-----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, Sw312mHIClUSEmwHys7dUjrxOnEerDMLDLEjy/wwz+PelFBrgXgwYAY9iVQaC07x Zw3gBfDO4DkoLyB2wfXeiQ== 0000912057-97-014003.txt : 19970425 0000912057-97-014003.hdr.sgml : 19970425 ACCESSION NUMBER: 0000912057-97-014003 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 48 FILED AS OF DATE: 19970424 EFFECTIVENESS DATE: 19970424 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT CENTRAL INDEX KEY: 0000768609 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 410417830 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-12333 FILM NUMBER: 97586520 BUSINESS ADDRESS: STREET 1: 400 ROBERT ST CITY: SAINT PAUL STATE: MN ZIP: 55101 BUSINESS PHONE: 612234306 MAIL ADDRESS: STREET 1: 400 ROBERT STREET NORTH CITY: ST PAUL STATE: MN ZIP: 55101 485BPOS 1 485BPOS File Number 33-12333 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment Number -------- --- Post-Effective Amendment Number X 10 -------- --- and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment Number -------- --- MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT --------------------------------------------------------------- (Exact Name of Registrant) THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY --------------------------------------------------------------- (Name of Depositor) 400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101-2098 --------------------------------------------------------------- (Address of Depositor's Principal Executive Offices) (Zip Code) (612) 665-3500 --------------------------------------------------------------- (Depositor's Telephone Number, Including Area Code) Dennis E. Prohofsky Copy to: Senior Vice President, General Counsel and Secretary J. Sumner Jones, Esq. The Minnesota Mutual Life Insurance Company Jones & Blouch L.L.P. 400 Robert Street North 1025 Thomas Jefferson Street, N.W. St. Paul, Minnesota 55101-2098 Suite 405 West (Name and Address of Agent for Service) Washington, D.C. 20007
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box) --- immediately upon filing pursuant to paragraph (b) X on May 1, 1997, pursuant to paragraph (b) of Rule 485 --- --- 60 days after filing pursuant to paragraph (a)(i) --- on (date) pursuant to paragraph (a)(i) --- 75 days after filing pursuant to paragraph (a)(ii) --- on (date) pursuant to paragraph (a)(ii). IF APPROPRIATE, CHECK THE FOLLOWING BOX: ___ this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940, Registrant has previously elected to register an indefinite amount of its variable annuity contracts under the Securities Act of 1933. The Rule 24f-2 Notice for Registrant's most recent fiscal year was filed on February 26, 1997. PART A INFORMATION REQUIRED IN A PROSPECTUS Minnesota Mutual Variable Annuity Account Cross Reference Sheet to Prospectus Form N-4 Item Number Caption in Prospectus 1. Cover Page 2. Special Terms 3. Questions and Answers About the Variable Annuity Contracts 4. Condensed Financial Information; Performance Data 5. General Descriptions 6. Contract Charges 7. Description of the Contracts 8. Description of the Contracts; Annuity Payments and Options 9. Description of the Contracts; Death Benefits 10. Description of the Contracts; Purchase Payments and Value of the Contract 11. Description of the Contracts; Redemptions 12. Federal Tax Status 13. Not Applicable 14. Table of Contents of the Statement of Additional Information VARIABLE ANNUITY CONTRACT PROSPECTUS FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT OF MINNESOTA MUTUAL'S VARIABLE ANNUITY ACCOUNT The individual variable annuity contract offered by this Prospectus is designed for use by members of the faculty and employees of the University of Minnesota. It may also be used by officers, directors, full-time and part-time employees, sales representatives and their employees, and retirees of Minnesota Mutual or any of Minnesota Mutual's other affiliated companies, any trust, pension or benefit plan for such persons, the spouses, siblings, direct ancestors and the direct descendents of such persons. The variable annuity contract may also be used by other groups. These groups shall consist of individuals employed by an employer or associated with a program established or maintained by an entity which: (1) provides an exclusive or partially exclusive sales arrangement with Minnesota Mutual or its affiliates; (2) allows for the purchase of annuities under section 403(b) or 403(b)(9) of the Code; and (3) has more than 1,000 individuals who are eligible for participation by annuity purchase. This variable annuity contract may also be used by individuals purchasing one or more of these contracts wherein the aggregate purchase payments total $5,000,000 or more, other than as part of a qualified pension or profit sharing plan, and by certain individuals solicited by registered investment advisers who charge new clients a fee for their services and where the initial contract purchase payment is at least $25,000. The use of this contract may be in connection with retirement plans which qualify for federal income tax advantages under sections 401, 403 or 408 of the Internal Revenue Code. Contract values will accumulate on a variable basis. Contract values will be a part of the Variable Annuity Account. The Variable Annuity Account invests its assets in shares of Advantus Series Fund, Inc. and in Class 2 of the Templeton Developing Markets Fund (the "Funds"). The accumulation value of the contract and the amount of each variable annuity payment will vary in accordance with the performance of the Portfolio or Portfolios of the Funds selected by the contract owner. The contract owner bears the entire investment risk for any amounts allocated to the Portfolios of the Fund. This Prospectus sets forth concisely the information that a prospective investor should know before investing in the Variable Annuity Account, and it should be read and kept for future reference. A Statement of Additional Information, bearing the same date, which contains further contract information, has been filed with the Securities and Exchange Commission and is incorporated by reference into this Prospectus. A copy of the Statement of Additional Information may be obtained without charge by calling (612) 665-3500, or by writing Minnesota Mutual at its principal office at Minnesota Mutual Life Center, 400 Robert Street North, St. Paul, Minnesota 55101-2098. A Table of Contents for the Statement of Additional Information appears in this Prospectus on page 28. This Prospectus is not valid unless attached to a current prospectus of Advantus Series Fund, Inc. and the Templeton Developing Markets Fund. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE. [LOGO] THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY 400 ROBERT STREET NORTH ST. PAUL, MN 55101-2098 PH 612/665-3500 http://www.minnesotamutual.com The date of this document and the Statement of Additional Information is: May 1, 1997 TABLE OF CONTENTS
Page Special Terms............................................... 3 Questions and Answers About the Variable Annuity Contract... 4 Expense Table............................................... 8 Condensed Financial Information............................. 10 Performance Data............................................ 12 General Descriptions The Minnesota Mutual Life Insurance Company............. 13 Variable Annuity Account................................ 13 Advantus Series Fund, Inc............................... 13 Templeton Variable Products Series Fund................. 14 Additions, Deletions or Substitutions................... 15 Contract Charges Administrative Charge................................... 15 Premium Taxes........................................... 16 Voting Rights............................................... 16 Description of the Contract General Provisions...................................... 16 Annuity Payments and Options............................ 17 Death Benefits.......................................... 21 Purchase Payments, Value of the Contract and Transfers.............................................. 21 Redemptions............................................. 23 Federal Tax Status.......................................... 23 Statement of Additional Information......................... 28 Appendix A--Illustration of Variable Annuity Values......... 29
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. 2 SPECIAL TERMS As used in this Prospectus, the following terms have the indicated meanings: ACCUMULATION UNIT: an accounting device used to determine the value of a contract before annuity payments begin. ACCUMULATION VALUE: your interest in this contract composed of your interest in one or more sub-accounts of the Variable Annuity Account. ANNUITANT: the person who may receive lifetime benefits under the contract. ANNUITY: a series of payments for life; for life with a minimum number of payments guaranteed; for the joint lifetime of the annuitant and another person and thereafter during the lifetime of the survivor; or for a period certain. ANNUITY UNIT: an accounting device used to determine the amount of annuity payments. CODE: the Internal Revenue Code of 1986, as amended. CONTRACT OWNER: the owner of the contract, which could be the annuitant, his employer, or a trustee acting on behalf of the employer. CONTRACT YEAR: a period of one year beginning with the contract date or a contract anniversary. FIXED ANNUITY: an annuity providing for payments of guaranteed amounts throughout the payment period. FUND: the mutual fund or separate investment portfolio within a series mutual fund which we have designated as an eligible investment for the Variable Annuity Account, namely, Advantus Series Fund, Inc. and its Portfolios and Class 2 of the Templeton Developing Markets Fund. PLAN: a tax-qualified employer pension, profit-sharing, or annuity purchase plan under which benefits are to be provided by the variable annuity contracts described herein. PURCHASE PAYMENTS: amounts paid to us under a contract. VALUATION DATE: each date on which a Fund Portfolio is valued. VARIABLE ANNUITY ACCOUNT: a separate investment account called the Minnesota Mutual Variable Annuity Account, where the investment experience of its assets is kept separate from our other assets. VARIABLE ANNUITY: an annuity providing for payments varying in amount in accordance with the investment experience of the Fund. WE, OUR, US: The Minnesota Mutual Life Insurance Company. YOU, YOUR: the Contract Owner. 3 QUESTIONS AND ANSWERS ABOUT THE VARIABLE ANNUITY CONTRACT WHAT IS AN ANNUITY? An annuity is a series of payments for life; for life with a minimum number of payments guaranteed; for the joint lifetime of the annuitant and another person and thereafter during the lifetime of the survivor; or for a period certain. An annuity with payments which are guaranteed as to amount during the payment period is a fixed annuity. An annuity with payments which vary during the payment period in accordance with the investment experience of a separate account is called a variable annuity. WHAT CONTRACT IS OFFERED BY THIS PROSPECTUS? The contract is a variable annuity contract issued by us which provides for monthly annuity payments. These payments may begin immediately or at a future date elected by you. Purchase payments received by us under a contract are allocated to our Variable Annuity Account, where they are invested in one or more Portfolios of the Fund and receive no interest or principal guarantees. For more information on the contract, see the heading "Description of the Contract" in this Prospectus. WHAT INVESTMENT OPTIONS ARE AVAILABLE FOR THE VARIABLE ANNUITY ACCOUNT? Purchase payments allocated to the Variable Annuity Account are invested in shares of Advantus Series Fund, Inc. and the Templeton Developing Markets Funds. Each Fund is a mutual fund of the series type, which means that it has several different portfolios which it offers for investment. Shares of this Fund will be made available at net asset value to the Variable Annuity Account to fund the variable annuity contracts. The Fund is also required to redeem its shares at net asset value at our request. We reserve the right to add, combine or remove other eligible funds. The investment objectives and certain policies of the Portfolios of the Advantus Series Fund are as follows: The Growth Portfolio seeks the long-term accumulation of capital. Current income, while a factor in portfolio selection, is a secondary objective. The Growth Portfolio will invest primarily in common stocks and other equity securities. Common stocks are more volatile than debt securities and involve greater investment risk. The Bond Portfolio seeks as high a level of long-term total rate of return as is consistent with prudent investment risk. A secondary objective is to seek preservation of capital. The Bond Portfolio will invest primarily in long-term, fixed-income, high-quality debt instruments. The value of debt securities will tend to rise and fall inversely with the rise and fall of interest rates. The Money Market Portfolio seeks maximum current income to the extent consistent with liquidity and the stability of capital. The Money Market Portfolio will invest in money market instruments and other debt securities with maturities not exceeding one year. The return produced by these securities will reflect fluctuation in short-term interest rates. AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. The Asset Allocation Portfolio seeks as high a level of long-term total rate of return as is consistent with prudent investment risk. The Asset Allocation Portfolio will invest in common stocks and other equity securities, bonds and money market instruments. The Asset Allocation Portfolio involves the risks inherent in stocks and debt securities of varying maturities and the risk that the Portfolio may invest too much or too little of its assets in each type of security at any particular time. The Mortgage Securities Portfolio seeks a high level of current income consistent with prudent investment risk. In pursuit of this objective the Mortgage Securities Portfolio will follow a policy of investment primarily in mortgage-related securities. Prices of mortgage-related securities will tend to rise and fall inversely with the rise and fall of the general level of interest rates. The Index 500 Portfolio seeks investment results that correspond generally to the price and yield performance of the common stocks included in the Standard & Poor's Corporation 500 Composite Stock Price Index (the "Index"). It is designed to provide an economical and convenient means of maintaining a broad position in the equity market as part of an overall investment strategy. All common stocks, including those in the Index, involve greater investment risk than debt securities. The fact that a stock has been included in the Index affords no assurance against declines in the price or yield performance of that stock. 4 The Capital Appreciation Portfolio seeks growth of capital. Investments will be made based upon their potential for capital appreciation. Therefore, current income will be incidental to the objective of capital growth. Because of the market risks inherent in any equity investment, the selection of securities on the basis of their appreciation possibilities cannot ensure against possible loss in value. The International Stock Portfolio seeks long-term capital growth. In pursuit of this objective, the International Stock Portfolio will follow a policy of investing in stocks issued by companies, large and small, and debt obligations of companies and governments outside the United States. Current income will be incidental to the objective of capital growth. The Portfolio is designed for persons seeking international diversification. Investors should consider carefully the substantial risks involved in investing in securities issued by companies and governments of foreign nations, which are in addition to the usual risks inherent in domestic investments. The Small Company Portfolio seeks long-term accumulation of capital. In pursuit of this objective, the Small Company Portfolio will follow a policy of investing primarily in common or preferred stocks issued by small companies, defined in terms of either market capitalization or gross revenues. Investments in small companies usually involve greater investment risks than fixed income securities or corporate equity securities generally. Small companies will typically have a market capitalization of less than $1.5 billion or annual gross revenues of less than $1.5 billion. The Value Stock Portfolio seeks the long-term accumulation of capital. In pursuit of this objective, the Value Stock Portfolio will follow a policy of investing primarily in the equity securities of companies which, in the opinion of the adviser, have market values which appear low relative to their underlying value or future earnings and growth potential. As it is anticipated that the Portfolio will consist in large part of dividend-paying common stocks, the production of income will be a secondary objective of the Portfolio. The Maturing Government Bond Portfolios seek to provide as high an investment return as is consistent with prudent investment risk for a specified period of time ending on a specified liquidation date. In pursuit of this objective, each of the four Maturing Government Bond Portfolios seek to return a reasonably assured targeted dollar amount, predictable at the time of investment, on a specific target date in the future through investment in a portfolio composed primarily of zero coupon securities. These are securities that pay no cash income and are sold at a discount from their par value at maturity. The current target dates for the maturities of these Portfolios are 1998, 2002, 2006 and 2010, respectively. On maturity, the Portfolio will be converted to cash and reinvested at the direction of the contract owner. In the absence of instructions, liquidation proceeds will be allocated to the Money Market Portfolio. The Small Company Value Portfolio seeks the long-term accumulation of capital. The Portfolio will follow a policy of investing