-----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, SAPtGDnQXrV6Te26Ouqvb2SBr1n4i9UXqT9RGr/fIeF7NNF/nXMTfbGzcjUNIpJf E/0pqSnDlb6/dXoBi0Lrjw== 0000950135-98-001168.txt : 19980226 0000950135-98-001168.hdr.sgml : 19980226 ACCESSION NUMBER: 0000950135-98-001168 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19980225 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANUFACTURERS LIFE INSURANCE CO OF NEW YORK SEP ACCOUNT A CENTRAL INDEX KEY: 0000884525 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 033-46217 FILM NUMBER: 98549235 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-06584 FILM NUMBER: 98549236 BUSINESS ADDRESS: STREET 1: 555 THEODORE FREMD AVE CITY: RYE STATE: NY ZIP: 10580 BUSINESS PHONE: 6172666008 MAIL ADDRESS: STREET 1: 555 THEODORE FREMD AVE STREET 2: STE C-209 CITY: RYE STATE: NY ZIP: 10580 485APOS 1 THE MANUFACURERS LIFE INSURANCE COMPANY 1 As filed with the Securities and Exchange Commission on February 25, 1998 Registration No. 33-46217 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POST-EFFECTIVE AMENDMENT NO. 7 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 8 THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A (FORMERLY, FNAL VARIABLE ACCOUNT) (Exact name of Registrant) THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK (FORMERLY, FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY) (Name of Depositor) Corporate Center at Rye 555 Theodore Fremd Avenue, Suite C-209 Rye, New York 10580-9966 (Address of Depositor's Principal Executive Offices) (914) 921-1020 (Depositor's Telephone Number Including Area Code) Copy to: Joseph Scott J. Sumner Jones, Esq. President Jones & Blouch, L.L.P. The Manufacturers Life Insurance 1025 Thomas Jefferson Street N.W. Company of New York Suite 405 West Corporate Center at Rye Washington, D.C. 20007-0805 555 Theodore Fremd Avenue Suite C-209 Rye, New York 10580-9966 (Name and Address of Agent for Service) ----------------------- It is proposed that this filing will become effective: [ ] immediately upon filing pursuant to paragraph (b) [ ] on [date] pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a) [ ] 75 days after filing pursuant to paragraph (a) [X] on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485 2 THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-4 N-4 Item Part A Caption in Prospectus - ------ --------------------- 1.................................. Cover Page 2.................................. Special Terms 3.................................. Summary 4.................................. Performance Data; Financial Statements 5.................................. General Information about The Manufacturers Life Insurance Company of New York The Manufacturers Life Insurance Company of New York Separate Account A Manufacturers Investment Trust 6.................................. Charges and Deductions; Withdrawal Charge; Administration Fees; Mortality and Expense Risk Charge; Taxes; Appendix A; Appendix B 7.................................. Accumulation Provisions; Company Approval; Purchase Payments; Accumulation Units; Net Investment Factor; Transfers Among Investment Options; Special Transfer Services - Dollar Cost Averaging; Asset Rebalancing Program; Withdrawals; Special Withdrawal Services - Systematic Withdrawal Plan; Contract Owner Inquiries; Other Contract Provisions; Ownership; Beneficiary; Modification; 8.................................. Annuity Provisions; General; Annuity Options; Determination of Amount of the First Variable Annuity Payment; Annuity Units and the Deter- mination of Subsequent Variable Annuity Payments; Transfers After Maturity Date 9.................................. Accumulation Provisions; Death Benefit Before Maturity Date; Annuity Provisions; Death Benefit After Maturity Date 10................................. Accumulation Provisions; Purchase Payments; Accumula- tion Units; Value of Accumula- 3 tion Units; Net Investment Factor; Distribution of Contracts 11 ............................... Withdrawals; Accumula- tion Provisions; Purchase Payments; Other Contract Provisions; Ten Day Right to Review 12................................. Federal Tax Matters; Intro- duction; The Company's Tax Status; Taxation of Annuities in General; Diversification Requirements; Qualified Retirement Plans 13............................... Legal Proceedings 14............................... Statement of Additional Information - Table of Contents Caption in Statement of Part B Additional Information - ------ ---------------------- 15................................. Cover Page 16................................. Table of Contents 17................................. General History and Information. 18................................. Services-Accountants; Services-Servicing Agent 19................................. Not Applicable 20................................. Principal Underwriter 21................................. Performance Data 22................................. Not Applicable 23................................. Financial Statements 4 PART A INFORMATION REQUIRED IN A PROSPECTUS 5 THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK Annuity Service Office and Mailing Address Corporate Center at Rye 555 Theodore Fremd Avenue, Suite C-209 Rye, New York 10580-9966 - -------------------------------------------------------------------------------- THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A - -------------------------------------------------------------------------------- OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT NON-PARTICIPATING This Prospectus describes a flexible purchase payment individual deferred combination fixed and variable annuity contract (the "contract") issued by The Manufacturers Life Insurance Company of New York, formerly First North American Life Assurance Company (the "Company"), a stock life insurance company organized under the laws of the state of New York. The contract is designed for use in connection with retirement plans which may or may not qualify for special Federal income tax treatment. The contract provides for the accumulation of contract values and the payment of annuity benefits on a variable and/or fixed basis. The contract offers thirty-eight investment options: thirty-five variable and three fixed. The variable portion of the contract value and annuity payments, if selected on a variable basis, will vary according to the investment performance of the sub-accounts of The Manufacturers Life Insurance Company of New York Separate Account A, formerly the FNAL Variable Account (the "Variable Account"). The Variable Account is a separate account established by the Company. Purchase payments and earnings on those purchase payments may be allocated to and transferred among one or more of thirty-five sub-accounts of the Variable Account. The assets of each sub-account are invested in shares of the Manufacturers Investment Trust, formerly NASL Series Trust (the "Trust"), a mutual fund having an investment portfolio for each sub-account of the Variable Account (see the accompanying Prospectus of the Trust). Fixed contract values may be accumulated under one, three and six year fixed account investment options. Except as specifically noted herein and as set forth under the caption "FIXED ACCOUNT INVESTMENT OPTIONS" below, this Prospectus describes only the variable portion of the contract. Additional information about the variable portion of the contract and Variable Account is contained in a Statement of Additional Information, dated the same date as this Prospectus, which has been filed with the Securities and Exchange Commission (the "SEC") and is incorporated herein by reference. The Statement of Additional Information is available without charge upon request by writing the Company at the above address or telephoning (914) 921-1020. In addition, the SEC maintains a Web site (http://www.sec.gov) that contains the Statement of Additional Information, material incorporated by reference, and other information regarding registrants that file electronically with the SEC. The table of contents for the Statement of Additional Information is included on page XX of this Prospectus. SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT CONTAINS INFORMATION ABOUT THE VARIABLE ACCOUNT AND THE VARIABLE PORTION OF THE CONTRACT THAT A PROSPECTIVE PURCHASER SHOULD KNOW BEFORE INVESTING. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is May 1, 1998. V9.PRO598 6 TABLE OF CONTENTS SPECIAL TERMS.................................................................3 SUMMARY ......................................................................5 GENERAL INFORMATION ABOUT THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A AND MANUFACTURERS INVESTMENT TRUST .......................13 The Manufacturers Life Insurance Company of New York......................13 The Manufacturers Life Insurance Company of New York Separate Account A .....................................................13 Manufacturers Investment Trust............................................13 DESCRIPTION OF THE CONTRACT..................................................18 ACCUMULATION PROVISIONS ..................................................18 Purchase Payments ...................................................18 Accumulation Units ..................................................19 Value of Accumulation Units .........................................19 Net Investment Factor ...............................................19 Transfers Among Investment Options ..................................20 Maximum Number of Investment Options.................................20 Special Transfer Services - Dollar Cost Averaging....................20 Asset Rebalancing Program............................................20 Withdrawals..........................................................21 Special Withdrawal Services - Systematic Withdrawal Plan.............22 Loans................................................................22 Death Benefit Before Maturity Date...................................23 ANNUITY PROVISIONS .......................................................24 General .............................................................24 Annuity Options .....................................................24 Determination of Amount of the First Variable Annuity Payment........25 Annuity Units and the Determination of Subsequent Variable Annuity Payments ................................26 Transfers After Maturity Date .......................................26 Death Benefit on or After Maturity Date..............................26 OTHER CONTRACT PROVISIONS ................................................26 Ten Day Right to Review .............................................26 Ownership ...........................................................27 Beneficiary .........................................................27 Modification ........................................................27 Company Approval ....................................................27 Misstatement and Proof of Age, Sex or Survival.......................27 FIXED ACCOUNT INVESTMENT OPTIONS..........................................27 CHARGES AND DEDUCTIONS ......................................................30 Withdrawal Charges........................................................30 Administration Fees.......................................................31 Mortality and Expense Risk Charge ........................................31 Taxes ....................................................................32 FEDERAL TAX MATTERS .........................................................32 INTRODUCTION .............................................................32 THE COMPANY'S TAX STATUS .................................................32 TAXATION OF ANNUITIES IN GENERAL .........................................32 Tax Deferral During Accumulation Period..............................32 Taxation of Partial and Full Withdrawals.............................34 Taxation of Annuity Payments.........................................34 Taxation of Death Benefit Proceeds...................................34 Penalty Tax on Premature Distributions...............................35 Aggregation of Contracts.............................................35 QUALIFIED RETIREMENT PLANS...................................................35 Qualified Plan Types.................................................36 Direct Rollovers.....................................................37 FEDERAL INCOME TAX WITHHOLDING............................................38 GENERAL MATTERS..............................................................38 Performance Data..........................................................38 Financial Statements......................................................38 Asset Allocation and Timing Services......................................38 Distribution of Contracts ................................................39 Contract Owner Inquiries..................................................39 Confirmation Statements...................................................39 Legal Proceedings ........................................................39 Other Information ........................................................39 STATEMENT OF ADDITIONAL INFORMATION - Table of Contents..........................................................39 APPENDIX A Examples of Calculation of Withdrawal Charge..............................40 7 SPECIAL TERMS The following terms as used in this Prospectus have the indicated meanings: Accumulation Unit - A unit of measure that is used to calculate the value of the variable portion of the contract before the maturity date. Annuitant - Any natural person or persons whose life is used to determine the duration of annuity payments involving life contingencies. If the contract owner names more than one person as an "Annuitant," the second person named shall be referred to as "Co-Annuitant." The "Annuitant" is as specified in the application, unless changed. All provisions based on the date of the death of the "Annuitant" will be based on the date of death of the last to survive of the "Annuitant" or "Co-Annuitant." In the event of the death of the "Annuitant" or "Co-Annuitant" who is also a contract owner, a death benefit is payable under the Death of Owner provision. The "Annuitant" and "Co-Annuitant" will be referred to collectively as "Annuitant." Annuity Option - The method selected by the contract owner (or as specified in the contract if no selection is made) for annuity payments made by the Company. Annuity Service Office - The service office of the Company is Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966. Annuity Unit - A unit of measure that is used after the maturity date to calculate variable annuity payments. Beneficiary - The person, persons or entity entitled to the death benefit under the contract upon the death of the annuitant. The beneficiary is as specified in the application, unless changed (see also "Successor Owner"). Contingent Beneficiary - The person, persons or entity to become the beneficiary if the beneficiary is not alive. The contingent beneficiary is as specified in the application, unless changed. Contract Anniversary - The anniversary of the contract date. Contract Date - The date of issue of the contract. Contract Value - The total of the investment account values and, if applicable, any amount in the loan account attributable to the contract. Contract Year - The period of twelve consecutive months beginning on the contract date or any anniversary thereof. Debt - Any amounts in the loan account attributable to the contract plus any accrued loan interest. The loan provision is applicable to certain qualified contracts only. Due Proof of Death - Due Proof of Death is required upon the death of the Annuitant or the Owner. One of the following must be received at the Annuity Service Office within one year of the date of death: (a) A certified copy of a death certificate; (b) A certified copy of a decree of a court of competent jurisdiction as to the finding of death; or (c) Any other proof satisfactory to us. Death benefits will be paid within 7 days of receipt of due proof of death and all required claim forms by the Annuity Service Office. Fixed Annuity - An annuity option with payments which are predetermined and guaranteed as to dollar amount. General Account - All the assets of the Company other than assets in separate accounts. 2 8 Investment Account - An account established by the Company which represents a contract owner's interest in an investment option prior to the maturity date. Investment Account Value - The value of a contract owner's investment in an investment account. Investment Options - The investment choices available to contract owners. There are thirty-five variable and three fixed investment options under the contract. Loan Account - The portion of the general account that is used for collateral when a loan is taken. Market Value Charge - A charge that may be assessed if amounts are withdrawn or transferred from the three or six year investment options prior to the end of the interest rate guarantee period. Maturity Date - The date on which annuity benefits commence. The maturity date is the date specified on the contract specifications page and is generally the first day of the month following the annuitant's 90th birthday. Net Purchase Payment - The purchase payment less the amount of premium tax, if any. Non-Qualified Contracts - Contracts which are not issued under qualified plans. Owner or Contract Owner - The person, persons (co-owner) or entity entitled to all of the ownership rights under the contract. The owner has the legal right to make all changes in contractual designations where specifically permitted by the contract. The owner is as specified in the application, unless changed. Portfolio or Trust Portfolio - A separate investment portfolio of the Trust, a mutual fund in which the Variable Account invests, or of any successor mutual fund. Purchase Payment - An amount paid by a contract owner to the Company as consideration for the benefits provided by the contract. Qualified Contracts - Contracts issued under qualified plans. Qualified Plans - Retirement plans which receive favorable tax treatment under Section 401, 403, 408 or 408A of the Internal Revenue Code of 1986, as amended. Separate Account - A segregated account of the Company that is not commingled with the Company's general assets and obligations. Sub-Account(s) - One or more of the sub-accounts of the Variable Account. Each sub-account is invested in shares of a different Trust portfolio. Successor Owner - The person, persons or entity to become the owner if the owner dies prior to the Maturity Date. The successor owner is as specified in the application, unless changed. If no Successor Owner is designated or the Successor Owner dies before the Owner, the Owner's estate is the Successor Owner (see also "Beneficiary"). Valuation Date - Any date on which the New York Stock Exchange is open for business and the net asset value of a Trust portfolio is determined. Valuation Period - Any period from one valuation date to the next, measured from the time on each such date that the net asset value of each portfolio is determined. Variable Account - The Variable Account, which is a separate account of the Company. Variable Annuity - An annuity option with payments which: (1) are not predetermined or guaranteed as to dollar amount, and (2) vary in relation to the investment experience of one or more specified sub-accounts. 3 9 SUMMARY The Contract. The contract offered by this Prospectus is flexible purchase payment individual deferred combination fixed and variable annuity contract. The contract provides for the accumulation of contract values and the payment of annuity benefits on a variable and/or fixed basis. Except as specifically noted herein and as set forth under the caption "FIXED ACCOUNT INVESTMENT OPTIONS" below, this Prospectus describes only the variable portion of the contract. Retirement Plans. The contract may be issued pursuant to either non-qualified retirement plans or plans qualifying for special income tax treatment under the Internal Revenue Code of 1986, as amended (the "Code"), such as individual retirement accounts and annuities, including Roth IRAs, pension and profit-sharing plans for corporations and sole proprietorships/partnerships ("H.R. 10" and "Keogh" plans), and tax-sheltered annuities for tax-exempt organizations (see "QUALIFIED RETIREMENT PLANS"). Purchase Payments. A contract may be issued upon the making of an initial purchase payment of as little as $30. A minimum of $300 must be paid during the first contract year. Purchase payments may be made at any time, except that if a purchase payment would cause the contract value to exceed $1,000,000, or the contract value already exceeds $1,000,000, additional purchase payments will be accepted only with the prior approval of the Company (see "PURCHASE PAYMENTS"). Investment Options. Purchase payments may be allocated among the thirty-eight investment options currently available under the contract: thirty-five variable account investment options and three fixed account investment options. Due to current administrative capabilities, a contract owner is limited to a maximum of 17 investment options (including all fixed account investment options) during the period prior to the maturity date of the contract. The thirty-five variable account investment options are the thirty-five sub-accounts of the Variable Account, a separate account established by the Company. The sub-accounts invest in corresponding portfolios of the Trust: Pacific Rim Emerging Markets Trust, Science and Technology Trust, International Small Cap Trust, Emerging Growth Trust, Pilgrim Baxter Growth Trust, Small/Mid Cap Trust, International Stock Trust, Worldwide Growth Trust, Global Equity Trust, Small Company Value Trust, Equity Trust, Growth Trust, Quantitative Equity Trust, Blue Chip Growth Trust, Real Estate Securities Trust, Value Trust, International Growth and Income Trust, Growth and Income Trust, Equity-Income Trust, Balanced Trust, Aggressive Asset Allocation Trust, High Yield Trust, Moderate Asset Allocation Trust, Conservative Asset Allocation Trust, Strategic Bond Trust, Global Government Bond Trust, Capital Growth Bond Trust, Investment Quality Bond Trust, U.S. Government Securities Trust, Money Market Trust, Lifestyle Aggressive 1000 Trust, Lifestyle Growth 820 Trust, Lifestyle Balanced 640 Trust, Lifestyle Moderate 460 Trust and the Lifestyle Conservative 280 Trust (see the accompanying Prospectus of the Trust). The portion of the contract value in the Variable Account and monthly annuity payments, if selected on a variable basis, will reflect the investment performance of the sub-accounts selected (see "THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A"). Purchase payments may also be allocated to the three fixed account investment options: one, three and six year guaranteed investment accounts. Under the fixed account investment options, the Company guarantees the principal value of purchase payments and the rate of interest credited to the investment account for the term of the guarantee period. The portion of the contract value in the fixed account investment options and monthly annuity payments, if selected on a fixed basis, will reflect such interest and principal guarantees (see "FIXED ACCOUNT INVESTMENT OPTIONS"). Subject to certain regulatory limitations, the Company may elect to add, subtract or substitute investment options. Transfers. Prior to the maturity date, amounts may be transferred among the variable account investment options and from the variable account investment options to the fixed account investment options without charge. In addition, amounts may be transferred prior to the maturity date among the fixed account investment options and from the fixed account investment options to the variable account investment options, subject to a one year holding period requirement (with certain exceptions) and a market value charge which may apply to such a transfer (see "FIXED ACCOUNT INVESTMENT OPTIONS"). After the maturity date, transfers are not permitted from variable annuity options to fixed annuity options or from fixed annuity options to variable annuity options. Transfers from any investment account must be at least $300 or, if less, the entire balance in the investment account. If, after the transfer the amount remaining in the investment account of the contract from which the transfer is made is less than $100, then we will transfer the entire amount instead of the requested amount. The Company may impose certain additional limitations 4 10 on transfers (see "TRANSFERS AMONG INVESTMENT OPTIONS" and "TRANSFERS AFTER MATURITY DATE"). Transfer privileges may also be used under a special service offered by the Company to dollar cost average an investment in the contract (see "SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING"). Withdrawals. Prior to the earlier of the maturity date or the death of the annuitant, the contract owner may withdraw all or a portion of the contract value. The amount withdrawn from any investment account must be at least $300 or, if less, the entire balance of the investment account. If a partial withdrawal plus any applicable withdrawal charge would reduce the contract value to less than $300, the withdrawal request will be treated as a request to withdraw the entire contract value. A withdrawal charge and an administration fee may be imposed (see "WITHDRAWALS"). A withdrawal may be subject to income tax and a 10% penalty tax (see "FEDERAL TAX MATTERS"). Withdrawal privileges may also be exercised pursuant to the Company's systematic withdrawal plan service (see "SPECIAL WITHDRAWAL SERVICES - SYSTEMATIC WITHDRAWAL PLAN"). Loans. The Company offers a loan privilege to owners of contracts issued in connection with Section 403(b) qualified plans that are not subject to Title I of ERISA. Owners of such contracts may obtain loans using the contract as the only security for the loan. The effective cost of a contract loan is 2% per year of the amount borrowed (see "LOANS"). Confirmation Statements. Owners will be sent confirmation statements for certain transactions in their account. Owners should carefully review these statements to verify their accuracy. Any mistakes should immediately be reported to the Company's Annuity Service Office. If the owner fails to notify the Company's Annuity Service Office of any mistake within 60 days of the mailing of the confirmation statement, the owner will be deemed to have ratified the transaction. Death Benefit Before Maturity Date. Generally, if the annuitant dies before the maturity date, the Company will pay to the beneficiary the minimum death benefit less any debt. During the first contract year, the minimum death benefit is the greater of (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the sum of all purchase payments made, less any amount deducted in connection with partial withdrawals. Except as provided below, during any subsequent contract year, the minimum death benefit will be the greater of (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the minimum death benefit determined in accordance with these provisions as of the last day of the previous contract year plus any purchase payments made and less any amount deducted in connection with partial withdrawals since then. If the annuitant dies after the first of the month following his or her 85th birthday, the minimum death benefit is the greater of: (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the excess of the sum of all purchase payments less the sum of any amounts deducted in connection with partial withdrawals. In certain other cases, an amount equal to the owner's interest will be distributed when the owner dies before the maturity date (see "DEATH BENEFIT BEFORE MATURITY DATE"). If the annuitant dies after the maturity date and annuity payments have been selected based on an annuity option providing for payments for a guaranteed period, the Company will make the remaining guaranteed payments to the beneficiary (see "DEATH BENEFIT ON OR AFTER MATURITY DATE"). Annuity Payments. The Company offers a variety of fixed and variable annuity options. Periodic annuity payments will begin on the maturity date. The contract owner selects the maturity date, frequency of payment and annuity option (see "ANNUITY PROVISIONS"). Ten Day Review. Within 10 days of receipt of a contract, the contract owner may cancel the contract by returning it to the Company (see "TEN DAY RIGHT TO REVIEW"). Charges and Deductions. The following table and Example are designed to assist contract owners in understanding the various costs and expenses that contract owners bear directly and indirectly. The table reflects expenses of the Variable Account and the Trust. The items listed under "Contract Owner Transaction Expenses" and "Separate Account Annual Expenses" are more completely described in this Prospectus (see "CHARGES AND DEDUCTIONS"). The items listed under "Trust Annual Expenses" are described in detail in the accompanying Trust Prospectus to which reference should be made. 5 11 CONTRACT OWNER TRANSACTION EXPENSES DEFERRED SALES LOAD (as percentage of purchase payments)
NUMBER OF COMPLETE YEARS WITHDRAWAL PURCHASE PAYMENT IN CHARGE CONTRACT PERCENTAGE -------- ---------- 0 6% 1 6% 2 5% 3 4% 4 3% 5 2% 6+ 0% ANNUAL CONTRACT FEE..............................$30 SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average account value) Mortality and expense risk fees.................1.25% Administration fee - asset based...............0.15% Total Separate Account Annual Expenses .........1.40%
TRUST ANNUAL EXPENSES (as a percentage of Trust average net assets)
MANAGEMENT OTHER TOTAL TRUST TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES - ------------------------------------------------------------------------------ Pacific Rim Emerging Markets........ 0.850% 0.570% 1.420% Science and Technology.............. 1.100% 0.160% 1.260% International Small Cap............. 1.100% 0.210% 1.310% Emerging Growth..................... 1.050% 0.060% 1.110% Pilgrim Baxter Growth............... 1.050% 0.130% 1.180% Small/Mid Cap....................... 1.000% 0.050% 1.050% International Stock................. 1.050% 0.330% 1.380% Worldwide Growth.................... 1.000% 0.320% 1.320% Global Equity....................... 0.900% 0.110% 1.010% Small Company Value................. 1.050% 0.100%* 1.150% Equity.............................. 0.750% 0.050% 0.800% Growth ............................. 0.850% 0.100% 1.950% Quantitative Equity................. 0.700% 0.070% 0.770% Blue Chip Growth.................... 0.925% 0.050% 0.975% Real Estate Securities.............. 0.700% 0.070% 0.770% Value............................... 0.800% 0.160% 0.960% International Growth and Income..... 0.950% 0.170% 1.120% Growth and Income................... 0.750% 0.040% 0.790% Equity Income....................... 0.800% 0.050% 0.850% Balanced ........................... 0.800% 0.080% 0.880% Aggressive Asset Allocation......... 0.750% 0.150% 0.900% High Yield.......................... 0.775% 0.110% 0.885% Moderate Asset Allocation........... 0.750% 0.100% 0.850% Conservative Asset Allocation....... 0.750% 0.140% 0.890% Strategic Bond...................... 0.775% 0.100% 0.875% Global Government Bond.............. 0.800% 0.130% 0.930% Capital Growth Bond................. 0.650% 0.080% 0.730% Investment Quality Bond............. 0.650% 0.090% 0.740%
6 12 U.S. Government Securities.......... 0.650% 0.070% 0.720% Money Market ....................... 0.500% 0.040% 0.540%
7 13
MANAGEMENT OTHER TOTAL TRUST TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES Lifestyle Aggressive 1000#.......... 0% 1.116%** 1.116% Lifestyle Growth 820#............... 0% 1.048%** 1.048% Lifestyle Balanced 640#............ 0% 0.944%** 0.944% Lifestyle Moderate 460#............. 0% 0.850%** 0.850% Lifestyle Conservative 260#......... 0% 0.708%** 0.708%
#Each Lifestyle Trust will invest in shares of the Underlying Portfolios. Therefore, each Lifestyle Trust will, in addition to its own expenses, such as certain Other Expenses, bear its pro rata share of the fees and expenses incurred by the Underlying Portfolios and the investment return of each Lifestyle Trust will be net of the Underlying Portfolio expenses. *Based on estimates of payments to be made during the current fiscal year. **Reflects expenses of the Underlying Portfolios. Manufacturers Securities Services, LLC has voluntarily agreed to pay the expenses of each Lifestyle Trust (excluding the expenses of the Underlying Portfolios). This voluntary expense reimbursement may be terminated at any time. If such expense reimbursement was not in effect, Total Trust Annual Expenses would be .04% higher (based on expenses of the Lifestyle Trusts for the fiscal year ended December 31, 1997) as noted in the chart below:.
MANAGEMENT OTHER TOTAL TRUST ANNUAL FEES EXPENSES EXPENSES Lifestyle Aggressive 1000 Trust 0% 1.156% 1.156% Lifestyle Growth 820 Trust 0% 1.088% 1.088% Lifestyle Balanced 640 Trust 0% 0.984% 0.984% Lifestyle Moderate 460 Trust 0% 0.890% 0.890% Lifestyle Conservative 280 Trust 0% 0.748% 0.748%
EXAMPLE A contract owner would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets, if the contract owner surrendered the contract at the end of the applicable time period:
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS** 10 YEARS** - -------------------------------------------------------------------------------- Pacific Rim Emerging Markets....... $84 $138 $182 $321 Science & Technology............... 83 133 174 305 International Small Cap............ 83 134 177 310 Emerging Growth.................... 81 129 167 291 Pilgrim Baxter Growth.............. 82 131 170 298 Small/Mid Cap...................... 81 127 164 285 International Stock................ 84 136 180 317 Worldwide Growth................... 83 135 177 311 Global Equity...................... 81 126 162 281 Small Company Value................ 82 130 Equity............................. 79 120 151 260 Growth ............................ 80 124 159 275 Quantitative Equity................ 78 119 150 257 Blue Chip Growth................... 80 125 160 277 Real Estate Securities............. 78 119 150 257 Value.............................. 80 125 159 276
8 14 International Growth and Income.... 82 129 167 292 Growth and Income.................. 78 120 151 259 Equity Income ..................... 79 121 154 265 Balanced........................... 79 122 155 268 Aggressive Asset Allocation........ 80 123 156 270 High Yield......................... 79 122 155 268 Moderate Asset Allocation.......... 79 121 154 265 Conservative Asset Allocation...... 79 123 156 269 Strategic Bond..................... 79 122 155 267 Global Government Bond............. 80 124 158 273 Capital Growth Bond................ 78 118 148 253 Investment Quality Bond............ 78 119 148 254 U.S. Government Securities........ 78 118 147 252 Money Market....................... 76 112 138 233 Lifestyle Aggressive 1000*......... 82 129 167 291 Lifestyle Growth 820*.............. 81 127 164 285 Lifestyle Balanced 640*............ 80 124 158 274 Lifestyle Moderate 460*............ 79 121 154 265 Lifestyle Conservative 280*........ 78 117 146 250
*The Example of Expenses for the Lifestyle Trusts is calculated using the midpoint of the minimum and maximum fees set forth under Annual Operating Expenses. ** The Example of Expenses for the Small Company Trust contains figures for only 1 and 3 years, since it is a newly created portfolio. 9 15 A contract owner would pay the following expenses on a $1,000 investment, assuming 5% annual return on assets, if the contract owner annuitized as provided in the contract or did not surrender the contract at the end of the applicable time period:
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS* 10 YEARS* - -------------------------------------------------------------------------------- Pacific Rim Emerging Markets........ $29 $89 $152 $321 Science & Technology................ 28 85 144 305 International Small Cap............. 28 86 147 310 Emerging Growth..................... 26 80 137 291 Pilgrim Baxter Growth............... 27 82 140 298 Small/Mid Cap....................... 25 78 134 285 International Stock................. 29 88 150 317 Worldwide Growth.................... 28 86 147 311 Global Equity....................... 25 77 132 281 Small Company Value................. 26 81 139 295 Equity ............................. 23 71 121 260 Growth.............................. 24 75 129 275 Quantitative Equity................. 23 70 120 257 Blue Chip Growth.................... 25 76 130 277 Real Estate Securities.............. 23 70 120 257 Value............................... 25 76 129 276 International Growth and Income..... 26 80 137 292 Growth and Income................... 23 70 121 259 Equity Income....................... 23 72 124 265 Balanced ........................... 24 73 125 268 Aggressive Asset Allocation......... 24 74 126 270 High Yield.......................... 24 73 125 268 Moderate Asset Allocation........... 23 72 124 265 Conservative Asset Allocation....... 24 73 126 269 Strategic Bond...................... 24 73 125 267 Global Government Bond.............. 24 75 128 273 Capital Growth...................... 22 69 118 253 Investment Quality Bond............. 22 69 118 254 U.S. Government Securities.......... 22 68 117 252 Money Market........................ 20 63 108 233 Lifestyle Aggressive 1000........... 26 80 137 291 Lifestyle Growth 820................ 25 78 134 285 Lifestyle Balanced 640.............. 24 75 128 274 Lifestyle Moderate 460.............. 23 72 124 265 Lifestyle Conservative 280.......... 22 68 116 250
* The Example of Expenses for the Small Company Value Trust contains figures for only 1 and 3 years, since it is a newly created portfolio. For purposes of presenting the foregoing Example, the Company has made certain assumptions mandated by the SEC. The Company has assumed that, where applicable, the maximum sales load is deducted, that there are no transfers or other transactions and that the "Other Expenses" line item under "Trust Annual Expenses" will remain the same. Such assumptions, which are mandated by the SEC in an attempt to provide prospective investors with standardized data with which to compare various annuity contracts, do not take into account certain features of the contract and prospective changes in the size of the Trust which may operate to change the expenses borne by contract owners. Consequently, the amounts listed in the Example above should not be considered a representation of past or future expenses and actual expenses borne by contract owners may be greater or lesser than those shown. 10 16 In addition, for purposes of calculating the values in the above Example, the Company has translated the $30 annual administration charge listed under "Annual Contract Fee" to a .086% annual asset charge based on the $35,000 approximate average size. So translated, such charge would be higher for smaller contracts and lower for larger contracts. The above summary is qualified in its entirety by the detailed information appearing elsewhere in this Prospectus and Statement of Additional Information and the Prospectus and Statement of Additional Information for the Trust, to which reference should be made. This Prospectus generally describes only the variable aspects of the contract, except where fixed aspects are specifically mentioned. TABLE OF ACCUMULATION UNIT VALUES
UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS AT SUB-ACCOUNT START OF YEAR* END OF YEAR END OF YEAR - --------------------------------------------------------------------------------------------------- Pacific Rim Emerging Markets 1997 .............................. $12.500000 Science & Technology 1997 .............................. $12.500000 International Small Cap 1996 .............................. $12.500000 $13.493094 365,317.719 1997 .............................. Emerging Growth 1997 .............................. $12.500000 Pilgrim Baxter Growth 1997 .............................. $12.500000 Small/Mid Cap 1996 .............................. $12.500000 $13.215952 746,253.254 1997 .............................. International Stock 1997 .............................. $12.500000 Worldwide Growth 1997 .............................. $12.500000 Global Equity 1992 .............................. $12.003976 $11.790318 21,242.936 1993 .............................. 11.790318 15.450341 701,425.817 1994 .............................. 15.450341 15.500933 1,612,831.628 1995 .............................. 15.500933 16.459655 1,679,042.917 1996 .............................. 16.495655 18.276450 1,955,863.791 1997 .............................. Equity 1992 .............................. $12.386657 $13.143309 17,805.389 1993 .............................. 13.143309 15.075040 532,797.733 1994 .............................. 15.075040 14.786831 1,212,483.594 1995 .............................. 14.786831 20.821819 1,680,197.930 1996 .............................. 20.821819 24.664354 2,439,815.649 1997 .............................. Growth 1996 .............................. $12.500000 $13.727312 140,312.944 1997 .............................. Quantitative Equity 1997 .............................. $12.500000 Blue Chip Growth 1992 .............................. $10.000000 $ 9.923524 105,743.980 1993 .............................. 9.923524 9.413546 605,012.548
11 17 1994 .............................. 9.413546 8.837480 1,049,124.977 1995 .............................. 8.837480 11.026969 1,318,608.463 1996 .............................. 11.026969 13.688523 1,623,697.582 1997 .............................. Real Estate Securities 1997 .............................. $12.500000 Value 1997 .............................. $12.500000 International Growth and Income 1995 .............................. $10.000000 $10.554228 419,354.257 1996 .............................. 10.554228 11.718276 1,080,586.010 1997 .............................. Growth and Income 1992 .............................. $10.942947 $11.927411 33,716.020 1993 .............................. 11.927411 12.893007 753,734.211 1994 .............................. 12.893007 13.076664 1,298,075.564 1995 .............................. 13.076664 16.660889 1,702,726.488 1996 .............................. 16.660889 20.178770 2,601,497.610 1997 .............................. Equity-Income 1993 .............................. $10.000000 $11.175534 1,087,538.574 1994 .............................. 11.175534 11.107620 2,147,059.046 1995 .............................. 11.107620 13.548849 2,700,623.434 1996 .............................. 13.548849 16.011513 3,362,755.333 1997 .............................. Balanced 1997 .............................. $12.500000 Aggressive Asset Allocation 1992 .............................. $10.880194 $11.623893 6,314.930 1993 .............................. 11.623893 12.642493 220,581.039 1994 .............................. 12.642493 12.381395 395,570.370 1995 .............................. 12.381395 14.990551 463,740.240 1996 .............................. 14.990551 16.701647 600,271.664 1997 .............................. High Yield 1997 .............................. $12.500000 Moderate Asset Allocation 1992 .............................. $11.012835 $11.772128 31,652.055 1993 .............................. 11.772128 12.775798 526,706.519 1994 .............................. 12.775798 12.396295 994,126.229 1995 .............................. 12.396295 14.752561 1,070,866.388 1996 .............................. 14.752561 15.995076 1,346,688.023 1997 .............................. Conservative Asset Allocation 1992 .............................. $11.102574 $11.821212 3,884.882 1993 .............................. 11.821212 12.705196 176,613.459 1994 .............................. 12.705196 12.298940 267,695.021 1995 .............................. 12.298940 14.320582 306,895.403 1996 .............................. 14.320582 15.113142 424,786.597 1997 .............................. Strategic Bond 1993 .............................. $10.000000 $10.750617 414,573.339 1994 .............................. 10.750617 9.965972 737,151.981 1995 .............................. 9.965972 11.716972 878,455.666 1996 .............................. 11.716972 13.250563 1,663,287.368
12 18 1997 .............................. Global Government Bond 1992 .............................. $13.322602 $13.415849 7,122.534 1993 .............................. 13.415849 15.741586 299,274.049 1994 .............................. 15.741586 14.630721 463,867.775 1995 .............................. 14.630721 17.772344 417,838.308 1996 .............................. 17.772344 19.803954 462,253.788 1997 .............................. Capital Growth Bond 1997 .............................. $12.500000 Investment Quality Bond (formerly called Bond Sub-account) 1992 .............................. $13.147350 $13.936240 1,442.768 1993 .............................. 13.936240 15.118716 209,360.256 1994 .............................. 15.118716 14.216516 309,793.553 1995 .............................. 14.216516 16.751499 305,028.908 1996 .............................. 16.751499 16.943257 386,465.721 1997 .............................. U.S. Gov. Securities (formerly called U.S. Gov. Bond Sub-account) 1992 .............................. $13.015785 $13.651495 13,906.158 1993 .............................. 13.651495 14.490734 546,010.063 1994 .............................. 14.490734 14.111357 652,508.827 1995 .............................. 14.111357 16.083213 696,869.324 1996 .............................. 16.083213 16.393307 807,763.458 1997 .............................. Money Market 1992 .............................. $12.892485 $13.137257 11.495 1993 .............................. 13.137257 13.303085 141,771.056 1994 .............................. 13.303085 13.623292 464,720.715 1995 .............................. 13.623292 14.190910 639,836.317 1996 .............................. 14.190910 14.699636 1,256,691.417 1997 .............................. Lifestyle Aggressive 1000 1997 .............................. $12.500000 Lifestyle Growth 820 1997 .............................. $12.500000 Lifestyle Balanced 640 1997 .............................. $12.500000 Lifestyle Moderate 460 1997 .............................. $12.500000 Lifestyle Conservative 260 1997 .............................. $12.500000
* Units under this series of contracts were first credited under the sub-accounts on August 9, 1994, except in the case of International Growth and Income where units were first credited on January 9, 1995, Small/Mid Cap and International Small Cap where units were first credited on March 4, 1996, Growth where units were first credited on July 15, 1996, Pacific Rim Emerging Markets, Science & Technology, Emerging Growth, Pilgrim Baxter Growth, International Stock, Worldwide Growth, Quantitative Equity, Real Estate Securities, Value, Balanced, High Yield, Capital Growth Bond, Lifestyle Aggressive 1000, Lifestyle Growth 820, Lifestyle Balanced 640, Lifestyle Moderate 460, Lifestyle Conservative 280 where units were first credited on January 1, 1997. 13 19 GENERAL INFORMATION ABOUT THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A AND MANUFACTURERS INVESTMENT TRUST THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK The Manufacturers Life Insurance Company of New York, (the "Company") is a stock life insurance company organized in 1992 under the laws of the state of New York. The Company's principal office is located at Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966. The Company is a wholly-owned subsidiary of The Manufacturers Life Insurance Company of North America, formerly North American Security Life Insurance Company ("Manulife North America"). Manulife North America is a stock life insurance company organized under the laws of Delaware in 1979 with its principal office located at 116 Huntington Avenue, Boston, Massachusetts 02116. Manulife North America's principal business is offering a variable annuity contract, similar to that offered by the Company in New York, in 49 other states, the District of Columbia and Puerto Rico. The ultimate parent of Manulife North America is The Manufacturers Life Insurance Company ("Manulife"), a Canadian mutual life insurance company based in Toronto, Canada. Prior to January 1, 1996, Manulife North America was a wholly owned subsidiary of North American Life Assurance Company ("NAL"), a Canadian mutual life insurance company. On January 1, 1996, NAL and Manulife merged with the combined company retaining the name Manulife. On January 19, 1998, the Board of Directors of Manulife asked the management of Manulife to prepare a plan for conversion of Manulife from a mutual life insurance company to an investor-owned, publicly traded stock company. Any demutualization plan for Manulife is subject to the approval of the Manulife Board of Directors and policyholders as well as regulatory approval. THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A The Company established The Manufacturers Life Insurance Company of New York Separate Account A (the "Variable Account") on March 4, 1992 as a separate account under the laws of New York. The income, gains and losses, whether or not realized, from assets of the Variable Account are, in accordance with the contracts, credited to or charged against the Variable Account without regard to other income, gains or losses of the Company. Nevertheless, all obligations arising under the contracts are general corporate obligations of the Company. Assets of the Variable Account may not be charged with liabilities arising out of any other business of the Company. The Variable Account is registered with the SEC under the Investment Company Act of 1940, as amended (the "1940 Act") as a unit investment trust. A unit investment trust is a type of investment company which invests its assets in specified securities, such as the shares of one or more investment companies. Registration under the 1940 Act does not involve supervision by the SEC of the management or investment policies or practices of the Variable Account. There are currently thirty-five sub-accounts within the Variable Account. The Company reserves the right, subject to prior approval of the New York Superintendent of Insurance and compliance with applicable law, to add other sub-accounts, eliminate existing sub-accounts, combine sub-accounts or transfer assets in one sub-account to another sub-account established by the Company or an affiliated company. MANUFACTURERS INVESTMENT TRUST The assets of each sub-account of the Variable Account are invested in shares of a corresponding portfolio of the Manufacturers Investment Trust (the "Trust"). A description of each portfolio is set forth below. The Trust is registered under the 1940 Act as an open-end management investment company. Each of the portfolios is diversified for purposes of the 1940 Act, except for the Global Government Bond Trust, the Emerging Growth Trust and the five 14 20 Lifestyle Trusts, which are non-diversified. The Trust receives investment advisory services from Manufacturers Securities Services, LLC ("MSS"), the successor to NASL Financial Services, Inc.. The Trust currently has fifteen Subadvisers who manage all of the portfolios:
SUBADVISER SUBADVISER TO ---------- ------------- Fidelity Management Trust Company Equity Trust Conservative Asset Allocation Trust Moderate Asset Allocation Trust Aggressive Asset Allocation Trust Founders Asset Management, Inc. Growth Trust Worldwide Growth Trust Balanced Trust International Small Cap Trust Fred Alger Management, Inc. Small/Mid Cap Trust J.P. Morgan Investment Management Inc. International Growth and Income Trust Manufacturers Adviser Corporation Pacific Rim Emerging Markets Trust Quantitative Equity Trust Real Estate Securities Trust Capital Growth Bond Trust Money Market Trust Lifestyle Trusts Miller Anderson & Sherrerd, LLP Value Trust High Yield Trust Morgan Stanley Asset Management Inc. Global Equity Trust Oechsle International Advisors, L.P. Global Government Bond Trust Pilgrim Baxter & Associates, Ltd. Pilgrim Baxter Growth Trust Rosenberg Institutional Equity Management Small Company Value Trust Rowe Price-Fleming International, Inc. International Stock Trust Salomon Brothers Asset Management Inc U.S. Government Securities Trust Strategic Bond Trust T. Rowe Price Associates, Inc. Science & Technology Trust Blue Chip Growth Trust Equity-Income Trust Warburg Pincus Asset Management, Inc. Emerging Growth Trust Wellington Management Company, LLP Growth and Income Trust Investment Quality Bond Trust
