaches to taking minimum distributions--"account based" or "annuity based"-- and there are a number of distribution options in both of these categories. These choices are intended to give individuals a great deal of flexibility to provide for themselves and their families. An account based minimum distribution approach may be a lump sum payment, or periodic withdrawals made over a period which does not extend beyond the individual's life expectancy or the joint life expectancies of the individual and a designated beneficiary. An annuity based approach involves application of the Annuity Account Value to an annuity for the life of the individual or the joint lives of the individual and a designated beneficiary, or for a period certain not extending beyond applicable life expectancies. You should discuss with your tax adviser which minimum distribution options are best for your own personal situation. Individuals who are participants in more than one tax-favored retirement plan may be able to choose different distribution options for each plan. Your required minimum distribution for any taxable year is calculated by taking into account the required minimum distribution from each of your individual retirement arrangements. The IRS, however, does not require that you make the required distribution from each individual retirement arrangement that you maintain. As long as the total amount distributed annually satisfies your overall minimum distribution requirement, you may choose to take your annual required distribution from any one or more individual retirement arrangements that you maintain. An individual may recompute his or her minimum distribution amount each year based on the individual's current life expectancy as well as that of the spouse. No recomputation is permitted, however, for a beneficiary other than a spouse. If there is an insufficient distribution in any year, a 50% tax may be imposed on the amount by which the minimum required to be distributed exceeds the amount actually distributed. The penalty tax may be waived by the Secretary of the Treasury in certain limited circumstances. Failure to have distributions made as the Code and Treasury regulations require may result in disqualification of your IRA. See "Tax Penalty for Insufficient Distributions" below. Except as described in the next sentence, if the individual dies after distribution in the form of an annuity has begun, or after the Required Beginning Date, payment of the remaining interest must be made at least as rapidly as under the method used prior to the individual's death. (The IRS has indicated that an exception to the rule that payment of the remaining interest must be made at least as rapidly as under the method used prior to the individual's death applies if the beneficiary of the IRA is the surviving spouse. In some circumstances, the surviving spouse may elect to "make the IRA his or her own" and halt distributions until he or she reaches age 70 1/2 ). If an individual dies before the Required Beginning Date and before distributions in the form of an 46 annuity begin, distributions of the individual's entire interest under the Certificate must be completed within five years after death, unless payments to a designated beneficiary begin within one year of the individual's death and are made over the beneficiary's life or over a period certain which does not extend beyond the beneficiary's life expectancy. If the surviving spouse is the designated beneficiary, the spouse may delay the commencement of such payments up until the individual would have attained 70 1/2 . In the alternative, a surviving spouse may elect to roll over the inherited IRA into the surviving spouse's own IRA. Taxation of Death Benefits Distributions received by a beneficiary are generally given the same tax treatment the individual would have received if distribution had been made to the individual. If you elect to have your spouse be the sole primary beneficiary and to be the successor Annuitant and Certificate Owner, then your surviving spouse automatically becomes both the successor Certificate Owner and Annuitant, and no death benefit is payable until the surviving spouse's death. Guaranteed Minimum Death Benefit The Code provides that no part of an individual retirement account may be invested in life insurance contracts. Treasury Regulations provide that an individual retirement account may be invested in an annuity contract which provides a death benefit of the greater of premiums paid or the contract's cash value. Your Certificate provides a minimum death benefit guarantee that in certain circumstances may be greater than either of contributions made or the Annuity Account Value. Although there is no ruling regarding the type of minimum death benefit guarantee provided by the Certificate, Equitable Life believes that the Certificate's minimum death benefit guarantee should not adversely affect the qualification of the Certificate as an IRA. Nevertheless, it is possible that the IRS could disagree, or take the position that some portion of the charge in the Certificate for the minimum death benefit guarantee should be treated for Federal income tax purposes as a taxable partial withdrawal from the Certificate. If this were so, such a deemed withdrawal would also be subject to tax penalty for Certificate Owners under age 59 1/2 . Tax Considerations for the IRA Assured Payment Option and IRA APO Plus Although the Life Contingent Annuity does not have a Cash Value, it will be assigned a value for tax purposes which will generally change each year. This value must be taken into account when determining the amount of required minimum distributions from your IRA even though the Life Contingent Annuity may not be providing a source of funds to satisfy such required minimum distribution. Accordingly, before you apply any IRA funds under the IRA Assured Payment Option or IRA APO Plus or terminate such Options, you should be aware of the tax considerations discussed below. Consult with your tax adviser to determine the impact of electing the IRA Assured Payment Option and IRA APO Plus in view of your own particular situation. When funds have been allocated to the Life Contingent Annuity, you will generally be required to determine your required minimum distribution by annually recalculating your life expectancy. The IRA Assured Payment Option and IRA APO Plus will not be available if you have previously made a different election. Recalculation is no longer required once the only payments you or your spouse receive are under the Life Contingent Annuity. If prior to the date payments are to start under the Life Contingent Annuity, you surrender your Certificate, or withdraw any remaining Annuity Account Value, it may be necessary for you to satisfy your required minimum distribution by accelerating the start date of payments for your Life Contingent Annuity, or to the extent available, take distributions from other IRA funds you may have. Alternatively you may convert your IRA Life Contingent Annuity under the IRA Rollover to a non-qualifed Life Contingent Annuity. This would be viewed as a distribution of the value of the Life Contingent Annuity from the IRA, and therefore, would be a taxable event. However, since the Life Contingent Annuity would no longer be part of an IRA, its value would not have to be taken into account in determining future required minimum distributions. If you have elected a Joint and Survivor form of the Life Contingent Annuity, the joint Annuitant must be your spouse. You must determine your required minimum distribution by annually recalculating both your life expectancy and your spouse's life expectancy. The IRA Assured Payment Option and IRA APO Plus will not be available if you have previously made a different election. Recalculation is no longer required once the only payments you or your spouse receive are under the Life Contingent Annuity. The value of such an annuity will change in the event of your death or the death of your spouse. For this reason, it is important that we be informed if you or your spouse dies before the Life Contingent Annuity has started payments so that a lower valuation can 47 be made. Otherwise a higher tax value may result in an overstatement of the amount that would be necessary to satisfy your required minimum distribution amount. Allocations of funds to the Life Contingent Annuity may prevent the Certificate from later receiving "conduit" IRA treatment. See "Tax-Free Transfers and Rollovers" above. Prohibited Transaction An IRA may not be borrowed against or used as collateral for a loan or other obligation. If the IRA is borrowed against or used as collateral, its tax- favored status will be lost as of the first day of the tax year in which the event occurred. If this happens, the individual must include in Federal gross income for that year an amount equal to the fair market value of the IRA Certificate as of the first day of that tax year, less the amount of any nondeductible contributions not previously withdrawn. Also, the early distribution penalty tax of 10% will apply if the individual has not reached age 59 1/2 before the first day of that tax year. See "Penalty Tax on Early Distributions" below. PENALTY TAX ON EARLY DISTRIBUTIONS The taxable portion of IRA distributions will be subject to a 10% penalty tax unless the distribution is made (1) on or after your death, (2) because you have become disabled, (3) on or after the date when you reach age 59 1/2 , or (4) in accordance with the exception outlined below if you are under 59 1/2 . A payout over your life or life expectancy (or joint and survivor lives or life expectancies), which is part of a series of substantially equal periodic payments made at least annually, is also not subject to penalty tax. To permit you to meet this exception, Equitable Life has two options: Substantially Equal Payment Withdrawals and the IRA Assured Payment Option with level payments, both of which are described in Part 6. If you are a Rollover IRA Certificate Owner who will be under age 59 1/2 as of the date the first payment is expected to be received and you choose either option, Equitable Life will calculate the substantially equal annual payments under a method we will select based on guidelines issued by the IRS (currently contained in IRS Notice 89-25, Question and Answer 12). Although Substantially Equal Payment Withdrawals and IRA Assured Payment Option payments are not subject to the 10% penalty tax, they are taxable as discussed in "Distributions from IRA Certificates," above. Once Substantially Equal Payment Withdrawals or IRA Assured Payment Option payments begin, the distributions should not be stopped or changed until the later of your attaining age 59 1/2 or five years after the date of the first distribution, or the penalty tax, including an interest charge for the prior penalty avoidance, may apply to all withdrawals. Also, it is possible that the IRS could view any additional withdrawal or payment you take from your Certificate as changing your pattern of Substantially Equal Payment Withdrawals or IRA Assured Payment Option payments for purposes of determining whether the penalty applies. TAX PENALTY FOR INSUFFICIENT DISTRIBUTIONS Failure to make required distributions discussed above in "Required Minimum Distributions" may cause the disqualification of the IRA. Disqualification may result in current taxation of your entire benefit. In addition a 50% penalty tax may be imposed on the difference between the required distribution amount and the amount actually distributed, if any. We do not automatically make distributions from a Certificate before the Annuity Commencement Date unless a request has been made. It is your responsibility to comply with the minimum distribution rules. We will notify you when our records show that your age 70 1/2 is approaching. If you do not select a method, we will assume you are taking your minimum distribution from another IRA that you maintain. You should consult with your tax adviser concerning these rules and their proper application to your situation. TAX PENALTY FOR EXCESS DISTRIBUTIONS OR ACCUMULATION A 15% excise tax applies to an individual's aggregate excess distributions from all tax-favored retirement plans (including IRAs). The excise tax is in addition to the ordinary income tax due but is reduced by the amount (if any) of the early distribution penalty tax imposed by the Code. The aggregate distributions in any year will be subject to excise tax if they exceed an indexed amount ($155,000 in 1996). In addition, in certain cases the estate tax imposed on a deceased individual's estate will be increased if the accumulated value of the individual's interest in qualified annuities and tax favored retirement plans is excessive. FEDERAL AND STATE INCOME TAX WITHHOLDING Equitable Life is required to withhold Federal income tax from IRA distributions, unless the recipient elects not to be subject to income tax withholding. The rate of withholding will depend on the type 48 of distribution and, in certain cases, the amount of the distribution. Special withholding rules apply to foreign recipients and United States citizens residing outside the United States. If a recipient does not have sufficient income tax withheld or does not make sufficient estimated income tax payments, however, the recipient may incur penalties under the estimated income tax rules. Recipients should consult their tax advisers to determine whether they should elect out of withholding. Requests not to withhold Federal income tax must be made in writing prior to receiving benefits under the Certificate. Our Processing Office will provide forms for this purpose. No election out of withholding is valid unless the recipient provides us with the correct taxpayer identification number and a United States residence address. Certain states have indicated that income tax withholding will apply to payments made from the Certificate to residents. In some states, a recipient may elect out of state withholding. Generally, an election out of Federal withholding will also be considered an election out of state withholding. If you need more information concerning a particular state or any required forms, call our Processing Office at the toll-free number and consult your tax adviser. Periodic payments are generally subject to wage- bracket type withholding (as if such payments were payments of wages by an employer to an employee) unless the recipient elects no withholding. If a recipient does not elect out of withholding or does not specify the number of withholding exemptions, withholding will generally be made as if the recipient is married and claiming three withholding exemptions. There is an annual threshold of taxable income from periodic annuity payments which is exempt from withholding based on this assumption. For 1996, a recipient of periodic payments (e.g., monthly or annual payments) which total less than a $14,075 taxable amount will generally be exempt from Federal income tax withholding, unless the recipient specifies a different choice of withholding exemptions. A withholding election may be revoked at any time and remains effective until revoked. If a recipient fails to provide a correct taxpayer identification number, withholding is made as if the recipient is single with no exemptions. A recipient of a non-periodic distribution (total or partial) will generally be subject to withholding at a flat 10% rate. A recipient who provides a United States residence address and a correct taxpayer identification number will generally be permitted to elect not to have tax withheld. All recipients receiving periodic and non-periodic payments will be further notified of the withholding requirements and of their right to make withholding elections. OTHER WITHHOLDING As a general rule, if death benefits are payable to a person two or more generations younger than the Certificate Owner, a Federal generation skipping tax may be payable with respect to the benefit at rates similar to the maximum estate tax rate in effect at the time. The generation skipping tax provisions generally apply to transfers which would also be subject to the gift and estate tax rules. Individuals are generally allowed an aggregate generation skipping tax exemption of $1 million. Because these rules are complex, you should consult with your tax adviser for specific information, especially where benefits are passing to younger generations, as opposed to a spouse or child. If we believe a benefit may be subject to generation skipping tax we may be required to withhold for such tax unless we receive acceptable written confirmation that no such tax is payable. IMPACT OF TAXES TO EQUITABLE LIFE The Certificates provide that Equitable Life may charge the Separate Account for taxes. Equitable Life can set up reserves for such taxes. TRANSFERS AMONG INVESTMENT OPTIONS Transfers among the Investment Funds or between the Guaranteed Period Account and one or more Investment Funds are not taxable. TAX CHANGES The United States Congress has in the past considered and may in the future consider proposals for legislation that, if enacted, could change the tax treatment of annuities and individual retirement arrangements. In addition, the Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing laws. State tax laws or, if you are not a United States resident, foreign tax laws, may affect the tax consequences to you or the beneficiary. These laws may change from time to time without notice and, as a result, the tax consequences may be altered. There is no way of predicting whether, when or in what form any such change would be adopted. Any such change could have retroactive effects regardless of the date of enactment. We suggest you consult your legal or tax adviser. 49 PART 10: INDEPENDENT ACCOUNTANTS The consolidated financial statements and consolidated financial statement schedules of Equitable Life at December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospectus, have been examined by Price Waterhouse LLP, independent accountants, whose reports thereon are incorporated herein by reference. Such consolidated financial statements and consolidated financial statement schedules have been incorporated herein by reference in reliance upon the reports of Price Waterhouse LLP given upon their authority as experts in accounting and auditing. 50 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE - ----------------------------------------------------------------------------- The example below shows how the market value adjustment would be determined and how it would be applied to a withdrawal, assuming that $100,000 were allocated on February 15, 1997 to a Guarantee Period with an Expiration Date of February 15, 2006 at a Guaranteed Rate of 7.00% resulting in a Maturity Value at the Expiration Date of $183,846, and further assuming that a withdrawal of $50,000 were made on February 15, 2001.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2001 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2001 (Before Withdrawal) - ------------------------------------------- (1) Present Value of Maturity Value, also Annuity Account Value .................. $144,048 $119,487 (2) Guaranteed Period Amount ............... 131,080 131,080 (3) Market Value Adjustment: (1)-(2) ...... 12,968 (11,593) On February 15, 2001 (After Withdrawal) - ------------------------------------------- (4) Portion of (3) Associated with Withdrawal: (3) x [$50,000 (divided by) (1)] ....... $ 4,501 $ (4,851) (5) Reduction in Guaranteed Period Amount: [$50,000-(4)] ........... 45,499 54,851 (6) Guaranteed Period Amount: (2)-(5) ..... 85,581 76,229 (7) Maturity Value ......................... 120,032 106,915 (8) Present Value of (7), also Annuity Account Value .................. 94,048 69,487
You should note that under this example if a withdrawal is made when rates have increased (from 7.00% to 9.00% in the example), a portion of a negative market value adjustment is realized. On the other hand, if a withdrawal is made when rates have decreased (from 7.00% to 5.00% in the example), a portion of a positive market value adjustment is realized. 51 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE - ----------------------------------------------------------------------------- Under the Certificates the death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the GMDB (see "Guaranteed Minimum Death Benefit (GMDB)" in Part 5); and (2) the death benefit provided with respect to the Guaranteed Period Account (see "Death Benefit Amount" in Part 4). The following is an example illustrating the calculation of the GMDB. Assuming $100,000 is allocated to the Investment Funds (with no allocation to the Money Market Fund or the Intermediate Government Securities Fund), no subsequent contributions, no transfers and no withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
END OF CONTRACT ANNUITY ACCOUNT NON-NEW YORK YEAR VALUE GMDB(1) NEW YORK GMDB - ---------- --------------- -------------- ------------- 1 $105,000 $106,000 $105,000(2) 2 $108,675 $112,360 $108,675(2) 3 $124,976 $119,102 $119,102(3) 4 $135,912 $126,248 $126,248(3) 5 $149,503 $133,823 $133,823(3) 6 $149,503 $141,852 $141,852(3) 7 $161,463 $150,363 $150,363(3) 8 $161,463 $159,385 $159,385(3)
The Annuity Account Values for Contract Years 1 through 8 are determined based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%, 0.00%, 8.00% and 0.00%, respectively. NON-NEW YORK (1) For Contract Years 1 through 8, the GMDB equals the initial contribution increased by 6%. NEW YORK (2) At the end of Contract Years 1 and 2, the GMDB is equal to the Annuity Account Value. (3) At the end of Contract Years 3 through 8, the GMDB is equal to the contributions increased by 6% instead of the Annuity Account Value, since the GMDB cannot be greater than this amount. 52 APPENDIX III: EXAMPLE OF PAYMENTS UNDER THE IRA ASSURED PAYMENT OPTION AND IRA APO PLUS - ----------------------------------------------------------------------------- The second column in the chart below illustrates the payments for a male age 70 who purchased the IRA Assured Payment Option on July , 1996 with a single contribution of $100,000, with increasing annual payments. The payments are to commence on February 15, 1997. It assumes that the fixed period is 15 years and that the Life Contingent Annuity will provide payments on a Single Life basis. Based on Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity, on July , 1996, the initial payment would be $ and would increase in each three year period to a final payment of $ . The first payment under the Life Contingent Annuity would be $ . Alternatively as shown in the third and fourth columns, this individual could purchase IRA APO Plus with the same $100,000 contribution, with the same fixed period and the Life Contingent Annuity on a Single Life basis. Based on Guaranteed Rates for the Guarantee Periods and the current purchase rate for the Life Contingent Annuity, on July , 1996, the same initial payment of $ would be purchased under IRA APO Plus. However, unlike the payment under the IRA Assured Payment Option that will increase every three years, this initial payment under IRA APO Plus is not guaranteed to increase. Therefore, only $ is needed to purchase the initial payment stream, and the remaining $ is invested in the Investment Funds according to the Certificate Owner's instructions. Any future increase in payments under IRA APO Plus will depend on the investment performance in the Investment Funds. Assuming hypothetical average annual rates of return of 0% and 8% (after deduction of charges) for the Investment Funds, the Annuity Account Value in the Investment Funds would grow to $ and $ respectively after three years. A portion of this amount is used to purchase the increase in the payments at the beginning of the fourth year. The remainder will stay in the Investment Funds to be drawn upon for the purchase of increases in payments at the end of each third year thereafter during the fixed period and at the end of the fixed period under the Life Contingent Annuity. Based on Guaranteed Rates for the Guarantee Periods and purchase rates for the Life Contingent Annuity as of July , 1996, the third and fourth columns illustrate the increasing payments that would be purchased under IRA APO Plus assuming 0% and 8% rates of return respectively. Under both options, while the Certificate Owner is living payments increase annually after the 16th year under the Life Contingent Annuity based on the increase in the Consumer Price Index, but in no event greater than 3% per year nor less than 0%. ANNUAL PAYMENTS
GUARANTEED INCREASING PAYMENTS ILLUSTRATIVE PAYMENTS ILLUSTRATIVE PAYMENTS UNDER THE IRA ASSURED PAYMENT UNDER IRA APO PLUS AT UNDER IRA APO PLUS AT YEARS OPTION 0% 8% - --------- ---------------------------------- ---------------------- ---------------------- 1-3 $x,xxx.xx $x,xxx.xx $x,xxx.xx 4-6 x,xxx.xx x,xxx.xx x,xxx.xx 7-9 x,xxx.xx x,xxx.xx x,xxx.xx 10-12 x,xxx.xx x,xxx.xx x,xxx.xx 13-15 x,xxx.xx x,xxx.xx x,xxx.xx 16 x,xxx.xx x,xxx.xx x,xxx.xx
As described above, a portion of the illustrated contribution is applied to the Life Contingent Annuity. This amount will generally be larger under the IRA Assured Payment Option than under IRA APO Plus, and conversely a smaller portion of the contribution will be allocated to Guarantee Periods under the former than the latter. In this illustration, $ is allocated under the IRA Assured Payment Option to the Guarantee Periods and under IRA APO Plus, $ is allocated to the Guarantee Periods and the Investment Funds. The balance of the $100,000 ($ and $ , respectively) is applied to the Life Contingent Annuity. The rates of return of 0% and 8% are for illustrative purposes only and are not intended to represent an expected or guaranteed rate of return. Your investment results will vary. Payments will also depend on the Guaranteed Rates and Life Contingent Annuity purchase rates in effect as of the Transaction Date. It is assumed that no Lump Sum Withdrawals are taken. 53 APPENDIX IV: IRS TAX DEDUCTION TABLE - ----------------------------------------------------------------------------- If your Maximum Permissible Dollar Deduction is $2,000, use this table to estimate the amount of your contribution which will be deductible.
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION - ------------ ----------- ------------ ----------- ------------ ----------- ------------ ----------- $ 0 $2,000 $2,550 $1,490 $5,050 $990 $ 7,550 $490 50 1,990 2,600 1,480 5,100 980 7,600 480 100 1,980 2,650 1,470 5,150 970 7,650 470 150 1,970 2,700 1,460 5,200 960 7,700 460 200 1,960 2,750 1,450 5,250 950 7,750 450 250 1,950 2,800 1,440 5,300 940 7,800 440 300 1,940 2,850 1,430 5,350 930 7,850 430 350 1,930 2,900 1,420 5,400 920 7,900 420 400 1,920 2,950 1,410 5,450 910 7,950 410 450 1,910 3,000 1,400 5,500 900 8,000 400 500 1,900 3,050 1,390 5,550 890 8,050 390 550 1,890 3,100 1,380 5,600 880 8,100 380 600 1,880 3,150 1,370 5,650 870 8,150 370 650 1,870 3,200 1,360 5,700 860 8,200 360 700 1,860 3,250 1,350 5,750 850 8,250 350 750 1,850 3,300 1,340 5,800 840 8,300 340 800 1,840 3,350 1,330 5,850 830 8,350 330 850 1,830 3,400 1,320 5,900 820 8,400 320 900 1,820 3,450 1,310 5,950 810 8,450 310 950 1,810 3,500 1,300 6,000 800 8,500 300 1,000 1,800 3,550 1,290 6,050 790 8,550 290 1,050 1,790 3,600 1,280 6,100 780 8,600 280 1,100 1,780 3,650 1,270 6,150 770 8,650 270 1,150 1,770 3,700 1,260 6,200 760 8,700 260 1,200 1,760 3,750 1,250 6,250 750 8,750 250 1,250 1,750 3,800 1,240 6,300 740 8,800 240 1,300 1,740 3,850 1,230 6,350 730 8,850 230 1,350 1,730 3,900 1,220 6,400 720 8,900 220 1,400 1,720 3,950 1,210 6,450 710 8,950 210 1,450 1,710 4,000 1,200 6,500 700 9,000 200 1,500 1,700 4,050 1,190 6,550 690 9,050 200 1,550 1,690 4,100 1,180 6,600 680 9,100 200 1,600 1,680 4,150 1,170 6,650 670 9,150 200 1,650 1,670 4,200 1,160 6,700 660 9,200 200 1,700 1,660 4,250 1,150 6,750 650 9,250 200 1,750 1,650 4,300 1,140 6,800 640 9,300 200 1,800 1,640 4,350 1,130 6,850 630 9,350 200 1,850 1,630 4,400 1,120 6,900 620 9,400 200 1,900 1,620 4,450 1,110 6,950 610 9,450 200 1,950 1,610 4,500 1,100 7,000 600 9,500 200 2,000 1,600 4,550 1,090 7,050 590 9,550 200 2,050 1,590 4,600 1,080 7,100 580 9,600 200 2,100 1,580 4,650 1,070 7,150 570 9,650 200 2,150 1,570 4,700 1,060 7,200 560 9,700 200 2,200 1,560 4,750 1,050 7,250 550 9,750 200 2,250 1,550 4,800 1,040 7,300 540 9,800 200 2,300 1,540 4,850 1,030 7,350 530 9,850 200 2,350 1,530 4,900 1,020 7,400 520 9,900 200 2,400 1,520 4,950 1,010 7,450 510 9,950 200 2,450 1,510 5,000 1,000 7,500 500 10,000 0 2,500 1,500 - ------------ Excess AGI = Your AGI minus your THRESHOLD LEVEL: If you are single, your Threshold Level is $25,000. If you are married, your Threshold Level is $40,000. If you are married and file a separate tax return, your Excess AGI = your AGI.
54 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
PAGE -------- Part 1: Minimum Distribution Withdrawals 2 Part 2: Accumulation Unit Values 2 Part 3: Annuity Unit Values 2 Part 4: Custodian and Independent Accountants 3 Part 5: Money Market Fund and Intermediate Government Securities Fund Yield Information 3 Part 6: Long-Term Market Trends 4 Part 7: Financial Statements 6
HOW TO OBTAIN A ROLLOVER IRA STATEMENT OF ADDITIONAL INFORMATION Send this request form to: Equitable Life Income Management Group P.O. Box 1547 Secaucus, NJ 07096-1547 Please send me an INCOME MANAGER Rollover IRA SAI: ----------------------------------------------- Name ----------------------------------------------- Address ----------------------------------------------- City State Zip 55 INCOME MANAGER(SM) ACCUMULATOR PROSPECTUS DATED JULY __, 1996 COMBINATION VARIABLE AND FIXED DEFERRED ANNUITY CERTIFICATES Issued By: The Equitable Life Assurance Society of the United States This prospectus describes certificates The Equitable Life Assurance Society of the United States (EQUITABLE LIFE, WE, OUR and US) offers under a combination variable and fixed deferred annuity contract (ACCUMULATOR) issued on a group basis or as individual contracts. Enrollment under a group contract will be evidenced by issuance of a certificate. Certificates and individual contracts each will be referred to as "Certificates." Accumulator Certificates are used for after-tax contributions to a non-qualified annuity. A minimum initial contribution of $10,000 is required to put the Certificate into effect. The Accumulator is designed to provide retirement income at a future date. Contributions accumulate on a tax-deferred basis and can be later distributed under a number of different methods which are designed to be responsive to the owner's (CERTIFICATE OWNER, YOU and YOUR) objectives. The Accumulator offers investment options (INVESTMENT OPTIONS) that permit you to create your own strategies. These Investment Options include 9 variable investment funds (INVESTMENT FUNDS) and each GUARANTEE PERIOD in the GUARANTEED PERIOD ACCOUNT.