primarily in the equity securities of small companies, defined in terms of market capitalization and which appear to have market values which are low relative to their underlying value or future earnings and growth potential. Dividend income will be incidental to the investment objective for this Portfolio. The International Bond Portfolio seeks to maximize current income consistent with protection of principal. The Portfolio pursues its objective by investing primarily in a managed portfolio of non-U.S. dollar debt securities issued by foreign governments, companies and supranational entities. The Index 400 Mid-Cap Portfolio seeks to provide investment results generally corresponding to the aggregate price and dividend performance of publicly traded common stocks that comprise the Standard & Poor's 400 Mid Cap Index. The Portfolio pursues its investment objective by investing primarily in the 400 common stocks that comprise the Index, issued by medium-sized domestic companies with market capitalizations that generally range from $200 million to $5 billion. It is designed to provide an economical and convenient means of maintaining a diversified portfolio in this equity security area as part of an over-all investment strategy. The inclusion of a stock in the Index in no way implies an opinion by Standard & Poor's as to its attractiveness 5 as an investment, nor is it a sponsor or in any way affiliated with the Portfolio. The Micro-Cap Value Portfolio seeks capital appreciation. The Portfolio will pursue its objective by investing in a diversified portfolio of securities that the sub-adviser believes to be undervalued. It will invest primarily in common stocks and stock equivalents of micro-cap companies, that is, companies with a market capitalization of less than $300 million. The Macro-Cap Value Portfolio seeks to provide high total return. It pursues this objective by investing in equity securities that the sub-adviser believes, through the use of dividend discount models, to be undervalued relative to their long-term earnings power, creating a diversified portfolio of equity securities which typically will have a price/earnings ratio and a price to book ratio that reflects a value orientation. The Portfolio seeks to enhance its total return relative to that of a universe of large-sized U.S. companies. The Micro-Cap Growth Portfolio seeks long-term capital appreciation. It pursues its objective by investing primarily in equity securities of smaller companies which the sub-adviser believes are in an early stage or transitional point in their development and have demonstrated or have the potential for above average revenue growth. It will invest primarily in common stocks and stock equivalents of micro-cap companies, that is, companies with a market capitalization of less than $300 million. ALTHOUGH THE MACRO-CAP VALUE, THE INDEX 400 MID-CAP, THE SMALL COMPANY VALUE, THE MICRO-CAP VALUE, THE MICRO-CAP GROWTH AND THE INTERNATIONAL BOND PORTFOLIOS OF THE FUND ARE INCLUDED IN THIS PROSPECTUS, THEY WILL NOT BE AVAILABLE IN THE CONTRACT UNTIL OCTOBER 1, 1997. In addition to the investments in the Advantus Series Fund, the Variable Annuity Account invests in the Templeton Developing Markets Fund, a diversified portfolio with two classes of shares of the Templeton Variable Products Series Fund Class 2, a mutual fund of the series type. ALTHOUGH THE TEMPLETON DEVELOPING MARKETS FUND IS INCLUDED IN THIS PROSPECTUS IT WILL NOT BE AVAILABLE IN THE CONTRACT UNTIL OCTOBER 1, 1997. The investment objectives and certain policies of the Templeton Developing Markets Fund available under the contract are as follows: The Templeton Developing Markets Fund seeks long-term capital appreciation. It pursues this objective by investing primarily in equity securities of issuers in countries having developing markets. Countries generally considered to have developing markets are all countries that are considered to be developing or emerging countries by the International Bank for Reconstruction and Development (more commonly referred to as the World Bank) or the International Finance Corporation, as well as countries that are classified by the United Nations or otherwise regarded by their authorities as developing. There is no assurance that any Fund will meet its objectives. Additional information concerning the investment objectives and policies of the Portfolios can be found in the current prospectus for each Fund, which is attached to this Prospectus. A person should carefully read the Fund's prospectus before investing in the contract. CAN YOU CHANGE THE PORTFOLIO SELECTED? Yes. You may change your allocation of future purchase payments by giving us written notice or a telephone call notifying us of the change. And before annuity payments begin, you may transfer all or a part of your accumulation value from one Fund to another or among the Portfolios. Under some contracts, transfers may be restricted dependent upon the source of purchase payments. Additional information can be found in this Prospectus. After annuity payments begin, transfers may be made with respect to variable annuity payments and, subject to some restrictions, amounts held as annuity reserves may be transferred among the variable annuity sub-accounts and the Portfolios. Annuity reserves may be transferred only from a variable annuity to a fixed annuity during the annuity period. WHAT CHARGES ARE ASSOCIATED WITH THE CONTRACTS? We deduct from the net asset value of the Variable Annuity Account an amount, computed daily, equal to an annual rate of .15% for contract administration. We reserve the right to increase the charge to not more than .35% of the net asset value of the Variable Annuity Account. In addition, Advantus Capital Management, Inc., ("Advantus Capital") one of our 6 subsidiaries, acts as the investment adviser to the Advantus Series Fund, Inc. and deducts from the net asset value of each Portfolio of the Fund a fee for its services which are provided under an investment advisory agreement. The investment advisory agreements with Advantus Capital provide that the fee shall be computed at the annual rate which may not exceed .4% of the Index 500 and Index 400 Micro-Cap Portfolios, .75% of the Capital Appreciation, Value Stock, Small Company Value and the Small Company Portfolios, 1.0% of the International Stock Portfolio .6% of the International Bond Portfolio, .7% of the Macro-Cap Value Portfolio, 1.1% of the Micro-Cap Growth Portfolio and 1.25% of the Micro-Cap Value Portfolio and .5% of each of the remaining Portfolio's average daily net assets other than the Maturing Government Bond Portfolios. The Maturing Government Bond Portfolios pay an advisory fee equal to an annual rate of .25% of average daily net assets, however, the Portfolio which matures in 1998 will pay a rate of .05% from its inception to April 30, 1998, and .25% thereafter and the Portfolio which matures in 2002 will pay a rate of .05% from its inception to April 30, 1998, and .25% thereafter of average daily net assets. The Funds are subject to certain expenses that may be incurred with respect to their operations. For more information, see the prospectus of each Fund which is attached to this prospectus. The Templeton Developing Markets Fund pays its investment adviser management fees at an annual rate of 1.25% of the Fund's average daily net assets and pays other operating expenses which will vary every year but, for the most recent fiscal year, were .53% of its average daily net assets. In addition, Class 2 of the Templeton Developing Markets Fund has a Rule 12b-1 plan and may pay up to .25% annually of the average daily net assets for distribution. For more information, see the fund's prospectus. Deductions for any applicable premium taxes may also be made (currently such taxes range from 0.0% to 3.5%) depending upon applicable law. For more information on charges, see the heading "Contract Charges" in this Prospectus. CAN YOU MAKE PARTIAL WITHDRAWALS FROM THE CONTRACT? Yes. You may make partial withdrawals of the accumulation value of your contract before an annuity begins. A penalty tax may be assessed upon withdrawals from annuity contracts in certain circumstances. For more information, see the heading "Federal Tax Status" in this Prospectus. DO YOU HAVE A RIGHT TO CANCEL THE CONTRACT? Yes. You may cancel the contract any time within ten days of your receipt of the contract by returning it to us or your agent. In some states, such as California, the free look period may be extended. In California, the free look period is extended to thirty days' time for contracts issued or delivered to owners that are 60 years of age or older at the time of delivery. These rights are subject to change and may vary among the states. IS THERE A GUARANTEED DEATH BENEFIT? Yes. The contract has a guaranteed death benefit if you die before annuity payments have started. The death benefit shall be equal to the greater of: (1) the amount of the accumulation value payable at death; or (2) the amount of the total purchase payments paid to us as consideration for this contract, less all contract withdrawals. WHAT ANNUITY OPTIONS ARE AVAILABLE? The contracts specify several annuity options. Each annuity option may be elected on either a variable annuity or fixed annuity or a combination of the two. Other annuity options may be available from us on request. The specified annuity options are a life annuity; a life annuity with a period certain of either 120 months, 180 months or 240 months; a joint and last survivor annuity and a period certain annuity. WHAT IF THE OWNER DIES? If you die before payments begin, we will pay the accumulation value of the contract as a death benefit to the named beneficiary. If the annuitant dies after annuity payments have begun, we will pay whatever death benefit may be called for by the terms of the annuity option selected. If the owner of this contract is other than a natural person, such as a trust or other similar entity, we will pay a death benefit of the accumulation value to the named beneficiary on the death of the annuitant, if death occurs prior to the date for annuity payments to begin. WHAT VOTING RIGHTS DO YOU HAVE? Contract owners and annuitants will be able to direct us as to how to vote shares of the underlying Funds held for their contracts where shareholder approval is required by law in the affairs of the Funds. 7 EXPENSE TABLE The tables shown below are to assist a contract owner in understanding the costs and expenses that a contract will bear directly or indirectly. For more information on contract costs and expenses, see the Prospectus heading "Contract Charges" and the information immediately following. The following contract expense information is intended to illustrate the expense of a MultiOption variable annuity contract. All expenses shown are rounded to the nearest dollar. The information contained in the tables must be considered with the narrative information which immediately follows them in this heading. FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average account value) Administrative Charge........................................ .15% ----- Total Separate Account Annual Expense.................... .15% ----- -----
UNDERLYING FUNDS ANNUAL EXPENSES (As a percentage of average net assets for the described underlying Fund.)
TOTAL FUND OTHER EXPENSE ANNUAL EXPENSE INVESTMENT (AFTER EXPENSE (AFTER EXPENSE MANAGEMENT REIMBURSEMENTS DISTRIBUTION REIMBURSEMENTS FEES IF ANY) EXPENSES IF ANY) ---------- -------------- ------------ -------------- Advantus Series Fund, Inc.: Growth Portfolio.............................. 0.50% 0.09% -- 0.59% Bond Portfolio................................ 0.50% 0.06% -- 0.56% Money Market Portfolio........................ 0.50% 0.00% -- 0.60% Asset Allocation Portfolio.................... 0.50% 0.04% -- 0.54% Mortgage Securities Portfolio................. 0.50% 0.08% -- 0.58% Index 500 Portfolio........................... 0.40% 0.05% -- 0.45% Capital Appreciation Portfolio................ 0.75% 0.10% -- 0.85% International Stock Portfolio................. 0.74% 0.22% -- 1.06% Small Company Portfolio....................... 0.75% 0.06% -- 0.81% Maturing Government Bond 1998 Portfolio (1)(2)...................................... 0.05% 0.15% -- 0.20% Maturing Government Bond 2002 Portfolio (1)(2)...................................... 0.05% 0.15% -- 0.20% Maturing Government Bond 2006 Portfolio (2)... 0.25% 0.15% -- 0.40% Maturing Government Bond 2010 Portfolio (2)... 0.25% 0.15% -- 0.40% Value Stock Portfolio (2)..................... 0.75% 0.08% -- 0.83% Small Company Value Portfolio (3)............. 0.75% 0.15% -- 0.90% International Bond Portfolio (3).............. 0.60% 1.00% -- 1.60% Index 400 Mid-Cap Portfolio (3)............... 0.40% 0.15% -- 0.55% Micro-Cap Value Portfolio (3)................. 1.25% 0.15% -- 1.40% Macro-Cap Value Portfolio (3)................. 0.70% 0.15% -- 0.85% Micro-Cap Growth Portfolio (3)................ 1.10% 0.15% -- 1.25% Templeton Variable Products Series: Developing Markets Fund Class 2 (4)........... 1.25% 0.53% 0.25% 2.03%
(1) Investment management fees for the Maturing Government Bond 1998 and 2002 Portfolios are equal on an annual basis to .05% of average daily net assets until April 30, 1998 at which time the fees will be .25% of average daily net assets. (2) Minnesota Mutual voluntarily absorbed certain expenses of the Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006 and Maturing Government Bond 2010 Portfolios for the year ended December 31, 1996. If these portfolios had been charged for expenses the ratio of expenses to average daily net assets would have been .72%, 1.14%, 1.58% and 2.18%, respectively. It is Minnesota Mutual's present intention to 8 waive other fund expenses during the current fiscal year which exceed, as a percentage of average daily net assets, .15%. Minnesota Mutual also reserves the option to reduce the level of other expenses which it will voluntarily absorb. (3) Although the Small Company Value, International Bond, Index 400 Mid-Cap, Micro-Cap Value, and Micro-Cap Growth Portfolios will not be available until October 1, 1997, Minnesota Mutual has voluntarily agreed to absorb or waive other fund expenses which exceed, as a percentage of average daily net assets, 1.00% for International Bond and .15% for Small Company Value, Index 400 Mid-Cap, Micro-Cap Value, Macro-Cap Value and Micro-Cap Growth Portfolios for the period ended December 31, 1997. If the Portfolios were to be charged for these expenses, it is estimated that the ratio of total expenses to average daily net assets would be 3.04% for Small Company Value, 3.19% for International Bond, 2.20% for Index 400 Mid-Cap, 4.07% for Micro-Cap Value, 2.97% for Macro-Cap Value, 3.77% for Micro-Cap Growth and 3.75% for Templeton Developing Markets. Minnesota Mutual also reserves the option to reduce the level of other expenses which it will voluntarily absorb. (4) Templeton Developing Markets -- Class 2. Figures are estimates for 1997 based on annualized Class 1 1996 figures. The Fund began operations in March 1996. Class 2 shares of the Fund were first offered May 1, 1997, and have a distribution plan or "Rule 12b-1 Plan" which is described in the Fund's prospectus. In addition, figures do not reflect the Investment Manager's agreement in advance to waive a portion of its fees during 1996. After the waiver, actual management fees and total operating expenses of the portfolio were 1.17% and 1.95% of net assets, respectively. This waiver agreement has been terminated. CONTRACT OWNER EXPENSE EXAMPLE You would pay the following expenses on a $1,000 investment assuming (1) 5% annual return and (2) redemption at the end of each time period.
1 YEAR 3 YEARS 5 YEARS 10 YEARS ------ ------- ------- -------- Advantus Series Fund, Inc.: Growth Portfolio........................... $ 8 $ 24 $ 41 $ 92 Bond Portfolio............................. $ 7 $ 23 $ 40 $ 88 Money Market Portfolio..................... $ 8 $ 24 $ 42 $ 93 Asset Allocation Portfolio................. $ 7 $ 22 $ 38 $ 86 Mortgage Securities Portfolio.............. $ 7 $ 23 $ 41 $ 91 Index 500 Portfolio........................ $ 6 $ 19 $ 33 $ 75 Capital Appreciation Portfolio............. $10 $ 32 $ 55 $122 International Stock Portfolio.............. $12 $ 38 $ 66 $147 Small Company Portfolio.................... $10 $ 31 $ 53 $118 Maturing Government Bond 1998 Portfolio.... $ 4 $ 11 $ 20 $ 44 Maturing Government Bond 2002 Portfolio.... $ 4 $ 11 $ 20 $ 44 Maturing Government Bond 2006 Portfolio.... $ 6 $ 18 $ 31 $ 69 Maturing Government Bond 2010 Portfolio.... $ 6 $ 18 $ 31 $ 69 Value Stock Portfolio...................... $10 $ 31 $ 54 $120 Small Company Value Portfolio.............. $11 $ 33 N/A N/A International Bond Portfolio............... $18 $ 55 N/A N/A Index 400 Mid-Cap Portfolio................ $ 7 $ 22 N/A N/A Micro-Cap Value Portfolio.................. $16 $ 49 N/A N/A Macro-Cap Value Portfolio.................. $10 $ 32 N/A N/A Micro-Cap Growth Portfolio................. $14 $ 44 N/A N/A Templeton Variable Products Series: Developing Markets Fund Class 2............ $22 $ 68 N/A N/A
The table does not reflect deductions for any applicable premium taxes which may be made from each purchase payment depending upon the applicable law. Prior to May 3, 1993, several of the Portfolios were known by different names. The Growth Portfolio was the Stock Portfolio, the Asset Allocation Portfolio was the Managed Portfolio, the Index 500 Portfolio was the Index Portfolio and the Capital Appreciation Portfolio was the Aggressive Growth Portfolio. 9 CONDENSED FINANCIAL INFORMATION The financial statements of Minnesota Mutual Variable Annuity Account and of The Minnesota Mutual Life Insurance Company may be found in the Statement of Additional Information. The table below gives per unit information about the financial history of each sub-account from the inception of each to December 31, 1996. This information should be read in conjunction with the financial statements and related notes of Minnesota Mutual Variable Annuity Account included in the Statement of Additional Information.