15 21 The following is a brief description of each portfolio: The PACIFIC RIM EMERGING MARKETS TRUST seeks long-term growth of capital by investing in a diversified portfolio that is comprised primarily of common stocks and equity-related securities of corporations domiciled in countries in the Pacific Rim region. The SCIENCE & TECHNOLOGY TRUST seeks long-term growth of capital. Current income is incidental to the portfolio's objective. The INTERNATIONAL SMALL CAP TRUST seeks capital appreciation by investing primarily in securities issued by foreign companies which have total market capitalization or annual revenues of $1 billion or less. These securities may represent companies in both established and emerging economies throughout the world. The EMERGING GROWTH TRUST seeks maximum capital appreciation by investing primarily in a portfolio of equity securities of domestic companies. The Emerging Growth Trust ordinarily will invest at least 65% of its total assets in common stocks or warrants of emerging growth companies that represent attractive opportunities for maximum capital appreciation. The PILGRIM BAXTER GROWTH TRUST seeks capital appreciation by investing in companies believed by the subadviser to have an outlook for strong earnings growth and the potential for significant capital appreciation. The SMALL/MID CAP TRUST seeks long term capital appreciation by investing at least 65% of its total assets (except during temporary defensive periods) in small/mid cap equity securities. As used herein small/mid cap equity securities are equity securities of companies that, at the time of purchase, have total market capitalization between $500 million and $5 billion. The INTERNATIONAL STOCK TRUST seeks long-term growth of capital by investing primarily in common stocks of established, non-U.S. companies. The WORLDWIDE GROWTH TRUST seeks long-term growth of capital by normally investing at least 65% of its total assets in equity securities of growth companies in a variety of markets throughout the world. The GLOBAL EQUITY TRUST seeks long-term capital appreciation by investing primarily in equity securities throughout the world, including U.S. issuers and emerging markets. The SMALL COMPANY VALUE TRUST seeks long term growth of capital by investing in equity securities of smaller companies which are traded principally in the markets of the United States. The EQUITY TRUST seeks growth of capital, by investing primarily in common stocks of United States issuers and securities convertible into or carrying the right to buy common stocks. The GROWTH TRUST seeks long term growth of capital by investing at least 65% of the portfolio's total assets in common stocks of well-established, high-quality growth companies that the subadviser believes have the potential to increase earnings faster than the rest of the market. The QUANTITATIVE EQUITY TRUST seeks to achieve intermediate and long-term growth through capital appreciation and current income by investing in common stocks and other equity securities of well established companies with promising prospects for providing an above average rate of return. The BLUE CHIP GROWTH TRUST seeks to achieve long-term growth of capital. Current income is a secondary objective and many of the stocks in the portfolio are expected to pay dividends. 16 22 The REAL ESTATE SECURITIES TRUST seeks to achieve a combination of long-term capital appreciation and satisfactory current income by investing in real estate related equity and debt securities. The VALUE TRUST seeks to realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk by investing primarily in common and preferred stocks, convertible securities, rights and warrants to purchase common stocks, ADRs and other equity securities of companies with equity capitalizations usually greater than $300 million. The INTERNATIONAL GROWTH AND INCOME TRUST seeks long-term growth of capital and income by investing, under normal circumstances, at least 65% of its total assets in equity securities of foreign issuers. The Portfolio may also invest in debt securities of corporate or sovereign issuers rated A or higher by Moody's Investor Servies, Inc. or Standard &Poor's Corporation or, if unrated, of equivalent credit quality as determined by the subadviser. The GROWTH AND INCOME TRUST seeks long-term growth of capital and income, consistent with prudent investment risk, by investing primarily in a diversified portfolio of common stocks of United States issuers which the subadviser believes are of high quality. The EQUITY-INCOME TRUST seeks to provide substantial dividend income and also long term capital appreciation by investing primarily in dividend-paying common stocks, particularly of established companies with favorable prospects for both increasing dividends and capital appreciation. The BALANCED TRUST seeks current income and capital appreciation by investing in a balanced portfolio of common stocks, U.S. and foreign government obligations and a variety of corporate fixed-income securities. The HIGH YIELD TRUST seeks to realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk by investing primarily in high yield debt securities, including corporate bonds and other fixed-income securities. The AUTOMATIC ASSET ALLOCATION TRUSTS seek the highest potential total return consistent with a specified level of risk tolerance -- conservative, moderate or aggressive -- by investing primarily in the kinds of securities in which the Equity, Investment Quality Bond, U.S. Government Securities and Money Market Trusts may invest. - The AGGRESSIVE ASSET ALLOCATION TRUST seeks the highest total return consistent with an aggressive level of risk tolerance. This Trust attempts to limit the decline in portfolio value in very adverse market conditions to 15% over any three year period. - The MODERATE ASSET ALLOCATION TRUST seeks the highest total return consistent with a moderate level of risk tolerance. This Trust attempts to limit the decline in portfolio value in very adverse market conditions to 10% over any three year period. - The CONSERVATIVE ASSET ALLOCATION TRUST seeks the highest total return consistent with a conservative level of risk tolerance. This Trust attempts to limit the decline in portfolio value in very adverse market conditions to 5% over any three year period. The STRATEGIC BOND TRUST seeks a high level of total return consistent with preservation of capital by giving its subadviser broad discretion to deploy the portfolio's assets among certain segments of the fixed-income market as the subadviser believes will best contribute to achievement of the portfolio's investment objective. The GLOBAL GOVERNMENT BOND TRUST seeks a high level of total return by placing primary emphasis on high current income and the preservation of capital, by investing primarily in a global portfolio of 17 23 high-quality, fixed-income securities of foreign and United States governmental entities and supranational issuers. The CAPITAL GROWTH BOND TRUST seeks to achieve growth of capital by investing in medium-grade or better debt securities, with income as a secondary consideration. The Capital Growth Bond Trust differs from most "bond" funds in that its primary objective is capital appreciation, not income. The INVESTMENT QUALITY BOND TRUST seeks a high level of current income consistent with the maintenance of principal and liquidity, by investing primarily in a diversified portfolio of investment grade corporate bonds and U.S. Government bonds with intermediate to longer term maturities. The portfolio may also invest up to 20% of its assets in non-investment grade fixed income securities. The U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current income consistent with preservation of capital and maintenance of liquidity, by investing in debt obligations and mortgage-backed securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities and derivative securities such as collateralized mortgage obligations backed by such securities. The MONEY MARKET TRUST seeks maximum current income consistent with preservation of principal and liquidity, by investing in high quality money market instruments with maturities of 397 days or less issued primarily by United States entities. The LIFESTYLE AGGRESSIVE 1000 TRUST seeks to provide long term growth of capital (current income is not a consideration) by investing 100% of the Lifestyle Trust's assets in other portfolios of the Trust ("Underlying Portfolios") which invest primarily in equity securities. The LIFESTYLE GROWTH 820 TRUST seeks to provide long term growth of capital with consideration also given to current income by investing approximately 20% of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in fixed income securities and approximately 80% of its assets in Underlying Portfolios which invest primarily in equity securities. The LIFESTYLE BALANCED 640 TRUST seeks to provide a balance between a high level of current income and growth of capital with a greater emphasis given to capital growth by investing approximately 40% of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in fixed income securities and approximately 60% of its assets in Underlying Portfolios which invest primarily in equity securities. The LIFESTYLE MODERATE 460 TRUST seeks to provide a balance between a high level of current income and growth of capital with a greater emphasis given to high income by investing approximately 60% of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in fixed income securities and approximately 40% of its assets in Underlying Portfolios which invest primarily in equity securities. The LIFESTYLE CONSERVATIVE 280 TRUST seeks to provide a high level of current income with some consideration also given to growth of capital by investing approximately 80% of the Lifestyle Trust's assets in Underlying Portfolios which invest primarily in fixed income securities and approximately 20% of its assets in Underlying Portfolios which invest primarily in equity securities. In pursuing the Strategic Bond, High Yield and Investment Quality Bond Trusts' investment objective, each portfolio expects to invest a portion of its assets in high yield securities, commonly known as "junk bonds" which also present a high degree of risk. The risks of these securities include price volatility and risk of default in the payment of interest and principal. See "Risk Factors Relating to High Yield Securities" contained in the Trust Prospectus before investing in any of these Trusts. In pursuing the Pacific Rim Emerging Markets, International Stock, Worldwide Growth, International Small Cap, Global Equity, Strategic Bond, International Growth and Income, High Yield and Global Government Bond 18 24 Trusts' investment objective, each portfolio may invest up to 100% of its assets in foreign securities which may present additional risks. See "Foreign Securities" contained in the Trust Prospectus before investing in any of these Trusts. If the shares of a Trust portfolio are no longer available for investment or in the Company's judgment investment in a Trust portfolio becomes inappropriate in view of the purposes of the Variable Account, the Company may eliminate the shares of a portfolio and substitute shares of another portfolio of the Trust or another open-end registered investment company. Substitution may be made with respect to both existing investments and the investment of future purchase payments. However, no such substitution will be made without notice to the contract owner and prior approval of the SEC to the extent required by the 1940 Act. The Company will vote shares of the Trust portfolios held in the Variable Account at meetings of shareholders of the Trust in accordance with voting instructions received from the persons having the voting interest under the contracts. The number of portfolio shares for which voting instructions may be given will be determined by the Company in the manner described below, not more than 90 days prior to the meeting of the Trust. Trust proxy material will be distributed to each person having the voting interest under the contract together with appropriate forms for giving voting instructions. Portfolio shares held in the Variable Account that are attributable to contract owners and as to which no timely instructions are received and portfolio shares held in the Variable Account that are beneficially owned by the Company will be voted by the Company in proportion to the instructions received. Prior to the maturity date, the person having the voting interest under a contract is the contract owner and the number of votes as to each portfolio for which voting instructions may be given is determined by dividing the value of the investment account corresponding to the sub-account in which such portfolio shares are held by the net asset value per share of that portfolio. After the maturity date, the person having the voting interest under a contract is the annuitant and the number of votes as to each portfolio for which voting instructions may be given is determined by dividing the reserve for the contract allocated to the sub-account in which such portfolio shares are held by the net asset value per share of that portfolio. Generally, the number of votes tends to decrease as annuity payments progress since the amount of reserves attributable to a contract will usually decrease after commencement of annuity payments. The Company reserves the right to make any changes in the voting rights described above that may be permitted by the Federal securities laws or regulations or interpretations of these laws or regulations. A full description of the Trust, including the investment objectives, policies and restrictions of each of the portfolios is contained in the Prospectus for the Trust and should be read by a prospective purchaser before investing. DESCRIPTION OF THE CONTRACT ACCUMULATION PROVISIONS PURCHASE PAYMENTS Purchase payments are paid to the Company at its Annuity Service Office. The minimum purchase payment is $30; however, at least $300 must be paid during the first contract year. Purchase payments may be made at any time. The Company may provide by separate agreement for purchase payments to be automatically withdrawn from a contract owner's bank account on a periodic basis. If a purchase payment would cause the contract value to exceed $1,000,000 or the contract value already exceeds $1,000,000, additional purchase payments will be accepted only with the prior approval of the Company. The Company may, at its option, cancel a contract at the end of any three consecutive contract years in which no purchase payments have been made, if both (i) the total purchase payments made over the life of the contract, less any withdrawals, are less than $2,000; and (ii) the contract value at the end of such three year period is less than $2,000. Upon cancellation the Company will pay the contract owner the contract value computed as of the valuation period during which the cancellation occurs less the annual $30 administration fee and less any debt. The amounts paid will be treated as withdrawals for Federal tax purposes and, thus, may be subject to income tax and to a 10% penalty tax (see "FEDERAL TAX MATTERS"). 19 25 Purchase payments are allocated among the investment options in accordance with the percentages designated by the contract owner in the application. In addition, contract owners have the option to participate in the Guarantee Plus Program administered by the Company. Under the Guarantee Plus Program the initial purchase payment is split between the fixed and variable investment options. A percentage of the initial purchase payment is allocated to the chosen fixed account, such that, at the end of the guaranteed period the fixed account will have grown to an amount at least equal to the total initial purchase payment. The percentage depends upon the current interest rate of the fixed investment option. The balance of the initial purchase payment is allocated among the variable investment options as indicated on the contract specifications page. Contract owners may elect to participate in the Guarantee Plus Program on the contract application and may obtain full information concerning the program and its restrictions from their securities dealers or the Annuity Service Office. The contract owner may change the allocation of subsequent purchase payments at any time upon written notice to the Company. ACCUMULATION UNITS The Company will establish an investment account for the contract owner for each variable account investment option to which such contract owner allocates purchase payments. Purchase payments are credited to such investment accounts in the form of accumulation units. The following discussion of accumulation units, the value of accumulation units and the net investment factor formula pertains only to the accumulations in the variable account investment options. The parallel discussion regarding accumulations in the fixed account investment options appears elsewhere in this Prospectus (see "FIXED ACCOUNT INVESTMENT OPTIONS"). The number of accumulation units to be credited to each investment account is determined by dividing the net purchase payment allocated to that investment account by the value of an accumulation unit for that investment account for the valuation period during which the purchase payment is received at the Company's Annuity Service Office complete with all necessary information or, in the case of the first purchase payment, pursuant to the procedures described below. Initial purchase payments received by mail will usually be credited in the valuation period during which received at the Annuity Service Office, and in any event not later than two business days after receipt of a properly completed application and all information necessary for processing of the application. The applicant will be informed of any deficiencies in an application if it cannot be processed and the purchase payment credited within two business days after receipt. If the deficiencies are not remedied within five business days after receipt, the purchase payment will be returned promptly to the applicant, unless the applicant specifically consents to the Company's retaining the purchase payment until all necessary information is received. Initial purchase payments received by wire transfer from broker-dealers will be credited in the valuation period during which received where such broker-dealers have made special arrangements with the Company for the collection and forwarding of contract applications. VALUE OF ACCUMULATION UNITS The value of accumulation units will vary from one valuation period to the next depending upon the investment results of the particular sub-accounts to which purchase payments are allocated. The value of an accumulation unit for each sub-account was arbitrarily set at $10 or $12.50 for the first valuation period under other contracts issued by the Company or an affiliate of the Company. The value of an accumulation unit for any subsequent valuation period is determined by multiplying the value of an accumulation unit for the immediately preceding valuation period by the net investment factor for such sub-account (described below) for the valuation period for which the value is being determined. NET INVESTMENT FACTOR The net investment factor is an index used to measure the investment performance of a sub-account from one valuation period to the next. The net investment factor for each sub-account for any valuation period is determined by dividing (a) by (b) and subtracting (c) from the result: Where (a) is: (1) the net asset value per share of a portfolio share held in the sub-account determined at the end of the current valuation period, plus 20 26 (2) the per share amount of any dividend or capital gain distributions made by the portfolio on shares held in the sub-account if the "ex-dividend" date occurs during the current valuation period. Where (b) is: the net asset value per share of a portfolio share held in the sub-account determined as of the end of the immediately preceding valuation period. Where (c) is: a factor representing the charges deducted from the sub-account on a daily basis for administrative expenses and mortality and expense risks. Such factor is equal on an annual basis to 1.40%: (0.15% for administrative expenses and 1.25% for mortality and expense risks). The net investment factor may be greater or less than or equal to one; therefore, the value of an accumulation unit may increase, decrease or remain the same. TRANSFERS AMONG INVESTMENT OPTIONS Before the maturity date the contract owner may transfer amounts among the variable account investment options and from such investment options to the fixed account investment options at any time and without charge upon written notice to the Company. Accumulation units will be canceled from the investment account from which amounts are transferred and credited to the investment account to which amounts are transferred. The Company will effect such transfers so that the contract value on the date of the transfer will not be affected by the transfer. The contract owner must transfer at least $300 or, if less, the entire value of the investment account. If after the transfer the amount remaining in the investment account is less than $100, then the Company will transfer the entire amount instead of the requested amount. The Company reserves the right to limit, upon notice, the maximum number of transfers a contract owner may make to one per month or six at any time within a contract year. The Company reserves the right to defer the transfer privilege at any time that the Company is unable to purchase or redeem shares of the Trust portfolios. In addition, in accordance with applicable law, the Company reserves the right to modify or terminate the transfer privilege at any time. MAXIMUM NUMBER OF INVESTMENT OPTIONS Due to current administrative capabilities, a contract owner is limited to a maximum of 17 investment options (including all fixed account investment options) during the period prior to the maturity date of the contract (the "Contract Period"). In calculating this limit for each contract owner, investment options to which the contract owner has allocated purchased payments at any time during the Contract Period will be counted toward the 17 maximum even if the contract owner no longer has contract value allocated to these investment options. SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING The Company administers a Dollar Cost Averaging ("DCA") program which enables a contract owner to pre-authorize a periodic exercise of the contractual transfer rights described above. Contract owners entering into a DCA agreement instruct the Company to transfer monthly a predetermined dollar amount from any sub-account or the one year fixed account investment option to other sub-accounts until the amount in the sub-account from which the transfer is made or one year fixed account investment option is exhausted. The DCA program is generally suitable for contract owners making a substantial deposit to the contract and who desire to control the risk of investing at the top of a market cycle. The DCA program allows such investments to be made in equal installments over time in an effort to reduce such risk. Contract owners interested in the DCA program may elect to participate in the program on the contract application or by separate application. Contract owners may obtain a separate application and full information concerning the program and its restrictions from their securities dealer or the Annuity Service Office. ASSET REBALANCING PROGRAM The Company administers an Asset Rebalancing Program which enables a contract owner to indicate to the Company the percentage levels he or she would like to maintain in particular portfolios. The contract owner's contract 21 27 value will be automatically rebalanced pursuant to the schedule described below to maintain the indicated percentages by transfers among the portfolios. (Fixed Account Investment Options are not eligible for participation in the Asset Rebalancing Program). The entire value of the variable investment accounts must be included in the Asset Rebalancing Program. Other investment programs, such as the DCA Program, or other transfers or withdrawals may not work in concert with the Asset Rebalancing Program. Therefore, contract owners should monitor their use of other programs and any other transfers or withdrawals while the Asset Rebalancing Program is being used. Contract owners interested in the Asset Rebalancing Program may obtain a separate application and full information concerning the program and its restrictions from their securities dealer or the Annuity Service Office. For rebalancing programs begun on or after October 1, 1996 asset rebalancing will only be permitted on the following time schedules: (i) quarterly on the 25th day of the last month of the quarter (or the next business day if the 25th is not a business day); (ii) semi-annually on June 25th or December 26th (or the next business day if these dates are not business days); or (iii) annually on December 26th (or the next business day if December 26th is not a business day). Rebalancing will continue to take place on the last business day of every calendar quarter for rebalancing programs begun prior to October 1, 1996. WITHDRAWALS Prior to the earlier of the maturity date or the death of the annuitant, the contract owner may withdraw all or a portion of the contract value upon written request, complete with all necessary information to the Company's Annuity Service Office. For certain qualified contracts, exercise of the withdrawal right may require the consent of the qualified plan participant's spouse under the Internal Revenue Code of 1986, as amended (the "Code") and regulations promulgated by the Treasury Department. In the case of a total withdrawal, the Company will pay the contract value as of the date of receipt of the request at its Annuity Service Office, less the annual $30 administration fee, any debt and any applicable withdrawal charge, and the contract will be canceled. In the case of a partial withdrawal, the Company will pay the amount requested and cancel that number of accumulation units credited to each investment account necessary to equal the amount withdrawn from each investment account plus any applicable withdrawal charge deducted from such investment account (see "CHARGES AND DEDUCTIONS"). When making a partial withdrawal, the contract owner should specify the investment options from which the withdrawal is to be made. The amount requested from an investment option may not exceed the value of that investment option less any applicable withdrawal charge. If the contract owner does not specify the investment options from which a partial withdrawal is to be taken, a partial withdrawal will be taken from the variable account investment options until exhausted and then from the fixed account investment options. If the partial withdrawal is less than the total value in the variable account investment options, the withdrawal will be taken pro rata from the variable account investment options: taking from each such variable account investment option an amount which bears the same relationship to the total amount withdrawn as the value of such variable account investment option bears to the total value of all the contract owner's investments in variable account investment options. For the rules governing the order and manner of withdrawals from the fixed account investment options, see "FIXED ACCOUNT INVESTMENT OPTIONS". There is no limit on the frequency of partial withdrawals; however, the amount withdrawn must be at least $300 or, if less, the entire balance in the investment option. If after the withdrawal (and deduction of any withdrawal charge) the amount remaining in the investment option is less than $100, the Company will treat the partial withdrawal as a withdrawal of the entire amount held in the investment option. If a partial withdrawal plus any applicable withdrawal charge would reduce the contract value to less than $300, the Company will treat the partial withdrawal as a total withdrawal of the contract value. The amount of any withdrawal from the variable account investment options will be paid promptly, and in any event within seven days of receipt of the request, complete with all necessary information at the Company's Annuity 22 28 Service Office, except that the Company reserves the right to defer the right of withdrawal or postpone payments for any period when: (1) the New York Stock Exchange is closed (other than customary weekend and holiday closings), (2) trading on the New York Stock Exchange is restricted, (3) an emergency exists as a result of which disposal of securities held in the Variable Account is not reasonably practicable or it is not reasonably practicable to determine the value of the Variable Account's net assets, or (4) the SEC, by order, so permits for the protection of security holders; provided that applicable rules and regulations of the SEC shall govern as to whether the conditions described in (2) and (3) exist. Withdrawals from the contract may be subject to income tax and a 10% penalty tax. Withdrawals are permitted from contracts issued in connection with Section 403(b) qualified plans only under limited circumstances (see "FEDERAL TAX MATTERS"). SPECIAL WITHDRAWAL SERVICES - SYSTEMATIC WITHDRAWAL PLAN The Company administers a Systematic Withdrawal Plan ("SWP") which enables a contract owner to pre-authorize a periodic exercise of the contractual withdrawal rights described above. Contract owners entering into a SWP agreement instruct the Company to withdraw a level dollar amount from specified investment options on a periodic basis. The total of SWP withdrawals in a contract year is limited to not more than 10% of the purchase payments made to ensure that no withdrawal or market value charge will ever apply to a SWP withdrawal. If an additional withdrawal is made from a contract participating in SWP, the SWP will terminate automatically and may be reinstated only on or after the next contract anniversary pursuant to a new application. SWP is not available to contracts participating in the dollar cost averaging program or for which purchase payments are being automatically deducted from a bank account on a periodic basis. SWP withdrawals will be withdrawn without withdrawal and market value charges. SWP withdrawals may, however, be subject to income tax and a 10% penalty tax (see "FEDERAL TAX MATTERS"). Contract owners interested in SWP may elect to participate in this program on the contract application or by separate application. Contract owners may obtain a separate application and full information concerning the program and its restrictions from their securities dealer or the Annuity Service Office. LOANS The Company offers a loan privilege only to owners of contracts issued in connection with Section 403(b) qualified plans that are not subject to Title I of ERISA. Owners of such contracts may obtain loans using the contract as the only security for the loan. Loans are subject to provisions of the Code and to applicable retirement program rules (collectively, "loan rules"). Tax advisors and retirement plan fiduciaries should be consulted prior to exercising loan privileges. Under the terms of the contract, the maximum loan value is equal to 80% of the contract value, although loan rules may serve to reduce such maximum loan value in some cases. The amount available for a loan at any given time is the loan value less any outstanding debt. Debt equals the amount of any loans plus accrued interest. Loans will be made only upon written request from the owner. The Company will make loans within seven days of receiving a properly completed loan application (applications are available from the Annuity Service Office), subject to postponement under the same circumstances that payment of withdrawals may be postponed (see "WITHDRAWALS"). When an owner requests a loan, the Company will reduce the owner's investment in the investment accounts and transfer the amount of the loan to the loan account, a part of the Company's general account. The owner may designate the investment accounts from which the loan is to be withdrawn. Absent such a designation, the amount of the loan will be withdrawn from the investment accounts in accordance with the rules for making partial withdrawals (see "WITHDRAWALS"). The contract provides that owners may repay contract debt at any time. Under applicable loan rules, loans generally must be repaid within five years, repayments must be made at least quarterly and repayments must be made in substantially equal amounts. When a loan is repaid, the amount of the repayment will be transferred from the loan account to the investment accounts. The owner may designate the investment accounts to which a repayment is to be allocated. Otherwise, the repayment will be allocated in the same manner as the owner's most recent purchase payment. On each contract anniversary, the Company will transfer from the investment accounts to the loan account the amount by which the debt on the contract exceeds the balance in the loan account. 23 29 The Company charges interest of 6% per year on contract loans. Loan interest is payable in arrears and, unless paid in cash, the accrued loan interest is added to the amount of the debt and bears interest at 6% as well. The Company credits interest with respect to amounts held in the loan account at a rate of 4% per year. Consequently, the net cost of loans under the contract is 2%. If on any date debt under a contract exceeds the contract value, the contract will be in default. In such case the owner will receive a notice indicating the payment needed to bring the contract out of default and will have a thirty-one day grace period within which to pay the default amount. If the required payment is not made within the grace period, the contract may be foreclosed (terminated without value). The amount of any debt will be deducted from the minimum death benefit (see "DEATH BENEFIT BEFORE MATURITY DATE"). In addition, debt, whether or not repaid, will have a permanent effect on the contract value because the investment results of the investment accounts will apply only to the unborrowed portion of the contract value. The longer debt is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If the investment results are greater than the rate being credited on amounts held in the loan account while the debt is outstanding, the contract value will not increase as rapidly as it would have if no debt were outstanding. If investment results are below that rate, the contract value will be higher than it would have been had no debt been outstanding. DEATH BENEFIT BEFORE MATURITY DATE The following discussion applies principally to contracts that are not issued in connection with qualified plans, i.e., a "non-qualified contract." The requirements of the tax law applicable to qualified plans, and the tax treatment of amounts held and distributed under such plans, are quite complex. Accordingly, a prospective purchaser of the contract to be used in connection with a qualified plan should seek competent legal and tax advice regarding the suitability of the contract for the situation involved and the requirements governing the distribution of benefits, including death benefits, from a contract used in the plan. In particular, a prospective purchaser who intends to use the contract in connection with a qualified plan should consider that the contract provides a minimum death benefit (described below) that could be characterized as an incidental death benefit. There are limits on the amount of incidental benefits that may be provided under certain qualified plans and the provision of such benefits may result in currently taxable income to plan participants (see "FEDERAL TAX MATTERS"). Death of Annuitant who is not the Contract Owner. The Company will pay the minimum death benefit, less any debt, to the beneficiary if the contract owner is not the annuitant and the annuitant dies before the contract owner and before the maturity date. If there is more than one such annuitant, the minimum death benefit will be paid on the death of the last surviving co-annuitant. The minimum death benefit will be paid either as a lump sum or in accordance with any of the annuity options available under the contract. An election to receive the death benefit under an annuity option must be made within 60 days after the date on which the death benefit first becomes payable (see "ANNUITY OPTIONS"). Rather than receiving the minimum death benefit, the beneficiary may elect to continue the contract as the new contract owner. (In general, a beneficiary who makes such an election will nonetheless be treated for Federal income tax purposes as if he had received the minimum death benefit.) Death of Annuitant who is the Contract Owner. The Company will pay the minimum death benefit, less any debt, to the beneficiary if the contract owner is the annuitant, dies before the maturity date and is not survived by a co-annuitant. If the contract is a non-qualified contract, the contract owner is the annuitant and the contract owner dies before the maturity date survived by a co-annuitant, the Company, instead of paying the minimum death benefit to the beneficiary, will pay to the successor owner an amount equal to the amount payable on total withdrawal without reduction for any withdrawal charge (see "WITHDRAWALS"). If the contract is a non-qualified contract, distribution of the minimum death benefit to the beneficiary (or of the amount payable to the successor owner) must be made within five years after the owner's death. If the beneficiary or successor owner, as appropriate, is an individual, in lieu of distribution within five years of the owner's death, distribution may be made as an annuity which begins within one year of the owner's death and is payable over the life of the beneficiary (or the successor owner) or over a period not in excess of the life expectancy of the beneficiary (or the successor owner). If the owner's spouse is the beneficiary (or the successor owner, as appropriate) that spouse may elect to continue the contract as the new owner in lieu of receiving the distribution. In such a case, the distribution rules applicable when a contract owner dies generally will apply when that spouse, as the owner, dies. 24 30 Death of Owner who is not the Annuitant. If the owner is not the annuitant and dies before the maturity date and before the annuitant, the successor owner will become the owner of the contract. If the contract is a non-qualified contract, an amount equal to the amount payable on total withdrawal, without reduction for any withdrawal charge, will be paid to the successor owner (see "WITHDRAWALS"). Distribution of that amount to the successor owner must be made within five years of the owner's death. If the successor owner is an individual, in lieu of distribution within five years of the owner's death, distribution may be made as an annuity which begins within one year of the owner's death and is payable over the life of the successor owner (or over a period not greater than the successor owner's life expectancy). If the owner's spouse is the successor owner, that spouse may elect to continue the contract as the new contract owner in lieu of receiving the distribution. In such a case, the distribution rules applicable when a contract owner dies generally will apply when that spouse, as the owner, dies. If there is more than one owner, distribution will occur upon the death of any owner. If both owners are individuals, distribution will be made to the remaining owner rather than to the successor owner. Entity as Owner. In the case of a non-qualified contract which is not owned by an individual (for example, a non-qualified contract owned by a corporation or a trust), the special rules stated in this paragraph apply. For purposes of distributions of death benefits before the maturity date, any annuitant will be treated as the owner of the contract, and a change in the annuitant or any co-annuitant shall be treated as the death of the owner. In the case of distributions which result from a change in an annuitant when the annuitant does not actually die, the amount distributed will be reduced by charges which would otherwise apply upon withdrawal (see "WITHDRAWALS"). If the contract is a non-qualified contract and there is both an individual and a non-individual contract owner, death benefits must be paid as provided in the contract upon the death of any annuitant, a change in any annuitant, or the death of any individual contract owner, whichever occurs earlier. If the annuitant dies on or prior to the first month following his or her 85th birthday, the minimum death benefit is as follows: during the first contract year, the minimum death benefit is the greater of: (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the sum of all purchase payments made, less any amount deducted in connection with partial withdrawals. Except as provided below, during any subsequent contract year, the minimum death benefit will be the greater of: (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the minimum death benefit determined in accordance with these provisions as of the last day of the previous contract year plus any purchase payments made and less any amount deducted in connection with partial withdrawals since then. If the annuitant dies after the first of the month following his or her 85th birthday, the minimum death benefit is the greater of: (a) the contract value on the date due proof of death and all required claim forms are received at the Company's Annuity Service Office, or (b) the excess of the sum of all purchase payments less the sum of any amounts deducted in connection with partial withdrawals. Death benefits will be paid within seven days of receipt of due proof of death and all required claim forms at the Company's Annuity Service Office, subject to postponement under the same circumstances that payment of withdrawals may be postponed (see "WITHDRAWALS"). ANNUITY PROVISIONS GENERAL The proceeds of the contract payable on death, withdrawal or the contract maturity date may be applied to the annuity options described below, subject to the distribution of death benefits provisions (see "DEATH BENEFIT BEFORE MATURITY DATE"). Generally, annuity benefits under the contract will begin on the maturity date. The maturity date is the date specified on the contract specifications page, unless changed. If no date is specified, the maturity date is the maximum maturity date described below. The maximum maturity date is the first day of the month following the 90th birthday of the annuitant. The contract owner may specify a different maturity date at any time by written request at least one month before both the previously specified and the new maturity date. The new maturity date must be the first day of a month no later than the first day of the month following the 90th birthday of the annuitant (see "FEDERAL TAX MATTERS - 25 31 - -Taxation of Annuities in General-- Delayed Maturity Dates"). Distributions from qualified contracts may be required before the maturity date (see "FEDERAL TAX MATTERS--Qualified Retirement Plans"). The contract owner may select the frequency of annuity payments. However, if the contract value at the maturity date is such that a monthly payment would be less than $20, the Company may pay the contract value, less any debt, in one lump sum to the annuitant on the maturity date. ANNUITY OPTIONS Annuity benefits are available under the contract on a fixed or variable basis, or any combination of fixed and variable bases. Upon purchase of the contract, and on or before the maturity date, the contract owner may select one or more of the annuity options described below on a fixed and/or variable basis (except Option 5 which is available on a fixed basis only) or choose an alternate form of settlement acceptable to the Company. If an annuity option is not selected, we will provide either variable or fixed, or a combination variable and fixed, annuity payments in proportion to the Investment Account Value of each Investment Option at the Maturity Date. Annuity payments will continue for 10 years or the life of the Annuitant, if longer. Treasury Department regulations may preclude the availability of certain annuity options in connection with certain qualified contracts. The following annuity options are guaranteed in the contract. Option 1(a): Non-Refund Life Annuity - An annuity with payments during the lifetime of the annuitant. No payments are due after the death of the annuitant. Since there is no guarantee that any minimum number of payments will be made, an annuitant may receive only one payment if the annuitant dies prior to the date the second payment is due. Option 1(b): Life Annuity with Payments Guaranteed for 10 Years - An annuity with payments guaranteed for 10 years and continuing thereafter during the lifetime of the annuitant. Since payments are guaranteed for 10 years, annuity payments will be made to the end of such period if the annuitant dies prior to the end of the tenth year. Option 2(a): Joint & Survivor Non-Refund Life Annuity - An annuity with payments during the lifetimes of the annuitant and a designated co-annuitant. No payments are due after the death of the last survivor of the annuitant and co-annuitant. Since there is no guarantee that any minimum number of payments will be made, an annuitant or co-annuitant may receive only one payment if the annuitant and co-annuitant die prior to the date the second payment is due. Option 2(b): Joint & Survivor Life Annuity with Payments Guaranteed for 10 Years - An annuity with payments guaranteed for 10 years and continuing thereafter during the lifetimes of the annuitant and a designated co-annuitant. Since payments are guaranteed for 10 years, annuity payments will be made to the end of such period if both the annuitant and the co-annuitant die prior to the end of the tenth year. In addition to the foregoing annuity options which the Company is contractually obligated to offer at all times, the Company currently offers the following annuity options. The Company may cease offering the following annuity options at any time and may offer other annuity options in the future. Option 3: Life annuity with Payments Guaranteed for 5, 15 or 20 Years - An Annuity with payments guaranteed for 5, 15 or 20 years and continuing thereafter during the lifetime of the annuitant. Since payments are guaranteed for the specific number of years, annuity payments will be made to the end of the last year of the 5, 15 or 20 year period. Option 4: Joint & Two-Thirds Survivor Non-Refund Life Annuity - An annuity with full payments during the joint lifetime of the annuitant and a designated co-annuitant and two-thirds payments during the lifetime of the survivor. Since there is no guarantee that any minimum number of payments will be made, an annuitant or co-annuitant may receive only one payment if the annuitant and co-annuitant die prior to the date the second payment is due. Option 5: Period Certain Only Annuity for 5, 10, 15 or 20 years - An annuity with payments for a 5, 10, 15 or 20 year period and no payments thereafter. DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT 26 32 The first variable annuity payment is determined by applying that portion of the contract value used to purchase a variable annuity, measured as of a date not more than ten business days prior to the maturity date (minus any applicable premium taxes), to the annuity tables contained in the contract. The rates contained in such tables depend upon the annuitant's age, sex and annuity option selected, except for contracts issued in connection with certain employer sponsored plans where sex-based tables may not be used. Under such tables, the longer the life expectancy of the annuitant under any life annuity option or the duration of any period for which payments are guaranteed under the option, the smaller will be the amount of the first monthly variable annuity payment. The tables are based on the 1983-a Individual Annuitant Mortality Table projected at Scale G, and reflect an assumed interest rate of 4% per year. ANNUITY UNITS AND THE DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS Variable annuity payments subsequent to the first will be based on the investment performance of the sub-accounts selected. The amount of such subsequent payments is determined by dividing the amount of the first annuity payment from each sub-account by the annuity unit value of such sub-account (as of the same date the contract value to effect the annuity was determined) to establish the number of annuity units which will thereafter be used to determine payments. This number of annuity units for each sub-account is then multiplied by the appropriate annuity unit value as of a uniformly applied date not more than ten business days before the annuity payment is due, and the resulting amounts for each sub-account are then totaled to arrive at the amount of the payment to be made. The number of annuity units remains constant during the annuity payment period. A pro-rata portion of the administration fee will be deducted from each annuity payment. The value of an annuity unit for each sub-account for any valuation period is determined by multiplying the annuity unit value for the immediately preceding valuation period by the net investment factor for that sub-account (see "NET INVESTMENT FACTOR") for the valuation period for which the annuity unit value is being calculated and by a factor to neutralize the assumed interest rate. A 4% assumed interest rate is built into the annuity tables in the contract used to determine the first variable annuity payment. A higher assumption would mean a larger first annuity payment, but more slowly rising subsequent payments when actual investment performance exceeds the assumed rate, and more rapidly falling subsequent payments when actual investment performance is less than the assumed rate. A lower assumption would have the opposite effect. If the actual net investment performance is 4% annually, annuity payments will be level. TRANSFERS AFTER MATURITY DATE Once variable annuity payments have begun, the contract owner may transfer all or part of the investment upon which such payments are based from one sub-account to another. Transfers will be made upon notice to the Company at least 30 days before the due date of the first annuity payment to which the change will apply. Transfers after the maturity date will be made by converting the number of annuity units being transferred to the number of annuity units of the sub-account to which the transfer is made, so that the next annuity payment if it were made at that time would be the same amount that it would have been without the transfer. Thereafter, annuity payments will reflect changes in the value of the new annuity units. The Company reserves the right to limit, upon notice, the maximum number of transfers a contract owner may make per contract year to four. The Company reserves the right to defer the transfer privilege at any time that the Company is unable to purchase or redeem shares of the Trust portfolios. In addition, in accordance with applicable law, the Company reserves the right to modify or terminate the transfer privilege at any time. Once annuity payments have commenced, no transfers may be made from a fixed annuity option to a variable annuity option or from a variable annuity option to a fixed annuity option. DEATH BENEFIT ON OR AFTER MATURITY DATE If annuity payments have been selected based on an Annuity Option providing for payments for a guaranteed period, and the Annuitant dies on or after the Maturity Date, we will make the remaining guaranteed payments to the Beneficiary. Any remaining payments will be made as rapidly as under the method of distribution being used as of the date of the Annuitant's death. If no Beneficiary is living, we will commute any unpaid guaranteed payments to a single sum (on the basis of the interest rate used in determining the payments) and pay that single sum to the estate of the last to die of the Annuitant and the Beneficiary. 27 33 OTHER CONTRACT PROVISIONS TEN DAY RIGHT TO REVIEW The contract owner may cancel the contract by returning it to the Company's Annuity Service Office or agent at any time within 10 days after receipt of the contract. Within 7 days of receipt of the contract by the Company, the Company will pay to the contract owner an amount equal to the contract value computed at the end of the valuation period on the date of surrender. When the contract is issued as an individual retirement annuity under Sections 408 or 408A of the Code, during the first 7 days of the 10 day period, the Company will return all purchase payments if this is greater than the amount otherwise payable. No withdrawal charge is imposed upon return of the contract within the ten day right to review period. OWNERSHIP The contract owner is the person entitled to exercise all rights under the contract. Prior to the maturity date, the contract owner is the person designated in the application or as subsequently named. On and after the maturity date, the annuitant is the contract owner and after the death of the annuitant, the beneficiary is the contract owner. In the case of non-qualified contracts, ownership of the contract may be changed or the contract collaterally assigned at any time during the lifetime of the annuitant prior to the maturity date, subject to the rights of any irrevocable beneficiary. Assigning a contract, or changing the ownership of a contract, may be treated as a distribution of the contract value for Federal tax purposes (see "FEDERAL TAX MATTERS"). Any change of ownership or assignment must be made in writing. Any change must be approved by the Company. Any assignment and any change, if approved, will be effective as of the date on which written. The Company assumes no liability for any payments made or actions taken before a change is approved or assignment is accepted or responsibility for the validity or sufficiency of any assignment. In the case of qualified contracts, ownership of the contract generally may not be transferred except by the trustee of an exempt employees' trust which is part of a retirement plan qualified under Section 401 of the Code or as otherwise permitted by applicable IRS regulations. Subject to the foregoing, a qualified contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than the Company. BENEFICIARY The beneficiary is the person, persons, or entity designated in the application or as subsequently named. The beneficiary may be changed during the lifetime of the annuitant subject to the rights of any irrevocable beneficiary. Any change must be made in writing, approved by the Company and if approved, will be effective as of the date on which written. The Company assumes no liability for any payments made or actions taken before the change is approved. Prior to the maturity date, if no beneficiary survives the annuitant, the contract owner or the contract owner's estate will be the beneficiary. The interest of any beneficiary is subject to that of any assignee. In the case of certain qualified contracts, regulations promulgated by the Treasury Department prescribe certain limitations on the designation of a beneficiary. MODIFICATION The contract may not be modified by the Company without the consent of the contract owner, except as may be required to make it conform to any law or regulation or ruling issued by a governmental agency or to improve the rights and/or benefits under the contract. COMPANY APPROVAL The Company reserves the right to accept or reject any contract application at its sole discretion. MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL 28 34 The Company may require proof of age, sex or survival of any person upon whose age, sex or survival any payment depends. If the age or sex of the annuitant has been misstated, the benefits will be those that would have been provided for the annuitant's correct age and sex. If the Company has made incorrect annuity payments, the amount of any underpayment will be paid immediately and the amount of any overpayment will be deducted from future annuity payments. FIXED ACCOUNT INVESTMENT OPTIONS Due to certain exemptive and exclusionary provisions, interests in the fixed account investment options are not registered under the Securities Act of 1933 (the "1933 Act") and the Company's general account is not registered as an investment company under the 1940 Act. Accordingly, neither interests in the fixed account investment options nor the general account are subject to the provisions or restrictions of the 1933 Act or the 1940 Act and the staff of the SEC has not reviewed the disclosures in this Prospectus relating thereto. Disclosures relating to interests in the fixed account investment options and the general account, however, may be subject to certain generally applicable provisions of the Federal securities laws relating to the accuracy of statements made in a registration statement. Investment Options. There are three fixed account investment options under the contract: one, three and six year investment accounts. Fixed investment accounts provide for the accumulation of interest on purchase payments at guaranteed rates for the duration of the one, three or six year guarantee period. The guaranteed interest rates on new amounts allocated or transferred to a fixed investment account are determined from time-to-time by the Company in accordance with market conditions. In no event will the guaranteed rate of interest be less than 4%. Once an interest rate is guaranteed for a fixed investment account, it is guaranteed for the duration of the guarantee period and may not be changed by the Company. Investment Accounts. Contract owners may allocate purchase payments, or make transfers from the variable investment options, to the fixed account investment options at any time prior to the maturity date. The Company establishes a separate investment account each time the contract owner allocates or transfers amounts to a fixed account investment option, except that amounts allocated or transferred to the same fixed account investment option on the same day will establish a single investment account. Amounts may not be allocated to a fixed account investment option that would extend the guarantee period beyond the maturity date. Renewals. At the end of a guarantee period, the contract owner may establish a new investment account with the same guarantee period at the then current interest rate, select a different fixed account investment option or transfer the amounts to a variable account investment option, all without the imposition of any charge. The contract owner may not select a guarantee period that would extend beyond the maturity date. In the case of renewals within one year of the maturity date, the only fixed account investment option available is to have interest accrued up to the maturity date at the then current interest rate for one year guarantee periods. If the contract owner does not specify the renewal option desired, the Company will select the same guarantee period as has just expired, so long as such period does not extend beyond the maturity date. In the event a renewal would extend beyond the maturity date, the Company will select the longest period that will not extend beyond such date, except in the case of a renewal within one year of the maturity date in which case the Company will credit interest up to the maturity date at the then current interest rate for one year guarantee periods. Market Value Charge. Any amount withdrawn, transferred or borrowed from a three or six year investment account prior to the end of the guarantee period may be subject to a market value charge. A market value charge will be calculated separately for each investment account affected by a transaction to which a market value charge may apply. The market value charge for an investment account will be calculated by multiplying the amount withdrawn or transferred from the investment account by the adjustment factor described below. The adjustment factor is determined by the following formula: 0.75x(B-A)xC/12 where: A- The guaranteed interest rate on the investment account. B- The guaranteed interest rate available, on the date the request is processed, for amounts allocated to a new investment account with the same length of guarantee period as the investment account from which the amounts are being withdrawn. 29 35 C- The number of complete months remaining to the end of the guarantee period. For purposes of applying this calculation, the maximum difference between "B" and "A" will be 3%. The adjustment factor will never be greater than 2x(A-4%) and never less than zero. The total market value charge will be the sum of the market value charges for each investment account being withdrawn. Where the guaranteed rate available on the date of the request is less than the rate guaranteed on the investment account from which the amounts are being withdrawn (B-A in the adjustment factor is negative), there is no market value charge. There is only a market value charge when interest rates have increased (B-A in the adjustment factor is positive). There will be no market value charge on withdrawals from the fixed account investment options in the following situations: (a) death of the annuitant; (b) amounts withdrawn to pay fees or charges; (c) amounts withdrawn from three and six year investment accounts within one month prior to the end of the guarantee period; and (d) amounts withdrawn in any year that do not exceed 10% of total purchase payments less any prior partial withdrawals in that year. Notwithstanding application of the foregoing formula, in no event will the market value charge (i) exceed the earnings attributable to the amount withdrawn from an investment account, (ii) together with any withdrawal charges for an investment account be greater than 10% of the amount transferred or withdrawn, or (iii) reduce the amount payable on withdrawal or transfer below the amount required under the non-forfeiture laws of the state with jurisdiction over the contract. The cumulative effect of the market value and withdrawal charges (or the effect of the withdrawal charge itself) could, however, result in a contract owner receiving total withdrawal proceeds of less than the contract owner's investment in the contract. Transfers. Prior to the maturity date, the contract owner may transfer amounts among the fixed account investment options and from the fixed account investment options to the variable account investment options, subject to the following conditions. An amount in a fixed investment account may not be transferred until held in such account for at least one year, except transfers may be made pursuant to the Dollar Cost Averaging program. Consequently, except as noted above, amounts in one year investment accounts effectively may not be transferred prior to the end of the guarantee period. Amounts in three and six year investment accounts may be transferred, after the one year holding period has been satisfied, but the market value charge described above may apply to such a transfer. The market value charge, if applicable, will be deducted from the amount transferred. The contract owner must specify the fixed account investment option from or to which a transfer is to be made. Where there are multiple investment accounts within a fixed account investment option, the contract owner may designate the particular investment accounts from which a transfer is to be taken. Absent such a designation, amounts will be withdrawn from the fixed account investment options on a first-in-first-out basis. Withdrawals. Prior to the earlier of the maturity date or the death of the annuitant, the contract owner may make total and partial withdrawals of amounts held in fixed account investment options. Withdrawals from fixed account investment options will be made in the same manner and be subject to the same limitations as set forth under "WITHDRAWALS", plus the following provisions also apply to withdrawals from fixed account investment options: (1) the Company reserves the right to defer payment of amounts withdrawn from fixed account investment options for up to six months from the date it receives the written withdrawal request (if a withdrawal is deferred for more than 10 days pursuant to this right, the Company will pay interest on the amount deferred at a rate not less than 4% per year); (2) if there are multiple investment accounts under a fixed account investment option, amounts must be withdrawn from such accounts on a first-in-first-out basis; and (3) the market value charge described above may apply to withdrawals from the three and six year investment options. In the event a market value charge applies to a withdrawal from a fixed investment account, it will be calculated with respect to the full amount in the investment account and deducted from the amount payable in the case of a total withdrawal. In the case of a partial withdrawal, the market value charge will be calculated on the amount requested and deducted, if applicable, from the remaining investment account value. Where a contract owner requests a partial withdrawal from a contract in excess of the amounts in the variable account investment options and does not specify the fixed account investment options from which the withdrawal is to be made, such withdrawal will be made from the one, three and six year investment options in that order. Within such 30 36 sequence, where there are multiple investment accounts within a fixed account investment option, withdrawals will be made on a first-in-first-out basis. Withdrawals from the contract may be subject to income tax and a 10% penalty tax. Withdrawals are permitted from contracts issued in connection with Section 403(b) qualified plans only under limited circumstances (see "FEDERAL TAX MATTERS"). Loans. The Company offers a loan privilege only to owners of contracts issued in connection with Section 403(b) qualified plans that are not subject to Title I of ERISA. Owners of such contracts may obtain loans using the contract as the only security for the loan. Owners of such contracts may borrow amounts allocated to fixed investment accounts in the same manner and subject to the same limitations as set forth under "LOANS". The market value charge described above may apply to amounts transferred from three and six year investment accounts to the loan account in connection with such loans and, if applicable, will be deducted from the amount so transferred. Fixed Annuity Options. Subject to the distribution of death benefits provisions (see "DEATH BENEFIT BEFORE THE MATURITY DATE"), on death, withdrawal or the maturity date of the contract, the proceeds may be applied to a fixed annuity option (see "ANNUITY OPTIONS"). The amount of each fixed annuity payment is determined by applying the portion of the proceeds applied to purchase the fixed annuity (less any applicable premium taxes), to the appropriate table in the contract. If the table in use by the Company is more favorable to the contract owner, the Company will substitute that table. The Company guarantees the dollar amount of fixed annuity payments. CHARGES AND DEDUCTIONS Charges and deductions under the contracts are assessed against contract values or annuity payments. Currently, there are no deductions made from purchase payments. In addition, there are deductions from and expenses paid out of the assets of the Trust portfolios that are described in the accompanying Prospectus of the Trust. WITHDRAWAL CHARGES If a withdrawal is made from the contract before the maturity date, a withdrawal charge (contingent deferred sales charge) may be assessed against amounts withdrawn attributable to purchase payments that have been in the contract less than six complete contract years. There is never a withdrawal charge with respect to earnings accumulated in the contract, certain other amounts available without withdrawal charges described below or purchase payments that have been in the contract more than six complete contract years. In no event may the total withdrawal charges exceed 6% of the amount invested. The amount of the withdrawal charge and when it is assessed is discussed below: 1. Each withdrawal from the contract is allocated first to the "amounts available without withdrawal charges" and second to "unliquidated purchase payments". In any contract year, the amounts available without withdrawal charges for that year is the greater of (1) the excess of the contract value on the date of withdrawal over the unliquidated purchase payments (the accumulated earnings on the contract) or (2) 10% of total purchase payments less any prior partial withdrawals in that year. Withdrawals allocated to the amounts available without withdrawal charges may be withdrawn without the imposition of a withdrawal charge. 2. If a withdrawal is made for an amount in excess of the amounts available without withdrawal charges, the excess will be allocated to purchase payments which will be liquidated on a first-in first-out basis. On any withdrawal request, the Company will liquidate purchase payments equal to the amount of the withdrawal request which exceeds the amounts available without withdrawal charges in the order such purchase payments were made: the oldest unliquidated purchase payment first, the next purchase payment second, etc. until all purchase payments have been liquidated. 3. Each purchase payment or portion thereof liquidated in connection with a withdrawal request is subject to a withdrawal charge based on the length of time the purchase payment has been in the contract. The amount of the withdrawal charge is calculated by multiplying the amount of the purchase payment being liquidated by the applicable withdrawal charge percentage obtained from the table below. 31 37