Investment Funds - ------------------------------------------------------------------------------ Guarantee Periods Asset Allocation Series: Equity Series: Fixed Income Series: Expiration Dates: - ---------------------------- ---------------------- ------------------------ ---------------------- o Conservative Investors o Growth & Income o Money Market February 15, o Growth Investors o Common Stock o Intermediate o 1997 through 2006 o Global Government Securities o International o Aggressive Stock
We invest each Investment Fund in Class B shares of a corresponding portfolio (PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are purchased by separate accounts of insurance companies. The prospectus for the Trust, which accompanies this prospectus, describes the investment objectives, policies and risks of the Portfolios. Amounts allocated to a Guarantee Period accumulate on a fixed basis and are credited with interest at a rate we set (GUARANTEED RATE) for the entire period. On each business day (BUSINESS DAY) we will determine the Guaranteed Rates available for amounts newly allocated to Guarantee Periods. A market value adjustment (positive or negative) will be made for withdrawals, transfers, surrender and certain other transactions from a Guarantee Period before its expiration date (EXPIRATION DATE). Each Guarantee Period has its own Guaranteed Rates. You may choose from a variety of payout options, including variable annuities and fixed annuities. This prospectus provides information about the Accumulator that prospective investors should know before investing. You should read it carefully and retain it for future reference. The prospectus is not valid unless accompanied by a current prospectus for the Trust, which you should also read carefully. Registration statements relating to Separate Account No. 49 (SEPARATE ACCOUNT) and interests under the Guarantee Periods have been filed with the Securities and Exchange Commission (SEC). The statement of additional information (SAI), dated July __, 1996, which is part of the registration statement for the Separate Account, is available free of charge upon request by writing to our Processing Office or calling 1-800-789-7771, our toll-free number. The SAI has been incorporated by reference into this prospectus. The Table of Contents for the SAI appears at the back of this prospectus. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE CERTIFICATES ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL INVESTED. Copyright 1996 The Equitable Life Assurance Society of the United States, New York, New York 10019. All rights reserved. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Equitable Life's Annual Report on Form 10-K for the year ended December 31, 1995 is incorporated herein by reference. All documents or reports filed by Equitable Life pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (EXCHANGE ACT) after the date hereof and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified and superseded, to constitute a part of this prospectus. Equitable Life files its Exchange Act documents and reports, including its annual and quarterly reports on Form 10-K and Form 10-Q, electronically pursuant to EDGAR under CIK No. 0000727920. Equitable Life will provide without charge to each person to whom this prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (other than exhibits not specifically incorporated by reference into the text of such documents). Requests for such documents should be directed to The Equitable Life Assurance Society of the United States, 787 Seventh Avenue, New York, New York 10019. Attention: Corporate Secretary (telephone: (212) 554-1234). 2 PROSPECTUS TABLE OF CONTENTS
GENERAL TERMS PAGE 4 FEE TABLE PAGE 5 PART 1: SUMMARY PAGE 7 What is the INCOME MANAGER? 7 Investment Options 7 Contributions 7 Transfers 7 Free Look Period 7 Services We Provide 7 Withdrawals 8 Death Benefits 8 Surrendering the Certificates 8 Income Annuity Options 8 Taxes 8 Deductions from Annuity Account Value 8 Deductions from Investment Funds 8 Trust Charges to Portfolios 9 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS PAGE 10 Equitable Life 10 Separate Account No. 49 10 The Trust 10 The Trust's Investment Adviser 11 Investment Policies and Objectives of the Trust's Portfolios 12 PART 3: INVESTMENT PERFORMANCE PAGE 13 Performance Data for a Certificate 13 Rate of Return Data for Investment Funds 14 Communicating Performance Data 17 Money Market Fund and Intermediate Government Securities Fund Yield Information 18 PART 4: THE GUARANTEED PERIOD ACCOUNT PAGE 19 Guarantee Periods 19 Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date 20 Death Benefit Amount 21 Investments 21 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE PAGE 22 Availability of the Certificates 22 Contributions Under the Certificates 22 Methods of Payment 22 Allocation of Contributions 22 Free Look Period 23 Annuity Account Value 23 Transfers Among Investment Options 24 Dollar Cost Averaging 24 Withdrawals 25 Death Benefit 26 When the Certificate Owner Dies Before the Annuitant 27 Cash Value 27 Surrendering the Certificates to Receive the Cash Value 27 Income Annuity Options 27 When Payments are Made 29 Assignment 29 Distribution of the Certificates 29 PART 6: DEDUCTIONS AND CHARGES PAGE 30 Charges Deducted from the Annuity Account Value 30 Charges Deducted from the Investment Funds 30 Trust Charges to Portfolios 31 Group or Sponsored Arrangements 31 Other Distribution Arrangements 32 PART 7: VOTING RIGHTS PAGE 33 Trust Voting Rights 33 Voting Rights of Others 33 Separate Account Voting Rights 33 Changes in Applicable Law 33 PART 8: TAX ASPECTS OF THE CERTIFICATES PAGE 34 Tax Changes 34 Taxation of Non-Qualified Annuities 34 Federal and State Income Tax Withholding 35 Other Withholding 35 Special Rules for Certificates Issued in Puerto Rico 36 Impact of Taxes to Equitable Life 36 Transfers Among Investment Options 36 PART 9: KEY FACTORS IN RETIREMENT PLANNING PAGE 37 Introduction 37 Inflation 37 Starting Early 38 Tax-Deferral 38 Investment Options 39 The Benefit of Annuitization 40 PART 10: INDEPENDENT ACCOUNTANTS PAGE 41 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE PAGE 42 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE PAGE 43 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS PAGE 44
3 GENERAL TERMS ACCUMULATION UNIT--Contributions that are invested in an Investment Fund purchase Accumulation Units in that Investment Fund. ACCUMULATION UNIT VALUE--The dollar value of each Accumulation Unit in an Investment Fund on a given date. ANNUITANT--The individual who is the measuring life for determining annuity benefits. ANNUITY ACCOUNT VALUE--The sum of the amounts in the Investment Options under the Accumulator Certificate. See "Annuity Account Value" in Part 5. ANNUITY COMMENCEMENT DATE--The date on which amounts are applied to provide an annuity benefit. BUSINESS DAY--Generally, any day on which the New York Stock Exchange is open for trading. For the purpose of determining the Transaction Date, our Business Day ends at 4:00 p.m. Eastern Time or the closing of the New York Stock Exchange, if earlier. CASH VALUE--The Annuity Account Value minus any applicable charges. CERTIFICATE--The Certificate issued under the terms of a group annuity contract and any individual contract, including any endorsements. CERTIFICATE OWNER--The person who owns an Accumulator Certificate and has the right to exercise all rights under the Certificate. CODE--The Internal Revenue Code of 1986, as amended. CONTRACT DATE--The date on which the Annuitant is enrolled under the group annuity contract, or the effective date of the individual contract. This is usually the Business Day we receive the initial contribution at our Processing Office. CONTRACT YEAR--The 12-month period beginning on your Contract Date and each anniversary of that date. EXPIRATION DATE--The date on which a Guarantee Period ends. GUARANTEE PERIOD--Any of the periods of time ending on an Expiration Date that are available for investment under the Certificates. GUARANTEED PERIOD ACCOUNT--The Account that contains the Guarantee Periods. GUARANTEED RATE--The annual interest rate established for each allocation to a Guarantee Period. INVESTMENT FUNDS--The funds of the Separate Account that are available under the Certificates. INVESTMENT OPTIONS--The choices for investment: the Investment Funds and each available Guarantee Period. MATURITY VALUE--The amount in a Guarantee Period on its Expiration Date. PORTFOLIOS--The portfolios of the Trust that correspond to the Investment Funds of the Separate Account. PROCESSING DATE--The day when we deduct certain charges from the Annuity Account Value. If the Processing Date is not a Business Day, it will be on the next succeeding Business Day. The Processing Date will be once each year on each anniversary of the Contract Date. PROCESSING OFFICE--The address to which all contributions, written requests (e.g., transfers, withdrawals, etc.) or other written communications must be sent. See "Services We Provide" in Part 1. SAI--The statement of additional information for the Separate Account under the Accumulator. SEPARATE ACCOUNT--Equitable Life's Separate Account No. 49. TRANSACTION DATE--The Business Day we receive a contribution or a transaction request providing all the information we need at our Processing Office. If your contribution or request reaches our Processing Office on a non-Business Day, or after the close of the Business Day, the Transaction Date will be the next following Business Day. Transaction requests must be made in a form acceptable to us. TRUST--The Hudson River Trust, a mutual fund in which the assets of separate accounts of insurance companies are invested. VALUATION PERIOD--Each Business Day together with any preceding non-business days. 4 FEE TABLE The purpose of this fee table is to assist you in understanding the various costs and expenses you may bear directly or indirectly under the Certificate so that you may compare them on the same basis with other similar products. The table reflects both the charges of the Separate Account and the expenses of the Trust. Charges for applicable taxes such as state or local premium taxes may also apply. For a complete description of the charges under the Certificate, see "Part 6: Deductions and Charges." For a complete description of the Trust's charges and expenses, see the prospectus for the Trust. As explained in Part 4, the Guarantee Periods are not a part of the Separate Account and are not covered by the fee table and examples. The only charge shown in the Table which will be deducted from amounts allocated to the Guarantee Periods is the withdrawal charge. A market value adjustment (either positive or negative) also may be applicable as a result of a withdrawal, transfer or surrender of amounts from a Guarantee Period. See "Part 4: The Guaranteed Period Account." OWNER TRANSACTION EXPENSES (DEDUCTED FROM ANNUITY ACCOUNT VALUE) WITHDRAWAL CHARGE AS A PERCENTAGE OF CONTRIBUTIONS (deducted upon surrender or for certain withdrawals. The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1")(1)
CONTRACT YEAR - -------------------------- 1 ...................7.00% 2 ...................6.00 3 ...................5.00 4 ...................4.00 5 ...................3.00 6 ...................2.00 7 ...................1.00 8+...................0.00
Transfer Charge(2) ............................................................................. $0.00 Guaranteed Minimum Death Benefit Charge (percentage deducted annually on each Processing Date as a percentage of the guaranteed minimum death benefit then in effect)(3) .................... 0.35% SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF ASSETS IN EACH INVESTMENT FUND) - ----------------------------------------------------------------------------------------------- Mortality and Expense Risk Charge .............................................................. 0.90% Asset Based Administrative Charge .............................................................. 0.35% ------- Total Separate Account Annual Expenses ........................................................ 1.25% =======
TRUST ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS IN EACH PORTFOLIO)
INVESTMENT PORTFOLIOS ----------------------------------------------------------- CONSERVATIVE GROWTH GROWTH & COMMON INVESTORS INVESTORS INCOME STOCK GLOBAL -------------- ----------- ---------- -------- -------- Investment Advisory Fee 0.55% 0.52% 0.55% 0.35% 0.53% Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% 0.25% Other Expenses 0.04% 0.04% 0.05% 0.03% 0.08% -------------- ----------- ---------- -------- -------- TOTAL TRUST ANNUAL EXPENSES(5) 0.84% 0.81% 0.85% 0.63% 0.86% ============== =========== ========== ======== ========
INTERMEDIATE AGGRESSIVE MONEY GOVT. INTERNATIONAL STOCK MARKET SECURITIES --------------- ------------ -------- -------------- Investment Advisory Fee 0.90% 0.46% 0.40% 0.50% Rule 12b-1 Plan Fee(4) 0.25% 0.25% 0.25% 0.25% Other Expenses 0.13% 0.03% 0.04% 0.07% --------------- ------------ -------- -------------- TOTAL TRUST ANNUAL EXPENSES(5) 1.28% 0.74% 0.69% 0.82% =============== ============ ======== ==============
5 - ------------ Notes: (1) Deducted upon a withdrawal with respect to amounts in excess of the 15% free corridor amount, and upon a surrender. See "Part 6: Deductions and Charges," "Withdrawal Charge." (2) We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. (3) See "Part 6: Deductions and Charges," "Guaranteed Minimum Death Benefit Charge." (4) The Class B shares of the Trust are subject to fees imposed under a distribution plan (herein, the "Rule 12b-1 Plan") adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Rule 12-b-1 Plan provides that the Trust, on behalf of each Portfolio, may pay annually up to 0.25% of the average daily net assets of a Portfolio attributable to its Class B shares in respect of activities primarily intended to result in the sale of the Class B shares. The Rule 12b-1 Plan fee, which may be waived in the discretion of the Distributors may only be increased by action of the Board of Trustees of the Trust up to a maximum of 0.50% per annum. (5) Expenses shown for all Portfolios are estimated. The investment advisory fee for each Portfolio may vary from year to year depending upon the average daily net assets of the respective Portfolio of the Trust. The maximum investment advisory fees, however, cannot be increased without a vote of that Portfolio's shareholders. The other direct operating expenses will also fluctuate from year to year depending on actual expenses. See "Trust Charges to Portfolios" in Part 6. EXAMPLES The examples below show the expenses that a hypothetical Certificate Owner would pay in the two situations noted below assuming a $1,000 contribution invested in one of the Investment Funds listed, and a 5% annual return on assets.(1) These examples should not be considered a representation of past or future expenses for each Investment Fund or Portfolio. Actual expenses may be greater or less than those shown. Similarly, the annual rate of return assumed in the examples is not an estimate or guarantee of future investment performance. IF YOU SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $91.16 $122.72 Growth Investors 90.86 121.82 EQUITY SERIES: Growth & Income 91.26 123.02 Common Stock 89.07 116.42 Global 91.36 123.32 International 95.53 135.82 Aggressive Stock 90.17 119.72 FIXED INCOME SERIES: Money Market 89.67 118.22 Intermediate Government Securities 90.96 122.12
IF YOU DO NOT SURRENDER YOUR CERTIFICATE AT THE END OF EACH PERIOD SHOWN, THE EXPENSES WOULD BE:
1 YEAR 3 YEARS -------- --------- ASSET ALLOCATION SERIES: Conservative Investors $24.87 $76.88 Growth Investors 24.57 75.98 EQUITY SERIES: Growth & Income 24.97 77.18 Common Stock 22.78 70.58 Global 25.07 77.48 International 29.24 89.99 Aggressive Stock 23.88 73.89 FIXED INCOME SERIES: Money Market 23.38 72.39 Intermediate Government Securities 24.67 76.28
- ------------ Notes: (1) The amount accumulated could not be paid in the form of an annuity at the end of any of the periods shown in the examples. If the amount applied to purchase an annuity is less than $2,000, or the initial payment is less than $20 we may pay the amount to the payee in a single sum instead of as payments under an annuity form. See "Income Annuity Options" in Part 5. The examples do not reflect charges for applicable taxes such as state or local premium taxes that may also be deducted in certain jurisdictions. 6 PART 1: SUMMARY The following Summary is qualified in its entirety by the terms of the Certificate when issued and the more detailed information appearing elsewhere in this prospectus (see "Prospectus Table of Contents"). WHAT IS THE INCOME MANAGER? The INCOME MANAGER is a family of annuities designed to provide for retirement income. The Accumulator is a non-qualified deferred annuity designed to provide retirement income at a future date through the investment of funds on an after-tax basis. Generally, earnings will accumulate without being subject to annual income tax, until withdrawn. The Accumulator features a combination of Investment Options, consisting of Investment Funds providing variable returns and Guarantee Periods providing guaranteed interest. Fixed and variable income annuities are also available. The Accumulator may not be available in all states. INVESTMENT OPTIONS The Accumulator offers the following Investment Options which permit you to create your own strategy for retirement savings. All available Investment Options may be selected under a Certificate. INVESTMENT FUNDS o Asset Allocation Series: the Conservative Investors and Growth Investors Funds o Equity Series: the Growth & Income, Common Stock, Global, International and Aggressive Stock Funds o Fixed Income Series: the Money Market and Intermediate Government Securities Funds GUARANTEE PERIODS o Guarantee Periods maturing in each of calendar years 1997 through 2006. CONTRIBUTIONS o To put a Certificate into effect, you must make an initial contribution of at least $10,000. o Subsequent contributions may be made in an amount of at least $1,000. TRANSFERS You may make an unlimited number of transfers among the Investment Funds. However, there are restrictions for transfers to and from the Guarantee Periods. Transfers from a Guarantee Period may result in a market value adjustment. Transfers among Investment Options are currently free of charge. Transfers among the Investment Options are not taxable. FREE LOOK PERIOD You have the right to examine the Accumulator Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You may cancel it by sending it to our Processing Office. Your refund will equal the Annuity Account Value, reflecting any investment gain or loss, and any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. SERVICES WE PROVIDE O REGULAR REPORTS o Statement of your Certificate values as of the last day of the calendar year; o Three additional reports of your Certificate values each year; o Annual and semi-annual statements of the Trust; and o Written confirmation of financial transactions. O TOLL-FREE TELEPHONE SERVICES Call 1-800-789-7771 for a recording of daily Accumulation Unit Values o and Guaranteed Rates applicable to the Guarantee Periods. Also call during our regular business hours to speak to one of our customer service representatives. O PROCESSING OFFICE o For contributions sent by Regular Mail: Equitable Life Income Management Group Post Office Box 13014 Newark, NJ 07188-0014 7 O FOR CONTRIBUTIONS SENT BY EXPRESS MAIL: Equitable Life c/o First Chicago National Processing Center 300 Harmon Meadow Boulevard, 3rd Floor Attn: Box 13014 Secaucus, NJ 07094 O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS) SENT BY REGULAR MAIL: Equitable Life Income Management Group P.O. Box 1547 Secaucus, NJ 07096-1547 O FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS) SENT BY EXPRESS MAIL: Equitable Life Income Management Group 200 Plaza Drive Secaucus, NJ 07096 WITHDRAWALS o Lump Sum Withdrawals--Before the Annuity Commencement Date while the Certificate is in effect, you may take a Lump Sum Withdrawal from your Certificate once per Contract Year at any time during such Contract Year. The minimum withdrawal amount is $1,000. o Periodic Withdrawals--You may also withdraw funds under our Periodic Withdrawal option, where the minimum withdrawal amount is $250. Withdrawals may be subject to a withdrawal charge and withdrawals from Guarantee Periods prior to their Expiration Dates will result in a market value adjustment. Withdrawals may be subject to income tax and tax penalty. DEATH BENEFITS If the Annuitant and successor Annuitant, if any, die before the Annuity Commencement Date, the Accumulator provides a death benefit. The beneficiary will be paid the greater of the Annuity Account Value in the Investment Funds and the guaranteed minimum death benefit, plus any death benefit provided with respect to the Guaranteed Period Account. SURRENDERING THE CERTIFICATES You may surrender a Certificate and receive the Cash Value at any time before the Annuity Commencement Date while the Annuitant is living. Withdrawal charges and a market value adjustment may apply. A surrender may also be subject to income tax and tax penalty. INCOME ANNUITY OPTIONS The Certificates provide income annuity options to which amounts may be applied at the Annuity Commencement Date. The income annuity options are offered on a fixed and variable basis. TAXES Generally, earnings on contributions made to the Certificate will not be included in your taxable income until distributions are made from the Certificate. Distributions prior to your attaining age 59 1/2 may be subject to tax penalty. DEDUCTIONS FROM ANNUITY ACCOUNT VALUE Withdrawal Charge A withdrawal charge will be imposed as a percentage of the initial and each subsequent contribution if a withdrawal exceeds the 15% free corridor amount or if the Certificate is surrendered. We determine the withdrawal charge separately for each contribution in accordance with the table below.
CONTRACT YEAR 1 2 3 4 5 6 7 8+ ------ ------ ------ ------ ------ ------ ------ ----- Percentage of Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For each contribution the Contract Year in which we receive that contribution is "Contract Year 1." Guaranteed Minimum Death Benefit Charge We deduct annually on each Processing Date an amount equal to 0.35% of the guaranteed minimum death benefit in effect on such Processing Date. Charges for State Premium and Other Applicable Taxes Generally, we deduct a charge for premium or other applicable taxes from the Annuity Account Value on the Annuity Commencement Date. The current tax charge that might be imposed varies by state and ranges from 0 to 3.5% (the rate is 1% in Puerto Rico and 5% in the Virgin Islands). DEDUCTIONS FROM INVESTMENT FUNDS Mortality and Expense Risk Charge We charge each Investment Fund a daily asset based charge for mortality and expense risks equivalent to an annual rate of 0.90%. 8 Asset Based Administrative Charge We charge each Investment Fund a daily asset based charge to cover administrative expenses under the Certificate equivalent to an annual rate of 0.35%. TRUST CHARGES TO PORTFOLIOS Investment advisory fees and other expenses of the Trust are charged daily against the Trust's assets. These are reflected in the Portfolio's daily share price and in the daily Accumulation Unit Value for the Investment Funds. The Trust Class B shares held in the Investment Funds are subject to a distribution fee under a Rule 12b-1 Plan. We offer other deferred variable annuities that invest in Trust shares that are not subject to the Rule 12b-1 Plan fees and that bear different charges and expenses. For more information about the Plan, and the address for any inquiries about the Plan, see "The Trust" in the accompanying Trust prospectus. 9 PART 2: EQUITABLE LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT FUNDS EQUITABLE LIFE Equitable Life is a New York stock life insurance company that has been in business since 1859. For more than 100 years we have been among the largest life insurance companies in the United States. Equitable Life has been selling annuities since the turn of the century. Our home office is located at 787 Seventh Avenue, New York, New York 10019. We are authorized to sell life insurance and annuities in all fifty states, the District of Columbia, Puerto Rico and the Virgin Islands. We maintain local offices throughout the United States. Equitable Life is a wholly owned subsidiary of The Equitable Companies Incorporated (the Holding Company). The largest stockholder of the Holding Company is AXA S.A. AXA beneficially owns 60.6% of the outstanding shares of common stock of the Holding Company plus convertible preferred stock. Under its investment arrangements with Equitable Life and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable Life. AXA, a French company, is the holding company for an international group of insurance and related financial service companies. Equitable Life, the Holding Company and their subsidiaries managed approximately $195.3 billion of assets as of December 31, 1995. SEPARATE ACCOUNT NO. 49 Separate Account No. 49 is organized as a unit investment trust, a type of investment company, and is registered with the SEC under the Investment Company Act of 1940 (1940 Act). This registration does not involve any supervision by the SEC of the management or investment policies of the Separate Account. The Separate Account has several Investment Funds, each of which invests in shares of a corresponding Portfolio of the Trust. Because amounts allocated to the Investment Funds are invested in a mutual fund, investment return and principal will fluctuate and the Certificate Owner's Accumulation Units may be worth more or less than the original cost when redeemed. Under the New York Insurance Law, the portion of the Separate Account's assets equal to the reserves and other liabilities relating to the Certificates are not chargeable with liabilities arising out of any other business we may conduct. Income, gains or losses, whether or not realized, from assets of the Separate Account are credited to or charged against the Separate Account without regard to our other income gains or losses. We are the issuer of the Certificates, and the obligations set forth in the Certificates (other than those of Annuitants or Certificate Owners) are our obligations. In addition to contributions made under the Accumulator Certificates, we may allocate to the Separate Account monies received under other contracts, certificates, or agreements. Owners of all such contracts, certificates or agreements will participate in the Separate Account in proportion to the amounts they have in the Investment Funds that relate to their contracts, certificates or agreements. We may retain in the Separate Account assets that are in excess of the reserves and other liabilities relating to the Accumulator Certificates or to other contracts, certificates or agreements, or we may transfer the excess to our General Account. We reserve the right, subject to compliance with applicable law; (1) to add Investment Funds (or sub-funds of Investment Funds) to, or to remove Investment Funds (or sub-funds) from, the Separate Account, or to add other separate accounts; (2) to combine any two or more Investment Funds or sub-funds thereof; (3) to transfer the assets we determine to be the share of the class of contracts to which the Certificate belongs from any Investment Fund to another Investment Fund; (4) to operate the Separate Account or any Investment Fund as a management investment company under the 1940 Act, in which case charges and expenses that otherwise would be assessed against an underlying mutual fund would be assessed against the Separate Account; (5) to deregister the Separate Account under the 1940 Act, provided that such action conforms with the requirements of applicable law; (6) to restrict or eliminate any voting rights as to the Separate Account; and (7) to cause one or more Investment Funds to invest some or all of their assets in one or more other trusts or investment companies. If any changes are made that result in a material change in the underlying investment policy of an Investment Fund, you will be notified as required by law. THE TRUST The Trust is an open-end diversified management investment company, more commonly called a mu- 10 tual fund. As a "series" type of mutual fund, it issues several different series of stock, each of which relates to a different Portfolio of the Trust. The Trust commenced operations in January 1976 with a predecessor of its Common Stock Portfolio. The Trust does not impose a sales charge or "load" for buying and selling its shares. All dividend distributions to the Trust are reinvested in full and fractional shares of the Portfolio to which they relate. Each Investment Fund invests in Class B shares of a corresponding Portfolio of the Trust. More detailed information about the Trust, its investment objectives, policies, restrictions, risks, expenses, the Rule 12b-1 Plan relating to the Class B shares, and all other aspects of its operations appears in its prospectus which accompanies this prospectus or in its statement of additional information. THE TRUST'S INVESTMENT ADVISER The Trust is advised by Alliance Capital Management L.P. (Alliance), which is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Alliance, a publicly-traded limited partnership, is indirectly majority-owned by Equitable Life. On December 31, 1995, Alliance was managing over $146.5 billion in assets. Alliance acts as an investment adviser to various separate accounts and general accounts of Equitable Life and other affiliated insurance companies. Alliance also provides management and consulting services to mutual funds, endowment funds, insurance companies, foreign entities, qualified and non-tax qualified corporate funds, public and private pension and profit-sharing plans, foundations and tax-exempt organizations. Alliance's record as an investment manager is based, in part, on its ability to provide a diversity of investment services to domestic, international and global markets. Alliance prides itself on its ability to attract and retain a quality, professional work force. Alliance employs more than 160 investment professionals, including 68 research analysts. Portfolio managers have an average investment experience of more than 16 years. Alliance's main office is located at 1345 Avenue of the Americas, New York, New York 10105. 11 INVESTMENT POLICIES AND OBJECTIVES OF THE TRUST'S PORTFOLIOS Each Portfolio has a different investment objective which it tries to achieve by following separate investment policies. The policies and objectives of each Portfolio will affect its return and its risks. There is no guarantee that these objectives will be achieved. The policies and objectives of the Trust's Portfolios are as follows:
Portfolio Investment Policy Objective - --------------------------- ---------------------------------------------------- ----------------------------- ASSET ALLOCATION SERIES: Conservative Investors Diversified mix of publicly-traded, fixed-income and High total return without, in equity securities; asset mix and security selection the adviser's opinion, undue are primarily based upon factors expected to reduce risk to principal risk. The Portfolio is generally expected to hold approximately 70% of its assets in fixed income securities and 30% in equity securities. Growth Investors Diversified mix of publicly-traded, fixed-income and High total return consistent equity securities; asset mix and security selection with the adviser's based upon factors expected to increase possibility determination of reasonable of high long-term return. The Portfolio is generally risk expected to hold approximately 70% of its assets in equity securities and 30% in fixed income securities. EQUITY SERIES: Growth & Income Primarily income producing common stocks and High total return through a securities convertible into common stocks. combination of current income and capital appreciation Common Stock Primarily common stock and other equity-type Long-term growth of capital instruments. and increasing income Global Primarily equity securities of non-United States as Long-term growth of capital well as United States companies. International Primarily equity securities selected principally to Long-term growth of capital permit participation in non-United States companies with prospects for growth. Aggressive Stock Primarily common stocks and other equity-type Long-term growth of capital securities issued by medium and other smaller sized companies with strong growth potential. FIXED INCOME SERIES: Money Market Primarily high quality short-term money market High level of current income instruments. while preserving assets and maintaining liquidity Intermediate Government Primarily debt securities issued or guaranteed by High current income Securities the U.S. government, its agencies and consistent with relative instrumentalities. Each investment will have a final stability of principal maturity of not more than 10 years or a duration not exceeding that of a 10-year Treasury note.
12 PART 3: INVESTMENT PERFORMANCE This Part presents performance data for each of the Investment Funds calculated by two methods. The first method, used in calculating values for the two tables in "Performance Data for a Certificate," reflects all applicable fees and charges other than the charge for tax such as premium taxes. The second method, used in preparing rates of return for the three tables in "Rate of Return Data for Investment Funds," reflects all fees and charges other than the withdrawal charge, the guaranteed minimum death benefit charge and the charge for tax such as premium taxes. These additional charges would effectively reduce the rates of return credited to a particular Certificate. The Separate Account was recently established and has had no prior operations, and no Certificates have been issued prior to the date of this prospectus. The calculations of investment performance shown below are based on the actual investment results of the Portfolios of the Trust, from which certain fees and charges applicable under the Accumulator have been deducted. The investment results of the Portfolios of the Trust have been adjusted to reflect the Rule 12b-1 Plan fee relating to the Class B shares. The results shown are not an estimate or guarantee of future investment performance, and do not reflect the actual experience of amounts invested under a particular Certificate. See "Part 4: The Guaranteed Period Account" for information on the Guaranteed Period Account. PERFORMANCE DATA FOR A CERTIFICATE The standardized performance data in the following tables illustrate the average annual total return of the Investment Funds over the periods shown, assuming a single initial contribution of $1,000 and the surrender of the Certificate at the end of each period. These tables (which reflect the first calcu- lation method described above) are prepared in a manner prescribed by the SEC for use when we advertise the performance of the Separate Account. An Investment Fund's average annual total return is the annual rate of growth of the Investment Fund that would be necessary to achieve the ending value of a contribution kept in the Investment Fund for the period specified. Each calculation assumes that the $1,000 contribution was allocated to only one Investment Fund, no transfers or subsequent contributions were made and no amounts were allocated to any other Investment Option under the Certificate. In order to calculate annualized rates of return, we divide the Cash Value of a Certificate which is surrendered on December 31, 1995 by the $1,000 contribution made at the beginning of each period illustrated. The result of that calculation is the total growth rate for the period. Then we annualize that growth rate to obtain the average annual percentage increase (decrease) during the period shown. When we "annualize," we assume that a single rate of return applied each year during the period will produce the ending value, taking into account the effect of compounding. GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995
LENGTH OF INVESTMENT PERIOD ---------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* - ---------------------- -------- -------- -------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors $1,116 $1,164 $1,454 -- $ 1,575 Growth Investors 1,175 1,289 1,993 -- 2,255 EQUITY SERIES: Growth & Income 1,152 -- -- -- 1,130 Common Stock 1,235 1,487 2,083 $3,436 11,048 Global 1,100 1,520 1,938 -- 2,101 International -- -- -- -- 1,031 Aggressive Stock 1,227 1,353 2,430 -- 5,120
13 GROWTH OF $1,000 UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995 (CONTINUED)
LENGTH OF INVESTMENT PERIOD --------------------------------------------------- INVESTMENT ONE THREE FIVE TEN SINCE FUND YEAR YEARS YEARS YEARS INCEPTION* - ----------------------------- ------- -------- -------- -------- ------------ FIXED INCOME SERIES: Money Market $ 972 $1,024 $1,108 $1,494 $2,164 Intermediate Govt. Securities 1,046 1,087 -- -- 1,274
- ------------ * See footnote below. AVERAGE ANNUAL TOTAL RETURN UNDER A CERTIFICATE SURRENDERED ON DECEMBER 31, 1995
LENGTH OF INVESTMENT PERIOD -------------------------------------------------- INVESTMENT THREE FIVE TEN SINCE FUND ONE YEAR YEARS YEARS YEARS INCEPTION* - ----------------------------- -------- ------- ------- -------- ------------ ASSET ALLOCATION SERIES: Conservative Investors 11.61% 5.20% 7.78% -- 6.70% Growth Investors 17.49 8.84 14.79 -- 12.32 EQUITY SERIES: Growth & Income 15.22 -- -- -- 4.16 Common Stock 23.47 14.13 15.81 13.14% 12.76 Global 10.04 14.97 14.14 -- 8.60 International -- -- -- -- 3.05 Aggressive Stock 22.67 10.61 19.43 -- 17.74 FIXED INCOME SERIES: Money Market (2.83) 0.81 2.07 4.10 5.28 Intermediate Govt. Securities 4.64 2.81 -- -- 4.96
- ------------ * The "Since Inception" dates are as follows: Conservative Investors (October 2, 1989); Growth Investors (October 2, 1989); Growth & Income (October 1, 1993); Common Stock (January 13, 1976); Global (August 27, 1987); International (April 3, 1995); Aggressive Stock (January 27, 1986); Money Market (July 13, 1981); and Intermediate Government Securities (April 1, 1991). The "Since Inception" numbers for the International Fund are unannualized. RATE OF RETURN DATA FOR INVESTMENT FUNDS The following tables (which reflect the second calculation method described above) provide you with information on rates of return on an annualized, cumulative and year-by-year basis. All rates of return presented are time-weighted and include reinvestment of investment income, including interest and dividends. Cumulative rates of return reflect performance over a stated period of time. Annualized rates of return represent the annual rate of growth that would have produced the same cumulative return, if performance had been constant over the entire period. Performance data of the Money Market and Common Stock Funds for the periods prior to March 22, 1985, reflect the investment results of two open-end management separate accounts (the "predecessor separate accounts") which were reorganized in unit investment trust form. The "Since Inception" figures for these Funds are based on the date of inception of the predecessor separate accounts. This performance data has been adjusted to reflect the maximum investment advisory fee payable for the corresponding Portfolio of the Trust and the Rule 12b-1 Plan fee, as well as an assumed charge of 0.06% for direct operating expenses. Performance data for the remaining Investment Funds reflect (i) the investment results of the corresponding Portfolios of the Trust from the date of inception of those Portfolios and (ii) the actual investment advisory fee, Rule 12b-1 Plan fee, and direct operating expenses of the relevant Portfolio. 14 The performance data for all periods has also been adjusted to reflect the Separate Account mortality and expense risk charge, and the asset based administrative charge equal to a total of 1.25% relating to the Certificates, as well as the Trust's expenses. BENCHMARKS Market indices are not subject to any charges for investment advisory fees, brokerage commission or other operating expenses typically associated with a managed portfolio. Nor do they reflect other charges such as the mortality and expense risk charge and the asset based administrative charge under the Certificates. Comparisons with these benchmarks, therefore, are of limited use. We include them because they are widely known and may help you to understand the universe of securities from which each Portfolio is likely to select its holdings. Benchmark data reflect the reinvestment of dividend income. PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS: Asset Allocation Series: CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite Index and 30% Standard & Poor's 500 Index. GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index and 70% Standard & Poor's 500 Index. Equity Series: GROWTH & INCOME: October 1, 1993; 75% Standard & Poor's 500 Index and 25% Value Line Convertible Index. COMMON STOCK: January 13, 1976; Standard & Poor's 500 Index. GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index. INTERNATIONAL: April 1, 1995; Morgan Stanley Capital International Europe, Australia, Far East Index. AGGRESSIVE STOCK: January 27, 1986; 50% Standard & Poor's Mid-Cap Total Return Index and 50% Russell 2000 Small Stock Index. Fixed Income Series: MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index. INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate Government Bond Index. The Lipper Variable Insurance Products Performance Analysis Survey (Lipper) records the performance of a large group of variable annuity products, including managed separate accounts of insurance companies. According to Lipper Analytical Services, Inc., the data are presented net of investment management fees, direct operating expenses and asset-based charges applicable under insurance policies or annuity contracts. Lipper data provide a more accurate picture than market benchmarks of the Accumulator performance relative to other variable annuity products. ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS 18.61% 6.94% 8.50% -- -- 8.01% Lipper Income 21.25 9.65 11.99 -- -- 9.79 Benchmark 24.11 10.41 11.73 -- -- 10.55 GROWTH INVESTORS 24.49 10.48 15.37 -- -- 14.30 Lipper Flexible Portfolio 21.58 9.32 11.43 -- -- 9.44 Benchmark 32.05 13.35 14.70 -- -- 11.97 EQUITY SERIES: GROWTH & INCOME 22.22 -- -- -- -- 8.02 Lipper Growth & Income 31.18 -- -- -- -- 12.76 Benchmark 34.93 -- -- -- -- 15.45 COMMON STOCK 30.47 15.64 16.39 13.44% 12.66% 13.07 Lipper Growth 31.08 12.09 15.53 12.05 12.26 12.25 Benchmark 37.54 15.30 16.57 14.87 14.79 14.24
15 ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- GLOBAL 17.04% 16.45% 14.76% -- -- 9.71% Lipper Global 13.87 13.45 9.10 -- -- 2.52 Benchmark 20.72 15.83 11.74 -- -- 6.75 INTERNATIONAL -- -- -- -- -- 10.05** Lipper International -- -- -- -- -- 12.21** Benchmark -- -- -- -- -- 9.17** AGGRESSIVE STOCK 29.67 12.21 19.93 -- -- 18.18 Lipper Small Company Growth 28.19 15.26 25.72 -- -- 16.06 Benchmark 29.69 13.67 20.16 -- -- 13.58 FIXED INCOME SERIES: MONEY MARKET 4.17 2.68 2.92 4.44% -- 5.84 Lipper Money Market 4.35 2.88 3.10 4.71 -- 6.27 Benchmark 5.74 4.34 4.47 5.77 -- 7.09 INTERMEDIATE GOVERNMENT SECURITIES 11.64 4.62 -- -- -- 6.05 Lipper Gen. U.S. Government 15.47 6.27 -- -- -- 7.87 Benchmark 14.41 6.74 -- -- -- 8.17
- ------------ * See footnote on next page. ** Unannualized. CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:*
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS 18.61% 22.30% 50.40% -- -- 61.83% Lipper Income 21.25 31.95 76.42 -- -- 79.42 Benchmark 24.11 34.58 74.09 -- -- 87.24 GROWTH INVESTORS 24.49 34.85 104.38 -- -- 130.44 Lipper Flexible Portfolio 21.58 30.92 72.73 -- -- 76.92 Benchmark 32.05 45.64 98.56 -- -- 102.72 EQUITY SERIES: GROWTH & INCOME 22.22 -- -- -- -- 18.94 Lipper Growth & Income 31.18 -- -- -- -- 31.42 Benchmark 34.93 -- -- -- -- 38.14 COMMON STOCK 30.47 54.65 113.57 252.92% 497.69% 1,061.89 Lipper Growth 31.08 41.29 107.30 215.49 483.45 920.87 Benchmark 37.54 53.30 115.25 300.11 692.18 1,327.94 GLOBAL 17.04 57.90 99.01 -- -- 116.63 Lipper Global 13.87 46.36 55.44 -- -- 23.09 Benchmark 20.72 55.39 74.20 -- -- 72.38 INTERNATIONAL -- -- -- -- -- 10.05** Lipper International -- -- -- -- -- 12.21** Benchmark -- -- -- -- -- 9.17** AGGRESSIVE STOCK 29.67 41.30 148.10 -- -- 424.83 Lipper Small Company Growth 28.19 55.24 268.67 -- -- 337.96 Benchmark 29.69 46.89 150.49 -- -- 254.09 FIXED INCOME SERIES: MONEY MARKET 4.17 8.25 15.50 54.44 -- 127.26 Lipper Money Market 4.35 8.87 16.48 58.55 -- 140.42 Benchmark 5.74 13.58 24.45 75.23 -- 170.07
- ------------ * See footnote on next page. ** Unannualized. 16 CUMULATIVE RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1995:* (CONTINUED)
SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 15 YEARS INCEPTION -------- --------- --------- ---------- ---------- ----------- INTERMEDIATE GOVERNMENT SECURITIES 11.64% 14.51% -- -- -- 32.21 % Lipper Gen. U.S. Government 15.47 20.05 -- -- -- 43.43 Benchmark 14.41 21.60 -- -- -- 45.17
YEAR-BY-YEAR RATES OF RETURN*
1983 1984 1985 1986 ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- -- -- GROWTH INVESTORS -- -- -- -- EQUITY SERIES: GROWTH & INCOME -- -- -- -- COMMON STOCK*** 24.24% (3.43)% 31.44% 15.62% GLOBAL -- -- -- -- INTERNATIONAL -- -- -- -- AGGRESSIVE STOCK -- -- -- 33.40 FIXED INCOME SERIES: MONEY MARKET*** 7.33 9.20 6.85 5.02 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- --
(RESTUBBED TABLE CONTINUED FROM ABOVE)
1987 1988 1989 1990 1991 1992 1993 1994 1995 ASSET ALLOCATION SERIES: CONSERVATIVE INVESTORS -- -- 2.70% 4.77% 18.09% 4.13% 9.15% (5.53)% 18.61% GROWTH INVESTORS -- -- 3.44 9.00 46.68 3.33 13.55 (4.60) 24.49 EQUITY SERIES: GROWTH & INCOME -- -- -- -- -- -- (0.64) (2.06) 22.22 COMMON STOCK*** 5.83% 20.61% 23.72 (9.49) 35.83 1.67 22.96 (3.60) 30.47 GLOBAL (13.67) 9.23 24.85 (7.48) 28.60 (2.00) 30.14 3.66 17.04 INTERNATIONAL -- -- -- -- -- -- -- -- 10.05 AGGRESSIVE STOCK 5.69 (0.38) 41.36 6.54 84.08 (4.61) 15.00 (5.25) 29.67 FIXED INCOME SERIES: MONEY MARKET*** 5.04 5.71 7.56 6.61 4.60 2.01 1.42 2.46 4.17 INTERMEDIATE GOVERNMENT SECURITIES -- -- -- -- 11.01 4.01 8.89 (5.80) 11.64
- ------------ * Returns do not reflect the withdrawal charge and the guaranteed minimum death benefit charge. ** Unannualized.