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 ---------- ---------- ------------ ------------ ------------ ---------- Growth Sub-Account: Unit value at beginning of period..... $2.012 $1.622 $1.611 $1.542 1.473 1.100 Unit value at end of period........... $2.354 $2.012 $1.622 $1.611 1.542 1.473 Number of units outstanding at end of period.............................. 1,448,982 1,534,005 1,477,118 1,145,632 879,694 532,298 Bond Sub-Account: Unit value at beginning of period..... $2.118 $1.772 $1.859 $1.688 1.585 1.350 Unit value at end of period........... $2.178 $2.118 $1.772 $1.859 1.688 1.585 Number of units outstanding at end of period.............................. 1,506,859 1,525,791 1,480,397 1,452,616 1,414,784 1,028,316 Money Market Sub-Account: Unit value at beginning of period..... $1.546 $1.469 $1.418 $1.383 1.342 1.275 Unit value at end of period........... $1.620 $1.546 $1.469 $1.418 1.383 1.342 Number of units outstanding at end of period.............................. 750,434 726,235 669,925 758,519 854,376 1,089,711 Asset Allocation Sub-Account: Unit value at beginning of period..... $2.251 $1.803 $1.831 $1.723 1.609 1.250 Unit value at end of period........... $2.529 $2.251 $1.803 $1.831 1.723 1.609 Number of units outstanding at end of period.............................. 2,029,532 1,871,136 2,307,972 2,610,010 1,843,236 659,538 Mortgage Securities Sub-Account: Unit value at beginning of period..... $2.091 $1.775 $1.839 $1.686 1.588 1.368 Unit value at end of period........... $2.198 $2.091 $1.775 $1.839 1.686 1.588 Number of units outstanding at end of period.............................. 450,065 485,533 477,367 632,499 753,204 363,294 Index 500 Sub-Account: Unit value at beginning of period..... $2.316 $1.695 $1.678 $1.531 1.428 1.102 Unit value at end of period........... $2.813 $2.316 $1.695 $1.678 1.531 1.428 Number of units outstanding at end of period.............................. 2,364,949 2,056,365 1,345,845 1,208,415 1,046,000 832,514 Capital Appreciation Sub-Account: Unit value at beginning of period..... $2.420 $1.974 $1.933 $1.754 1.672 1.182 Unit value at end of period........... $2.842 $2.420 $1.974 $1.933 1.754 1.672 Number of units outstanding at end of period.............................. 1,668,256 1,869,447 1,659,517 1,193,412 913,174 582,915 PERIOD FROM JUNE 1, 1987 TO DECEMBER 1990 1989 1988 1987 -------- -------- -------- ------------ Growth Sub-Account: Unit value at beginning of period..... 1.099 0.873 0.757 1.000 Unit value at end of period........... 1.100 1.099 0.873 0.757 Number of units outstanding at end of period.............................. 239,250 156,253 115,601 18,851 Bond Sub-Account: Unit value at beginning of period..... 1.261 1.121 1.050 1.000 Unit value at end of period........... 1.350 1.261 1.121 1.050 Number of units outstanding at end of period.............................. 800,284 707,399 116,128 7,642 Money Market Sub-Account: Unit value at beginning of period..... 1.185 1.093 1.026 1.000 Unit value at end of period........... 1.275 1.185 1.093 1.026 Number of units outstanding at end of period.............................. 748,839 541,490 276,977 48,357 Asset Allocation Sub-Account: Unit value at beginning of period..... 1.208 1.006 0.909 1.000 Unit value at end of period........... 1.250 1.208 1.006 0.909 Number of units outstanding at end of period.............................. 316,973 216,005 144,160 571 Mortgage Securities Sub-Account: Unit value at beginning of period..... 1.251 1.105 1.019 1.000 Unit value at end of period........... 1.368 1.251 1.105 1.019 Number of units outstanding at end of period.............................. 187,645 172,295 157,244 117,269 Index 500 Sub-Account: Unit value at beginning of period..... 1.149 0.882 0.761 1.000 Unit value at end of period........... 1.102 1.149 0.882 0.761 Number of units outstanding at end of period.............................. 547,781 436,533 261,284 126,183 Capital Appreciation Sub-Account: Unit value at beginning of period..... 1.206 0.874 0.813 1.000 Unit value at end of period........... 1.182 1.206 0.874 0.813 Number of units outstanding at end of period.............................. 339,404 180,206 135,463 8,751
10
YEAR ENDED DECEMBER 31, --------------------------------------------------------------------------------- 1996 1995 1994 1993 1992 1991 ---------- ---------- ------------ ------------ ------------ ---------- International Stock Sub-Account: Unit value at beginning of period..... $1.495 $1.311 $1.317 $0.915 1.000(a) Unit value at end of period........... $1.788 $1.495 $1.311 $1.317 0.915 Number of units outstanding at end of period.............................. 2,418,015 2,254,079 2,153,847 1,330,940 441,041 Small Company Sub-Account Unit value at beginning of period..... $1.604 $1.217 $1.148 $1.000(b) Unit value at end of period........... $1.705 $1.604 $1.217 $1.148 Number of units outstanding at end of period.............................. 1,237,091 1,581,035 1,091,852 387,337 Maturing Government Bond 1998 Sub-Account Unit value at beginning of period..... $1.145 $0.988 $1.000(c) Unit value at end of period........... $1.190 $1.145 $0.988 Number of units outstanding at end of period.............................. 1,324,838 1,146,897 881,942 Maturing Government Bond 2002 Sub-Account Unit value at beginning of period..... $1.222 $0.979 $1.000(c) Unit value at end of period........... $1.241 $1.222 $0.979 Number of units outstanding at end of period.............................. 269,553 121,397 120,595 Maturing Government Bond 2006 Sub-Account Unit value at beginning of period..... $1.305 $0.970 $1.000(c) Unit value at end of period........... $1.287 $1.305 $0.970 Number of units outstanding at end of period.............................. 117,035 124,592 121,565 Maturing Government Bond 2010 Sub-Account Unit value at beginning of period..... $1.351 $0.958 $1.000(c) Unit value at end of period........... $1.303 $1.351 $0.958 Number of units outstanding at end of period.............................. 141,772 116,635 211,596 Value Stock Sub-Account Unit value at beginning of period..... $1.400 $1.055 $1.000(c) Unit value at end of period........... $1.831 $1.400 $1.055 Number of units outstanding at end of period 798,596 426,836 183,180 PERIOD FROM JUNE 1, 1987 TO DECEMBER 1990 1989 1988 1987 -------- -------- -------- ------------ International Stock Sub-Account: Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Small Company Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Maturing Government Bond 1998 Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Maturing Government Bond 2002 Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Maturing Government Bond 2006 Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Maturing Government Bond 2010 Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period.............................. Value Stock Sub-Account Unit value at beginning of period..... Unit value at end of period........... Number of units outstanding at end of period
(a) The information for the sub-account is shown for the period May 1, 1992 to December 31, 1992. May 1, 1992 was the effective date of the 1933 Act Registration Statement for the sub-account. (b) The information for the sub-account is shown for the period May 3, 1993 to December 31, 1993. May 3, 1993 was the effective date of the 1933 Act Registration Statement for the sub-account. (c) The information for the sub-account is shown for the period May 2, 1994 to December 31, 1994. May 2, 1994 was the effective date of the 1933 Act Registration Statement for the sub-account. 11 PERFORMANCE DATA From time to time the Variable Annuity Account may publish advertisements containing performance data relating to its Sub-Accounts. In the case of the Money Market Sub-Account, the Variable Annuity Account will publish yield or effective yield quotations for a seven-day or other specified period. In the case of the other Sub-Accounts, performance data will consist of average annual total return quotations for a one-year period and for the period since the Sub- Account became available pursuant to the Variable Annuity Account's registration statement, and may also include cumulative total return quotations for the period since the Sub-Account became available pursuant to such registration statement. The Money Market Sub-Account may also quote such average annual and cumulative total return figures. Performance figures used by the Variable Annuity Account are based on historical information of the Sub-Accounts for specified periods, and the figures are not intended to suggest that such performance will continue in the future. Performance figures of the Variable Annuity Account will reflect only charges made against the net asset value of the Variable Annuity Account pursuant to the terms of the variable annuity contracts offered by this Prospectus. The various performance figures used in Variable Annuity Account advertisements relating to the contracts described in this Prospectus are summarized below. More detailed information on the computations is set forth in the Statement of Additional Information. MONEY MARKET SUB-ACCOUNT YIELD. Yield quotations for the Money Market Sub-Account are based on the income generated by an investment in the sub-account over a specified period, usually seven days. The figures are "annualized," that is, the amount of income generated by the investment during the period is assumed to be generated over a 52-week period and is shown as a percentage of the investment. Effective yield quotations are calculated similarly, but when annualized the income earned by an investment in the sub- account is assumed to be reinvested. Effective yield quotations will be slightly higher than yield quotations because of the compounding effect of this assumed reinvestment. TOTAL RETURN FIGURES. Cumulative total return figures may also be quoted for all Sub-Accounts. Cumulative total return is based on a hypothetical $1,000 investment in the Sub-Account at the beginning of the advertised period, and is equal to the percentage change between the $1,000 net asset value of that investment at the beginning of the period and the net asset value of that investment at the end of the period. Prior to May 3, 1993, several of the Sub-Accounts were known by different names. The Growth Sub-Account was the Stock Sub-Account, the Asset Allocation Sub-Account was the Managed Sub-Account, the Index 500 Sub-Account was the Index Sub-Account and the Capital Appreciation Sub-Account was the Aggressive Growth Sub-Account. All cumulative total return figures published for Sub-Accounts will be accompanied by average annual total return figures for a one-year period, five-year period and for the period since the Sub-Account became available pursuant to the Variable Annuity Account's registration statement. Average annual total return figures will show for the specified period the average annual rate of return required for an initial investment of $1,000 to equal the accumulation value of that investment at the end of the period. PREDICTABILITY OF RETURN. For each of the Maturing Government Bond Sub-Accounts, Minnesota Mutual will calculate an anticipated growth rate (AGR) on each day that the underlying Portfolio of the Fund is valued. Minnesota Mutual may also calculate an anticipated value at maturity (AVM) on any such day. Daily calculations for each are necessary because (i) the AGR and AVM calculations assume, among other things, an expense ratio and portfolio composition that remains unchanged for the life of each such Sub-Account to the target date at maturity, (ii) such calculations are therefore meaningful as a measure of predictable return with respect to particular units only if such units are held to the applicable target maturity date and only with respect to units purchased on the date of such calculations (the AGR and AVM applicable to units purchased on any other date may be materially different). Those assumptions can only be hypothetical given that owners of contracts have the option to purchase or redeem units on any business day through contract activity, and will receive dividend and capital gain distributions through the receipt of additional shares to their unit values. A number of factors in addition to contract owner activity can cause a Maturing Government Bond Sub- Account's AGR and AVM to change from day to day. These include the adviser's efforts to improve total return through market 12 opportunities, transaction costs, interest rate changes and other events that affect the market value of the investments held in each Maturing Government Bond Portfolio in the Fund. Despite these factors, it is anticipated that if specific units of a Maturing Government Bond Sub-Account are held to the applicable target maturity date, then the AGR and AVM applicable to such units (i.e., calculated as of the date of purchase of such units) will vary from the actual return experienced by such units within a narrow range. - ------------------------------------------------------------------------ GENERAL DESCRIPTIONS A. THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY We are a mutual life insurance company organized in 1880 under the laws of Minnesota. Our home office is at 400 Robert Street North, St. Paul, Minnesota 55101-2098, telephone: (612) 665-3500. We are licensed to do a life insurance business in all states of the United States (except New York where we are an authorized reinsurer), the District of Columbia, Canada, Puerto Rico, and Guam. B. VARIABLE ANNUITY ACCOUNT A separate account called the Minnesota Mutual Variable Annuity Account was established on September 10, 1984, by our Board of Trustees in accordance with certain provisions of the Minnesota insurance law. The separate account is registered as a "unit investment trust" with the Securities and Exchange Commission under the Investment Company Act of 1940, but such registration does not signify that the Securities and Exchange Commission supervises the management, or the investment practices or policies, of the Variable Annuity Account. The separate account meets the definition of a "separate account" under the federal securities laws. The Minnesota law under which the Variable Annuity Account was established provides that the assets of the Variable Annuity Account shall not be chargeable with liabilities arising out of any other business which we may conduct, but shall be held and applied exclusively to the benefit of the holders of those variable annuity contracts for which the separate account was established. The investment performance of the Variable Annuity Account is entirely independent of both the investment performance of our General Account and of any other separate account which we may have established or may later establish. All obligations under the contracts are general corporate obligations of Minnesota Mutual. The Variable Annuity Account currently has twenty-one sub-accounts to which contract owners may allocate purchase payments. Each sub-account invests in shares of a corresponding Portfolio of the Fund. Additional sub-accounts may be added at our discretion. The University of Minnesota provides tax-deferred annuities and custodial funds in accordance with section 403(b) as amended by section 415, of the Code. The University of Minnesota has separated its plan into two sections: The Basic Plan, which is that portion of the plan that relates to the Faculty Retirement Plan; and the Optional Plan, which is that portion of the plan which relates to the purchase of optional annuities and mutual funds. When this contract is used in association with the University of Minnesota Basic Plan, purchase payments may be allocated only to the following sub-accounts: Money Market Account and Bond Account. When this contract is used in association with the Optional Plan, purchase payments may be allocated to any sub-account offered under the contract. In addition, contracts issued in association with the Basic Plan and Optional Plan do not allow amounts to be transferred between the two Plans. C. ADVANTUS SERIES FUND, INC. The Variable Annuity Account currently invests in Advantus Series Fund, Inc. (the "Series Fund"), a mutual fund of the series type which is advised by Advantus Capital Management, Inc. Prior to May 1, 1997, the name of the Series Fund was "MIMLIC Series Fund, Inc." On January 14, 1997, the Fund's Board of Directors approved an amendment of the Series Fund's Articles of Incorporation for the purpose of changing the name of the Series Fund to "Advantus Series Fund, Inc." effective May 1, 1997. The purpose of the name change is to provide the Series Fund with a more distinctive name which may provide greater visibility and name recognition, which reflects the name of its adviser, and which may provide additional marketing opportunities for variable contracts investing in shares of the Series Fund. The change in the Series Fund's name will not result in any change in investment objectives, policies or practices for the Series Fund or any of its portfolios. The Series Fund is registered with the Securities and Exchange Commission as a 13 diversified, open-end management investment company, but such registration does not signify that the Commission supervises the management, or the investment practices or policies, of the Series Fund. The Series Fund issues its shares, continually and without sales charge, only to us and our separate accounts, which currently include the Variable Annuity Account, Variable Fund D, the Variable Life Account, the Group Variable Annuity Account and the Variable Universal Life Account. The Series Fund may also be used as the underlying investment medium for separate accounts of the Northstar Life Insurance Company, a wholly-owned life insurance subsidiary of Minnesota Mutual which is domiciled in the State of New York. Shares are sold and redeemed at net asset value. In the case of a newly issued contract, purchases of shares of the Portfolios of the Series Fund in connection with the first purchase payment will be based on the values next determined after issuance of the contract by us. Redemptions of shares of the Portfolios of the Series Fund are made at the net asset value next determined after receive a request for transfer, partial withdrawal or surrender at our home office. In the case of outstanding contracts, purchases of shares of the Portfolio of the Series Fund for the Variable Annuity Account are made at the net asset value of such shares next determined after receipt by us of contract purchase payments. The Series Fund's investment adviser is Advantus Capital Management, Inc. ("Advantus Capital"). Advantus Capital is a wholly-owned subsidiary of MIMLIC Asset Management Company ("MIMLIC Management") which prior to May 1, 1997, served as investment adviser to the Series Fund. MIMLIC