NUMBER OF COMPLETE YEARS WITHDRAWAL PURCHASE PAYMENT IN CHARGE CONTRACT PERCENTAGE -------- ---------- 0 6% 1 6% 2 5% 3 4% 4 3% 5 2% 6+ 0%
The total withdrawal charge will be the sum of the withdrawal charges for the purchase payments being liquidated. 4. The withdrawal charge is deducted from the contract value remaining after the contract owner is paid the amount requested, except in the case of a complete withdrawal when it is deducted from the amount otherwise payable. In the case of a partial withdrawal, the amount requested from an investment account may not exceed the value of that investment account less any applicable withdrawal charge. 5. There is no withdrawal charge on distributions made as a result of the death of the annuitant or contract owner and no withdrawal charges are imposed on the maturity date if the contract owner annuitizes as provided in the contract. The amount collected from the withdrawal charge will be used to reimburse the Company for the compensation paid to cover selling concessions to broker-dealers, preparation of sales literature and other expenses related to sales activity. For examples of calculation of the withdrawal charge, see Appendix A. Withdrawals from the fixed account investment options may be subject to a market value charge in addition to the withdrawal charge described above (see "FIXED ACCOUNT INVESTMENT OPTIONS"). Withdrawal Charge Waiver in Connection with Clinton's Administration's Fiscal Year 1999 Budget Proposal The Clinton administration's Fiscal Year 1999 Budget proposal dated February 2, 1998 (the "1999 Budget Proposal") contains proposals to change the taxation of non-qualified annuity contracts (see "FEDERAL TAX MATTERS - Introduction"). While it is uncertain whether the 1999 Budget Proposal will become law, if the 1999 Budget Proposal is enacted substantially as proposed, withdrawal charges will be waived on purchase payments made on or after February 2, 1998, provided such amounts are withdrawn within 60 days of the date that the 1999 Budget Proposal becomes law. The Company reserves the right to terminate this withdrawal charge waiver at any time. If the waiver is terminated, purchase payments made from February 2, 1998 to the termination date of the waiver will not be subject to withdrawal charge as provided above. This waiver does not affect a contract owner's right to cancel a contract within the ten day right to review period (see "OTHER CONTRACT PROVISIONS - Ten Day Right to Review"). Withdrawals may be subject to income tax to the extent of earnings under the contract and, if made prior to age 59 1/2, generally will be subject to a 10% IRS penalty tax (see "FEDERAL TAX MATTERS - Taxation of Partial and Full Withdrawals"). ADMINISTRATION FEES Each year the Company will deduct an annual administration fee of $30 as partial compensation for the cost of providing all administrative services attributable to the contracts and the operations of the Variable Account and the Company in connection with the contracts. Prior to the maturity date, this administration fee is deducted on the last day of each contract year. It is withdrawn from each investment option in the same proportion that the value of such investment option bears to the contract value. If the entire contract is withdrawn on other than the last day of any contract year, the $30 administration fee will be deducted from the amount paid. During the annuity period, the fee is deducted on a pro-rata basis from each annuity payment. A daily charge in an amount equal to 0.15% of the value of each variable investment account on an annual basis is also deducted from each sub-account to reimburse the Company for administrative expenses. This asset based 32 38 administrative charge will not be deducted from the fixed account investment options. The charge will be reflected in the contract value as a proportionate reduction in the value of each variable investment account. Because this portion of the administrative fee is a percentage of assets rather than a flat amount, larger contracts will in effect pay a higher proportion of this portion of the administrative expense than smaller contracts. The Company does not expect to recover from such fees any amount in excess of its accumulated administrative expenses. Even though administrative expenses may increase, the Company guarantees that it will not increase the amount of the administration fees. There is no necessary relationship between the amount of the administrative charge imposed on a given contract and the amount of the expense that may be attributed to that contract. MORTALITY AND EXPENSE RISK CHARGE The mortality risk assumed by the Company is the risk that annuitants may live for a longer period of time than estimated. The Company assumes this mortality risk by virtue of annuity rates incorporated into the contract which cannot be changed. This assures each annuitant that his longevity will not have an adverse effect on the amount of annuity payments. Also, the Company guarantees that if the annuitant dies before the maturity date, it will pay a minimum death benefit (see "DEATH BENEFIT BEFORE MATURITY DATE"). The expense risk assumed by the Company is the risk that the administration charges or withdrawal charge may be insufficient to cover actual expenses. To compensate it for assuming these risks, the Company deducts from each of the sub-accounts a daily charge in an amount equal to 1.25% of the value of the variable investment accounts on an annual basis, consisting of .8% for the mortality risk and .45% for the expense risk. The charge will be reflected in the contract value as a proportionate reduction in the value of each variable investment account. The rate of the mortality and expense risk charge cannot be increased. If the charge is insufficient to cover the actual cost of the mortality and expense risks undertaken, the Company will bear the loss. Conversely, if the charge proves more than sufficient, the excess will be profit to the Company and will be available for any proper corporate purpose including, among other things, payment of distribution expenses. The mortality and expense risk charge is not assessed against the fixed account investment options. TAXES The Company reserves the right to charge, or provide for, certain taxes against purchase payments, contract values or annuity payments. Such taxes may include premium taxes or other taxes levied by any government entity which the Company determines to have resulted from the (i) establishment or maintenance of the Variable Account, (ii) receipt by the Company of purchase payments, (iii) issuance of the contracts, or (iv) commencement or continuance of annuity payments under the contracts. The State of New York does not currently assess a premium tax. In the event New York does impose a premium tax, the Company reserves the right to pass-through such tax to contract owners. For a discussion on premium taxes which may be applicable to non-New York residents, see "STATE PREMIUM TAXES" in the Statement of Additional Information. The Company will withhold taxes to the extent required by applicable law. FEDERAL TAX MATTERS INTRODUCTION The following discussion of the Federal income tax treatment of the contract is not exhaustive, does not purport to cover all situations, and is not intended as tax advice. A qualified tax advisor should always be consulted with regard to the application of law to individual circumstances. This discussion is based on the Code, Treasury Department regulations, and interpretations existing on the date of this Prospectus. These authorities, however, are subject to change by Congress, the Treasury Department, and judicial decisions. The 1999 Budget Proposal contains proposals to change the taxation of non-qualified annuity contracts. The 1999 Budget Proposal proposes to tax exchanges of variable contracts for fixed contracts, exchanges of fixed contracts for variable contracts, exchanges of variable contracts for variable contracts and reallocation within variable contracts. Currently, owners of annuity contracts may exchange their contracts for another annuity without currently incurring tax, and reallocations among investment options are not treated as a taxable exchange. In addition, the 1999 Budget Proposal proposes that the contract 33 39 owner's basis in annuity contracts be reduced annually by 1.25% of the cash value for purposes of determining the taxable gain on surrenders, withdrawals, and all annuity payments except those made for life at the rates guaranteed in the contract. Currently, basis in annuity contracts is not reduced by this amount. The 1999 Budget Proposal states that it generally would apply only to contracts issued after the date of first congressional committee action, but that the new exchange and reallocation rules would also apply to any existing contract that was materially changed. While it is uncertain whether the 1999 Budget Proposal will become law, if the 1999 Budget Proposal is enacted substantially as proposed, withdrawal charges will be waived (see "CHARGES AND DEDUCTIONS - Reduction or Elimination of Withdrawal Charge"). This discussion does not address state or local tax consequences associated with the purchase of a contract. In addition, THE COMPANY MAKES NO GUARANTEE REGARDING ANY TAX TREATMENT -- FEDERAL, STATE, OR LOCAL -OF ANY CONTRACT OR OF ANY TRANSACTION INVOLVING A CONTRACT. THE COMPANY'S TAX STATUS The Company is taxed as a life insurance company under the Code. Since the operations of the Variable Account are a part of, and are taxed with, the operations of the Company, the Variable Account is not separately taxed as a "regulated investment company" under the Code. Under existing Federal income tax laws, investment income and capital gains of the Variable Account are not taxed to the extent they are applied under a contract. The Company does not anticipate that it will incur any Federal income tax liability attributable to such income and gains of the Variable Account, and therefore the Company does not intend to make provision for any such taxes. If the Company is taxed on investment income or capital gains of the Variable Account, then the Company may impose a charge against the Variable Account in order to make provision for such taxes. TAXATION OF ANNUITIES IN GENERAL TAX DEFERRAL DURING ACCUMULATION PERIOD Under existing provisions of the Code, except as described below, any increase in the contract value is generally not taxable to the contract owner or annuitant until received, either in the form of annuity payments, as contemplated by the contract, or in some other form of distribution. However, certain requirements must be satisfied in order for this general rule to apply, including: (1) the contract must be owned by an individual (or treated as owned by an individual), (2) the investments of the Variable Account must be "adequately diversified" in accordance with Treasury Department regulations, (3) the Company, rather than the owner, must be considered the owner of the assets of the Variable Account for Federal tax purposes, and (4) the contract must provide for appropriate amoritization, through annuity payments, of the contract's purchase payments and earnings, e.g., the maturity date must not occur at too advanced an age. Non-Natural Owners. As a general rule, deferred annuity contracts held by "non-natural persons" such as a corporation, trust or other similar entity, as opposed to a natural person, are not treated as annuity contracts for Federal income tax purposes. The investment income on such contracts is taxed as ordinary income that is received or accrued by the owner of the contract during the taxable year. There are several exceptions to this general rule for non-natural contract owners. First, contracts will generally be treated as held by a natural person if the nominal owner is a trust or other entity which holds the contract as an agent for a natural person. However, this special exception will not apply in the case of any employer who is the nominal owner of an annuity contract under a non-qualified deferred compensation arrangement for its employees. In addition, exceptions to the general rule for non-natural contract owners will apply with respect to (1) contracts acquired by an estate of a decedent by reason of the death of the decedent, (2) certain qualified contracts, (3) certain contracts purchased by employers upon the termination of certain qualified plans, (4) certain contracts used in connection with structured settlement agreements, and (5) contracts purchased with a single premium when the annuity starting date (as defined in the tax law) is no later than a year from purchase of the annuity and substantially equal periodic payments are made, not less frequently than annually, during the annuity period. 34 40 Loss of Interest Deduction where Contracts are held by or for the Benefit of Certain Non-Natural Persons. In the case of contracts issued after June 8, 1997 to a non-natural taxpayer (such as a corporation or a trust) or held for the benefit of such an entity, recent changes in the tax law may result in otherwise deductible interest no longer being deductible by the entity, regardless of whether the interest relates to debt used to purchase or carry the contract. However, this interest deduction disallowance does not affect contracts where the income on such contracts is treated as ordinary income that is received or accrued by the owner during the taxable year. Entities that are considering purchasing the contract, or entities that will be beneficiaries under a contract, should consult a tax advisor. Diversification Requirements. For a contract to be treated as an annuity for Federal income tax purposes, the investments of the Variable Account must be "adequately diversified" in accordance with Treasury Department Regulations. The Secretary of the Treasury has issued regulations which prescribe standards for determining whether the investments of the Variable Account are "adequately diversified." If the Variable Account failed to comply with these diversification standards, a contract would not be treated as an annuity contract for Federal income tax purposes and the contract owner would generally be taxable currently on the excess of the contract value over the premiums paid for the contract. Although the Company does not control the investments of the Trust, it expects that the Trust will comply with such regulations so that the Variable Account will be considered "adequately diversified." Ownership Treatment. In certain circumstances, a variable annuity contract owner may be considered the owner, for Federal income tax purposes, of the assets of the separate account used to support his or her contract. In those circumstances, income and gains from such separate account assets would be includible in the contract owner's gross income. The Internal Revenue Service (the "IRS") has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. In addition, the Treasury Department announced, in connection with the issuance of regulations concerning investment diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor, rather than the insurance company, to be treated as the owner of the assets in the account." This announcement also stated that guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular sub-accounts [of a separate account] without being treated as owners of the underlying assets." As of the date of this Prospectus, no such guidance has been issued. The ownership rights under this contract are similar to, but different in certain respects from, those described by the IRS in rulings in which it was determined that contract owners were not owners of separate account assets. For example, the owner of this contract has the choice of many more investment options to which to allocate premiums and contract values, and may be able to transfer among investment options more frequently than in such rulings. These differences could result in the contract owner being treated as the owner of the assets of the Variable Account and thus subject to current taxation on the income and gains from those assets. In addition, the Company does not know what standards will be set forth in the regulations or rulings which the Treasury Department has stated it expects to issue. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent the contract owner from being considered the owner of the assets of the Variable Account. Delayed Maturity Dates. If the contract's maturity date occurs (or is scheduled to occur) at a time when the annuitant has reached an advanced age, e.g., past age 85, it is possible that the contract would not be treated as an annuity for Federal income tax purposes. In that event, the income and gains under the contract could be currently includible in the owner's income. The remainder of this discussion assumes that the contract will be treated as an annuity contract for Federal income tax purposes and that the Company will be treated as the owner of the Variable Account assets. TAXATION OF PARTIAL AND FULL WITHDRAWALS 35 41 In the case of a partial withdrawal, amounts received are includible in income to the extent the contract value before the withdrawal exceeds the "investment in the contract." In the case of a full withdrawal, amounts received are includible in income to the extent they exceed the "investment in the contract." For these purposes the investment in the contract at any time equals the total of the purchase payments made under the contract to that time (to the extent such payments were neither deductible when made nor excludable from income as, for example, in the case of certain employer contributions to qualified plans) less any amounts previously received from the contract which were not included in income. Other than in the case of certain qualified contracts, any amount received as a loan under a contract, and any assignment or pledge (or agreement to assign or pledge) any portion of the contract value, is treated as a withdrawal of such amount or portion. (Loans, assignments and pledges are permitted only in limited circumstances under qualified contracts.) The investment in the contract is increased by the amount includible in income with respect to such assignment or pledge, though it is not affected by any other aspect of the assignment or pledge (including its release). If an individual transfers his or her interest in an annuity contract without adequate consideration to a person other than the owner's spouse (or to a former spouse incident to divorce), the owner will be taxed on the difference between the "contract value" and the "investment in the contract" at the time of transfer. In such case, the transferee's investment in the contract will be increased to reflect the increase in the transferor's income. The contract provides a death benefit that in certain circumstances may exceed the greater of the purchase payments and the contract value. As described elsewhere in this Prospectus, the Company imposes certain charges with respect to the death benefit. It is possible that those charges (or some portion thereof) could be treated for Federal income tax purposes as a partial withdrawal from the contract. There may be special income tax issues present in situations where the owner and the annuitant are not the same person and are not married to one another. A tax advisor should be consulted in those situations. TAXATION OF ANNUITY PAYMENTS Normally, the portion of each annuity payment taxable as ordinary income is equal to the excess of the payment over the exclusion amount. In the case of variable annuity payments, the exclusion amount is the "investment in the contract" (defined above) allocated to the variable annuity option, adjusted for any period certain or refund feature, when payments begin to be made divided by the number of payments expected to be made (determined by Treasury Department regulations which take into account the annuitant's life expectancy and the form of annuity benefit selected). In the case of fixed annuity payments, the exclusion amount is the amount determined by multiplying (1) the payment by (2) the ratio of the investment in the contract allocated to the fixed annuity option, adjusted for any period certain or refund feature, to the total expected value of annuity payments for the term of the contract (determined under Treasury Department regulations). A simplified method of determining the taxable portion of annuity payments applies to contracts issued in connection with certain qualified plans other than IRAs. Once the total amount of the investment in the contract is excluded using these ratios, annuity payments will be fully taxable. If annuity payments cease because of the death of the annuitant and before the total amount of the investment in the contract is recovered, the unrecovered amount generally will be allowed as a deduction to the annuitant in his or her last taxable year. TAXATION OF DEATH BENEFIT PROCEEDS Amounts may be distributed from a contract because of the death of an owner or the annuitant. Prior to the maturity date, such death benefit proceeds are includible in income as follows: (1) if distributed in a lump sum, they are taxed in the same manner as a full withdrawal, as described above, or (2) if distributed under an annuity option, they are taxed in the same manner as annuity payments, as described above. After the maturity date, where a guaranteed period exists under an annuity option and the annuitant dies before the end of that period, payments made to the beneficiary for the remainder of that period are includible in income as follows: (1) if received in a lump sum, they are includible in income to the extent that they exceed the unrecovered investment in the contract at that time, or (2) if distributed in accordance with the existing annuity option selected, they are fully 36 42 excludable from income until the remaining investment in the contract is deemed to be recovered, and all annuity payments thereafter are fully includible in income. PENALTY TAX ON PREMATURE DISTRIBUTIONS There is a 10% penalty tax on the taxable amount of any payment from a non-qualified contract unless the payment is: (a) received on or after the contract owner reaches age 59 1/2; (b) attributable to the contract owner's becoming disabled (as defined in the tax law); (c) made to a beneficiary on or after the death of the contract owner or, if the contract owner is not an individual, on or after the death of the primary annuitant (as defined in the tax law); (d) made as a series of substantially equal periodic payments (not less frequently than annually) for the life (or life expectancy) of the annuitant or for the joint lives (or joint life expectancies) of the annuitant and designated beneficiary (as defined in the tax law); (e) made under an annuity contract purchased with a single premium when the annuity starting date (as defined in the tax law) is no later than a year from purchase of the annuity and substantially equal periodic payments are made, not less frequently than annually, during the annuity period; or (f) made with respect to certain annuities issued in connection with structured settlement agreements. (A similar penalty tax, applicable to distributions from certain qualified contracts, is discussed below.) AGGREGATION OF CONTRACTS In certain circumstances, the amount of an annuity payment or a withdrawal from a contract that is includible in income may be determined by combining some or all of the non-qualified contracts owned by an individual. For example, if a person purchases a contract offered by this Prospectus and also purchases at approximately the same time an immediate annuity, the IRS may treat the two contracts as one contract. In addition, if a person purchases two or more deferred annuity contracts from the same insurance company (or its affiliates) during any calendar year, all such contracts will be treated as one contract. The effects of such aggregation are not clear; however, it could affect the amount of a withdrawal or an annuity payment that is taxable and the amount which might be subject to the penalty tax described above. QUALIFIED RETIREMENT PLANS The contracts are also designed for use in connection with certain types of retirement plans which receive favorable treatment under the Code. Numerous special tax rules apply to the participants in such qualified plans and to the contracts used in connection with such qualified plans. Therefore, no attempt is made in this Prospectus to provide more than general information about use of the contract with the various types of qualified plans. The tax rules applicable to qualified plans vary according to the type of plan and the terms and conditions of the plan itself. For example, for both withdrawals and annuity payments under certain qualified contracts, there may be no "investment in the contract" and the total amount received may be taxable. Also, loans from qualified contracts, where allowed, are subject to a variety of limitations, including restrictions as to the amount that may be borrowed, the duration of the loan, and the manner in which the loan must be repaid. (Owners should always consult their tax advisors and retirement plan fiduciaries prior to exercising their loan privileges.) Both the amount of the contribution that may be made, and the tax deduction or exclusion that the owner may claim for such contribution, are limited under qualified plans. If this contract is used in connection with a qualified plan, the owner and annuitant must be the same individual. If a co-annuitant is named, all distributions made while the annuitant is alive must be made to the annuitant. Also, if a co-annuitant is named who is not the annuitant's spouse, the annuity options which are available may be limited, depending on the difference in ages between the annuitant and co-annuitant. Furthermore, the length of any guarantee period may be limited in some circumstances to satisfy certain minimum distribution requirements under the Code. In addition, special rules apply to the time at which distributions must commence and the form in which the distributions must be paid. For example, failure to comply with minimum distribution requirements applicable to qualified plans will result in the imposition of an excise tax. This excise tax generally equals 50% of the amount by which a minimum required distribution exceeds the actual distribution from the qualified plan. In the case of IRAs, distributions of minimum amounts (as specified in the tax law) must generally commence by April 1 of the calendar year following the calendar year in which the owner attains age 70 1/2. In the case of certain other 37 43 qualified plans, distributions of such minimum amounts must generally commence by the later of this date or April 1 of the calendar year following the calendar year in which the employee retires. There is also a 10% penalty tax on the taxable amount of any payment from certain qualified contracts. (The amount of the penalty tax is 25% of the taxable amount of any payment received from a "SIMPLE retirement account" during the 2 year period beginning on the date the individual first participated in any qualified salary reduction arrangement (as defined in the tax law) maintained by the individual's employer.) There are exceptions to this penalty tax which vary depending on the type of qualified plan. In the case of an "Individual Retirement Annuity" or an "IRA", including a "SIMPLE IRA," exceptions provide that the penalty tax does not apply to a payment (a) received on or after the contract owner reaches age 59 1/2, (b) received on or after the owner's death or because of the owner's disability (as defined in the tax law), or (c) made as a series of substantially equal periodic payments (not less frequently than annually) for the life (or life expectancy) of the owner or for the joint lives (or joint life expectancies) of the owner and designated beneficiary (as defined in the tax law). These exceptions, as well as certain others not described herein, generally apply to taxable distributions from other qualified plans (although, in the case of plans qualified under Sections 401 and 403, exception "c" above for substantially equal periodic payments applies only if the owner has separated from service). In addition, the penalty tax does not apply to certain distributions from IRAs taken after December 31, 1997 which are used for qualified first time home purchasers or for higher education expenses. Special conditions must be met to qualify for these two exceptions to the penalty tax. Owners wishing to take a distribution form an IRA for these purposes should consult their tax advisor. When issued in connection with a qualified plan, a contract will be amended as generally necessary to conform to the requirements of the plan. However, contract owners, annuitants, and beneficiaries are cautioned that the rights of any person to any benefits under qualified plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the contract. In addition, the Company shall not be bound by terms and conditions of qualified plans to the extent such terms and conditions contradict the contract, unless the Company consents. QUALIFIED PLAN TYPES Following are brief descriptions of various types of qualified plans in connection with which the Company may issue a contract. Individual Retirement Annuities. Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an "IRA." IRAs are subject to limits on the amounts that may be contributed, the persons who may be eligible and on the time when distributions may commence. Also, distributions from certain other types of qualified retirement plans may be "rolled over" on a tax-deferred basis into an IRA. The contract may not, however, be used in connection with an "Education IRA" under Section 530 of the Code. IRAs generally may not provide life insurance coverage, but they may provide a death benefit that equals the greater of the premiums paid and the contract value. The contract provides a death benefit that in certain circumstances may exceed the greater of the purchase payments and the contract value. It is possible that the contract's death benefit could be viewed as providing life insurance coverage with the result that the contract would not be viewed as satisfying the requirements of an IRA. Simplified Employee Pensions (SEP-IRAs). Section 408(k) of the Code allows employers to establish simplified employee pension plans for their employees, using the employees' IRAs for such purposes, if certain criteria are met. Under these plans the employer may, within specified limits, make deductible contributions on behalf of the employees to IRAs. As discussed above (see Individual Retirement Annuities), there is some uncertainty regarding the treatment of the contract's death benefit for purposes of the tax rules governing IRAs (which would include SEP-IRAs). Employers intending to use the contract in connection with such plans should seek competent advice. SIMPLE IRAs. Section 408(p) of the Code permits certain small employers to establish "SIMPLE retirement accounts," including SIMPLE IRAs, for their employees. Under SIMPLE IRAs, certain deductible 38 44 contributions are made by both employees and employers. SIMPLE IRAs are subject to various requirements, including limits on the amounts that may be contributed, the persons who may be eligible, and the time when distributions may commence. As discussed above (see Individual Retirement Annuities), there is some uncertainty regarding the proper characterization of the contract's death benefit for purposes of the tax rules governing IRAs (which would include SIMPLE IRAs). Employers intending to use the contract in connection with such plans should seek competent advice. Corporate and Self-Employed ("H.R. 10" and "Keogh") Pension and Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of tax-favored retirement plans for employees. The Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly referred to as "H.R. 10" or "Keogh", permits self-employed individuals also to establish such tax-favored retirement plans for themselves and their employees. Such retirement plans may permit the purchase of the contracts in order to provide benefits under the plans. The contract provides a death benefit that in certain circumstances may exceed the greater of the purchase payments and the contract value. It is possible that such death benefit could be characterized as an incidental death benefit. There are limitations on the amount of incidental benefits that may be provided under pension and profit sharing plans. In addition, the provision of such benefits may result in current taxable income to participants. Employers intending to use the contract in connection with such plans should seek competent advice. Tax-Sheltered Annuities. Section 403(b) of the Code permits public school employees and employees of certain types of charitable, educational and scientific organizations specified in Section 501(c)(3) of the Code to have their employers purchase annuity contracts for them and, subject to certain limitations, to exclude the amount of purchase payments from gross income for tax purposes. These annuity contracts are commonly referred to as "tax-sheltered annuities". Purchasers of the contracts for such purposes should seek competent advice as to eligibility, limitations on permissible amounts of purchase payments and other tax consequences associated with the contracts. In particular, purchasers should consider that the contract provides a death benefit that in certain circumstances may exceed the greater of the purchase payments and the contract value. It is possible that such death benefit could be characterized as an incidental death benefit. If the death benefit were so characterized, this could result in currently taxable income to purchasers. In addition, there are limitations on the amount of incidental benefits that may be provided under a tax-sheltered annuity. Even if the death benefit under the contract were characterized as an incidental death benefit, it is unlikely to violate those limits unless the purchaser also purchases a life insurance contract as part of his or her tax-sheltered annuity plan. Tax-sheltered annuity contracts must contain restrictions on withdrawals of (i) contributions made pursuant to a salary reduction agreement in years beginning after December 31, 1988, (ii) earnings on those contributions, and (iii) earnings after 1988 on amounts attributable to salary reduction contributions (and earnings on those contributions) held as of the last day of the year beginning before January 1, 1989. These amounts can be paid only if the employee has reached age 59 1/2, separated from service, died, or become disabled (within the meaning of the tax law), or in the case of hardship (within the meaning of the tax law). Amounts permitted to be distributed in the event of hardship are limited to actual contributions; earnings thereon cannot be distributed on account of hardship. Amounts subject to the withdrawal restrictions applicable to Section 403(b)(7) custodial accounts may be subject to more stringent restrictions. (These limitations on withdrawals do not apply to the extent the Company is directed to transfer some or all of the contract value to the issuer of another tax-sheltered annuity or into a Section 403(b)(7) custodial account.) Roth IRAs. Recently enacted Section 408A of the Code permits eligible individuals to contribute to a type of IRA known as a "Roth IRA." Roth IRAs differ from other IRAs in several respects. Among the differences is that, although contributions to a Roth IRA are not deductible, "qualified distributions" from a Roth IRA will be excludable from income. Additionally, the eligibility and mandatory distribution requirements for Roth IRAs differ from non-Roth IRAs. Furthermore, a rollover may be made to a Roth IRA only if it is a "qualified rollover contribution." A "qualified rollover contribution" is a rollover contribution to a Roth IRA from another Roth IRA or from a non-Roth IRA, but only if such rollover contribution meets the rollover requirements for IRAs under section 408(d)(3) of the Code. In the case of a qualified rollover contribution or a transfer from a non-Roth IRA to a Roth IRA, any portion of the amount rolled over which would be includible in gross income were it not part of a qualified rollover contribution or 39 45 a nontaxable transfer will be includible in gross income. However, the 10 percent penalty tax on premature distributions generally will not apply. All or part of amounts in a non-Roth IRA may be converted into a Roth IRA. Such a conversion can be made without taking an actual distribution from the IRA. For example, an individual may make a conversion by notifying the IRA issuer or trustee, whichever is applicable. The conversion of an IRA to a Roth IRA is a special type of qualified rollover distribution. Hence, the IRA participant must be eligible to make a qualified rollover distribution in order to convert an IRA to a Roth IRA. A conversion typically will result in the inclusion of some or all of the IRA value in gross income, as described above. Persons with adjusted gross incomes in excess of $100,000 or who are married and file a separate return are not eligible to make a qualified rollover contribution or a transfer in a taxable year from a non-Roth IRA to a Roth IRA. Any "qualified distribution" from a Roth IRA is excludible from gross income. A "qualified distribution" is a payment or distribution which satisfies two requirements. First, the payment or distribution must be (a) made after the Owner attains age 59 1/2, (b) made after the Owner's death, (c) attributable to the Owner being disabled, or (d) a qualified first-time homebuyer distribution within the meaning of section 72(t)(2)(F) of the Code. Second, the payment or distribution must be made in a taxable year that is at least five years after (a) the first taxable year for which a contribution was made to any Roth IRA established for the Owner, or (b) in the case of a payment or distribution properly allocable to a qualified rollover contribution from a non-Roth IRA (or income allocable thereto), the taxable year in which the rollover contribution was made. A distribution from a Roth IRA which is not a qualified distribution is generally taxed in the same manner as a distribution from non-Roth IRAs. Distributions from a Roth IRA need not commence at age 70 1/2. As described above (see Individual Retirement Annuities), there is some uncertainty regarding the proper characterization of the Contract's death benefit for purposes of the tax rules governing IRAs (which include Roth IRAs). Persons intending to use the Contract in connection with a Roth IRA should seek competent advice. DIRECT ROLLOVERS If the contract is used in connection with a retirement plan that is qualified under Sections 401(a), 403(a), or 403(b) of the Code, any "eligible rollover distribution" from the contract will be subject to "direct rollover" and mandatory withholding requirements. An eligible rollover distribution generally is any taxable distribution from such qualified plans, excluding certain amounts such as (i) minimum distributions required under Section 401(a)(9) of the Code, and (ii) certain distributions for life, life expectancy, or for 10 years or more which are part of a "series of substantially equal periodic payments." Under these requirements, Federal income tax equal to 20% of the eligible rollover distribution will be withheld from the amount of the distribution. Unlike withholding on certain other amounts distributed from the contract, discussed below, the owner cannot elect out of withholding with respect to an eligible rollover distribution. However, this 20% withholding will not apply if, instead of receiving the eligible rollover distribution, the distributee elects to have it directly transferred to certain qualified plans. Prior to receiving an eligible rollover distribution, a notice will be provided explaining generally the direct rollover and mandatory withholding requirements and how to avoid the 20% withholding by electing a direct rollover. FEDERAL INCOME TAX WITHHOLDING The Company will withhold and remit to the U.S. Government a part of the taxable portion of each distribution made under a contract unless the distributee notifies the Company at or before the time of the distribution that he or she elects not to have any amounts withheld. In certain circumstances, the Company may be required to withhold tax. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, the withholding rate applicable to the taxable portion of non-periodic payments (including withdrawals prior to the maturity date and rollovers from non-Roth IRAs to Roth IRAs) is 10%. As discussed above, the withholding rate applicable to eligible rollover distributions is 20%. 40 46 GENERAL MATTERS PERFORMANCE DATA Each of the sub-accounts may in its advertising and sales materials quote total return figures. The sub-accounts may advertise both "standardized" and "non-standardized" total return figures, although standardized figures will always accompany non-standardized figures. Non-standardized total return figures may be quoted assuming both (i) redemption at the end of the time period and (ii) not assuming redemption at the end of the time period. Standardized figures include total return figures from: (i) the inception date of the sub-account of the Variable Account which invests in the portfolio or (ii) ten years, whichever period is shorter. Non-standardized figures include total return numbers from: (i) inception date of the portfolio or (ii) ten year, whichever period is shorter. Such figures will always include the average annual total return for recent one year and, when applicable, five and ten year periods and, where less than ten years, the inception date of the sub-account, in the case of standardized returns, and the inception date of the portfolio, in the case of non-standardized returns. Where the period since inception is less than one year, the total return quoted will be the aggregate return for the period. The average annual total return is the average annual compounded rate of return that equates a purchase payment to the market value of such purchase payment on the last day of the period for which such return is calculated. The aggregate total return is the percentage change (not annualized) that equates a purchase payment to the market value of such purchase payment on the last day of the period for which such return is calculated. For purposes of the calculations it is assumed that an initial payment of $1,000 is made on the first day of the period for which the return is calculated. For total return figures quoted for periods prior to the commencement of the offering of this contract, October 31, 1992, standardized performance data will be the historical performance of the Trust portfolio from the date the applicable sub-account of the Variable Account first became available for investment under other contracts offered by the Company, adjusted to reflect current contract charges. In the case of non-standardized performance, performance figures will be the historical performance of the Trust portfolio from the inception date of the portfolio (or in the case of the Trust portfolios created in connection with the merger of Manulife Series Fund, Inc. into the Trust, the inception date of the applicable predecessor Manulife Series Fund portfolio), adjusted to reflect current contract charges. Past performance figures quoted are not intended to indicate future performance of any sub-account. More detailed information on the computations is set forth in the Statement of Additional Information. FINANCIAL STATEMENTS Financial Statements for the Variable Account and for the Company are contained in the Statement of Additional Information. ASSET ALLOCATION AND TIMING SERVICES The Company is aware that certain third parties may offer asset allocation and timing services in connection with the contracts. In certain cases the Company may agreed to honor transfer instructions from such asset allocation and timing services where it has received powers of attorney, in a form acceptable to it, from the contract owners participating in the service. THE COMPANY DOES NOT ENDORSE, APPROVE OR RECOMMEND SUCH SERVICES IN ANY WAY AND CONTRACT OWNERS SHOULD BE AWARE THAT FEES PAID FOR SUCH SERVICES ARE SEPARATE AND IN ADDITION TO FEES PAID UNDER THE CONTRACTS. DISTRIBUTION OF CONTRACTS MSS, located at 73 Tremont Street, Boston, Massachusetts 02108, a Delaware limited liability company controlled by the parent of the Company, is the principal underwriter of the contracts in addition to providing advisory services to the Trust. MSS is a broker-dealer registered under the Securities Exchange Act of 1934 (the "1934 Act") and a member of the National Association of Securities Dealers, Inc. (the "NASD"). Sales of the contracts will be made by registered representatives of broker-dealers authorized by MSS and the company to sell the contracts. Such registered representatives will also be licensed insurance agents of the Company. MSS will pay distribution compensation to selling brokers in varying amounts which under 41 47 normal circumstances are not expected to exceed 1% of purchase payments plus 0.80% of the contract value per year commencing one year after each initial purchase payment. MSS may from time to time pay additional compensation pursuant to promotional contests. Additionally, in some circumstances, MSS will be compensated for providing marketing support for the distribution of the contracts. CONTRACT OWNER INQUIRIES All contract owner inquiries should be directed to the Company's Annuity Service Office at Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966. CONFIRMATION STATEMENTS Owners will be sent confirmation statements for certain transactions in their account. Owners should carefully review these statements to verify their accuracy. Any mistakes should immediately be reported to the Company's Annuity Service Office. If the owner fails to notify the Company's Annuity Service Office of any mistake within 60 days of the mailing of the confirmation statement, the owner will be deemed to have ratified the transaction. LEGAL PROCEEDINGS There are no legal proceedings to which the Variable Account is a party or to which the assets of the Variable Account are subject. Neither the Company nor MSS are involved in any litigation that is of material importance in relation to their total assets or that relates to the Variable Account. OTHER INFORMATION A registration statement has been filed with the SEC under the 1933 Act and the 1940 Act with respect to the variable portion of the contracts discussed in this Prospectus. Not all the information set forth in the registration statement, amendments and exhibits thereto has been included in this Prospectus. Statements contained in this Prospectus or the Statement of Additional Information concerning the content of the contracts and other legal instruments are only summaries. For a complete statement of the terms of these documents, reference should be made to the instruments filed with the SEC. STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS General Information and History............................................ 3 Performance Data........................................................... 3 State Premium Taxes........................................................ 6 Services .................................................................. 7 Independent Auditors.............................................. 7 Servicing Agent................................................... 7 Principal Underwriter............................................. 7 Cancellation of Contract.......................................... 7 Appendix A: State Premium Taxes............................................ 8 Financial Statements....................................................... 9 42 48 APPENDIX A EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE Example 1 - Assume a single payment of $50,000 is made into the contract, no transfers are made, no additional payments are made and there are no partial withdrawals. The table below illustrates four examples of the withdrawal charges that would be imposed if the contract is completely withdrawn, based on hypothetical contract values. HYPOTHETICAL AMOUNT PURCHASE CONTRACT CONTRACT AVAILABLE WITHOUT PAYMENTS WITHDRAWAL CHARGE YEAR VALUE WITHDRAWAL CHARGES LIQUIDATED PERCENT AMOUNT - ---- ----- ------------------ ---------- ------- ------ 1 55,000 5,000(a) 50,000 6% 3,000 3 50,500 5,000(b) 45,500 5% 2,275 5 60,000 10,000(c) 50,000 3% 1,500 7 70,000 20,000(d) 50,000 0% 0
(a) During any contract year the amount that may be withdrawn without withdrawal charges is the greater of accumulated earnings, or 10% of the total purchase payments made under the contract less any prior partial withdrawals in that contract year. In the first contract year the earnings under the contract and 10% of purchase payments both equal $5,000. Consequently, on total withdrawal $5,000 is withdrawn without withdrawal charges, the entire $50,000 purchase payment is liquidated and the withdrawal charge is assessed against such liquidated purchase payment (contract value less withdrawal amount without charges). (b) In the example for the third contract year, the accumulated earnings of $500 is less than 10% of purchase payments, therefore the amount that may be withdrawn without withdrawal charges is equal to 10% of purchase payments ($50,000 X 10% = $5,000) and the withdrawal charge is only applied to purchase payments liquidated (contract value less withdrawal amount without charges). (c) In the example for the fifth contract year, the accumulated earnings of $10,000 is greater than 10% of purchase payments ($5,000), therefore the amount that may be withdrawn without withdrawal charges is equal to the accumulated earnings of $10,000 and the withdrawal charge is applied to the purchase payments liquidated (contract value less withdrawal amount without charges). (d) There is no withdrawal charge on any purchase payments liquidated that have been in the contract for at least 6 years. 43 49 Example 2 - Assume a single payment of $50,000 is made into the contract, no transfers are made, no additional payments are made and there are a series of four partial withdrawals made during the third contract year of $2,000, $5,000, $7,000, and $8,000.