*** Prior to 1982 the Year-by-Year Rates of Return were: 1976 1977 1978 1979 1980 1981 1982 COMMON STOCK 7.83% (10.60)% 6.62% 27.90% 47.88% (7.27)% 15.82% MONEY MARKET - - - - - 5.54 11.33
COMMUNICATING PERFORMANCE DATA In reports or other communications or in advertising material, we may describe general economic and market conditions affecting the Separate Account and the Trust and may compare the performance of the Investment Funds with (1) that of other insurance company separate accounts or mutual funds included in the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc., VARDS or similar investment services that monitor the performance of insurance company separate accounts or mutual funds, (2) other appropriate indices of investment securities and averages for peer universes of funds which are shown under "Benchmarks" and "Fund Inception Dates and Comparative Benchmarks" in this Part 3, or (3) data developed by us derived from such indices or averages. The Morningstar Variable Annuity/Life Report consists of nearly 700 variable life and annuity funds, all of which report their data net of investment management fees, direct operating expenses and separate account charges. VARDS is a monthly reporting service that monitors approximately 760 variable life and variable annuity funds on performance and account information. Advertisements or other communications furnished to present or prospective Certificate Owners may also include evaluations of an Investment Fund or Portfolio by financial publications that are nationally recognized such as Barron's, Morningstar's Variable Annuity Sourcebook, Business Week, Chicago Tribune, Forbes, Fortune, Institutional Investor, Investment Adviser, Investment Dealer's Digest, Investment Management Weekly, Los Angeles Times, Money, Money Management Letter, Kiplinger's Personal Finance, Financial Planning, National Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York Times, and The Wall Street Journal. 17 MONEY MARKET FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND YIELD INFORMATION The current yield and effective yield of the Money Market Fund and Intermediate Government Securities Fund may appear in reports and promotional material to current or prospective Certificate Owners. Money Market Fund Current yield for the Money Market Fund will be based on net changes in a hypothetical investment over a given seven-day period, exclusive of capital changes, and then "annualized" (assuming that the same seven-day result would occur each week for 52 weeks). "Effective yield" is calculated in a manner similar to that used to calculate current yield, but when annualized, any income earned by the investment is assumed to be reinvested. The "effective yield" will be slightly higher than the "current yield" because any earnings are compounded weekly. Money Market Fund yields and effective yields assume the deduction of all Certificate charges and expenses other than the withdrawal charge, guaranteed minimum death benefit charge and any charge for tax such as premium tax. See "Part 4: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. Intermediate Government Securities Fund Current yield for the Intermediate Government Securities Fund will be based on net changes in a hypothetical investment over a given 30-day period, exclusive of capital changes, and then "annualized" (assuming that the same 30-day result would occur each month for 12 months). "Effective yield" is calculated in a manner similar to that used to calculate current yield, but when annualized, any income earned by the investment is assumed to be reinvested. The "effective yield" will be slightly higher than the "current yield" because any earnings are compounded monthly. Intermediate Government Securities Fund yields and effective yields assume the deduction of all Certificate charges and expenses other than the withdrawal charge, guaranteed minimum death benefit charge and any charge for tax such as premium tax. See "Part 4: Money Market Fund and Intermediate Government Securities Fund Yield Information" in the SAI. 18 PART 4: THE GUARANTEED PERIOD ACCOUNT GUARANTEE PERIODS Each amount allocated to a Guarantee Period and held to the Period's Expiration Date accumulates interest at a Guaranteed Rate. The Guaranteed Rate for each allocation is the annual interest rate applicable to new allocations to that Guarantee Period, which was in effect on the Transaction Date for the allocation. We may establish different Guaranteed Rates under different classes of Certificates. We use the term GUARANTEED PERIOD AMOUNT to refer to the amount allocated to and accumulated in each Guarantee Period. The Guaranteed Period Amount is reduced or increased by any market value adjustment as a result of withdrawals, transfers or charges (see below). Your Guaranteed Period Account contains the Guarantee Periods to which you have allocated Annuity Account Value. On the Expiration Date of a Guarantee Period, its Guaranteed Period Amount and its value in the Guaranteed Period Account are equal. We call the Guaranteed Period Amount on an Expiration Date the Guarantee Period's Maturity Value. We report the Annuity Account Value in your Guaranteed Period Account to reflect any market value adjustment that would apply if all Guaranteed Period Amounts were withdrawn as of the calculation date. The Annuity Account Value in the Guaranteed Period Account on any Business Day, therefore, will be the sum of the present value of the Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect for new allocations to each such Guarantee Period on such date. Guarantee Periods and Expiration Dates We currently offer Guarantee Periods ending on February 15th for each of the maturity years 1997 through 2006. Not all Guarantee Periods will be available to Annuitants ages 71 and above. See "Allocation of Contributions" in Part 5. As Guarantee Periods expire we expect to add maturity years so that generally 10 are available in all states at any time. The Guarantee Periods are not available for investment under the Certificates in the state of Maryland. We will not accept allocations to a Guarantee Period if, on the Transaction Date: o Such Transaction Date and the Expiration Date for such Guarantee Period fall within the same calendar year. o The Guaranteed Rate is 3%. o The Guarantee Period has an Expiration Date beyond the February 15th immediately following the Annuity Commencement Date. Guaranteed Rates and Price Per $100 of Maturity Value Because the Maturity Value of a contribution allocated to a Guarantee Period can be determined at the time it is made, you can determine the amount required to be allocated to a Guarantee Period in order to produce a target Maturity Value (assuming no transfers or withdrawals are made and no charges are allocated to the Guarantee Period). The required amount is the present value of that Maturity Value at the Guaranteed Rate on the Transaction Date for the contribution, which may also be expressed as the price per $100 of Maturity Value on such Transaction Date. Guaranteed Rates for new allocations as of July __, 1996 and the related price per $100 of Maturity Value for each currently available Guarantee Period were as follows:
GUARANTEE PERIODS WITH EXPIRATION DATE GUARANTEED FEBRUARY 15TH OF RATE AS OF PRICE PER $100 OF MATURITY YEAR JULY , 1996 MATURITY VALUE - -------------------- -------------- ------------------ 1997 x.xx% $xx.xx 1998 x.xx xx.xx 1999 x.xx xx.xx 2000 x.xx xx.xx 2001 x.xx xx.xx 2002 x.xx xx.xx 2003 x.xx xx.xx 2004 x.xx xx.xx 2005 x.xx xx.xx 2006 x.xx xx.xx
Allocation Among Guarantee Periods The same approach as described above may also be used to determine the amount which you would need to allocate to each Guarantee Period in order to create a series of constant Maturity Values for two or more years. For example, if you wish to have $100 mature on February 15th of each of years 1997 through 2001, then according to the above table the lump sum contribution you would have to make as of July __, 1996 would be $_____ (i.e., the sum of the 19 price per $100 of Maturity Value for each maturity year from 1997 through 2001). The above table is provided to illustrate the use of present value calculations. It does not take into account the potential for charges to be deducted or withdrawals or transfers from Guarantee Periods. Actual calculations will also be based on Guaranteed Rates on each actual Transaction Date, which may differ. Options at Expiration Date We will notify you on or before December 31st prior to the Expiration Date of each Guarantee Period in which you have any Guaranteed Period Amount. You may elect one of the following options to be effective at the Expiration Date, subject to the restrictions set forth on the prior page and under "Allocation of Contributions" in Part 5: (a) to transfer the Maturity Value into any Guarantee Period we are then offering, or into any of our Investment Funds; or (b) to withdraw the Maturity Value (subject to any withdrawal charges which may apply). If we have not received your election as of the Expiration Date, the Maturity Value in the expired Guarantee Period will be transferred into the Guarantee Period with the earliest Expiration Date. MARKET VALUE ADJUSTMENT FOR TRANSFERS, WITHDRAWALS OR SURRENDER PRIOR TO THE EXPIRATION DATE Any withdrawal (including transfers, surrender and deductions) from a Guarantee Period prior to its Expiration Date will cause any remaining Guaranteed Period Amount for that Guarantee Period to be increased or decreased by a market value adjustment. The amount of the adjustment will depend on two factors: (a) the difference between the Guaranteed Rate applicable to the amount being withdrawn and the Guaranteed Rate on the Transaction Date for new allocations to a Guarantee Period with the same Expiration Date, and (b) the length of time remaining until the Expiration Date. In general, if interest rates have risen between the time when an amount was originally allocated to a Guarantee Period and the time it is withdrawn, the market value adjustment will be negative, and vice versa; and the longer the period of time remaining until the Expiration Date, the greater the impact of the interest rate difference. Therefore, it is possible that a significant rise in interest rates could result in a substantial reduction in your Annuity Account Value in the Guaranteed Period Account related to longer term Guarantee Periods. The market value adjustment (positive or negative) resulting from a withdrawal of all funds from a Guarantee Period will be determined for each contribution allocated to that Guarantee Period as follows: (1) We determine the present value of the Maturity Value on the Transaction Date as follows: (a) We determine the Guaranteed Period Amount that would be payable on the Expiration Date, using the applicable Guaranteed Rate. (b) We determine the period remaining in your Guarantee Period (based on the Transaction Date) and convert it to fractional years based on a 365 day year. For example three years and 12 days becomes 3.0329. (c) We determine the current Guaranteed Rate which applies on the Transaction Date to new allocations to the same Guarantee Period. (d) We determine the present value of the Guaranteed Period Amount payable at the Expiration Date, using the period determined in (b) and the rate determined in (c). (2) We determine the Guaranteed Period Amount as of the current date. (3) We subtract (2) from the result in (1)(d). The result is the market value adjustment applicable to such Guarantee Period, which may be positive or negative. The market value adjustment (positive or negative) resulting from a withdrawal of a portion of the amount in a Guarantee Period will be a percentage of the market value adjustment that would be applicable upon a withdrawal of all funds from a Guarantee Period. This percentage is determined by (i) dividing the amount of the withdrawal or transfer from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal or transfer. See Appendix I for an example. The Guaranteed Rate for new allocations to a Guarantee Period is the rate we have in effect for this purpose even if new allocations to that Guarantee Period would not be accepted at the time. This rate will not be less than 3%. If we do not have a Guaranteed Rate in effect for a Guarantee Period to which the "current Guaranteed Rate" in (1)(c) would apply, we will use the rate at the next closest Expiration Date. If we are no longer offering new Guarantee Periods, the "current Guaranteed Rate" will be determined in accordance with our procedures then in effect. For purposes of calculating the market value adjustment only, we reserve the right to add up to 0.25% to the current rate in (1)(c) above. 20 DEATH BENEFIT AMOUNT The death benefit provided with respect to the Guaranteed Period Account is equal to the Annuity Account Value in the Guaranteed Period Account or, if greater, the sum of the Guaranteed Period Amounts in each Guarantee Period. See "Annuity Account Value" in Part 5. INVESTMENTS Amounts allocated to Guarantee Periods will be held in a "nonunitized" separate account established by Equitable Life under the laws of New York. This separate account provides an additional measure of assurance that full payment of amounts due under the Guarantee Periods will be made. Under the New York Insurance Law, the portion of the separate account's assets equal to the reserves and other contract liabilities relating to the Certificates are not chargeable with liabilities arising out of any other business we may conduct. Investments purchased with amounts allocated to the Guaranteed Period Account are the property of Equitable Life. Any favorable investment performance on the assets held in the separate account accrues solely to Equitable Life's benefit. Certificate Owners do not participate in the performance of the assets held in this separate account. Equitable Life may, subject to applicable state law, transfer all assets allocated to the separate account to its general account. Regardless of whether assets supporting Guaranteed Period Accounts are held in a separate account or our general account, all benefits relating to the Annuity Account Value in the Guaranteed Period Account are guaranteed by Equitable Life. Equitable Life has no specific formula for establishing the Guaranteed Rates for the Guarantee Periods. Equitable Life expects the rates to be influenced by, but not necessarily correspond to, among other things, the yields on the fixed income securities to be acquired with amounts that are allocated to the Guarantee Periods at the time that the Guaranteed Rates are established. Our current plans are to invest such amounts in fixed income obligations, including corporate bonds, mortgage backed and asset backed securities and government and agency issues having durations in the aggregate consistent with those of the Guarantee Periods. Although the foregoing generally describes Equitable Life's plans for investing the assets supporting Equitable Life's obligations under the fixed portion of the Certificates, Equitable Life is not obligated to invest those assets according to any particular plan except as may be required by state insurance laws, nor will the Guaranteed Rates Equitable Life establishes be determined by the performance of the nonunitized separate account. General Account Our general account supports all of our policy and contract guarantees, including those applicable to the Guaranteed Period Account, as well as our general obligations. The general account is subject to regulation and supervision by the Insurance Department of the State of New York and to the insurance laws and regulations of all jurisdictions where we are authorized to do business. Because of applicable exemptions and exclusionary provisions, interests in the general account have not been registered under the Securities Act of 1933 (1933 Act), nor is the general account an investment company under the 1940 Act. Accordingly, the general account is not subject to regulation under the 1933 Act or the 1940 Act. However, the market value adjustment interests under the Certificates are registered under the 1933 Act. We have been advised that the staff of the SEC has not made a review of the disclosure that is included in this prospectus for your information that relates to the general account (other than market value adjustment interests). The disclosure, however, may be subject to certain generally applicable provisions of the Federal securities laws relating to the accuracy and completeness of statements made in prospectuses. 21 PART 5: PROVISIONS OF THE CERTIFICATES AND SERVICES WE PROVIDE The provisions of your Certificate may be restricted by applicable laws or regulations. AVAILABILITY OF THE CERTIFICATES The Certificates are available for Annuitant issue ages 20 through 83 (may be limited to age 78 in some states). These Certificates may not be available in all states. CONTRIBUTIONS UNDER THE CERTIFICATES Your initial contribution must be at least $10,000. Subsequent contributions may be made in an amount of at least $1,000 at any time subject to the following: For Annuitant issue ages 20 through 69, contributions made on or after age 70 may not exceed contributions made prior to age 70; and for issue ages 70 through 74, contributions made on or after age 75 may not exceed contributions made prior to age 75. For all issue ages, contributions may not be made once the Certificate is within seven years of the Annuity Commencement Date. We may refuse to accept any contributions if the sum of all contributions under a Certificate would then total more than $1,500,000. We may also refuse to accept any contribution if the sum of all contributions under all Equitable annuity accumulation certificates/ contracts that you own would then total more than $2,500,000. Contributions are credited as of the Transaction Date. METHODS OF PAYMENT Except as indicated below, all contributions must be made by check. All contributions made by check must be drawn on a bank or credit union in the U.S., in U.S. dollars and made payable to Equitable Life. All checks are accepted subject to collection. All contributions should be sent to Equitable Life at our Processing Office address designated for contributions. Wire Transmittals We will accept, by agreement with broker-dealers who use wire transmittals, transmittal of initial contributions by wire order from the broker-dealer to the Processing Office. Such transmittals must be accompanied by essential information we require to allocate the contribution. Contributions accepted by wire order will be invested at the value next determined following receipt for contributions allocated to the Investment Funds. Contributions allocated to the Guaranteed Period Account will receive the Guaranteed Rate(s) in effect for the applicable Guarantee Period(s) on the date contributions are received. Wire orders not accompanied by complete information, may be retained for a period not exceeding five Business Days while an attempt is made to obtain the required information. If the required information cannot be obtained within those five Business Days, the Processing Office will inform the broker-dealer, on behalf of the applicant, of the reasons for the delay and return the contribution immediately to the applicant, unless the applicant specifically consents to our retaining the contribution until the required information is received by the Processing Office. Notwithstanding the acceptance by us of the wire order and the essential information, however, a Certificate will not be issued until the receipt and acceptance of a properly completed application. During the time from receipt of the initial contribution until a signed application is received from the Certificate Owner, no other financial transactions may be requested. If an application is not received within ten days of receipt of the initial contribution via wire order, or if an incomplete application is received and cannot be completed within ten days of receipt of the initial contribution, the amount of the initial contribution will be returned to the applicant. After your Certificate has been issued, subsequent contributions may be transmitted by wire. ALLOCATION OF CONTRIBUTIONS You have two options from which to choose for allocation of your contributions: Self-Directed Allocation and Principal Assurance. Self-Directed Allocation You design your own investment program by allocating your contributions among the Investment Options in any way you choose. Your contributions may be allocated to one or up to all of the available Investment Options at any time. We allocate contributions among the Investment Options according to your allocation percentages. Allocations must be in whole percentages. Allocation percentages can be 22 changed at any time by writing to our Processing Office, or by telephone. The change will be effective on the Transaction Date and will remain in effect for future contributions unless another change is requested. Allocation of the initial contribution is subject to the provisions for the free look period. See "Free Look Period" below. Allocation of any contribution to the Guaranteed Period Account is subject to the following restrictions. o No more than 60% of any contribution may be allocated to the Guaranteed Period Account. o For Annuitants ages 71 through 74, allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. For Annuitants ages 75 and above, allocations may be made only to Guarantee Periods with maturities of five years or less; however, in no event may allocations be made to Guarantee Periods with maturities beyond the February 15th immediately following the Annuity Commencement Date. Principal Assurance This option is designed to assure that your Maturity Value in a specified Guarantee Period equals your initial contribution, while at the same time allowing you to invest in the Investment Funds. The maturity year you select for such specified Guaranteed Period may not be later than 10 years nor earlier than seven years. However, in no event may you elect a year beyond the year in which the Annuitant will attain age 80. In order to accomplish this strategy, we will allocate a portion (equal to the present value) of your initial contribution to a Guarantee Period based on the year you select. See "Guaranteed Rates and Price Per $100 of Maturity Value" in Part 4. You may allocate the balance of your contribution to the Investment Funds in any way you choose. Such allocations to the Investment Funds must be in whole percentages. Allocation of the portion of your initial contribution to the Investment Funds is subject to the provisions for the free look period. See "Free Look Period" below. Principal Assurance may only be elected at issue of your Certificate and assumes no withdrawals or transfers of the amount allocated to the specified Guarantee Period. Subsequent contributions must be allocated under "Self-Directed Allocation" described above. Allocations to the Investment Funds A contribution allocated to an Investment Fund purchases Accumulation Units in that Investment Fund based on the Accumulation Unit Value for that Investment Fund computed on the Transaction Date. Allocations to the Guaranteed Period Account Contributions allocated to the Guaranteed Period Account will have the Guaranteed Rate for the specified Guarantee Period offered on the Transaction Date. FREE LOOK PERIOD You have the right to examine the Accumulator Certificate for a period of 10 days after you receive it, and to return it to us for a refund. You cancel it by sending it to our Processing Office. The free look is extended if your state requires a refund period of longer than 10 days. This right applies only to the initial owner of a Certificate. Your refund will equal the Annuity Account Value reflecting any investment gain or loss, and any positive or negative market value adjustment, through the date we receive your Certificate at our Processing Office. Some states may require that we calculate the refund differently. In those states that require that we calculate the refund differently, we may require that any portion of your initial contribution that you request to have allocated to the Investment Funds, be allocated to the Money Market Fund until the end of the free look period. We follow these same procedures if you change your mind before a Certificate has been issued, but after a contribution has been made. See "Part 8: Tax Aspects of the Certificates" for possible consequences of canceling your Certificate during the free look period. If you cancel your Certificate during the free look period, we may require that you wait six months before you may apply for a Certificate with us again. ANNUITY ACCOUNT VALUE The Annuity Account Value is the sum of the Annuity Account Values in the Investment Funds and the Guaranteed Period Account. Annuity Account Value in Investment Funds The Annuity Account Value in an Investment Fund on any Business Day is equal to the number of Accumulation Units in that Investment Fund times the Accumulation Unit Value for the Investment Fund for that date. The number of Accumulation Units in an Investment Fund at any time is equal to the sum of Accumulation Units purchased by contributions and transfers less the sum of Accumulation Units redeemed for withdrawals, transfers or deductions for charges. 23 The number of Accumulation Units purchased or sold in any Investment Fund equals the dollar amount of the transaction divided by the Accumulation Unit Value for that Investment Fund for the applicable Transaction Date. The number of Accumulation Units will not vary because of any later change in the Accumulation Unit Value. The Accumulation Unit Value varies with the investment performance of the corresponding Portfolios of the Trust, which in turn reflects the investment income and realized and unrealized capital gains and losses of the Portfolios, as well as the Trust fees and expenses. The Accumulation Unit Value is also stated after deduction of the Separate Account asset charges relating to the Certificates. A description of the computation of the Accumulation Unit Value is found in the SAI. Annuity Account Value in Guaranteed Period Account The Annuity Account Value in the Guaranteed Period Account on any Business Day will be the sum of the present value of the Maturity Value in each Guarantee Period, using the Guaranteed Rate in effect for new allocations to such Guarantee Period on such date. (This is equivalent to the Guaranteed Period Amount increased or decreased by the full market value adjustment.) The Annuity Account Value, therefore, may be higher or lower than the contributions (less withdrawals) accumulated at the Guaranteed Rate. At the Expiration Date the Annuity Account Value in the Guaranteed Period Account will equal the Maturity Value. See "Part 4: The Guaranteed Period Account." TRANSFERS AMONG INVESTMENT OPTIONS At any time prior to the Annuity Commencement Date, you may transfer all or portions of your Annuity Account Value among the Investment Options, subject to the following restrictions. Transfers are permitted to or from a Guarantee Period once per quarter o during each Contract Year. Such transfers may be made at any time during each quarter. Transfers out of a Guarantee Period other than at the Expiration Date will o result in a market value adjustment. See "Part 4: The Guaranteed Period Account." Transfers to Guarantee Periods are subject to the restrictions set forth o under "Guarantee Periods and Expiration Dates" in Part 4 and are limited based on the attained age of the Annuitant. See "Allocation of Contributions" above. Transfer requests must be made directly to our Processing Office. Your request for a transfer should specify your Certificate number, the amounts or percentages to be transferred and the Investment Options to and from which the amounts are to be transferred. Your transfer request may be in writing or by telephone. For telephone transfer requests, procedures have been established by Equitable Life that are considered to be reasonable and are designed to confirm that instructions communicated by telephone are genuine. Such procedures include requiring certain personal identification information prior to acting on telephone instructions and providing written confirmation. In light of the procedures established, Equitable Life will not be liable for following telephone instructions that it reasonably believes to be genuine. We may restrict, in our sole discretion, the use of an agent acting under a power of attorney, such as a market timer, on behalf of more than one Certificate Owner to effect transfers. Any agreements to use market timing services to effect transfers are subject to our rules then in effect and must be on a form satisfactory to us. A transfer request will be effective on the Transaction Date and the transfer to or from Investment Funds will be made at the Accumulation Unit Value next computed after the Transaction Date. All transfers will be confirmed in writing. DOLLAR COST AVERAGING If you have at least $10,000 of Annuity Account Value in the Money Market Fund, you may choose to have a specified dollar amount transferred from the Money Market Fund to other Investment Funds on a monthly basis. The main objective of dollar cost averaging is to attempt to shield your investment from short term price fluctuations. Since the same dollar amount is transferred to other Investment Funds each month, more Accumulation Units are purchased in an Investment Fund if the value per Accumulation Unit is low and fewer Accumulation Units are purchased if the value per Accumulation Unit is high. Therefore, a lower average value per Accumulation Unit may be achieved over the long term. This plan of investing allows you to take advantage of market fluctuations but does not assure a profit or protect against a loss in declining markets. The dollar cost averaging option may be elected at the time you apply for the Certificate or at a later date. The minimum amount that may be transferred each month is $250. The maximum amount which 24 may be transferred is equal to the Annuity Account Value in the Money Market Fund at the time the option is elected, divided by 12. The transfer date will be the same calendar day each month as the Contract Date. If, on any transfer date, the Annuity Account Value in the Money Market Fund is equal to or less than the amount you have elected to have transferred, the entire amount will be transferred and the dollar cost averaging option will end. You may change the transfer amount once each Contract Year, or cancel this option by sending us satisfactory notice to our Processing Office at least seven calendar days before the next transfer date. WITHDRAWALS The Accumulator is an annuity contract, even though you may elect to receive your benefits in a non- annuity form. You may take withdrawals from your Certificate before the Annuity Commencement Date and while the Annuitant is alive. Two withdrawal options are available: Lump Sum Withdrawals and Periodic Withdrawals. Withdrawals may result in withdrawal charges. See "Part 6: Deductions and Charges." Withdrawals may also be taxable and subject to tax penalty. See "Part 8: Tax Aspects of the Certificates." Amounts withdrawn from the Guaranteed Period Account, other than at the Expiration Date, will result in a market value adjustment. See "Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date" in Part 4. As a deterrent to early withdrawal (generally prior to age 59 1/2 ) the Code provides certain penalties. We may also be required to withhold income taxes from the amount distributed. These rules are outlined in "Part 8: Tax Aspects of the Certificates." o LUMP SUM WITHDRAWALS--You may take a Lump Sum Withdrawal once per Contract Year at any time during such Contract Year. The minimum amount of such withdrawal is $1,000. A request to withdraw more than 90% of the Cash Value as of the date of the withdrawal will result in the termination of the Certificate and will be treated as a surrender of the Certificate for its Cash Value. See "Surrendering the Certificates to Receive the Cash Value," below. To make a Lump Sum Withdrawal, you must submit a request satisfactory to us which specifies the Investment Options from which the Lump Sum Withdrawal will be taken. If we have received the information we require, the requested withdrawal will become effective on the Transaction Date and proceeds will usually be mailed within seven calendar days thereafter, but we may delay payment as described in "When Payments Are Made" below. If we receive only partially completed information, our Processing Office will contact you for specific instructions before your request can be processed. o PERIODIC WITHDRAWALS--Periodic Withdrawals provide level percentage or level amount payouts. You may choose to receive Periodic Withdrawals on a quarterly or annual frequency. You select a dollar amount or percentage of the Annuity Account Value to be withdrawn, subject to a maximum of 2.5% quarterly and 10.0% annually, but in no event may any payment be less than $250. If at the time a Periodic Withdrawal is to be made, the withdrawal amount would be less than $250, no payment will be made and your Periodic Withdrawal election will terminate. You select the date of the month when the withdrawals will be made, but you may not choose a date later than the 28th day of the month. If no date is selected, withdrawals will be made on the same calendar day of the month as the Contract Date. The commencement of payments under the Periodic Withdrawal option may not be elected to start sooner than 28 days after issue of the Certificate. You may elect Periodic Withdrawals at any time by completing the proper form and sending it to our Processing Office. You may change the payment frequency of your Periodic Withdrawals once each Contract Year or cancel this withdrawal option at any time by sending notice in a form satisfactory to us. The notice must be received at our Processing Office at least seven calendar days prior to the next scheduled withdrawal date. You may also change the amount or percentage of your Periodic Withdrawals once in each Contract Year. However, you may not change the amount or percentage in any Contract Year where you have previously taken another withdrawal under the Lump Sum Withdrawal option described above. Unless you specify otherwise, Periodic Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount of the withdrawal required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first. Withdrawal Charges Withdrawals in excess of the 15% free corridor amount may be subject to a withdrawal charge. See "Withdrawal Charge" in Part 6. 25 DEATH BENEFIT When the Annuitant Dies Generally, upon receipt of proof satisfactory to us of the Annuitant's death, prior to the Annuity Commencement Date, we will pay the death benefit to the beneficiary named in your Certificate. You designate the beneficiary at the time you apply for the Certificate. While the Certificate is in effect, you may change your beneficiary by writing to our Processing Office. The change will be effective on the date the written submission was signed. The death benefit payable will be determined as of the date we receive such proof of death and any required instructions as to the method of payment. The death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the guaranteed minimum death benefit defined below; and (2) the death benefit provided with respect to the Guaranteed Period Account. See "Part 4: The Guaranteed Period Account." Guaranteed Minimum Death Benefit (GMDB) Applicable to Certificates issued in all states except - ----------------------------------------------------------------------------- New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see below) is credited to and becomes part of the GMDB on each Processing Date. GMDB Interest Rate Interest will be calculated at the effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on an interest rate of 3% for Annuitant issue ages 74 and under; and 0% for issue ages 75 and above. Contributions, transfers and withdrawals during the Contract Year will be taken into account. Applicable to Certificates issued in New York The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB calculated on the immediately preceding Business Day, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. Additionally, on each Processing Date the GMDB is reset at the greater of the current GMDB and the current Annuity Account Value in the Investment Funds. On no date, however, will the GMDB be greater than (a) the portion of the initial contribution allocated to the Investment Funds, plus (b) any subsequent contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds, plus (d) interest (as discussed under GMDB Interest Rate above) that is credited on each Processing Date. See Appendix II for an example of the calculation of the GMDB. How Withdrawals and Transfers Affect the GMDB Withdrawals and transfers out of the Investment Funds generally reduce the GMDB on a dollar-for- dollar basis as of the date of the withdrawal or transfer. However, if at any time the sum of withdrawals and transfers out of the Investment Funds in a Contract Year, calculated as a percentage of the Annuity Account Value as of the date of such withdrawal or transfer, exceed the current GMDB interest rate, the transaction that caused the excess and all additional withdrawals and/or transfers out of the Investment Funds in that Contract Year will cause a percentage reduction in the GMDB as of the date of the withdrawal or transfer, rather than a dollar-for-dollar reduction. This means that if the GMDB interest rate is 6% and you withdraw 5% of the Annuity Account Value in the Investment Funds, your GMDB will be reduced by the dollar amount of the withdrawal as of the date of the withdrawal. If you withdraw 10% of your Annuity Account Value, your GMDB will be reduced by 10% as of the date of the withdrawal. You should consider the timing of your withdrawals and transfers as they relate to the affect on the GMDB. How Payment is Made We will pay the death benefit to the beneficiary in the form of the income annuity option you have chosen under your Certificate. If no income annuity option has been chosen at the time of the Annuitant's death, the beneficiary will receive the death benefit in a lump sum. However, subject to certain exceptions in the Certificate, Equitable Life's rules then in effect and any other applicable requirements under the Code, the beneficiary may elect to apply the death benefit to one or more income annuity options offered by Equitable Life. See "Income Annuity Options" below. Note that if you are both the Certificate Owner and the Annuitant, only a life 26 annuity or an annuity that does not extend beyond the life expectancy of the beneficiary may be elected. Successor Annuitant If you are both the Certificate Owner and the Annuitant and you elect your spouse to be both the sole primary beneficiary and the successor Annuitant/ Certificate Owner, then no death benefit is payable until your surviving spouse's death. If the successor Annuitant/Certificate Owner election is in effect at your death, the GMDB will be set at the Annuity Account Value in the Investment Funds as of the date of death, if greater than the current GMDB. WHEN THE CERTIFICATE OWNER DIES BEFORE THE ANNUITANT When you are not the Annuitant and you die before the Annuity Commencement Date, the beneficiary named to receive the death benefit upon the Annuitant's death will automatically succeed as Certificate Owner (unless you name a different person as a successor Owner in a written form acceptable to us and send it to our Processing Office). The Certificate provides that the original Certificate Owner's entire interest in the Certificate be completely distributed to the named beneficiary by the fifth anniversary of such Owner's death (unless an income annuity option is elected and payments begin within one year after the Certificate Owner's death and are made over the beneficiary's life or over a period not to exceed the beneficiary's life expectancy). If an income annuity option has not been elected, as described above, on the fifth anniversary of your death, we will pay any Annuity Account Value remaining on such date, less any applicable withdrawal charge. If the successor Certificate Owner is your surviving spouse, no distributions are required as long as both the surviving spouse and the Annuitant are living. CASH VALUE The Cash Value under the Certificate fluctuates daily with the investment performance of the Investment Funds you have selected and reflects any upward or downward market value adjustment. See "Part 4: The Guaranteed Period Account." We do not guarantee any minimum Cash Value except for amounts in a Guarantee Period held to the Expiration Date. On any date before the Annuity Commencement Date while the Certificate is in effect, the Cash Value is equal to the Annuity Account Value less any withdrawal charge. The free corridor amount will not apply when calculating the withdrawal charge applicable upon a surrender. See "Part 6: Deductions and Charges." SURRENDERING THE CERTIFICATES TO RECEIVE THE CASH VALUE You may surrender a Certificate to receive the Cash Value at any time while the Annuitant is living and before the Annuity Commencement Date. For a surrender to be effective, we must receive your written request and the Certificate at our Processing Office. The Cash Value will be determined on the Transaction Date. All benefits under the Certificate will be terminated as of that date. You may receive the Cash Value in a single sum payment or apply it under one or more of the income annuity options described below. We will usually pay the Cash Value within seven calendar days, but we may delay payment as described in "When Payments are Made" below. In some cases, surrenders may have adverse tax consequences. See "Part 8: Tax Aspects of the Certificates." INCOME ANNUITY OPTIONS Income annuity options provide periodic payments over a specified period of time which may be fixed or may be based on the Annuitant's life. Annuity forms of payment are calculated as of the Annuity Commencement Date, which is on file with our Processing Office. You can change the Annuity Commencement Date by writing to our Processing Office any time before the Annuity Commencement Date. However, you may not choose a date later than the 28th day of any month. Also, based on the issue age of the Annuitant, the Annuity Commencement Date may not be later than (i) the Processing Date which follows the Annuitant's 85th birthday for issue ages 74 and under; (ii) 10 years after the Contract Date for issue ages 75 through 80; and (iii) the Processing Date which follows the Annuitant's 90th birthday for issue ages 81 through 83. Different age ranges may apply in some states. Before the Annuity Commencement Date, we will send a letter advising that annuity benefits are available. Unless you otherwise elect, we will pay fixed annuity benefits on the "normal form" indicated for your Certificate as of the Annuity Commencement Date. The amount applied to provide the annuity benefit will be (1) the Annuity Account Value for any life annuity form or (2) the Cash Value for any period certain only annuity form except that if the period certain is more than five years, the amount applied will be no less than 95% of the Annuity Account Value. Amounts in the Guarantee Periods that are applied to an income annuity option prior to an Expiration Date will result in a market value adjustment. See "Market Value Adjustment for Transfers, Withdrawals or Surrender Prior to the Expiration Date" in Part 4. 27 ANNUITY FORMS o Life Annuity: An annuity which guarantees payments for the rest of the Annuitant's life. Payments end with the last monthly payment before the Annuitant's death. Because there is no death benefit associated with this annuity form, it provides the highest monthly payment of any of the life income annuity options, so long as the Annuitant is living. o Life Annuity-Period Certain: This annuity form also guarantees payments for the rest of the Annuitant's life. In addition, if the Annuitant dies before a specified period of time (the "certain period") has ended, payments will continue to the beneficiary for the balance of the certain period. Certain periods may be 5, 10, 15 or 20 years. A life annuity with a certain period of 10 years is the normal form of annuity under the Certificates. o Life Annuity-Refund Certain: This annuity form guarantees payments to you for the rest of your life. In addition, if you die before the amount applied to purchase this annuity option has been recovered, payments will continue to your beneficiary until that amount has been recovered. This option is available only as a fixed annuity. o Period Certain Annuity: This annuity form guarantees payments for a specific period of time, usually 5, 10, 15 or 20 years, and does not involve life contingencies. o Joint and Survivor Life Annuity: This annuity form guarantees life income to you and, after your death, continuation of income to the survivor. The life annuity-period certain and the life annuity- refund certain are available on either a single life or joint and survivor life basis. The income annuity options outlined above are available in both fixed and variable form, unless otherwise indicated. Fixed annuity payments are guaranteed by us and will be based either on the tables of guaranteed annuity payments in your Certificate or on our then current annuity rates, whichever is more favorable for the Annuitant. Variable income annuities may be funded through the Common Stock Fund through the purchase of annuity units. The amount of each variable annuity payment may fluctuate, depending upon the performance of the Common Stock Fund. That is because the annuity unit value rises and falls depending on whether the actual rate of net investment return (after deduction of charges) is higher or lower than the assumed base rate. See "Annuity Unit Values" in the SAI. Variable income annuities may also be available by separate prospectus through the Common Stock or other Funds of other separate accounts we offer. For all Annuitants, the normal form of annuity provides for fixed payments. We may offer other forms not outlined here. Your registered representative can provide details. For each income annuity option, we will issue a separate written agreement putting the option into effect. Before we pay any annuity benefit, we require the return of the Certificate. The amount of the annuity payments will depend on the amount applied to purchase the annuity, the type of annuity chosen and, in the case of a life income annuity option, the Annuitant's age (or the Annuitant's and joint Annuitant's ages) and in certain instances, the sex of the Annuitant(s). Once an income annuity option is chosen and payments have commenced, no change can be made. If, at the time you elect an income annuity option, the amount to be applied is less than $2,000 or the initial payment under the option elected is less than $20 monthly, we reserve the right to pay the Annuity Account Value in a single sum rather than as payments under the annuity form chosen. ASSURED PAYMENT PLAN If you are the Owner and the Annuitant, you may apply your Annuity Account Value, in whole or in part, to purchase the Assured Payment Plan (Life Annuity with a Period Certain), provided you meet the issue age and payment restrictions for the Assured Payment Plan. If you apply a part of the Annuity Account Value, it will be considered a withdrawal. See "Withdrawals" above. The Assured Payment Plan, is designed to provide guaranteed level or increasing annual payments for your life or for your life and the life of a joint Annuitant. If the Annuity Account Value is applied from an Accumulator Certificate to purchase the Assured Payment Plan at a time when the dollar amount of the withdrawal charge is greater than 2% of remaining contributions (after withdrawals), such withdrawal charge will not be deducted. However, a new withdrawal charge schedule will apply under the Assured Payment Plan. For purposes of the Assured Payment Plan withdrawal charge schedule, the year in which your Annuity Account Value is applied under the Assured Payment Plan will be "Contract Year 1." If the Annuity Account Value is applied from the Accumulator when the dollar amount of the withdrawal charge is 2% or less, such withdrawal charge will not be deducted and there will be no withdrawal charge schedule under the Assured Payment Plan. You should consider the timing of your purchase as it relates to the potential for withdrawal charges under the Assured Payment Plan. No subsequent contributions will be permitted under the Assured Payment Plan Certificate. 28 You may also apply your Annuity Account Value to purchase the Assured Payment Plan (Period Certain) once withdrawal charges are no longer in effect. This version of the Assured Payment Plan provides for annual payments for a specified period. No withdrawal charges will apply under the Assured Payment Plan Certificate. The Assured Payment Plan (Life Annuity with a Period Certain) and Assured Payment Plan (Period Certain) are described in our prospectus for the Assured Payment Plan, dated May 1, 1996. Copies are available from your registered representative. To purchase this annuity form we also require the return of your Certificate. An Assured Payment Plan Certificate will be issued putting this annuity form into effect. Depending upon your circumstances, this may be accomplished on a tax-free basis. Consult your tax adviser. WHEN PAYMENTS ARE MADE Under applicable law, application of proceeds from the Investment Funds to a variable annuity, payment of a death benefit from the Investment Funds, payment of any portion of the Annuity Account Value (less any applicable withdrawal charge) from the Investment Funds, and, upon surrender, payment of the Cash Value from the Investment Funds will be made within seven calendar days after the Transaction Date. Payments or application of proceeds from the Investment Funds can be deferred for any period during which (1) the New York Stock Exchange is closed or trading on it is restricted, (2) sales of securities or determination of the fair value of an Investment Fund's assets is not reasonably practicable because of an emergency, or (3) the SEC, by order, permits us to defer payment in order to protect persons with interest in the Investment Funds. We can defer payment of any portion of the Annuity Account Value in the Guaranteed Period Account (other than for death benefits) for up to six months while you are living. We may also defer payments for any amount attributable to a contribution made in the form of a check for a reasonable amount of time (not to exceed 15 days) to permit the check to clear. ASSIGNMENT The Certificates may be assigned at any time before the Annuity Commencement Date and for any purpose other than as collateral or security for a loan. Equitable Life will not be bound by an assignment unless it is in writing and we have received it at our Processing Office. In some cases, an assignment may have adverse tax consequences. See "Part 8: Tax Aspects of the Certificates." DISTRIBUTION OF THE CERTIFICATES As the distributor of the Certificates, Equitable Distributors, Inc. (EDI), an indirect wholly owned subsidiary of Equitable Life, has responsibility for sales and marketing functions for the Certificates. EDI also serves as the principal underwriter of the Separate Account under the 1940 Act. EDI is registered with the SEC as a broker-dealer under the Exchange Act and is a member of the National Association of Securities Dealers, Inc. EDI's principal business address is 787 Seventh Avenue, New York, New York 10019. The Certificates will be sold by registered representatives of EDI, as well as by unaffiliated broker- dealers with which EDI has entered into selling agreements. Broker-dealer sales compensation (including for EDI and its affiliates) will not exceed six percent of total contributions made under a Certificate. EDI may also receive compensation and reimbursement for its marketing services under the terms of its distribution agreement with Equitable Life. Broker-dealers receiving sales compensation will generally pay a portion thereof to their registered representatives as commission related to sales of the Certificates. The offering of the Certificates is intended to be continuous. 29 PART 6: DEDUCTIONS AND CHARGES CHARGES DEDUCTED FROM THE ANNUITY ACCOUNT VALUE We allocate the entire amount of each contribution to the Investment Options you select, subject to certain restrictions. We then periodically deduct certain amounts from your Annuity Account Value. The charges described below and under "Charges Deducted from the Investment Funds" below will not be increased by us for the life of the Certificates. We may reduce certain charges under group or sponsored arrangements. See "Group or Sponsored Arrangements" below. Charges are deducted proportionately from all the Investment Funds in which your Annuity Account Value is invested on a pro rata basis, except as noted below. Withdrawal Charge A withdrawal charge will be imposed as a percentage of each contribution made to the extent that a withdrawal exceeds the free corridor amount, or if the Certificate is surrendered to receive its Cash Value. We determine the withdrawal charge separately for each contribution in accordance with the table below.