Management is a wholly-owned subsidiary of Minnesota Mutual. The same portfolio managers and other personnel who previously provided investment advisory services to the Series Fund through MIMLIC Management continue to provide the same services through Advantus Capital. It acts as an investment adviser to the Series Fund pursuant to an advisory agreement. Advantus Capital acts as investment adviser for the Fund and its Portfolios. Winslow Capital Management, Inc., a Minnesota corporation with principal offices at 4720 IDS Tower, 80 South Eighth Street, Minneapolis, Minnesota 55402, has been retained under an investment sub-advisory agreement with Advantus Capital Management, Inc. to provide investment advice and, in general, conduct the management and investment program of the Capital Appreciation Portfolio. Similarly, Templeton Investment Counsel, Inc., a Florida corporation with principal offices in Fort Lauderdale, Florida has been retained under an investment sub-advisory agreement to provide investment advice to the International Stock Portfolio of the Fund. J.P. Morgan Investment Management Inc., a Delaware corporation with principal offices in New York, New York, has been retained under an investment sub-advisory agreement to provide investment advice for the Macro-Cap Value Portfolio of the Fund. Keystone Investment Management Company, a Delaware corporation with principal offices in Boston, Massachusetts, has been retained under an investment sub-advisory agreement to provide investment advice for the Micro-Cap Value Portfolio of the Fund. Wall Street Associates, a California corporation with principal offices in La Jolla, California, as been retained under an investment sub-advisory agreement to provide investment advice for the Micro-Cap Growth Portfolio of the Fund. Julius Baer Investment Management, Inc., a Delaware corporation with principal offices in New York, New York, has been retained under an investment sub-advisory agreement to provide investment advice for the International Bond Portfolio of the Fund. A prospectus for the Fund is attached to this Prospectus. A person should carefully read the Fund's prospectus before investing in the contracts. D. TEMPLETON VARIABLE PRODUCTS SERIES FUND In addition to the investments in the Fund, the Variable Annuity Account invests in the Templeton Developing Markets Fund, a diversified portfolio of the Templeton Variable Products Series Fund, a mutual fund of the series type. The investment objectives and certain policies of the Templeton Developing Markets Fund available under the contract are as follows: The Templeton Developing Markets fund seeks long-term capital appreciation. It pursues this objective by investing primarily in equity securities of issuers in countries having developing markets. Countries considered to have developing markets are all countries that are considered to be developing or emerging countries by the International Bank for Reconstruction and Development (more commonly referred to as the World Bank) 14 or the International Finance Corporation, as well as countries that are classified by the United Nations or otherwise regarded by their authorities as developing. Class 2 of the Templeton Developing Markets Fund pays .25% of the average daily net assets annually under a distribution plan adopted under Rule 12b-1 of the Investment Company Act of 1940. Amounts paid under the 12b-1 plan to Minnesota Mutual may be used for certain contract owner services or distribution activities. The investment adviser of Templeton Developing Markets Fund is Templeton Asset Management Ltd., a Singapore corporation. It is an indirect wholly owned subsidiary of Franklin Resources, Inc. ("Franklin"). Through its subsidiaries, Franklin is engaged in the financial services industry. The Templeton organization has been investing globally since 1940 and, with its affiliates, provides investment management and advisory services to a worldwide client base. The investment adviser and its affiliates have offices worldwide. E. ADDITIONS, DELETIONS OR SUBSTITUTIONS We retain the right, subject to any applicable law, to make substitutions with respect to the investments of the sub-accounts of the Variable Annuity Account. If investment in a fund should no longer be possible or if we determine it becomes inappropriate for contracts of this class, we may substitute another fund for a sub-account. Substitution may be with respect to existing accumulation values, future purchase payments and future annuity payments. We may also establish additional sub-accounts in the Variable Annuity Account and we reserve the right to add, combine or remove any sub-accounts of the Variable Annuity Account. Each additional sub-account will purchase shares in a new portfolio or mutual fund. Such sub-accounts may be established when, in our sole discretion, marketing, tax, investment or other conditions warrant such action. Similar considerations will be used by us should there be a determination to eliminate one or more of the sub-accounts of the Variable Annuity Account. The addition of any investment option will be made available to existing contract owners on such basis as may be determined by us. We also reserve the right, when permitted by law, to de-register the Variable Annuity Account under the Investment Company Act of 1940, to restrict or eliminate any voting rights of the contract owners, and to combine the Variable Annuity Account with one or more of our other separate accounts. Shares of the Funds are also sold to other separate accounts, which are used to receive and invest premiums paid under variable life policies. It is conceivable that in the future it may be disadvantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in a Fund simultaneously. Although neither Minnesota Mutual nor the Fund currently foresees any such disadvantages either to variable life insurance policy owners or to variable annuity contract owners, the Funds' Board of Directors intends to monitor events in order to identify any material conflicts between such policy owners and contract owners and to determine what action, if any, should be taken in response thereto. Such action could include the sale of Fund shares by one or more of the separate accounts, which could have adverse consequences. Material conflicts could result from, for example, (1) changes in state insurance laws, (2) changes in Federal income tax laws, (3) changes in the investment management of any of the Portfolios of the Fund, or (4) differences in voting instructions between those given by policy owners and those given by contract owners. - ------------------------------------------------------------------------ CONTRACT CHARGES A. ADMINISTRATIVE CHARGE We perform all administrative services relative to the contract. These services include the review of applications for compliance with our issue criteria, the preparation and issue of contracts, the receipt of purchase payments, forwarding amounts to the Fund for investment, the preparation and mailing of periodic reports and the performance of other services. As consideration for providing these services we currently make a deduction from the Variable Annuity Account at the annual rate of .15%. We reserve the right to increase this administrative charge to not more than .35%. The administrative charge is designed to cover the administrative expenses incurred by us under the contract. We do not expect to recover from the charge any amount in excess of our accumulated expenses associated with the administration of the contract. 15 B. PREMIUM TAXES Deduction for any applicable state premium taxes may be made from each purchase payment or at the commencement of annuity payments. (Currently, such taxes range from 0.0% to 3.5%, depending on the applicable law.) Any amount withdrawn from the contract may be reduced by any premium taxes not previously deducted from purchase payments. - ------------------------------------------------------------------------ VOTING RIGHTS The Fund shares held in the Variable Annuity Account will be voted by us at the regular and special meetings of the Fund. Shares will be voted by us in accordance with instructions received from contract owners with voting interests in each sub-account of the Variable Annuity Account. In the event no instructions are received from a contract owner, we will vote such shares of the Fund in the same proportion as shares of the Fund for which instructions have been received from contract owners with voting interests in each sub-account of the Variable Annuity Account. In the event no instructions are received from a contract owner, with respect to shares of a Portfolio held by a sub-account, Minnesota Mutual will vote such shares of the Portfolio and shares not attributable to contracts in the same proportion as shares of the Portfolio held by such sub-account for which instructions have been received. The number of votes which are available to a contract owner will be calculated separately for each sub-account of the Variable Annuity Account. If, however, the Investment Company Act of 1940 or any regulation under that Act should change so that we may be allowed to vote shares in our own right, then we may elect to do so. During the accumulation period of each contract, the contract owner holds the voting interest in each contract. The number of votes will be determined by dividing the accumulation value of the contract attributable to each sub-account by the net asset value per share of the underlying Fund shares held by that sub- account. During the annuity period of each contract, the annuitant holds the voting interest in each contract. The number of votes will be determined by dividing the reserve for each contract allocated to each sub-account by the net asset value per share of the underlying Fund shares held by that sub-account. After an annuity begins, the votes attributable to any particular contract will decrease as the reserves decrease. In determining any voting interest, fractional shares will be recognized. We shall notify each contract owner or annuitant of a Fund shareholders' meeting if the shares held for the contract owner's contract may be voted at such meeting. We will also send proxy materials and a form of instruction so that you can instruct us with respect to voting. - ------------------------------------------------------------------------ DESCRIPTION OF THE CONTRACT A. GENERAL PROVISIONS 1. TYPE OF CONTRACT OFFERED FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT This type of contract may be used in connection with all types of plans, or individual retirement annuities adopted by or on behalf of individuals. It may also be purchased by individuals not as a part of any plan. The contract provides for a variable annuity or a fixed annuity to begin at some future date with the purchase payments for the contract to be paid prior to the annuity commencement date in a series of payments flexible in respect to the date and amount of payment. 2. ISSUANCE OF CONTRACTS The contract is issued to you, the contract owner named in the application. The owner of the contract may be the annuitant or someone else. 3. MODIFICATION OF THE CONTRACTS A contract may be modified at any time by written agreement between you and us. However, no such modification will adversely affect the rights of an annuitant under the contract unless the modification is made to comply with a law or government regulation. You will have the right to accept or reject the modification. This right of acceptance or rejection is limited for contracts used as individual retirement annuities. 16 4. ASSIGNMENT If the contract is sold in connection with a tax-qualified program (including employer sponsored employee pension benefit plans, tax-sheltered annuities and individual retirement annuities), your or the annuitant's interest may not be assigned, sold, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose, and to the maximum extent permitted by law, benefits payable under the contract shall be exempt from the claims of creditors. If the contract is not issued in connection with a tax-qualified program, the interest of any person in the contract may be assigned during the lifetime of the annuitant. We will not be bound by any assignment until we have recorded written notice of it at our home office. We are not responsible for the validity of any assignment. An assignment will not apply to any payment or action made by us before it was recorded. Any proceeds which become payable to an assignee will be payable in a single sum. Any claim made by an assignee will be subject to proof of the assignee's interest and the extent of the assignment. 5. LIMITATIONS ON PURCHASE PAYMENTS You choose when to make purchase payments. There is no minimum amount which is to be allocated to any sub-account of the Variable Annuity Account. We may cancel a flexible payment contract, in our discretion, if no purchase payments are made for a period of two or more full contract years and both (a) the total purchase payments made, less any withdrawals, and (b) the accumulation value of the entire contract, are less than $2,000. If such a cancellation takes place, we will pay you the accumulation value of your contract and we will notify you, in advance, of our intent to exercise this right in our annual report which advises contract owners of the status of their contracts. We will act to cancel the contract ninety days after the contract anniversary unless an additional purchase payment is received before the end of that ninety day period. Contracts issued in some states, for example, New Jersey, do not permit such a cancellation and contracts issued there do not contain this provision. There may be limits on the maximum contributions to retirement plans that qualify for special tax treatment. 6. DEFERMENT OF PAYMENT Whenever any payment under a contract is to be made in a single sum, payment will be made within seven days after the date such payment is called for by the terms of the contract, except as payment may be subject for postponement for: (a) any period during which the New York Stock Exchange is closed other than customary weekend and holiday closings, or during which trading on the New York Stock Exchange is restricted, as determined by the Securities and Exchange Commission; (b) any period during which an emergency exists as determined by the Commission as a result of which it is not reasonably practical to dispose of securities in the Fund or to fairly determine the value of the assets of the Fund; or (c) such other periods as the Commission may by order permit for the protection of the contract owners. 7. PARTICIPATION IN DIVISIBLE SURPLUS The contracts participate in our divisible surplus, according to the annual determination of our Board of Trustees as to the portion, if any, of our divisible surplus which has accrued on the contracts. No assurance can be given as to the amount of divisible surplus, if any, that will be distributable under these contracts in the future. Such amount may arise if mortality experience is more favorable than assumed. When any distribution of divisible surplus is made, it may take the form of additional payments to annuitants or the crediting of additional accumulation units. B. ANNUITY PAYMENTS AND OPTIONS 1. ANNUITY PAYMENTS Variable annuity payments are determined on the basis of (a) a mortality table at least as favorable as the mortality table specified in the contract, which reflects the age of the annuitant, (b) the type of annuity payment option selected, and (c) the investment performance of the Fund Portfolios selected by the contract owner. The amount of the variable annuity payments will not be affected by adverse mortality experience or by an increase in our expenses in excess of the maximum expense deductions provided for in the contract. The annuitant will receive the 17 value of a fixed number of annuity units each month. The value of such units, and thus the amounts of the monthly annuity payments will, however, reflect investment gains and losses and investment income of the Funds, and thus the annuity payments will vary with the investment experience of the assets of the Portfolio of the Fund selected by the contract owner. 2. ELECTING THE RETIREMENT DATE AND FORM OF ANNUITY The contracts provide for four optional annuity forms, any one of which may be elected if permitted by law. Each annuity option may be elected on either a variable annuity or a fixed annuity basis, or a combination of the two. Other annuity options may be available from us on request. While the contracts require that notice of election to begin annuity payments must be received by us at least 30 days prior to the annuity commencement date, we are currently waiving that requirement for such variable annuity elections received at least three valuation days prior to the 15th of the month. We reserve the right to enforce the 30 day notice requirement at our option at any time in the future. The contract permits an annuity payment to begin on the first day of any month after the 50th birthday of the annuitant. Contract payments must begin before the 75th birthday of the annuitant. If an election has not been made otherwise, and the plan does not specify to the contrary, annuity payments will begin on the later of: the first day of the month immediately following the 65th birthday of the annuitant, or the first day of the month immediately following the fifth contract anniversary. A variable annuity will be provided and the annuity option shall be Option 2A, a life annuity with a period of 120 months. The minimum first monthly annuity payment on either a variable or fixed dollar basis is $20. If such first monthly payment would be less than $20, we may fulfill our obligation by paying in a single sum the accumulation value of the contract which would otherwise have been applied to provide annuity payments. Once annuity payments have commenced, you cannot surrender an annuity benefit and receive a single sum settlement in lieu thereof. Benefits under retirement plans that qualify for special tax treatment generally must commence no later than the April 1 following the year in which the participant reaches age 70 1/2 and are subject to other conditions and restrictions. 