HYPOTHETICAL PARTIAL WITHDRAW WITHDRAWAL PURCHASE CONTRACT REQUESTED AMOUNT PAYMENTS WITHDRAWAL CHARGE VALUE WITHOUT CHARGES LIQUIDATED PERCENT AMOUNT 65,000 2,000 15,000(a) 0 5% 0 49,000 5,000 3,000(b) 2,000 5% 100 52,000 7,000 4,000(c) 3,000 5% 150 44,000 8,000 0(d) 8,000 5% 400
(a) The amount that can be withdrawn without withdrawal charges during any contract year is the greater of the contract value less the unliquidated purchase payments (accumulated earnings), or 10% of purchase payments less 100% of all prior withdrawals in that contract year. For the first example, accumulated earnings of $15,000 is the amount that can be withdrawn without withdrawal charges since it is greater than 10% of purchase payments less prior withdrawals ($5,000-0). The amount requested ($2,000) is less than the amount that can be withdrawn without withdrawal charges so no purchase payments are liquidated and no withdrawal charge applies. (b) The contract has negative accumulated earnings ($49,000-$50,000), so the amount that can be withdrawn without withdrawal charges is limited to 10% of purchase payments less all prior withdrawals. Since $2,000 has already been withdrawn earlier in the current contract year, the remaining amount that can be withdrawn without withdrawal charges during the third contract year is $3,000. The $5,000 partial withdrawal will consist of $3,000 amount that can be withdrawn without withdrawal charge, and the remaining $2,000 will be subject to a withdrawal charge and result in purchase payments being liquidated. The remaining unliquidated purchase payments are $48,000. (c) The contract has increased in value to $52,000. The unliquidated purchase payments are $48,000 so the accumulated earnings are $4,000, which is greater than 10% of purchase payments less prior withdrawals ($5,000-$2,000-$5,000<0). Hence the amount that can be withdrawn without withdrawal charges is $4,000. Therefore, $3,000 of the $7,000 partial withdrawal will be subject to a withdrawal charge and result in purchase payments being liquidated. The remaining unliquidated purchase payments are $45,000. (d) The amount that can be withdrawn without withdrawal charges is zero since the contract has negative accumulated earnings ($44,000-$45,000) and the full 10% of purchase payments ($5,000) has already been utilized. The full amount of $8,000 will result in purchase payments being liquidated subject to a withdrawal charge. At the beginning of the next contract year the full 10% of purchase payments would be available again for withdrawal requests during that year. 44 50 PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION 51 - -------------------------------------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A - -------------------------------------------------------------------------------- of THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK FLEXIBLE PURCHASE PAYMENT INDIVIDUAL DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT NON-PARTICIPATING This Statement of Additional Information is not a Prospectus. It contains information in addition to that described in the Prospectus and should be read in conjunction with the Prospectus dated the same date as this Statement of Additional Information. The Prospectus may be obtained by writing The Manufacturers Life Insurance Company of New York, at the Annuity Service Office, Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580-9966 or by telephoning (914) 921-1020. The date of this Statement of Additional Information is May 1, 1998. - -------------------------------------------------------------------------------- 52 V9SAI598 53 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS Page General Information and History............................................3 Performance Data...........................................................3 State Premium Taxes........................................................6 Services...................................................................7 Independent Auditors..............................................7 Servicing Agent...................................................7 Principal Underwriter.............................................7 Cancellation of Contract..........................................7 Appendix A - State Premium Taxes...........................................8 Financial Statements.......................................................9 54 GENERAL INFORMATION AND HISTORY The Manufacturers Life Insurance Company of New York Separate Account A ("Variable Account") is a separate investment account of The Manufacturers Life Insurance Company of New York, formerly First North American Life Assurance Company (the "Company"), a stock life insurance company organized under the laws of New York in 1992. The Company is a wholly-owned subsidiary of The Manufacturers Life Insurance Company of North America, formerly North American Security Life Insurance Company ("Manulife North America"), a stock life insurance company established in 1979 in Delaware. The ultimate parent of Manulife North America is The Manufacturers Life Insurance Company ("Manulife"), a Canadian mutual life insurance company based in Toronto, Canada. Prior to January 1, 1996, Manulife North America was a wholly owned subsidiary of North American Life Assurance Company ("NAL"), a Canadian mutual life insurance company. On January 1, 1996, NAL and Manulife merged with the combined company retaining the name Manulife. PERFORMANCE DATA Each of the sub-accounts may in its advertising and sales materials quote total return figures. The sub-accounts may advertise both "standardized" and "non-standardized" total return figures, although standardized figures will always accompany non-standardized figures. Non-standardized total return figures may be quoted assuming both (i) redemption at the end of the time period and (ii) not assuming redemption at the end of the time period. Standardized figures include total return figures from: (i) the inception date of the sub-account of the Variable Account which invests in the portfolio or (ii) inception date of the portfolio or (ii) ten years, whichever period is shorter. Such figures will always include the average annual total return for recent one year and, when applicable, five and ten year periods and, where less than ten years, the inception date of the sub-account, in the case of standardized returns, and the inception date of the portfolio, in the case of non-standardized returns. Where the period since inception is less than one year, the total return quoted will be the aggregate return for the period. The average annual total return is the average annual compounded rate of return that equates a purchase payment to the market value of such purchase payment on the last day of the period for which such return is calculated. The aggregate total return is the percentage change (not annualized) that equates a purchase payment to the market value of such purchase payment on the last day of the period for which such return is calculated. For purposes of the calculations it is assumed that an initial payment of $1,000 is made on the first day of the period for which the return is calculated. In calculating standardized return figures, all recurring charges (all asset charges (mortality and expense risk fees and administrative fees)) are reflected and the asset charges are reflected in changes in unit values. Standardized total return figures will be quoted assuming redemption at the end of the period. Non-standardized total return figures reflecting redemption at the end of the time period are calculated on the same basis as the standardized returns. Non-standardized total return figures not reflecting redemption at the end of the time period are calculated on the same basis as the standardized returns except that the calculations assume no redemption at the end of the period and do not reflect deduction of the annual contract fee. The Company believes such non-standardized figures not reflecting redemptions at the end of the time period are useful to contract owners who wish to assess the performance of an ongoing contract of the size that is meaningful to the individual contract owner. For total return figures quoted for periods prior to the commencement of the offering of this contract, October 31, 1992, standardized performance data will be the historical performance of the Trust portfolio from the date the applicable sub-account of the Variable Account first became available for investment under other contracts offered by the Company; adjusted to reflect current contract charges. In the case of non-standardized performance, performance figures will be the historical performance of the Trust portfolio from the inception date of the portfolio (or in the case of the Trust portfolios created in connection with the merger of Manulife Series Fund, Inc. into the Trust, the inception date of the applicable predecessor. Manulife Series Fund portfolio), adjusted to reflect current contract charges. 55 STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES CALCULATED AS OF DECEMBER 31, 1997
========================================================================================== TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION OR 10 YEARS, DATE* WHICHEVER SHORTER - ------------------------------------------------------------------------------------------ Pacific Rim Emerging Markets N/A N/A -37.94% 1/1/97 - ------------------------------------------------------------------------------------------ Science & Technology N/A N/A 3.17% 1/1/97 - ------------------------------------------------------------------------------------------ International Small Cap -6.04% N/A 0.72% 3/4/96 - ------------------------------------------------------------------------------------------ Emerging Growth N/A N/A 10.53% 1/1/97 - ------------------------------------------------------------------------------------------ Pilgrim Baxter Growth N/A N/A -6.76% 1/1/97 - ------------------------------------------------------------------------------------------ Small/Mid Cap 7.59% N/A 7.45% 3/4/96 - ------------------------------------------------------------------------------------------ International Stock N/A N/A -4.31% 1/1/97 - ------------------------------------------------------------------------------------------ Worldwide Growth N/A N/A 5.66% 1/1/97 - ------------------------------------------------------------------------------------------ Global Equity 13.06% 12.63% 13.08% 10/31/92 - ------------------------------------------------------------------------------------------ Small Company Value N/A N/A -9.98% 10/1/97 - ------------------------------------------------------------------------------------------ Equity 11.53% 16.78% 18.18%+ 10/31/92 - ------------------------------------------------------------------------------------------ Growth 17.55% N/A 19.40% 7/15/96 - ------------------------------------------------------------------------------------------ Quantitative Equity N/A N/A 22.79% 1/1/97 - ------------------------------------------------------------------------------------------ Blue Chip Growth 19.11% 11.09% 10.91% 12/11/92 - ------------------------------------------------------------------------------------------ Real Estate Securities N/A N/A 13.53% 1/1/97 - ------------------------------------------------------------------------------------------ Value N/A N/A 14.39% 1/1/97 - ------------------------------------------------------------------------------------------ International Growth and Income -6.84% N/A 3.33% 1/9/95 - ------------------------------------------------------------------------------------------ Growth and Income 24.92% 16.88% 17.37% 10/31/92 - ------------------------------------------------------------------------------------------ Equity-Income 21.84% N/A 15.47% 2/19/93 - ------------------------------------------------------------------------------------------ Balanced N/A N/A 10.82% 1/1/97 - ------------------------------------------------------------------------------------------ Aggressive Asset Allocation 11.38% 10.58% 10.99% 10/31/92 - ------------------------------------------------------------------------------------------ High Yield N/A N/A 5.06% 1/1/97 - ------------------------------------------------------------------------------------------ Moderate Asset Allocation 8.20% 8.71% 9.04% 10/31/92 - ------------------------------------------------------------------------------------------ Conservative Asset Allocation 3.84% 6.52% 6.76% 10/31/92 - ------------------------------------------------------------------------------------------ Strategic Bond 3.41% N/A 7.41% 2/19/93 - ------------------------------------------------------------------------------------------ Global Government Bond -4.03% 7.93% 7.63% 10/31/92 - ------------------------------------------------------------------------------------------ Capital Growth Bond N/A N/A 1.88% 1/1/97 - ------------------------------------------------------------------------------------------ Investment Quality Bond 2.27% 5.10% 5.33% 10/31/92 - ------------------------------------------------------------------------------------------ U.S. Government Securities 1.09% 4.58% 4.67% 10/31/92 - ------------------------------------------------------------------------------------------ Money Market -1.99% 2.42% 2.55% 10/31/92 - ------------------------------------------------------------------------------------------ Lifestyle Aggressive 1000 N/A N/A 4.80% 1/1/97 - ------------------------------------------------------------------------------------------
56 - ------------------------------------------------------------------------------------------ Lifestyle Growth 820 N/A N/A 7.29% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Balanced 640 N/A N/A 7.38% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Moderate 460 N/A N/A 6.79% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Conservative 280 N/A N/A 5.07% 1/1/97 - ------------------------------------------------------------------------------------------
* Inception date of the sub-account of the Variable Account which invests in the portfolio. 57 NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES (ASSUMING REDEMPTION AT THE END OF THE TIME PERIOD) CALCULATED AS OF DECEMBER 31, 1997
========================================================================================== TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION OR 10 YEARS, DATE OF WHICHEVER PORTFOLIO SHORTER - ------------------------------------------------------------------------------------------ Pacific Rim Emerging Markets* -38.40% N/A -10.33% 10/4/94 - ------------------------------------------------------------------------------------------ Science & Technology N/A N/A 3.17% 1/1/97 - ------------------------------------------------------------------------------------------ International Small Cap -6.04% N/A 0.72% 3/4/96 - ------------------------------------------------------------------------------------------ Emerging Growth N/A N/A 10.53% 1/1/97 - ------------------------------------------------------------------------------------------ Pilgrim Baxter Growth N/A N/A -6.76% 1/1/97 - ------------------------------------------------------------------------------------------ Small/Mid Cap 7.59% N/A 7.54% 3/4/96 - ------------------------------------------------------------------------------------------ International Stock N/A N/A -4.31% 1/1/97 - ------------------------------------------------------------------------------------------ Worldwide Growth N/A N/A 5.66% 1/1/97 - ------------------------------------------------------------------------------------------ Global Equity 13.06% 12.63% 8.18% 3/18/88 - ------------------------------------------------------------------------------------------ Small Company Value N/A N/A -9.98% 10/1/97 - ------------------------------------------------------------------------------------------ Equity 11.53% 16.78% 13.50%+ 6/18/85 - ------------------------------------------------------------------------------------------ Growth 17.55% N/A 19.40% 7/15/96 - ------------------------------------------------------------------------------------------ Quantitative Equity* 21.97% 14.52% 13.48% 4/30/87 - ------------------------------------------------------------------------------------------ Blue Chip Growth 19.11% 11.09% 10.91% 12/11/92 - ------------------------------------------------------------------------------------------ Real Estate Securities* 10.70% 14.95% 14.22% 4/30/87 - ------------------------------------------------------------------------------------------ Value N/A N/A 14.39% 1/1/97 - ------------------------------------------------------------------------------------------ International Growth and Income -6.84% N/A 3.33% 1/9/95 - ------------------------------------------------------------------------------------------ Growth and Income 24.92% 16.88% 15.57% 4/23/91 - ------------------------------------------------------------------------------------------ Equity-Income 21.84% N/A 15.47% 2/19/93 - ------------------------------------------------------------------------------------------ Balanced N/A N/A 10.82% 1/1/97 - ------------------------------------------------------------------------------------------ Aggressive Asset Allocation 11.38% 10.58% 8.51% 8/3/89 - ------------------------------------------------------------------------------------------ High Yield N/A N/A 5.06% 1/1/97 - ------------------------------------------------------------------------------------------ Moderate Asset Allocation 8.20% 8.71% 7.51% 8/3/89 - ------------------------------------------------------------------------------------------ Conservative Asset Allocation 3.84% 6.52% 6.21% 8/3/89 - ------------------------------------------------------------------------------------------ Strategic Bond 3.41% N/A 7.41% 2/19/93 - ------------------------------------------------------------------------------------------ Global Government Bond 11.43% 8.28% 8.04% 3/18/88 - ------------------------------------------------------------------------------------------ Capital Growth Bond* 1.31% 5.15% 6.97%+ 6/26/84 - ------------------------------------------------------------------------------------------ Investment Quality Bond 2.27% 5.10% 5.42% 6/18/85 - ------------------------------------------------------------------------------------------ U.S. Government Securities 1.09% 4.58% 5.82% 3/18/88 - ------------------------------------------------------------------------------------------ Money Market -1.99% 2.42% 3.93%+ 6/18/85 - ------------------------------------------------------------------------------------------
58 - ------------------------------------------------------------------------------------------ Lifestyle Aggressive 1000 N/A N/A 4.80% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Growth 820 N/A N/A 7.29% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Balanced 640 N/A N/A 7.38% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Moderate 460 N/A N/A 6.79% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Conservative 280 N/A N/A 5.07% 1/1/97 - ------------------------------------------------------------------------------------------
59 + Ten year average annual return. * On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust. Performance presented for these sub-accounts is based upon the performance of the respective predecessor Manulife Series Fund portfolio for periods prior to December 31, 1996. Performance for each of these sub-accounts is based on the historical performance of the predecessor Manulife Series Fund portfolio, adjusted to reflect current contract charges, and therefore, does not reflect for periods prior to December 31, 1996 the current Trust portfolio expenses that an investor would incur as a holder of units of the sub-account. 60 NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES (ASSUMING NO REDEMPTION AT THE END OF THE TIME PERIOD) CALCULATED AS OF DECEMBER 31, 1997
========================================================================================== TRUST PORTFOLIO 1 YEAR 5 YEAR SINCE INCEPTION INCEPTION OR 10 YEARS, DATE OF WHICHEVER PORTFOLIO SHORTER - ------------------------------------------------------------------------------------------ Pacific Rim Emerging Markets* -35.04% N/A -9.28% 10/4/94 - ------------------------------------------------------------------------------------------ Science & Technology N/A N/A 9.18% 1/1/97 - ------------------------------------------------------------------------------------------ International Small Cap -0.62 N/A 3.92% 3/4/96 - ------------------------------------------------------------------------------------------ Emerging Growth N/A N/A 16.59% 1/1/97 - ------------------------------------------------------------------------------------------ Pilgrim Baxter Growth N/A N/A -1.38% 1/1/97 - ------------------------------------------------------------------------------------------ Small/Mid Cap 13.66% N/A 10.58% 3/4/96 - ------------------------------------------------------------------------------------------ International Stock N/A N/A 1.22% 1/1/97 - ------------------------------------------------------------------------------------------ Worldwide Growth N/A N/A 11.73% 1/1/97 - ------------------------------------------------------------------------------------------ Global Equity 19.12% 13.05% 8.23% 3/18/88 - ------------------------------------------------------------------------------------------ Small Company Value N/A N/A -4.81% 10/1/97 - ------------------------------------------------------------------------------------------ Equity 17.59% 17.15% 13.54%+ 6/18/85 - ------------------------------------------------------------------------------------------ Growth 23.61% N/A 23.23% 7/15/96 - ------------------------------------------------------------------------------------------ Quantitative Equity* 28.03% 14.92% 13.52%+ 4/30/87 - ------------------------------------------------------------------------------------------ Blue Chip Growth 25.17% 11.54% 11.23% 12/11/92 - ------------------------------------------------------------------------------------------ Real Estate Securities* 16.76% 15.34% 14.27%+ 4/30/87 - ------------------------------------------------------------------------------------------ Value N/A N/A 20.46% 1/1/97 - ------------------------------------------------------------------------------------------ International Growth and Income -1.47% N/A 4.94% 1/9/95 - ------------------------------------------------------------------------------------------ Growth and Income 30.99% 17.25% 15.62% 4/23/91 - ------------------------------------------------------------------------------------------ Equity-Income 27.90% N/A 15.87% 2/19/93 - ------------------------------------------------------------------------------------------ Balanced N/A N/A 16.88% 1/1/97 - ------------------------------------------------------------------------------------------ Aggressive Asset Allocation 11.41% 8.93% 7.43% 8/3/89 - ------------------------------------------------------------------------------------------ High Yield N/A N/A 11.12% 1/1/97 - ------------------------------------------------------------------------------------------ Moderate Asset Allocation 14.26% 9.20% 7.56% 8/3/89 - ------------------------------------------------------------------------------------------ Conservative Asset Allocation 9.89% 7.04% 6.26% 8/3/89 - ------------------------------------------------------------------------------------------ Strategic Bond 9.44% N/A 7.94% 2/19/93 - ------------------------------------------------------------------------------------------ Global Government Bond 1.52% 8.43% 7.36% 3/18/88 - ------------------------------------------------------------------------------------------ Capital Growth Bond* 7.20% 5.70% 7.02%+ 6/26/84 - ------------------------------------------------------------------------------------------ Investment Quality Bond 8.23% 5.64% 5.47%+ 6/18/85 - ------------------------------------------------------------------------------------------ U.S. Government Securities 6.97% 5.14% 5.87% 3/18/88 - ------------------------------------------------------------------------------------------
61 - ------------------------------------------------------------------------------------------ Money Market 3.69% 3.02% 3.98%+ 6/18/85 - ------------------------------------------------------------------------------------------ Lifestyle Aggressive 1000 N/A N/A 10.86% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Growth 820 N/A N/A 13.35% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Balanced 640 N/A N/A 13.44% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Moderate 460 N/A N/A 12.86% 1/1/97 - ------------------------------------------------------------------------------------------ Lifestyle Conservative 280 N/A N/A 11.13% 1/1/97 - ------------------------------------------------------------------------------------------
62 + Ten year average annual return. * On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust. Performance presented for these sub-accounts is based upon the performance of the respective predecessor Manulife Series Fund portfolio for periods prior to December 31, 1996. Performance for each of these sub-accounts is based on the historical performance of the predecessor Manulife Series Fund portfolio, adjusted to reflect current contract charges, and therefore, does not reflect for periods prior to December 31, 1996 the current Trust portfolio expenses that an investor would incur as a holder of units of the sub-account. * * * * * In addition to the non-standardized returns quoted above, each of the sub-accounts may from time to time quote aggregate non-standardized total returns calculated in the same manner as set forth above for other time periods. From time to time the Trust may include in its advertising and sales literature general discussions of economic theories, including but not limited to, discussions on how demographic and political trends can affect the financial markets. Further, the Trust may also include in its advertising and sales literature specific information on each of the Trust's subadvisers, including but not limited to, research capabilities of a subadviser, assets under management, information relating to other clients of a subadviser, and other generalized information. STATE PREMIUM TAXES New York does not currently assess a premium tax. In the event New York does impose a premium tax, the Company reserves the right to pass-through such tax to contract owners. For residents of all other states, except for residents in Pennsylvania, South Dakota and Kentucky premium taxes will be deducted from the contract value used to provide for fixed or variable annuity payments unless required otherwise by applicable law. The amount deducted will depend on the premium tax assessed in the applicable state. State premium taxes currently range from 0% to 3.5% depending on the jurisdiction and the tax status of the contract and are subject to change by the legislature or other authority. (See "APPENDIX B: STATE PREMIUM TAXES") FOR RESIDENTS OF PENNSYLVANIA, SOUTH DAKOTA AND KENTUCKY THE FOLLOWING PREMIUM TAX ASSESSMENT WILL APPLY: A premium tax will be assessed against all non-qualified purchase payments received from contract owners who are residents of South Dakota. The rate of tax is 1.25% for South Dakota residents. If the Kentucky Revenue Cabinet's policy change on premium taxes becomes effective as expected, a premium tax will be assessed against all purchase payments received on or after July 1, 1997 from contract owners who are residents of Kentucky. The rate of tax is 2.00% for Kentucky residents. Purchase payments received for the period October 1, 1992 through September 7, 1995 for non-qualified contracts of Pennsylvania residents will be assessed a 2.00% premium tax; purchase payments received on or after September 8, 1995 will not be assessed a premium tax. For purchase payments received on or after October 1, 1992 (July 1, 1997 for Kentucky), the state premium tax will be collected upon payment of any withdrawal benefits, upon any annuitization or payment of death benefits. For payments received prior to October 1, 1992 (July 1, 1997 for Kentucky) the premium tax will deducted upon annuitization only. In the states of Pennsylvania and South Dakota, purchase payments received in connection with the funding of a qualified plan are exempt from state premium tax. SERVICES INDEPENDENT AUDITORS The financial statements of the Company and the Variable Account at December 31, 1997 and 1996 and for the years then ended appearing in this Statement of Additional Information have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such given upon the authority of such firm as experts in accounting and auditing. 63 The statutory balance sheet of the Company as of December 31, 1995 and the related statutory statements of operations, changes in capital and deficit and cash flows for each of the two years in the period ended December 31, 1995, appearing in this Statement of Additional Information have been included herein in reliance on the report (which report includes an adverse opinion as to generally accepted accounting principles and an unqualified opinion as to statutory accounting practices prescribed or permitted by the Insurance Department of the State of New York), of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. The statement of operations and changes in net assets of the Variable Account for the year ended December 31, 1995, appearing in this Statement of Additional Information has been included herein in reliance on the report of Coopers & Lybrand L.L.P., independent accountants, given on the authority of that firm as experts in accounting and auditing. SERVICING AGENT Computer Sciences Corporation Financial Services Group ("CSC FSG") provides to the Company a computerized data processing recordkeeping system for variable annuity administration. Vantage provides various daily, semimonthly, monthly, semiannual and annual reports including: daily updates on accumulation unit values, variable annuity participants and transactions, and agent production and commissions; semimonthly commission statements; monthly summaries of agent production and daily transaction reports; semiannual statements for contract owners; and annual contract owner tax reports. CSC FSG receives approximately $7.50 per policy per year, plus certain other fees paid by the Company for the services provided. PRINCIPAL UNDERWRITER Manufacturers Securities Services, LLC, ("MSS") the successor to NASL Financial Services, Inc., a Delaware limited liability partnership controlled by the parent of the Company, serves as principal underwriter of the contracts. Contracts are offered on a continuous basis. The aggregate dollar amount of underwriting commissions paid to MSS in 1997, 1996 and 1995 respectively were ____________, $7,049,687, $5,659,896. MSS did not retain any of these amounts during such periods. CANCELLATION OF CONTRACT The Company may, at its option, cancel a contract at the end of any three consecutive contract years in which no purchase payments by or on behalf of the contract owner have been made, if both (i) the total purchase payments made for the contract, less any withdrawals, are less than $2,000; and (ii) the contract value at the end of such three year period is less than $2,000. The Company, as a matter of administrative practice, will attempt to notify a contract owner prior to such cancellation in order to allow the contract owner to make the necessary purchase payment to keep the contract in force. 64 APPENDIX A STATE PREMIUM TAXES Premium taxes vary according to the state and are subject to change. In many jurisdictions there is no tax at all. For current information, a tax advisor should be consulted.
TAX RATE --------------------------- QUALIFIED NON-QUALIFIED STATE CONTRACTS CONTRACTS - -------------------------------------------------------------------------------- CALIFORNIA .50% 2.35% DISTRICT OF COLUMBIA 2.25% 2.25% KANSAS .00 2.00% KENTUCKY 2.00% 2.00% MAINE .00 2.00% NEVADA .00 3.50% PUERTO RICO 1.00% 1.00% SOUTH DAKOTA .00 1.25% TEXAS .04% .04% WEST VIRGINIA 1.00% 1.00% WYOMING .00 1.00%
65 FINANCIAL STATEMENTS 66 PART C OTHER INFORMATION 67 Item 24. Financial Statements and Exhibits (a) Financial Statements (1) Financial Statements of the Registrant, The Manufacturers Life Insurance Company of New York Separate Account A (Part B of the registration statement) - to be filed by amendment (2) Financial Statements of the Depositor, The Manufacturers Life Insurance Company of New York (Part B of the registration statement) - to be filed by amendment (b) Exhibits (1) (a) Resolution of the Board of Directors of First North American Life Assurance Company establishing the FNAL Variable Account is filed herewith. (b) Resolution of the Board of Directors of First North American Life Assurance Company establishing the Fixed Separate Account is filed herewith. (c) Resolution of the Board of Directors of First North American Life Assurance Company establishing The Manufacturers Life Insurance Company of New York Separate Account D and The Manufacturers Life Insurance Company of New York Separate Account E is filed herewith. (2) Agreements for custody of securities and similar investments - Not Applicable. (3) (a) Underwriting Agreement between The Manufacturers Life insurance Company of New York (Depositor) and Manufacturers Securities Services, LLC (Underwriter) is filed herewith. (b) Selling Agreement between The Manufacturers Life Insurance Company of New York, Manufactures Securities Services, LLC (Underwriter), Selling Broker Dealers, and General Agent is filed herewith. (4) Form of Specimen Flexible Purchase Payment Individual Deferred Combination Fixed and Variable Annuity Contract, Non-Participating is filed herewith. (4) (a) Specimen Death Benefit Endorsement was previously filed as Exhibit (b)(4)(i) to post-effective amendment no. 5 to the Registrant's registration statement on Form N-4 dated April 30, 1996. (4) (b) Specimen Death Benefit Endorsement was previously filed as Exhibit (b)(3)(iii) to post effective amendment no. 6 to the Registrant's registration statement on Form N-4 dated February 28, 1997 (5) Form of Specimen Application for Flexible Purchase Payment Individual Deferred Combination Fixed and Variable Annuity Contract, Non-Participating is filed herewith. (6) (a)(i) Declaration of Intention and Charter of First North American Life Assurance Company is filed herewith. 1 68 (a)(ii) Certificate of amendment of the Declaration of Intention and Charter of First North American Life Assurance Company is filed herewith. (a)(iii) Certificate of amendment of the Declaration of Intention and Charter of The Manufacturers Life Insurance Company of New York is filed herewith (b) By-laws of The Manufacturers Life Insurance Company of New York are filed herewith. (7) Contract of reinsurance in connection with the variable annuity contracts being offered - Not Applicable. (8) Other material contracts not made in the ordinary course of business which are to be performed in whole or in part on or after the date the registration statement is filed: (a) Administrative Agreement between The Manufactures Life Insurance Company and The Manufacturers Life Insurance Company of New York is filed herewith. (b) Investment Services Agreement between First North American Life Assurance Company and Elliott and Page, Ltd - previously filed as exhibit (b)(8)(iv) to Form N-4 filed on September 2, 1992. (c) License and Service Agreement between North American Security Life Insurance Company, First North American Life Assurance Company, and Mentap Systems, Inc. - Previously filed as Exhibit (b)(8)(v) to FNAL Variable Account Registration Statement on Form N-4 filed on April 28, 1995. (9) Opinion of Counsel and consent to its use as to the legality of the securities being registered was. previously filed as exhibit (b)(9) to Form N-4 filed on September 2, 1992. (10) (a) Written consent of Ernst & Young LLP, independent auditors will be filed by amendment. (b) Written consent of Coopers & Lybrand L.L.P, independent accountants will be filed by amendment. (11) All financial statements omitted from Item 23, Financial Statements - Not Applicable. (12) Agreements in consideration for providing initial capital between or among Registrant, Depositor, Underwriter or initial contract owners - Not Applicable. (13) Schedule for computation of each performance quotation provided in the Registration Statement in response to Item 21 was previously filed as Exhibit (13) to post effective amendment no. 5 to the Registrant's registration statement on Form N-4 dated April 30, 1996. (14) Power of Attorney - First North American Life Assurance Company Directors was previously filed as Exhibit (b)(3)(iii) to post effective amendment no. 6 to the Registrant's registration statement on Form N-4 dated February 28, 1997. 2 69 (21) Financial Data Schedule - Not Applicable. 3 70 Item 25. Directors and Officers of the Depositor. OFFICERS AND DIRECTORS OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK NAME AND PRINCIPAL BUSINESS POSITION WITH THE MANUFACTURERS ADDRESS LIFE INSURANCE COMPANY OF NEW YORK John Richardson Director and Chairman Manulife Financial 200 Bloor Street East North Tower 11 Ontario, Canada M4W-1E5 Bruce R. Gordon Director 200 Bloor Street East North Tower 10 Toronto, Ontario Canada M4W-1E5 Joseph Scott President & Director 73 Tremont Street Boston, MA 02108-3915 David W. Libby Treasurer 73 Tremont Street Boston, MA 02108-3915 Theodore Kilkuskie Director 73 Tremont Street Boston, MA 02108 John D. DesPrez III Director 73 Tremont Street Boston, MA 02108 Robert C. Perez Director 715 North Avenue New Rochelle, NY 01801 James K. Robinson Director 7 Summit Drive Rochester, New York 14620-3127 4 71 Neil M. Merkl Esq. Director 35-35 161st Street Flushing, New York 11358 Bruce Avedon Director 6601 Hitching Post Lane Cincinnati, OH 45230 Ruth Ann Fleming Director 145 Western Drive Short Hills, NJ 07078-1930 Tracy Anne Kane Secretary; Counsel 73 Tremont Street Boston, MA 02108 Stephanie Elliman Vice President & Chief International Corporate Center at Rye Administrative Officer 555 Theodore Fremd Avenue Rye, New York 10580 5 72 Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT. THE MANUFACTURERS LIFE INSURANCE COMPANY Manulife Corporate Organization as at December 31, 1997 The Manufacturers Life Insurance Company (Canada) 1. Cantay Holdings Inc. - Ontario (100%) 2. 484551 Ontario Limited - Ontario (100%) a. 911164 Ontario Inc. - Ontario (100%) 3. Churchill Lifestyles Corp. (100%) 4. 495603 Ontario Limited - Ontario (100%) 5. 1198183 Ontario Limited - Ontario (100%) 6. 1198184 Ontario Limited - Ontario (100%) 7. 1235434 Ontario Limited - Ontario (100%) 8. 576986 Ontario Inc. - Ontario (100%) 9. Balmoral Developments Inc. - Ontario (100%) 10. Manulife Bank of Canada - Canada (100%) 11. Manulife Securities International Ltd. - Canada (100%) 12. Family Realty First Corp. - Ontario (100%) 13. NAL Resources Limited - Alberta (100%) 14. Manulife International Capital Corporation Limited - Ontario (100%) a. Regional Power Inc. - Ontario (100%) i. La Regionale Power (Port Cartier) Inc. - Ontario (100%) ii. La Regionale Power Angliers Inc. - Ontario (100%) iii. Addalam Power Corporation - Philippines (100%) 15. Peel-de Maisonneuve Investments Ltd. - Canada (100%) a. 2932121 Canada Inc. - Canada (100%) 16. FNA Financial Inc. - Canada (100%) a. NAL Trustco Inc. - Ontario (100%) b. First North American Insurance Company - Canada (100%) c. Elliott & Page Limited - Ontario (100%) d. Seamark Asset Management Ltd. - Canada (67.86%) e. NAL Resources Management Limited - Canada (100%) i. NAL Energy Inc. - Alberta (100%) 17. ManuCab Ltd. - Canada (100%) a. Plazcab Service Limited - Newfoundland (100%) 18. Manufacturers Life Capital Corporation Inc. - Canada (100%) 19. The North American Group Inc. - Ontario (100%) 20. 994744 Ontario Inc. - Ontario (100%) 21. 1268337 Ontario Inc. - Ontario (100%) 22. 3426505 Canada Inc. - Canada (100%) 23. The Manufacturers Investment Corporation - Michigan (100%) a. Manulife Reinsurance Corporation (U.S.A.) - Michigan (100%) i. The Manufacturers Life Insurance Company (U.S.A.) - Michigan (100%) (1) Dover Leasing Investments, LLC - Delaware (99%) (2) The Manufacturers Life Insurance Company of America - Michigan (100%) (a) Manulife Holding Corporation - Delaware (100%) (i) Manufacturers Adviser Corporation - Colorado (100%) (ii) Succession Plainning International, Inc. - Wisconsin (100%) (iii) ManEquity, Inc. - Colorado (100%) 6 73 (iv) Manulife Property Management of Washington, D.C. Inc. - Washington, D.C. (100%) (v) ManuLife Service Corporation - Colorado (100%) (vi) Manulife Leasing Company, LLC - Delaware (80%) (3) Capitol Bankers Life Insurance Company - Michigan (100%) (4) Ennal, Inc. - Ohio (100%) (5) Manulife-Wood Logan Holding Co. Inc. - Delaware (62.5%) (a) Wood Logan Associates, Inc. - Connecticut (100%) (i) Wood Logan Distributors, Inc. - Connecticut (100%) (b) The Manufacturers Life Insurance Company of North America - Delaware (100%) (i) Manufacturers Securities Services, LLC - Massachusetts (100%) (ii) The Manufacturers Life Insurance Company of New York - New York (100%) ii. Manulife Reinsurance Limited - Bermuda (100%) (1) MRL Holding, LLC - Delaware (99%) (a) Manulife-Wood Logan Holding Co. Inc. - Delaware (22.5%) iii. MRL Holding, LLC - Delaware (1%) 24. Manulife International Investment Management Limited - U.K. (100%) a. Manulife International Fund Management Limited - U.K. (100%) 25. WT(SW) Properties Ltd. - U.K. (100%) 26. Manulife Europe Ruckversicherungs-Aktiengesellschaft - Germany (100%) 27. Manulife International Holdings Limited - Bermuda (100%) a. Manulife (International) Limited - Bermuda (100%) i. Zhong Hong Life Insurance Co., Ltd. - China (51%) ii. The Manufacturers (Pacific Asia) Insurance Company Limited - H.K. (100%) iii. Newtime Consultants Limited - H.K. (100%) 28. Manulife (International) Reinsurance Limited - Bermuda (100%) a. Manulife (International) P & C Limited - Bermuda (100%) b. Manufacturers P & C Limited - Barbados (100%) c. Manufacturers Life Reinsurance Limited - Barbados (100%) 29. Chinfon-Manulife Insurance Company Limited - Bermuda (100%) 30. Manulife (Malaysia) SDN. BHD. - Malaysia (100%) 31. Manulife (Thailand) Ltd. - Thailand (100%) 32. Young Poong Manulife Insurance Company - Korea (100%) 33. Manulife Data Services Inc. - Barbados (100%) a. Manulife Funds Direct (Barbados) Limited - Barbados (100%) i. Manulife Funds Direct (Hong Kong) Limited - H.K. (100%) 34. OUB Manulife Pte. Ltd. - Singapore (100%) 35. Manulife Holdings (Hong Kong) Limited - H.K. (100%) 36. ManuLife Financial Systems (Hong Kong) Limited - H.K. (100%) 37. P.T. Asuransi Jiwa Dhamala ManuLife - Indonesia (51%) a. P.T. AMP Panin Life - Indonesia (100%) Item 27. NUMBER OF CONTRACT OWNERS. As of December 31, 1997, there were 4,991 qualified and 7,870 non-qualified contracts of the series offered hereby outstanding. 7 74 Item 28. INDEMNIFICATION. Article 10 of the Charter of the Company provides as follows: TENTH: No director of the Corporation shall be personally liable to the Corporation or any of its shareholders for damages for any breach of duty as a director; provided, however, the foregoing provision shall not eliminate or limit (i) the liability of a director if a judgment or other final adjudication adverse to such director established his or her such acts or omissions were in bad faith or involved intentional misconduct or were acts or omissions (a) which he or she knew or reasonably should have known violated the New York Insurance Law or (b) which violated a specific standard of care imposed on directors directly, and not by reference, by a provision of the New York Insurance Law (or any regulations promulgated thereunder) or (c) which constituted a knowing violation of any other law, or establishes that the director personally gained in fact a financial profit or other advantage to which the director was not legally entitled or (ii) the liability of a director for any act or omission prior to the adoption of this Article by the shareholders of the Corporation. Any repeal or modification of this Article by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. 8 75 Article VII of the By-laws of the Company provides as follows: SECTION VII.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation may indemnify any person made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she, his or her testator, testatrix or intestate, is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of any other corporation of any type or kind, domestic or foreign, of any partnership, joint venture, trust, employee benefit plan or other enterprise, against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred by him or her in connection with the defense or settlement of such action, or in connection with an appeal therein, if such director or officer acted, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the Corporation, except that no indemnification under this Section shall be made in respect of (1) a threatened action, or a pending action which is settled or is otherwise disposed of, or (2) any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation, unless and only to the extent that the court in which the action was brought, or , if no action was brought, any court of competent jurisdiction, determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper. The Corporation may indemnify any person made, or threatened to be made, a party to an action or proceeding (other than one by or in the right of the Corporation to procure a judgment in its favor), whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Corporation served in any capacity at the request of the Corporation, by reason of the fact that he or she, his or her testator, testatrix or intestate, was a director or officer of the Corporation, or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the Corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, of its equivalent, shall not in itself create a presumption that any such director or officer did not act, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interest of the Corporation or that he or she had reasonable cause to believe that his or her conduct was unlawful. Notwithstanding the foregoing, Registrant hereby makes the following undertaking pursuant to Rule 484 under the Securities Act of 1933: Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the 9 76 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. Notwithstanding the foregoing, Registrant hereby makes the following undertaking pursuant to Rule 484 under the Securities Act of 1933: Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29. PRINCIPAL UNDERWRITERS. a. Name of Investment Company Capacity In which acting -------------------------- ------------------------ Manufacturers Investment Trust Investment Adviser The Manufacturers Life Insurance Principle Underwriter Company of North America Separate Account A The Manufacturers Life Insurance Principle Underwriter Company of North America Separate Account B The Manufacturers Life Insurance Principle Underwriter Company of New York Separate Account A b. The Manufacturers Life Insurance Company of North America is the managing member of Manufacturers Securities Services, LLC and has sole power to act on behalf of Manufacturers Securities Services, LLC. The officers and directors of The Manufacturers Life Insurance Company of North America are set forth under Item 25. Name and Principal Position with The Manufacturers Life Insurance Business Address Company of North America - ---------------- ------------------------ John D. Richardson Director and Chairman of the Board of 200 Bloor Street East Directors North Tower, 11th Floor Toronto, Ontario Canada M4W-1E5 Peter S. Hutchison Director 200 Bloor Street East 10 77 North Tower, 7th Floor Toronto, Ontario Canada M4W-1E5 John D. DesPrez III President & Director 73 Tremont Street Boston, MA 02108 James Boyle Vice President, Administration and Chief 116 Huntington Avenue Administrative Officer Boston, MA 02116 John G. Vrysen Vice President & Chief Actuary 73 Tremont Street Boston, MA 02108 Hugh McHaffie Vice President, U.S. Annuities and Product 73 Tremont Street Development Boston, MA 02108 Richard C. Hirtle Vice President, Strategic Development and 116 Huntington Avenue Accumulation Life Products Boston, MA 02116 James D. Gallagher Vice President, Secretary and General Counsel 73 Tremont Street Boston, MA 02108 Janet Sweeney Vice President, Corporate Services 73 Tremont Street Boston, MA 02108 Robert Boyda Vice President, Investment Management Services 73 Tremont Street Boston, MA 01208 11 78 Name and Principal Position with The Manufacturers Life Business Address Insurance Company of North America - ---------------- ---------------------------------- David W. Libbey Vice President, Treasurer & Chief 73 Tremont Street Financial Officer Boston, MA 02108 c. None. Item 30. LOCATION OF ACCOUNTS AND RECORDS. All books and records are maintained at Corporate Center at Rye, 555 Theodore Fremd Avenue, Rye, New York 10580. Item 31. MANAGEMENT SERVICES. The Company has entered into an Administrative Services Agreement with The Manufacturers Life Insurance Company ("Manulife"). This Agreement provides that under the general supervision of the Board of Directors of the Company, and subject to initiation, preparation and verification by the Chief Administrative Officer of the Company, Manulife shall provide accounting services related to the provision of a payroll support system, general ledger, accounts payable, tax and auditing services. Item 32. UNDERTAKINGS. Representation of Insurer Pursuant to Section 26 of the Investment Company Act of 1940 The Manufacturers Life Insurance Company of New York ("Company") hereby represents that the fees and charges deducted under the contracts issued pursuant to this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company. 12 79 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- (1)(a) Resolution of the Board of Directors of First North American Life Assurance Company establishing the FNAL Variable Account (1)(b) Resolution of the Board of Directors of First North American Life Assurance Company establishing the Fixed Separate Account (1)(c) Resolution of the Board of Directors of First North American Life Assurance Company establishing The Manufacturers Life Insurance Company of New York Separate Account D and The Manufacturers Life Insurance Company of New York Separate Account E (3)(a) Underwriting Agreement between The Manufacturers Life Insurance Company of New York (Depositor) and Manufacturer Securities Services, LLC (Underwriter), and General Agents is filed herewith. (3)(b) Selling Agreement between The Manufacturers Life Insurance Company of New York, Manufactures Securities Services, LLC (Underwriter), Selling Broker Dealers, and General Agent (4) Form of Specimen Flexible Purchase Payment Individual Deferred Combination Fixed and Variable Annuity Contract, Non-Participating (5) Form of Specimen Application for Flexible Purchase Payment Individual Deferred Combination Fixed and Variable Annuity Contract, Non-Participating (6)(a)(i) Declaration of Intention and Charter of First North American Life Assurance Company (6)(a)(ii) Certificate of amendment of the Declaration of Intention and Charter of First North American Life Assurance Company (6)(a)(iii) Certificate of amendment of the Declaration of Intention and Charter of The Manufacturers Life Insurance Company of New York (6)(b) By-laws of First North American Life Assurance Company (8)(a) Administrative Agreement between The Manufacturers Life Insurance Company and The Manufacturers Life Insurance Company of New York 13 80 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, The Manufacturers Life Insurance Company of New York Separate Account A, has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth of Massachusetts on the 25th day of February, 1998. THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A (Registrant) By: THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK (Depositor) By: /s/ Joseph Scott ------------------------------------ Joseph Scott President Attest: /s/ Tracy Anne Kane - -------------------------- Tracy Anne Kane Secretary 81 As required by the Securities Act of 1933, this amended Registration Statement has been signed by the following persons in the capacities with the Depositor and on the dates indicated. SIGNATURE TITLE DATE * Director 2/25/98 - --------------------------- (Chairman) John Richardson /s/ Joseph Scott Director; President 2/25/98 - --------------------------- (Chief Executive Officer) Joseph Scott /s/ John D. DesPrez III Director 2/25/98 - --------------------------- John D. DesPrez III Director 2/25/98 - --------------------------- Theodore Kilkuski * Director 2/25/98 - --------------------------- Robert C. Perez * Director 2/25/98 - --------------------------- H. Bruce Gordon * Director 2/25/98 - --------------------------- James K. Robinson * Director 2/25/98 - --------------------------- Neil M. Merkl * Director 2/25/98 - --------------------------- Bruce Avedon 82 * Director 2/25/98 - --------------------------- Ruth Ann Fleming *By: /s/ Tracy Anne Kane February 25, 1998 ---------------------------- ----------------- Tracy Anne Kane Date Attorney-in-Fact Pursuant to Powers of Attorney EX-99.