CONTRACT YEAR 1 2 3 4 5 6 7 8+ ------ ------ ------ ------ ------ ------ ------ ----- Percentage of Contribution 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each contribution withdrawn or surrendered. For each contribution, the Contract Year in which we receive that contribution is "Contract Year 1." The withdrawal charge is deducted from the Investment Options from which each such withdrawal is made in proportion to the amount being withdrawn from each Investment Option. Free Corridor Amount The free corridor amount is 15% of the Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during that Contract Year. Any withdrawal requested that exceeds the free corridor amount will be subject to the withdrawal charge. The 15% free corridor amount is not applicable to a surrender. For purposes of calculating the withdrawal charge, (1) we treat contributions as being withdrawn on a first-in first-out basis, and (2) amounts withdrawn up to the free corridor amount are not considered a withdrawal of any contributions. Although we treat contributions as withdrawn before earnings for purposes of calculating the withdrawal charge, the Federal income tax law treats earnings as withdrawn first. See "Part 8: Tax Aspects of the Certificates." The withdrawal charge is to help cover sales expenses. Transfer Charge Currently there is no charge for transfers. We reserve the right to impose a charge in the future at a maximum of $25 for each transfer among the Investment Options in excess of five per Contract Year. Guaranteed Minimum Death Benefit Charge We deduct a charge for providing a minimum death benefit guarantee with respect to the Investment Funds annually on each Processing Date. The charge is equal to 0.35% of the GMDB in effect at such Processing Date. If the amount collected from this charge exceeds the cost of providing the benefits, it will be to our profit, and may be used to pay distribution expenses not recovered from sales charges under the Certificates. Charges for State Premium and Other Applicable Taxes We deduct a charge for applicable taxes, such as state or local premium taxes, that might be imposed in your state. Generally we deduct this charge from the amount applied to provide an income annuity option. In certain states, however, we may deduct the charge for taxes from contributions. The current tax charge that might be imposed varies by state and ranges from 0% to 3.5% (the rate is 1% in Puerto Rico and 5% in the Virgin Islands). CHARGES DEDUCTED FROM THE INVESTMENT FUNDS Mortality and Expense Risk Charge We will deduct a daily charge from the assets in each Investment Fund to compensate us for mortality 30 and expense risks. The daily charge is at the rate of 0.002477%, which is equivalent to an annual rate of 0.90%, on the assets in each Investment Fund. Approximately 0.60% of this annual charge is allocated to the mortality risk and 0.30% is allocated to the expense risk. We will realize a gain from this charge to the extent it is not needed to provide for benefits and expenses under the Certificate. We will use any gain for any lawful purpose including payment of distribution expenses not recovered from sales charges under the Certificate. The mortality risk assumed is the risk that Annuitants as a group will live for a longer time than our actuarial tables predict. As a result, we would be paying more in annuity income than we planned. We also assume a risk that the mortality assumptions reflected in our guaranteed annuity payment tables, shown in each Certificate, will differ from actual mortality experience. Lastly, we assume a mortality risk to the extent that the guaranteed minimum death benefit charge is insufficient to pay any amount by which such death benefit exceeds the Cash Value of the Certificate. The expense risk assumed is the risk that it will cost us more to issue and administer the Certificates than we expect. Asset Based Administrative Charge We will deduct a daily charge from the assets in each Investment Fund, to compensate us for administrative expenses under the Certificates. The daily charge is at a rate of 0.000969% (equivalent to an annual rate of 0.35%) on the assets in each Investment Fund. The asset based administrative charge is not designed to produce a profit for Equitable Life. TRUST CHARGES TO PORTFOLIOS Investment advisory fees charged daily against the Trust's assets, the Rule 12b-1 Plan fee, direct operating expenses of the Trust (such as trustees' fees, expenses of independent auditors and legal counsel, bank and custodian charges and liability insurance), and certain investment-related expenses of the Trust (such as brokerage commissions and other expenses related to the purchase and sale of securities), are reflected in each Portfolio's daily share price. The maximum investment advisory fees paid annually by the Portfolios cannot be changed without a vote by shareholders. They are as follows:
DAILY AVERAGE NET ASSETS ------------------------------------- FIRST NEXT OVER $350 $400 $750 MILLION MILLION MILLION ----------- ----------- ----------- ASSET ALLOCATION SERIES: Conservative Investors ... .550% .525% .500% Growth Investors .......... .550% .525% .500% EQUITY SERIES: Common Stock .............. .400% .375% .350% Global .................... .550% .525% .500% Aggressive Stock .......... .500% .475% .450% FIXED INCOME SERIES: Money Market .............. .400% .375% .350% Intermediate Govt. Securities ................ .500% .475% .450% FIRST NEXT OVER $500 $500 $1 MILLION MILLION BILLION ----------- ----------- ----------- EQUITY SERIES: Growth & Income ........... .550% .525% .500% FIRST NEXT OVER $500 $1 $1.5 MILLION BILLION BILLION ----------- ----------- ----------- EQUITY SERIES: International ............. .900% .850% .800%
Investment advisory fees are established under the Trust's investment advisory agreements between the Trust and its investment adviser, Alliance. All of these fees and expenses are described more fully in the Trust prospectus. GROUP OR SPONSORED ARRANGEMENTS For certain group or sponsored arrangements, we may reduce the withdrawal charge or change the minimum initial contribution requirements. We may also change the guaranteed minimum death benefit. Group arrangements include those in which a trustee or an employer, for example, purchases contracts covering a group of individuals on a group basis. Sponsored arrangements include those in which an employer allows us to sell Certificates to its employees or retirees on an individual basis. Our costs for sales, administration, and mortality generally vary with the size and stability of the group among other factors. We take all these factors into account when reducing charges. To qualify for reduced charges, a group or sponsored arrangement must meet certain requirements, including our requirements for size and number of years in existence. Group or sponsored arrangements that have been set up solely to buy Certificates or that have been in existence less than six months will not qualify for reduced charges. 31 We will make these and any similar reductions according to our rules in effect when a Certificate is approved for issue. We may change these rules from time to time. Any variation in the withdrawal charge will reflect differences in costs or services and will not be unfairly discriminatory. Group and sponsored arrangements may be governed by the Code, the Employee Retirement Income Security Act of 1974 (ERISA), or both. We make no representations as to the impact of those and other applicable laws on such programs. WE RECOMMEND THAT EMPLOYERS, TRUSTEES, AND OTHERS PURCHASING OR MAKING CERTIFICATES AVAILABLE FOR PURCHASE UNDER SUCH PROGRAMS SEEK THE ADVICE OF THEIR OWN LEGAL AND BENEFITS ADVISERS. OTHER DISTRIBUTION ARRANGEMENTS The withdrawal charge may be reduced or eliminated when sales are made in a manner that results in savings of sales and administrative expenses, such as sales through persons who are compensated by clients for recommending investments and receive no commission or reduced commissions in connection with the sale of the Certificates. In no event will a reduction or elimination of the withdrawal charge be permitted where it would be unfairly discriminatory. 32 PART 7: VOTING RIGHTS TRUST VOTING RIGHTS As explained previously, contributions allocated to the Investment Funds are invested in shares of the corresponding Portfolios of the Trust. Since we own the assets of the Separate Account, we are the legal owner of the shares and, as such, have the right to vote on certain matters. Among other things, we may vote: o to elect the Trust's Board of Trustees, o to ratify the selection of independent auditors for the Trust, and o on any other matters described in the Trust's current prospectus or requiring a vote by shareholders under the 1940 Act. Because the Trust is a Massachusetts business trust, annual meetings are not required. Whenever a shareholder vote is taken, we will give Certificate Owners the opportunity to instruct us how to vote the number of shares attributable to their Certificates. If we do not receive instructions in time from all Certificate Owners, we will vote the shares of a Portfolio for which no instructions have been received in the same proportion as we vote shares of that Portfolio for which we have received instructions. We will also vote any shares that we are entitled to vote directly because of amounts we have in an Investment Fund in the same proportions that Certificate Owners vote. Each Trust share is entitled to one vote. Fractional shares will be counted. Voting generally is on a Portfolio-by-Portfolio basis except that shares will be voted on an aggregate basis when universal matters, such as election of Trustees and ratification of independent auditors, are voted upon. However, if the Trustees determine that shareholders in a Portfolio are not affected by a particular matter, then such shareholders generally would not be entitled to vote on that matter. VOTING RIGHTS OF OTHERS Currently, we control the Trust. Trust shares are held by other separate accounts of ours and by separate accounts of insurance companies affiliated and unaffiliated with us. Shares held by these separate accounts will probably be voted according to the instructions of the owners of insurance policies and contracts issued by those insurance companies. While this will dilute the effect of the voting instructions of the Accumulator Certificate Owners, we currently do not foresee any disadvantages arising out of this. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the Trust's response to any of those events insufficiently protects our Certificate Owners, we will see to it that appropriate action is taken to protect our Certificate Owners. SEPARATE ACCOUNT VOTING RIGHTS If actions relating to the Separate Account require Certificate Owner approval, Certificate Owners will be entitled to one vote for each Accumulation Unit they have in the Investment Funds. Each Certificate Owner who has elected a variable annuity payout may cast the number of votes equal to the dollar amount of reserves we are holding for that annuity in the Common Stock Fund divided by the Accumulation Unit Value for the Common Stock Fund. We will cast votes attributable to any amounts we have in the Investment Funds in the same proportion as votes cast by Certificate Owners. CHANGES IN APPLICABLE LAW The voting rights we describe in this prospectus are created under applicable Federal securities laws. To the extent that those laws or the regulations promulgated under those laws eliminate the necessity to submit matters for approval by persons having voting rights in separate accounts of insurance companies, we reserve the right to proceed in accordance with those laws or regulations. 33 PART 8: TAX ASPECTS OF THE CERTIFICATES This prospectus generally covers our understanding of the current Federal income tax rules that apply to an annuity purchased with after-tax dollars (non- qualified annuity). This prospectus does not provide detailed tax information and does not address issues such as state income and other taxes or Federal gift and estate taxes. Please consult a tax adviser when considering the tax aspects of the Accumulator Certificates. TAX CHANGES The United States Congress has in the past considered and may in the future consider proposals for legislation that, if enacted, could change the tax treatment of annuities. In addition, the Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing laws. State tax laws or, if you are not a United States resident, foreign tax laws, may affect the tax consequences to you or the beneficiary. These laws may change from time to time without notice and, as a result, the tax consequences may be altered. There is no way of predicting whether, when or in what form any such change would be adopted. Any such change could have retroactive effects regardless of the date of enactment. We suggest you consult your legal or tax adviser. TAXATION OF NON-QUALIFIED ANNUITIES Equitable Life has designed the Accumulator Certificate to qualify as an "annuity" for purposes of Federal income tax law. Gains in the Annuity Account Value of the Certificate generally will not be taxable to an individual until a distribution occurs, either by a withdrawal of part or all of its value or as a series of periodic payments. However, there are some exceptions to this rule: (1) if a Certificate fails the investment diversification requirements; (2) if an individual transfers a Certificate as a gift to someone other than a spouse (or divorced spouse), any gain in its Annuity Account Value will be taxed at the time of transfer; (3) the assignment or pledge of any portion of the value of a Certificate will be treated as a distribution of that portion of the Certificate; and (4) when an insurance company (or its affiliate) issues more than one non-qualified deferred annuity certificate or contract during any calendar year to the same taxpayer, the certificates or contracts are required to be aggregated in computing the taxable amount of any distribution. Corporations, partnerships, trusts and other non- natural persons generally cannot defer the taxation of current income credited to the Certificate unless an exception under the Code applies. Prior to the Annuity Commencement Date, any withdrawals which do not terminate your total interest in the Certificate are taxable to you as ordinary income to the extent there has been a gain in the Annuity Account Value. The balance of the distribution is treated as a return of the "investment" or "basis" in the Certificate and is not taxable. Generally, the investment or basis in the Certificate equals the contributions made, less any amounts previously withdrawn which were not taxable. Special rules may apply if contributions made to another annuity certificate or contract prior to August 14, 1982 are transferred to a Certificate in a tax-free exchange. To take advantage of these rules, you should notify us prior to such an exchange. If you surrender or cancel the Certificate, the distribution is taxable to the extent it exceeds the investment in the Certificate. Once annuity payments begin, a portion of each payment is considered to be a tax-free recovery of investment based on the ratio of the investment to the expected return under the Certificate. The remainder of each payment will be taxable. In the case of a variable annuity, special rules apply if the payments received in a year are less than the amount permitted to be recovered tax-free. In the case of a life annuity, after the total investment has been recovered, future payments are fully taxable. If payments cease as a result of death, a deduction for any unrecovered investment will be allowed. The taxable portion of a distribution is treated as ordinary income and is subject to income tax withholding. See "Federal and State Income Tax Withholding" below. In addition, a penalty tax of 10% applies to the taxable portion of a distribution unless the distribution is (1) made on or after the date the taxpayer attains age 59 1/2 , (2) made on or after your death, (3) attributable to the disability of the taxpayer, (4) part of a series of substantially equal installments as an annuity for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and a beneficiary, or (5) with respect to income allocable to amounts contributed to an annuity certificate or contract prior to August 14, 1982 which are transferred to the Certificate in a tax-free exchange. 34 If, as a result of the Annuitant's death, the beneficiary is entitled to receive the death benefit described in Part 5, the beneficiary is generally subject to the same tax treatment as would apply to you, had you surrendered the Certificate (discussed above). If the beneficiary elects to take the death benefit in the form of a life income or installment option, the election should be made within 60 days after the day on which a lump sum death benefit first becomes payable and before any benefit is actually paid. The tax computation will reflect your investment in the Certificate. The Certificate provides a minimum guaranteed death benefit that in certain circumstances may be greater than either the contributions made or the Annuity Account Value. This provision provides investment protection against an untimely termination of a Certificate on the death of an Annuitant at a time when the Certificate's Annuity Account Value might otherwise have provided a lower benefit. Although we do not believe that the provision of this benefit should have any adverse tax effect, it is possible that the IRS could take a contrary position and could assert that some portion of the charges for the minimum guaranteed death benefit should be treated for Federal income tax purposes as a partial withdrawal from the Certificate. If this were so, such a deemed withdrawal could be taxable, and for Certificate Owners under age 59 1/2 , also subject to tax penalty. FEDERAL AND STATE INCOME TAX WITHHOLDING Equitable Life is required to withhold Federal income tax on the taxable portion of annuity payments, unless the recipient elects not to be subject to income tax withholding. The rate of withholding will depend on the type of distribution and, in certain cases, the amount of the distribution. Special withholding rules apply to foreign recipients and United States citizens residing outside the United States. If a recipient does not have sufficient income tax withheld or does not make sufficient estimated income tax payments, however, the recipient may incur penalties under the estimated income tax rules. Recipients should consult their tax advisers to determine whether they should elect out of withholding. Requests not to withhold Federal income tax must be made in writing prior to receiving benefits under the Certificate. Our Processing Office will provide forms for this purpose. No election out of withholding is valid unless the recipient provides us with the correct taxpayer identification number and a United States residence address. Certain states have indicated that income tax withholding will apply to payments made from the Certificate to residents. In some states, a recipient may elect out of state withholding. Generally, an election out of Federal withholding will also be considered an election out of state withholding. If you need more information concerning a particular state or any required forms, call our Processing Office at the toll-free number and consult your tax adviser. Periodic payments are generally subject to wage- bracket type withholding (as if such payments were payments of wages by an employer to an employee) unless the recipient elects no withholding. If a recipient does not elect out of withholding or does not specify the number of withholding exemptions, withholding will generally be made as if the recipient is married and claiming three withholding exemptions. There is an annual threshold of taxable income from periodic annuity payments which is exempt from withholding based on this assumption. For 1996, a recipient of periodic payments (e.g., monthly or annual payments) which total less than a $14,075 taxable amount will generally be exempt from Federal income tax withholding, unless the recipient specifies a different choice of withholding exemption. A withholding election may be revoked at any time and remains effective until revoked. If a recipient fails to provide a correct taxpayer identification number, withholding is made as if the recipient is single with no exemptions. A recipient of a non-periodic distribution (total or partial) will generally be subject to withholding at a flat 10% rate. A recipient who provides a United States residence address and a correct taxpayer identification number will generally be permitted to elect not to have tax withheld. All recipients receiving periodic and non-periodic payments will be further notified of the withholding requirements and of their right to make withholding elections. OTHER WITHHOLDING As a general rule, if death benefits are payable to a person two or more generations younger than you, a Federal generation skipping tax may be payable with respect to the benefit at rates similar to the maximum estate tax rate in effect at the time. The generation skipping tax provisions generally apply to transfers which would also be subject to the gift and estate tax rules. Individuals are generally allowed an aggregate generation skipping tax exemption of $1 million. Because these rules are complex, you should consult with your tax adviser for specific information, especially where benefits are passing to younger generations, as opposed to a spouse or child. 35 If we believe a benefit may be subject to generation skipping tax we may be required to withhold for such tax unless we receive acceptable written confirmation that no such tax is payable. SPECIAL RULES FOR CERTIFICATES ISSUED IN PUERTO RICO Under current law Equitable Life treats income from Accumulator Certificates as U.S.-source. A Puerto Rico resident is subject to U.S. taxation on such U.S.-source income. Only Puerto Rico-source income of Puerto Rico residents is excludable from U.S. taxation. Income from Accumulator Certificates is also subject to Puerto Rico tax. The computation of the taxable portion of amounts distributed from a Certificate may differ in the two jurisdictions. Therefore, an individual might have to file both U.S. and Puerto Rico tax returns, showing different amounts of income for each. Puerto Rico generally provides a credit against Puerto Rico tax for U.S. tax paid. Depending on an individual's personal situation and the timing of the different tax liabilities, an individual may not be able to take full advantage of this credit. Please consult your tax adviser to determine the applicability of these rules to your own tax situation. IMPACT OF TAXES TO EQUITABLE LIFE The Certificates provide that Equitable Life may charge the Separate Account for taxes. Equitable Life can set up reserves for such taxes. TRANSFERS AMONG INVESTMENT OPTIONS Transfers among the Investment Funds or between the Guaranteed Period Account and one or more Investment Funds are not taxable. 36 PART 9: KEY FACTORS IN RETIREMENT PLANNING INTRODUCTION The Accumulator is available to help meet the retirement income and investment needs of individuals. In assessing these retirement needs, some key factors need to be addressed: (1) the impact of inflation on fixed retirement incomes; (2) the importance of planning early for retirement; (3) the benefits of tax-deferral; (4) the selection of an appropriate investment strategy; and (5) the benefit of annuitization. Each of these factors is addressed below. Unless otherwise noted, all of the following presentations use an assumed annual rate of return of 7.5% compounded annually. This rate of return is for illustrative purposes only and is not intended to represent an expected or guaranteed rate of return for any investment vehicle, including the Accumulator. In addition, unless otherwise noted, none of the illustrations reflect any charges that may be applied under a particular investment vehicle, including the Accumulator. Such charges would effectively reduce the actual return under any investment vehicle. All earnings in these presentations are assumed to accumulate tax-deferred unless otherwise noted. Most programs designed for retirement savings offer tax-deferral. Monies are taxed upon withdrawal and a 10% penalty tax may apply to premature withdrawals. Certain retirement programs prohibit early withdrawals. See "Part 8: Tax Aspects of the Certificates." Where taxes are taken into consideration in these presentations, a 28% tax rate is assumed. The source of the data used by us to compile the charts which appear in this Part 9 (other than charts 1, 2, 3, 4 and 7) is Ibbotson Associates, Inc. Chicago. Stocks, Bonds, Bills and Inflation 1996 Yearbook (TM). All rights reserved. In reports or other communications or in advertising material we may make use of these or other graphic or numerical illustrations that we prepare showing the impact of inflation, planning early for retirement, tax-deferral, diversification and other concepts important to retirement planning. INFLATION Inflation erodes purchasing power. This means that, in an inflationary period, the dollar is worth less as time passes. Because many people live on a fixed income during retirement, inflation is of particular concern to them. The charts that follow illustrate the detrimental impact of inflation over an extended period of time. Between 1965 and 1995, the average annual inflation rate was 5.39%. As demonstrated in Chart 1, this 5.39% annual rate of inflation would cause the purchasing power of $35,000 to decrease to only $7,246 after 30 years. In Chart 2, the impact of inflation is examined from another perspective. Specifically, the chart illustrates the additional income needed to maintain the purchasing power of $35,000 over a thirty year period. Again, the 1965-1995 historical inflation rate of 5.39% is used. In this case, an additional $134,064 would be required to maintain the purchasing power of $35,000 after 30 years. CHART 1 [THE FOLLOWING TABLE WAS REPRESENTED AS A 3-D BAR GRAPH IN THE PROSPECTUS] Today -- $35,000 10 years -- $20,705 20 years -- $12,248 30 years -- $ 7,246 [END OF GRAPHICALLY REPRESENTED DATA] CHART 2 ANNUAL INCOME NEEDED [THE FOLLOWING TABLE WAS REPRESENTED AS A 3-D BAR GRAPH IN THE PROSPECTUS] Today -- $ 35,000 10 years -- $ 59,165 20 years -- $100,013 30 years -- $169,064 Increase Needed: $24,165 $65,013 $134,064 [END OF GRAPHICALLY REPRESENTED DATA] 37 STARTING EARLY The impact of inflation accentuates the need to begin a retirement program early. The value of starting early is illustrated in the following charts. As shown in Chart 3, if an individual makes annual contributions of $2,500 to his or her retirement program beginning at age 30, he or she would accumulate $414,551 by age 65 under the assumptions described earlier. If that individual waited until age 50, he or she would only accumulate $70,193 by age 65 under the same assumptions. CHART 3 [THE FOLLOWING TABLE WAS REPRESENTED AS A STACKED AREA GRAPH IN THE PROSPECTUS:] 30 ................. $414,551 40 ................. $182,691 50 ................. $ 70,193 BLACK - Age 30 GRAY - Age 40 DOTTED - Age 50 [END OF GRAPHICALLY REPRESENTED DATA] In Table 1, the impact of starting early is demonstrated in another format. For example, if an individual invests $300 monthly, he or she would accumulate $387,193 in thirty years under our assumptions. In contrast, if that individual invested the same $300 per month for 15 years, he or she would accumulate only $97,804 under our assumptions. TABLE 1
MONTHLY CONTRIBUTION YEAR 10 YEAR 15 YEAR 20 YEAR 25 YEAR 30 - -------------- -------- -------- --------- --------- --------- $ 20 $ 3,532 $ 6,520 $ 10,811 $ 16,970 $ 25,813 50 8,829 16,301 27,027 42,425 64,532 100 17,659 32,601 54,053 84,851 129,064 200 35,317 65,202 108,107 169,701 258,129 300 52,969 97,804 162,160 254,552 387,193
Chart 4 presents an additional way to demonstrate the significant impact of starting to make contributions to a retirement program earlier rather than later. It assumes that an individual had a goal to accumulate $250,000 (pre-tax) by age 65. If he or she starts at age 30, under our assumptions he or she could reach the goal by making a monthly pre-tax contribution of $130 (equivalent to $93 after taxes). The total net cost for the 30 year old in this hypothetical example would be $39,265. If the individual in this hypothetical example waited until age 50, he or she would have to make a monthly pre-tax contribution of $767 (equivalent to $552 after taxes) to attain the goal, illustrating the importance of starting early. CHART 4 GOAL: $250,000 BY AGE 65 [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PROSPECTUS:] $ 93 a Month ............. 30 $39,265 $210,735 $212 a Month ............. 40 $63,641 $186,359 $552 a Month ............. 50 $99,383 $150,617 BLACK - Net Cost WHITE - Tax-Deferred Earnings at 7.5% [END OF GRAPHICALLY REPRESENTED DATA] TAX-DEFERRAL Contributing to a retirement plan early is part of an effective strategy for addressing the impact of inflation. Another part of such a strategy is to carefully select the types of retirement programs in which to invest. In deciding where to invest retirement contributions, there are three basic types of programs. The first type offers the most tax benefits, and therefore is potentially the most beneficial for accumulating funds for retirement. Contributions are made with pre-tax dollars or are tax-deductible and earnings grow income tax-deferred. An example of this type of program is the deductible Individual Retirement Annuity (IRA). The second type of program also provides for tax deferred earnings growth; however, contributions are made with after-tax dollars. Examples of this type of program are non-deductible IRAs and non- qualified annuities. The third approach to retirement savings is fully taxable. Contributions are made with after-tax dollars and earnings are taxed each year. Examples of this type of program include certificates of deposit, savings accounts, and taxable stock, bond or mutual fund investments. 38 Consider an example. For the type of retirement program that offers both pre-tax contributions and tax-deferral, assume that a $2,000 annual pre-tax contribution is made for thirty years. In this example, the retirement funds would be $173,100 after thirty years (assuming a 7.5% rate of return, no withdrawals and assuming the deduction of the 1.25% Separate Account daily asset charge--but no withdrawal charge or other charges under the Certificate, or Trust charges to Portfolios), and such funds would be $222,309 without the effect of any charges. Assuming a lump sum withdrawal was made in year thirty and a 28% tax bracket, these amounts would be $124,632 and $160,062, respectively. For the type of program that offers only tax-deferral, assume an after-tax annual contribution of $1,440 for thirty years and the same rate of return. The after-tax contribution is derived by taxing the $2,000 pre-tax contribution again assuming a 28% tax bracket. In this example, the retirement funds would be $123,938 after thirty years assuming the deduction of charges and no withdrawals, and $160,062 without the effect of charges. Assuming a lump sum withdrawal in year thirty, the total after-tax amount would be $101,331 with charges deducted and $127,341 without charges as described above. For the fully taxable investment, assume an after- tax contribution of $1,440 for thirty years. Earnings are taxed annually. After thirty years, the amount of this fully taxable investment is $108,046. Keep in mind that taxable investments have fees and charges too (investment advisory fees, administrative charges, 12b-1 fees, sales loads, brokerage commissions, etc.). We have not attempted to apply these fees and charges to the fully taxable amounts since this is intended merely as an example of tax deferral. Again, it must be emphasized that the assumed rate of return of 7.5% compounded annually used in these examples is for illustrative purposes only and is not intended to represent a guaranteed or expected rate of return on any investment vehicle. Moreover, early withdrawals of tax-deferred investments are generally subject to a 10% penalty tax. INVESTMENT OPTIONS Selecting an appropriate retirement program is clearly an important part of an effective retirement planning strategy. Carefully choosing among Investment Options is another essential component. During the 1965-1995 period, common stock average annual returns outperformed the average annual returns of fixed investments such as long-term government bonds and Treasury Bills (T-Bills). See "Notes" below. Common stocks earned an average annual return of 10.68% over this period, in contrast to 6.72% and 7.92% for the other two investment categories. Significantly, common stock returns also outpaced inflation which grew at 5.39% over this period. Although common stock returns have historically outpaced returns of fixed investments, people often allocate a significant percentage of their retirement funds to fixed return investments. Their primary concern is the preservation of principal. Given this concern, Chart 5 illustrates the impact of exposing only the interest generated by a fixed investment to the stock market. In this illustration, the fixed investment is represented by a Treasury Bill return and the stock investment is represented by the Standard & Poor's 500 ("S&P 500"). The chart assumes that a $20,000 fixed investment was made on January 1, 1980. If the interest on that investment were to accumulate based upon the return of the S&P 500, the total investment would have been worth $131,033 in 1995. Had the interest been reinvested in the fixed investment, the fixed investment would have grown to $62,379. As illustrated in Chart 5, significant opportunities for growth exist while preserving principal. See "Notes" below. CHART 5 Market Value Market Value Month of S&P 500 If 100% in Ending & Fixed Acct 3 Mo. T-Bill 1980 J 20,160 20,160 F 20,338 20,339 M 20,547 20,586 A 20,823 20,845 M 21,031 21,014 J 21,183 21,142 J 21,369 21,254 A 21,515 21,390 S 21,708 21,550 O 21,930 21,755 N 22,333 21,964 D 22,522 22,252 1981 J 22,619 22,483 F 22,888 22,724 M 23,239 22,999 A 23,386 23,247 M 23,637 23,514 J 23,878 23,832 J 24,129 24,127 A 24,156 24,436 S 24,196 24,739 O 24,659 25,039 N 25,079 25,306 D 25,118 25,527 1982 J 25,195 25,731 F 25,113 25,968 M 25,278 26,222 A 25,722 26,518 M 25,770 26,799 J 25,861 27,057 J 25,945 27,341 A 26,850 27,549 S 27,028 27,689 O 27,937 27,852 N 28,411 28,028 D 28,690 28,216 1983 J 29,131 28,410 F 29,492 28,587 M 29,965 28,767 A 30,862 28,971 M 30,943 29,171 J 31,495 29,366 J 31,284 29,584 A 31,627 29,808 S 31,938 30,035 O 31,930 30,263 N 32,348 30,475 D 32,418 30,698 1984 J 32,490 30,931 F 32,222 31,150 M 32,577 31,378 A 32,826 31,632 M 32,297 31,879 J 32,719 32,118 J 32,701 32,381 A 34,295 32,650 S 34,470 32,931 O 34,708 33,260 N 34,705 33,503 D 35,205 33,717 1985 J 36,503 33,936 F 36,845 34,133 M 37,000 34,345 A 37,089 34,592 M 38,272 34,820 J 38,673 35,012 J 38,748 35,229 A 38,744 35,423 S 38,262 35,635 O 39,208 35,867 N 40,706 36,086 D 41,803 36,320 1986 J 42,011 36,524 F 43,792 36,717 M 45,230 36,938 A 45,021 37,130 M 46,493 37,312 J 47,036 37,506 J 45,602 37,701 A 47,609 37,874 S 45,430 38,045 O 46,935 38,220 N 47,703 38,369 D 47,070 38,557 1987 J 50,789 38,719 F 52,147 38,885 M 53,115 39,068 A 52,912 39,240 M 53,327 39,389 J 55,086 39,578 J 56,925 39,760 A 58,441 39,947 S 57,685 40,127 O 49,695 40,367 N 47,333 40,509 D 49,428 40,667 1988 J 50,743 40,785 F 52,280 40,972 M 51,393 41,152 A 51,824 41,342 M 52,174 41,553 J 53,765 41,756 J 53,732 41,969 A 52,733 42,217 S 54,245 42,478 O 55,302 42,738 N 54,915 42,981 D 55,673 43,252 1989 J 58,362 43,490 F 57,529 43,755 M 58,548 44,048 A 60,672 44,343 M 62,465 44,694 J 62,377 45,011 J 66,323 45,326 A 67,365 45,662 S 67,310 45,958 O 66,344 46,271 N 67,446 46,590 D 68,687 46,874 1990 J 65,533 47,142 F 66,234 47,410 M 67,578 47,714 A 66,541 48,043 M 71,214 48,370 J 70,982 48,674 J 70,955 49,005 A 66,481 49,329 S 64,314 49,625 O 64,286 49,962 N 67,252 50,247 D 68,667 50,548 1991 J 70,922 50,811 F 74,664 51,055 M 76,053 51,280 A 76,316 51,552 M 78,820 51,794 J 76,216 52,011 J 78,945 52,266 A 80,422 52,507 S 79,523 52,748 O 80,405 52,970 N 78,042 53,176 D 84,752 53,378 1992 J 83,616 53,560 F 84,486 53,710 M 83,290 53,892 A 85,196 54,065 M 85,604 54,216 J 84,717 54,390 J 87,387 54,558 A 86,078 54,700 S 86,890 54,842 O 87,176 54,969 N 89,486 55,095 D 90,453 55,249 1993 J 91,013 55,376 F 92,016 55,498 M 93,614 55,637 A 91,858 55,770 M 93,843 55,893 J 94,136 56,033 J 93,836 56,167 A 96,699 56,308 S 96,183 56,454 O 97,774 56,578 N 97,093 56,720 D 98,087 56,850 1994 J 100,753 56,992 F 98,615 57,112 M 95,249 57,266 A 96,281 57,421 M 97,589 57,605 J 95,734 57,783 J 98,297 57,945 A 101,558 58,159 S 99,666 58,375 O 101,566 58,596 N 98,647 58,813 D 99,883 59,072 1995 J 102,044 59,320 F 105,307 59,557 M 107,925 59,831 A 110,571 60,095 M 114,257 60,419 J 116,566 60,703 J 119,871 60,976 A 120,235 61,263 S 124,521 61,526 O 124,249 61,816 N 128,920 62,075 D 131,033 63,379 $62,379 Without Interest Exposed to Stock Market (S&P 500) [END OF GRAPHICALLY REPRESENTED DATA] Another variation of the example in Chart 5 is to gradually transfer principal from a fixed investment into the stock market. Chart 6 assumes that a $20,000 fixed investment was made on January 1, 1980. For the next two years, $540 is transferred monthly into the stock market (represented by the S&P 500). The total investment, given this strategy, would have grown to $139,695 in 1995. In contrast, had the principal not been transferred, the fixed investment would have grown to $62,379. See "Notes" below. 39 CHART 6 $139,695 with Principal Transfer [THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PROSPECTUS] Market Value Market Value Month of S&P 500 If 100% in Ending & Fixed Acct 3 Mo. T-Bil 1980 J 20540 20160 F 20702 20339 M 20770 20586 A 21068 20845 M 21425 21014 J 21659 21142 J 22000 21254 A 22149 21390 S 22394 21550 O 22623 21755 N 23446 21964 D 23372 22252 1981 J 23246 22483 F 23569 22724 M 24053 22999 A 24031 23247 M 24246 23514 J 24324 23832 J 24514 24127 A 24051 24436 S 23651 24739 O 24397 25039 N 25087 25306 D 24857 25527 1982 J 24193 25731 F 23594 25968 M 23618 26222 A 24248 26518 M 23995 26799 J 23892 27057 J 23731 27341 A 25407 27549 S 25647 27689 O 27281 27852 N 28031 28028 D 28386 28216 1983 J 29041 28410 F 29568 28587 M 30282 28767 A 31737 28971 M 31721 29171 J 32549 29366 J 32000 29584 A 32424 29808 S 32790 30035 O 32616 30263 N 33176 30475 D 33142 30698 1984 J 33104 30931 F 32544 31150 M 32969 31378 A 33202 31632 M 32246 31879 J 32767 32118 J 32593 32381 A 34841 32650 S 34959 32931 O 35133 33260 N 35058 33503 D 35692 33717 1985 J 37434 33936 F 37844 34133 M 37970 34345 A 37984 34592 M 39531 34820 J 40023 35012 J 40038 35229 A 39976 35423 S 39254 35635 O 40428 35867 N 42341 36086 D 43701 36320 1986 J 43926 36524 F 46184 36717 M 47968 36938 A 47659 37130 M 49498 37312 J 50136 37506 J 48265 37701 A 50769 37874 S 47982 38045 O 49830 38220 N 50767 38369 D 49918 38557 1987 J 54519 38719 F 56165 38885 M 57317 39068 A 57035 39240 M 57525 39389 J 59630 39578 J 61849 39760 A 63662 39947 S 62711 40127 O 52932 40367 N 50090 40509 D 52585 40667 1988 J 54165 40785 F 55951 40972 M 54862 41152 A 55344 41342 M 55720 41553 J 57582 41756 J 57509 41969 A 56280 42217 S 58018 42478 O 59225 42738 N 58749 42981 D 59588 43252 1989 J 62695 43490 F 61691 43755 M 62824 44048 A 65234 44343 M 67232 44694 J 67118 45011 J 71581 45326 A 72728 45662 S 72661 45958 O 71544 46271 N 72760 46590 D 74150 46874 1990 J 70617 47142 F 71385 47410 M 72851 47714 A 71676 48043 M 76833 48370 J 76576 48674 J 76526 49005 A 71611 49329 S 69246 49625 O 69192 49962 N 72438 50247 D 73964 50548 1991 J 76420 50811 F 80470 51055 M 81977 51280 A 82241 51552 M 84947 51794 J 82165 52011 J 85076 52266 A 86666 52507 S 85709 52748 O 86662 52970 N 84157 53176 D 91300 53378 1992 J 90106 53560 F 91047 53710 M 89770 53892 A 91798 54065 M 92244 54216 J 91302 54390 J 94130 54558 A 92765 54700 S 93626 54842 O 93940 54969 N 96377 55095 D 97388 55249 1993 J 97994 55376 F 99055 55498 M 100732 55637 A 98899 55770 M 100989 55893 J 101297 56033 J 100991 56167 A 103992 56308 S 103458 56454 O 105136 56578 N 104425 56720 D 105474 56850 1994 J 108259 56992 F 106046 57112 M 102533 57266 A 103617 57421 M 104976 57605 J 103062 57783 J 105741 57945 A 109118 58159 S 107170 58375 O 109151 58596 N 106146 58813 D 107426 59072 1995 J 109681 59320 F 113071 59557 M 115775 59831 A 118526 60095 M 122319 60419 J 124733 60703 J 128155 60976 A 128547 61263 S 132973 61526 O 132710 61816 N 137525 62075 D 139695 62379 $62,379 Without Principal Transfer [END OF GRAPHICALLY REPRESENTED DATA] NOTES 1. Common Stocks: Standard & Poor's (S&P) Composite Index is an unmanaged weighted index of the stock performance of 500 industrial, transportation, utility and financial companies. Results shown assume reinvestment of dividends. Both market value and return on common stock will vary. 2. U.S. Government Securities: Long-term Government Bonds are measured using a one-bond portfolio constructed each year containing a bond with approximately a 20-year maturity and a reasonably current coupon. U.S. Treasury Bills are measured by rolling over each month a one-bill portfolio containing, at the beginning of each month, the bill having the shortest maturity not less than one month. U.S. Government securities are guaranteed as to principal and interest, and if held to maturity, offer a fixed rate of return. However, market value and return on such securities will fluctuate prior to maturity. The Accumulator can be an effective program for diversifying ongoing investments between various asset categories. In addition, the Accumulator offers special features which help address the risk associated with timing the equity markets, such as dollar cost averaging. By transferring the same dollar amount each month from the Money Market Fund to other Investment Funds, dollar cost averaging attempts to shield your investment from short term price fluctuations. This, however, does not assure a profit or protect against a loss in declining markets. THE BENEFIT OF ANNUITIZATION An individual may shift the risk of outliving his or her principal by electing a lifetime income annuity. See "Income Annuity Options," in Part 5. Chart 7 below shows the monthly income that can be generated under various forms of life annuities, as compared to receiving level payments of interest only or principal and interest from the investment. Calculations in the Chart are based on the following assumption: a $100,000 contribution was made at one of the ages shown, annuity payments begin immediately, and a 5% annuitization interest rate is used. For purposes of this example, principal and interest are paid out on a level basis over 15 years. In the case of the interest only scenario, the principal is always available and may be left to other individuals at death. Under the principal and interest scenario, a portion of the principal will be left at death, assuming the individual dies within the 15 year period. In contrast, under the life annuity scenarios, there is no residual amount left. CHART 7 MONTHLY INCOME ($100,000 CONTRIBUTION)