3. OPTIONAL ANNUITY FORMS OPTION 1--LIFE ANNUITY This is an annuity payable monthly during the lifetime of the annuitant and terminating with the last monthly payment preceding the death of the annuitant. This option offers the maximum monthly payment since there is no guarantee of a minimum number of payments or provision for a death benefit for beneficiaries. It would be possible under this option for the annuitant to receive only one annuity payment if he died prior to the due date of the second annuity payment, two if he died before the due date of the third annuity payment, etc. OPTION 2--LIFE ANNUITY WITH A PERIOD CERTAIN OF 120 MONTHS (OPTION 2A), 180 MONTHS (OPTION 2B), OR 240 MONTHS (OPTION 2C) This is an annuity payable monthly during the lifetime of the annuitant, with the guarantee that if the annuitant dies before payments have been made for the period certain elected, payments will continue to the beneficiary during the remainder of the period certain. If the beneficiary so elects at any time during the remainder of the period certain, the present value of the remaining guaranteed number of payments, based on the then current dollar amount of one such payment and using the same interest rate which served as a basis for the annuity shall be paid in a single sum to the beneficiary. OPTION 3--JOINT AND LAST SURVIVOR ANNUITY This is an annuity payable monthly during the joint lifetime of the annuitant and a designated joint annuitant and continuing thereafter during the remaining lifetime of the survivor. Under this option there is no guarantee of a minimum number of payments or provision for a death benefit for beneficiaries. If this option is elected, the contract and payments shall then be the joint property of the annuitant and the designated joint annuitant. It would be possible under this option for both annuitants to receive only one annuity payment if they both died prior to the due date of the second annuity payment, two if they died before the due date of the third annuity payment, etc. OPTION 4--PERIOD CERTAIN ANNUITY This is an annuity payable monthly for a period certain of from 1 to 20 years, as elected. If the annuitant dies before payments have been 18 made for the period certain elected, payments will continue to the beneficiary during the remainder of the fixed period. In the event of the death of the annuitant, the beneficiary may, at any time during the payment period, elect that (1) the present value of the remaining guaranteed number of payments, based on the then current dollar amount of one such payment and using the same interest rate which served as a basis for the annuity, shall be paid in a single sum, or (2) such commuted amount shall be applied to effect a life annuity under Option 1 or Option 2. 4. DETERMINATION OF AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT Under the contract described in this Prospectus, the first monthly annuity payment is determined by the available value of the contract when an annuity begins. In addition, a number of states do impose a premium tax on the amount used to purchase an annuity benefit, depending on the type of plan involved. Where applicable, these taxes currently range from 0.0% to 3.5% and are deducted from the contract value applied to provide annuity payments. We reserve the right to make such deductions from purchase payments as they are received. The amount of the first monthly payment depends on the optional annuity form elected and the adjusted age of the annuitant. A formula for determining the adjusted age is contained in the contract. The contracts contain tables indicating the dollar amount of the first monthly payment under each optional annuity form for each $1,000 of value applied. The tables are determined from the Progressive Annuity Table with interest at the rate of 3.5% per annum, assuming births in the year 1900 and an age setback of eight years. Also, for contracts issued after 1993 or such later date as we may be able to issue this contract in a jurisdiction, the contracts contain a provision that applies a contract fee of $200 when a fixed annuity is elected. If, when annuity payments are elected, we are using tables of annuity rates for these contracts which result in larger annuity payments, we will use those tables instead. The 3.5% interest rate assumed in the annuity tables would produce level annuity payments if the net investment rate remained constant at 3.5% per year. Subsequent payments will be less than, equal to, or greater than the first payment depending upon whether the actual net investment rate is less than, equal to, or greater than 3.5%. A higher interest rate would mean a higher initial payment, but a more slowly rising (or more rapidly falling) series of subsequent payments. A lower assumption would have the opposite effect. The dollar amount of the first monthly variable annuity payment is determined by applying the available value (after deduction of any premium taxes not previously deducted) to the table using the adjusted age of the annuitant and any joint annuitant. A number of annuity units is then determined by dividing this dollar amount by the then current annuity unit value. Thereafter, the number of annuity units remains unchanged during the period of annuity payments. This determination is made separately for each sub-account of the separate account. The number of annuity units is determined for each sub-account and is based upon the available value in each sub-account as of the date annuity payments are to begin. The dollar amount determined for each sub-account will then be aggregated for purposes of making payment. Annuity payments are always made as of the first day of a month. The contracts require that notice of election to begin annuity payments must be received by us at least thirty days prior to the annuity commencement date. However, Minnesota Mutual currently waives this requirement, and at the same time reserves the right to enforce the thirty day notice at its option in the future. Money will be transferred to the General Account for the purpose of electing fixed annuity payments, or to the appropriate variable sub-accounts for variable annuity payments, on the valuation date coincident with the first valuation date following the fourteenth day of the month preceding the date on which the annuity is to begin. If a request for a fixed annuity is received between the first valuation date following the fourteenth day of the month and the second to last valuation date of the month prior to commencement, the transfer will occur on the valuation date coincident with or next following the date on which the request is received. If a fixed annuity request is received after the third to the last valuation day of the month prior to commencement, it will be treated as a request received the following month, and the commencement date will be changed to the first of the month following the requested commencement date. The account value used to determine fixed annuity payments will be the value as of the last valuation date of the month preceding the date the fixed annuity is to begin. 19 If a variable annuity request is received after the third valuation date preceding the first valuation date following the fourteenth day of the month prior to the commencement date, it will be treated as a request received the following month, and the commencement date will be changed to the first of the month following the requested commencement date. The account value used to determine the initial variable annuity payment will be the value as of the first valuation date following the fourteenth day of the month prior to the variable annuity begin date. 5. AMOUNT OF SECOND AND SUBSEQUENT MONTHLY ANNUITY PAYMENTS The dollar amount of the second and later variable annuity payments is equal to the number of annuity units determined for each sub-account times the annuity unit value for that sub-account as of the due date of the payment. This amount may increase or decrease from month to month. 6. VALUE OF THE ANNUITY UNIT The value of an annuity unit for a sub-account is determined monthly as of the first day of each month by multiplying the value on the first day of the preceding month by the product of (a) .997137, and (b) the ratio of the value of the accumulation unit for that sub-account for the valuation date next following the fourteenth day of the preceding month to the value of the accumulation unit for the valuation date next following the fourteenth day of the second preceding month (.997137 is a factor to neutralize the assumed net investment rate, discussed in Section 4 above, of 3.5% per annum built into the annuity rate tables contained in the contract and which is not applicable because the actual net investment rate is credited instead). The value of an annuity unit for a sub-account as of any date other than the first day of a month is equal to its value as of the first day of the next succeeding month. 7. TRANSFER OF ANNUITY RESERVES Amounts held as annuity reserves may be transferred among the variable annuity sub-accounts during the annuity period. Annuity reserves may also be transferred from a variable annuity to a fixed annuity during this time. The change must be made by a written request. The annuitant and joint annuitant, if any, must make such an election. There are restrictions to such a transfer. The transfer of an annuity reserve amount from any sub-account must be at least equal to $5,000 or the entire amount of the reserve remaining in that sub-account. In addition, annuity payments must have been in effect for a period of 12 months before a change may be made. Such transfers can be made only once every 12 months. The written request for an annuity transfer must be received by us more than thirty days in advance of the due date of the annuity payment subject to the transfer. Upon request, we will make available to you annuity reserve sub-account amount information. A transfer will be made on the basis of annuity unit values. The number of annuity units from the sub-account being transferred will be converted to a number of annuity units in the new sub-account. The annuity payment option will remain the same and cannot be changed. After this conversion, a number of annuity units in the new sub-account will be payable under the elected option. The first payment after conversion will be of the same amount as it would have been without the transfer. The number of annuity units will be set at that number of units which are needed to pay that same amount on the transfer date. When we receive a request for the transfer of variable annuity reserves, it will be effective for future annuity payments. The transfer will be effective and funds actually transferred in the middle of the month prior to the next annuity payment affected by your request. We will use the same valuation procedures to determine your variable annuity payment that we used initially. However, if your annuity is based upon annuity units in a sub-account which matures on a date other than the stated annuity valuation date, then your annuity units will be adjusted to reflect sub-account performance in the maturing sub-account and the sub-account to which reserves are transferred for the period between annuity valuation dates. Amounts held as reserves to pay a variable annuity may also be transferred to a fixed annuity during the annuity period. However, the restrictions which apply to annuity sub-account transfers will apply in this case as well. The amount transferred will then be based upon the adjusted age of the annuitant and any joint annuitant at the time of the transfer. The annuity payment option will remain the same. Amounts paid as a fixed annuity may not be transferred to a variable annuity. Contracts with this transfer feature may not be available in all states. 20 C. DEATH BENEFITS The contracts provide that in the event of the death of the owner before annuity payments begin, the amount payable at death will be the accumulation value determined as of the valuation date coincident with or next following the date due proof of death is received by us at our home office. Death proceeds will be paid in a single sum to the beneficiary designated unless an annuity option is elected. Payment will be made within seven days after we receive due proof of death. Except as noted below, the entire interest in the contract must be distributed within five years of the owner's death. The contract has a guaranteed death benefit if you die before annuity payments have started. The death benefit shall be equal to the greater of: (1) the amount of the accumulation value payable at death; or (2) the amount of the total purchase payments paid to us as consideration for this contract, less all contract withdrawals. If the owner dies on or before the date on which annuity payments begin and if the designated beneficiary is a person other than the owner's spouse, that beneficiary may elect an annuity option measured by a period not longer than that beneficiary's life expectancy only so long as annuity payments begin not later than one year after the owner's death. If there is no designated beneficiary, then the entire interest in a contract must be distributed within five years after the owner's death. If the annuitant dies after annuity payments have begun, any payments received by a non-spouse beneficiary must be distributed at least as rapidly as under the method elected by the annuitant as of the date of death. If any portion of the contract interest is payable to the owner's designated beneficiary who is also the surviving spouse of the owner, that spouse shall be treated as the contract owner for purposes of: (1) when payments must begin, and (2) the time of distribution in the event of that spouse's death. Payments must be made in substantially equal installments. If the owner of this contract is other than a natural person, such as a trust or other similar entity, we will pay a death benefit of the accumulation value to the named beneficiary on the death of the annuitant, if death occurs prior to the date for annuity payments to begin. D. PURCHASE PAYMENTS, VALUE OF THE CONTRACT AND TRANSFERS 1. CREDITING ACCUMULATION UNITS During the accumulation period--the period before annuity payments begin--each purchase payment is credited on the valuation date coincident with or next following the date such purchase payment is received by us at our home office. When the contracts are originally issued, application forms are completed by the applicant and forwarded to our home office. We will review each application form submitted to us for compliance with our issue criteria and, if it is accepted, a contract will be issued. If the initial purchase payment is accompanied by an incomplete application, that purchase payment will not be credited until the valuation date coincident with or next following the date a completed application is received. We will offer to return the initial purchase payment accompanying an incomplete application if it appears that the application cannot be completed within five business days. Purchase payments will be credited to the contract in the form of accumulation units. The number of accumulation units credited with respect to each purchase payment is determined by dividing the portion of the purchase payment allocated to each sub-account by the then current accumulation unit value for that sub-account. The number of accumulation units so determined shall not be changed by any subsequent change in the value of an accumulation unit, but the value of an accumulation unit will vary from valuation date to valuation date to reflect the investment experience of the Portfolios of the Fund. We will determine the value of accumulation units on each day on which each Fund is valued. The net asset value of the Fund's shares shall be computed once daily, and, in the case of Money Market Portfolio, after the declaration of the daily dividend, as of the primary closing time for business on the New York Stock Exchange (as of the date hereof the primary close of trading is 3:00 p.m. (Central Time), but this time may be changed) on each day, Monday through Friday, except (i) days on which changes in the value of such Fund's portfolio securities will not materially affect the current net asset value of such Fund's shares, (ii) days during which no such Fund's shares are tendered for redemption and no order to purchase or sell such Fund's shares is received 21 by such Fund and (iii) customary national business holidays on which the New York Stock Exchange is closed for trading (as of the date hereof, New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day). Accordingly, the value of accumulation units so determined will be applicable to all purchase payments received by us at our home office on that day prior to the close of business of the Exchange. The value of accumulation units applicable to purchase payments received after the close of business of the Exchange will be the value determined on the next valuation date. Upon your written request, values under the contract may be transferred among the sub-accounts of the Variable Annuity Account. We will make the transfer on the basis of accumulation unit values on the valuation date coincident with or next following the day we receive the request at our home office. There is no dollar amount limitation which is applied to transfers. Systematic transfer arrangements are limited to the use of a maximum of twenty sub-accounts. Also, you may effect transfers, or a change in the allocation of future premiums, by means of a telephone call. Transfers or requests made pursuant to such a call are subject to the same conditions and procedures as are outlined above for written transfer requests. We reserve the right to restrict the frequency of--or otherwise modify, condition, terminate or impose charges upon--telephone transfer privileges. For more information on telephone transfers, contact Minnesota Mutual. While for some contract owners we have used a form to pre-authorize telephone transactions, we now make this service automatically available to all contract owners. We will employ reasonable procedures to satisfy ourselves that instructions received from contract owners are genuine and, to the extent that we do not, we may be liable for any losses due to unauthorized or fraudulent instructions. We require contract owners or a person authorized by you to personally identify themselves in those telephone conversations through contract numbers, social security numbers and such other information as we may deem to be reasonable. We record telephone transfer instruction conversations and we provide the contract owners with a written confirmation of the telephone transfer. For contracts where this is available, contract owners in any sub-account of the Variable Annuity Account may elect to have accumulation unit values of that sub-account systematically transferred to any of the other sub-accounts of the Variable Annuity Account on a monthly, quarterly, semi-annual or annual basis. Should the amount remaining in such a sub-account be less than the amount you previously indicated as a transfer amount, we will then transfer the balance remaining as well as allocating that amount pro rata in accordance with your prior instructions. The terms and conditions otherwise applicable to transfers generally, as described above, also apply to such systematic transfer plans. 