(1)(A) 2 RESOLUTION OF THE BOARD OF DIRECTORS 1 Exhibit 1A SECRETARY'S CERTIFICATE THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK (the "Company") do hereby certify that the following is a true and correct copy of the action taken by the Board of Directors of the Company on March 4, 1992, and that the following resolutions are in full force and effect on the date hereof: ESTABLISHMENT OF SEPARATE ACCOUNT RESOLVED, that the Company, pursuant to the provisions of New York law and subject to the approval of the Superintendent of Insurance of New York, hereby establishes a separate account to be designated initially as the FNAL Variable Account (hereinafter referred to as "Variable Account") for the following uses and purposes and subject to such conditions as are hereinafter set forth; and it is RESOLVED, that the Variable Account shall be established for the purpose of providing for the issuance by the Company of such variable annuity contracts (hereinafter referred to as "Contracts") of the Company as the Board of Directors may designate for such purpose and shall constitute a separate account into which are allocated amounts paid to or held by the Company under such Contracts and any dividend accumulations with respect to such Contracts; and it is RESOLVED, that the Company shall receive and hold in the Variable Account amounts arising from (i) premiums paid pursuant to the Contracts and (ii) such assets of the Company as the proper officers of the Company may deem prudent and appropriate to have invested in the same manner as the assets applicable to its reserve liability under the Contracts and lodged in the Variable Account, and any dividend accumulations thereon; and it is RESOLVED, that contracts issued by the Company shall provide that the portion of the assets of the separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the Company may conduct, and the income, gains and losses, whether or not realized, from assets allocated to the Variable Account shall, in accordance with the Contracts, be credited to or charged against such Variable Account without regard to other income, gains or losses of the Company; and it is RESOLVED, that the officers of the Company are hereby authorized and directed to take all action as may be necessary or appropriate to cause the separate account to be registered as a unit investment trust under the Investment Company Act of 1940 ("Act"), as amended, and one or more applications to be made for such exemptive or other orders under the Act as may be necessary or desirable; and it is RESOLVED, that the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause to be filed with the Securities and Exchange Commission in accordance with the provisions of the Securities Act of 1933, as amended, one or more registration statements and any amendments thereto relating to such variable annuity contracts, and to pay the registration fees required in connection therewith; and it is RESOLVED, that thirteen (13) subaccounts of the Variable Account are established, within the Variable Account, to which net payments under the Contracts will be allocated in accordance with instructions received from Contract holders and that the Board of Directors is authorized to increase or decrease the number of subaccounts in the Variable Account as deemed necessary or appropriate; and it is 2 RESOLVED, that the proper officers of the Company are authorized and directed to negotiate and execute an Underwriting Agreement with NASL Financial Services, Inc., a registered member broker-dealer, under which it will act as principal underwriter and distributor of the Contracts participating in the Variable Account; and it is RESOLVED, that the proper officers of the Company are authorized to transfer funds from time to time between the Variable Account and the General Account of the Company as deemed necessary or appropriate and in accordance with the terms of the Contracts; and it is FURTHER RESOLVED, that the proper officers of the Company and its counsel are authorized, in the name and on behalf of the Company, under its corporate seal or otherwise to execute and deliver such corporate documents and certificates and to take such further action as may be necessary or desirable, including, but not limited to, the payment of applicable fees, in order to effectuate the purposes of the foregoing resolutions or any of them, and such officers are authorized to pay such expenses, as in their judgment shall be necessary, proper or advisable in order fully to carry out the intent and accomplish the purposes of the foregoing resolutions. DATED at Boston, Massachusetts as of December 9, 1997. /s/ Kimberely S. Ciccarelli --------------------------- KIMBERLY S. CICCARELLI ASSISTANT SECRETARY EX-99.(1)(B) 3 RESOLUTION OF THE BOARD OF DIRECTORS 1 Exhibit 1B FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY (the "Company") do hereby certify that the following is a true and correct copy of the action taken by the Board of Directors of the Company on May 6 1997, and that the following resolutions are in full force and effect on the date hereof: Variable Life Separate Accounts RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and subject to the approval of the Superintendent of Insurance of New York, the Company hereby establishes two separate accounts which shall each be divided into up to thirty five (35) variable sub-accounts for use in connection with the offer and sale of variable life insurance contracts, the issuance of which is hereby authorized. Such separate accounts are to be designated initially as the FNAL Variable Life Account I and the FNAL Variable Life Account II (hereinafter referred to as "Variable Life Accounts") and such sub-accounts shall be designated the "Global Equity", "Blue Chip Growth", "Equity", "Equity-Income", "Growth and Income", "International Growth and Income", "Strategic Bond", "Global Government Bond", "Investment Quality Bond", "U.S. Government Securities", "Money Market", "Aggressive Asset Allocation", "Moderate Asset Allocation", "Conservative Asset Allocation", "Pacific Rim Emerging Markets", "Growth", "Science & Technology", "Emerging Growth", "Pilgrim Baxter Growth", "International Stock", "Worldwide Growth", "Quantitative Equity", "Equity Index", "Value", "Real Estate Securities", "Balanced", "High Yield", "Capital Growth Bond", "Conservative Lifestyle", "Moderate Lifestyle", "Balanced Lifestyle", "Growth Lifestyle", "Aggressive Lifestyle", "Small/Mid Cap", "International Small Cap", respectively; and it is FURTHER RESOLVED, that each variable life insurance contract issued by the Company shall provide that the portion of the assets of the separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the Company may conduct and, consistent with the provisions of Section 4240 of the New York Insurance Laws, as amended, that income, gains and losses, realized or unrealized, from assets allocated to the separate account shall be credited or charged against such account without regard to other income, gains or losses of the Company; and it is FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with registration requirements of the Investment Company Act of 1940 ("1940 Act") as it may be amended from time to time; and it is FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to 2 comply with the registration requirements of the Securities Act of 1933 as it may be amended from time to time; and it is FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to perform all such acts and do all things as may, in their judgment and discretion, be necessary or desirable to give full effect to these resolutions so as to enable the Company to establish the separate account and issue variable life insurance contracts, including, without limitation: (a) the preparation, execution of, or amendment to, the custodian agreement, underwriting agreements, and such other agreements and documents respecting such separate account or contracts as they may deem necessary or desirable; (b) the determination of the terms and conditions of the variable life insurance contracts herein authorized, and (c) the determination of all other actions requisite to obtain the qualification, registration or authorization for the sale of variable life insurance contracts. MVA Separate Account RESOLVED, that pursuant to Section 4223 of the New York Insurance Laws, New York Regulation 127 and subject to the approval of the Superintendent of Insurance of New York, the Company hereby establishes a separate account to be designated initially as the FNAL Fixed Separate Account for use in connection with the offer and sale of market value adjusted deferred annuity contracts ("the Contracts"), the issuance of which is hereby authorized; and it is FURTHER RESOLVED, that the FNAL Fixed Separate Account shall constitute a non-unitized, non insulated separate account into which are allocated amounts paid to or held by the Company under such Contracts and any dividend accumulations with respect to such Contracts; and it is FURTHER RESOLVED, that Contracts issued by the Company shall provide that the assets of the separate account shall be held at market value, determined using external pricing sources where available, and shall be chargeable with liabilities arising out of any other business the Company may conduct; and it is FURTHER RESOLVED, that the separate account shall be managed in accordance with the Board approved investment policy for the general account and that all times, the Company shall maintain in the separate account an aggregate market value at least equal to the aggregate cash values of the liabilities adjusted by the market value adjustment formula; and it is FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause to be filed with the Securities and Exchange Commission in accordance with the provisions of the Securities Act of 1933, as amended, one or more registration statements and any amendments thereto relating 3 to such market value adjusted annuity contracts, and to pay the registration fees required in connection therewith; and it is FURTHER RESOLVED, that, if at any time it is determined that the registration of the separate account is required under the 1940 Act, the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with registration requirements of the 1940 Act as it may be amended from time to time; and it FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to perform all such acts and do all things as may, in their judgment and discretion, be necessary or desirable to give full effect to these resolutions so as to enable the Company to establish the separate account and issue variable life insurance contracts, including, without limitation: (a) the preparation, execution of, or amendment to, the custodian agreement, underwriting agreements, and such other agreements and documents respecting such separate account or contracts as they may deem necessary or desirable; (b) the determination of the terms and conditions of the variable life insurance contracts herein authorized, and (c) the determination of all other actions requisite to obtain the qualification, registration or authorization for the sale of variable life insurance contracts. DATED at Boston, Massachusetts as of December 9, 1997. /s/ Kimberely S. Ciccarelli --------------------------- KIMBERLY S. CICCARELLI ASSISTANT SECRETARY (CORPORATE SEAL) EX-99.(1)(C) 4 RESOLUTION OF THE BOARD OF DIRECTORS 1 Exhibit 1C FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY I, KIMBERLY S. CICCARELLI, ASSISTANT SECRETARY of FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY (the "Company") do hereby certify that the following is a true and correct copy of the action taken by the Board of Directors of the Company on August 20, 1997, and that the following resolutions are in full force and effect on the date hereof: The Manufacturers Life Insurance Company of New York Separate Account D RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and subject to the approval of the Superintendent of Insurance of New York, the Company does hereby establish a separate account which shall be divided into seventeen (17) variable sub-accounts for use in connection with the offer and sale of group annuity contracts, the issuance of which is hereby authorized. Such separate account is hereby designated as "The Manufacturers Life Insurance Company of New York Separate Account D" and such sub-accounts shall be designated but not limited to the "Developing Markets", "Science & Technology", "Capital Appreciation", "Mid-Cap Growth", "International Stock", "Contra", "Growth Opportunities", " Socially Responsible", "Discovery", "Small-Cap Value", "Mid-Cap Value", "Value", "Growth & Income", "Diversified Capital", "High-Yield", "Income", and "Short-Term Government", respectively; and it is FURTHER RESOLVED, that each variable group annuity contract issued by the Company shall provide that the portion of the assets of the separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the Company may conduct and, consistent with the provisions of Section 4240 of the New York Insurance Laws, as amended, that income, gains and losses, realized or unrealized, from assets allocated to the separate account shall be credited or charged against such account without regard to other income, gains or losses of the Company; and it is FURTHER RESOLVED, that, if at any time it is determined that the registration of the separate account is required under the Investment Company Act of 1940 (the "1940 Act"), the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with registration requirements of the 1940 Act as it may be amended from time to time; and it is FURTHER RESOLVED, that, if at any time it is determined that the registration of the separate account is required under the Securities Act of 1933, the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with the registration requirements of the Securities Act of 1933 as it may be amended from time to time; and it is 2 FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to perform all such acts and do all things as may, in their judgment and discretion, be necessary or desirable to give full effect to these resolutions so as to enable the Company to establish the separate account and issue variable group annuity contracts, including, without limitation: (a) the preparation, execution of, or amendment to, the custodian agreement, underwriting agreements, and such other agreements and documents respecting such separate account or contracts as they may deem necessary or desirable; (b) the determination of the terms and conditions of the variable group annuity contracts herein authorized, and (c) the determination of the jurisdiction or jurisdictions in which action shall be taken to obtain the requisite qualification, registration or authorization for the sale of variable group annuity contracts. The Manufacturers Life Insurance Company of New York Separate Account E RESOLVED, that pursuant to Section 4240 of the New York Insurance Laws, and subject to the approval of the Superintendent of Insurance of New York, the Company does hereby establish a separate account which shall be divided into twenty-two (22) variable sub-accounts for use in connection with the offer and sale of group annuity contracts, the issuance of which is hereby authorized. Such separate account is hereby designated as "The Manufacturers Life Insurance Company of New York Separate Account E" and such sub-accounts shall be designated but not limited to the "Foreign", "Future Science & Technology", "Future Blue Chip Growth", "Future Equity-Income", "Future Emerging Growth", "Future Capital Appreciation", "Quantitative Equity", "Index Stock", "Future Global Equity", "Future Growth", "Future Real Estate Securities", "Balanced", "Future Value", "Capital Growth Bond", "Future High-Yield", "Future Strategic Bond", "Money Market", "Future Lifestyle Aggressive", "Future Lifestyle Growth", "Future Lifestyle Balanced", "Future Lifestyle Moderate", "Future Lifestyle Conservative", respectively; and it is FURTHER RESOLVED, that each variable group annuity contract issued by the Company shall provide that the portion of the assets of the separate account equal to the reserves and other contract liabilities with respect to such account shall not be chargeable with liabilities arising out of any other business the Company may conduct and, consistent with the provisions of Section 4240 of the New York Insurance Laws, as amended, that income, gains and losses, realized or unrealized, from assets allocated to the separate account shall be credited or charged against such account without regard to other income, gains or losses of the Company; and it is FURTHER RESOLVED, that, if at any time it is determined that the registration of the separate account is required under the 1940 Act, the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with registration requirements of the 1940 Act as it may be amended from time to time; and it is 3 FURTHER RESOLVED, that, if at any time it is determined that the registration of the separate account is required under the Securities Act of 1933, the officers of the Company are hereby authorized and directed to take all such action as may be necessary or appropriate to cause the separate account to comply with the registration requirements of the Securities Act of 1933 as it may be amended from time to time; and it is FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to perform all such acts and do all things as may, in their judgment and discretion, be necessary or desirable to give full effect to these resolutions so as to enable the Company to establish the separate account and issue variable group annuity contracts, including, without limitation: (a) the preparation, execution of, or amendment to, the custodian agreement, underwriting agreements, and such other agreements and documents respecting such separate account or contracts as they may deem necessary or desirable; (b) the determination of the terms and conditions of the variable group annuity contracts herein authorized, and (c) the determination of the jurisdiction or jurisdictions in which action shall be taken to obtain the requisite qualification, registration or authorization for the sale of variable group annuity contracts. Plan of Operations: Approval to Rename Separate Accounts WHEREAS, the Board of Directors voted on May 6, 1997 to establish two Variable Life Separate Accounts designated the "FNAL Variable Life Account I" and the "FNAL Variable Life Account II" and a separate account to support the market value adjusted product designated the "FNAL Fixed Separate Account"; and WHEREAS, it is recommended that the names of all of the Company's separate accounts be amended, including the prior existing separate account designated the "FNAL Variable Account"; it is RESOLVED, that the "FNAL Variable Account" be changed to "The Manufacturers Life Insurance Company of New York Separate Account A"; and it is FURTHER RESOLVED, that the "FNAL Variable Life Account I" be changed to "The Manufacturers Life Insurance Company of New York Separate Account B" and the "FNAL Variable Life Account II" be changed to "The Manufacturers Life Insurance Company of New York Separate Account C"; and it is FURTHER RESOLVED that the "FNAL Fixed Separate Account" be changed to "The Manufacturers Life Insurance Company of New York Separate Account G", and it is FURTHER RESOLVED, that the above changes will be effective concurrently with the effective date of the name change of the Company. DATED at Boston, Massachusetts as of December 9, 1997. /s/ Kimberely S. Ciccarelli --------------------------- KIMBERLY S. CICCARELLI ASSISTANT SECRETARY ( CORPORATE SEAL) EX-99.(3)(A) 5 UNDERWRITING AGREEMENT 1 Exhibit 3a UNDERWRITING AND DISTRIBUTION AGREEMENT AGREEMENT made this 7th day of October, 1997, by and between The Manufacturers Life Insurance Company of New York ("Manulife New York"), a New York corporation, and Manufacturers Securities Services, LLC ("LLC"), a Delaware limited liability company. WITNESSETH: WHEREAS, Manulife New York sells certain insurance products listed on Exhibit A hereto (the "Insurance Contracts"), some of which are regulated as securities under the federal securities laws (the "Registered Insurance Products"), and WHEREAS, Manulife New York has entered into an Underwriting Agreement with NASL Financial Services, Inc. ("NASL Financial") whereby NASL Financial was appointed as its principal underwriter and exclusive representative for the distribution of certain Manulife New York variable insurance products (the "Prior Agreement"); and WHEREAS, NASL Financial merged with and into LLC on September 30, 1997; and WHEREAS, Manulife New York is deemed to be under common control with LLC for the purposes of the application of Article 15 of the New York Insurance Law; and WHEREAS, LLC is registered with the Securities and Exchange Commission ("SEC") as a broker-dealer under the 1934 Act, is a member of the National Association of Securities Dealers, Inc. ("NASD") and has been duly appointed and licensed as an insurance agent of Manulife New York; and 2 WHEREAS, Manulife New York wishes to terminate the Prior Agreement and to arrange for the underwriting of all Registered Insurance Contracts through LLC in conformity with the requirements of the Securities Exchange Act of 1934 ("1934 Act"); and WHEREAS, Manulife New York wishes to arrange for the distribution of all of its Insurance Products through LLC and to authorize LLC to enter into agreements with selling entities with respect thereto. NOW, THEREFORE, the parties hereto agree as follows: 1. (a) Manulife New York hereby appoints LLC as the principal underwriter of, and its exclusive representative for the distribution of, the Insurance Contracts, and LLC hereby agrees to use its best efforts to arrange for the sale of the Insurance Contracts by general agents and, in connection with Registered Insurance Contracts, by other broker-dealer registered under the 1934 Act. LLC agrees to assist such entities and their representatives and associated persons to the extent that and in such manner as LLC shall deem appropriate in order to enhance the sale of Insurance Contracts and the payment of purchase payments thereunder. (b) The territory to which this Agreement shall apply shall be limited to the State of New York. 2. (a) With the consent of Manulife New York, LLC may execute agreements for the sale and distribution of the Insurance Contracts ("Selling Agreements") with (i) other general agents/broker-dealers duly qualified under applicable Federal and state laws to offer and sell the Registered Insurance Contracts; and (ii) general agents to offer and sell Manulife New York insurance products other than the Registered Insurance Contracts. Manulife New York may, in its sole discretion, refuse to consent to a Selling Agreement or refuse to appoint a general agent or sub-agent pursuant thereto. 2 3 (b) Such Selling Agreements shall contain such terms and conditions as LLC shall deem appropriate and which are acceptable to Manulife New York. Such agreements may provide that any confirmation required to be sent in connection with the issuance of Insurance Contracts or the receipt of purchase payments thereunder will be sent by Manulife New York. All Selling Agreements shall provide that no commission shall be paid in excess of the limitations imposed by Section 4228 of the New York Insurance Law and no expense allowance payment shall be made in excess of the amount approved for payment by the Company to LLC pursuant to New York Insurance Department Regulation No. 49. 3. Manulife New York will prepare and maintain all books and records relating to the Insurance Contracts including such books and records as LLC is required to maintain under the 1934 Act to the extent such requirements are applicable to the Registered Insurance Contracts. For purposes of this Agreement, books and records maintained for LLC shall be deemed to be the property of LLC and shall be subject at all times to examination by the SEC in accordance with Section 17(a) of the 1934 Act. 4. LLC will not accept or receive on behalf of Manulife New York any Registered Insurance Contract purchase payment. LLC will not permit any other broker-dealer to participate in the distribution of the Registered Insurance Contracts unless such broker-dealer agrees that (i) it will not accept any purchase payment other than the first and (ii) it will not accept any first purchase payment unless made payable to Manulife New York. Such broker-dealer must also agree to forward promptly to Manulife New York at the service office designated by it any first purchase payment received by such broker-dealer together with a completed Registered Insurance Contract application. Manulife New York reserves the right to reject any application in its sole discretion. 3 4 5. Manulife New York will furnish to LLC currently effective prospectuses relating to Registered Insurance Contracts in such numbers as LLC may reasonably require from time to time. LLC shall be responsible for the preparation at its own expense of sales materials relative to the Contracts and agrees to use its best efforts to obtain any approvals or clearances required from the NASD or other regulatory authorities with respect to such sales materials. Any sales materials prepared by LLC or its designee, must be approved by Manulife New York prior to use. LLC is responsible for all other expenses incurred by it in the performance of this Agreement. 6. As compensation for the expenses incurred and services performed by LLC hereunder, Manulife New York will pay LLC the commissions and expense allowances in connection with the Insurance Contracts marketed and distributed pursuant to this Agreement as set forth on Exhibit B hereto. Such payments shall be made within one week in which payments upon which such commission and expense allowance is based are received by Manulife New York. Manulife New York reserves the right to revise such commissions and allowances upon at least ten (10) days' prior notice to LLC. Any amendment to said Exhibit shall apply to compensation due on applications received by Manulife New York after the effective date thereof. 7. All commissions and expense allowances in connection with Insurance Contract sales shall be paid by or on behalf of LLC in accordance with the terms of the applicable Selling Agreement then in effect. 8. LLC shall have no right to incur any indebtedness on behalf of Manulife New York pursuant to this Agreement. LLC hereby authorizes Manulife New York to set off LLC's liabilities to Manulife New York against any and all amounts otherwise payable to LLC pursuant hereto. 4 5 9. Manulife New York represents that the Prior Agreement will be terminated as of the effective date hereof. 10. This Agreement shall be construed in accordance with and governed by the law of the State of New York. 11. This Agreement shall take effect as of the date set forth above and may be terminated at any time by either party hereto on sixty (60) days' written notice. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year first above written. THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK By /s/ Joseph M. Scott ------------------------------------------ Joseph M. Scott, President Attest: /s/ Kimberely S. Ciccarelli --------------------------- MANUFACTURERS SECURITIES SERVICES COMPANY, L.L.C. by its Managing Member The Manufacturers Life Insurance Company of North America By /s/ John D. Desprez, III ------------------------------------------ John D. DesPrez, III, President Attest: /s/ Kimberely S. Ciccarelli --------------------------- 5 6 EXHIBIT A INSURANCE CONTRACTS (Products which are not Registered Insurance Contracts are identified as such.) (i) Individual variable annuities or fixed and variable annuities (ii) Fixed annuities (registered and non-registered) (iii) Term life insurance (non-registered) (iv) Universal life insurance (non-registered) (v) Variable life insurance. (vi) Variable universal life insurance (vii) Group annuities (non-registered) (ix) Such other Insurance Products as are from time to time agreed by the parties to the foregoing Agreement and added to this Schedule A in accordance therewith. 6 EX-99.(3)(B) 6 SELLING AGREEMENT 1 Exhibit 3B THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK HOME OFFICE: International Corporate Center at Rye 555 Theodore Fremd Avenue, Suite C-209 Rye, New York 10580 SELLING AGREEMENT AGREEMENT by and between The Manufacturers Life Insurance Company of New York ("MLNY"), a New York Corporation; Manufacturers Securities Services, LLC ("MSS"), a Delaware limited liability Company which is a registered broker-dealer with the Securities and Exchange Commission under the Securities Act of 1934 (the "1934 Act"), a member of the National Association of Securities Dealers, Inc. ("NASD") and duly licensed and appointed with MLNY; (Selling Broker-Dealer), also a registered broker-dealer and member of the NASD; and (General Agent). I. INTRODUCTION WHEREAS, MLNY has issued certain insurance and annuity contracts, and some of these Contracts are registered under the Securities Act of 1933 (the "1933 Act") ("Contracts" or "Contracts" collectively); and WHEREAS, MLNY has, pursuant to an Underwriting and Distribution Agreement dated October 7, 1997, appointed MSS as principal underwriter and exclusive representative for the distribution of the Contracts and has authorized MSS to enter into agreements, subject to the consent of MLNY, with Selling Broker-Dealers and General Agents for the distribution of the Contracts; and WHEREAS, Selling Broker-Dealer and General Agent wish to participate in the distribution of the Contracts; NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto agree as follows: 2 II. APPOINTMENT Subject to the terms and conditions of this Agreement, MLNY and MSS hereby appoint ____________________________ as Selling-Broker-Dealer and ___________________________ as General Agent for the solicitation of applications for the purchase of the Contracts, and Selling Broker-Dealer and General Agent accept such appointment. III. AUTHORITY AND DUTIES OF GENERAL AGENT A. LICENSING AND APPOINTMENT OF SUBAGENTS General Agent is authorized to appoint Sub-agents to solicit sales of the Contracts. General Agent warrants that all Sub-agents appointed by General Agent pursuant to this Agreement shall not solicit nor aid, directly or indirectly, in the solicitation of any application for any Contract until that Sub-agent is fully licensed under the applicable insurance laws, and, in connection with securities regulated Contracts, is a fully registered representative of Selling Broker-Dealer. General Agent shall prepare and transmit the appropriate licensing and appointment forms to MLNY. General Agent shall pay all fees to state insurance regulatory authorities in connection with obtaining necessary licenses and appointments for Sub-agents. All fees payable to such regulatory authorities in connection with the initial MLNY appointment of Sub-agents who already possess necessary licenses shall be paid by MLNY. Any renewal license fees due after the initial appointment shall be paid by General Agent. General Agent shall periodically provide MLNY with a list of all Sub-agents appointed by General Agent and the jurisdictions where such Sub-agents are licensed to solicit sales of the Contracts. MLNY shall periodically provide General Agent with a list which shows: 1) the jurisdiction where MLNY is authorized to do business; and 2) any limitations on the availability of the Contracts in any of such jurisdictions. General Agent agrees to fulfill all requirements set forth in the General Letter of Recommendation attached as Exhibit A in conjunction with the submission of licensing and appointment papers for all applicants as Sub-agents submitted by General Agent. B. REJECTION OF SUB-AGENT MSS or MLNY may, by written notice to General Agent, refuse to permit any Sub-agent the right to solicit applications for the sale of any of the Contracts, require General Agent to cause any Sub-agent to cease such solicitations or sales and cancel the appointment of any Sub-agent. C. SUPERVISION OF SUB-AGENTS General Agent shall supervise any Sub-agents appointed pursuant to this Agreement to solicit sales of the Contracts and bear responsibility for all acts and omissions of each Sub-agent. General Agent shall comply with and exercise all responsibilities required by applicable federal and state law and regulations. General Agent shall not be responsible for those supervisory responsibilities belonging to Selling Broker-Dealer under applicable securities laws which include, but are not limited to, supervising and training Sub-agents in their capacity as registered representatives. Nothing contained in this Agreement or otherwise shall be deemed to make any Sub-agent appointed by General 3 Agent an employee or agent of MLNY or MSS. MLNY and MSS shall not have any responsibility for the training and supervision of any Sub-agent or any other employee of General Agent. If the act or omission of a Sub-agent or any other employee General Agent is the proximate cause of any claim, damage or liability (including reasonable attorneys' fees) to MLNY or MSS, General Agent shall be responsible and liable therefore. Before a Sub-agent is permitted to sell the Contracts, General Agent, Selling Broker-Dealer and Sub-agent shall have entered into a written agreement pursuant to which: 1) Sub-agent is appointed a Sub-agent of General Agent and a registered representative of Selling Broker-Dealer 2) Sub-agent agrees that his or her selling activities relating to securities regulated Contracts shall be under the supervision and control of Selling Broker-Dealer and his or her selling activities relating to insurance regulated Contracts shall be under the supervision and control of General Agent; and 3) that Sub-agent's right to continue to sell such Contracts is subject to his or her continued compliance with such agreement and any procedures, rules or regulations implemented by Selling Broker-Dealer or General Agent. IV. AUTHORITY AND DUTIES OF SELLING BROKER-DEALER A. SUPERVISION OF REGISTERED REPRESENTATIVES Selling Broker-Dealer agrees that it has full responsibility for the training and supervision of all persons, including Sub-agents of General Agent, associated with Selling Broker-Dealer who are engaged directly or indirectly in the offer or sale of securities regulated Contracts. All such persons shall be subject to the control of Selling Broker-Dealer with respect to their securities regulated activities. Broker-Dealer shall: 1) train and supervise Sub-agents, in their capacity as registered representatives, in the sale of securities regulated Contracts; 2) use its best efforts to cause such Sub-agents to qualify under applicable federal and state laws to engage in the sale of securities regulated Contracts; 3) provide MLNY and MSS to their satisfaction, with evidence of Sub-agents' qualifications to sell securities regulated Contracts; and 4) notify MLNY if any of such Sub-agents ceases to be a registered representative of Selling Broker-Dealer. Selling Broker-Dealer agrees that a Sub-agent must be a registered representative of Selling Broker-Dealer before engaging in the solicitation of any securities regulated Contracts and have entered into the written agreement more fully described in Section III, Paragraph C. MLNY and MSS shall not have any responsibility of the supervision of any registered representative or any other employee or affiliate of Selling Broker-Dealer. If the act or omission of a registered representative or any other employee or affiliate of Selling Broker-Dealer is the proximate cause of any claim, damage, or liability (including reasonable attorneys' fees) to MLNY or MSS, Selling Broker-Dealer shall be responsible and liable therefore. Selling Broker-Dealer shall fully comply with the requirements of the NASD and of the 1934 Act and all other applicable federal or state laws. Selling Broker-Dealer shall establish such rules and procedures as may be necessary to cause diligent supervision of the securities activities of the Sub-agents. Upon request of MSS, Selling Broker-Dealer shall furnish such records as may be necessary to establish diligent supervision. 4 V. AUTHORITY AND DUTIES OF GENERAL AGENT AND SELLING BROKER-DEALER A. CONTRACTS The securities and insurance regulated Contracts issued by MLNY to which the Agreement applies are listed in Schedule I, which may be amended from time to time by MLNY. MLNY, in its sole discretion with prior or concurrent written notice to Selling Broker-Dealer and General Agent, may suspend distribution of any Contracts. MLNY also has the right to amend any Contracts at any time. B. SECURING APPLICATIONS Each application for a Contract shall be made on an application form provided by MLNY, and all payments collected by Selling Broker-Dealer, General Agent or any registered representative and Sub-agent shall be remitted promptly in full, together with such application form and any other required documentation, directly to MLNY at the address indicated on such application or to such other address as may be designated. Selling Broker-Dealer and General Agent shall review all such applications for completeness. Check or money order in payment of such Contracts should be made payable to the order of "The Manufacturers Life Insurance Company of New York." All applications are subject to the acceptance or rejection by MLNY in its sole discretion. C. RECEIPT OF MONEY All money payable in connection with any of the Contracts whether as premium, purchase payment or otherwise and whether paid by or on behalf of any contract owner or anyone else having an interest in the Contracts, is the property of MLNY and shall be transmitted immediately in accordance with the administrative procedures of MLNY without any deduction or offset for any reason including but not limited to, any deduction or offset for compensation claimed by Selling Broker-Dealer or General Agent, unless there has been a prior arrangement for net wire transmissions between MLNY and Selling Broker-Dealer or General Agent. D. NOTICE OF SUB-AGENT'S NONCOMPLIANCE Selling Broker-Dealer shall notify MSS and General Agent in the event a Sub-agent fails or refuses to submit to the supervision of Selling Broker-Dealer or General Agent in accordance with this Agreement, the agreement between Selling Broker-Dealer, General Agent and Sub-agent referred to in Section III, Paragraph C and Section IV, Paragraph A, or otherwise fails to meet the rules and standards imposed by Selling Broker-Dealer or its registered representatives or General Agent or its Sub-agents. Selling Broker-Dealer or General Agent shall also immediately notify such Sub-agent that he or she is no longer authorized to sell the Contracts, and both Selling Broker-Dealer and General Agent shall take whatever additional action may be necessary to terminate the sales activities of such Sub-agent relating to the Contracts. E. SALES PROMOTION, ADVERTISING AND PROSPECTUSES No sales promotion materials, circulars, documents or any advertising relating to any of the Contracts shall be used by Selling Broker-Dealer, General Agent or any Sub-agents unless the specific item has been approved in writing by MLNY prior to use. Selling Broker-Dealer shall be provided, without any expense to Selling 5 Broker-Dealer, with prospectuses relating to securities regulated Contracts. Selling Broker-Dealer and General Agent shall be provided with such other material as MLNY determines necessary or desirable for use in connection with sales of the Contracts. Nothing in these provisions shall prohibit Selling Broker-Dealer or General Agent from advertising life insurance and annuities on a generic basis. VI. COMPENSATION A. COMMISSIONS AND FEES Commissions and fees payable to Selling Broker-Dealer or General Agent in connection with the securities regulated Contracts shall be paid by MSS to Selling Broker-Dealer or General Agent, or as otherwise required by law. Commissions and fees payable to Selling Broker-Dealer, General Agent or Sub-agent in connection with the insurance regulated Contracts shall be paid by MSS to Selling Broker-Dealer or General Agent, or as otherwise required by law. Selling Broker-Dealer or General Agent, as applicable, shall pay Sub-agent. MSS will provide Selling Broker-Dealer and General Agent with a copy of its current Contracts, Commissions and Fees Schedule. Unless otherwise provided in the Contracts, Commissions and Fees Schedule, commissions will be paid as a percentage of premiums or purchase payments (collectively, Payments) received in cash or their legal tender and accepted by MLNY on applications obtained by the various Sub-agents appointed by General Agent hereunder. Upon termination of this Agreement, all compensation to the Selling Broker-Dealer and General Agent hereunder shall cease. However, Selling Broker-Dealer and General Agent shall be entitled to receive compensation for all new and additional premium payments which are in process at the time of termination, and shall continue to be liable for any chargebacks pursuant to the provisions of said Contracts, Commissions and Fees Schedule, or any other amounts advanced by or otherwise due MSS or MLNY hereunder. No commission shall be paid in excess of the limits of Section 4228 of the New York Insurance Law and no expense allowance payment shall be made in excess of the amount approved for payment by Manufacturers Life Insurance Company of New York pursuant to New York Insurance Department Regulation No. 49. B. TIME OF PAYMENT MSS will pay any commissions due General Agent or Selling Broker-Dealer hereunder within fifteen (15) days after the end of the calendar month in which Payments upon which such commission is based are accepted by MLNY. C. AMENDMENT OF SCHEDULES MSS and MLNY may, upon at least ten (10) days' prior written notice to Selling Broker-Dealer and General Agent, change the Contracts, Commissions and Fees Schedule by written amendment of such Schedule. Any such change shall apply to compensation due on applications received by MLNY after the effective date of such by MLNY after the effective date of such notice. D. PROHIBITION AGAINST REBATES MSS or MLNY may terminate this Agreement if Selling Broker-Dealer, General Agent or any Sub-agent of General Agent rebates, offers to rebate or withholds any part of any Payments on the Contracts. If Selling Broker-Dealer, General Agent or any Sub-agent of General Agent shall at any time induce or endeavor to induce any owner of 6 any Contract issued hereunder to discontinue payments or to relinquish any such Contract, except under circumstances where there is reasonable grounds for believing the Contract is not suitable for such person, anyand all compensation due Selling Broker-Dealer or General Agent here under shall cease and terminate. E. INDEBTEDNESS AND RIGHT OF SET OFF Nothing contained in this Agreement shall be construed as giving Selling Broker-Dealer or General Agent the right to incur any indebtedness on behalf of MSS or MLNY. Selling Broker-Dealer and General Agent hereby authorize MSS to set off liabilities of Selling Broker-Dealer and General Agent to MSS or MLNY against any and all amounts otherwise payable to Selling Broker-Dealer or General Agent. VII. GENERAL PROVISIONS A. WAIVER Failure of any party to insist upon strict compliance with any of the conditions of the 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 to be, or shall constitute, a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. B. LIMITATIONS No party other than MLNY shall have the authority to 1) make, alter, or discharge any Contract issued by MLNY; 2) waive any forfeiture or extend the time of making any Payments; or 3) enter into any proceedings in a court of law or before a regulatory agency in the name of or on behalf of MLNY. No party other than MSS and MLNY, respectively, shall have the authority to: 1) alter the forms which MSS or MLNY prescribe, or substitute other forms in place of those prescribed by MSS; or 2) enter into any proceeding in a court of law or before a regulatory agency in the name of or on behalf of MSS. C. FIDELITY BOND AND OTHER LIABILITY COVERAGE Selling Broker-Dealer and General Agent hereby assign any proceeds received from a fidelity bonding company, error and omissions or other liability coverage, to MLNY or MSS as their interest may appear, to the extent of their loss due to activities covered by the bond, policy or other liability coverage. If there is any deficiency amount, whether due to a deductible or otherwise, Selling Broker-Dealer or General Agent shall promptly pay such amounts on demand. Selling Broker-Dealer and General Agent hereby indemnify and hold harmless MLNY and MSS from any deficiency and from the costs of collection thereof (including reasonable attorneys' fees). D. BINDING EFFECT This Agreement shall be binding on and shall insure to the benefit of the parties to it and their respective successors and assigns provided that neither Selling Broker-Dealer nor General Agent may assign this Agreement or any rights or obligations hereunder without prior written consent of MLNY. E. REGULATIONS All parties agree to observe and comply with the existing laws and rule or 7 regulations of applicable local, state or federal regulatory authorities and with those which may be enacted or adopted during the term of this Agreement regulating the business contemplated hereby in any jurisdiction in which the business described herein is to be transacted. F. INDEMNIFICATION 1) MSS agrees to indemnify and hold harmless Selling Broker-Dealer and General Agent, their officers, directors and employees, against any and all losses, claims, damages or liabilities to which they may become subject under the 1933 Act, the 1934 Act, or other federal or state statutory law or regulation, at common law 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 or any omission or alleged omission to state a material fact required to be stated or necessary to make the statements made not misleading in the registration statement for the Contracts or for the shares of Manufacturers Investment Trust ("Trust") filed pursuant to the 1933 Act, or any prospectus included as a part thereof, as from time to time amended and supplemented. MSS agrees to indemnify and hold harmless Selling Broker-Dealer and General Agent, their officers, directors and employees, against any and all losses, claims, damages or liabilities to which they may become subject under the 1933 Act, the 1934 Act, or other federal or state statutory law or regulation, at common law 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 or any omission or alleged omission to state a material fact required to be stated or necessary to make the statements made not misleading in any advertisement or sales literature approved in writing by MLNY pursuant to Section V, Paragraph E of this Agreement. 2) Selling Broker-Dealer and General Agent agree to indemnify and hold harmless MSS and MLNY, their officers, directors, and employees, against any and all losses, claims, damages or liabilities to which they may become subject under the 1933 Act, the 1934 Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of liabilities (or actions in respect thereof) arise out of or are based upon: a) any oral or written misrepresentations by Selling Broker-Dealer or General Agent or their officers, directors, employees or agents unless such misrepresentation is contained in the registration statement for the Contracts or Trust shares, any prospectus included as a part thereof, as from time to time amended and supplemented, or any advertisement or sales literature approved in writing by MLNY pursuant to Section V, Paragraph E, of this Agreement, or b) the failure of Selling Broker-Dealer or General Agent or their officers, directors, employees or agents to comply with any applicable provisions of this Agreement. G. NOTICES All notices or communications shall be sent to the address shown in this Agreement, or to such other address as the party may request, by giving written notice to the other parties. H. GOVERNING LAW This Agreement shall be construed in accordance with and governed by the laws of the State of New York. 8 I. AMENDMENT OF AGREEMENT MLNY reserves the right to amend this Agreement in writing at any time. The submission of an application for the Contracts by Selling Broker-Dealer or General Agent five or more business days after notice of any such amendment has been sent to the other parties shall constitute agreement to such amendment. J. GENERAL AGENT AS BROKER-DEALER If Selling Broker-Dealer and General Agent are the same person or legal entity, such person or legal entity shall have the rights and obligations hereunder of both Selling Broker-Dealer and General Agent and this Agreement shall be binding and enforceable in both capacities. K. COMPLAINTS AND INVESTIGATIONS General Agent, Selling Broker- Dealer and MSS agree to cooperate fully in the event of any regulatory investigation, inquiry or proceedings, judicial proceedings or customer complaint involving the Contracts. In furtherance of the foregoing: 1) each party will notify all other parties of any such investigation, inquiry, proceedings or complaint involving the Contracts or affecting the ability of a party to perform pursuant to this Agreement within 10 days of obtaining knowledge of the same; and 2) in the case of a customer complaint the involved parties will consult with each other prior to sending any written response with respect to such complaint. L. TERMINATION This Agreement may be terminated without cause, by any party upon thirty (30) days' prior written notice; and may be terminated, for cause, by any party immediately; and shall be terminated as respects securities regulated Contracts if MSS or Selling Broker-Dealer shall cease to be a registered broker-dealer under the Securities Exchange 1934 Act and a member of the NASD. ADDRESS FOR NOTICES For The Manufacturers Life Insurance Company of New York: International Corporate Center at Rye 555 Theodore Fremd Avenue Suite C-209 Rye, NY 10580 9 For Manufacturers Security Services, LLC: ------------------------------------ ------------------------------------ 73 Tremont Street Boston, MA 02108 For General Agent: ------------------------------------ For Selling Broker-Dealer: ------------------------------------ - --------------------------------------- ------------------------------------ - --------------------------------------- ------------------------------------ This Agreement shall be effective upon execution by General Agent and Selling Broker-Dealer, and delivery of the Agreement to MSS. Manufacturers Securities Services, LLC by The Manufacturers Life Insurance Company of North America, Managing Member, By: Dated: ------------------------------ /s/ Richard Hirtle - --------------------------------------- ------------------------------------ Richard Hirtle, VP Treasurer & CFO (General Agent) By: --------------------------------- (Name and Title) The Manufacturers Life Insurance Company ------------------------------------ of New York, By: (Selling Broker-Dealer) /s/ Joseph M. Scott By: - --------------------------------------- ------------------------------------ Joseph M. Scott, President (Name and Title) 10 EXHIBIT A GENERAL LETTER OF RECOMMENDATION General Agent hereby certifies to MLNY that all of the following requirements will be fulfilled in conjunction with the submission of licensing/appointment papers for all applicants as Sub-agents submitted by General Agent. General Agent will, upon request, forward proof of compliance with same to MLNY in a timely manner. 1. We have made a thorough and diligent inquiry and investigation relative to each applicant's identity, residence and business reputation and declare that each applicant is personally known to us, has been examined by us, is known to be of good moral character, has a good business reputation, is reliable, is financially responsible and is worthy of a license. Each individual is trustworthy, competent and qualified to act as an agent for MLNY to hold himself or herself out in good faith to the general public. We vouch for each applicant. 2. We have on file a B-300, B-301 or U-4 form which was completed by each applicant. We have fulfilled all the necessary investigative requirements for the registration of each applicant as a registered representative through our NASD member firm, and each applicant is presently registered as an NASD registered representative. The above information in our files indicates no fact or condition which would disqualify the applicant from receiving a license and all the findings of all investigative information is favorable. 3. We certify that all educational requirements have been met for the specific state in which each applicant is requesting a license, and that all such persons have fulfilled the appropriate examination, education and training requirements. 4. If the applicant is required to submit his or her picture, signature, and securities registration in the state in which he or she is applying for a license, we certify that those items forwarded to MLNY are those of the applicant and the securities registration is a true copy of the original. 5. We hereby warrant that the applicant is not applying for a license with MLNY in order to place insurance chiefly and solely on his or her life or property, lives or property of his or her relatives, or property or liability of his or her associates. 6. We certify that each applicant will receive close and adequate supervision, and that we will make inspection when needed of all or any risks written by these applicants, to the end that the insurance interest of the public will be properly protected. 7. We will not permit any applicant to transact insurance as an agent until duly licensed therefore. No applicants have been given a contract or furnished supplies, nor have any applicants been permitted to write, solicit business, or act as an agent in any capacity, and they will not be so permitted until the certificate of authority or license applied for is received. 