JOINT AND SURVIVOR* ----------------------------------- INTEREST PRINCIPAL AND ONLY FOR INTEREST FOR SINGLE 50% TO 66.67% TO 100% TO ANNUITANT LIFE 15 YEARS LIFE SURVIVOR SURVIVOR SURVIVOR - ----------- ---------- -------------- -------- ---------- ----------- ---------- Male 65 $401 $785 $ 617 $560 $544 $513 Male 70 401 785 685 609 588 549 Male 75 401 785 771 674 646 598 Male 80 401 785 888 760 726 665 Male 85 401 785 1,045 878 834 757
- ------------ The numbers are based on 5% interest compounded annually and the 1983 Individual Annuity Mortality Table "a" projected with modified Scale G. Annuity purchase rates available at annuitization may vary, depending primarily on the annuitization interest rate, which may not be less than an annual rate of 2.5%. * The Joint and Survivor Annuity Forms are based on male and female Annuitants of the same age. 40 PART 10: INDEPENDENT ACCOUNTANTS The consolidated financial statements and consolidated financial statement schedules of Equitable Life at December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 included in Equitable Life's Annual Report on Form 10-K, incorporated by reference in the prospec- tus, have been examined by Price Waterhouse LLP, independent accountants, whose reports thereon are incorporated herein by reference. Such consolidated financial statements and consolidated financial statement schedules have been incorporated herein by reference in reliance upon the reports of Price Waterhouse LLP given upon their authority as experts in accounting and auditing. 41 APPENDIX I: MARKET VALUE ADJUSTMENT EXAMPLE - ----------------------------------------------------------------------------- The example below shows how the market value adjustment would be determined and how it would be applied to a withdrawal, assuming that $100,000 were allocated on February 15, 1997 to a Guarantee Period with an Expiration Date of February 15, 2006 at a Guaranteed Rate of 7.00% resulting in a Maturity Value at the Expiration Date of $183,846, and further assuming that a withdrawal of $50,000 were made on February 15, 2001.
ASSUMED GUARANTEED RATE ON FEBRUARY 15, 2001 ---------------------- 5.00% 9.00% ---------- ---------- As of February 15, 2001 (Before Withdrawal) - ------------------------------------------- (1) Present Value of Maturity Value, also Annuity Account Value .................. $144,048 $119,487 (2) Guaranteed Period Amount ............... 131,080 131,080 (3) Market Value Adjustment: (1)-(2) ...... 12,968 (11,593) February 15, 2001 (After Withdrawal) - ------------------------------------------- (4) Portion of (3) Associated with Withdrawal: (3) x [$50,000 / (1)] $ 4,501 $ (4,851) (5) Reduction in Guaranteed Period Amount: [$50,000-(4)] ........... 45,499 54,851 (6) Guaranteed Period Amount: (2)-(5) ..... 85,581 76,229 (7) Maturity Value ......................... 120,032 106,915 (8) Present Value of (7), also Annuity Account Value .................. 94,048 69,487
You should note that under this example if a withdrawal is made when rates have increased (from 7.00% to 9.00% in the example), a portion of a negative market value adjustment is realized. On the other hand, if a withdrawal is made when rates have decreased (from 7.00% to 5.00% in the example), a portion of a positive market value adjustment is realized. 42 APPENDIX II: GUARANTEED MINIMUM DEATH BENEFIT (GMDB) EXAMPLE - ----------------------------------------------------------------------------- Under the Certificates the death benefit is equal to the sum of: (1) the Annuity Account Value in the Investment Funds, or, if greater, the GMDB (see "Guaranteed Minimum Death Benefit (GMDB)" in Part 5); and (2) the death benefit provided with respect to the Guaranteed Period Account (see "Death Benefit Amount" in Part 4). The following is an example illustrating the calculation of the GMDB. Assuming $100,000 is allocated to the Investment Funds (with no allocation to the Money Market Fund or Intermediate Government Securities Fund), no subsequent contributions, no transfers and no withdrawals, the GMDB for an Annuitant age 45 would be calculated as follows:
END OF CONTRACT ANNUITY ACCOUNT NON-NEW YORK YEAR VALUE GMDB(1) NEW YORK GMDB - ---------- --------------- -------------- ------------- 1 $105,000 $106,000 $105,000(2) 2 $108,675 $112,360 $108,675(2) 3 $124,976 $119,102 $119,102(3) 4 $135,912 $126,248 $126,248(3) 5 $149,503 $133,823 $133,823(3) 6 $149,503 $141,852 $141,852(3) 7 $161,463 $150,363 $150,363(3) 8 $161,463 $159,385 $159,385(3)
The Annuity Account Values for Contract Years 1 through 8 are determined based on hypothetical rates of return of 5.00%, 3.50%, 15.00%, 8.75%, 10.00%, 0.00%, 8.00% and 0.00%, respectively. NON-NEW YORK (1) For Contract Years 1 through 8, the GMDB equals the initial contribution increased by 6%. NEW YORK (2) At the end of Contract Years 1 and 2, the GMDB is equal to the Annuity Account Value. (3) At the end of Contract Years 3, through 8, the GMDB is equal to the contributions increased by 6% instead of the Annuity Account Value, since the GMDB cannot be greater than this amount. 43 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
PAGE -------- Part 1: Accumulation Unit Values 2 Part 2: Annuity Unit Values 2 Part 3: Custodian and Independent Accountants 3 Part 4: Money Market Fund and Intermediate Government 3 Securities Fund Yield Information Part 5: Long-Term Market Trends 4 Part 6: Financial Statements 6
HOW TO OBTAIN AN ACCUMULATOR STATEMENT OF ADDITIONAL INFORMATION Send this request form to: Equitable Life Income Management Group P.O. Box 1547 Secaucus, NJ 07096-1547 Please send me an Accumulator SAI: --------------------------------------------------------- Name --------------------------------------------------------- Address --------------------------------------------------------- City State Zip 44 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The estimated expenses of issuance and distribution of the certificates are as follows:
Amount ------ Securities and Exchange Commission Registration Fee $68,966 Printing Expenses $92,750 Accounting Fees and Expenses $45,000 Legal Fees and Miscellaneous Expenses $200,000 Total Expenses $406,716
Item 15. Indemnification of Directors and Officers Equitable Life's by-laws provide, in Article VII, as follows: 7.5 Indemnification of Directors, Officers and Employees. (a) To the extent permitted by the law of the State of New York and subject to all applicable requirements thereof: (i) any person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate, is or was a director, officer or employee of the Company shall be indemnified by the Company; (ii) any person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate serves or served any other organization in any capacity at the request of the Company may be indemnified by the Company; and (iii) the related expenses of any such person in any of said categories may be advanced by the Company (b) To the extent permitted by the law of the State of New York, the Company may provide for further indemnification or advancement of expenses by resolution of shareholders of the Company or the Board of Directors, by amendment of these By-Laws, or by agreement. {Business Corporation Law [section][section] 721 -726; Insurance Law [section]1216} The directors and officers of Equitable Life are insured under policies issued by Lloyd's of London, X. L. Insurance Company and ACE Insurance Company. The annual limit on such policies is $100 million, and the policies insure the officers and directors against certain liabilities arising out of their conduct in such capacities. Item 16. Exhibits Exhibits No. (1) (a) Form of Distribution Agreement by and among Equitable Distributors, Inc., Separate Account Nos. 45 and 49 of Equitable Life and Equitable Life Assurance Society of the United States. (b) Form of Sales Agreement among Equitable Distributors, Inc. as Distributor, a Broker-Dealer (to be named) and a General Agent (to be named). (c) Form of The Hudson River Trust Sales Agreement by and among The Equitable Life Assurance Society of the United States, Equitable Distributors, Inc. and Separate Account No. 49 of The Equitable Life Assurance Society of the United States. (2) Not applicable. (4) (a) Form of group annuity contract no. 1050-94IC, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (b) Form of group annuity certificate nos. 94ICA and 94ICB, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (c) Forms of endorsement nos. 94ENIRAI, 94ENNQI and 94ENMVAI to contract no. 1050-94IC and data pages no. 94ICA/BIM(IRA), (NQ), (NQ Plan A) and (NQ Plan B), previously filed with this Registration Statement No. 33-88456 on February 3, 1995. (d) Forms of application used with the IRA, NQ and Fixed Annuity Markets, previously filed with this Registration Statement No. 33-88456 on February 3, 1995. (e) Form of endorsement no. 95ENLCAI to contract no. 1050-94IC and data pages no. 94ICA/BLCA, previously filed with this Registration Statement No. 33-88456 on April 10, 1995. (f) Forms of data pages for Rollover IRA, IRA Assured Payment Option, IRA Assured Payment Option Plus, Accumulator, Assured Growth Plan, Assured Growth Plan (Flexible Income Program), Assured Payment Plan (Period Certain) and Assured Payment Plan (Life with a Period Certain), previously filed with this Registration Statement No. 33-88456 on August 31, 1995. (g) Forms of data pages for Rollover IRA, IRA Assured Payment Option, IRA Assured Payment Option Plus, Accumulator, Assured Growth Plan and Assured Payment Plan (Life Annuity with a Period Certain), previously filed with this Registration Statement No. 33-88456 on April 23, 1996. 2 Exhibits No. (h) Form of Separate Account Insulation Endorsement for the Endorsement Applicable to Market Value Adjustment Terms, previously filed with this Registration Statement No. 33-88456 on April 23, 1996. (i) Forms of Guaranteed Minimum Death Benefit Endorsements (and applicable data page for Rollover IRA) for Endorsement Applicable to Market Value Adjustment Terms and for the Life Contingent Annuity Endorsement, previously filed with this Registration Statement No. 33- 88456 on April 23, 1996. (j) Forms of Enrollment Form/Application for Rollover IRA, Choice Income Plan, Assured Growth Plan, Accumulator and Assured Payment Plan, previously filed with this Registration Statement No. 33-88456 on April 23, 1996. (k) Forms of data pages for the Accumulator. (l) Forms of data pages for the Rollover IRA. (5) (a) Opinion and Consent of Jonathan E. Gaines, Esq., Vice President and Associate General Counsel of Equitable, as to the legality of the securities being registered, previously filed with this Registration Statement No. 33-88456 on January 17, 1995. (b) Copy of the Internal Revenue Service determination letter regarding qualification under Section 401 of the Internal Revenue Code, previously filed with this Registration Statement No. 33-88456 on August 31, 1995. (8) Not applicable. (12) Not applicable. (15) Not applicable. (23) Consent of Price Waterhouse. (24)(a) Powers of Attorney for all members of the Board of Directors, previously filed with this Registration Statement No. 33-88456 on April 23, 1996. (24)(b) Power of Attorney for Stanley B. Tulin. (26) Not applicable. (28) Not applicable. 3 Item 17. Undertakings (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post- effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan distribution not previously disclosed in the registration statement of or any material change to such information in the registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Insofar as indemnification for liabilities 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 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. 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and State of New York, on June 7, 1996. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (Registrant) By:/s/Jerome S. Golden ----------------------- Jerome S. Golden President Income Management Group A Division of The Equitable Life Assurance Society of the United States Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by or on behalf of the following persons in the capacities and on the date indicated. PRINCIPAL EXECUTIVE OFFICERS: James M. Benson President, Chief Executive Officer and Director William T. McCaffrey Senior Executive Vice President, Chief Operating Officer and Director Joseph J. Melone Chairman of the Board and Director PRINCIPAL FINANCIAL OFFICER: Stanley B. Tulin Senior Executive Vice President and Chief Financial Officer PRINCIPAL ACCOUNTING OFFICER: /s/ Alvin H. Fenichel Senior Vice President and Controller Alvin H. Fenichel June 7, 1996 DIRECTORS: Claude Bebear Jean-Rene Foutou Winthrop Knowlton James M. Benson Norman C. Francis Arthur L. Liman Christopher Brocksom Donald J. Greene George T. Lowy Francoise Colloc'h Anthony J. Hamilton William T. McCaffrey Henri de Castries John T. Hartley Joseph J. Melone Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne William T. Esrey W. Edwin Jarmain George J. Sella, Jr. G. Donald Johnston, Jr. Dave H. Williams By: /s/Jerome S. Golden ---------------------- Jerome S. Golden Attorney-in-Fact June 7 , 1996 5 EXHIBIT INDEX Exhibit No. Page - ----------- ---- 1(a) Form of Distribution Agreement by and among Equitable Distributors, Inc., Separate Account Nos. 45 and 49 of Equitable Life and Equitable Life Assurance Society of the United States. 1(b) Form of Sales Agreement among Equitable Distributors, Inc. as Distributor, a Broker-Dealer (to be named) and a General Agent (to be named). 1(c) Form of The Hudson River Trust Sales Agreement by and among The Equitable Life Assurance Society of the United States, Equitable Distributors, Inc. and Separate Account No. 49 of The Equitable Life Assurance Society of the United States. 4(k) Forms of data pages for the Accumulator. 4(l) Forms of data pages for the Rollover IRA. 23 Consent of Price Waterhouse. 24(b) Power of Attorney for Stanley B. Tulin. 6 EX-99.1(A) 2 DISTRIBUTION AGREEMENT DISTRIBUTION AGREEMENT AGREEMENT, dated as of July 1, 1996 by and among Equitable Distributors, Inc. ("Distributor"), The Equitable Life Assurance Society of the United States ("Equitable") and Equitable's Separate Account Nos. 45 and 49 ("Separate Accounts"). W I T N E S S E T H : WHEREAS, the Separate Accounts are separate accounts established and maintained by Equitable pursuant to the laws of the State of New York, under which income, gains and losses, whether or not realized, from assets allocated to the Separate Accounts, are credited to or charged against the Separate Accounts without regard to other income, gains or losses of Equitable; WHEREAS, the Separate Accounts are registered as investment companies under the Investment Company Act of 1940 ("1940 Act"), and units of interest in the Separate Accounts are registered under the Securities Act of 1933 ("1933 Act"); WHEREAS, Equitable offers market value adjustment ("MVA") interests under deferred annuity contracts; WHEREAS, the MVA interests are registered under the 1933 Act; WHEREAS, Equitable issues variable and fixed annuity contracts, including market value adjusted contracts, and may in the future issue additional forms of contracts (all of which are collectively referred to herein as the "Contracts"), whose net considerations may be allocated for investment in whole or in part to the Separate Accounts or to the purchase of MVA interests; WHEREAS, the Distributor, a wholly-owned subsidiary of Equitable, is a broker-dealer registered under the Securities Exchange Act of 1934 ("1934 Act") and is a member of the National Association of Securities Dealers, Inc. ("NASD"); WHEREAS, the parties hereto desire to have the Distributor act as principal underwriter or distributor for the Separate Accounts to assume the responsibilities set forth in this Agreement with respect to the distribution of the Contracts, and the Distributor desires to assume such responsibilities; WHEREAS, the parties desire to have Equitable perform certain services in connection with the sale of the Contracts. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I Distribution Responsibility for the Contracts [section]1.1 The Distributor represents that it is a broker-dealer duly registered under the 1934 Act and is a member in good standing of the NASD and, to the extent necessary to perform the activities contemplated hereunder, is duly registered, or otherwise qualified, under the securities laws of every state CAPITAL PRINTING SYSTEMS] or other jurisdiction in which the Contracts are available for sale, and the Distributor agrees to maintain such status. [section]1.2 Equitable authorizes the Distributor to act, and the Distributor agrees to serve, as principal underwriter for the Separate Accounts, as distributor of the MVA interests under the Contracts and as distributor of the Contracts in each state or other jurisdiction where the Contracts may legally be sold. The Distributor shall at all times function as and be deemed to be an independent contractor and will be under no obligation to effectuate any particular number of sales of Contracts or to promote or make sales, except to the extent the Distributor deems advisable. The Distributor shall be fully responsible for carrying out all compliance and supervisory obligations in connection with the distribution of the Contracts, as required by the NASD Rules of Fair Practice ("NASD Rules") and by federal and any applicable state or foreign securities laws. The Distributor shall assume full responsibility for the oversight of securities activities of any person associated with the Distributor, as defined in Section 3(a)(18) of the 1934 Act, and engaged directly or indirectly in the distribution of the Contracts ("Associated Persons"), and shall have the authority to require that disciplinary action be taken with respect to the Associated Persons. The Distributor shall be fully responsible for compensating the Associated Persons and the Selling Broker-Dealers (as defined in Section 1.3) for their sales of the Contracts. [section]1.3 The Distributor is hereby authorized to enter into separate written agreements ("Sales Agreements"), on such terms and conditions as the Distributor may determine not to be inconsistent with this Agreement, with broker-dealers ("Selling Broker-Dealers") which agree to participate in the distribution of, and to use their best efforts to solicit applications for, the Contracts. The Sales Agreements shall provide that each Selling Broker-Dealer shall be required to assume full responsibility for continued compliance by itself and its associated persons (as defined in Section 3(a)(18) of the 1934 Act) with the NASD Rules and applicable federal and state securities and insurance laws. Each Selling Broker-Dealer and its registered representatives ("Registered Representatives") soliciting applications for the Contracts shall be duly and appropriately licensed, registered and otherwise qualified for the sale of the Contracts under the NASD Rules and federal and state securities and insurance laws applicable to the offer and sale of the Contracts. The Distributor shall have full responsibility for the supervision of all Selling Broker-Dealers and shall assume any legal responsibilities of Equitable for the acts or omissions of any Selling Broker-Dealer or its Registered Representatives. [section]1.4 The Distributor is authorized to recommend the appointment of the Selling Broker-Dealers and their eligible Registered Representatives and affiliates as agents of Equitable for the sale of Contracts. It shall be the responsibility of each Selling Broker-Dealer to apply for and maintain the proper insurance licenses for each of its agents selling the Contracts in all states or other jurisdictions in which the Contracts are offered for sale by such agent. Equitable will undertake to make such appointments as the Distributor shall request in the appropriate states or other jurisdictions, provided that Equitable reserves the right to refuse to appoint any proposed agent and to terminate its appointments. Equitable shall promptly notify the Distributor of each such termination. Equitable agrees to be responsible for all appointment fees required under pertinent state insurance laws to authorize agents properly for the sale of the Contracts, excluding, however, any licensing or other fees required to be paid at any time after the initial appointment of such agents. [section]1.5 The parties hereto recognize that any Associated Person or Registered Representative selling the Contracts as contemplated by this Agreement shall be acting as an insurance agent of Equitable and that the obligations and rights of the Distributor to supervise such persons shall be limited to the extent specifically described herein or required under applicable federal or state securities laws or NASD Rules. Such persons shall not be considered agents or employees of the Distributor. Further, it is intended by the -2- parties hereto that such persons are and shall continue to be considered to have a common law independent contractor relationship with Equitable and not to be common law employees of Equitable, unless any contract between Equitable and any person selling the Contracts specifically provides otherwise. [section]1.6 The Distributor shall take reasonable steps to ensure that the Registered Representatives appointed as agents of Equitable for the sale of the Contracts shall not make recommendations to an applicant to purchase a Contract in the absence of reasonable grounds to believe that the purchase of the Contract is suitable for the applicant. While not limited to the following, a determination of suitability shall be based on information furnished to a Registered Representative after reasonable inquiry of such applicant (and any other information known about the applicant) concerning the applicant's insurance and investment objectives and financial situation and needs, including the likelihood (depending upon the nature of the Contract) that the applicant will make sufficient payments or retain the Contract for a sufficient period of time to derive the benefits of the Contract. [section]1.7 The Distributor agrees that no person, including the Selling Broker-Dealers and their Registered Representatives, shall be permitted to use, develop or distribute any sales materials which have not been approved in advance by Equitable. The Distributor agrees that it will make timely filings, as required, with the NASD and any other securities regulators of any sales literature, advertising or other materials relating to the Separate Accounts or the MVA interests under the Contracts, and obtain such approvals as may be necessary. Equitable will be responsible for filing such items, as necessary, with any insurance regulatory authorities and obtaining any required approvals. The Distributor also agrees that no person, including the Selling Broker-Dealers and their Registered Representatives, shall be permitted, in connection with the offer and sale of the Contracts, to make any representations or communicate any information regarding Equitable, the Contracts, the Separate Accounts, the MVA interests under the Contracts or the funding media for the Contracts which are not contained in materials approved by Equitable, as provided in this Agreement, or included in the registration statements of the Separate Accounts and such MVA interests effective under the 1933 Act at the time of such representation or communication. [xection]1.8 The Distributor shall be responsible for, with respect to agents appointed by Equitable as provided in Section 1.4, maintaining the records of agents licensed, registered and otherwise qualified to sell the Contracts, and for furnishing periodic reports to Equitable as to the sale of Contracts made pursuant to this Agreement. [section]1.9 Anything in this Agreement to the contrary notwithstanding, Equitable shall retain the ultimate right of control over, and the responsibility for, the issuance, servicing and marketing of the Contracts, including the right to review and approve all advertising concerning the Contracts, to suspend sales of the Contracts in any jurisdiction or jurisdictions, to appoint and discharge its agents authorized to sell the Contracts, and to refuse to sell a Contract to any applicant for any reason whatsoever. ARTICLE II Recordkeeping Responsibility for the Contracts [section]2.1 The Distributor and Equitable shall each cause to be maintained and preserved such accounts, books and other documents as are required by the 1934 Act and 1940 Act and any other applicable laws and regulations. In particular, without limiting the foregoing, the Distributor shall cause all the books and records in connection with the offer and sale of the Contracts to be maintained and preserved in conformity with the requirements of Rules 17a-3 and 17a-4 under the 1934 Act and as may -3- otherwise be required under the NASD Rules and federal and applicable state securities laws, to the extent that such requirements are applicable to the Contracts. [section]2.2 The Distributor and Equitable shall each submit to all regulators and administrative bodies having jurisdiction over the sales of the Contracts, present or future, any information, reports or other material that any such body by reason of this Agreement may request or require pursuant to applicable laws or regulations. In particular, without limiting the foregoing, Equitable agrees that any books and records which it maintains which are required to be maintained by the Distributor under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to inspection by the Securities and Exchange Commission ("SEC") in accordance with Section 17(a) of the 1934 Act. [section]2.3 The Distributor and Equitable each agree and understand that all documents, reports, records, books, files and other materials required under applicable NASD regulations and federal and state securities laws relative to the sale of Contracts shall be the property of the Distributor, with the exception of any books and records maintained by Equitable which relate to sales compensation and shall be the joint property of Equitable and the Distributor. If, however, such documents, reports, records, books, files and other materials which are the property of the Distributor are required by applicable regulation or law to be maintained also by Equitable, such material shall be the joint property of the Distributor and Equitable. All other documents, reports, records, books, files and other materials maintained relative to this Agreement shall be the property of Equitable. Upon the termination of this Agreement, all such material shall be returned to the applicable party. [section]2.4 The Distributor and Equitable from time to time during the term of this Agreement, shall allocate among themselves, subject to a right of further delegation, the administrative responsibility for maintaining and preserving the books, records and accounts kept in connection with the Contracts; provided, however, in the case of books, records and accounts kept pursuant to a requirement of applicable law or regulation, the ultimate responsibility for maintaining and preserving such books, records and accounts shall be that of the party which is required to maintain or preserve such books, records and accounts under the applicable law or regulation, and such books, records and accounts shall be maintained and preserved under the supervision of that party. The Distributor and Equitable shall cause each other to be furnished with such reports as each may reasonably request for the purpose of meeting its respective reporting and recordkeeping requirements under such regulations and laws and under the insurance laws of the State of New York and any other applicable states or jurisdictions. ARTICLE III Procedures for Sale of Variable Contracts [section]3.1 Equitable represents and warrants that units of interest of the Separate Accounts and MVA interests offered under the Contracts are registered under the 1933 Act to the extent such registration is required, that the Separate Accounts are registered under the 1940 Act and that the Contracts are qualified to be sold under the insurance laws and any applicable securities laws of all states and other jurisdictions in which the Contracts are authorized for sale. Equitable further represents and warrants that it is a life insurance company duly organized under the laws of the State of New York and in good standing and authorized to conduct business under the laws of each state in which the Contracts are offered and sold. [section]3.2 The Distributor will require that the Agents authorized to sell the Contracts use only the effective prospectuses, statements of additional information ("SAIs") and other authorized materials in soliciting the sale of the Contracts. The Distributor is not authorized to give any information or to make any representations concerning Equitable, the Contracts, the Separate Accounts, the MVA interests under -4- the Contracts or the funding media for the Contracts other than those contained in the current prospectus or SAI therefor filed with the SEC or in such materials as may be authorized by Equitable. [section]3.3 All applications for the Contracts shall be made on application forms supplied by Equitable or in a form otherwise satisfactory to Equitable, and any payments collected by the Distributor shall be remitted by the Distributor promptly in full, together with such application or enrollment forms and any other required documentation, directly to Equitable, at the address indicated on such application or to such other address as Equitable may, from time to time, designate in writing. The Distributor shall review any such applications or other documents received by it for completeness before transmitting them to Equitable. Checks, money orders or electronic transmissions of funds in payment on any Contract shall be drawn to the order of "The Equitable Life Assurance Society of the United States". All applications for Contracts shall be subject to acceptance or rejection by Equitable at its discretion. [section]3.4 All money payable in connection with the Contracts, whether as purchase payments or otherwise, and whether paid by, or on behalf of any applicant or contractowner, is the property of Equitable. If such money is not transmitted directly by a Selling Broker-Dealer to Equitable in accordance with the administrative procedures of Equitable and is received by the Distributor, it shall be transmitted promptly by the Distributor in accordance with the administrative procedures of Equitable without any deduction or offset for any reason, including by example but not limitation, any deduction or offset for compensation claimed by the Distributor or payable to the Selling Broker-Dealers. No cash payments shall be accepted by the Distributor in connection with the Contracts. [section]3.5 The costs of printing the prospectuses, SAIs and sales material used in connection with the solicitation of applications for the Contracts shall be borne by Equitable or by the Distributor, or shall be paid in part by each of them, as Equitable and the Distributor shall from time to time mutually agree. Equitable shall provide to the Distributor copies of such prospectuses, SAIs and sales material in such number as the Distributor shall reasonably request. Equitable shall make available to the Distributor copies of all financial statements and other documents that the Distributor shall reasonably request for use in connection with the distribution of the Contracts. [section]3.6 Unless otherwise agreed in writing by Equitable, neither the Distributor nor any agent of Equitable nor any Selling Broker-Dealer shall have an interest in any surrender charges, deductions or other fees payable to Equitable. ARTICLE IV Services and Personnel Provided by Equitable [section]4.1 Equitable agrees to furnish compliance and related support services, including personnel, to assist the Distributor in the performance of the services which the Distributor is required to provide hereunder. In furnishing such services, all personnel of Equitable shall be subject at all times to the supervision and control of the Distributor. ARTICLE V Compensation and Expenses [section]5.1 The Distributor shall be compensated by Equitable for its services under this Agreement in accordance with the terms of Schedule I hereto, as it may be amended from time to time as provided in Section 8.5. In addition, Equitable will reimburse the Distributor for the actual expenses incurred by it to -5- provide the compliance and related support services which the Distributor is required to furnish under this Agreement. [section]5.2 The Distributor shall pay the costs and expenses, direct and indirect, incurred by Equitable in furnishing services and personnel, pursuant to Article IV. In determining the basis for the apportionment of expenses, specific identification or estimates based on time, company assets, square footage or any other mutually agreeable method providing for a fair and reasonable allocation of cost may be used, provided such method is in conformity with the requirements of Section 1712 of the New York Insurance Law and New York Insurance Department Regulation No. 33. The charge to the Distributor for such apportioned expenses shall be at cost as described in this Section 5.2. [section]5.3 Within 45 days after the end of each calendar quarter, and more often if desired, Equitable shall submit to the Distributor a statement of apportioned expenses showing the basis for such appointment, and settlement shall be made within 15 days thereafter. The statement of apportioned expenses shall set forth in reasonable detail the nature of the expenses being apportioned and other relevant information to support the charge. ARTICLE VI Regulatory Proceedings, Complaints, Indemnification [section]6.1 The Distributor and Equitable agree to cooperate fully in insurance regulatory investigations or proceedings or judicial proceedings arising in connection with the offering, sale or distribution of the Contracts. The Distributor and Equitable further agree to cooperate fully in any securities regulatory investigation or proceeding or judicial proceeding with respect to Equitable, the Distributor, their respective affiliates