2. VALUE OF THE CONTRACT The accumulation value of the contract at any time prior to the commencement of annuity payments can be determined by multiplying the total number of accumulation units credited to the contract by the current value of an accumulation unit. There is no assurance that such value will equal or exceed the purchase payments made. The contract owner will be advised periodically of the number of accumulation units credited to the contract, the current value of an accumulation unit, and the total value of the contract. 3. ACCUMULATION UNIT VALUE The value of an accumulation unit for each sub-account of the Variable Annuity Account was set at $1.000000 on the first valuation date of the Variable Annuity Account for this class of contract. The value of an accumulation unit on any subsequent valuation date is determined by multiplying the value of an accumulation unit on the immediately preceding valuation date by the net investment factor for the applicable sub-account (described below) for the valuation period just ended. The value of an accumulation unit as of any date other than a valuation date is equal to its value on the next succeeding valuation date. 4. NET INVESTMENT FACTOR FOR EACH VALUATION PERIOD The net investment factor is an index used to measure the investment performance of a sub-account from one valuation period to the next. For any sub-account, the net investment factor for a valuation period is the gross investment rate for such sub-account for the valuation period, less a deduction for the administrative charge at the current rate of .15% per annum. 22 The gross investment rate is equal to: (1) the net asset value per share of a Portfolio share held in a sub-account of the Variable Annuity Account determined at the end of the current valuation period, plus (2) the per share amount of any dividend or capital gain distribution by the Portfolio if the "ex-dividend" date occurs during the current valuation period, divided by (3) the net asset value per share of that Portfolio share determined at the end of the preceding valuation period. The gross investment rate may be positive or negative. E. REDEMPTIONS 1. PARTIAL WITHDRAWALS AND SURRENDER The contract provides that prior to the date annuity payments begin partial withdrawals may be made by you from the contract for cash amounts of at least $250. You must make a written request for any withdrawal. In this event, the accumulation value will be reduced by the amount of the withdrawal. In the absence of instructions, withdrawals will be made from the sub-accounts on a pro rata basis. We will waive the applicable dollar amount limitation on withdrawals where a systematic withdrawal program is in place and such a smaller amount satisfies the minimum distribution requirements of the Code. In the absence of instructions to the contrary, systematic withdrawals will be made from the sub-accounts on a pro rata basis if accumulation values are in no more than twenty sub-accounts. If more than twenty sub-accounts have accumulation values, we will need instructions as to those sub-accounts from which systematic withdrawals are to be made. For systematic withdrawals, the maximum number of sub-accounts which may be used is twenty. The contract provides that prior to the commencement of annuity payments, you may elect to surrender the contract for its accumulation value. You will receive in a single cash sum the accumulation value computed as of the valuation date coincident with or next following the date of surrender, or you may elect an annuity. Once annuity payments have commenced for an annuitant, the annuitant cannot surrender his/her annuity benefit and receive a single sum settlement in lieu thereof. For a discussion of commutation rights of annuitants and beneficiaries subsequent to the annuity commencement date, see "Optional Annuity Forms" on pages 17-18. Contract owners may also submit their signed written withdrawal or surrender requests to Minnesota Mutual by facsimile (FAX) transmission. Our FAX number is (612) 665-7942. Transfer instructions or changes as to future allocations of premium payments may be communicated to us by the same means. Payment of a partial withdrawal or surrender will be made to you within 7 days after we receive your completed request. 2. RIGHT OF CANCELLATION You should read the contract carefully as soon as it is received. You may cancel the purchase of a contract within ten days after its delivery, for any reason, by giving us written notice at 400 Robert Street North, St. Paul, Minnesota 55101-2098, of an intention to cancel. If the contract is cancelled and returned, we will refund to you the greater of (a) the accumulation value of the contract or (b) the amount of purchase payments paid under the contract. Payment of the requested refund will be made to you within seven days after we receive notice of cancellation. In some states, such as California, the free look period may be extended. In California, the free look period is extended to thirty days' time for contracts issued or delivered to owners that are 60 years of age or older at the time of delivery. These rights are subject to change and may vary among the states. The liability of the Variable Annuity Account under the foregoing is limited to the accumulation value of the contract at the time it is returned for cancellation. Any additional amounts necessary to make our refund to you equal to the purchase payments will be made by us. - ------------------------------------------------------------------------ FEDERAL TAX STATUS INTRODUCTION The discussion contained herein is general in nature and is not intended as tax advice. Each person concerned should consult a competent tax adviser. No attempt is made to consider any applicable state or other tax laws. In addition, this discussion is based on our understanding of federal income tax laws as they are currently interpreted. No representation is made regarding the likelihood of continuation of current income tax laws or the current interpretations of the Internal Revenue Service. We are taxed as a "life insurance company" under the Internal Revenue Code. The 23 operations of the Variable Annuity Account form a part of, and are taxed with, our other business activities. Currently, no federal income tax is payable by us on income dividends received by the Variable Annuity Account or on capital gains arising from the Variable Annuity Account's activities. The Variable Annuity Account is not taxed as a "regulated investment company" under the Code and it does not anticipate any change in that tax status. TAXATION OF ANNUITY CONTRACTS IN GENERAL Section 72 of the Code governs taxation of non-qualified annuities in general and some aspects of tax qualified programs. No taxes are imposed on increases in the value of a contract until distribution occurs, either in the form of a payment in a single sum or as annuity payments under the annuity option elected. As a general rule, deferred annuity contracts held by a corporation, trust or other similar entity, as opposed to a natural person, are not treated as annuity contracts for federal 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. For payments made in the event of a full surrender of an annuity, the taxable portion is generally the amount in excess of the cost basis of (i.e., purchase payments) the contract. Amounts withdrawn from the variable annuity contracts not part of a qualified program are treated first as taxable income to the extent of the excess of the contract value over the purchase payments made under the contract. Such taxable portion is taxed at ordinary income tax rates. In the case of a withdrawal under an annuity that is part of a qualified program, a portion of the amount received is taxable based on the ratio of the "investment in the contract" to the individual's balance in the retirement plan, generally the value of the annuity. The "investment in the contract" generally equals the portion of any deposits made by or on behalf of an individual under an annuity which was not excluded from the gross income of the individual. For annuities issued in connection with qualified plans, the "investment in the contract" can be zero. For annuity payments, the taxable portion is generally determined by a formula that establishes the ratio that the cost basis of the contract bears to the expected return under the contract. Such taxable part is taxed at ordinary income rates. If a taxable distribution is made under the variable annuity contracts, a penalty tax of 10% of the amount of the taxable distribution may apply. This additional tax does not apply where the taxpayer is 59 1/2 or older, where payment is made on account of the taxpayer's disability, or where payment is made by reason of the death of the owner, and in certain other circumstances. The Code also provides an exception to the penalty tax for distributions, in periodic payments, of substantially equal installments, for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and beneficiary. For some types of qualified plans, other tax penalties may apply to certain distributions. A transfer of ownership of a contract, the designation of an annuitant or other payee who is not also the contract owner, or the assignment of the contract may result in certain income or gift tax consequences to the contract owner that are beyond the scope of this discussion. A contract owner who is contemplating any such transfer, designation or assignment should consult a competent tax adviser with respect to the potential tax effects of that transaction. For purposes of determining a contract owner's gross income, the Code provides that all non-qualified deferred annuity contracts issued by the same company (or its affiliates) to the same contract owner during any calendar year shall be treated as one annuity contract. Additional rules may be promulgated under this provision to prevent avoidance of its effect through serial contracts or otherwise. For further information on these rules, see your tax adviser. DIVERSIFICATION REQUIREMENTS Section 817(h) of the Code authorizes the Treasury to set standards by regulation or otherwise for the investments of the Variable Annuity Account to be "adequately diversified" in order for the contract to be treated as an annuity contract for Federal tax purposes. The Variable Annuity Account, through the Fund, intends to comply with the diversification requirements prescribed in Regulations Section 1.817-5, which affect how the Fund's assets may be invested. Although the investment adviser is an affiliate of Minnesota Mutual, Minnesota Mutual does not have control over the Fund or its investments. 24 Nonetheless, Minnesota Mutual believes that each Portfolio of the Fund in which the Variable Annuity Account owns shares will be operated in compliance with the requirements prescribed by the Treasury. In certain circumstances, owners of variable annuity contracts may be considered the owners, for federal income tax purposes, of the assets of the separate account used to support their contracts. In those circumstances, income and gains from the separate account assets would be includible in the variable annuity contract owner's gross income. The IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury Department has also 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 (i.e., the contract owner), rather than the insurance company, to be treated as the owner of the assets in the account." This announcement also states that guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular subaccounts without being treated as owners of the underlying assets." As of the date of this Prospectus, no such guidance has been issued. The ownership rights under the 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 a contract has the choice of several sub-accounts in which to allocate net purchase payments and contract values, and may be able to transfer among sub-accounts more frequently than in such rulings. These differences could result in a contract owner being treated as the owner of the assets of the Variable Annuity Account. In addition, Minnesota Mutual does not know what standards will be set forth, if any, in the regulations or rulings which the Treasury Department has stated it expects to issue. Minnesota Mutual therefore reserves the right to modify the contract as necessary to attempt to prevent a contract owner from being considered the owner of a pro rata share of the assets of the Variable Annuity Account. REQUIRED DISTRIBUTIONS In order to be treated as an annuity contract for Federal income tax purposes, Section 72(s) of the Code requires any non-qualified contract issued after January 18, 1985 to provide that (a) if an owner dies on or after the annuity starting date but prior to the time the entire interest in the contract has been distributed, the remaining portion of such interest will be distributed at least as rapidly as under the method of distribution being used as of the date of that owner's death; and (b) if an owner dies prior to the annuity starting date, the entire interest in the contract must be distributed within five years after the date of the owner's death. These requirements shall be considered satisfied if any portion of the owner's interest which is payable to or for the benefit of a "designated beneficiary" is distributed over the life of such beneficiary or over a period not extending beyond the life expectancy of that beneficiary and such distributions begin within one year of that owner's death. The owner's "designated beneficiary" is the person designated by such owner as a beneficiary and to whom ownership of the contract passes by reason of death. It must be a natural person. However, if the owner's "designated beneficiary" is the surviving spouse of the owner, the contract may be continued with the surviving spouse as the new owner. Non-qualified contracts issued after January 18, 1985, contain provisions which are intended to comply with the requirements of Section 72(s) of the Code, although no regulations interpreting these requirements have yet been issued. Minnesota Mutual intends to review such provisions and modify them if necessary to assure that they comply with the requirements of Code Section 72(s) when clarified by regulation or otherwise. Other rules may apply to qualified contracts. TAXATION OF DEATH BENEFIT PROCEEDS Amounts may be distributed from a contract because of the death of the owner. Generally, such amounts are includable in the income of the recipient as follows: (1) if distributed in a lump sum, they are taxed in the same manner as a full surrender of the contract, as described above, or (2) if distributed under an annuity option, they are taxed in the same manner as annuity payments, as described above. 25 POSSIBLE CHANGES IN TAXATION In past years, legislation has been proposed that would have adversely modified the federal taxation of certain annuities. For example, one such proposal would have changed the tax treatment of non-qualified annuities that did not have "substantial life contingencies" by taxing income as it is credited to the annuity. Although as of the date of this Prospectus Congress is not actively considering any legislation regarding the taxation of annuities there is always the possibility that the tax treatment of annuities could change by legislation or other means (such as IRS regulations, revenue rulings, judicial decisions, etc.). Moreover, it is also possible that any change could be retroactive (that is, effective prior to the date of the change). TAX QUALIFIED PROGRAMS The annuity is designed for use with several types of retirement plans that qualify for special tax treatment. The tax rules applicable to participants and beneficiaries in retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits; distributions prior to age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified minimum distribution rules; aggregate distributions in excess of a specified annual amount; and in other specified circumstances. We make no attempt to provide more than general information about use of annuities with the various types of retirement plans. Owners and participants under retirement plans as well as annuitants and beneficiaries are cautioned that the rights of any person to any benefits under annuities purchased in connection with these plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the annuity issued in connection with such a plan. Some retirement plans are subject to transfer restrictions, distribution and other requirements that are not incorporated into the annuity or our annuity administration procedures. Owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the annuities comply with applicable law. Purchasers of annuities for use with any retirement plan should consult their legal counsel and tax adviser regarding the suitability of the contract. PUBLIC SCHOOL SYSTEMS AND CERTAIN TAX EXEMPT ORGANIZATIONS Under Code Section 403(b), payments made by public school systems and certain tax exempt organizations to purchase annuity contracts for their employees are excludable from the gross income of the employee, subject to certain limitations. However, these payments may be subject to FICA (Social Security) taxes. Code Section 403(b)(11) restricts the distribution under Code Section 403(b) annuity contracts of: (1) elective contributions made in years beginning after December 31, 1988; (2) earnings on those contributions; and (3) earnings in such years on amounts held as of the last year beginning before January 1, 1989. Distribution of those amounts may only occur upon death of the employee, attainment of age 59 1/2, separation from service, disability, or financial hardship. In addition, income attributable to elective contributions may not be distributed in the case of hardship. INDIVIDUAL RETIREMENT ANNUITIES Code Sections 219 and 408 permit individuals or their employers to contribute to an individual retirement program known as an "Individual Retirement Annuity" or "IRA." Individual Retirement Annuities are subject to limitations on the amount which may be contributed and deducted and the time when distributions may commence. In addition, distributions from certain other types of retirement plans may be placed into an Individual Retirement Annuity on a tax deferred basis. Employers may establish Simplified Employee Pension (SEP) Plans for making IRA contributions on behalf of their employees. SIMPLE RETIREMENT ACCOUNTS Beginning January 1, 1997, certain small employers may establish Simple Retirement Accounts as provided by Section 408(p) of the Code, under which employees may elect to defer up to $6,000 (as increased for cost of living adjustments) as a percentage of compensation. The sponsoring employer is required to make a matching contribution on behalf