8. We certify that the General Agent, Selling Broker-Dealer and applicant shall have entered into a written agreement pursuant to which: a) applicant is appointed a Sub-agent of General Agent and a registered representative fee Selling Broker-Dealer; b) applicant agrees that his or her selling activities relating to securities regulated Contracts shall be under the supervision and control of Selling Broker-Dealer and his or her selling activities relating to insurance regulated Contracts shall be under the supervision and control of General Agent; and c) that applicant's right to continue to sell such Contracts is subject to this or her continued compliance with such agreement and any procedures, rules or regulations implemented by Selling Broker-Dealer or General Agent. EX-99.(4) 7 SPECIMEN FLEXIBLE PURCHASE PAYMENT 1 THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK - -------------------------------------------------------------------------------- HOME OFFICE: International Corporate Center at Rye 555 Theodore Fremd Avenue Rye, N.Y. 10580 THIS IS A LEGAL CONTRACT - READ IT CAREFULLY. WE AGREE to pay the benefits of this Contract in accordance with its terms. THIS CONTRACT is issued in consideration of the Application and the Purchase Payments. SIGNED FOR THE COMPANY at its Executive Office, Rye, New York, on the Contract Date. DETAILS OF VARIABLE ACCOUNT PROVISIONS ON PAGE 9 DETAILS OF FIXED ACCOUNT PROVISIONS ON PAGE 10 DETAILS OF MARKET VALUE CHARGE PROVISIONS ON PAGE 10 President Secretary Flexible Purchase Payment Deferred Combination Fixed and Variable Annuity Non-Participating ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. TEN DAY RIGHT TO REVIEW The Contract Owner may cancel the Contract by returning it to our Annuity Service Office or agent at any time within 10 days after receipt of the Contract. Within 7 days of receipt of the Contract by us, we will pay the Contract Value, computed at the end of the Valuation Period, on the date of surrender, to the Contract Owner. 2 INTRODUCTION - -------------------------------------------------------------------------------- This is a flexible purchase payment deferred combination fixed and variable annuity. This Contract provides that prior to the Maturity Date, the Contract Value will accumulate on either a fixed or variable basis or a combination of both. After the Maturity Date, annuity payments may be either fixed or variable, or a combination of fixed and variable. The variable portion of the Contract will vary with the investment performance of the Variable Account. The fixed portion of the Contract will accumulate based on interest rates guaranteed by the Company for the period selected. If you select annuity payments on a variable basis, the payment amount will vary with the investment performance of the Variable Account. You must allocate Purchase Payments among one or more Investment Options. The Investment Options are identified in the Application and on the Contract Specifications Page. TABLE OF CONTENTS - -------------------------------------------------------------------------------- Contract Specifications Page Page PART 1 - DEFINITIONS .................................................... 1 PART 2 - GENERAL PROVISIONS.............................................. 3 PART 3 - OWNERSHIP....................................................... 5 PART 4 - BENEFITS ....................................................... 6 PART 5 - PURCHASE PAYMENTS .............................................. 8 PART 6 - VARIABLE ACCOUNT PROVISIONS .................................... 9 PART 7 - FIXED ACCOUNT PROVISIONS ....................................... 10 PART 8 - ANNUITY PROVISIONS ............................................. 11 PART 9 - TRANSFERS ...................................................... 12 PART 10 - WITHDRAWAL PROVISIONS .......................................... 13 PART 11 - CHARGES AND DEDUCTIONS ......................................... 16 PART 12 - PAYMENT OF CONTRACT BENEFITS ................................... 16 3 PART 1 DEFINITIONS - -------------------------------------------------------------------------------- ACCUMULATION UNIT A unit of measure that is used to calculate the value of the variable portion of the Contract before the Maturity Date. ANNUITANT Any natural person or persons whose life is used to determine the duration of annuity payments involving life contingencies. If you name more than one person as an "Annuitant", the second person named shall be referred to as "Co- Annuitant". All provisions based on the date of death of the "Annuitant" will be based on the date of death of the last to survive of the "Annuitant" or "Co-Annuitant". In the event of the death of the "Annuitant" or "Co-Annuitant" who is also a Contract Owner, a death benefit is payable under the Death of Owner Provision. The "Annuitant" and "Co-Annuitant" will be collectively referred to as "Annuitant" in this Contract. The Annuitant is as specified in the Application, unless changed. ANNUITY OPTION The method selected by you for annuity payments made by us. Unless you indicate otherwise, we will provide either variable or fixed, or a combination variable and fixed annuity payments in proportion to the Investment Account Value of each Investment Option at the Maturity Date. Annuity payments will continue for 10 years or the life of the Annuitant, if longer. ANNUITY SERVICE OFFICE Any office designated by us for the receipt of Purchase Payments and processing of Contract Owner requests. ANNUITY UNIT A unit of measure that is used after the Maturity Date to calculate Variable Annuity payments. BENEFICIARY The person or persons, or entity entitled to the death benefit under this Contract upon the death of the Annuitant. The Beneficiary is as specified in the Application, unless changed. (See also "Successor Owner") CONTINGENT BENEFICIARY The person or persons, or entity to become the Beneficiary if the Beneficiary is not alive. The Contingent Beneficiary is as specified in the Application, unless changed. CONTRACT ANNIVERSARY The anniversary of the Contract Date. CONTRACT DATE The date of issue of the Contract. CONTRACT VALUE The total of the Investment Account Values and, if applicable, any amount in the Loan Account attributable to the Contract. CONTRACT YEAR The period of twelve consecutive months beginning on the Contract Date or any anniversary thereafter. DEBT Any amounts in the Loan Account attributable to the Contract plus any accrued loan interest. The loan provision is applicable to Qualified Contracts only. DESIGNATED BENEFICIARY For purposes of section 72(s) of the Internal Revenue Code of 1986, the "designated beneficiary" under the contract shall be the individual who is entitled to receive the amounts payable on death, or if any Owner is not an individual, on any change in (or death of) the Annuitant or Co-Annuitant. FIXED ANNUITY An Annuity Option with payments which are predetermined and guaranteed as to dollar amount. GENERAL ACCOUNT All the assets of The Manufacturers Life Insurance Company of New York other than assets in separate accounts. 1 4 INVESTMENT ACCOUNT An account established by us which represents your interest in an Investment Option prior to the Maturity Date. INVESTMENT ACCOUNT VALUE The value of your investment in an Investment Account. INVESTMENT OPTIONS The Investment Options can be either fixed or variable. The Investment Options available under this Contract are shown on the Contract Specifications Page. LOAN ACCOUNT The portion of the General Account that is used for collateral when a loan is taken. MARKET VALUE CHARGE A charge that may be assessed if amounts are withdrawn or transferred from the 3-year or 6-year Investment Options prior to the end of the interest rate guarantee period. MATURITY DATE The date on which annuity benefits commence. It is the date specified on the Contract Specifications Page, unless changed. NET PURCHASE PAYMENT The Purchase Payment less the amount of premium tax, if any, deducted from the Purchase Payment. NON-QUALIFIED CONTRACTS Contracts which are not issued under Qualified Plans. OWNER OR CONTRACT OWNER The person, persons, or entity entitled to the ownership rights under this Contract. The Owner is as specified in the Application, unless changed. PORTFOLIO OR TRUST A separate portfolio of Manufacturers Investment PORTFOLIO Trust, a mutual fund in which PORTFOLIO the Variable Account invests, or any successor mutual fund. PURCHASE PAYMENT An amount paid to us by you as consideration for the benefits provided by the Contract. QUALIFIED CONTRACTS Contracts issued under Qualified Plans. QUALIFIED PLANS Retirement Plans which receive favorable tax treatment under section 401, 403, 408 or 457, of the Internal Revenue Code of 1986, as amended. SEPARATE ACCOUNT A segregated account of The Manufacturers Life Insurance Company of New York that is not commingled with our general assets and obligations. SUB-ACCOUNT(S) One or more of the Sub-Accounts of the Variable Account. Each Sub-Account is invested in shares of a different Trust Portfolio. SUCCESSOR OWNER The person, persons, or entity to become the Owner if the Owner dies prior to the Maturity Date. The Successor Owner is as specified in the Application, unless changed. If no Successor Owner is designated, or the Successor Owner dies before the Owner, the Owner's estate is the Successor Owner. (See also "Beneficiary") VALUATION DATE Any date on which the New York Stock Exchange is open for business and the net asset value of a Trust Portfolio is determined. VALUATION PERIOD Any period from one Valuation Date to the next, measured from the time on each such date that the net asset value of each Portfolio is determined. VARIABLE ACCOUNT The Manufacturers Life Insurance Company of New York Separate Account A, which is a separate account of The Manufacturers Life Insurance Company of New York. VARIABLE ANNUITY An Annuity Option with payments which: (1) are not predetermined or guaranteed as to dollar amount, and (2) vary in relation to the investment ex perience of one or more specified variable Sub-Accounts. WE AND YOU "We", "us" and "our" means The Manufacturers Life Insurance Company of 2 5 New York. "You" or "your" means the Owner of this Contract. PART 2 GENERAL PROVISIONS - -------------------------------------------------------------------------------- ENTIRE CONTRACT This Contract and any Contract endorsements and attached copy of the Application are the entire Contract. Only our President, Vice-President or Secretary may agree to change or waive any provisions of the Contract. The change or waiver must be in writing. We will not change or modify this Contract without your consent except as may be required to make it conform to any applicable law or regulation or any ruling issued by a government agency. The benefits and values available under this Contract are not less than the minimum required by the state of New York. We have filed a detailed statement of the method used to calculate the benefits and values with the New York Department of Insurance. BENEFICIARY The Beneficiary is the person or persons to whom benefits will be paid upon death of the Annuitant. Unless otherwise indicated, the Beneficiary will be revocable. A revocable Beneficiary may be changed by you. If changed, the Beneficiary is as shown in the latest change. Prior to the Maturity Date, if no Beneficiary survives the Annuitant, you or your estate will be the Beneficiary. The interest of any revocable Beneficiary is subject to that of any assignee. If more than one Beneficiary is designated, the interest of a Beneficiary who dies before any other Beneficiary will pass to the surviving Beneficiaries in proportion to their share in the benefits unless otherwise provided. CHANGE IN MATURITY DATE Prior to the Maturity Date, you may change the Maturity Date by written request at least one month before both the previously specified Maturity Date and the new Maturity Date. After the election, the new Maturity Date will become the Maturity Date. The maximum Maturity Date will be the first of the month following the Annuitant's eighty-fifth birthday. Any extension of the maximum Maturity Date will be allowed only with our prior approval. ASSIGNMENT You may assign this Contract at any time during the lifetime of the Annuitant and prior to the Maturity Date. No assignment will be binding on us unless it is written in a form acceptable to us and received at our Annuity Service Office. We will not be liable for any payments made or actions we take before the assignment is accepted by us. An absolute assignment will revoke the interest of any revocable Beneficiary. We will not be responsible for the validity of any as signment. A Qualified Contract may not be assigned to any person other than the employer. CLAIMS OF CREDITORS To the extent permitted by law, no payments under this Contract will be subject to the claims of your, the Beneficiary's or the Annuitant's creditors. MISSTATEMENT AND PROOF We may require proof of age, sex or survival of OF AGE, SEX OR SURVIVAL any person upon whose age, sex or survival any payments depend. If the age or sex of the Annuitant has been misstated, the benefits will be those which the Purchase Payments would have provided for the correct age and sex. If we have made incorrect annuity payments, the amount of any underpayment, adjusted with interest at 4% per annum, will be paid immediately. The amount of any overpayment will be deducted from future annuity payments. ADDITION, DELETION OR We reserve the right, subject to prior approval of the New York 3 6 SUBSTITUTION OF superintendent of Insurance and compliance with INVESTMENT OPTIONS applicable law, to make additions to, deletions from, or substitutions for the Portfolio shares that are held by the Variable Account or that the Variable Account may purchase. We reserve the right to eliminate the shares of any of the eligible Portfolios and to substitute shares of another Portfolio of the Trust, or of another open-end registered investment company, if the shares of any eligible Portfolio are no longer available for in vestment, or if in our judgment further investment in any eligible Portfolio should become inappropriate in view of the purposes of the Variable Account. We will not substitute any shares attributable to your interest in a Sub-Account without notice to you and prior approval of the Securities and Exchange Commission to the extent required by the Investment Company Act of 1940. Nothing contained herein shall prevent the Variable Account from purchasing other securities for other series or classes of contracts, or from effecting a conversion between shares of another open-end investment company.We reserve the right, subject to prior approval of the New York Superintendent of Insurance and compliance with applicable law, to establish additional Sub-Accounts which would invest in shares of a new Portfolio of the Trust or in shares of another open-end investment company. We also reserve the right, subject to prior approval of the New York Superintendent of Insurance and compliance with applicable law, to eliminate existing Sub-Accounts, to combine Sub-Accounts or to transfer assets in a Sub-Account to another Separate Account established by us or an affiliated company. In the event of any such substitutions or changes, we may, by appropriate endorsement, make such changes in this and other Contracts as may be necessary or appropriate to reflect such substitutions or changes. If deemed by us to be in the best interests of persons having voting rights under the Contracts, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under such Act in the event such registration is no longer required. NON-PARTICIPATING Your Contract is non-participating and will not share in our profits or surplus earnings. We will pay no dividends on your Contract. REPORTS At least once each year we will send you a report containing information required by the Investment Company Act of 1940 and the laws of the state of New York. INSULATION The portion of the assets of the Variable Account equal to the reserves and other contract liabilities with respect to such account are not chargeable with liabilities arising out of any other business we may conduct. Moreover, the income, gains and losses, realized or unrealized, from assets allocated to the Variable Account shall be credited to or charged against such account without regard to our other income, gains or losses. OWNERSHIP OF ASSETS We shall have exclusive and absolute ownership and control of our assets, including the assets of the Variable Account. CURRENCY AND PLACE OF All payments made to or by us shall be made in the PAYMENTS lawful currency of the United States of America. Payments to us or by us shall be made at the Annuity Service Office or elsewhere if we consent. NOTICES AND ELECTIONS To be effective, all notices and elections you make under this Contract must be in writing, signed by you and received by us at our Annuity Service Office. Un less otherwise provided, all notices, requests and elections will be effective when received by us, complete with all necessary information and your signature, at our Annuity Service Office. GOVERNING LAW This Contract will be governed by the laws of the state of New York. 4 7 PART 3 OWNERSHIP - -------------------------------------------------------------------------------- GENERAL During the Annuitant's lifetime and prior to the Maturity Date, the Owner of this Contract shall be the person so named in the Application or the latest change filed with us. On and after the Maturity Date, the Annuitant is the Owner of the Contract. After the Annuitant's death, the Beneficiary is the Owner of the Contract. CHANGE OF OWNER, Subject to the rights of an irrevocable ANNUITANT, BENEFICIARY Beneficiary, you may change the Beneficiary during the Annuitant's lifetime by written request in a form acceptable to us and which is received at our Annuity Service Office. The Annuitant may not be changed after the Maturity Date. You need not send us the Contract unless we request it. Any change must be approved by us. If approved, it will take effect on the date you signed the request. We will not be liable for any payments or actions we take before the change is approved. In the case of the Qualified Contracts, ownership of the Contract generally may not be transferred except by the trustee of an exempt employees' trust which is part of a retirement plan qualified under section 401 of the Internal Revenue Code. Subject to the foregoing, a Qualified Contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than the employer. PART 4 BENEFITS - -------------------------------------------------------------------------------- ANNUITY BENEFITS We will pay a monthly income to the Annuitant, if living, on the Maturity Date. Payments can be fixed or variable, or a combination of fixed and variable. Annuity benefits will commence on the Maturity Date and continue for the period of time provided for under the Annuity Option selected. We may pay the Contract Value, less Debt, on the Maturity Date in one lump sum if the monthly income is less than $20. On or before the Maturity Date you must select how the Contract Value will be used to provide the monthly income. You may select a Fixed or Variable Annuity. Unless you indicate otherwise, we will provide either variable or fixed, or a combination variable and fixed annuity payments in proportion to the Investment Account Value of each Investment Option at the Maturity Date. Annuity payments will continue for 10 years or the life of the Annuitant, if longer. If a Variable Annuity is used, the amount of the first monthly annuity payment will be obtained from the appropriate option table under the "Payment of Contract Benefits" Section. Subsequent monthly annuity payments will vary based on the investment experience of the Sub-Account(s) used to effect the annuity. The method used to calculate the amount of the initial and subsequent payments is described under the "Variable Annuity Payments" Section of Part 8. If a Fixed Annuity is used, the portion of the Contract Value used to effect a Fixed Annuity will be applied to the appropriate table contained in this Contract. If the table in use by us on the Maturity date is more favorable to you, we will use that table. We guarantee the dollar amount of fixed annuity payments. 5 8 DEATH BENEFIT BEFORE DEATH OF ANNUITANT WHERE YOU ARE NOT THE MATURITY DATE ANNUITANT. We will pay the minimum death benefit, less any Debt, to the Beneficiary if you are not the Annuitant and the Annuitant dies before the Maturity Date. Payment will be made either as a lump sum or in accordance with any Annuity Option described in this Contract. If there is more than one Annuitant, the minimum death benefit will be paid on the death of the last surviving Co-Annuitant. Upon the death of the Annuitant, the Beneficiary becomes the Owner of the Contract and may elect to continue the Contract rather than to receive payment of the minimum death benefit. DEATH OF ANNUITANT WHERE YOU ARE THE ANNUITANT. We will pay the minimum death benefit, less any debt, to the Beneficiary if you are the Annuitant, there is no surviving Co-Annuitant and you die before the Maturity Date. The Beneficiary becomes entitled to exercise ownership rights in the Contract and may continue the Contract. If this is a Non-Qualified Contract, the following special distribution rules apply. Distribution of the Beneficiary's interest in the Contract must be made within 5 years after your death or as an annuity which begins within one year of death and is payable over the life of the Beneficiary (or over a period not in excess of the Beneficiary's life expectancy). If your spouse is the Beneficiary, your spouse may elect to be treated as Owner and distribution will be made no later than the date on which distribution would be required after the death of your spouse. If you are the Annuitant, there is a surviving Co-Annuitant, and you die before the Maturity Date, payment of your interest in the Contract will be made in accordance with the Death of Owner provision of this Contract. MINIMUM DEATH BENEFIT. If the Annuitant dies on or prior to the first of the month following his or her 85th birthday, the minimum death benefit will be determined as follows: 1. During the first 6 Contract Years, the minimum death benefit will be the greater of: a) the Contract Value on the date that due proof of death is received at the Annuity Service Office, or b) The sum of all Purchase Payments made, less any amount deducted in connection with partial withdrawals. 2. During any subsequent 6 Contract Year period, the minimum death benefit will be the greater of: a) the Contract Value on the date that due proof of death is received at the Annuity Service Office, or b) the minimum death benefit on the last day of the previous 6 Contract Year period plus any Purchase Payments made and less any amount deducted in connection with partial withdrawals since then. If the Annuitant dies after the first of the month following his or her 85th birthday, the minimum death benefit will be the Contract Value on the date that due proof of death is received at the Annuity Service Office. DEATH OF OWNER. If you die before the Annuitant and before the Maturity Date, the Successor Owner will become the Owner of the Contract and will be entitled to your interest in the Contract (the amount payable on total withdrawal). If this is a Non-Qualified Contract, the following special distribution rules apply. Distribution of such interest must be made within 5 years after your death or as an annuity which begins within one year of death and is payable over the life of the Successor Owner (or over a period not in excess of the Successor Owner's life expectancy). If your spouse is the Successor Owner, your spouse will be treated as Owner and distribution will be made no later than the date distribution would be required after the 6 9 death of your spouse. If you DEATH BENEFIT ON OR AFTER If annuity payments have been selected based on an MATURITY DATE Annuity Option providing for a guaranteed period, and the Annuitant dies on or after the Maturity Date, we will make the remaining guaranteed payments to the Beneficiary. Such payments will be made as rapidly as under the method of distribution being used as of the date of the Annuitant's death. If no Beneficiary is living, we will commute any unpaid guaranteed payments to a single sum (on the basis of the interest rate used in determining the payments) and pay that single sum to the estate of the last to die of the Annuitant and the Beneficiary. DUE PROOF OF DEATH Due proof of death is required upon the death of the Annuitant or the Owner. Due proof of death is one of the following received at the Annuity Service Office within 1 year of the date of death: a) A certified copy of a death certificate. b) A certified copy of a decree of a court of competent jurisdiction as to the finding of death. c) Any other proof satisfactory to us. Death benefits will be paid within 7 days of receipt of due proof of death, accompanied by appropriate distribution instructions. PART 5 PURCHASE PAYMENTS - -------------------------------------------------------------------------------- GENERAL All Purchase Payments under this Contract are payable at our Annuity Service Office or such other place as we may designate. The minimum Purchase Payment will be $30. However at least $300 must be paid during the first Contract Year. Purchase Payments may be made at any time. If a Purchase Payment would cause the Contract Value to exceed $1,000,000, or the Contract Value already exceeds $1,000,000, no additional Purchase Payments will be accepted without our prior approval. NONPAYMENT OF PURCHASE If, prior to the Maturity Date, no Purchase PAYMENTS FOR THREE YEARS Payments are made for three consecutive Contract Years, and if both: a) the total Purchase Payments made, less any partial withdrawals, are less than $2,000; and b) the Contract Value at the end of such three year period is less than $2,000; we may cancel the Contract and pay you the Contract Value (measured as of the Valuation Period during which the cancellation occurs), less any Debt and administration fee. ALLOCATION OF NET When we receive Purchase Payments, the Net PURCHASE PAYMENTS Purchase Payments will be allocated among Investment Options in accordance with the allocation percentages shown in the Application. You may change the allocation of subsequent Purchase Payments at any time, without charge, by giving us written notice. PART 6 VARIABLE ACCOUNT PROVISIONS - -------------------------------------------------------------------------------- INVESTMENT ACCOUNT We will establish a separate Investment Account for you for each variable Investment Option to which you allocate amounts. The Investment Account represents the number of your Accumulation Units in an Investment Option. INVESTMENT ACCOUNT VALUE The Investment Account Value of an Investment Account is determined by (a) times (b) where: 7 10 a) equals the number of Accumulation Units credited to the Investment Account, and b) equals the value of the appropriate Accumulation Unit. ACCUMULATION UNITS We will credit Net Purchase Payments to your Investment Accounts in the form of Accumulation Units. The number of Accumulation Units to be credited to each Investment Account of the Contract will be determined by dividing the Net Purchase Payment allocated to that Investment Account by the Accumulation Unit value for that Investment Account. Accumulation Units will be adjusted for any transfers and will be canceled on payment of a death benefit, withdrawal, maturity or assessment of certain charges based on their value for the Valuation Period in which such transaction occurs. VALUE OF ACCUMULATION The Accumulation Unit value for any Valuation UNIT Period is determined by multiplying the Accumulation Unit value for the immediately preceding Valuation Period by the "net investment factor" for the Investment Account for the Valuation Period for which the value is being determined. The value of an Accumulation Unit may increase, decrease or remain the same from one Valuation Period to the next. NET INVESTMENT FACTOR The net investment factor for a variable Investment Account is an index that measures the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for any Valuation Period is determined by dividing (a) by (b) and subtracting (c) from the result where: a) is the net result of: 1) the net asset value per share of a Portfolio share held in the Sub-Account determined as of the end of the current Valuation Period, plus 2) the per share amount of any dividend or capital gain distributions made by the Portfolio on shares held in the Sub-Account if the "ex-dividend" date occurs during the current Valuation Period, and (b) is the net asset value per share of a Portfolio share held in the Sub-Account determined as of the end of the immediately preceding Valuation Period, and (c) is a factor representing the charges deducted from the Sub-Account on a daily basis. Such factor is equal on an annual basis to 1.40% (1.25% for mortality and expense risks; and 0.15% for administrative expenses). The net investment factor may be greater or less than, or equal to, one. PART 7 FIXED ACCOUNT PROVISIONS - -------------------------------------------------------------------------------- INVESTMENT ACCOUNT We will establish a separate Investment Account for you each time you allocate amounts to a fixed Investment Option. Any amounts you allocate to the same fixed Investment Option on the same day will establish a new Investment Account. Amounts invested in these Investment Accounts will earn interest at the guaranteed rate in effect on the date the amounts are allocated for the duration of the guarantee period. We will determine the guaranteed rate from time to time for new allocations, but in no event will the minimum guaranteed rate under a fixed Investment Account be less than 4%. GUARANTEE PERIODS For any amounts allocated to the fixed options, you have the choice of the length of the guarantee period. The amount can be allocated into any combination of the 1-year, 3-year or 6-year guarantee periods. Separate Investment Accounts will be established for each guarantee period. The guarantee period will be the 1-year, 3-year or 6-year period measured from the date the amount is allocated to the Investment Account. 8 11 Amounts cannot be allocated to a fixed option that would extend the guarantee period beyond the Maturity Date. RENEWALS The renewal amount is the Investment Account Value at the end of the particular guarantee period. The renewal amount will be automatically renewed in the same Investment Option at the end of the guarantee period, unless you specify otherwise. If renewal in a particular Investment Option would result in the guarantee period for that In vestment Account being beyond the Maturity Date, the renewal amount may not be renewed in that Investment Option. The renewal amount will be applied to the longest guarantee period of an Investment Option such that the guarantee period does not extend beyond the Maturity Date. Renewals within 3 years of the Maturity Date will be applied to the 1 Year Investment Option. INVESTMENT ACCOUNT VALUE The amount in the Investment Accounts will accumulate at a rate of interest determined by us and in effect on the date the amount is allocated to the Investment Account. The Investment Account Value is the accumulated value of the amount invested in the Investment Account reduced by any withdrawals, loans, transfers or charges taken from the Investment Account. MARKET VALUE CHARGE Any amounts withdrawn from a 3-year or a 6-year fixed Investment Account, prior to the end of the guarantee period, may be subject to a Market Value Charge. The Market Value Charge will only apply to amounts withdrawn from a 3-year or 6-year Investment Account pursuant to a partial withdrawal, total withdrawal, transfer or a loan. A Market Value Charge will be calculated separately for each 3-year or 6-year Investment Account affected. The Market Value Charge for a particular Investment Account will be calculated by multiplying the amount withdrawn or transferred from the Investment Account by the adjustment factor described below. The adjustment factor for a particular Investment Account is determined by the following formula: 0.75 x (B-A) x C/12 Where A, B and C are defined as follows: A- The guaranteed interest rate on the Investment Account. B- The guaranteed interest rate available, on the date the request is processed, for amounts allocated to a new Investment Account with the same length of guarantee period as the Investment Account from which amounts are being withdrawn. C-The number of complete months remaining to the end of the guarantee period. For purposes of this calculation, the maximum difference between "B" and "A" will be 3%. Furthermore, the adjustment factor will never be greater than 2 x (A - 4%) and never less than zero.The total Market Value Charge will be the sum of the Market Value Charges for each Investment Account being withdrawn. For full withdrawals, the Market Value Charge will be calculated on the total amount of each Investment Account, and the total Market Value Charge will be deducted from the amount otherwise payable. For partial withdrawals, the Market Value Charge will be calculated based on the withdrawal amount requested from each Investment Account and the Market Value Charge, if applicable, will be deducted from the remaining Investment Account Value. For transfers (including transfers to the Loan Account pursuant to a loan request) the Market Value Charge, if applicable, will be deducted from the amount transferred. There will be no Market Value Charge on withdrawals from the fixed 9 12 Investment Accounts in the following situations: (a) death of the Annuitant, (b) amounts withdrawn to pay any fees or charges, and (c) amounts withdrawn from 3-year or 6-year Investment Accounts within one month prior to the end of the guarantee period. In no event will the Market Value Charge exceed the earnings attributable to the amount withdrawn from an Investment Account. In no event will the Market Value Charge plus any withdrawal charges for an In vestment Account be greater than 10% of the amount transferred or withdrawn. In no event will the Market Value Charge reduce the amount payable on withdrawal or transfer below the amount required under the non-forfeiture laws of the state that has jurisdiction over this Contract. PART 8 ANNUITY PROVISIONS - -------------------------------------------------------------------------------- VARIABLE ANNUITY PAYMENTS The amount of the first variable annuity payment is determined by applying the portion of the Contract Value used to effect a Variable Annuity, measured as of a date not more than 10 business days prior to the Maturity Date (minus any ap plicable premium taxes), to the appropriate tables(s) contained in this Contract. If the table in use by us on the Maturity Date is more favorable to you, we will use that table. Subsequent payments will be based on the investment performance of one or more Sub-Accounts as you select. The amount of such payments is determined by the number of Annuity Units credited for each Sub-Account. Such number is determined by dividing the portion of the first payment allocated to that Sub-Account by the Annuity Unit value for that Sub-Account determined as of the same date that the Contract Value to effect annuity payments was determined. This number of Annuity Units for each Sub-Account is then multiplied by the appropriate Annuity Unit value for each subsequent determination date, which is a uniformly applied date not more than 10 business days before the payment is due. MORTALITY AND EXPENSE We guarantee that the dollar amount of each GUARANTEE variable annuity payment will not be affected by changes in mortality and expense experience. ANNUITY UNIT VALUE The value of an Annuity Unit for each Sub-Account for any Valuation Period is determined as follows: a) The net investment factor for the Sub-Account for the Valuation Period for which the Annuity Unit value is being calculated is multiplied by the value of the Annuity Unit for the preceding Valuation Period; and b) The result is adjusted to compensate for the interest rate assumed in the tables used to determine the first variable annuity payment. The dollar value of Annuity Units may increase, decrease or remain the same from one Valuation Period to the next. FIXED ANNUITY PAYMENTS The amount of each fixed annuity payment is determined by applying the portion of the Contract Value used to effect a Fixed Annuity measured as of a date not more than 10 business days prior to the Maturity Date (minus any applicable premium taxes) to the appropriate table contained in this Contract. If the table in use by us on the Maturity Date is more favorable to you, we will use that table. In addition, at the time of their commencement, fixed annuity payments will not be less than those provided by an amount applied to purchase a single consideration immediate annuity to the same class of annuitants at that time. This amount will be the greater of: 10 13 a) the contract value less applicable withdrawal charges b) 95% of the contract value We guarantee the dollar amount of fixed annuity payments. PART 9 TRANSFERS - -------------------------------------------------------------------------------- TRANSFERS Before the Maturity Date you may transfer amounts among Investment Accounts of the Contract. There is no transaction charge for transfers, however, amounts transferred from a 3-year or 6-year fixed Investment Account prior to the end of the guarantee period may be subject to a Market Value Charge. Amounts will be canceled from the Investment Accounts from which amounts are transferred and credited to the Investment Account to which amounts are transferred. We will effect such transfers so that the Contract Value on the date of transfer will not be affected by the transfer, except for the Market Value Charge, if applicable. We reserve the right to limit, upon notice, the maximum number of transfers you may make per Contract Year to one per month or six at any time within a Contract Year. You must transfer at least $300 or, if less, the entire amount in the Investment Account each time you make a transfer. If, after the transfer, the amount remaining in the Investment Account of the Contract from which the transfer is made is less than $100, then we will transfer the entire amount instead of the requested amount. We reserve the right to defer the transfer privilege at any time that we are unable to purchase or redeem shares of the Trust Portfolios. In addition, in accordance with applicable law, the Company reserves the right to modify or terminate the transfer privilege at any time. Amounts may not be transferred from a fixed Investment Account unless those amounts have been in the fixed Investment Account for at least one year. Amounts transferred from a 3-year or 6-year fixed Investment Account may be subject to a Market Value Charge. The Market Value Charge, if applicable, will be deducted from the amount transferred. Once variable annuity payments have begun, you may transfer all or part of the investment upon which your variable annuity payments are based from one Sub-Account to another. To do this, we will convert the number of variable Annuity Units you hold in the Sub-Account from which you are transferring to a number of variable Annuity Units of the Sub-Account to which you are transferring so that the amount of a variable annuity payment, if it were made at that time, would not be affected by the transfer. After that, your variable annuity payments will reflect changes in the values of your new variable Annuity Units. You must give us notice at least 30 days before the due date of the first variable annuity payment to which the transfer will apply. We reserve the right to limit, upon notice, the maximum number of transfers you may make per Contract Year after variable annuity payments have begun to four. After the Maturity Date, transfers will not be allowed from a fixed to a variable Annuity Option, or from a variable to a fixed Annuity Option. PART 10 WITHDRAWAL PROVISIONS - -------------------------------------------------------------------------------- 11 14 CONTRACT VALUE Your Contract Value is equal to the total of the Investment Account Values and, if applicable, any amount in the Loan Account attributable to the Contract. PAYMENTS OF WITHDRAWALS You may withdraw part or all of the Contract Value, less any Debt, at any time before the earlier of the death of the Annuitant or the Maturity Date, by sending us a written request. We will pay all withdrawals within seven days of receipt at the Annuity Service Office subject to postponement in certain circumstances, as specified below. SUSPENSION OF PAYMENTS We may defer the right of withdrawal, or postpone the date of payment, from the variable Investment Accounts for any period when: (1) the New York Stock Exchange is closed (other than customary weekend and holiday closings); (2) trading on the New York Stock Exchange is restricted; (3) an emergency exists as a result of which disposal of securities held in the Variable Account is not reasonably practicable or it is not reasonably practicable to determine the value of the Variable Account's net assets; or (4) the Securities and Exchange Commission, by order, so permits for the protection of security holders; provided that applicable rules and regulations of the Securities and Exchange Commission shall govern as to whether the conditions described in (2) and (3) exist. We may defer the right of withdrawal from the fixed Investment Accounts for not more than six months from the day we receive written request and the Contract, if required. If such payments are deferred 10 days or more, the amount deferred will earn interest at a rate not less than 4% per year. TOTAL WITHDRAWAL If you are withdrawing all of the Contract Value, we will deduct, if applicable, the Debt, the withdrawal charge, the Market Value Charge and the administration fee from the amount otherwise payable. PARTIAL WITHDRAWAL If you are withdrawing part of the Contract Value, you should specify the amount that should be withdrawn from each Investment Option of the Contract. If there are multiple Investment Accounts under a fixed Investment Option, the requested amount from that Investment Option must be withdrawn from those Investment Accounts on a first-in-first-out basis. If you do not specify, the requested amount will be withdrawn in the following order: a) from the variable Investment Accounts, on a pro rata basis, b) 1-year Investment Accounts, c) 3-year Investment Accounts, and d) 6-year Investment Accounts. We will deduct the withdrawal charge and the Market Value Charge, if applicable, from the Contract Value remaining after payment of the requested amount. WITHDRAWAL CHARGE If a withdrawal is made from the Contract before the Maturity Date, a withdrawal charge (contingent deferred sales charge) may be assessed against Purchase Payments that have been in your Contract for less than 6 years. No withdrawal charge will apply to Purchase Payments being withdrawn that have been in the Contract for 6 or more years. The amount of the withdrawal charge and when it is assessed is discussed below: 1. An amount can be withdrawn without withdrawal charges. This amount is defined as the greater of: a) the excess of the Contract Value on the date of withdrawal over the unliquidated Purchase Payments, or b) after the first Contract Year, 10% of total Purchase Payments minus 100% of all prior partial withdrawals, in that contract year. The amount withdrawn without withdrawal charges will be applied to your requested withdrawal in the following order: 12 15 a) withdrawals from the variable Investment Accounts, b) withdrawals from your 1-year Investment Accounts, c) withdrawals from your 3-year Investment Accounts, and d) withdrawals from your 6-year Investment Accounts. 2. Withdrawals in excess of the amount available without withdrawal charges as defined in (1) above, may be subject to withdrawal charges. A withdrawal charge will be assessed against Purchase Payments liquidated that have been in the Contract for less than 6 years. Purchase Payments will be liquidated on a first-in-first-out basis. We will liquidate Purchase Payments in the order such Purchase Payments were made: the oldest unliquidated Purchase Payment first, the next Purchase Payment second, etc...until all Purchase Payments have been liquidated. 3. Any Purchase Payments liquidated are subject to a withdrawal charge based on the length of time the Purchase Payment has been in this Contract. The withdrawal charge is determined by multiplying the amount of the Purchase Payment being liquidated by the applicable withdrawal charge percentage obtained from the table below. Number of Complete Years Purchase Payment has been Withdrawal Charge in Contract Percentage ------------------------- ----------------- 0 6% 1 6 2 5 3 4 4 3 5 2 6+ The total withdrawal charge will be the sum of the withdrawal charges for the Purchase Payments being liquidated. 4. The withdrawal charge is deducted from the Contract Value remaining after you are paid the amount requested, except in the case of a complete withdrawal when it is deducted from the amount otherwise payable. In the case of a partial withdrawal, the amount requested from an Investment Account may not exceed the value of that Investment Account less any applicable withdrawal charge and/or Market Value Charge, if applicable. 5. In no event will the aggregate withdrawal charge be greater than 6% of the total Purchase Payments made. FREQUENCY AND AMOUNT OF You may make as many partial withdrawals as you PARTIAL WITHDRAWALS wish. Any withdrawal from an Investment Account of the Contract must be at least $300 or the entire balance of the Investment Account, if less. If after the withdrawal, the amount remaining in the Investment Account is less than $100, then we will consider the withdrawal request to be a request for withdrawal of the entire amount held in the Investment Account. If a partial withdrawal would reduce the Contract Value to less than $300, then we will treat the partial withdrawal request as a total withdrawal of the Contract Value. PART 11 CHARGES AND DEDUCTIONS - -------------------------------------------------------------------------------- MORTALITY AND EXPENSE Amounts invested in a variable Investment Option RISK CHARGE are subject to a mortality and expense charge to compensate us for assuming the mortality and expense risks. We deduct from each Sub-Account a charge each Valuation Period at an annual rate of 1.25% (0.8% for mortality risk and 0.45% for expense risk). There are no mortality and expense risk charges associated with fixed Investment Options. ADMINISTRATION FEES To compensate us for assuming certain administrative expenses we charge administration fees equal to $30 per year plus we deduct from each Sub-Account a charge each Valuation Period at an annual rate of 0.15%. The 0.15% administration fee does not apply to the fixed Investment Option. Prior to the Maturity Date, the $30 administrative fee is deducted on each 13 16 Contract Anniversary. It is withdrawn from each Investment Option in the same proportion that the value of the Investment Accounts of each Investment Option bears to the Contract Value. If the Contract Value is totally withdrawn on any date other than the Contract Anniversary, we will deduct the total amount of the $30 administration fee from the amount paid. During the annuity period, the $30 administration fee is deducted on a pro rata basis from each annuity payment. The 0.15% administration fee is added to the mortality and expense risk charge of 1.25% and is reflected in the net investment factor used to determine the value of Accumulation Units and Annuity Units for the variable portion of the Contract. TAXES We reserve the right to charge certain taxes against your Purchase Payments, Contract Value, or annuity payments, as appropriate. Such taxes may include any premium taxes or other taxes levied by any government entity which we, in our sole discretion, determine have resulted from the establishment or maintenance of the Variable Account, or from the receipt by us of Purchase Payments, or from the issuance of this Contract, or from the commencement or continuance of annuity payments under this Contract. PART 12 PAYMENT OF CONTRACT BENEFITS - -------------------------------------------------------------------------------- GENERAL Benefits payable under this Contract may be applied in accordance with one or more of the Annuity Options described below. ALTERNATE ANNUITY OPTIONS Instead of settlement in accordance with the Annuity Options described below, you may choose an alternate form of settlement acceptable to us. DESCRIPTION OF ANNUITY Option 1: Life Annuity OPTIONS (a) Life Non-Refund. We will make payments during the lifetime of the Annuitant. No payments are due after the death of the Annuitant. (b) Life 10-Year Certain. We will make payments for 10 years and after that during the lifetime of the Annuitant. No payments are due after the death of the Annuitant or, if later, the end of the 10-year period certain. Option 2: Joint and Survivor Life Annuity (a) Joint and Survivor Non-Refund. We will make payments during the joint lifetime of the Annuitant and Co-Annuitant. Payments will then continue during the remaining lifetime of the survivor. No payments are due after the death of the last survivor of the Annuitant and Co-Annuitant. (b) Joint and Survivor with 10-Year Certain. We will make payments for 10 years and after that during the joint lifetime of the Annuitant and Co-Annuitant. Payments will then continue during the remaining lifetime of the survivor. No payments are due after the death of the survivor of the Annuitant and Co-Annuitant or, if later, the end of the 10-year period certain. ANNUITY PAYMENT RATES The annuity payment rates on the attached tables show, that for each $1,000 applied, the dollar amount of both (a) the first monthly variable annuity payment based on the assumed interest rate of 4% and (b) the monthly fixed annuity payment, when this payment is based on the minimum guaranteed interest rate of 4% per year. The annuity payment rates for payments made on a less frequent basis (quarterly, semiannual or annual) will be quoted by us upon request. The annuity payment rates are based on the 1983 Table A projected at Scale G with interest at the rate of 4% per annum and assume births in year 1942. The amount of each annuity payment will depend upon the sex and adjusted age of the Annuitant, the Co-Annuitant, if any, or other payee. The adjusted age is determined from the actual age nearest birthday at the time 14 17 the first monthly annuity payment is due, as follows:
Calendar Year of Birth and Adjustment to Actual Age -------------------------- ------------------------ 1899 - 1905 +6 1906 - 1911 +5 1912 - 1918 +4 1919 - 1925 +3 1926 - 1932 +2 1933 - 1938 +1 1939 - 1945 0 1946 - 1951 -1 1952 - 1958 -2 1959 - 1965 -3 1966 - 1972 -4 1973 - 1979 -5 1980 + -6
The dollar amount of annuity payment for any age or combination of ages not shown following or for any other form of Annuity Option agreed to by us will be quoted on request. 15 18 AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT PER $1000 OF CONTRACT VALUE OPTION 1: LIFE ANNUITY
Option 1(A): Non-Refund Option 1(B): 10-Year Certain - -------------------------------------------------------------------------------- Adjusted Adjusted Age of Age of Annuitant Male Female Annuitant Male Female - -------------------------------------------------------------------------------- 55 4.83 4.44 55 4.78 4.41 60 5.24 4.74 60 5.15 4.70 65 5.79 5.15 65 5.62 5.08 70 6.35 5.70 70 6.21 5.58 75 7.51 6.49 75 6.89 6.21 80 8.81 7.56 80 7.65 6.98 85 10.57 9.06 85 8.40 7.80 - --------------------------------------------------------------------------------
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY Option 2(A): Non-Refund - --------------------------------------------------------------------------------
AGE OF CO-ANNUITANT Adjusted Age of 10 Years 5 Years Same 5 Years 10 Years Annuitant Younger Younger Age Older Older - -------------------------------------------------------------------------------- 55 3.87 3.99 4.13 4.27 4.41 60 4.02 4.18 4.36 4.55 4.73 65 4.21 4.43 4.67 4.92 5.16 70 4.47 4.76 5.08 5.43 5.75 75 4.80 5.20 5.65 6.11 6.54 80 5.26 5.80 6.41 7.04 7.60 85 5.89 6.63 7.47 8.29 8.97 - --------------------------------------------------------------------------------
Option 2(B): 10-Year Certain - --------------------------------------------------------------------------------
AGE OF CO-ANNUITANT Adjusted Age of 10 Years 5 Years Same 5 Years 10 Years Annuitant Younger Younger Age Older Older - -------------------------------------------------------------------------------- 55 3.87 3.99 4.13 4.27 4.41 60 4.02 4.18 4.36 4.55 4.73 65 4.21 4.43 4.66 4.91 5.15 70 4.46 4.75 5.07 5.40 5.70 75 4.80 5.18 5.61 6.03 6.39 80 5.24 5.75 6.30 6.81 7.20 85 5.82 6.47 7.13 7.68 8.06 - --------------------------------------------------------------------------------