and agents or representatives, to the extent that such investigation or proceeding is in connection with the Contracts. [section]6.2 Without limiting the generality of Section 6.1, the Distributor and Equitable agree that: (A) The Distributor will be notified promptly of any customer complaint or notice of any regulatory investigation or proceeding or judicial proceeding received by Equitable with respect to the Distributor or any agent or representative or which may affect Equitable's issuance of the Contracts. (B) The Distributor will promptly notify Equitable of any customer complaint or notice of any regulatory investigation or proceeding received by the Distributor or its affiliates with respect to the Distributor or any agent or representative in connection with any Contract. (C) In the case of a substantive customer complaint, the Distributor and Equitable will cooperate in investigating such complaint and any response to such complaint which either of them has prepared will be sent to the other for approval not less than five business days prior to its transmittal to the customer or regulatory authority, except that if a more prompt response is required, the proposed response shall be communicated by telephone or facsimile transmission. [section]6.3 Equitable agrees to indemnify and hold harmless the Distributor and its officers and directors against any losses, claims, damages or liabilities, joint or several, to which the Distributor or its affiliates or such officer or director may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact, required to be stated therein or necessary to make the statements therein not misleading, contained in -6- (A) any registration statement relating to the Separate Accounts or the MVA interests offered under the Contracts, or any amendment thereof, or (B) any document executed by Equitable specifically for the purpose of qualifying the Contracts for sale under the securities laws of any jurisdiction. Equitable will reimburse the Distributor and each such officer or director for any legal or other expenses reasonably incurred by the Distributor or such officer or director in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that Equitable will not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information (including, without limitation, negative responses to inquiries) furnished to Equitable by or on behalf of the Distributor specifically for use in the preparation of any such registration statement or any amendment thereof or any such qualification document or any amendment thereof. [section]6.4 The Distributor agrees to indemnify and hold harmless Equitable, its directors, each of its officers who has signed the registration statements relating to the Separate Accounts and the MVA interests, each person, if any, who controls Equitable within the meaning of the 1933 Act or the 1934 Act, and the Separate Accounts against any losses, claims, damages or liabilities to which Equitable and any such director or officer or controlling person may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (A) Any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, contained in (i) any registration statement relating to the Separate Accounts or the MVA interests offered under the Contracts or any amendment thereof, or (ii) any qualification document relating to the Separate Accounts or the MVA interests offered under the Contracts or any amendment thereof, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with information (including without limitation, negative responses to inquiries) furnished to Equitable by the Distributor specifically for use in the preparation of any registration statement relating to the Separate Accounts or such MVA interests or any amendment thereof or any such qualification document relating to the Separate Accounts or such MVA interests or any amendment thereof; or (B) Any unauthorized use of sales materials or any verbal or written misrepresentations or any unlawful sales practices concerning the Contracts by the Distributor or otherwise attributable to a failure by the Distributor to discharge properly its responsibilities under this Agreement; or (C) Claims by agents or representatives or employees of the Distributor for commissions, service fees, expense allowances or other compensation or remuneration of any type. The Distributor will reimburse Equitable and any director or officer or controlling person for any legal or other expenses reasonably incurred by Equitable, such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which the Distributor may otherwise have. -7- [section]6.5 Promptly after receipt by a party entitled to indemnification ("Indemnified Party") under this Article VI of notice of the commencement of any action, if a claim in respect thereof is to be made against any person obligated to provide indemnification under this Article VI ("Indemnifying Party"), such Indemnified Party will notify the Indemnifying Party in writing of the commencement thereof, but the omission so to notify the Indemnifying Party will not relieve it from any liability under this Article VI, except to the extent that the omission results in a failure of actual notice to the Indemnifying Party and such Indemnifying Party is damaged solely as a result of the failure to give such notice. In case any such action is brought against any Indemnified Party, and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, to the extent that it may wish to assume the defense thereof, with separate counsel satisfactory to the Indemnified Party. Such participation shall not relieve such Indemnifying Party of the obligation to reimburse the Indemnified Party for reasonable legal and other expenses incurred by such Indemnified Party in defending itself, except for such expenses incurred after the Indemnifying Party has deposited funds sufficient to effect the settlement, with prejudice, of the claim in respect of which indemnity is sought. Any such Indemnifying Party shall not be liable to any such Indemnified Party on account of any settlement of any claim or action effected without the consent of such Indemnifying Party. [section]6.6 The indemnity agreements contained in this Article VI shall remain operative and in full force and effect, regardless of: (A) any investigation made by or on behalf of the Distributor or any officer or director thereof or by or on behalf of Equitable or any officer or director thereof; (B) delivery of any Contracts and payments therefor; and (C) any termination of this Agreement. A successor by law of the Distributor or of any other party to this Agreement, as the case may be, shall be entitled to the benefits of the indemnity agreements contained in this Article VI. ARTICLE VII Term of Agreement [section]7.1 This Agreement shall become effective as of the date first above written and shall continue in full force and effect from year to year thereafter, until terminated as herein provided. [section]7.2 This Agreement may be terminated by any party hereto on not less than 60 days' prior written notice to the other parties or by an agreement in writing signed by all of the parties hereto. Unless otherwise agreed by the parties hereto, this Agreement shall automatically be terminated in the event of its assignment. [section]7.3 Upon termination of this Agreement, all authorizations, rights, and obligations shall cease except the obligations to settle accounts hereunder, including the settlement of monies due in connection with Contracts in effect at the time of termination or issued pursuant to applications received by Equitable prior to termination, and the agreements contained in Article VI. -8- ARTICLE VIII Miscellaneous [section]8.1 None of the parties hereto shall be liable to the other for any action taken or omitted by it, or any of its officers, agents or employees, in performing their respective responsibilities under this Agreement in good faith and without negligence, willful misfeasance or reckless disregard of such responsibilities. [section]8.2 The Distributor will execute such papers and do such acts and things as shall from time to time be reasonably requested by Equitable for the purpose of (a) maintaining the registration of the interests under the Contracts under the 1933 Act and the Separate Accounts under the 1940 Act, and (b) qualifying and maintaining qualification of the Contracts for sale under the applicable laws of any state. [section]8.3 All notices under this Agreement shall be given in writing and addressed as follows: if to the Distributor, to: Equitable Distributors, Inc. 787 Seventh Avenue New York, New York 10019 Attention: President if to Equitable or the Separate Accounts, to: The Equitable Life Assurance Society of the United States and Separate Account Nos. 45 and 49 787 Seventh Avenue New York, New York 10019 Attention: President Equitable Special Products Group or to such other address as such party may hereafter specify in writing. Each such notice shall be either hand delivered or transmitted by certified United States mail, return receipt requested, and shall be effective upon delivery. [section]8.4 If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. [section]8.5 This Agreement constitutes the entire agreement between the parties hereto and, except for any modification of Schedule I in accordance with its terms, may be amended only in a written instrument executed by all parties hereto. [section]8.6 This Agreement shall be subject to the provisions of the 1934 Act and, to the extent applicable, the 1940 Act and the rules, regulations and rulings thereunder and of the NASD, from time to time in effect, including such exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be interpreted and construed in accordance therewith. -9- [section]8.7 This Agreement shall be interpreted in accordance with the laws of the State of New York. [section]8.8 This Agreement may be executed in two or more counterparts, each of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be amended and restated as of July 1, 1996, and to be signed by their respective officials thereunto duly authorized, as of said date. EQUITABLE DISTRIBUTORS, INC. By:____________________________________ THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By:____________________________________ SEPARATE ACCOUNT NOS. 45 and 49 By: THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES as depositor By:____________________________________ -10- EX-99.1(B) 3 SALES AGREEMENT BROKER-DEALER AND GENERAL AGENT SALES AGREEMENT AGREEMENT, by and among Equitable Distributors, Inc. ("Distributor"), __________________________ ("Broker-Dealer") and ___________________________ ("General Agent"). W I T N E S S E T H : WHEREAS, the Distributor and the Broker-Dealer are both broker-dealers registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ("1934 Act"), and members of the National Association of Securities Dealers, Inc.; WHEREAS, the General Agent, which is an Affiliate of, or the same person as, the Broker-Dealer, or whose employees are also employees of the Broker-Dealer, is an insurance agency duly licensed to sell variable life insurance and variable annuities in any state or other jurisdiction in which the General Agent intends to perform hereunder; WHEREAS, The Equitable Life Assurance Society of the United States ("Equitable") has appointed the Distributor as principal underwriter or distributor of the Variable Accounts and the MVA Interests and as distributor of the Contracts and has authorized the Distributor to recommend persons for appointment as agents of Equitable to solicit applications for the sale of the Contracts; WHEREAS, it is intended that the General Agent shall be authorized to offer and sell the Contracts to the general public subject to the terms and conditions set forth more fully herein; WHEREAS, Equitable has authorized the Distributor to enter into separate written agreements with broker-dealers registered under the 1934 Act which agree to participate in the distribution of the Contracts, and the parties hereto desire that the Broker-Dealer be authorized to solicit applications for the sale of the Contracts; WHEREAS, in the future, Contracts may be issued by an insurance company which is an Affiliate of Equitable and the Distributor may be authorized to promote the offer and sale of such Contracts in the same manner that Equitable has authorized the Distributor to act, as described above. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and promises herein contained, the parties hereto agree as follows: ARTICLE I Definitions [section]1.1 Defined Terms. In addition to any terms defined elsewhere in this Agreement, the terms defined in this Section 1.1, whenever used in this Agreement (including in the Schedules and Exhibits), shall have the respective meanings indicated. a. Affiliated Person or Affiliate -- With respect to a person, any other person controlling, controlled by, or under common control with, such person. b. Agent -- An individual associated with the General Agent and registered with the NASD as a representative of the Broker-Dealer who is appointed by an Equitable Life Company as an insurance agent for the purpose of soliciting applications for the Contracts. c. Broker-of-Record -- The party designated in the Equitable Life Companies records as the person, with respect to a Contract, who is entitled to receive compensation payable with respect to such Contract and who is authorized to contact directly the owner of such Contract. In the case of compensation payable with respect to a Premium, the Broker-of-Record shall be the party designated as such in the records of an Equitable Life Company, at the time such Premium is accepted by such Equitable Life Company. In the case of any payment of compensation payable with respect to Contract value or client services, the Broker-of-Record shall be the party designated as such in the records of an Equitable Life Company, in accordance with the rules and procedures of the Equitable Life Companies at the time any such payment is payable. In the case of compensation payable on annuitization of a Contract, the Broker-of-Record shall be the party designated as such in the records of an Equitable Life Company on the annuity commencement date specified in such Contract. d. Contract Prospectus -- The prospectus for the interests under the Contracts included within a Contract Registration Statement and including any Contract prospectus or supplement separately filed under the 1933 Act. The Contract Prospectus also shall include the statement of additional information which is part of the Contract Registration Statement, unless the context otherwise requires. e. Contract Registration Statements -- The most recent effective registration statements, or most recent effective post-effective amendments thereto, relating to interests under the Contracts and in the Variable Accounts, as required by the 1933 Act and the 1940 Act, including financial statements therein and all exhibits thereto. f. Contracts -- The classes of life insurance policies and annuity contracts, including certificates, issued by Equitable or by an Affiliate of Equitable which are identified in Schedule I. Schedule I may be modified from time to time, as provided in Section 2.6. g. Effective Date -- April 24, 1995. h. Equitable Life Companies or, individually, an Equitable Life Company -- Equitable and any Affiliate of Equitable which is an insurance company. i. MVA Interests -- The market value adjustment interests under the Contracts. j. NASD -- National Association of Securities Dealers, Inc. k. 1940 Act -- Investment Company Act of 1940, as amended. l. 1934 Act -- Securities Exchange Act of 1934, as amended. m. 1933 Act -- Securities Act of 1933, as amended. n. Premium -- Any premium, contribution or other consideration relating to the Contracts. o. SEC or Commission -- Securities and Exchange Commission. -2- . p. Trust -- The Hudson River Trust and any other entity available for investment through the Variable Accounts under the Contracts. q. Trust Prospectus -- The prospectus for the Trust included within the Trust Registration Statement and including any Trust prospectus or supplement separately filed under the 1933 Act. The Trust Prospectus also shall include the statement of additional information which is part of the Trust Registration Statement, unless the context otherwise requires. r. Trust Registration Statement -- The most recent effective registration statement or most recent effective post-effective amendment thereto relating to the Trust as required by the 1933 Act and the 1940 Act, including financial statements therein and all exhibits thereto. s. Variable Accounts -- Segregated asset accounts identified in Exhibit A, each of which has been established by an Equitable Life Company pursuant to state law as a funding vehicle for the Contracts. The Variable Accounts are divided into divisions that invest in shares of the Trust. [section]1.2 Cross-References. All references in this Agreement to a Section, Article, Schedule or Exhibit are to a section, article, schedule or exhibit of this Agreement, unless otherwise indicated. ARTICLE II Authorization of Broker-Dealer and General Agent [section]2.1 Authority to Distribute Contracts. Pursuant to the authority granted to it by Equitable, the Distributor hereby authorizes the Broker-Dealer, under the securities laws, and General Agent, under the insurance laws, each in a non-exclusive capacity, to distribute the Contracts. The Broker-Dealer and the General Agent accept such authorization and agree to use their best efforts to find purchasers for the Contracts in each case acceptable to the Equitable Life Company issuing such Contracts. The Broker-Dealer and the General Agent understand that the public offering of and solicitation for interests under the Contracts are not permitted to commence, or to continue, unless the Contract Registration Statements have become effective and, with respect to each state or other jurisdiction in which Contract applications are to be solicited, the Contracts are qualified for sale under all applicable securities and insurance laws. The Broker-Dealer and the General Agent agree that the solicitation of applications for the sale of the Contracts will commence as soon as practicable after the Contract Registration Statements have become effective. [section]2.2 Notification by Distributor. The Distributor shall notify the Broker-Dealer and the General Agent: a. If there are no effective Contract Registration Statements, when the Contract Registration Statements have become effective; b. Of all states and other jurisdictions in which the Contracts are qualified for sale and of the states and other jurisdictions in which the Contracts may not be lawfully sold; c. Of any request by the SEC for any amendments or supplements to a Contract Registration Statement or of any request for additional information that must be provided by the Broker-Dealer or the General Agent or any Affiliate of the Broker-Dealer or the General Agent; d. Of the issuance by the SEC of any stop order with respect to a Contract Registration Statement or the initiation of any proceedings for that purpose or for any other purpose relating to the registration and/or offering of the Contracts; -3- e. If any event occurs as a result of which the Contract Prospectus(es) or any sales literature for the Contracts would include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. The Distributor will provide the Broker-Dealer and the General Agent with notification of these matters immediately by telephone, with notification in writing promptly thereafter. [section]2.3 Authority to Recommend Agent Appointments. The General Agent is vested under this Agreement with power and authority to select and recommend individuals who are associated with the General Agent and are registered representatives of the Broker-Dealer for appointment as agents of Equitable, and only individuals so recommended by the General Agent to the Distributor shall become Agents, provided that Equitable reserves the right in its sole discretion to refuse to appoint any proposed agent or, once appointed, to terminate the same at any time with or without cause. [section]2.4 Limitations on Authority. Neither the Broker-Dealer nor the General Agent shall possess or exercise any authority on behalf of the Distributor or the Equitable Life Companies other than that expressly conferred on the Broker-Dealer or the General Agent by this Agreement. In particular, and without limiting the foregoing, neither the Broker-Dealer nor the General Agent shall have any authority, nor shall either grant such authority to any Agent, on behalf of the Distributor (i) to make, alter or discharge any Contract or other contract entered into pursuant to a Contract; (ii) to waive any Contract provision; (iii) to extend the time for payment of any Premiums; or (iv) to receive any monies or Premiums from applicants for or purchasers of the Contracts (except for the sole purpose of forwarding monies or Premiums to an Equitable Life Company). [section]2.5 Insurer's Right to Reject Applications. The Broker-Dealer and the General Agent acknowledge that each Equitable Life Company has the right in its sole discretion to reject any applications or Premiums received by it and to return or refund to an applicant such applicant's Premium. In the event that an Equitable Life Company rejects an application solicited by an Agent, such Equitable Life Company will return any Premium paid by the applicant to such applicant and will promptly notify the General Agent of such action. In the event that a purchaser exercises his or her free look right under a Contract, any amount to be refunded as provided in such Contract will be so refunded to the purchaser by or on behalf of the Equitable Life Company that issued such Contract, and such Equitable Life Company will promptly notify the General Agent of such action. [section]2.6 Contracts Included Under Agreement. Schedule I to this Agreement describes the life insurance and annuity contracts which are included as Contracts under this Agreement. Schedule I may be amended by the Distributor in its sole discretion from time to time to include other classes of annuity contracts or life insurance contracts issued by an Equitable Life Company and distributed by the Distributor pursuant to any distribution agreement with an Equitable Life Company which relates to the Contracts. The provisions of this Agreement shall apply with equal force to such additional Contracts unless the context otherwise requires. Schedule I may be amended by the Distributor in its sole discretion from time to time to delete classes of annuity contracts or life insurance contracts. [section]2.7 Independent Contractor Status. The Distributor acknowledges that the Broker-Dealer and the General Agent are each independent contractors. Accordingly, while the Broker-Dealer and the General Agent agree to use their best efforts to solicit applications for the Contracts, the Broker-Dealer and the General Agent are not obliged or expected to give full time and energies to the performance of their obligations hereunder or to sell or solicit a specified number of Contracts, nor are the Broker-Dealer and the General Agent obliged or expected to represent the Distributor or any Equitable Life Company exclusively. Nothing herein contained shall constitute the Broker-Dealer, the General Agent, or any agents -4- or representatives of the Broker-Dealer or the General Agent as employees of an Equitable Life Company or the Distributor. ARTICLE III Licensing and Registration of Broker-Dealer, General Agent and Agents [section]3.1 Broker-Dealer Qualifications. The Broker-Dealer represents that it is a broker-dealer registered with the SEC under the 1934 Act, and is a member of the NASD. The Broker-Dealer must, at all times when performing its functions and fulfilling its obligations under this Agreement, be duly registered as a broker-dealer under the 1934 Act and in each state or other jurisdiction in which Broker-Dealer intends to perform its functions and fulfill its obligations hereunder and in which such registration is required, and be a member in good standing of the NASD. [section]3.2 General Agent Qualifications. The General Agent represents that it is a licensed life insurance agent where required to solicit applications. The General Agent must, at all times when performing its functions and fulfilling its obligations under this Agreement, be duly licensed to sell the Contracts in each state or other jurisdiction in which the General Agent intends to perform its functions and fulfill its obligations hereunder. [section]3.3 Qualifications of Broker-Dealer Representatives. The Broker-Dealer represents and warrants that it shall take all necessary action to ensure that no individual shall offer or sell the Contracts on behalf of Broker-Dealer in any state or other jurisdiction in which the Contracts may lawfully be sold unless such individual is an associated person of Broker-Dealer (as that term is defined in Section 3(a)(18) of the 1934 Act), is not subject to a statutory disqualification (as that term is defined in the 1934 Act) and is duly registered with the NASD and any applicable state securities regulatory authority as a registered person of Broker-Dealer qualified to distribute the Contracts in such state or other jurisdiction. [section]3.4 Qualifications of General Agent's Agents and Appointment of Agents. The General Agent represents and warrants that it shall take all necessary action to ensure that no individual shall offer or sell the Contracts on behalf of the General Agent in any state or other jurisdiction unless such individual is duly appointed as an agent of the General Agent, duly licensed and appointed as an agent of the appropriate Equitable Life Company and appropriately licensed, registered or otherwise qualified to offer and sell the Contracts to be offered and sold by such individual under the insurance laws of such state or jurisdiction. The General Agent understands that certain states may require that a special variable contracts examination be passed by agent before he or she can solicit applications for the Contracts. Nothing in this Agreement is to be construed as requiring an Equitable Life Company to obtain a license or issue a consent or appointment to enable any particular agent to sell Contracts. Moreover, without limiting the generality of the foregoing, an Equitable Life Company shall not consider for appointment any individual who was a member of Equitable's career agency force within the preceding 12 months. All matters concerning the licensing of any individuals recommended for appointment by the General Agent under any applicable state insurance law shall be a matter directly between the General Agent and such individual. The General Agent shall furnish the Equitable Life Companies with proof of proper licensing of such individual or other proof, reasonably acceptable to the Equitable Life Companies, of satisfaction by such individual of licensing requirements prior to the appointment of any such individual as an agent of any Equitable Life Company. In conjunction with the submission of appointment papers for all such individuals as insurance agents of an Equitable Life Company, the General Agent shall be deemed to represent that each individual is competent and qualified to act as an agent for the Equitable Life Companies and to hold himself or herself out in good faith to the general public. -5- ARTICLE IV Broker-Dealer and General Agent Compliance [section]4.1 Supervisory Responsibilities of General Agent. The General Agent shall train, supervise and be solely responsible for the conduct of the Agents in their solicitation activities in connection with the Contracts, and shall supervise Agents' strict compliance with applicable rules and regulations of any governmental or other insurance authorities that have jurisdiction over insurance contract activities, as well as the rules and procedures of the Equitable Life Companies pertaining to the solicitation, sale and submission of applications for the Contracts and the provision of services relating to the Contracts. The General Agent shall be solely responsible for background investigations of the proposed agents to determine their qualifications, good character and moral fitness to sell the Contracts. [section]4.2 Supervisory Responsibilities of Broker-Dealer. The Broker-Dealer shall be responsible for securities training, supervision and control of the Agents in connection with their solicitation activities and any incidental services with respect to the Contracts and shall supervise Agents' strict compliance with applicable federal and state securities laws and NASD requirements in connection with such solicitation activities and with the rules and procedures of the Equitable Life Companies. [section]4.3 Compliance With Applicable Laws. The Broker-Dealer and the General Agent hereby represent and warrant that they are in compliance with all applicable federal and state securities laws and regulations and all applicable insurance laws and regulations, including, without limitation, state insurance laws and regulations imposing insurance licensing requirements. The Broker-Dealer and the General Agent each agree to carry out their respective sales and administrative activities and obligations under this Agreement in continued compliance with federal and state laws and regulations, including those governing securities and insurance-related activities or transactions, as applicable. The Broker-Dealer and the General Agent shall notify the Distributor and the Equitable Life Companies immediately in writing if Broker-Dealer and/or the General Agent fail to comply with any of the laws and regulations applicable to either of them. [section]4.4 Restrictions on Sales Activity. The Broker-Dealer and the General Agent and Agents shall not offer or attempt to offer the Contracts, nor solicit applications for the Contracts, nor deliver Contracts, in any state or other jurisdiction in which the Contracts may not lawfully be sold or offered for sale. For purposes of determining where the Contracts may be offered and applications solicited, the Broker-Dealer and the General Agent may rely on written notification, as revised from time to time, received from the Distributor. [section]4.5 Premiums and Other Payments. All Premiums and loan repayments shall be sent promptly (and in any event not later than two business days after receipt) to the appropriate Equitable Life Company at the address indicated in the rules and procedures of the Equitable Life Companies, or at such other address as the Equitable Life Companies or the Distributor may subsequently specify in writing. Each initial Premium shall be accompanied by a properly completed application for a Contract, unless such Premium is submitted in accordance with the procedures set forth in Exhibit B, which have been accepted and agreed to by the Broker-Dealer and the General Agent, as provided in Exhibit B. Checks in payment of Premiums or outstanding loans shall be drawn to the order of the appropriate Equitable Life Company. [section]4.6 Misdirected Payments. In the event that Premiums or loan repayments are sent to the General Agent or Broker-Dealer, rather than to the appropriate Equitable Life Company, the General Agent and Broker-Dealer shall promptly (and in any event, within two business days) remit such Premiums to the appropriate Equitable Life Company at the address indicated in the rules and procedures of the Equitable Life Companies. The General Agent and Broker-Dealer acknowledge that if any Premium or other -6- payment is held at any time by either of them, such Premium or other payment shall be held on behalf of the client, and the General Agent or Broker-Dealer shall segregate such Premium or other payment from their own funds and promptly (and in any event, within two business days) remit such Premium or other payment to the Equitable Life Company issuing the Contract pursuant to which such amounts have been paid. [section]4.7 Delivery of Contracts. Upon issuance of a Contract by an Equitable Life Company and delivery of such Contract to the General Agent, the General Agent shall promptly deliver such Contract to its purchaser. For purposes of this provision, "promptly" shall be deemed to mean not later than five calendar days. Consistent with its administrative procedures, each Equitable Life Company will assume that a Contract issued by it will be delivered by the General Agent to the purchaser of such Contract within five calendar days. As a result, if a purchaser exercises the free look rights under a Contract, the Broker-Dealer and the General Agent shall indemnify the Equitable Life Company issuing a Contract for any loss incurred by such Equitable Life Company that results from the General Agent's failure to deliver such Contract to its purchaser within the contemplated five-calendar-day period. [section]4.8 Restrictions on Communications. Neither the Broker-Dealer nor the General Agent, nor any of their directors, partners, officers, employees, registered persons, associated persons, agents or affiliated persons, in connection with the offer or sale of the Contracts, shall give any information or make any representations or statements, written or oral, concerning the Contracts, the Variable Accounts or the Trust other than information or representations contained in the Contract and Trust Prospectuses, statements of additional information and Registration Statements, or in reports or proxy statements therefor, or in promotional, sales or advertising material or other information supplied and approved in writing by the Distributor. [section]4.9 Directions Given on Behalf of Contract Owners. The Broker-Dealer and the General Agent shall be solely responsible for the accuracy and propriety of any instruction given or action taken by an Agent on behalf of an owner or prospective owner of a Contract, including any instruction or action pursuant to Exhibit B. Neither the Distributor nor the Equitable Life Companies shall have any responsibility or liability for any action taken or omitted by it or by them in good faith in reliance on or by acceptance of such an instruction or action. [section]4.10 Restrictions on Sales Material and Name Usage. The Broker-Dealer and the General Agent shall neither use nor authorize the use of any promotional, sales or advertising material relating to the Contracts, the Equitable Life Companies, the Variable Accounts, the MVA Interests or the Trust without the prior written approval of the Distributor. Furthermore, the Broker-Dealer and the General Agent shall neither use nor authorize the use of the name of Equitable or of an Affiliate of Equitable, or any other name, trademark, service mark, symbol or trade style that is now or may hereafter be owned by Equitable or by an Affiliate of Equitable, except in the manner and to the extent that such use may be specifically authorized in writing by Equitable or the Distributor. [section]4.11 Market Timing and Other Prohibitions. The Broker-Dealer and the General Agent understand and acknowledge that the Distributor, in its sole discretion and at any time during the term of this Agreement, may restrict or prohibit the solicitation, offer or sale of Contracts and Premiums thereunder in connection with any so-called "market timing" or "asset allocation" program, plan, arrangement or service. Should the Distributor determine in its sole discretion that the Broker-Dealer or the General Agent is soliciting, offering or selling, or has solicited, offered or sold, Contracts or Premiums subject to any so-called "market timing" or "asset allocation" program, plan, arrangement or service which is not permitted under this Agreement (an "unapproved program"), the Distributor may take such action which is necessary, in its sole discretion, to halt such solicitations, offers or sales. Furthermore, in addition to any indemnification provided in Article XI and any other liability that the Broker-Dealer and the General Agent -7- might have, the Distributor may hold the Broker-Dealer and the General Agent liable for any damages or losses, actual or consequential, sustained by the Distributor or any of its Affiliates, or the Trust or any Equitable Life Company, as a result of any unapproved program which causes such losses or damages following solicitation, offer or sale of a Contract or Premium subject to any unapproved program or similar service made available by or through the Broker-Dealer or the General Agent. Notwithstanding any prohibitions which may be imposed pursuant to this Section 4.11, the Broker-Dealer and its registered representatives who are Agents may provide incidental services in the form of guidance to applicants and owners of Contracts regarding the allocation of Premiums and Contract value, provided that such services are (i) solely incidental to the Broker-Dealer's activities in connection with the sales of the Contracts, (ii) subject to the supervision and control of the Broker-Dealer, and (iii) furnished in accordance with rules and procedures prescribed by Equitable. [section]4.12 Tax Reporting Responsibility. The Broker-Dealer and the General Agent shall be solely responsible under applicable tax laws for the reporting of compensation paid to Agents and for any withholding of taxes from compensation paid to Agents, including, without limitation, FICA, FUTA, and federal, state and local income taxes. [section]4.13 Maintenance of Books and Records. The General Agent represents that it maintains and shall maintain such books and records concerning the activities of the Agents as may be required by the appropriate insurance regulatory agencies that have jurisdiction and that may be reasonably required by the Distributor to reflect adequately the Contracts processed through the General Agent. The General Agent shall make such books and records available to the Distributor and/or an Equitable Life Company at any reasonable time upon written request by the Distributor. The Broker-Dealer represents that it maintains and shall maintain appropriate books and records concerning the activities of the Agents as are required by the SEC, the NASD and other agencies having jurisdiction and that may be reasonably required by the Distributor to reflect adequately the Contracts processed through the General Agent. Broker-Dealer shall make such books and records available to the Distributor and/or an Equitable Life Company at any reasonable time upon written request by the Distributor or an Equitable Life Company. [section]4.14 Bonding of Agents and Others. The Broker-Dealer represents that all directors, officers, employees, and registered representatives of the Broker-Dealer who are appointed pursuant to this Agreement