of contributing employees. Distributions from a Simple Retirement Account are subject to the same restrictions that apply to IRA distributions and are taxed as ordinary income. Subject to certain exceptions, premature distributions prior to age 59 1/2 are subject to a 10% penalty tax, which is increased to 25% if the distribution occurs within the first two years after the commencement of the employee's 26 participation in the plan. The failure of the Simple Retirement Account to meet Code requirements may result in adverse tax consequences. CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS Code Section 401(a) permits employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish retirement plans for themselves and their employees. These retirement plans may permit the purchase of the contracts to accumulate retirement savings under the plans. Adverse tax or other legal consequences to the plan, to the participant or to both may result if this annuity is assigned or transferred to any individual as a means to provide benefit payments, unless the plan complies with all legal requirements applicable to such benefits prior to transfer of the annuity. DEFERRED COMPENSATION PLANS Code Section 457 provides for certain deferred compensation plans. These plans may be offered with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. The plans may permit participants to specify the form of investment for their deferred compensation account with respect to non-governmental Section 457 Plans. All investments are owned by the sponsoring employer and are subject to the claims of the general creditors of the employer and depending on the terms of the particular plan, the employer may be entitled to draw on deferred amounts for purposes unrelated to its Section 457 plan obligations. In general, all amounts received under a Section 457 plan are taxable and are subject to federal income tax withholding as wages. WITHHOLDING In general, distributions from annuities are subject to federal income tax withholding unless the recipient elects not to have tax withheld. Different rules may apply to payments delivered outside the United States. Some states have enacted similar rules. Recent changes to the Code allow the rollover of most distributions from tax-qualified plans and Section 403(b) annuities directly to other tax-qualified plans that will accept such distributions and to individual retirement accounts and individual retirement annuities. Distributions which may not be rolled over are those which are: (1) one of a series of substantially equal annual (or more frequent) payments made (a) over the life or life expectancy of the employee, (b) the joint lives or joint expectancies of the employee and the employee's designated beneficiary, or (c) for a specified period of ten years or more; (2) a required minimum distribution; or (3) the non-taxable portion of a distribution. Any distribution eligible for rollover, which may include payment to an employee, an employee's surviving spouse or an ex-spouse who is an alternate payee, will be subject to federal tax withholding at a 20% rate unless the distribution is made as a direct rollover to a tax-qualified plan or to an individual retirement account or annuity. It may be noted that amounts received by individuals which are eligible for rollover may still be placed in another tax-qualified plan or individual retirement account or individual retirement annuity if the transaction is completed within sixty days after the distribution has been received. Such a taxpayer must replace withheld amounts with other funds to avoid taxation on the amount previously withheld. SEE YOUR OWN TAX ADVISER It should be understood that the foregoing description of the federal income tax consequences under these contracts is not exhaustive and that special rules are provided with respect to situations not discussed herein. It should also be understood that should a plan lose its qualified status, employees will lose some of the tax benefits described. Statutory changes in the Internal Revenue Code with varying effective dates, and regulations adopted thereunder may also alter the tax consequences of specific factual situations. Due to the complexity of the applicable laws, tax advice may be needed by a person contemplating the purchase of a variable annuity contract or exercising elections under such a contract. For further information a qualified tax adviser should be consulted. 27 STATEMENT OF ADDITIONAL INFORMATION A Statement of Additional Information, which contains additional information including financial statements, is available from the offices of Minnesota Mutual at your request. The Table of Contents for that Statement of Additional Information is as follows: Trustees and Principal Management Officers of Minnesota Mutual Distribution of Contract Performance Data Auditors Registration Statement Financial Statements 28 APPENDIX A--ILLUSTRATION OF VARIABLE ANNUITY VALUES The illustration included in this appendix shows the effect of investment performance on the monthly variable annuity income. The illustration assumes a gross investment return, after tax, of: 0%, 4.44% and 12.00%. For illustration purposes, an average annual expense equal to .94% of the average daily net assets is deducted from the gross investment return to determine the net investment return. The net investment return is then used to project the monthly variable annuity incomes. The expense charge of .94% includes: .15% for contract administration and an average of .79% for investment management and other fund expenses. These expenses are listed for each portfolio in the table following. The gross and net investment rates are for illustrative purposes only and are not a reflection of past or future performance. Actual variable annuity income will be more or less than shown if the actual returns are different than those illustrated. The illustration assumes 100% of the assets are invested in Sub-Account(s) of the Variable Annuity Account. For comparison purposes, a current fixed annuity income, available through the General Account is also provided. The illustration assumes an initial interest rate, used to determine the first variable payment of 3.50%. After the first variable annuity payment, future payments will increase if the annualized net rate of return exceeds the initial interest rate, and will decrease if the annualized net rate of return is less than the initial interest rate. The illustration provided is for a male, age 65, selecting a life and 10 year certain annuity option with $100,000 of non-qualified funds, residing in the State of Minnesota. Upon request, we will provide a comparable illustration based upon the proposed annuitant's date of birth, sex, annuity option, state of residence, type of funds, value of funds, and selected gross annual rate of return (not to exceed 12%). ACTUAL 1996 VARIABLE ANNUITY SEPARATE ACCOUNT CHARGES AND FUND EXPENSES
FUND SEPARATE ACCOUNT ADMINISTRATIVE MANAGEMENT OTHER FUND SUB-ACCOUNT NAME CHARGE FEE EXPENSES TOTAL - ---------------------------------------- -------------- ---------- ---------- ----- Growth.................................. .15% .50% .09% .74% Bond.................................... .15% .50% .06% .71% Money Market............................ .15% .50% .10% .75% Asset Allocation........................ .15% .50% .04% .69% Mortgage Securities..................... .15% .50% .08% .73% Index 500............................... .15% .40% .05% .60% Capital Appreciation.................... .15% .75% .10% 1.00% International Stock..................... .15% .74% .32% 1.19% Small Company........................... .15% .75% .09% .99% Value Stock............................. .15% .75% .14% 1.04% Maturing Government Bond 1998........... .15% .05% .15% .35% Maturing Government Bond 2002........... .15% .05% .15% .35% Maturing Government Bond 2006........... .15% .25% .15% .55% Maturing Government Bond 2010........... .15% .25% .15% .55% Small Company Value..................... .15% .75% .15% 1.05% International Bond...................... .15% .60% 1.00% 1.75% Index 400 Mid-Cap....................... .15% .40% .15% .70% Micro-Cap Value......................... .15% 1.25% .15% 1.55% Macro-Cap Value......................... .15% .70% .15% 1.00% Micro-Cap Growth........................ .15% 1.10% .15% 1.40% Templeton Developing Markets Class 2.... .15% 1.25% .78%* 2.18% -- --- --- ----- Average......................... .15% .60% .20% .94%
* For the purpose of this illustration, the term "Other Fund Expenses" includes a distribution fee in this fund of .25%. 29 VARIABLE ANNUITY PAYOUT ILLUSTRATION PREPARED FOR: Prospect PREPARED BY: Minnesota Mutual SEX: Male DATE OF BIRTH: 05/01/32 STATE: MN LIFE EXPECTANCY: 20.2 (IRS) 17.3 (MML) ANNUITIZATION OPTION:10 Year Certain with Life Contingency QUOTATION DATE: 05/01/97 COMMENCEMENT DATE: 06/01/97 SINGLE PAYMENT RECEIVED: $100,000.00 FUNDS: Non-Qualified INITIAL MONTHLY INCOME: $624 The monthly variable annuity income amount shown below assumes a constant annual investment return. The initial interest rate of 3.50% is the assumed rate used to calculate the first monthly payment. Thereafter, monthly payments will increase or decrease based upon the relationship between the initial interest rate and the performance of the Sub-Account(s) selected. The investment returns shown are hypothetical and not a representation of future results.
ANNUAL RATE OF RETURN ----------------------------------------------------------- 0% GROSS 4.44% GROSS 12.00% GROSS DATE AGE (-.94% NET) (3.50% NET) (11.06% NET) - ------------------------------------------------------- --------- --------------- --------------- -------------- June 1, 1997........................................... 65 $ 678 $ 678 $ 678 June 1, 1998........................................... 66 649 678 728 June 1, 1999........................................... 67 621 678 781 June 1, 2000........................................... 68 595 678 838 June 1, 2001........................................... 69 569 678 899 June 1, 2006........................................... 74 457 678 1,279 June 1, 2011........................................... 79 367 678 1,820 June 1, 2016........................................... 84 295 678 2,589 June 1, 2021........................................... 89 237 678 3,683 June 1, 2026........................................... 94 190 678 5,240 June 1, 2031........................................... 99 153 678 7,454 June 1, 2032........................................... 100 146 678 7,999
IF 100% OF YOUR PURCHASE WAS APPLIED TO PROVIDE A FIXED ANNUITY ON THE QUOTATION DATE OF THIS ILLUSTRATION, THE FIXED ANNUITY INCOME AMOUNT WOULD BE $777. Net rates of return reflect expenses totaling .94%, which consist of the .15% Variable Account administrative charge and .79% for the Fund management fee and other Fund expenses (this is an average with the actual varying from .20% to 2.03%). Minnesota Mutual MultiOption variable annuities are available through registered representatives of MIMLIC Sales Corporation. This is an illustration only and not a contract. 30 PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION Minnesota Mutual Variable Annuity Account Cross Reference Sheet to Statement of Additional Information Form N-4 Item Number Caption in Statement of Additional Information 15. Cover Page 16. Cover Page 17. Trustees and Principal Management Officers of Minnesota Mutual 18. Not Applicable 19. Not Applicable 20. Distribution of Contracts 21. Performance Data 22. Not Applicable 23. Financial Statements Minnesota Mutual Variable Annuity Account ("Variable Annuity Account"), a Separate Account of The Minnesota Mutual Life Insurance Company ("Minnesota Mutual") 400 Robert Street North St. Paul, Minnesota 55101-2098 Telephone: (612) 665-3500 Statement of Additional Information The date of this document and the Prospectus is: May 1, 1997 This Statement of Additional Information is not a prospectus. Much of the information contained in this Statement of Additional Information expands upon subjects discussed in the Prospectus. Therefore, this Statement should be read in conjunction with the Fund's current Prospectus, bearing the same date, which may be obtained by calling The Minnesota Mutual Life Insurance Company at (612) 665-3500, or writing to Minnesota Mutual at Minnesota Mutual Life Center, 400 Robert Street North, St. Paul, Minnesota 55101-2098. Trustees and Principal Management Officers of Minnesota Mutual Distribution of Contract Performance Data Auditors Registration Statement Financial Statements TRUSTEES AND PRINCIPAL MANAGEMENT OFFICERS OF MINNESOTA MUTUAL Trustees Principal Occupation Giulio Agostini Senior Vice President, Finance and Administrative Services, Minnesota Mining and Manufacturing Company, Maplewood, Minnesota Anthony L. Andersen Chair-Board of Directors, H. B. Fuller Company, St. Paul, Minnesota, since June 1995, prior thereto for more than five years President and Chief Executive Officer, H. B. Fuller Company (Adhesive Products) John F. Grundhofer Chairman of the Board, President and Chief Executive Officer, First Bank System, Inc., Minneapolis, Minnesota (Banking) Harold V. Haverty Retired since May 1995, prior thereto, for more than five years Chairman of the Board, President and Chief Executive Officer, Deluxe Corporation, Shoreview, Minnesota (Check Printing) David S. Kidwell, Ph.D. Dean and Professor of Finance, The Curtis L. Carlson School of Management, University of Minnesota Reatha C. King, Ph.D. President and Executive Director, General Mills Foundation, Minneapolis, Minnesota Thomas E. Rohricht Member, Doherty, Rumble & Butler Professional Association, St. Paul, Minnesota (Attorneys) Terry Tinson Saario, Ph.D. Prior to March 1996, and for more than five years, President, Northwest Area Foundation, St. Paul, Minnesota (Private Regional Foundation) Robert L. Senkler Chairman of the Board, President and Chief Executive Officer, The Minnesota Mutual Life Insurance Company, since August 1995; prior thereto for more than five years Vice President and Actuary, The Minnesota Mutual Life Insurance Company Michael E. Shannon Chairman, Chief Financial and Administrative Officer, Ecolab, Inc., St. Paul, Minnesota, since August 1992, prior thereto President, Residential Services Group, Ecolab, Inc., St. Paul, Minnesota from October 1990 to July 1992 (Develops and Markets Cleaning and Sanitizing Products) Frederick T. Weyerhaeuser Chairman, Clearwater Investment Trust, since May 1996, prior thereto for more than five years, Chairman, Clearwater Management Company, St. Paul, Minnesota (Financial Management) -1- Principal Officers (other than Trustees) Name Position John F. Bruder Senior Vice President Keith M. Campbell Vice President Paul H. Gooding Vice President and Treasurer Robert E. Hunstad Executive Vice President James E. Johnson Senior Vice President and Actuary Richard D. Lee Vice President Joel W. Mahle Vice President Dennis E. Prohofsky Senior Vice President, General Counsel and Secretary Gregory S. Strong Vice President and Actuary Terrence S. Sullivan Senior Vice President Randy F. Wallake Senior Vice President All Trustees who are not also officers of Minnesota Mutual have had the principal occupation (or employers) shown for at least five years. All officers of Minnesota Mutual have been employed by Minnesota Mutual for at least five years. DISTRIBUTION OF CONTRACT The contract will be sold in a continuous offering. MIMLIC Sales Corporation ("MIMLIC Sales") acts as principal underwriter of the contracts. MIMLIC Sales is a wholly-owned subsidiary of MIMLIC Corporation, which in turn is a wholly-owned subsidiary of Minnesota Mutual Life. MIMLIC Corporation is also the sole owner of the shares of Advantus Capital Management Inc., a registered investment adviser and the investment adviser to the Advantus Series Fund, Inc. MIMLIC Sales is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Amounts paid by Minnesota Mutual to the underwriter for 1996, 1995 and 1994, respectively, were $13,034,146, $7,208,781 and $7,363,105 respectively, and for payments to associated dealers on the sale of the contracts, which include other contracts issued through the Variable Annuity Account. Agents of Minnesota Mutual who are also registered representatives of MIMLIC Sales are compensated directly by Minnesota Mutual. -2- PERFORMANCE DATA CURRENT YIELD FIGURES FOR MONEY MARKET SUB-ACCOUNT Current annualized yield quotations for the Money Market Sub-Account are based on the Sub-Account's net investment income for a seven-day or other specified period and exclude any realized or unrealized gains or losses on sub-account securities. Current annualized yield is computed by determining the net change (exclusive of realized gains and losses from the sale of securities and unrealized appreciation and depreciation) in the value of a hypothetical account having a balance of one accumulation unit at the beginning of the specified period, dividing such net change in account value by the value of the account at the beginning of the period, and annualizing this quotient on a 365-day basis. The Variable Annuity Account may also quote the effective yield of the Money Market Sub-Account for a seven-day or other specified period for which the current annualized yield is computed by expressing the unannualized return on a compounded, annualized basis. The yield and effective yield of the Money Market Sub-Account for the seven-day period ended December 31, 1996 were 4.60% and 4.71%, respectively. TOTAL RETURN FIGURES FOR ALL SUB-ACCOUNTS Cumulative total return quotations for Sub-Accounts represent the total return for the period since the Sub-Account became available pursuant to the Variable Annuity Account's registration statement. Cumulative total return is equal to the percentage change between the net asset value of a hypothetical $1,000 investment at the beginning of the period and the net asset value of that same investment at the end of the period. Prior to May 3, 1993, several of the Sub-Accounts were known by different names. The Growth Sub-Account was the Stock Sub-Account, the Asset Allocation Sub- Account was the Managed Sub-Account, the Index 500 Sub-Account was the Index Sub-Account and the Capital Appreciation Sub-Account was the Aggressive Growth Sub-Account. The cumulative total return figures published by the Variable Annuity Account relating to the contracts described in the Prospectus will reflect Minnesota Mutual's voluntary absorption of certain Fund expenses described below. The cumulative total returns for the Sub-Accounts for the specified periods ended December 31, 1996 are shown in the table below. The figures in parentheses show what the cumulative total returns would have been had Minnesota Mutual not absorbed Fund expenses as described above.