Monthly installments for ages not shown will be furnished on request. 16 19 - -------------------------------------------------------------------------------- THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK - -------------------------------------------------------------------------------- 20 Manulife Financial and the block design are registered service marks of The Manufacturers Life Insurance Company and are used by it and its subsidiaries. EX-99.(5) 8 SPECIMEN APPLICATION FOR FLEXIBLE PURCHASE PAYMENT 1 ==================================================================================================================================== Flexible Payment Deferred Combination Fixed and Variable Annuity Application. Payment (or original of exchange/transfer request) must accompany Application. Please make check payable to The Manufacturers Life Insurance Company of New York (the "Company") and address to: International Corporate Center at Rye, 555 Theodore Fremd Avenue, Suite C-209, Rye, New York 10580. ==================================================================================================================================== 1. OWNERS (Applicants) CO-OWNER (OPTIONAL) Name* Name* - ---------------------------------------------------------------- ---------------------------------------------------------------- First Middle Last First Middle Last Address _____ _____ _____ - ---------------------------------------------------------------- Sex [ ] M [ ] F Date of Birth | | | | Street |_____|_____|_____| Month Day Year - ---------------------------------------------------------------- __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ City State Zip | | | | | | | | | | | | | | | | | | | | _____ _____ _____ |__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| Sex [ ] M [ ] F Date of Birth | | | | Social Security Number Tax ID Number |_____|_____|_____| Month Day Year =============================================================== Daytime Phone Number: ( ) _____________________________ SUCCESSOR OWNER* (Optional) __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ | | | | | | | | | | | | | | | | | | | | Name* |__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| ---------------------------------------------------------------- Social Security Number Tax ID Number First Middle Last _____ _____ _____ Client Brokerage Acct. # (If applicable):__________________ Sex [ ] M [ ] F Date of Birth | | | | |_____|_____|_____| - ---------------------------------------------------------------- Month Day Year ANNUITANTS (If different from Owner) __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ | | | | | | | | | | | | | | | | | | | | Name* |__|__|__|__|__|__|__|__|__| or |__|__|__|__|__|__|__|__|__| - ---------------------------------------------------------------- Social Security Number Tax ID Number First Middle Last Address - ---------------------------------------------------------------- ---------------------------------------------------------------- Street 2. INVESTMENT ALLOCATION ---------------------------------------------------------------- - ---------------------------------------------------------------- City State Zip Allocate payment with application of $____________ as indicated _____ _____ _____ below. (must total 100%): Sex [ ] M [ ] F Date of Birth | | | | |_____|_____|_____| ____ % Manufacturers Adviser Pac Rim Emerging Mkts (008) Month Day Year __ __ __ __ __ __ __ __ __ ____ % T. Rowe Price Science & Technology (016) | | | | | | | | | | |__|__|__|__|__|__|__|__|__| ____ % Founders Int'l Small Cap (006) Social Security Number ____ % Warburg Pincus Emerging Growth (020) - ---------------------------------------------------------------- CO-ANNUITANT (OPTIONAL) ____ % Pilgrim Baxter Growth (022) Name* ____ % Fred Alger Small/Mid Cap (011) - ---------------------------------------------------------------- First Middle Last ____ % Rowe Price-Fleming Int'l Stock (024) _____ _____ _____ Sex [ ] M [ ] F Date of Birth | | | | ____ % Founders Worldwide Growth (026) |_____|_____|_____| Month Day Year ____ % Morgan Stanley Global Equity (009) __ __ __ __ __ __ __ __ __ | | | | | | | | | | ____ % Rosenberg Small Company Value (119) |__|__|__|__|__|__|__|__|__| Social Security Number ____ % Fidelity Equity (001) - ---------------------------------------------------------------- ____ % Founders Growth (005) BENEFICIARIES (Enclose signed letter if more information is required.) ____ % Manufacturers Adviser Quant Equity (065) Name* ____ % T. Rowe Price Blue Chip Growth (012) - --------------------------------------------------------------- First Middle Last Relationship ____ % Manufacturers Adviser Real Estate Securities (068) _____ _____ _____ __ __ __ __ __ __ __ __ __ Date of Birth | | | | | | | | | | | | | | ____ % Miller Anderson Value (066) |_____|_____|_____| |__|__|__|__|__|__|__|__|__| Month Day Year Social Security Number ____ % J.P. Morgan Int'l Growth & Income (013) Name* ____ % Wellington Management Growth & Income (017) - --------------------------------------------------------------- First Middle Last Relationship ____ % T. Rowe Price Equity-Income (007) _____ _____ _____ __ __ __ __ __ __ __ __ __ Date of Birth | | | | | | | | | | | | | | ____ % Founders Balanced (071) |_____|_____|_____| |__|__|__|__|__|__|__|__|__| Month Day Year Social Security Number ____ % Fidelity Aggr Asset Alloc (004) CONTINGENT BENEFICIARY ____ % Miller Anderson High Yield (076) Name* ____ % Fidelity Mod Asset Alloc (003) - --------------------------------------------------------------- First Middle Last Relationship ____ % Fidelity Cons Asset Alloc (002) _____ _____ _____ __ __ __ __ __ __ __ __ __ Date of Birth | | | | | | | | | | | | | | ____ % Salomon Brothers Strategic Bond (015) |_____|_____|_____| |__|__|__|__|__|__|__|__|__| Month Day Year Social Security Number ____ % Oechsle Global Gov't Bond (010) - ---------------------------------------------------------------- ____ % Manufacturers Adviser Capital Growth Bond (080) REMARKS ____ % Wellington Management Inv Quality Bond (018) ____ % Salomon Brothers U.S. Gov't Securities (014) ____ % Manufacturers Adviser Money Market (019) FIXED ACCOUNTS ____ % 1 Yr (028)** ____ % 3 Yr (029) ____ % 6 Yr (030) LIFESTYLE PORTFOLIOS ____ % Cons 280 (179) ____ % Mod 460 (180) ____ % Bal 640 (181) ____ % Growth 820 (182) ____ % Aggr 1000 (183) - ------------------------------------------------------------------------------------------------------------------------------------ APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
2 - ------------------------------------------------------------------------------------------------------------------------------------ 3. PLAN SPECIFICS - ------------------------------------------------------------------------------------------------------------------------------------ TYPE OF PLAN (Must be completed) [ ] Non-Qualified or [ ] IRA Rollover [ ] IRA Transfer [ ] IRA Tax Year____________ [ ] Profit Sharing [ ] 401(k) [ ] SEP IRA Tax Year_________ [ ] Money Purchase [ ] Keogh (HR-10) [ ] 403(b) Check if ERISA [ ] [ ] Defined Benefit [ ] Other Qualified _________ - ------------------------------------------------------------------------------------------------------------------------------------ Will the purchase of this Annuity replace or change any other insurance or annuity? [ ] No [ ] Yes (If "Yes," state company and contract number in Remarks, and attach replacement forms.) If 1035 exchange, or any other transfer of assets, attach original of exchange form or letter. - ------------------------------------------------------------------------------------------------------------------------------------ Has Annuitant or applicant(s) any other annuities or insurance with the Company? [ ] No [ ] Yes (If "Yes," list contract number in Remarks.) - ------------------------------------------------------------------------------------------------------------------------------------ Maturity Date _______________ (mm/yy). Default is the Annuitant's 90th birthday. - ------------------------------------------------------------------------------------------------------------------------------------ 4. SIGNATURES (Irrevocable Beneficiary, if designated, must also sign application.) - ------------------------------------------------------------------------------------------------------------------------------------ STATEMENT OF APPLICANT: It is hereby agreed that the Contract applied for shall not take effect until the later of: (1) the issuance of the Contract, or (2) receipt by the Company at its Annuity Service Office of the first payment required under the Contract. The foregoing information is true and complete to the best of the Applicant's knowledge and belief and is correctly recorded. The Proposed Owner agrees to be bound by the representations herein and acknowledges the receipt of an effective Prospectus describing the Contract applied for. The Contract applied for is suitable for my/our insurance investment objectives, financial situation and needs. When utilizing Check Plus or the Systematic Withdrawal Program, I/we agree to hold the Company harmless if any debit/transfer is erroneously received by the bank indicated on my voided check, or is not honored upon presentation, and any accumulation units may be canceled, due to such electronic debits/transfers. Irrevocable Beneficiary must authorize participation by signing below. I UNDERSTAND THAT ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THE CONTRACT APPLIED FOR, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. - ------------------------------------------------------------------------------------------------------------------------------------ Signed in (State) Date Signed Signature of Owner/Applicant Signature of Co-Owner - ------------------------------------------------------------------------------------------------------------------------------------ Signature of Annuitant Signature of Co-Annuitant Signature of Irrevocable Beneficiary (if different from Owner) (if different from Owner) (if designated) STATEMENT OF AGENT: Will this contract replace or change any existing life insurance or annuity in this or any other company? [ ] Yes [ ] No If yes, please explain under Remarks. I certify (1) the Applicant signed this Application in my presence; and (2) I am authorized and qualified to discuss the Contract herein applied for. - ------------------------------------------------------------------------------------------------------------------------------------ Signature of Agent Print Full Name Name of Firm - ------------------------------------------------------------------------------------------------------------------------------------ Agent Number Agent Phone Number State License ID Number ==================================================================================================================================== Broker/Dealer Use Only (Optional) Plan T [ ] Plan NT [ ] (If left blank, Plan NT will be selected.) - ------------------------------------------------------------------------------------------------------------------------------------ 5. OTHER - ------------------------------------------------------------------------------------------------------------------------------------ APP-VEN-NY-9 2 9/97
3 ==================================================================================================================================== SERVICE OPTIONS [X] Indicate each option you wish to elect. ==================================================================================================================================== [ ] GUARANTEE PLUS PROGRAM (Minimum Payment $5,000) The Company will allocate a portion of the payment with this application to the 6-year Fixed Account, such that, at the end of the 6-year period, the account will have grown to an amount at least equal to the total payment. The remaining balance will be allocated proportionately according to the investment selections on the application, which should total 100% excluding the amount allocated to the 6-year Fixed Account. ==================================================================================================================================== [ ] CHECK PLUS - AUTOMATIC PURCHASE* I authorize the Company to collect $________ (minimum $30) starting the month of _____________ by initiating electronic debit entries to my bank account with the following frequency: [ ] Monthly: [ ] 5th or [ ] 20th [ ] Quarterly (20th of January, April, July and October). When utilizing Check Plus, I agree that if any debit/transfer is erroneously received by the bank indicated on the enclosed check, or is not honored upon presentation, any accumulation units may be canceled, and I agree to hold the Company harmless from any loss due to such electronic debits/transfers. (PLEASE ATTACH A VOIDED CHECK/WITHDRAWAL SLIP.) ==================================================================================================================================== [ ] DOLLAR COST AVERAGING* (Minimum Payment $6,000) I authorize the Company to transfer an amount (minimum $100) each month as indicated below. Transfers are available from all variable and the one-year fixed investment options. A maximum of 10% from the one-year fixed investment option may be transferred monthly. Please make first transfer on _____/_____/_____ (mm/dd/yy). Source Fund Destination Fund Amount _______________________________ _______________________________ $____________________________ _______________________________ _______________________________ $____________________________ _______________________________ _______________________________ $____________________________ _______________________________ _______________________________ $____________________________ _______________________________ _______________________________ $____________________________ ==================================================================================================================================== [ ] SYSTEMATIC WITHDRAWAL PLAN* (Minimum Payment $12,000) I authorize withdrawals (minimum $100) from my Contract Value to commence as indicated below. A maximum of 10% of payments may be withdrawn annually. When utilizing the Systematic Withdrawal Plan, I agree that if any debit/transfer is erroneously received by the bank indicated on the enclosed voided check, or is not honored upon presentation, any accumulation units may be canceled, and I agree to hold the Company harmless from any loss due to such electronic debits/transfers. From: ___________________________________________ $__________________________ From: ___________________________________________ $__________________________ From: ___________________________________________ $__________________________ From: ___________________________________________ $__________________________ From: ___________________________________________ $__________________________ Please indicate frequency: [ ] Monthly or [ ] Quarterly (January, April, July and October) Day of Withdrawal [ ] 7th [ ] 16th or [ ] 26th Please [ ] Withhold [ ] Do not withhold Federal Income Taxes [ ] I wish to utilize Electronic Funds Transfer in the processing of my Systematic Withdrawal Plan. PLEASE ATTACH A VOIDED CHECK Or, if different from owner, make check payable to: - ------------------------------------------------------------------------------------------------------------------------------------ First Middle Last - ------------------------------------------------------------------------------------------------------------------------------------ Street City State Zip (Please allow 7 business days for receipt of check.) - ------------------------------------------------------------------------------------------------------------------------------------ APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
4 ==================================================================================================================================== SERVICE OPTIONS [X] Indicate each option you wish to elect. ==================================================================================================================================== [ ] AUTOMATIC REBALANCING If marked, the policyholder's contract value, excluding amounts in the fixed account investment options, will be automatically rebalanced to maintain the rebalancing percentage levels in the variable portfolios as selected below, based on the current total value of the eligible portfolios on the day of rebalancing. You may change the rebalancing percentages or terminate your participation in the program by providing the Manufacturers Life Insurance Company of New York with a completed Automatic Rebalancing Authorization form. If a policyholder elects to participate in Automatic Rebalancing, the total value of the variable portfolios must be included in the program. Therefore, subsequent payments received and applied to portfolios in percentages different from the current rebalancing allocation will be rebalanced at the next date of rebalancing unless the subsequent payments are allocated to the fixed account investment options. Rebalancing will occur on the 25th of the month (or next business day), please indicate frequency: [ ] Quarterly [ ] Semi-Annually (June & December) [ ] Annually (December) ASSET ALLOCATIONS (must total 100%): ____ % Manufacturers Adviser Pac Rim Emerging Mkts (008) ____ % Wellington Management Growth & Income (017) ____ % T. Rowe Price Science & Technology (016) ____ % T. Rowe Price Equity-Income (007) ____ % Founders Int'l Small Cap (006) ____ % Founders Balanced (071) ____ % Warburg Pincus Emerging Growth (020) ____ % Fidelity Aggr Asset Alloc (004) ____ % Pilgrim Baxter Growth (022) ____ % Miller Anderson High Yield (076) ____ % Fred Alger Small/Mid Cap (011) ____ % Fidelity Mod Asset Alloc (003) ____ % Rowe Price-Fleming Int'l Stock (024) ____ % Fidelity Cons Asset Alloc (002) ____ % Founders Worldwide Growth (026) ____ % Salomon Brothers Strategic Bond (015) ____ % Morgan Stanley Global Equity (009) ____ % Oechsle Global Gov't Bond (010) ____ % Rosenberg Small Company Value (119) ____ % Manufacturers Adviser Capital Growth Bond (080) ____ % Fidelity Equity (001) ____ % Wellington Management Inv Quality Bond (018) ____ % Founders Growth (005) ____ % Salomon Brothers U.S. Gov't Securities (014) ____ % Manufacturers Adviser Quant Equity (065) ____ % Manufacturers Adviser Money Market (019) ____ % T. Rowe Price Blue Chip Growth (012) LIFESTYLE PORTFOLIOS ____ % Manufacturers Adviser Real Estate Securities (068) ____ % Cons 280 (179) ____ % Mod 460 (180) ____ % Miller Anderson Value (066) ____ % Bal 640 (181) ____ % Growth 820 (182) ____ % J.P. Morgan Int'l Growth & Income (013) ____ % Aggr 1000 (183) ==================================================================================================================================== AUTHORIZATION ==================================================================================================================================== Owner - ------------------------------------------------------------------------------------------------------------------------------------ Please Print First Name Middle Last Owner Signature Date - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ APP-VEN-NY-9 *Unless subsequently changed in accordance with terms of Contract issued. 9/97
EX-99.(6)(A)(I) 9 DECLARATION OF INTENTION AND CHARTER 1 DECLARATION OF INTENTION AND CHARTER OF FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY We, the undersigned, all being natural persons of the age of eighteen years or over, and at least a majority of us being citizens and residents of the United States, and at least three of us being residents of the State of New York, do hereby declare our intention to form a stock life insurance corporation for the purpose of doing the kinds of insurance business authorized by Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of the State of New York, and for that purpose do adopt the following charter: 2 CHARTER OF FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY FIRST: The name of the corporation shall be First North American Life Assurance Company (hereinafter referred to as the "Corporation"). SECOND: The principal office of the Corporation shall be located in the County of Westchester, State of New York. THIRD: The kinds of insurance to be transacted by the Corporation shall be those defined in Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of the State of New York as follows: (1) "Life insurance," means every insurance upon the lives of human beings and every insurance appertaining thereto, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, or provide a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of this chapter. (2) "Annuities," means all agreements to make periodical payments for a period certain or where the making or continuance of all or of some of a series of such payments, or the amount of any such payment, depends upon the continuance of human life, except payments made under the authority of paragraph on hereof. Amounts paid the -2- 3 insurer to provide annuities and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of this chapter. (3) "Accident and health insurance," means (I) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancelable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date. and such other kind or kinds of insurance or other business or businesses as a stock life insurance company now is or hereafter may be permitted to transact under the Insurance Law of the State of New York. FOURTH: The manner in which the corporate powers of the Corporation shall be exercised are through a Board of Directors and through such committees, officers and agents as the Board of Directors shall empower. FIFTH: The Board of Directors of the Corporation shall consist of the number of directors as may from time to time be determined in accordance with the By-Laws of the Corporation, but shall not be less than thirteen nor more than eighteen in number. However, the initial number of directors shall be thirteen. In -3- 4 the event the number of directors duly elected and serving shall be less than thirteen, the Corporation shall not for that reason be dissolved, but the vacancy or vacancies shall be filled as provided in paragraph Sixth. SIXTH: (a) The directors of the Corporation shall be elected at each annual meeting of shareholders which shall be held on the second Friday in March of each year, commencing in the year 1991, by the majority vote of those present and voting, a quorum being present. At each annual meeting of shareholders, each shareholder of record on the books of the Corporation on the date of record fixed by the Board of Directors in accordance with the By-Laws of the Corporation shall be entitled to one vote, in person or by proxy, for each share of stock so registered in his name. The holders of a majority of the shares of stock entitled to vote at such meeting shall constitute a quorum at such meeting. Each director so elected shall hold office until the next annual meeting of shareholders and until a successor is duly elected and qualified. If any vacancy shall occur in the Board of Directors by reason of death, resignation, removal or otherwise, the remaining member of the Board of Directors at a meeting called for that purpose on such notice as may be provided for in the By-Laws of the Corporation, or at any regular meeting thereof, may elect a director so elected shall hold office until the next annual meeting of shareholders and until a successor is duly elected and qualified. -4- 5 (b) The officers of the Corporation shall be President, a Secretary and a Treasurer, and shall be appointed or elected by the Board of Directors, in addition to such other officers as may be appointed or elected by the Board of Directors in accordance with the By-Laws of the Corporation, as soon as practicable after the annual election of directors. Each officer so elected shall hold office until a successor is duly appointed or elected and qualified. If any vacancy shall occur in any office or the Corporation by reason of death, resignation, removal or otherwise, the Board of Directors at a meeting called for that purpose on such notice as may be provided for in the By-Laws of the Corporation, or at any regular meeting thereof, may appoint or elect an officer or officers to fill the vacancy or vacancies, and each officer so appointed or elected shall hold office for the term for which he has been appointed or elected and until a successor is duly appointed or elected and has qualified. (C) Each director shall be at least eighteen years of age, and at all times a majority of the directors shall be citizens and residents of the United States, and not less than three of the directors shall be residents of the State of New York. A director shall not be required to hold any shares of stock of the Corporation. SEVENTH: The names and post office residence addresses of the directors who shall serve until the first annual meeting of the shareholders of the Corporation are: -5- 6 Name Address ---- ------- William Joseph Atherton 8 Hastings Lane Medford, Massachusetts Bruce Avedon 6601 Hitching Post Lane Cincinnati, Ohio Kenneth Henry Conrad 40 Pond Circle Jamaica Plain, Massachusetts John David DesPrez 23 Bristol Road Wellesley, Massachusetts Ruth Ann Fleming 145 Western Drive Short Hills, New Jersey Robert C. Jones Angel Hill Road Chatham, New York Richard Charles Hirtle 156 Pleasant Street Whitman, Massachusetts Peter Seaton Hutchison 63 Rumsey Road Toronto, Ontario Canada Brian Leslie Moore 28 Heathview Avenue Willowdale, Ontario Canada Robert C. Perez 50 West 70th Street New York, New York James K. Robinson 7 Summit Drive Rochester, New York John Gysbertus Vrysen 19 Sweetland Farm Road Norfolk, Massachusetts Howell Douglas Wood 218 Sleepy Hollow Road New Canaan, Connecticut EIGHTH: The duration of the corporate existence of the Corporation shall be perpetual. NINTH: The amount of the capital of the Corporation shall be two million dollars ($2,000,000), and shall consist of -6- 7 two million (2,000,000) shares of capital stock having a par value of one dollar ($1.00) per share. TENTH: No director of the Corporation shall be personally liable to the Corporation or any of its shareholders for damages for any breach of duty as a director; provided, however, that the foregoing provision shall not eliminate or limit (i) the liability of a director if a judgment or other final adjudication adverse to such director establishes that his or her such acts or omissions were acts or omissions (a) which he or she knew or reasonably should have known violated the New York Insurance Law or (b) which violated a specific standard of care imposed on directors directly, and not by reference, by a provision of the New York Insurance Law (or any regulations promulgated thereunder) or (c) which constituted a knowing violation of any other law, or establishes that the director personally gained in fact a financial profit or other advantage to which the director for any act or omission prior to the adoption of this Article by the shareholders of the Corporation. Any repeal or modification of this Article by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. -7- 8 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 30th day of January, 1992. /s/ Richard C. Hirtle ------------------------------------ Richard C. Hirtle /s/ Kenneth H. Conrad ------------------------------------ Kenneth H. Conrad /s/ John G. Vrysen ------------------------------------ John G. Vrysen /s/ William J. Atherton ------------------------------------ William J. Atherton ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -8- 9 STATE OF MASSACHUSETTS ) : SS.: COUNTY OF SUFFOLK ) On this 30th day of January , 1992, before me personally came RICHARD HIRTLE to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Valerie Lapaglia ------------------------------------ Notary Public STATE OF MASSACHUSETTS ) : SS.: COUNTY OF SUFFOLK ) On this 30th day of January , 1992, before me personally came KENNETH CONRAD to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Valerie Lapaglia ------------------------------------ Notary Public -9- 10 STATE OF MASSACHUSETTS ) : SS.: COUNTY OF SUFFOLK ) On this 30th day of January , 1992, before me personally came JOHN G. VRYSEN to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Valerie Lapaglia ------------------------------------ Notary Public STATE OF MASSACHUSETTS ) : SS.: COUNTY OF SUFFOLK ) On this 30th day of January , 1992, before me personally came WILLIAM ATHERTON to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Valerie Lapaglia ------------------------------------ Notary Public -10- 11 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 30th day of January, 1992. ------------------------------------ /s/ Carlos B. Barbosa ------------------------------------ Carlos B. Barbosa ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -11- 12 PROVINCE OF ONTARIO ) : SS.: CITY OF NORTH YORK ) On this 28th day of January , 1992, before me personally came CARLOS BARBOSA to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ ------------------------------------ Notary Public STATE OF ____________ ) : SS.: COUNTY OF____________ ) On this ____ day of ___________, 19 __ , before me personally came _______________to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. ------------------------------------ Notary Public -12- 13 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 27th day of January, 1992. /s/ Lynn Silberman ------------------------------------ Lynn Silberman ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -13- 14 STATE OF NEW YORK ) : SS.: COUNTY OF RICHMOND ) On this 27th day of January , 1992, before me personally came LYNN SILBERMAN to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Kathy Slaven ------------------------------------ Notary Public STATE OF ____________) : SS.: COUNTY OF ___________) On this ____ day of ______________, 19__, before me personally came ______________ to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. ------------------------------------ Notary Public -14- 15 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 30th day of January, 1992. /s/ Ruth Ann Fleming ------------------------------------ Ruth Ann Fleming ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -15- 16 STATE OF MASSACHUSETTS ) : SS.: COUNTY OF SUFFOLK ) On this 30th day of January , 1992, before me personally came RUTH ANN FLEMING to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Valerie Lapaglia ------------------------------------ Notary Public STATE OF ________________) : SS.: COUNTY OF _______________) On this _____ day of ___________, 19 __, before me personally came ________________________ to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. ------------------------------------ Notary Public -16- 17 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 30th day of January, 1992. /s/ Brian L. Moore ------------------------------------ Brian L. Moore ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -17- 18 CITY OF NORTH YORK ) : SS.: PROVINCE OF ONTARIO ) On this 30th day of January , 1992, before me personally came BRIAN L. MOORE to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ ------------------------------------ Notary Public STATE OF ________________) : SS.: COUNTY OF _______________) On this _____ day of ___________, 19 __, before me personally came ________________________ to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. ------------------------------------ Notary Public -18- 19 IN WITNESS WHEREOF, the undersigned have hereunto subscribed their names as of this 30th day of January, 1992. /s/ Donald D. Gabay ------------------------------------ Donald D. Gabay /s/ Stewart H. Walker ------------------------------------ Stewart H. Walker /s/ David M. Kaston ------------------------------------ David M. Kaston /s/ Charles S. Berlin ------------------------------------ Charles S. Berlin ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------ -19- 20 STATE OF NEW YORK ) : SS.: COUNTY OF NEW YORK ) On this 30th day of January , 1992, before me personally came DONALD D. GABAY to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Deborah T. Cassarino ------------------------------------ Notary Public STATE OF NEW YORK ) : SS.: COUNTY OF NEW YORK ) On this 30th day of January , 1992, before me personally came STEWART H. WALKER to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Deborah T. Cassarino ------------------------------------ Notary Public -20- 21 STATE OF NEW YORK ) : SS.: COUNTY OF NEW YORK ) On this 30th day of January , 1992, before me personally came DAVID KASTON to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Deborah T. Cassarino ------------------------------------ Notary Public STATE OF NEW YORK ) : SS.: COUNTY OF NEW YORK ) On this 30th day of January , 1992, before me personally came CHARLES S. BERLIN to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Deborah T. Cassarino ------------------------------------ Notary Public -21- 22 STATE OF NEW YORK ) : SS.: COUNTY OF NASSAU ) On this 24th day of January , 1992, before me personally came ILANA HANAU to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Merril C. Schapiro ------------------------------------ Notary Public STATE OF ________________) : SS.: COUNTY OF _______________) On this _____ day of ___________, 19 __, before me personally came ________________________ to me personally known and known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. ------------------------------------ Notary Public -22- EX-99.(6)(A)(II) 10 CERTIFICATE OF AMENDMENT OF THE DECLARATION... 1 NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY SECRETARY' S CERTIFICATE I, John D. DesPrez Ill, Secretary of North American Security Life Insurance Company (the "Company") do hereby certify that the following is a true and correct copy of resolutions passed by the Board of Directors of the Company on the 4th day of March 1992, and that the said resolutions are in full force and effect on the date hereof: Pursuant to the authority of Section 141(f) of the General Corporation Law of the State of Delaware, the undersigned, being all of the directors of the Corporation, do take and adopt the following action by their written consent: WHEREAS, North American Security Life Insurance Company (the "Company") desires to establish a subsidiary to be known as First North American Life Assurance Company; it is RESOLVED, that the Company be and it is hereby authorized to establish a subsidiary to be known as First North American Life Assurance Company; and it is FURTHER RESOLVED, that the proper officers of the Company be, and they hereby are, authorized and directed to do all things and execute all instruments and documents necessary or desirable to effect the foregoing. DATED at Boston, Massachusetts as of the 6th day of March, 1992 /s/ John D. DesPrez III -------------------------------- John D. DesPrez Secretary -24- 2 FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY SECRETARY'S CERTIFICATE I, Christina M. Perrino, Secretary of First North Amerian Life Assurance company ("the Company") do hereby certify that the following is a true and correct copy of a resolution passed by the Board of Directors of the Company on the 4th day of March, 1992, and that the said resolutions are in full force and effect on the date hereof: RESOLVED, That the Company give to the Superintendent of Financial Institutions in Canada ("the Superintendent") the Undertaking required by the Superintendent; and that the Undertaking shall be as set forth below; and that the proper officers of the Company be, and they hereby are, authorized and directed to do all thing and take all actions necessary to execute and deliver the Undertaking to the Superintendent. UNDERTAKING FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY First North American Life Assurance Company ("First North American")hereby undertakes that while North American Security Life Insurance Company ("Security Life") holds an investment in the shares of First North American, First North American will 1. Provide the Superintendent with copies of its financial statement, a copy of the annual report that it is required to file with its supervisory authority, and such other information concerning its financial condition and affairs as he may from time to time request; 2. Limit its activities to the transaction of the business of life insurance, personal accident and sickness insurance, together with such other activities as may be necessarily incidental to the transaction of such business. 3. Not make any investment that North American Life Assurance Company of Canada is prohibited from making by section 52 of the Canadian and British Insurance Companies Act; 4. Not acquire or hold, except with the approval of the Superintendent, shares of any corporation incorporated to undertake contracts of life insurance; 5. Not acquire or hold except with the approval of the Superintendent, more than thirty percent of the common shares of any corporation except a real estate corporation -25- 3 DATED at Boston, Massachusetts as of the 6th day of March, 1992. /s/Christina M. Perrino ----------------------------------- Secretary -26- 4 UNDERTAKING FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY First North American Life First North American Life Assurance Company ("First North American") hereby undertakes that while North American Security Life Insurance Company ("Security Life") holds an investment in the shares of First North American, First North American will 1. Provide the Superintendent with copies of its financial statements, a copy of the annual report that it is required to file with its supervisory authority, and such other information concerning its financial condition and affairs as he may from time to time request; 2. Limit its activities to the transaction of the business of life insurance, personal accident and sickness insurance, together with such other activities as may be necessarily incidental to the transaction of such business; 3. Not make any investment that North American Life Assurance Company of Canada is prohibited from making by section 52 of the Canadian and British Insurance Companies Act; 4. Not acquire or hold, except with the approval of the Superintendent, shares of any corporation incorporated to undertake contracts of life insurance; and 5. Not acquire or hold, except with the approval of the Superintendent, more than thirty percent of the common shares of any corporation except a real estate corporation. DATED at Boston, Massachusetts as of the 6th day of, 1992. FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY /s/ John D. DesPrez III ---------------------------------- By: John D. DesPrez III Executive Vice President ---------------------------------- Title -27- 5 FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY DIRECTORS AND OFFICERS William J. Atherton Director; President Bruce Avedon Director Kenneth H. Conrad Director; Vice President Administration James R. Crysdale Associate Treasurer John D. DePrez III Director; Executive Vice President Ruth Ann Fleming Director R. Courtney Jones Director Richard S. Hirtle Director; Vice President & Treasurer Peter S. Hutchinson Director Brian L. Moore Chairman of the Board Sarah A. Murphy Chief Administrative Officer Morton Patrontasch Associate Treasurer Christina M. Perrino Secretary & Counsel Robert C. Perez Director James K. Robinson Director John G. Vrysen Director; Vice President & Actuary H. Douglas Wood Director -28- 6 CERTIFICATE OF AMENDMENT of the DECLARATION OF INTENTION AND CHARTER of FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY Under Section 805 Of The Business Corporation Law and Section 1206 of the Insurance Law The undersigned officers of First North American Life Assurance Company (the "Corporation"), duly organized and existing under the Laws of the State of New York, do hereby certify that: 1. That the name of the Corporation is First North American Life Assurance Company. 2. That the Declaration of Intention and Charter (the "Charter") was filed on February 10, 1992 with the Superintendent of Insurance. 3. That the Charter of the Corporation is hereby amended to change the name of the Corporation by deleting paragraph FIRST in its entirety and inserting the following in lieu thereof: FIRST: The name of the Corporation shall be The Manufacturers Life Insurance Company of New York (hereinafter referred to as the "Corporation"). 4. That the foregoing amendment has been duly authorized by the Board of Directors at their regularly scheduled meeting held May 6, 1997 and by the Sole Stockholder of the Corporation at a Special Meeting held May 6, 1997, in accordance with the provisions of Section 803(a) of the Business Corporation Law of the State of New York. 5. That the foregoing amendment shall be effective at 12:01 a.m. Eastern Standard Time on October 1, 1997. 7 IN WITNESS WHEREOF, First North American Life Assurance Company has caused this Certificate to be executed by Joseph Scott, President and Tracy Kane, Secretary. FIRST NORTH AMERICAN LIFE ASSURANCE COMPANY By /s/ Joseph Scott ---------------------------------------- Joseph Scott, President By /s/ Tracy Kane ---------------------------------------- Tracy Kane, Secretary Commonwealth of Massachusetts ) ) County of Suffolk ) On this 9th day of September, 1997, before me personally came Joseph Scott, President and Tracy Kane, Secretary of First North American Life Assurance Company, the Corporation described in the above executed instrument, and that he/she signed his/her name thereto by order of the Directors of said Corporation. /s/ Kimberly S. Ciccarelli ---------------------------------------- Notary Public Commission Expires November 13, 2003 EX-99.(6)(A)(III) 11 CERTIFICATE OF AMENDMENT OF THE DECLARATION... 1 Exhibit 6a(iii) CERTIFICATE OF AMENDMENT OF THE DECLARATION OF INTENTION AND CHARTER OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW AND SECTION 1206 OF THE INSURANCE LAW The undersigned officers of The Manufacturers Life Insurance Company of New York (the "Corporation"), duly organized and existing under the Laws of the State of New York, do hereby certify that: 1. That the name of the Corporation is The Manufacturers Life Insurance Company of New York, originally formed as First North American Life Assurance Company. 2. That the Declaration of Intention and Charter (the "Charter") was filed on February 10, 1992 with the Superintendent of Insurance and amended on October 1,1997 to change the name of the Corporation. 3. That the Charter of the Corporation is hereby amended to decrease the number of Directors of the Corporation by deleting paragraph FIFTH in its entirety and inserting the following in lieu thereof: FIFTH: The Board of Directors of the Corporation shall consist of the number of Directors as may from time to time be determined in accordance with the By-Laws of the Corporation, but shall not be less than nine nor more than eighteen in number, of which four, but not less than one-third, must not be officers or employees of the Corporation or any entity controlling, controlled by, or under common control with the Corporation and who are not beneficial owners of a controlling interest in the voting stock of the Corporation or any such entity. The number of Directors shall be increased to not less than thirteen within one year following the end of the calendar year in which the Corporation exceeded one and one-half billion dollars in admitted assets. In the event the number of Directors duly elected and serving shall be less than nine, the Corporation shall not for that reason be dissolved, but the vacancy or vacancies shall be filled as provided in paragraph Sixth. 2 4. That the foregoing amendment has been duly authorized by the Board of Directors at their regularly scheduled meeting held August 20, 1997, and by the Sole Stockholder of the Corporation at a Special Meeting held August 20, 1997, in accordance with the provisions of Section 803(a) of the Business Corporation Law of the State of New York. IN WITNESS WHEREOF, The Manufacturers Life Insurance Company of New York has caused this Certificate to be executed by Joseph Scott, President and Tracy Kane, Secretary. THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK By /s/ Joseph Scott ----------------------------------------------- Joseph Scott, President By /s/ Tracy Kane ----------------------------------------------- Tracy Kane, Secretary STATE of Massachusetts ) ) County of Suffolk ) On this 17th day of October, 1997, before me personally came Joseph Scott, President and Tracy Kane, Secretary of The Manufacturers Life Insurance Company of New York, the Corporation described in the above executed instrument, and that he/she signed his/her name thereto by order of the Directors of said Corporation. /s/ Kimberly S. Ciccarelli -------------------------- Notary Public Commission Expires November 13, 2003 EX-99.(6)(B) 12 BY-LAWS OF FIRST NORTH AMERICAN LIFE 1 BY-LAWS OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK ARTICLE I CHARTER ------- SECTION I.1. CHARTER. The name and purpose of the Corporation shall be as set forth in the Charter. These By-Laws, the powers of the Corporation and of its directors and shareholders, and all matters concerning the conduct and regulation of the business and affairs of the Corporation shall be subject to such provisions in regard thereto, if any, as are set forth in the Charter. All references in these By-Laws to the Charter shall mean the Charter as from time to time amended. ARTICLE II OFFICES ------- SECTION II.1. OFFICES. The principal office of the Corporation shall be located in the County of Westchester, State of New York. The Corporation, in addition to its principal office, may also establish and maintain such other offices and places of business, within or without the State of New York, as the Board of Directors may from time to time determine. ARTICLE III SHAREHOLDERS ------------ SECTION III.1. ANNUAL MEETING. The annual meeting of the shareholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the second Friday in March of each year, at 10:00 a.m., or on such other date or at such other time as may be fixed by the Board of Directors and stated in the notice of the meeting. The place of the meeting shall be the principal office of 2 the Corporation, or such other place, within or without the State of New York, as may be fixed by the Board of Directors and stated in the notice of the meeting. SECTION III.2. SPECIAL MEETINGS. A special meeting of the shareholders may be called at any time by the President or the Board of Directors, and shall be called by the President upon the written request of one-third of the shareholders of record entitled to vote, such written request to state the purpose or purposes of the meeting and to be delivered to the President. All special meetings shall be held at the principal office of the Corporation, or at such other place, within or without the State of New York, as may be designated by the President, at a date and time to be fixed by the President, which date shall not be later than thirty days from the date of the receipt of such written request. SECTION III.3. NOTICE OF MEETINGS AND WAIVER. Except as otherwise required by law, a written notice of each meeting of shareholders, whether annual or special, stating the place, date and hour of the meeting, shall be given not less than ten or more than fifty days before the meeting to each shareholder of record entitled to vote at such meeting. No notice of any meeting of shareholders need be given to a shareholder if a written waiver of notice, executed before, during or after the meeting by such shareholder or his attorney thereunto duly authorized, is filed with the records of the meeting, or to any shareholder who shall attend such meeting in person or by proxy otherwise than for the express purpose of objecting, prior to the conclusion of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, or to any shareholder with whom communication is at the time unlawful. SECTION III.4. QUORUM AND ADJOURNMENT. Except as otherwise required by law, the Charter or these By-Laws, at all meetings of shareholders, the holders of a majority of the shares entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. In the absence of a quorum, any officer entitled to 2 3 preside over or act as secretary of such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum be present. At any such adjourned meeting at which a quorum may be present, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days or a new record date is fixed, notice of adjournment of a meeting of shareholders to another time or place shall be given to each shareholder of record entitled to vote at such meeting. SECTION III.5. VOTING. Shareholders entitled to vote shall have one vote for each share of stock, and a proportionate vote for a fractional share of stock, entitled to vote held by them of record according to the records of the Corporation. The Corporation shall not, directly or indirectly, vote any share of its own stock. The vote upon any question shall be by ballot whenever requested by any person entitled to vote but, unless such a request is made, voting may be conducted in any way approved by the meeting. In the absence of a higher standard required by law, the Charter or these By-Laws, any matter properly before a meeting of shareholders shall be decided by a majority of the votes cast hereon. SECTION III.6. PROXIES. Shareholders entitled to vote at a meeting or to express consent or dissent without a meeting may vote either in person or by proxy in writing dated not more than six months before the meeting named therein, which proxy shall be filed with the Secretary or other person responsible to record the proceedings of the meeting before being voted. Unless otherwise specifically limited by their terms, such proxies shall entitle the holders thereof to vote at any adjournment of such meeting but shall not be valid after eleven months from its date, unless the proxy provides for a longer period. The Secretary shall determine the validity of any proxy submitted for use at any meeting. 3 4 SECTION III.7. WAIVER OF IRREGULARITIES. Unless otherwise provided by law, all informalities and irregularities in calls, notices of meetings and in the manner of voting, form of proxy, credentials and methods of ascertaining those present, shall be deemed waived if no objection is made thereto at the meeting. SECTION III.8. ACTION BY WRITTEN CONSENT. So far as permitted by law, any action required or permitted to be taken at any meeting of shareholders may be taken without meeting if a written consent setting forth such action is signed by all the shareholders entitled to vote thereon and such written consent is filed with the records of the Corporation. Written consent thus given shall have the same effect as a unanimous vote of shareholders. ARTICLE IV BOARD OF DIRECTORS ------------------ SECTION IV.1. POWER OF BOARD AND QUALIFICATION OF DIRECTORS. The business of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Charter or these By-Laws directed or required to be exercised or done by the shareholders. Each director shall be at least eighteen years of age. Not less than three of the directors shall be residents of the State of New York, and a majority of the directors shall be citizens and residents of the United States. At least four of the directors shall be persons who are not officers or employees of the Corporation or of any entity controlling, controlled by, or under common control with the Corporation and who are not beneficial owners of a controlling interest in the voting stock of the Corporation or any such entity. A director meeting the qualifications of the immediately preceding sentence is hereinafter referred to as a "Non-Affiliated Director." No director need be a shareholder. 