as Agents for state insurance law purposes or who have access to funds of the Equitable Life Companies, including but not limited to funds submitted with applications for the Contracts or funds being returned to purchasers of Contracts, are and shall be covered by a blanket fidelity bond, including coverage for larceny and embezzlement, issued by a reputable bonding company. This bond shall be maintained by the Broker-Dealer at the Broker-Dealer's expense. Such bond shall be, at least, of the form, type and amount required under the NASD Rules of Fair Practice. The Distributor may require evidence, satisfactory to it, that such coverage is in force, and the Broker-Dealer shall give prompt written notice to the Distributor of any cancellation or change of coverage. The Broker-Dealer assigns any proceeds received from the fidelity bonding company to the Equitable Life Companies to the extent of each Equitable Life Company's loss due to activities covered by the bond. If there is any deficiency amount, as a result of a deductible provision or otherwise, the Broker-Dealer shall promptly pay the affected Equitable Life Company such amount on demand, and the Broker-Dealer hereby indemnifies and holds harmless such Equitable Life Company from any such deficiency and from the costs of collection thereof (including reasonable attorneys' fees). [section]4.15 Reports to Insurers. The Broker-Dealer and the General Agent shall promptly furnish to each Equitable Life Company or its authorized agent any reports and information that such Equitable Life Company may reasonably request for the purpose of meeting such Equitable Life Company's reporting and recordkeeping requirements under the insurance laws of any state, under any applicable federal or state securities laws, rules or regulations, or the rules of the NASD. -8- ARTICLE V Standard of Conduct for Agents [section]5.1 Basic Rules of Conduct. The Broker-Dealer and the General Agent shall ensure that each Agent shall comply with a standard of conduct including, but not limited to, the following: a. An Agent shall be duly qualified, licensed and registered to solicit and participate in the sale of Contracts as provided in Article III. b. An Agent shall not solicit applications for the Contracts without delivering the appropriate Contract Prospectus(es) the Trust Prospectus and, where required by state insurance law (as set forth in a notice to be supplied by the Equitable Life Companies), the then currently effective statement of additional information for the Contracts, and any other information whose delivery is specifically required. In soliciting applications for the Contracts, an Agent shall only make statements, oral or written, which are in accordance with the Contract Prospectus, the Trust Prospectus and written sales literature regarding the Contracts authorized by the Distributor. An Agent shall utilize only those applications for the Contracts provided to the General Agent by the Distributor. c. An Agent shall recommend the purchase of a Contract to an applicant only if he or she has reasonable grounds to believe that such purchase is suitable for the applicant in accordance with, among other things, applicable regulations of any state regulatory authority, the SEC and the NASD. While not limited to the following, a determination of suitability shall be based on information supplied to an Agent after a reasonable inquiry concerning the applicant's insurance and investment objectives and financial situation and needs. d. An Agent shall require that any payment of an initial Premium, whether in the form of a check or otherwise, shall be drawn in U.S. dollars on a bank located in the United States and made payable to the appropriate Equitable Life Company and, if in the form of a check, signed by the applicant for the Contract. An Agent shall not accept third-party checks or cash for Premiums. e. All checks and applications for the Contracts received by an Agent shall be forwarded promptly, and in any event not later than two business days after receipt, to the processing office designated by the Equitable Life Companies. f. An Agent shall have no authority to endorse checks to an Equitable Life Company. g. An Agent shall have no authority to alter, modify, waive or change any of the terms, rates, charges or conditions of the Contracts. h. An Agent shall make no representations concerning the continuation of non-guaranteed terms or provisions of the Contracts. i. An Agent shall have no authority to advertise for, on behalf of, or with respect to an Equitable Life Company, the Distributor, the Variable Accounts, the MVA Interests, the Contracts or the Trust without prior written approval and authorization from the Distributor. j. An Agent shall have no authority to solicit applications for Contracts or Premiums thereunder which will be subject to or in connection with any so-called "market timing" or "asset allocation" program, plan, arrangement or service which is an unapproved program. -9- k. An Agent shall not furnish any transfer or other instructions by telephone to an Equitable Life Company on behalf of an owner of a Contract without having first obtained from such owner a written authorization in a form acceptable to the Equitable Life Companies. l. An Agent shall not encourage a prospective purchaser to surrender or exchange an insurance policy or contract issued by an Equitable Life Company in order to purchase a Contract or, conversely, to surrender or exchange a Contract in order to purchase another insurance policy or contract issued by an Equitable Life Company, except to the extent such surrenders or exchanges have been authorized by the Distributor. In the event that an insurance policy or contract issued by an Equitable Life Company is surrendered or exchanged in order to purchase a Contract, no compensation shall be paid under this Agreement. m. An Agent shall act in accordance with the rules and procedures of the Equitable Life Companies in connection with any solicitation activities relating to the Contracts. ARTICLE VI Responsibilities of Distributor for Marketing Materials and Reports [section]6.1 Prospectuses and Applications Provided by Distributor. During the term of this Agreement, the Distributor will provide the Broker-Dealer and the General Agent, without charge, with as many copies of the Contract Prospectus(es), Trust Prospectus and applications for the Contracts, as the Broker-Dealer or the General Agent may reasonably request. Upon receipt from the Distributor of updated copies of the Contract Prospectus(es), Trust Prospectus and applications for the Contracts, the Broker-Dealer and the General Agent will promptly discard or destroy all copies of such documents previously provided to them, except such copies as are needed for purposes of maintaining proper records. Upon termination of this Agreement, the Broker-Dealer and the General Agent will promptly return, to the Distributor, all Contract and Trust Prospectuses, Contract applications, and other materials and supplies furnished by the Distributor to the Broker-Dealer or the General Agent or to the Agents. [section]6.2 Sales Material Provided by Distributor. During the term of this Agreement, the Distributor will be responsible for providing and approving all promotional, sales and advertising material to be used by the Broker-Dealer and the General Agent. The Distributor will file such materials or will cause such materials to be filed with the SEC and the NASD, and with any state securities regulatory authorities, as required. [section]6.3 Information Provided by Distributor. The Distributor will compile periodic marketing reports summarizing sales results to the extent reasonably requested by the Broker-Dealer or the General Agent. ARTICLE VII Commissions, Fees and Expenses [section]7.1 Compensation Schedule. During the term of this Agreement, the Distributor shall pay to the General Agent (or to the Broker-Dealer, at the request of the General Agent) as compensation for Contracts for which it is the Broker-of-Record, the amounts set forth in Schedule II, as such Schedule II may be amended or modified at any time, in any manner and without prior notice by the Distributor, and subject to the other provisions of this Agreement. Any amendment to Schedule II will be applicable to any Contract for which an application or initial Premium is received by an Equitable Life Company on or after the effective date of such amendment, in accordance with procedures established by the Distributor. -10- Compensation with respect to any Contract shall be paid to the General Agent only for so long as the General Agent is the Broker-of-Record for such Contract. [section]7.2 Limitations on Compensation. No compensation or reimbursement of any kind other than that described in this Agreement is payable to the General Agent or the Broker-Dealer. In addition, the Broker-Dealer and the General Agent recognize that, unless the provisions of Exhibit B apply to the receipt of an initial Premium, all compensation payable to the General Agent hereunder will be disbursed by or on behalf of the Distributor after each Premium is received and accepted by the appropriate Equitable Life Company. [section]7.3 Expenses Paid by Broker-Dealer and General Agent. Neither the Broker-Dealer nor the General Agent shall, directly or indirectly, expend or contract for the expenditure of any funds of the Distributor or any Equitable Life Company. The Broker-Dealer and the General Agent shall each pay all expenses incurred by each of them in the performance of this Agreement, unless otherwise specifically provided for in this Agreement or unless the Distributor shall have agreed in advance in writing to share the cost of certain expenses. Initial state appointment fees for agents of an Equitable Life Company who are associated with the General Agent will be paid by such Equitable Life Company unless otherwise paid by the General Agent or Broker-Dealer. Renewal state appointment fees for any Agent shall be paid by such Equitable Life Company if, in the sole discretion of such Equitable Life Company, its minimum production and activity requirements for the payment of renewal appointment fees have been met by such Agent. Each Equitable Life Company shall establish reasonable minimum production and activity requirements for the payment of renewal state appointment fees, which may be changed by such Equitable Life Company in its sole discretion at any time without notice. Except as otherwise provided herein, the Broker-Dealer will be obligated to pay all state appointment fees, including, but not limited to, renewal appointment fees not paid for by an Equitable Life Company, transfer fees and termination fees, and any other fees required to be paid to obtain state insurance licenses for Agents. [section]7.4 Offsets of Compensation Under Other Agreements. With respect to commissions, compensation or any other amounts owed by the Distributor or any Affiliate of the Distributor to the Broker-Dealer or the General Agent under any other agreement, the Distributor shall have a right to set off against such amounts any monies payable by the General Agent under this Agreement, including Schedule II, to the Distributor, to the extent permitted by applicable law. This right on the part of the Distributor shall not prevent both of them or either of them from pursuing any other means or remedies available to them to recover such monies payable by the General Agent. [section]7.5 No Rights of Agents to Compensation Paid by Distributor. Agents shall have no interest in this Agreement or right to any commissions to be paid by the Distributor to the General Agent. The General Agent shall be solely responsible for the payment of any commission or consideration of any kind to Agents. The General Agent shall have no interest in any compensation paid by an Equitable Life Company to the Distributor, now or hereafter, in connection with the sale of any Contracts under this Agreement. ARTICLE VIII Term and Exclusivity of Agreement [section]8.1 Limited Classes of Contracts. This Agreement relates solely to the Contracts identified in Schedule I. [section]8.2 Term. This Agreement shall remain in effect for a period of one year from the Effective Date, and, unless terminated earlier pursuant to Sections 8.3 or 8.4, shall automatically continue in effect for one-year periods thereafter; provided, however, that it shall automatically terminate upon termination of -11- any distribution agreement between the Distributor and an Equitable Life Company relating to the Contracts. [section]8.3 Early Termination by Notice. This Agreement may be terminated by any party hereto by giving notice to the other parties at least sixty (60) days prior to an anniversary of the Effective Date. [section]8.4 Termination for Cause. If Broker-Dealer or the General Agent shall default in their respective obligations under this Agreement, or breach any of their respective representations or warranties made in this Agreement, the Distributor may, at its option, cancel and terminate this Agreement without notice. [section]8.5 Surviving Provisions. Upon termination of this Agreement, all authorizations, rights, and obligations hereunder shall cease except: a. the obligation to settle accounts hereunder, including the payment of compensation with respect to Contracts in effect at the time of termination or issued pursuant to applications received by an Equitable Life Company prior to termination or Premiums received under such Contracts subsequent to termination of this Agreement; b. the provisions with respect to indemnification set forth in Article XI; c. the provisions of Section 4.13 that require the General Agent and the Broker-Dealer to maintain certain books and records; d. the confidentiality provisions contained in Section 10.3; and e. the provisions of subparagraph l. of Section 5.1 with respect to the surrender or exchange of a Contract. ARTICLE IX Complaints and Investigations [section]9.1 Cooperation in Investigations and Proceedings. The Distributor, the Broker-Dealer and the General Agent shall each cooperate fully in any insurance regulatory investigation, proceeding or inquiry or in any judicial proceeding arising in connection with the Contracts marketed under this Agreement. In addition, the Distributor, the Broker-Dealer and the General Agent shall cooperate fully in any securities regulatory investigation, proceeding or inquiry or in any judicial proceeding with respect to the Distributor, the Broker-Dealer, their Affiliates or their agents, to the extent that such investigation or proceeding is in connection with the Contracts marketed under this Agreement. Copies of documents received by any party to this Agreement in connection with any judicial proceeding shall be furnished promptly to all of the other parties. [section]9.2 Notification and Related Requirements. Without limiting the provisions of Section 9.1: a. The Broker-Dealer and the General Agent will be notified promptly of any customer complaint or notice of any regulatory investigation, proceeding or inquiry or any judicial proceeding received by the Distributor or an Equitable Life Company with respect to the Broker-Dealer, General Agent or any Agent. b. The Broker-Dealer and the General Agent will promptly notify the Distributor and the appropriate Equitable Life Company of any customer complaint or notice of any regulatory -12- investigation, proceeding or inquiry or any judicial proceeding received by the Broker-Dealer, the General Agent or their Affiliates with respect to themselves, their Affiliates or any Agent in connection with any Contract marketed under this Agreement or any activity relating to any such Contract and, upon request by the Distributor, will promptly provide copies of all relevant materials to the Distributor. c. In the case of a customer complaint, the Distributor, the Broker-Dealer and the General Agent will cooperate in investigating such complaint, and any response by the Broker-Dealer or the General Agent to such complaint will be sent to the Distributor for written approval not less than five business days prior to its being sent to the customer or regulatory authority, except that if a more prompt response is required, the proposed response shall be communicated by telephone or facsimile. The Distributor shall have final authority to determine the content of each such response. ARTICLE X Assignment, Amendment, Confidentiality [section]10.1 Non-Assignable Except to Certain Affiliates. This Agreement shall be non-assignable by the parties hereto, except that a party may assign its rights and obligations to any subsidiary of, or any company under common control with, such party, provided that: a. the assignee is duly licensed to perform all functions required of that party under this Agreement; b. the assignee undertakes to perform such party's functions hereunder; and c. in the event that the Broker-Dealer or the General Agent determines to assign its rights and obligations under this Agreement: i. such proposed assignment is approved in advance by the Distributor; and ii. the Broker-Dealer or the General Agent or assignee pays any state insurance agent appointment fees and any other charges or fees, including taxes, that become due and payable as a result of the assignment. 10.2 Prior Agreements and Amendments. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, either oral or written, between the parties relating to the Contracts and, except for any amendment of Schedule I, pursuant to the terms of Section 2.6, or Schedule II, pursuant to the terms of Section 7.1, may not be modified in any way unless by written agreement. [section]10.3 Confidentiality. Each party to this Agreement shall maintain the confidentiality of any client list or any other proprietary information that it may acquire in the performance of this Agreement and shall not use such information for any purpose unrelated to the administration of the Contracts without the prior written consent of the other parties. ARTICLE XI Indemnification [section]11.1 Indemnification of Distributor. The Broker-Dealer and the General Agent, jointly and severally, shall indemnify and hold harmless each Equitable Life Company, the Distributor and each person who controls or is associated with an Equitable Life Company or the Distributor within the meaning of such terms under the federal securities laws, and any officer, director, employee or agent of the foregoing, -13- against any and all losses, claims, damages or liabilities, joint or several (including any investigative, legal and other expenses reasonably incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), insofar as such losses, claims, d amages or liabilities arise out of or are based upon: a. violation(s) by the Broker-Dealer, the General Agent or an Agent of federal or state securities laws or regulations, insurance laws or regulations, or any rule or requirement of the NASD; b. any unauthorized use of sales or advertising material, any oral or written misrepresentations, or any unlawful sales practices concerning the Contracts, the Equitable Life Companies, the Variable Accounts, the MVA Interests or the Trust, by the Broker-Dealer, the General Agent or an Agent; c. claims by the Agents or other agents or representatives of the General Agent or the Broker-Dealer for commissions or other compensation or remuneration of any type; d. any action or inaction by any clearing broker or broker furnishing similar services through which the Broker-Dealer or the General Agent processes any transaction pursuant to this Agreement; e. any failure on the part of the Broker-Dealer, the General Agent or an Agent to submit Premiums or applications for Contracts or accurate and proper instructions of a Contract owner or prospective owner to the Equitable Life Companies, or to submit the correct amount of a Premium, on a timely basis and in accordance with Sections 4.5 and 4.6 and the rules and procedures of the Equitable Life Companies. f. any failure on the part of the Broker-Dealer, the General Agent, or an Agent to deliver Contracts to purchasers thereof on a timely basis in accordance with Section 4.7 and in accordance with the rules and procedures of the Equitable Life Companies; or g. any other breach by the Broker-Dealer or the General Agent of any provision of this Agreement, including, without limitation, Section 5.1. This indemnification will be in addition to any liability which the Broker-Dealer and the General Agent may otherwise have. [section]11.2 Indemnification of Broker-Dealer and General Agent. The Distributor shall indemnify and hold harmless the Broker-Dealer and the General Agent and each person who controls or is associated with the Broker-Dealer or the General Agent within the meaning of such terms under the federal securities laws, and any officer, director, employee or agent of the foregoing, against any and all losses, claims, damages or liabilities, joint or several (including any investigative, legal and other expenses reasonably incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which they or any of them may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based upon a breach by the Distributor of any provision of this Agreement. This indemnification will be in addition to any liability which the Distributor may otherwise have. [section]11.3 Notification and Procedures. After receipt by a party entitled to indemnification ("Indemnified Party") under this Article XI of notice of the commencement of any action or threat of such action, if a claim in respect thereof is to be made against any person obligated to provide indemnification under this Article XI ("Indemnifying Party"), such Indemnified Party will notify the Indemnifying Party in -14 writing of the commencement thereof as soon as practicable thereafter, provided that the omission so to notify the Indemnifying Party will not relieve it from any liability under this Article XI, except to the extent that the omission results in a failure of actual notice to the Indemnifying Party and such Indemnifying Party is damaged solely as a result of the failure to give such notice. The Indemnifying Party, upon the request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if such proceeding is settled with such consent or if final judgment is entered in such proceeding for the plaintiff, the Indemnifying Party shall indemnify the Indemnified Party from and against any loss or liability by reason of such settlement or judgment. ARTICLE XII Miscellaneous [section]12.1 Headings. The headings 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. [section]12.2 Counterparts. This Agreement may be executed in two or more counterparts, each of which taken together shall constitute one and the same instrument. [section]12.3 Severability. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. [section]12.4 Notices. All notices under this Agreement shall be given in writing and addressed as follows: if to the Distributor, to: Equitable Distributors, Inc. 787 Seventh Avenue New York, New York 10019 Attention: President if to the Broker-Dealer or the General Agent, to: --------------------------------------- --------------------------------------- --------------------------------------- Attention: ----------------------------- or to such other address as such party may hereafter specify in writing. Each such notice shall be either hand delivered or transmitted by certified United States mail, return receipt requested, and shall be effective upon delivery. -15- [section]12.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding its conflict of laws provisions. [section]12.6 Scope of Sales Material References. For purposes of this Agreement, all references to sales, promotional, marketing or advertising material shall include, without limitation, 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), and educational or training materials or other communications distributed or made generally available to some or all Agents or employees of the Broker-Dealer or the General Agent. [section]12.7 No Waiver of Rights. 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. Failure of any party to insist upon strict compliance with any of the conditions of this Agreement shall not be construed as a waiver of any of the conditions, but the same shall remain in full force and effect. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. [section]12.8 Scope of Agreement. All Schedules and Exhibits to this Agreement are part of the Agreement. ARTICLE XIII Sales By or Through Banks [section]13.1 Applicability of Article; Supplemental Definitions. This Article XIII applies only if the Broker-Dealer or the General Agent distributes Contracts in one or more of the following circumstances (collectively referred to as "Bank-Related Sales"): (i) on the premises of a bank, trust company, savings bank, savings and loan association, or other institution (a) the deposits of which are insured by the Federal Deposit Insurance Corporation ("FDIC") or (b) which is chartered, organized, regulated or supervised under the authority of any federal or state bank or similar financial institution regulatory agency or authority (collectively, "Banks"); (ii) by means of personal, telephone, mail or other oral or written contacts originating from the premises of a Bank; or (iii) to persons which are referred to the Broker-Dealer or General Agent by a Bank. For purposes of this Article XIII, the term "Bank Regulatory Requirements" shall include (i) the Interagency Statement on Retail Sales of Nondeposit Products (February 15, 1994), published by the U.S. Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the FDIC and the U.S. Office of Thrift Supervision, as supplemented or amended from time to time, and (ii) any federal or state laws, regulations, orders, directives, circulars, agreements in writing, memoranda, commitments in writing or other legal or supervisory requirements which may be administered, adopted, promulgated, enforced or applied with respect to any Bank-Related Sales under this Agreement (regardless of whether any such requirement is of general or specific applicability) by any federal or state bank or financial institution regulatory agency or authority. [section]13.2 Written Agreements for Bank-Related Sales. The authorization to distribute Contracts which is conferred on the Broker-Dealer and the General Agent under Article II shall not include Bank-Related Sales unless such activities are conducted under the terms of a written agreement with each and any Bank where such Bank-Related Sales will take place which complies in all respects with applicable Bank Regulatory Requirements. The Broker-Dealer or General Agent shall, upon request of the Distributor, provide the Distributor with a copy of each such written agreement. The Broker-Dealer and the General -16- Agent shall have exclusive responsibility for ensuring strict compliance with the terms and conditions of any such written agreement. [section]13.3 Compliance with Bank Regulatory Requirements. The Broker-Dealer and the General Agent each represent and warrant, on behalf of itself and the Agents, that it is in compliance with all Bank Regulatory Requirements applicable to third parties engaged in Bank-Related Sales. The Broker-Dealer and the General Agent shall have exclusive responsibility for ensuring strict compliance with all Bank Regulatory Requirements with respect to any Bank-Related Sales under this Agreement. The Broker-Dealer and the General Agent each undertake to keep the Distributor promptly informed of any amendments, supplements or changes to applicable Bank Regulatory Requirements which may affect this Agreement. [section]13.4 Production by Distributor of Certain Books and Records. The Distributor agrees to provide to the Broker-Dealer or the General Agent, upon request, any books and records relating to Contracts distributed through Bank-Related Sales for purposes of making such records available for inspection by any federal or state bank or financial institution regulatory agency with jurisdiction over such Bank-Related Sales, or over a Bank through which such sales are conducted. The Distributor's agreement under this Section 13.4 shall not constitute or represent in any respect an admission or acknowledgment by Distributor that such federal or state bank or financial institution regulatory authority has any jurisdiction over Distributor or the activities of the Distributor, and the Distributor expressly disclaims any such jurisdiction. [section]13.5 Prospectuses and Applications Provided by Distributor; Sales Materials. During the term of this Agreement, the Distributor will provide the Broker-Dealer and the General Agent, without charge, with as many copies of the Contract Prospectus(es), Trust Prospectus and applications for the Contracts, containing those disclosures specifically required by any applicable Bank Regulatory Requirements with respect to products not insured by the FDIC and similar matters, as the Broker-Dealer or the General Agent reasonably may request. The Broker-Dealer and the General Agent shall have exclusive responsibility for ensuring the use and delivery of such materials, and any sales materials described in Article VI, in compliance with applicable Bank Regulatory Requirements. The terms of Article VI otherwise shall govern the furnishing, use and return of such documents and materials. [section]13.6 Supplemental Indemnification of Distributor. In addition to the indemnifications provided to the Distributor under Section 11.1, the Broker-Dealer and the General Agent, jointly and severally, shall indemnify each person entitled to indemnification under Section 11.1 for any losses, claims, damages or liabilities (as described in Section 11.1) arising out of or based on violations or failures to comply with any Bank Regulatory Requirements. The provisions of Article VI otherwise shall govern the terms and procedures with respect to any indemnifications provided under this Section 13.6. [section]13.7 Construction With Other Provisions. The provisions of this Article XIII are in addition to the other terms and conditions of this Agreement. In the event of any inconsistency between the provisions of this Article XIII and any other term or condition of this Agreement, the requirements of this Article XIII and not such other term or condition, shall govern. -17- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers. --------------------------------------- [Broker-Dealer] By: ------------------------------------ Title: --------------------------------------- [General Agent] By: ------------------------------------ Title: Agreed to and accepted as of the _____ day of ____________, 199_ in New York, New York EQUITABLE DISTRIBUTORS, INC. By: ----------------------------------------- Title: --------------------------------------- -18- EXHIBIT A Variable Accounts Separate Account No. 45 of Equitable. Separate Account No. 49 of Equitable. -i- EXHIBIT B Special Procedures for Initial Premium Transmittal As indicated in Section 4.5, an initial Premium which is not accompanied by a properly completed application for a Contract may be accepted by an Equitable Life Company if the Broker-Dealer and the General Agent have accepted, agreed to and complied with the procedures set forth in this Exhibit B. Wire Transmittal and Electronic Data Transmission of Application Information 1. The Broker-Dealer will cause the initial Premium to be paid to the appropriate Equitable Life Company by wire transfer. 2. The wire transfer will be accompanied by an electronic transmission of application information in a form prescribed by the Equitable Life Companies. 3. The proposed Contract issuance will not occur in any of the following states: Kentucky, New York, North Carolina, Pennsylvania. 4. The proposed Contract issuance will not involve any of the following: a. A contract replacement. b. A contract exchange within the meaning of Section 1035 of the Internal Revenue Code. c. The funding of benefits under a tax-qualified retirement plan or individual retirement account. 5. The Broker-Dealer and the General Agent will advise the proposed owner of the Contract that, unless a transaction has been requested in writing by the owner and the signature of the owner has been guaranteed, no financial transactions with respect to the Contract shall be executed until a signed acknowledgment form has been received by the appropriate Equitable Life Company. 6. Any cost associated with the correction of an error made in the investment of an initial Premium shall be borne by the Broker-Dealer, unless such error results directly from any improper action of an Equitable Life Company. 7. If the owner of the Contract requests a return of the initial Premium after the Premium has been invested and the Contract issued, the provisions of subparagraph a.ii. of Schedule II shall apply. Wire Transmittal and Submission of Application 1. The Broker-Dealer will cause the initial Premium to be paid to the appropriate Equitable Life Company by wire transfer. -i- 2. The wire transfer will be accompanied by a simultaneous telephone facsimile transmission of application information in a form prescribed by the Equitable Life Companies. 3. Any cost associated with the correction of an error made in the investment of an initial Premium shall be borne by the Broker-Dealer, unless such error results directly from any improper action of an Equitable Life Company. 4. If no properly completed application for a Contract is received by an Equitable Life Company within the period of time specified by it, and the initial Premium is therefore returned to the proposed owner of the Contract, the provisions of subparagraph a.ii. of Schedule II shall apply. The procedures set forth in this Exhibit B, as further described in the Contract Prospectus and as modified from time to time, are hereby accepted and agreed to as of the day and year first above written. --------------------------------------- [Broker-Dealer] By: ------------------------------------ --------------------------------------- [General Agent] By: ------------------------------------ -ii- SCHEDULE I Contracts The Contracts made available through the Income Management Group of Equitable, including the following: NQ Accumulator Rollover IRA Assured Growth Plan NQ Assured Payment Plan (Certain Period and Life Annuity) NQ Assured Payment Plan (Certain Period Only) -i- EX-99.1(C) 4 SALES AGREEMENT THE HUDSON RIVER TRUST SALES AGREEMENT AGREEMENT, dated as of [ ], by and among Equitable Distributors, Inc. ("EDI"), The Equitable Life Assurance Society of the United States ("Insurer") and Insurer's Separate Account No. 49 (the "Separate Account"). W I T N E S S E T H: WHEREAS, EDI is a principal underwriter for sale of Class B shares issued by The Hudson River Trust (the "Trust"), a series mutual fund whose shareholders are separate accounts ("Eligible Separate Accounts") of insurance companies ("Participating Insurance Companies"), pursuant to a Distribution Agreement ("Distribution Agreement"); WHEREAS, such Participating Insurance Companies issue, among other products, variable life insurance and annuity products ("Variable Products") whose net premiums, contributions or other considerations are allocated to Eligible Separate Accounts for investment in the Trust, and shares of the Trust are not sold except in connection with such Variable Products; WHEREAS, the Trust is registered as an open-end investment company under the Investment Company Act of 1940 (the "1940 Act"); WHEREAS, the Board of Trustees of the Trust may, in its sole discretion, determine that certain portfolios and classes of shares shall be available only to certain types of Variable Products or to a single insurer and its affiliates; WHEREAS, Insurer issues Variable Products, whose net premiums are allocated to the Separate Account, and which are eligible for investment in the Trust's portfolios; WHEREAS, EDI, an affiliate of Insurer, will also distribute the Variable Products, either directly or indirectly under selling agreements with one or more non-affiliated broker-dealers; WHEREAS, EDI is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "1934 Act") and is a member of the National Association of Securities Dealers, Inc. (the "NASD"); WHEREAS, EDI, Insurer and Broker-Dealer wish to define and describe the conditions under which the Class B shares of the Trust will be made available for investment by the Separate Account. NOW, THEREFORE, EDI, Insurer and the Separate Account hereby agree as follows: 1. The Board of Trustees of the Trust has adopted a Policy on Conflicts (the "Policy"). This Agreement shall be subject to the provisions of the Policy, the terms of which shall be incorporated herein by reference, made a part hereof and controlling. The Policy may be amended or superseded, without prior notice, and this Agreement shall be deemed amended to the extent the Policy is amended or superseded. Insurer, EDI and the Separate Account each represent and warrant that it will act in a manner consistent with such Policy as so set forth and as it may be amended or superseded, so long as it -2- owns any Class B shares of the Trust. This provision shall survive the termination of this Agreement. 2. EDI will make available to the Separate Account the Class B shares of the Trust's portfolios in connection with Variable Products funded by the Separate Account only as set forth on Schedule A hereto. Schedule A may be modified from time to time by written agreement of the parties. 3. Purchases and redemptions of Class B shares will be at net asset value for the appropriate portfolio, computed as set forth in the most recent Trust prospectus and Statement of Additional Information (respectively, "Trust Prospectus" and "SAI") and any supplements thereto, and shall be submitted by Insurer to the Trust's transfer agent pursuant to procedures and in accordance with payment provisions adopted by the parties from time to time. The Class B shares of the Trust may not be sold or transferred except to an Eligible Separate Account and only in accordance with Schedule A. 4. (a) In good faith and as soon as practicable, EDI will provide, at Trust expense, camera ready copy of the current Trust Prospectus and SAI and any supplements thereto for distribution by Insurer with the prospectus for the Variable Products, and camera ready copy of Trust proxy materials, annual and semi-annual reports, and any supplements thereto. To the extent that the foregoing documents are distributed by Insurer to existing owners of Variable Products, EDI will request reimbursement from the Trust for the printing and mailing costs associated with such distribution, upon receipt from Insurer of adequate documentation for presentation to the Trust. EDI will use its best efforts to coordinate with Insurer and to provide notice of -3- anticipated filings or supplements. Insurer may alter the form of the Trust Prospectus, SAI, annual and semi-annual reports, proxy statements or other Trust documents, with the prior approval of the Trust's officers. Insurer shall bear all costs associated with such alteration of form. Insurer is not authorized (i) to give any information or make any representations concerning the Trust, its shares or operations except those contained in the most recent Trust Prospectus and SAI and any supplements thereto, or (ii) to use any description of the Trust in any sales literature or advertising (including brochures, letters, illustrations and other similar materials, whether transmitted directly to potential purchasers of Variable Products or published in print or audio-visual media), except in either case as EDI or officers of the Trust may authorize in advance, which authorization will not be unreasonably withheld or delayed. Insurer shall indemnify and hold harmless EDI from any and all losses, claims, damages or liabilities (or actions in respect thereof) to which EDI may be subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or result from negligent, improper, fraudulent or unauthorized acts or omissions by Insurer or its employees, agents or representatives, including but not limited to improper solicitation of applications for Variable Products. (b) EDI will indemnify and hold harmless Insurer and the Separate Account against any losses, claims, damages or liabilities, to which Insurer or the Separate Account may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Trust Prospectus and/or SAI or any supplements thereto, (ii) the omission or alleged omission to state any material fact required to be stated in the Trust Prospectus and/or SAI or any supplements thereto or necessary to make the statements therein not misleading, or (iii) -4- other misconduct or negligence of EDI in its capacity as a distributor of the Trust; and will reimburse Insurer or the Separate Account for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action; provided, however, that EDI shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Trust Prospectus and/or SAI or any such supplement in good faith reliance upon and in conformity with written information furnished by Insurer specifically for use in the preparation thereof. EDI shall not indemnify Insurer or the Separate Account for any action where an applicant for the Variable Products or a policyholder was not furnished or sent or given, at or prior to written confirmation of the sale of the Variable Products and at such later times as required by state or federal securities laws, a copy of the prospectus relating to the Variable Products together with the Trust Prospectus, any supplements to the Trust Prospectus EDI may furnish to Insurer and, if requested by the applicant from Insurer or required by applicable law, the Trust SAI and any supplements thereto and, as required by applicable law, the Trust's annual and semi-annual reports, other required reports and proxy statements. 5. This Agreement shall terminate automatically if it shall be assigned. The Agreement shall also terminate automatically if the Distribution Agreement shall terminate. 6. If EDI is notified that the Distribution Agreement will be terminated and that it shall cease to be a principal underwriter of the Class B shares of the Trust, EDI shall immediately notify the other parties in writing of such termination, and this -5- Agreement shall continue in effect until the effective date of the termination of the Distribution Agreement. This Agreement may be terminated by any party at any time on one hundred eighty days' written notice to the other parties, without the payment of any penalty. 7. This Agreement shall be subject to the provisions of the 1940 Act, the 1934 Act and the Securities Act of 1933 and the rules, regulations, and rulings thereunder and of the NASD, from time to time in effect, including such exemptions from the 1940 Act and no-action positions as the Securities and Exchange Commission or its staff may grant, and the terms hereof shall be interpreted and construed in accordance therewith. Without limiting the generality of the foregoing, the term "assigned" shall not include any transaction exempt from section 15(b)(2) of the Investment Company Act by order of the Securities and Exchange Commission or any transaction as to which the staff of the Securities and Exchange Commission has taken a no-action position. Insurer and EDI shall each, in connection with its obligations hereunder, comply with all laws and regulations applicable thereto, whether federal or state, and whether relating to insurance, securities or other general areas, including but not limited to the record keeping and sales supervision requirements of such laws and regulations. EDI shall immediately notify Insurer of the issuance by any regulatory body of any stop order with respect to the Trust Prospectus or SAI or the initiation of any proceeding for that purpose or for any other purpose relating to the registration or an offering of shares of the Trust and of any other action or circumstances that may prevent the lawful offer or sale of shares of the Trust in any state or jurisdiction. -6- 8. Insurer and EDI shall submit to all regulatory and administrative bodies having jurisdiction over the operations of Insurer, EDI or the Trust, present or future, any information, reports or other material which any such body by reason of this Agreement may request or require as authorized by applicable laws or regulations. EDI shall keep confidential any information about Insurer's Variable Products or policy owners obtained pursuant to this Agreement and shall disclose such information only if Insurer has authorized such disclosure, or if such disclosure is required by state or federal regulatory bodies, as authorized by applicable law. EDI will notify Insurer of disclosures required by regulatory bodies as soon as possible. EDI agrees that all records and other data pertaining to the Variable Products are the exclusive property of Insurer and that any such records and other data, whether maintained in written or electronic format, shall be furnished to Insurer by EDI upon termination of this Agreement for any reason whatsoever. This shall not preclude EDI from keeping copies of such data or records for its own files subject to the provisions of this paragraph. 9. Insurer retains the ultimate right of control over, and responsibility for marketing the Variable Products. 10. EDI represents that neither EDI nor any person employed in any material connection with respect to the services provided pursuant to this Agreement: (a) Within the last 10 years has been convicted of any felony or misdemeanor arising out of conduct involving embezzlement, fraudulent conversion, or -7- misappropriation of funds or securities, or involving violations of ss.ss. 1341, 1342, or 1343 of Title 18, United States Code; or (b) Within the last 10 years has been found by any state regulatory authority to have violated or has acknowledged violation of any provision of any state insurance law involving fraud, deceit or knowing misrepresentation; or (c) Within the last 10 years has been found by any federal or state regulatory authorities to have violated or have acknowledged violation of any provision of federal or state securities laws involving fraud, deceit or knowing misrepresentation. 11. EDI and Insurer each represent that no commission or other fee shall be charged or paid to any person or entity in connection with the sale or purchase of the Trust's Class B shares to or from the Separate Account, other than regular salary or wages. 12. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. The effective date of this Agreement shall be the date first above written. EQUITABLE DISTRIBUTORS, INC. Attest: _______________________ By:______________________________________ THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Attest: By:______________________________ SEPARATE ACCOUNT NO. 49 By: THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES as depositor Attest: _________________________ By:______________________________ SCHEDULE A Name of Portfolio Common Stock Money Market Aggressive Stock Global International Conservative Investors Growth Investors Quality Bond Intermediate Government Securities Growth and Income EX-99.4(K) 5 ACCUMULATOR ACCUMULATOR DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. - ------ OWNER: [John Doe] ANNUITANT: [John Doe] Age: [60] Sex: [Male] CONTRACT: GROUP ANNUITY CONTRACT NO. AC 7625 CERTIFICATE NUMBER: [00000] ENDORSEMENTS ATTACHED: Endorsement Applicable to Non-Qualified Certificates Endorsement Applicable to Market Value Adjustment Terms ISSUE DATE: [January 1, 1996] CONTRACT DATE: [January 1, 1996] ANNUITY COMMENCEMENT DATE: [January 22, 2021] THE MAXIMUM MATURITY AGE IS AGE [85] -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows the Annuitant's [85th] birthday. BENEFICIARY: [Jane Doe] SUCCESSOR OWNER/ANNUITANT: [Applicable if Owner and Annuitant are the same and beneficiary is the spouse at the time of election and time of Owner/Annuitant's death] [Jane Doe] Data Page 1 DATA PAGES (CONT'D) PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. - ------ INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$10,000.00] INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN. INVESTMENT OPTIONS ALLOCATION (SEE SECTION 3.01) o [CONSERVATIVE INVESTORS FUND $2,500.00 o GROWTH INVESTORS FUND o GROWTH AND INCOME FUND o COMMON STOCK FUND $2,500.00 o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1997 $2,500.00 FEBRUARY 15, 1998 $2,500.00 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 FEBRUARY 15, 2006] ------------------ TOTAL:[$10,000.00] Investment Options shown are Investment Funds of our Separate Account No. 49 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate Data Page 2 DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): Except as indicated below, your initial and any subsequent Contributions are allocated according to your instructions. No more than 60% of any Contribution may be allocated to the Guaranteed Period Account. If you have elected Principal Assurance in the application then a portion of your initial Contribution is allocated by us to a Guarantee Period you have selected. The remaining portion of your initial Contribution is allocated to the Investment Funds according to your instructions. Any subsequent Contributions will be allocated according to your instructions. ( See Data pages, Part C; Allocation Restrictions) CONTRIBUTION LIMITS (SEE SECTION 3.02): [Initial Contribution minimum: [$10,000]. Subsequent Contribution minimum: [$1,000]. Subsequent Contributions can be made at any time subject to the following: For issue ages 20 through 69, Contributions made on or after age 70 may not exceed Contributions made prior to age 70; for issue ages 70 through 74, Contributions made after age 75 may not exceed Contributions made prior to age 75. For all issue ages, Contributions may not be made once the Certificate is within seven years of the Annuity Commencement Date. We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than [$1,500,000]. We may also refuse to accept any contribution if the sum of all contributions under all Equitable annuity accumulation certificates/contracts you own would then total more than [$2,500,000].] TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Periodic Withdrawals - Unless you specify otherwise, Periodic Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first. WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - Only one Lump Sum Withdrawal may be taken during a Contract Year at any time during such Contract Year; Periodic Withdrawals - May not start sooner than 28 days after issue of this Certificate. You may elect to receive Periodic Withdrawals on a quarterly or annual basis subject to a maximum of 2.5% quarterly and 10.0% annually of the Annuity Account Value as of the Transaction Date. Data Page 3 DATA PAGES (CONT'D) MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): [Lump Sum Withdrawals minimum - $1,000; Periodic Withdrawals minimum - $250.] MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) [90%] or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The sum of: (1) The Annuity Account Value in the Investment Funds, or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. (See Data pages, Part C) Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see below) is credited to and becomes part of the GMDB on each Processing Date. GMDB Interest Rate Interest will be calculated at the effective annual GMDB interest rate of 6% for Annuitant issue ages 69 and under; 3% for issue ages 70 through 74; and 0% for issue ages 75 and above, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on an interest rate of 3% for Annuitant issue ages 74 and under; and 0% for issue ages 75 and above. Contributions, transfers and withdrawals during the Contract Year will be taken into account. Data Page 4 DATA PAGES (CONT'D) Withdrawals and transfers out of the Investment Funds generally reduce the GMDB on a dollar-for-dollar basis as of the date of the withdrawal or transfer. However, if at any time the sum of withdrawals and transfers out of the Investment Funds in a Contract Year, calculated as a percentage of the Annuity Account Value as of the date of such withdrawal or transfer, exceed the current GMDB interest rate, the transaction that caused the excess and all additional withdrawals and/or transfers out of the Investment Funds in that Contract Year will cause a percentage reduction in the GMDB as of the date of the withdrawal or transfer, rather than a dollar-for-dollar reduction. This means that if the GMDB interest rate is 6% and you withdraw 5% of the Annuity Account Value in the Investment Funds, your GMDB will be reduced by the dollar amount of the withdrawal as of the date of the withdrawal. If you withdraw 10% of your Annuity Account Value, your GMDB will be reduced by 10% as of the date of the withdrawal. If the successor Owner/Annuitant Owner election is in effect at your death, the GMDB will be set at the Annuity Account Value in the Investment Funds as of the date of death, if greater than the current GMDB. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): [Life Annuity 10 Year Period Certain] AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide the Annuity Benefit will be (1) the Annuity Account Value for any life annuity form or (2) the Cash Value for any period certain only annuity form except that if the period certain is more than five years the amount applied will be no less than 95% of the Annuity Account Value. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): [6% per year] MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): [$2,000, as well as minimum of $20 for initial monthly annuity payment.] WITHDRAWAL CHARGES (SEE SECTION 8.01): [A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that a withdrawal exceeds the Free Corridor Amount as discussed in Section 8.01 or, if the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below.] Data Page 5 DATA PAGES (CONT'D) Current and Maximum Percentage of Contract Year Contributions ------------- ------------- [1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%] [The applicable withdrawal charge percentage is determined by the Contract Year in which the withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each Contribution withdrawn or surrendered. For purposes of the table, for each Contribution, the Contract Year in which we receive that Contribution is "Contract Year 1."] [Withdrawal charges will be deducted from the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option.] FREE CORRIDOR AMOUNT (SEE SECTION 8.01): [[15%] of Annuity Account Value at the beginning of the Contract Year minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions.] ++ [Withdrawals in excess of the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply).] [The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender.] CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Guaranteed Minimum Death Benefit Charge: [For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to [0.35%] of the guaranteed minimum death benefit in effect on such Processing Date. [0.35%] is the maximum we will charge.] (b) Premium Taxes: [A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date.] Data Page 6 DATA PAGES (CONT'D) The charge in (a) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. The charge in (b) will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charge in (b) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. TRANSFER CHARGE (SEE SECTION 8.03): Currently, there is no charge. We reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five. DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum [Annual rate of 0.90% (equivalent to a daily rate of 0.002477%).] Asset Based Administrative Charge: Current and Maximum [Annual rate of 0.35% (equivalent to a daily rate of 0.000969%).] Data Page 7 DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): If the Annuitant is between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which the Annuitant will attain age 80. If the Annuitant is age 75 or above, allocations may be made only to Guarantee Periods with maturities of five years or less; however, in no event may allocations be made to Guarantee Periods with maturities beyond the February 15th immediately following the Annuity Commencement Date. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): If no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all the Annuity Account Value from a Guarantee Period. This percentage is determined by (i) dividing the amount of the withdrawal or transfer from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal or transfer. TRANSFER RULES (SEE SECTION 4.02): Transfers are permitted to or from the Guaranteed Period Account or among the Guarantee Periods once per quarter during each Contract Year at any time during the quarter. Guarantee Periods to which transfers may be made are limited based on your attained age (see Allocation Restrictions above). MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): The Guaranteed Rate for new allocations to a Guarantee Period is the rate we have in effect for this purpose even if new allocations to that Guarantee Period would not be accepted at the time. This rate will not be less than 3%. The current rate percentage we use in item (c) of the formula is 0.00%. For purposes of calculating the MVA only, we reserve the right to add up to 0.25% to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value in the Guaranteed Period Account and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. Data Page 8 EX-99.4(L) 6 ROLLOVER IRA ROLLOVER IRA DATA PART A -- THIS PART LISTS YOUR PERSONAL DATA. - ------ OWNER: [John Doe] ANNUITANT: [John Doe] Age: [60] Sex: [Male] CONTRACT: GROUP ANNUITY CONTRACT NO. AC 7627 CERTIFICATE NUMBER: [00000] ENDORSEMENTS ATTACHED: Endorsement Applicable to IRA Certificates Endorsement Applicable to Market Value Adjustment Terms Endorsement Applicable to Life Contingent Annuity ISSUE DATE: [January 1, 1996] CONTRACT DATE: [January 1, 1996] ANNUITY COMMENCEMENT DATE: [January 22, 2021] THE MAXIMUM MATURITY AGE IS AGE [85] -- SEE SECTION 7.03. The Annuity Commencement Date may not be later than the Processing Date which follows your [85th] birthday. If you elect the IRA Assured Payment Option or IRA Assured Payment Option Plus (IRA APO Plus) when you are age 79 or older, and subsequently terminate the Option, the Annuity Commencement Date may be no later than the calendar year in which you attain age 90. However, if you choose a date later than age 70 1/2, distribution of at least the minimum payments required must commence by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 (see item 2 of the Endorsement Applicable to IRA Certificates). BENEFICIARY: [Jane Doe] Data Page 1 DATA PAGES (CONT'D) PART B -- THIS PART DESCRIBES CERTAIN PROVISIONS OF YOUR CERTIFICATE. - ------ INITIAL CONTRIBUTION RECEIVED (SEE SECTION 3.02): [$10,000.00] INVESTMENT OPTIONS AVAILABLE (SEE PART II); YOUR ALLOCATION IS ALSO SHOWN. ALLOCATION INVESTMENT OPTIONS (SEE SECTION 3.01) - ------------------ ------------------ o [CONSERVATIVE INVESTORS FUND o GROWTH INVESTORS FUND o GROWTH AND INCOME FUND $2,500.00 o COMMON STOCK FUND o GLOBAL FUND o INTERNATIONAL FUND o AGGRESSIVE STOCK FUND $2,500.00 o MONEY MARKET FUND o INTERMEDIATE GOVERNMENT SECURITIES FUND o GUARANTEE PERIODS (CLASS I) EXPIRATION DATE AND GUARANTEED RATE FEBRUARY 15, 1997 5.00% $2,500.00 FEBRUARY 15, 1998 5.00% $2,500.00 FEBRUARY 15, 1999 FEBRUARY 15, 2000 FEBRUARY 15, 2001 FEBRUARY 15, 2002 FEBRUARY 15, 2003 FEBRUARY 15, 2004 FEBRUARY 15, 2005 FEBRUARY 15, 2006 FEBRUARY 15, 2007* FEBRUARY 15, 2008* FEBRUARY 15, 2009* FEBRUARY 15, 2010* FEBRUARY 15, 2011*] ------------------- TOTAL: [$10,000.00] Investment Options shown are Investment Funds of our Separate Account No. 49 and Guarantee Periods shown are in the Guaranteed Period Account. See Endorsement Applicable to Market Value Adjustment Terms. * Only available under the IRA Assured Payment Option and IRA APO Plus. "TYPES" OF INVESTMENT OPTIONS (SEE SECTION 4.02): Not applicable GUARANTEED INTEREST ACCOUNT (SEE SECTION 2.01): Not available under this Certificate Data Page 2 DATA PAGES (CONT'D) BUSINESS DAY (SEE SECTION 1.05): A Business Day for this Certificate will mean any day on which the New York Stock Exchange is open for trading. PROCESSING DATES (SEE SECTION 1.20): A Processing Date is each Contract Date anniversary. AVAILABILITY OF INVESTMENT OPTIONS (SEE SECTION 2.04): (See Data pages, Part C; Allocation Restrictions) ALLOCATION OF CONTRIBUTIONS (SEE SECTION 3.01): [Except as indicated below, your initial and any subsequent Contributions are allocated according to your instructions. (No more than 60% of any Contribution may be allocated to the Guaranteed Period Account.)] [If you have elected Principal Assurance in the application, then a portion of your initial Contribution is allocated by us to a Guarantee Period you have selected. The remaining portion of your initial Contribution is allocated to the Investment Funds according to your instructions. Any subsequent Contributions will be allocated according to your instructions. (See Data pages, Part C; Allocation Restrictions)] [If you elect the IRA Assured Payment Option after issue of the Certificate, your Annuity Account Value and any subsequent Contributions will be allocated by us to the Guaranteed Period Account and the Life Contingent Annuity and no amounts may be allocated to the Investment Funds. (See Data pages, Part C; Allocation Restrictions)] [If you elect the IRA APO Plus after issue of the Certificate, a portion of your Annuity Account Value is allocated by us to the Guaranteed Period Account and the Life Contingent Annuity. The remaining Annuity Account Value is allocated to the Investment Funds according to your instructions until transferred by us. (See Data pages, Part C; Allocation Restrictions)] CONTRIBUTION LIMITS (SEE SECTION 3.02): [We will only accept initial Contributions of at least [$10,000 ]in the form of either a rollover Contribution or a direct custodian-to-custodian transfer from other individual retirement arrangements. Subsequent Contributions may be made in an amount of at least [$1,000]. Subsequent Contributions may be "regular" IRA Contributions (limited to a maximum of $2,000 a year), rollover Contributions or direct transfers. Rollover Contributions and direct transfers are not subject to the $2,000 annual limit. "Regular" IRA Contributions may not be made for the taxable year in which you attain age 70 1/2 and thereafter. Rollover and direct transfer Contributions may be made until you attain age 83. However, any amount contributed after you attain age 70 1/2 must be net of your minimum distribution for the year in which the rollover or direct transfer Contribution is made (see item 2 Annuity Commencement Date in Endorsement Applicable to IRA Certificates). We may refuse to accept any Contribution if the sum of all Contributions under your Certificate would then total more than [$1,500,000]. We may also refuse to accept any contribution if the sum of all contributions under all Equitable annuity accumulation certificates/contracts you own would then total more than [$2,500,000].] Data Page 3 DATA PAGES (CONT'D) [A minimum Annuity Account Value of $25,000 is required to elect the IRA Assured Payment Option or IRA APO Plus.] TRANSFER RULES (SEE SECTION 4.02): (See Data pages, Part C) ALLOCATION OF WITHDRAWALS (SEE SECTION 5.01): [Lump Sum Withdrawals - You must provide withdrawal instructions indicating from which Investment Options the Lump Sum Withdrawal and any withdrawal charge will be taken; Minimum Distribution Withdrawals - Unless you specify otherwise, Minimum Distribution Withdrawals will be withdrawn on a pro rata basis from your Annuity Account Value in the Investment Funds. If there is insufficient value or no value in the Investment Funds, any additional amount of the withdrawal required or the total amount of the withdrawal, as applicable, will be withdrawn from the Guarantee Periods in order of the earliest Expiration Date(s) first.] WITHDRAWAL RESTRICTIONS (SEE SECTION 5.01): Lump Sum Withdrawals - Only one Lump Sum Withdrawal may be taken during a Contract Year at any time during such Contract Year; Minimum Distribution Withdrawals - May be elected in the year in which you attain age 70 1/2 or at a later date. Minimum Distribution Withdrawals will be made annually. Minimum Distribution Withdrawals may not be elected while the IRA Assured Payment Option or IRA APO Plus is in effect. MINIMUM WITHDRAWAL AMOUNT (SEE SECTION 5.01): [Lump Sum Withdrawals minimum - $1,000; Minimum Distribution Withdrawals minimum - $250.] MINIMUM AMOUNT OF ANNUITY ACCOUNT VALUE AFTER A WITHDRAWAL (SEE SECTION 5.02): Requests for a withdrawal must be for either (a) [90]% or less of the Cash Value or (b) 100% of the Cash Value (surrender of the Certificate). We will NOT exercise our rights, described in Sections 5.02(b) and 5.02(c), to terminate the Certificate. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The sum of: (1) The Annuity Account Value in the Investment Funds or, if greater, the guaranteed minimum death benefit defined below; and (2) The death benefit amount provided with respect to the Endorsement Applicable to Market Value Adjustment Terms. (See Data pages, Part C) Data Page 4 DATA PAGES (CONT'D.) Guaranteed Minimum Death Benefit (GMDB) The GMDB is determined daily. On the Contract Date, the GMDB is equal to the portion of the initial Contribution allocated to the Investment Funds. Thereafter, the GMDB is equal to (a) the GMDB determined on the immediately preceding Business Day, plus (b) any subsequent Contributions and transfers into the Investment Funds, less (c) any transfers and withdrawals from such Funds. In addition, interest (see below) is credited to and becomes part of the GMDB on each Processing Date. Interest will be calculated at the applicable effective annual GMDB interest rate for your "attained age" (your age at issue of the Certificate plus the number of Contract Years that have elapsed since the Contract Date, see table below) taking into account Contributions, transfers and withdrawals during the Contract Year, except with respect to amounts in the Money Market Fund and the Intermediate Government Securities Fund where the interest credit will be based on an interest rate of 3% for Annuitant attained ages 70 and under; and 0% for attained ages 71 and over. Attained Age Rate ------------ ---- 20 through 70 6% 71 through 85 0% Withdrawals and transfers out of the Investment Funds generally reduce the GMDB on a dollar-for-dollar basis as of the date of the withdrawal or transfer. However, if at any time the sum of withdrawals and transfers out of the Investment Funds in a Contract Year, calculated as a percentage of the Annuity Account Value as of the date of such withdrawal or transfer, exceed the current GMDB interest rate, the transaction that caused the excess and all additional withdrawals and/or transfers out of the Investment Funds in that Contract Year will cause a percentage reduction in the GMDB as of the date of the withdrawal or transfer, rather than a dollar-for-dollar reduction. This means that if the GMDB interest rate is 6% and you withdraw 5% of the Annuity Account Value in the Investment Funds, your GMDB will be reduced by the dollar amount of the withdrawal as of the date of the withdrawal. If you withdraw 10% of your Annuity Account Value, your GMDB will be reduced by 10% as of the date of the withdrawal. NORMAL FORM OF ANNUITY (SEE SECTION 7.04): [Life Annuity 10 Year Period Certain] AMOUNT OF ANNUITY BENEFIT (SEE SECTION 7.05): The amount applied to provide the Annuity Benefit will be (1) the Annuity Account Value for any life annuity form or (2) the Cash Value for any period certain only annuity form except that if the period certain is more than five years the amount applied will be no less than 95% of the Annuity Account Value. INTEREST RATE TO BE APPLIED IN ADJUSTING FOR MISSTATEMENT OF AGE OR SEX (SEE SECTION 7.06): [6% per year] Data Page 5 DATA PAGES (CONT'D) MINIMUM AMOUNT TO BE APPLIED TO AN ANNUITY (SEE SECTION 7.06): [$2,000, as well as minimum of $20 for initial monthly annuity payment.] WITHDRAWAL CHARGES (SEE SECTION 8.01): [A withdrawal charge will be imposed as a percentage of each Contribution made to the extent that (i) any withdrawals during a Contract Year exceed the Free Corridor Amount as discussed in Section 8.01 or, (ii) the Certificate is surrendered to receive the Cash Value. We determine the withdrawal charge separately for each Contribution in accordance with the table below.] Current and Maximum Percentage of Contract Year Contributions ------------- ------------- [1 7.00% 2 6.00% 3 5.00% 4 4.00% 5 3.00% 6 2.00% 7 1.00% 8 and later 0.00%] [The applicable withdrawal charge percentage is determined by the Contract Year in which the Lump Sum Withdrawal is made or the Certificate is surrendered, beginning with "Contract Year 1" with respect to each Contribution withdrawn or surrendered. For purposes of the table, for each Contribution, the Contract Year in which we receive that Contribution is "Contract Year 1."] [Withdrawal charges will be deducted from the Annuity Account Value in the Investment Options from which each withdrawal is made in proportion to the amount being withdrawn from each Investment Option.] FREE CORRIDOR AMOUNT (SEE SECTION 8.01): [[15%] of Annuity Account Value at the beginning of the Contract Year, minus any amount previously withdrawn during the Contract Year. Amounts withdrawn up to the Free Corridor Amount will not be deemed a withdrawal of Contributions. In any Contract Year when a Minimum Distribution Withdrawal is the only withdrawal taken, no withdrawal charge will apply.] [Lump Sum Withdrawals in excess of the Free Corridor Amount or a Minimum Distribution Withdrawal when added to a Lump Sum Withdrawal previously taken in the same Contract Year, which exceeds the Free Corridor Amount will be deemed withdrawals of Contributions in the order in which they were made (that is, the first-in, first-out basis will apply).] [The Free Corridor Amount does not apply when calculating the withdrawal charge applicable upon a surrender.] Data Page 6 DATA PAGES (CONT'D) [If the IRA Assured Payment Option or IRA APO Plus is in effect a 10% Free Corridor Amount will apply for Lump Sum Withdrawals.] CHARGES DEDUCTED FROM ANNUITY ACCOUNT VALUE (SEE SECTION 8.02): (a) Guaranteed Minimum Death Benefit Charge: [For the guaranteed minimum death benefit we will deduct on each Processing Date an amount equal to [0.20%] of the guaranteed minimum death benefit in effect on such Processing Date. [0.20%] is the maximum we will charge.] (b) Premium Taxes: [A charge for any applicable premium tax generally will be deducted from the amount applied to provide an Annuity Benefit under Section 7.02. In certain states, however, we may deduct the charge from Contributions rather than at the Annuity Commencement Date.] The charge in (a) will always be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. The charge in (b) will be deducted from the Annuity Account Value in the Investment Funds on a pro rata basis. If there is insufficient value in the Investment Funds, all or a portion of the charge in (b) will be deducted from the Annuity Account Value with respect to the Guarantee Periods in order of the earliest Expiration Date(s) first. TRANSFER CHARGE (SEE SECTION 8.03): [Currently, there is no charge. We reserve the right to impose a charge at a maximum of $25 for each transfer per Contract Year in excess of five.] DAILY SEPARATE ACCOUNT CHARGES (SEE SECTION 8.04): Mortality and Expense Risk Charge: Current and Maximum [Annual rate of 0.90% (equivalent to a daily rate of 0.002477%).] Asset Based Administrative Charge: Current and Maximum [Annual rate of 0.35% (equivalent to a daily rate of 0.000969%).] Data Page 7 DATA PAGES (CONT'D) PART C -- THIS PART LISTS THE TERMS WHICH APPLY TO THE ENDORSEMENT APPLICABLE TO MARKET VALUE ADJUSTMENT TERMS (MVA ENDORSEMENT). ALLOCATION RESTRICTIONS (SEE SECTION 3.01): Except as indicated below, if you are between ages 71 through 74 allocations may not be made to a Guarantee Period with a maturity year that would exceed the year in which you will attain age 80. At ages 75 and above, allocations may be made only to Guarantee Periods with maturities of five years or less; however, in no event may allocations be made to Guarantee Periods with maturities beyond the February 15th immediately following the Annuity Commencement Date. If you elect the IRA Assured Payment Option, your Contributions and Annuity Account Value will be allocated by us to serially maturing Guarantee Periods having Expiration Dates in annual sequence and the Modal Payment portion of the Guaranteed Period Account, if applicable, and applied to the Life Contingent Annuity, so as to provide substantially equal or increasing withdrawal payments during a fixed period followed by annuity payments for life under the Life Contingent Annuity. The fixed period payments consist of payments described under Transfers at Expiration Date, below. When amounts are applied under the Life Contingent Annuity, Data pages, Part D will be issued. If you elect the APO Plus, a portion of your Annuity Account Value is allocated by us to serially maturing Guarantee Periods having Expiration Dates in annual sequence and the Modal Payment portion of the Guaranteed Period Account, if applicable, and applied to the Life Contingent Annuity, so as to provide substantially equal withdrawal payments during a fixed period followed by annuity payments for life under the Life Contingent Annuity. Fixed period payments are described under Transfers at Expiration Date, below. The remaining Annuity Account Value is allocated among the Investment Funds according to your instructions. Any subsequent Contributions will also be allocated to the Investment Funds according to your instructions and then will be periodically transferred by us to the Guarantee Periods and the Life Contingent Annuity. When amounts are applied under the Life Contingent Annuity, Data pages, Part D will be issued. TRANSFERS AT EXPIRATION DATE (SEE ITEM 1 OF MVA ENDORSEMENT): Except as indicated below, if no election is made with respect to amounts in the Guaranteed Period Account as of the Expiration Date, such amounts will be transferred into the Guarantee Period with the earliest Expiration Date. If the IRA Assured Payment Option or IRA APO Plus is in effect, upon the expiration of a Guarantee Period, the Guaranteed Period Amount will be paid to you in full, if annual payments are to be made on an Expiration Date in each calendar year. Otherwise, the Guaranteed Period Amount will be transferred into the Modal Payment portion of the Guaranteed Period Account. You may not transfer these amounts into any other Investment Options. These withdrawals will not be subject to a withdrawal charge. Data Page 8 DATA PAGES (CONT'D) MARKET VALUE ADJUSTMENT (MVA) ON TRANSFERS AND WITHDRAWALS (SEE ITEM 2 OF MVA ENDORSEMENT): The MVA (positive or negative) resulting from a withdrawal or transfer of a portion of the amount in a Guarantee Period will be a percentage of the MVA that would be applicable upon a withdrawal of all of the Annuity Account Value from a Guarantee Period. This percentage is determined by (i) dividing the amount of the withdrawal or transfer from the Guarantee Period by (ii) the Annuity Account Value in such Guarantee Period prior to the withdrawal or transfer. TRANSFER RULES (SEE SECTION 4.02): Transfers are permitted to or from the Guaranteed Period Account or among the Guarantee Periods once per quarter during each Contract Year at any time during the quarter. Guarantee Periods to which transfers may be made are limited based on your attained age (see Allocation Restrictions above). MVA FORMULA (SEE ITEM 3 OF MVA ENDORSEMENT): The Guaranteed Rate for new allocations to a Guarantee Period is the rate we have in effect for this purpose even if new allocations to that Guarantee Period would not be accepted at the time. This rate will not be less than 3%. The current rate percentage we use in item (c) of the formula is [0.00%]. For purposes of calculating the MVA only, we reserve the right to add up to [0.25%] to such current rate percentage. DEATH BENEFIT AMOUNT (SEE SECTION 6.01): The larger of (a) the Annuity Account Value in the Guaranteed Period Account and (b) the sum of the Guaranteed Period Amounts in each Guarantee Period. Data Page 9 EX-99.23 7 CONSENT OF INDEPENDENT ACCOUNTANTS Consent of Independent Accountants We hereby consent to the incorporation by reference in the Prospectuses constituting part of this Post-Effective Amendment No. 4 to Registration Statement No. 33-88456 on Form S-3 of our report dated February 7,1996, appearing on page F-1 of The Equitable Life Assurance Society of the United States ' Annual Report on Form 10-K for the year ended December 31,1996. We also consent to the incorporation by reference of our report on the Consolidated Financial Statement Schedules dated February 7,1996, which appears on page F-41 of such Annual Report on Form 10-K. We also consent to the referenc es to us under the headings "Independent Accountants" in such Prospectuses. /s/ Price Waterhouse LLP Price Waterhouse LLP New York, New York June 6,1996 EX-99.24(B) 8 POWER OF ATTORNEY POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline Sherman, Michael F. McNelis, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 21st day of May, 1996. /s/Stanley B. Tulin ------------------- -----END PRIVACY-ENHANCED MESSAGE-----