4 5 SECTION IV.2. NUMBER, ELECTION AND TERM OF OFFICE. The Board of Directors shall consist of not less than nine nor more than eighteen directors. The number of directors shall be fixed by majority vote of the entire Board; provided that no decrease in the number of directors shall shorten the term of any incumbent director. Subject to the provisions of Section 4.8 hereof, the directors shall be elected annually by the shareholders entitled to vote at the annual meeting of shareholders, by a majority of votes at such election. Each director, whether elected at an annual meeting or pursuant to Section 4.8 hereof, shall continue in office until the annual meeting of shareholders held next after his or her election and until his or her successor shall have been elected and qualified or until his or her earlier death, resignation or removal in the manner hereinafter provided. No election of directors shall be valid unless a notice of the election shall have been filed with the Superintendent of Insurance of the State of New York at least ten days before the election. SECTION IV.3. REGULAR MEETINGS. A regular meeting of the Board of Directors for the election of officers and for the transaction of such other business as may properly come before the meeting shall be held without notice at the place where the annual meeting of shareholders is held, immediately following such meeting. The Board of Directors by resolution shall provide for the holding of three additional regular meetings, with or without notice, and shall fix the times and places, within or without the State of New York, at which such meetings shall be held. One regular meeting shall be held in each calendar quarter. SECTION IV.4. SPECIAL MEETINGS, NOTICE AND WAIVER. Special meetings of the Board of Directors may be called by the President, and shall be called by the President upon receipt of a written request of not less than three directors. All special meetings shall be held at a date, time and place to be fixed by the President, and the President shall direct the Secretary to give notice of each special meeting to each director by mail at least five days before such meeting 5 6 is to be held or in person or by telephone or telegraph at least two days before such meeting. Such notice shall state the date, time, place and purposes of such meeting. Notice of a meeting need not be given to any director if a written waiver of notice, executed by him or her before, during or after the meeting, is filed with the records of the meeting. SECTION IV.5. QUORUM AND CONFERENCE CALL MEETINGS. A majority of the entire Board of Directors, at least one of whom shall be a Non-Affiliated Director, shall constitute a quorum for the transaction of business. When a quorum is present at any meeting, a majority of the directors present may take any action except as otherwise expressly required by law, the Charter or these By-Laws. In the absence of a quorum, a majority of the directors present at the time and place of any meeting, may adjourn such meeting from time to time until a quorum be present. If by reason of one or more vacancies there is less than the minimum number of directors, the Board of Directors shall have the power to function legally prior to the filling of the vacancy; provided, however, that there shall always be a quorum. Any one or more directors may participate in a regular or special meeting of the Board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. Notwithstanding the foregoing, with respect to at least one of the regular meetings in each calendar year, which meeting shall be designated by the Board of Directors, the quorum requirements set forth in this Section may be met only if the requisite number and category of directors are physically present at the place at which the meeting is held. SECTION IV.6. CHAIRMAN. The Board of Directors may elect, from among its members, a Chairman. The Chairman of the Board, if one is elected, shall preside at all meetings of the Board of Directors and shall have such other powers and duties as may be granted or assigned to him or her from time to time by the Board of Directors. If a Chairman of the Board is 6 7 elected but is absent or unable to preside at meetings of the Board of Directors, or if no Chairman is elected, the President shall preside at such meetings. SECTION IV.7. RESIGNATION AND REMOVAL. Any director may resign at any time by giving written notice of such resignation to either the Board of Directors, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon receipt thereof by the Board of Directors or by the President or Secretary. Any director may be removed either with or without cause at any time by the affirmative vote of the shareholders of record holding a majority of the outstanding shares of the Corporation entitled to vote for the election of directors, given at a meeting of the shareholders called for that purpose, or by the holders of a majority of the outstanding shares entitled to vote for the election of directors without holding a meeting or notice but by merely presenting their majority to the Secretary of the Corporation in writing for the removal of a director or directors without cause. Any director may be removed with cause by a majority of the total number of directors constituting the entire Board of Directors at a meeting of the Board of Directors. SECTION IV.8. VACANCIES. A vacancy in the Board of Directors arising by reason of death, resignation, removal (with or without cause), increase in the number of directors, or otherwise, which may occur between annual meetings of the shareholders of the Corporation may be filled by a majority vote of the remaining directors, though less than a quorum. Any such vacancy may also be filled by the shareholders entitled to vote for the election of directors at any meeting held during the existence of such vacancy. SECTION IV.9. COMPENSATION. The Board of Directors may authorize payment of a retainer fee to one or more of the directors in instances where, in the discretion of the Board, such payment is deemed appropriate. Other than such payments, if any, directors, as such, shall not be compensated for their services but by resolution of the Board of Directors may be paid a fee for 7 8 attendance at each meeting of the Board of Directors or a committee thereof; provided, however, that no director shall be paid a fee, whether by retainer, for attendance, or otherwise, if such director is also a salaried officer of the Corporation. Nothing in these by-laws contained shall prevent any director from serving the Corporation in any other capacity or receiving compensation therefor. SECTION IV.10. ACTION BY WRITTEN CONSENT. So far as permitted by law, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if a written consent setting forth such action is signed by all the directors entitled to vote thereon and such written consent is filed with the records of the Corporation. Written consent thus given shall have the same effect as a unanimous vote of directors. ARTICLE V COMMITTEES OF DIRECTORS ----------------------- SECTION V.1. COMMITTEES. The Board of Directors, by the affirmative vote of the majority of the entire Board, shall appoint from among its members an Audit, Nominating and Evaluation Committee, which shall be comprised solely of Non-Affiliated Directors, an Executive Committee, an Investment Committee and such other committees as it may deem necessary. Each member of each such committee shall continue in office during the pleasure of the Board or until he or she shall cease to be a director. Except to the extent a greater proportion is required by the provisions of this Article V, not less than one-third of the members of each such committee shall consist of Non-Affiliated Directors, at least one of whom shall be present to constitute a quorum for the transaction of business. The presence, at any meeting of a committee, of a majority of its members then in office, at lease one of whom is a Non-Affiliated Director, shall constitute a quorum for the transaction of business. A majority of such quorum may decide any questions that 8 9 may come before such meeting. Any one or more members of a committee may participate in a meeting of such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. So far as permitted by law, any action required or permitted to be taken at any meeting of any committee appointed and established by the Board of Directors may be taken without a meeting if a written consent setting forth such action is signed by all of the members of such committee entitled to vote thereon and such written consent is filed with the records of the Corporation. SECTION V.2. EXECUTIVE COMMITTEE. The Board of Directors shall appoint an Executive Committee consisting of not less than five directors, and may designate as Chairman of the Executive Committee one of the members so appointed. The Chairman of the Executive Committee shall preside at all meetings of the Executive Committee at which he is present. The Executive Committee shall keep a record of its proceedings and shall adopt its own rules of procedure. The Executive Committee shall submit a written report of its activities to the Board of Directors at the next meeting of the Board of Directors. Each director may inspect and review, at any time during normal business hours, the minutes of the meetings of the Executive Committee, and said minutes shall be retained by the Secretary of the Corporation and made available to the Board of Directors at each of its meetings. Except as otherwise provided by law, the Charter or these By-Laws, all the powers of the Board of Directors when not in session, may be vested, to the extent from time to time determined by the Board of Directors, in the Executive Committee. To the extent appropriate to carry out this provision, references in these By-Laws to the Board of Directors shall be read to mean the Executive Committee. The Executive 9 10 Committee may authorize one or more officers, employees or agents of the Corporation to carry out the exercise of its powers. The Executive Committee shall have the power and authority to declare dividends and to authorize the issuance of common stock. The Executive Committee shall not have and may not exercise the following powers: (1) To submit to the shareholders any action which by any applicable statute requires shareholders' approval; (2) To fill any vacancy in the Board of Directors or in any committee thereof; (3) To fix the compensation of any director for serving on the Board or any committee thereof; (4) To amend or repeal these By-Laws, or to adopt new By-Laws; (5) To amend, alter or repeal any resolution of the Board of Directors which by its terms provides that it shall not be amended or repealed. SECTION V.3. AUDIT, NOMINATING AND EVALUATION COMMITTEE. The Board of Directors shall appoint an Audit, Nominating and Evaluation Committee consisting of not less than five directors, and may designate as Chairman of the Audit, Nominating and Evaluation Committee one of the members so appointed. The Audit, Nominating and Evaluation Committee shall consist solely of Non-Affiliated Directors. The Chairman of the Audit, Nominating and Evaluation Committee shall preside at all meetings of the Audit, Nominating and Evaluation Committee at which he or she is present. The Audit, Nominating and Evaluation Committee shall keep a record of its proceedings and shall adopt its own rules of procedure. The Audit, Nominating and Evaluation Committee shall submit a report of its activities to the Board of Directors at the next meeting of the Board of Directors. The Audit, Nominating and Evaluation Committee shall have responsibility for: (1) recommending the selection of independent certified public accountants; (2) reviewing the Corporation's financial condition, the scope and results of 10 11 the independent audit and any internal audit; (3) nominating candidates for director for election by shareholders; and (4) evaluating the performance of officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are principal officers of the Corporation and recommending to the Board of Directors the selection and compensation of such principal officers. The Audit, Nominating and Evaluation Committee shall, to the extent empowered by the Board, have and possess all of the rights and powers of the Board of Directors, between meetings of the Board of Directors, to: (1) meet and discuss with the representative of any firm of certified public accountants, for reviewing the Corporation's financial condition, the scope and results of the independent audit and any internal audit; (2) to nominate candidates for director for election by shareholders; and (3) to evaluate the performance of officers who, pursuant to Section 6.1 of Article VI of these By-Laws, are principal officers of the Corporation and to recommend to the Board of Directors the selection and compensation of such principal officers. The Audit, Nominating and Evaluation Committee shall, to the extent empowered by the Board, have and possess all of the rights and powers of the Board of Directors, between meetings of the Board of Directors, to meet and discuss with the representatives of any firm of certified public accountants retained by the Corporation, at any time and from time to time, whether before and/or after the preparation of the year-end financial statements of the Corporation, the scope of the audit of such firm with respect to any year, and to question such representatives with respect thereto. In addition, the Audit, Nominating and Evaluation Committee shall have the authority to meet with and question officers and employees of the Corporation with respect to financial matters pertaining to the Corporation. The Audit, Nominating and Evaluation Committee shall not have and may not exercise any of the powers referred to in clauses (1) through (5), inclusive, of Section 5.2 hereof. 11 12 SECTION V.4. INVESTMENT COMMITTEE. The Board of Directors shall appoint an Investment Committee consisting of not less than five directors, and may designate as Chairman of the Investment Committee one of the members so appointed. The Chairman of the Investment Committee shall preside at all meetings of the Investment Committee at which he or she is present. The Investment Committee shall keep a record of its proceedings and shall adopt its own rules of procedure. The Investment Committee shall submit a report of its activities to the Board of Directors at the next meeting of the Board of Directors. The Investment Committee shall have the power to invest the funds of the Corporation in deposits with banks and insurance companies, the purchase and acquisition of stocks, bonds and other securities, in the name and in behalf of the Corporation and to withdraw any such deposits and to sell and dispose of the stocks, bonds and other securities owned by the Corporation, at such times and upon such terms as it may deem wise and advantageous to the Corporation; provided, however, that in any case where the investment of such funds in stocks, bonds or other securities involves the active participation of the Corporation in the management of the business represented by any such securities, the Investment Committee shall not have the power to make any investments or otherwise deal with such securities without the approval of the Board of Directors. All actions of the Investment Committee shall be subject to revision or alteration by the Board of Directors; provided, however, that rights or acts of third parties shall not be affected by any such revision or alteration. ARTICLE VI OFFICERS -------- SECTION VI.1. NUMBER AND PRINCIPAL OFFICERS. The officers of the Corporation shall be a President, a Secretary, a Treasurer, and such other officers as may be appointed in accordance with the provisions of Section 6.3 hereof. So far as permitted by applicable law, any 12 13 two or more offices may be held by the same person, except that the President and the Secretary shall not be the same person. The President, any Vice-Presidents appointed or elected by the Board of Directors, the Secretary and the Treasurer shall be principal officers of the Corporation for purposes of Section 5.3 of Article V of these By-Laws. SECTION VI.2. ELECTION, TERM OF OFFICE AND QUALIFICATION. The President, the Treasurer and the Secretary shall be elected annually by the directors at their first meeting following the annual meeting of shareholders, by vote of a majority of the directors present and voting, and other officers, if any, may be elected or appointed by the directors at said meeting or at any other time. The President shall be and remain a director. No other officer need be a director. Except as otherwise provided by law or by the Charter or by these By-Laws, the President, the Treasurer and the Secretary shall hold office until the first meeting of the directors following the next annual meeting of shareholders and until their respective successors are chosen and qualified, or, in each case, until he or she sooner dies, resigns or is removed, unless a shorter period shall have been specified by the terms of his or her election or appointment. Each agent, if any, shall retain his or her authority at the pleasure of the directors. SECTION VI.3. OTHER OFFICERS. The Board of Directors from time to time may appoint other officers or agents, including but not limited to one or more Vice-Presidents, one or more assistant treasurers and one or more assistant secretaries, each of whom shall hold office for such period, have such authority and perform such duties as are provided in these By-Laws or as the Board of Directors from time to time may determine. The Board of Directors may delegate to any officer or committee the power to appoint any such other officers or agents and to prescribe their respective authorities and duties. 13 14 SECTION VI.4. PRESIDENT. The President shall, subject to the control of the Board of Directors, have general charge of the business, affairs and property of the Corporation, and control over its several officers. The President shall do and perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by these By-Laws or by the Board of Directors. SECTION VI.5. TREASURER. Subject to the order of the Board of Directors, the Treasurer shall have supervision over the funds, securities, receipts and disbursements of the Corporation and shall be the chief accounting officer of the Corporation. He or she shall cause all monies and other valuable effects to be deposited in the name and to the credit of the Corporation, in such banks or trust companies or with such bankers or other depositories as shall be selected by the Board of Directors or which he or she shall select pursuant to authority conferred upon him or her by the Board of Directors. He or she shall cause the funds of the Corporation to be disbursed by checks or drafts upon the authorized depositories of the Corporation and shall cause to be taken and preserved proper vouchers for all monies disbursed. He or she shall cause to be kept correct books of account of the business and transactions of the Corporation and shall render to the President, the Board of Directors or the Executive Committee, whenever requested, an account of the financial condition of the Corporation and of his or her transactions as Treasurer. He or she shall be responsible for keeping and maintaining the stock books and stock transfer books of the Corporation. He or she shall be empowered, from time to time, to require of the officers or agents of the Corporation reports or statements giving such information as he or she may desire with respect to any and all financial transactions of the Corporation, and shall have such other powers and duties as from time to time may be assigned to him or her by these By-laws or by the Board of Directors or by the President. If required by the Board of Directors, he or she shall give the Corporation a bond in such sum with 14 15 such surety or sureties as shall be satisfactory to the Board for the faithful performance of his or her duties. SECTION VI.6. SECRETARY. The Secretary shall keep and record all the minutes of the meetings of shareholders and the Board of Directors in books to be maintained for that purpose, and shall perform like duties for committees of the Board of Directors when required. He or she shall give notice to the shareholders and the Board of Directors in accordance with the provisions of these By-Laws or as required by statute. Except for those records for which the Treasurer is responsible, the Secretary shall be responsible for the records of the Corporation and the Board of Directors. He or she shall keep in safe custody the seal of the Corporation and shall see that the seal is affixed to all documents the execution of which, on behalf of the Corporation under its seal, shall have been duly authorized. He or she shall see that all lists, books, reports, statements and certificates and other documents and records required by law to be kept or filed are properly kept or filed. He or she shall perform all duties and shall have all powers incident to the office of the Secretary and shall perform such other duties and have such other powers as from time to time may be assigned to him or her by these By-Laws or by the Board of Directors or the President. SECTION VI.7. VICE-PRESIDENTS. The Vice-Presidents, if any, in the order designated by the Board of Directors or, lacking such designation, by the President, shall in the absence or disability of the President perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors shall prescribe. SECTION VI.8. RESIGNATION AND REMOVAL. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors or to the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon receipt thereof by the Board of Directors, the President or the Secretary. Any officer may be removed, 15 16 either with or without cause, by vote of a majority of the total number of directors constituting the entire Board of Directors, at a special meeting of the Board of Directors called for that purpose. SECTION VI.9. VACANCIES. A vacancy in any office because of death, resignation, removal or any other cause shall be filled for the unexpired portion of the term in the manner prescribed by these By-laws for the regular election or appointment to such office. SECTION VI.10. SALARIES. Subject to the provisions of Article V of these By-Laws, the salaries or other compensation of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary or other compensation by reason of the fact that he or she is also a director of the Corporation; provided, however, that no director shall be paid a fee, whether by retainer, for attendance, or otherwise, if such director is also a salaried officer of the Corporation. ARTICLE VII INDEMNIFICATION OF DIRECTORS AND OFFICERS ----------------------------------------- SECTION VII.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation may indemnify any person made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she, his or her testator, testatrix or intestate, is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of any other corporation of any type or kind, domestic or foreign, of any partnership, joint venture, trust, employee benefit plan or other enterprise, against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred by him or her in connection with the defense or settlement of such action, or in connection with an appeal therein, if such director or officer acted, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any 16 17 other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the Corporation, except that no indemnification under this Section shall be made in respect of (1) a threatened action, or a pending action which is settled or is otherwise disposed of, or (2) any claim issue or matter as to which such person shall have been adjudged to be liable to the Corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper. The Corporation may indemnify any person made, or threatened to be made, a party to an action or proceeding (other than one by or in the right of the Corporation to procure a judgment in its favor), whether civil or criminal, including an action by or in the right or any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Corporation served in any capacity at the request of the Corporation, but reason of the fact that he or she, his or her testator, testatrix or intestate, was a director or officer of the Corporation, or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the Corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his or her conduct was unlawful. 17 18 The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such director or officer did not act, in good faith, for a purpose which he or she reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interest of the Corporation or that he or she had reasonable cause to believe that his or her conduct was unlawful. A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in the first two paragraphs of this Article VII, shall be entitled to indemnification as authorized in such paragraphs. Except as provided in the preceding sentence and unless ordered by a court, any indemnification under such paragraphs shall be made by the Corporation, only if authorized in the specific case: (1) By the Board of Directors acting by a quorum consisting of directors which are not parties to such action or proceeding upon a finding that the director, officer or employee has met the standard of conduct set forth in the first two paragraphs of this Article VII, as the case may be or (2) If such a quorum is not obtainable with due diligence or, even if obtainable, a quorum of disinterested directors so directs, (a) By the Board of Directors upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in the first two paragraphs of this Article VII has been met by such director, officer or employee, or 18 19 (b) By the shareholders upon a finding that the director, officer or employee has met the applicable standard of conduct set forth in such paragraphs. Expenses, including attorneys' fees, incurred in defending a civil or criminal action or a proceeding may be paid by the Corporation in advance of the final disposition of such action or proceeding, if authorized in accordance with the preceding paragraph, subject to repayment to the Corporation in case the person receiving such advancement is ultimately found, under the procedure set forth in this Article VII, not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the Corporation exceed the indemnification to which he or she is entitled. Nothing herein shall affect the right of any person to be awarded indemnification or, during the pendency of litigation, an allowance of expenses, including attorneys' fees, by a court in accordance with law. If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders, the Corporation shall, not later than the next annual meeting of shareholders unless such meeting is held within three months from the date of such payment, and in any event, within fifteen months from the date of such payment, mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation. The Corporation shall have the power, in furtherance of the provisions of this Article VII, to apply for, purchase and maintain insurance of the type and in such amounts as is or may hereafter be permitted by Section 726 of the Business Corporation Laws. 19 20 No payment of indemnification, advancement or allowance under Sections 721 or 726, inclusive, or the Business Corporation Law shall be made unless a notice has been filed with the Superintendent of Insurance of the State of New York, not less than thirty days prior to such payment, specifying the persons to be paid, the amounts to be paid, the manner in which such payment is authorized and the nature and status, at the time of such notice, of the litigation or threatened litigation. ARTICLE VIII CONFLICT OF INTEREST -------------------- SECTION VIII.1. CONFLICT OF INTEREST. No director, officer or employee of the Corporation shall have any position with or a substantial interest in any other business enterprise operated for profit, the existence of which would conflict or might reasonably be supposed to conflict with the proper performance of his or her Corporation duties or responsibilities, or which might tend to affect his or her independence of judgment with respect to transactions between the Corporation and such other business enterprise, without full and complete disclosure thereof to the Board of Directors. Each director, officer or employee who has such a conflicting or possibly conflicting interest with respect to any transactions which he or she knows is under consideration by the Board, is required to make timely disclosure thereof so that it may be part of the directors' consideration of the transaction. The holding of any office or position in any corporation affiliated with the Corporation or any corporation owning a majority of the stock of the Corporation and carrying out the duties of any such office or position shall not be deemed to be a conflicting interest; nor shall this Article VIII be construed to prevent the receipt of any salaries or other benefits from any corporation affiliated with the Corporation or from any corporation owning the majority of the stock of the Corporation. The ownership of one percent or more of the issued and outstanding 20 21 stock of any corporation doing business with the Corporation or competing with the Corporation shall be considered to be a "substantial interest in any other business enterprise operated for profit"; provided, however, that ownership of the stock or other securities of any corporation affiliated with the Corporation or of any corporation owning a majority of the stock of the Corporation shall not be considered to be a conflicting interest. SECTION VIII.2. GIFTS. None of the directors, officers and employees shall accept gifts, gratuities or favors of any kind from any person, firm or corporation doing business or seeking to do business with the Corporation under circumstances from which it could reasonably be inferred that the purpose of the gift, gratuity or favor could be to influence the said director, officer or employee in the conduct of Corporation transactions with the donor or the interest the donor is representing. Nothing in this Section 8.2 shall be construed to prohibit either the giving or the receiving of normal hospitality or a social nature or normal practice of gift exchange on a reciprocal basis between person having close personal relationships unrelated to business. ARTICLE IX EXECUTION OF INSTRUMENTS AND SEAL --------------------------------- SECTION IX.1. EXECUTION OF INSTRUMENTS. Except as the Board of Directors may generally or in particular cases authorize the execution thereof in some other manner, all documents, instruments or writings of any nature made, accepted or endorsed by the Corporation shall be signed, executed, verified, acknowledged and delivered by the President, any Vice- President, or the Secretary. SECTION IX.2. CORPORATION SEAL. The corporate seal shall be in the form of a circle and shall bear the name of the Corporation and shall indicate its formation under the laws of the State of New York; provided, that the form of such seal shall be subject to alteration from time to time by the Board of Directors. 21 22 ARTICLE X CAPITAL STOCK ------------- SECTION X.1. NUMBER OF SHARES AND PAR VALUE. The total number of shares and the par value of all stock which the Corporation is authorized to issue shall be as stated in the Charter. SECTION X.2. CERTIFICATES OF SHARES. Each shareholder shall be entitled to a certificate, signed by the President and the Treasurer or Secretary certifying the number and class of the shares owned by him or her in the Corporation. Such signatures may be facsimiles if the certificates are countersigned by a transfer agent or registered by a registrar other than the Corporation or its employees. Certificates for shares of the stock of the Corporation shall be in such form as shall be approved by the Board of Directors, and the seal of the Corporation shall be affixed thereto. There shall be entered upon the stock books of the Corporation the number of each certificate issued, the name of the person owning the shares represented thereby, the number of shares and the date thereof. SECTION X.3. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates therefore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of the fact by the owner claiming the certificate or certificates to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, the advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate or certificates alleged to have been lost, stolen or destroyed. 22 23 SECTION X.4. RECORD DATE. In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to a corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than fifty days nor less than ten days before the date of such meeting, nor more than fifty days prior to any other action. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Absent Board of Directors action, the record date shall be ten days before the date of such meeting. SECTION X.5. STOCK TRANSFERS. Transfers of stock shall be made only upon the books of the Corporation, and only upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer. ARTICLE XI DIVIDENDS --------- SECTION XI.1. DIVIDENDS. Dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting; provided, however, that the Corporation shall not distribute any dividend to its shareholders unless a notice of intention to declare such dividend has been filed with the Superintendent of Insurance of the State of New York not less than thirty days after such filing gives written notice to the Corporation of 23 24 his or her disapproval of such distribution, on the ground that he or she finds that the financial condition of the Corporation does not warrant the distribution of such dividend. ARTICLE XII APPLICATIONS, POLICIES AND PREMIUMS ----------------------------------- SECTION XII.1. APPLICATIONS, POLICIES AND PREMIUMS. The President, or a duly authorized Vice-President, shall prescribe and approve all forms of policies issued by the Corporation, including all riders and provisions included in or attached to such policies, and the forms of applications therefor. The President, or a duly authorized Vice-President, shall fix all rates of premiums ARTICLE XIII FISCAL YEAR ----------- SECTION XIII.1. FISCAL YEAR. The fiscal year of the Corporation shall end on the last day of December annually. ARTICLE XIV NOTICES ------- SECTION XIV.1. NOTICES. Whenever, under the provisions of law, the Charter or these By-Laws, notice is required to be given to any director or shareholder, it shall not be construed to mean personal notice unless specifically allowed, but such notice may be given in writing, by certified or registered mail, return receipt requested, addressed to such director or shareholder, at his or her address as it appears on the records of the Corporation, with postage there prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. ARTICLE XV AMENDMENTS ---------- 24 25 SECTION XV.1. AMENDMENTS. These By-Laws may be amended, changed or repealed by the Board of Directors, except that the Board may take no action which, by law or the Charter, is required to be taken by the shareholders, or which excludes or limits the right of a shareholder to vote on a matter. Any By-Law so amended, changed or repealed by the directors may be further altered or amended or reinstated by the shareholders in the manner provided below. These By-Laws may be amended, changed or repealed by a majority vote of the shareholders present at any annual meeting or at a special meeting called for that purpose, provided that the notice of any such annual or special meeting shall specify the subject matter of the proposed amendment, change or repeal shall have been submitted in writing and filed with the Secretary at least five days prior to such meeting. 25 EX-99.(8)(A) 13 ADMINISTRATIVE AGREEMENT 1 ADMINISTRATIVE SERVICES AGREEMENT This Administrative Services Agreement (this "Agreement") is made effective as of 12:01 a.m., Eastern Standard Time, on the 1st day of October, 1997 ("Effective Date"), by and between THE MANUFACTURERS LIFE INSURANCE COMPANY, a corporation organized under the Insurance Companies Act (Canada) ("Provider") and THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, a New York stock life insurance corporation ("Company"). WHEREAS, Provider has extensive experience in the operation of an insurance business and has provided certain services to Company pursuant to the terms of an Administrative Services Agreement effective July, 8, 1992 between the Company and North American Life Assurance Company, which subsequently merged with and into the Provider (the "Prior Agreement"); and WHEREAS, Company desires Provider to perform administrative and special services (collectively, "services") for Company in its insurance operations and desires further to make use in its day-to-day operations of certain property, equipment and facilities (collectively, "facilities") of Provider as Company may request; and WHEREAS, Provider and Company contemplate that such an arrangement will achieve certain operating economies and improve services to the mutual benefit of both; and WHEREAS, Provider and Company wish to assure that all charges for services and the use of facilities incurred hereunder are reasonable and in accordance with the requirements of New York Insurance Department Regulation No. 33 and to the extent practicable 2 reflect actual costs and are arrived at in a fair and equitable manner, and that estimated costs, whenever used, are adjusted periodically, to bring them into alignment with actual costs; and WHEREAS, Provider and Company wish to identify the services to be rendered to Company by Provider and the facilities to be used by Company and to provide a method of fixing bases for determining the charges to be made to Company: NOW, THEREFORE, in consideration of the premises and of the mutual promises set forth herein, and intending to be legally bound hereby, Provider and Company agree as follows: PERFORMANCE OF SERVICES AND USE OF FACILITIES. Subject to the terms, conditions and limitations of this Agreement, Provider agrees to the extent requested by Company to perform diligently and in a professional manner such services for Company as Company determines to be reasonably necessary in the conduct of its insurance operations. Subject to the terms, conditions and limitations of this Agreement, Provider agrees to the extent requested by Company to make available to Company such of its facilities as Company and Provider may mutually determine to be reasonably necessary in the conduct of its insurance operations, including but not limited to data processing equipment, business property (whether owned or leased) and communications equipment. Provider agrees at all times to maintain sufficient facilities and trained personnel of the kind necessary to perform this Agreement. With the Company's prior written consent, Provider may arrange to furnish such services through one or more of its affiliates, subject to the terms, conditions and limitations set forth herein. The Provider shall furnish the Company with written confirmation of the nature and extent of services to be provided to the Company by such affiliates and the location(s) at which 3 such services shall be performed. Any such affiliate shall agree in writing to observe and be bound by all terms and conditions of this Agreement in performing such services and its records shall be subject to inspection, audit and examination by the Company in accordance with Section 5 and 6 hereof. Charges for such services shall be determined consistent with the requirements of Section 3, and shall be included in the statement furnished by the Provider to the Company pursuant to Section 4. Provider shall, at all times, remain liable to the Company for the performance of services by such affiliates to the same extent as if they had been performed by Provider itself. CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever Provider utilizes its personnel to perform services for Company pursuant to this Agreement, such personnel shall at all times remain employees of Provider subject solely to its direction and control, and Provider shall alone retain full liability to such employees for their welfare, salaries, fringe benefits, legally required employer contributions and tax obligations. No facility of Provider used in performing services for or subject to use by Company shall be deemed to be transferred, assigned, conveyed or leased by performance or use pursuant to this Agreement. EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any services hereunder which require the exercise of judgment by Provider, Provider shall perform any such service in accordance with any standards and guidelines Company develops and communicates to Provider. In performing any services hereunder, Provider shall at all times act in a manner reasonably calculated to be in or not opposed to the best interests of Company. CONTROL. The performance of services by Provider for Company pursuant to this Agreement shall in no way impair the absolute control of the business and 4 operations of Provider or Company by their respective Boards of Directors. Provider shall act hereunder so as to assure the separate operating identity of Company, consistent with the provisions of Section 1507 of the New York Insurance Law. SERVICES. The performance of Provider under this Agreement with respect to the business and operations of Company shall at all times be subject to the direction and control of the Board of Directors of Company. Subject to the foregoing and to the terms, conditions and limitations of this Agreement, Provider shall provide to Company the services set forth below in connection with the insurance business of the Company. (a) UNDERWRITING. Subject to underwriting standards established by Company and communicated to Provider, Provider shall provide underwriting services, including review of policy applications, assignment of policy numbers, MIB review, medical review and other investigations and actual policy issue, all subject to final approval of Company. Provider shall provide assistance to the Company in the development of all underwriting criteria pursuant to which all new business applications and policyowner service transactions requiring underwriting decisions will be processed and acted upon. All new applications will initially be sent to Provider. Upon completion of underwriting, originals will be sent to the Company and retained at its home offices in Rye, New York. All policyowner service transactions requiring any underwriting decisions shall be determined by Provider personnel. (b) POLICY OWNER SERVICES. Provider shall provide automated systems and personnel to assist with policyowner services, from the point of issue through termination of 5 coverage. Policyowner records of the Company shall be maintained at the home offices of the Company. (c) CLAIMS. Subject to claims settlement procedures established by Company and communicated to Provider, Provider shall provide claims services, including verification that the policy was in force, and review and investigation of claims, all subject to final approval of Company. (d) MARKETING. Upon request of the Company, Provider shall assist the Company in preparation of marketing material, assist in the recruitment and product training of agents and provide other marketing support services. However, all decisions regarding the approval of marketing material and the acceptance, appointment or termination of agents shall be made by the Company. (e) ACCOUNTING. Preparation and maintenance of financial statements and reports, including all required GAAP and statutory financial statements and all federal, state or local tax returns. (f) FUNCTIONAL SUPPORT SERVICES. Provider shall provide (i) actuarial services, including rate and profit share analysis, product development, counseling on reserving requirements, work required for or in support of rate and/or form submissions and actuarial certifications, (ii) telecommunications services and electronic data processing services, facilities and integration, including software programming and documentation, hardware utilization related to provision of certain policy owner services and administration, a system facilitating access to Provider's electronic data processing system, (iii) legal services, including representation of Company in the prosecution or defense of actions and in the negotiation and preparation of contracts, agreements and agency documents, product development and drafting 6 and filing of policies and forms, governmental relations and advising on regulatory compliance and rendering opinions on various legal matters, (iv) purchasing and employee relations services, and (v) consultation in negotiating banking, accounting, and treasury arrangements. CHARGES. Company agrees to reimburse Provider for services and facilities provided by Provider to Company pursuant to this Agreement. The charge to Company for such services and facilities shall include all direct and directly allocable expenses, reasonably and equitably determined to be attributable to Company by Provider, plus a reasonable charge for direct overhead, the amount of such charge for overhead to be agreed upon by the parties from time to time. Subject to New York Insurance Department Regulation 33, the bases for determining such charges to Company shall be those used by Provider for internal cost distribution. Such bases shall be modified and adjusted by mutual agreement where necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by Provider on behalf of Company. Cost analyses will be made from time to time by Provider to determine, as closely as possible, the actual cost of services rendered and facilities made available to Company hereunder. Provider shall forward to Company the information developed by these analyses, and such information shall be used to develop bases for the distribution of expenses which more currently reflect the actual incidence of cost incurred by Provider on behalf of Company. Provider's determination of charges hereunder shall be presented to Company, and if Company objects to any such determination, it shall so advise Provider within thirty (30) days of receipt of notice of said determination. Unless the parties can reconcile any such objection, they shall agree to the selection of a firm of independent certified public accountants which shall 7 determine the charges properly allocable to Company and shall, within a reasonable time, submit such determination, together with the basis therefor, in writing to Provider and Company whereupon such determination shall be binding. The expenses of such a determination by a firm of independent certified public accountants shall be borne equally by Provider and Company. PAYMENT. Provider shall submit to Company within thirty (30) days of the end of each calendar quarter a written statement of the amount estimated to be owed by Company for services and the use of facilities pursuant to this Agreement in that calendar quarter, and Company shall pay to Provider within fifteen (15) days following receipt of such written statement the amount set forth in the statement. Within thirty (30) days after the end of each calendar year, Provider will submit to Company a detailed written statement of the charges due from Company to Provider in that calendar year, including charges not included in any previous statements, and any balance payable or to be refunded as shown in such statement shall be paid or refunded within fifteen (15) days following receipt of such written statement by Company. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible for maintaining full and accurate accounts and records of all services rendered and facilities used pursuant to this Agreement and such additional information as Company may reasonably request for purposes of its internal bookkeeping and accounting operations. Provider shall keep such accounts and records insofar as they pertain to the computation of charges hereunder available at its principal offices for audit, inspection and copying by Company and persons authorized by it or any governmental agency having jurisdiction over Company during all reasonable business hours. 8 With respect to accounting and statistical records prepared by Provider by reason of its performance under this Agreement, summaries of such records shall be delivered to Company within thirty (30) days from the end of the quarter to which the records pertain. OTHER RECORDS AND DOCUMENTS. All books, records, and files established and maintained by Provider by reason of its performance under this Agreement which, absent this Agreement, would have been held by Company, shall be deemed the property of Company, and shall be subject to examination at all times by Company and persons authorized by it or any governmental agency having jurisdiction over Company, and shall be delivered to Company at least quarterly. With respect to original documents other than those provided for in Section 5 hereof which would otherwise be held by Company and which may be obtained by Provider in performing under this Agreement, Provider shall deliver such documents to Company within thirty (30) days of their receipt by Provider except where continued custody of such original documents is necessary to perform hereunder. 7. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be deemed to grant Provider an exclusive right to provide services to Company, and Company retains the right to contract with any third party, affiliated or unaffiliated, for the performance of services or for the use of facilities as are available to or have been requested by Company pursuant to this Agreement. 8. CONTACT PERSON(S). Company and Provider each shall appoint one or more individuals who shall serve as contact person(s) for the purpose of carrying out this Agreement. Such contact person(s) shall be authorized to act on behalf of their respective parties as to the matters pertaining to this Agreement. Effective upon execution of this Agreement, the 9 initial contact person(s) shall be those set forth in Appendix A. Each party shall notify the other, in writing, as to the name, address and telephone number of any replacement for any such designated contact person. 9. TERMINATION AND MODIFICATION. This Agreement shall remain in effect until terminated by either Provider or Company upon giving thirty (30) days or more advance written notice, provided that Company shall have the right to elect to continue to receive data processing services and/or to continue to utilize data processing facilities and related software for up to 180 days from the date of such notice. Subject to the terms (including any limitations and restrictions) of any applicable software or hardware licensing agreement then in effect between Provider and any licensor, Provider shall, upon termination of this Agreement, grant to Company a perpetual license, without payment of any fee, in any electronic data processing software developed or used by Provider in connection with the services provided to Company hereunder if such software is not commercially available and is necessary, in Company's reasonable judgment, for Company to perform subsequent to termination the functions provided by Provider hereunder. Upon termination, Provider shall promptly deliver to Company all books and records that are, or are deemed by this Agreement to be, the property of Company. 10. SETTLEMENT ON COMPLETE TERMINATION. No later than sixty (60) days after the effective date of termination of this Agreement, Provider shall deliver to Company a detailed written statement for all charges incurred and not included in any previous statement to the effective date of termination. The amount owed or to be refunded hereunder shall be due and payable within fifteen (15) days of receipt of such statement. 11. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not be assignable by either party hereto, except as set forth herein or by operation of law. Except as 10 and to the extent specifically provided in this Agreement, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto, or their respective legal successors, any rights, remedies, obligations or liabilities, or to relieve any person other than the parties hereto, or their respective legal successors, from any obligations or liabilities that would otherwise be applicable. The representations, warranties, covenants and agreements contained in this Agreement shall be binding upon, extend to and inure to the benefit of the parties hereto, their, and each of their, successors and assigns respectively. 12. GOVERNING LAW; SERVICE OF SUIT; FORUM SELECTION. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York applicable to contracts made and to be performed in that State, without regard to principles of conflict of laws. 13. ARBITRATION. Any unresolved dispute or difference between the parties arising out of or relating to this Agreement, or the breach thereof, except as provided in Section 3, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association and the Expedited Procedures thereof. The award rendered by the Arbitrator shall be final and binding upon the parties, and judgment upon the award rendered by the Arbitrator may be entered in any Court having jurisdiction thereof. The arbitration shall take place in New York, New York. 14. NOTICE. All notices, statements or requests provided for hereunder shall be deemed to have been duly given when delivered by hand to an officer of the other party, or when deposited with the U.S. Postal Service, as first class certified or registered mail, postage prepaid, overnight courier service, telex or telecopier, addressed 11 If to Provider to: The Manufacturers Life Insurance Company 200 Bloor Street East Toronto Ontario Canada M4W 1E5 Attention: Senior Vice President and General Manager, U.S. Operations If to Company to: The Manufacturers Life Insurance Company of New York International Corporate Center at Rye 555 Theodore Fremd Avenue Rye, New York 10580 Attention: President or to such other persons or places as each party may from time to time designate by written notice sent as aforesaid. 15. ENTIRE AGREEMENT. This Agreement, together with such amendments as may from time to time be executed in writing by the parties in accordance with Section 1505 of the New York Insurance Law, constitutes the entire agreement and understanding between the parties in respect of the transactions contemplated hereby and supersedes the Prior Agreement, as well as any and all other agreements, arrangements and understandings relating to the subject matter hereof, including the Administrative Services Agreement effective as of July 8, 1992 between the Company and North American Security Life Insurance Company. 16. SECTION HEADINGS. Section headings contained herein are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 12 17. COUNTERPARTS. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate by their respective officers duly authorized so to do, and their respective corporate seals to be affixed hereto, as of the date and year first above written. (Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY BY /s/ JOhn D. Richardson ----------------------------------------------- John D. Richardson Senior Vice President and General Manager U.S. Operations Attest: /s/ Kimberly S. Ciccarelli ------------------------------- (Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK BY /s/ Joseph M. Scott -------------------------------------- Joseph M. Scott President 13 APPENDIX A CONTACT PERSON(S) FOR PROVIDER Theodore Kilkuskie, Vice President, U.S. Individual Insurance Bruce Gordon, Vice President, U.S. Pensions John D. DesPrez, Vice President, U.S. Annuities CONTACT PERSON(S) FOR COMPANY Joseph Scott, President Stephanie Elliman, Vice President -----END PRIVACY-ENHANCED MESSAGE-----