From Inception Date of to 12/31/96 Inception --------------- --------- Growth Sub-Account 135.38% (133.72%) 6/3/87 -3- Bond Sub-Account 117.78% (116.70%) 6/3/87 Money Market Sub-Account 62.02% (59.89%) 6/3/87 Asset Allocation Sub-Account 152.83% (152.42%) 6/3/87 Mortgage Securities Sub-Account 119.79% (119.38%) 6/3/87 Index 500 Sub-Account 181.30% (180.55%) 6/3/87 Capital Appreciation Sub-Account 184.20% (181.49%) 6/3/87 International Stock Sub-Account 78.81% (78.77%) 5/1/92 Small Company Sub-Account 70.51% (70.39%) 5/3/93 Maturing Government Bond 1998 Sub-Account 20.37% (20.03%) 5/2/94 Maturing Government Bond 2002 Sub-Account 27.03% (26.29%) 5/2/94 Maturing Government Bond 2006 Sub-Account 32.73% (31.54%) 5/2/94 Maturing Government Bond 2010 Sub-Account 35.44% (33.00%) 5/2/94 Value Stock Sub-Account 81.34% (81.08%) 5/2/94
Cumulative total return quotations for Sub-Accounts will be accompanied by average annual total return figures for a one-year period, five-year period and for the period since the Sub-Account became available pursuant to the Variable Annuity Account's registration statement. Average annual total return figures are the average annual compounded rates of return required for an initial investment of $1,000 to equal the accumulation value of that same investment at the end of the period. The average annual total return figures published by the Variable Annuity Account will reflect Minnesota Mutual's voluntary absorption of certain Fund expenses. For the period subsequent to March 9, 1987, Minnesota Mutual is voluntarily absorbing the fees and expenses that exceed .65% of the average daily net assets of the Growth, Bond, Money Market, Asset Allocation and Mortgage Securities Portfolios of the Fund, .55% of the average daily net assets of the Index 500 Portfolio of the Fund, .90% of the average daily net assets of the Capital Appreciation and Small Company Portfolios of the Fund and expenses that exceed 1.00% of the average daily net assets of the International Stock Portfolio exclusive of the advisory fee. And, for the period subsequent to May 2, 1994, Minnesota Mutual has voluntarily absorbed fees and expenses that exceed .90% of the average daily net assets of the Value Stock Portfolio and fees and expenses that exceed -4- .40% of the average daily net assets of the Maturing Government Bond Portfolios. It should be noted that for the Maturing Government Bond Portfolios maturing in 1998 and 2002, Minnesota Mutual will voluntarily absorb fees and expenses that exceed .20% of average daily net assets of those Portfolios until April 30, 1998. Minnesota Mutual has voluntarily agreed to absorb fees and expenses that exceed .55% of the average daily net assets of the Index 400 Mid-Cap Portfolio, .90% of the average daily net assets of the Small Company Value Portfolio, 1.40% of the average daily net assets of the Mid-Cap Value Portfolio, 1.25% of the average daily net assets of the Micro-Cap Growth Portfolio, .85% of the average daily net assets of the Macro-Cap Value Portfolio and expenses that exceed 1.00% of the average daily net assets of the International Bond Portfolio exclusive of the advisory fee. There is no specified or minimum period of time during which Minnesota Mutual has agreed to continue its voluntary absorption of these expenses, and Minnesota Mutual may in its discretion cease its absorption of expenses at any time. Should Minnesota Mutual cease absorbing expenses the effect would be to increase substantially Fund expenses and thereby reduce investment return. The average annual rates of return for the Sub-Accounts of the contracts described in the Prospectus for the specified periods ended December 31, 1996 are shown in the table below. The figures in parentheses show what the average annual rates of return would have been had Minnesota Mutual not absorbed Fund expenses as described above. -5-
Year Ended Five Years From Inception Date of 12/31/96 Ended 12/31/96 to 12/31/96 Inception ---------------- --------------- ----------------- --------- Growth Sub-Account 16.97% (16.97%) 9.83% (9.83%) 9.35% (9.26%) 6/3/87 Bond Sub-Account 2.81% (2.81%) 6.56% (6.41%) 8.46% (8.40%) 6/3/87 Money Market Sub-Account 4.80% (4.80%) 3.84% (3.62%) 5.17% (5.02%) 6/3/87 Asset Allocation Sub-Account 12.33% (12.33%) 9.47% (9.47%) 10.17% (10.14%) 6/3/87 Mortgage Securities Sub-Account 5.10% (5.10%) 6.72% (6.70%) 8.57% (8.54%) 6/3/87 Index 500 Sub-Account 21.46% (21.46%) 14.52% (14.50%) 11.40% (11.36%) 6/3/87 Capital Appreciation Sub-Account 17.44% (17.44%) 11.20% (15.41%) 11.52% (11.40%) 6/3/87 International Stock 19.61% (19.61%) -- -- 13.25% (13.23%) 5/1/92 Sub-Account Small Company Sub-Account 6.29% (6.29%) -- -- 15.67% (20.03%) 5/3/93 Maturing Government Bond 1998 Sub-Account 3.97% (3.45%) -- -- 7.20% (7.07%) 5/2/94 Maturing Government Bond 2002 Sub-Account 1.57% (.76%) -- -- 9.38% (9.13%) 5/2/94 Maturing Government Bond 2006 Sub-Account -1.36% (-2.36%) -- -- 11.20% (10.81%) 5/2/94 -6- Maturing Government Bond 2010 Sub-Account -3.56% (-5.34%) -- -- 12.04% (11.27%) 5/2/94 Value Stock Sub-Account 30.75% (30.70%) -- -- 24.99% (24.89%) 5/2/94
-7- PREDICTABILITY OF RETURN ANTICIPATED VALUE AT MATURITY. The maturity values of zero-coupon bonds are specified at the time the bonds are issued, and this feature, combined with the ability to calculate yield to maturity, has made these instruments popular investment vehicles for investors seeking reliable investments to meet long-term financial goals. Each Maturing Government Bond Portfolio of the Fund consists primarily of zero- coupon bonds but is actively managed to accommodate contract owner activity and to take advantage of perceived market opportunities. Because of this active management approach, there is no guarantee that a certain price per share of a Maturing Government Bond Portfolio, or a certain price per unit of the corresponding Sub-Account, will be attained by the time a Portfolio is liquidated. Instead, the Fund attempts to track the price behavior of a directly held zero-coupon bond by: (1) Maintaining a weighted average maturity within each Maturing Government Bond Portfolio's target maturity year; (2) Investing at least 90% of assets in securities that mature within one year of that Portfolio's target maturity year; (3) Investing a substantial portion of assets in Treasury STRIPS (the most liquid Treasury zero); (4) Under normal conditions, maintaining a nominal cash balance; (5) Executing portfolio transactions necessary to accommodate net contract owner purchases or redemptions on a daily basis; and (6) Whenever feasible, contacting several U.S. government securities dealers for each intended transaction in an effort to obtain the best price on each transaction. These measures enable the Company to calculate an anticipated value at maturity (AVM) for each unit of a Maturing Government Bond Sub-Account, calculated as of the date of purchase of such unit, that approximates the price per unit that such unit will achieve by the weighted average maturity date of the underlying Portfolio. The AVM calculation for each Maturing Government Bond Sub-Account is as follows: AVM = P(1 + AGR/2)2T where P = the Sub-Account's current price per unit; T = the Sub-Account's weighted average term to maturity in years; and AGR = the anticipated growth rate. This calculation assumes an expense ratio and a portfolio composition for the underlying Maturing Government Bond Portfolio that remain constant for the life of such Portfolio. Because the Portfolio's expenses and composition do not remain constant, however, the -8- Company may calculate AVM for each Maturing Government Bond Sub-Account on any day on which the underlying Maturing Government Bond Portfolio is valued. Such an AVM is applicable only to units purchased on that date. In addition to the measures described above, which the adviser believes are adequate to assure close correspondence between the price behavior of each Portfolio and the price behavior of directly held zero-coupon bonds with comparable maturities, the Fund expects that each Portfolio will invest at least 90% of its net assets in zero-coupon bonds until it is within four years of its target maturity year and at least 80% of its net assets in zero-coupon securities within two to four years of its target maturity year. This expectation may be altered if the market supply of zero-coupon securities diminishes unexpectedly. ANTICIPATED GROWTH RATE. The Company calculates an anticipated growth rate (AGR) for each Maturing Government Bond Sub-Account on each day on which the underlying Portfolio is valued. AGR is a calculation of the anticipated annualized rate of growth for a Sub-Account unit, calculated from the date of purchase of such unit to the Sub-Account's target maturity date. As is the case with calculations of AVM, the AGR calculation assumes that each underlying Maturing Government Bond Portfolio expense ratio and portfolio composition will remain constant. Each Maturing Government Bond Sub-Account AGR changes from day to day (i.e., a particular AGR calculation is applicable only to units purchased on that date), due primarily to changes in interest rates and, to a lesser extent, to changes in portfolio composition and other factors that affect the value of the underlying Portfolio. The Company expects that a contract owner who holds specific units until the underlying Portfolio's weighted average maturity date will realize an investment return and maturity value on those units that do not differ substantially from the AGR and AVM calculated on the day such units were purchased. The AGR and AVM calculated with respect to units purchased on any other date, however, may be materially different. AUDITORS The financial statements of Minnesota Mutual and the Variable Annuity Account included herein have been audited by KPMG Peat Marwick LLP, 4200 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, independent auditors, whose reports thereon appear elsewhere herein, and have been so included in reliance upon the reports of KPMG Peat Marwick LLP and upon the authority of said firm as experts in accounting and auditing. REGISTRATION STATEMENT We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, with respect to the contracts offered hereby. This Prospectus does not contain all the information set forth in the registration statement and amendments thereto and the exhibits filed as a part thereof, to all of which reference is hereby made for further information concerning the Variable Annuity Account, Minnesota Mutual, and the contracts. Statements contained in this Prospectus as to the contents of contracts and other legal instruments are summaries, and reference is made to such instruments as filed. -9- INDEPENDENT AUDITORS' REPORT The Board of Trustees of The Minnesota Mutual Life Insurance Company and Contract Owners of Minnesota Mutual Variable Annuity Account: We have audited the accompanying statements of assets and liabilities of the Growth, Bond, Money Market, Asset Allocation, Mortgage Securities, Index 500, Capital Appreciation, International Stock, Small Company, Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006, Maturing Government Bond 2010 and Value Stock Segregated Sub-Accounts of Minnesota Mutual Variable Annuity Account (the Account) (contracts offered to certain defined groups and individuals) as of December 31, 1996 and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for the periods in footnote (6). These financial statements and the financial highlights are the responsibility of the Account's management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investments owned at December 31, 1996 were verified by examination of the underlying portfolios of MIMLIC Series Fund, Inc. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Growth, Bond, Money Market, Asset Allocation, Mortgage Securities, Index 500, Capital Appreciation, International Stock, Small Company, Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006, Maturing Government Bond 2010 and Value Stock Segregated Sub-Accounts of Minnesota Mutual Variable Annuity Account at December 31, 1996 and the results of their operations, changes in their net assets and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota February 14, 1997 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MONEY ASSET ASSETS GROWTH BOND MARKET ALLOCATION ------------ ------------ ------------ ------------ Investments in shares of MIMLIC Series Fund, Inc.: Growth Portfolio, 1,479,090 shares at net asset value of $2.343 per share (cost $2,895,086) . . . . . . $ 3,465,921 - - - Bond Portfolio, 2,581,134 shares at net asset value of $1.283 per share (cost $3,121,605) . . . . . . - 3,312,325 - - Money Market Portfolio, 1,215,828 shares at net asset value of $1.000 per share (cost $1,215,828) . . . - - 1,215,828 - Asset Allocation Portfolio, 2,964,596 shares at net asset value of $1.865 per share (cost $4,717,264) . . . - - - 5,528,692 Mortgage Securities Portfolio, 833,620 shares at net asset value of $1.187 per share (cost $960,593) . . . . - - - - Index 500 Portfolio, 2,783,694 shares at net asset value of $2.409 per share (cost $4,872,256) . . . . . . - - - - Capital Appreciation Portfolio, 1,936,302 shares at net asset value of $2.471 per share (cost $3,457,034) . . . - - - - ------------ ------------ ------------ ------------ 3,465,921 3,312,325 1,215,828 5,528,692 Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . . . . . . . . . . . . . . . . . 4,921 37,292 7 34 Receivable from Minnesota Mutual for contract purchase payments . . . . . . . . . . . . . . . . 2,746 1,765 1,102 4,936 Dividends receivable from MIMLIC Series Fund, Inc. . . . . . . - - 4 - ------------ ------------ ------------ ------------ Total assets . . . . . . . . . . . . . . . . . . . . . . 3,473,588 3,351,382 1,216,941 5,533,662 ------------ ------------ ------------ ------------ LIABILITIES Payable to MIMLIC Series Fund, Inc. for investments purchased . . . . . . . . . . . . . . . . . . . 2,746 1,765 1,102 4,936 Payable to Minnesota Mutual for contract terminations and administrative charges . . . . . . . . . . 4,921 37,292 7 34 ------------ ------------ ------------ ------------ Total liabilities . . . . . . . . . . . . . . . . . . . . 7,667 39,057 1,109 4,970 ------------ ------------ ------------ ------------ Net assets applicable to annuity contract owners . . . . $ 3,465,921 3,312,325 1,215,832 5,528,692 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY Contracts in accumulation period, accumulation units outstanding of 1,448,982 for Growth; 1,506,859 for Bond; 750,434 for Money Market; 2,029,532 for Asset Allocation; 450,065 for Mortgage Securities; 2,364,949 for Index 500 and 1,668,256 for Capital Appreciation. . . . $ 3,409,342 3,282,546 1,215,832 5,131,753 Contracts in annuity payment period (note 2) . . . . . . . . . 56,579 29,779 - 396,939 ------------ ------------ ------------ ------------ Total contract owners' equity . . . . . . . . . . . . . . $ 3,465,921 3,312,325 1,215,832 5,528,692 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . $ 2.354 2.178 1.620 2.529 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MORTGAGE INDEX CAPITAL ASSETS SECURITIES 500 APPRECIATION ------------ ------------ ------------ Investments in shares of MIMLIC Series Fund, Inc.: Growth Portfolio, 1,479,090 shares at net asset value of $2.343 per share (cost $2,895,086) . . . . . . - - - Bond Portfolio, 2,581,134 shares at net asset value of $1.283 per share (cost $3,121,605) . . . . . . - - - Money Market Portfolio, 1,215,828 shares at net asset value of $1.000 per share (cost $1,215,828) . . . - - - Asset Allocation Portfolio, 2,964,596 shares at net asset value of $1.865 per share (cost $4,717,264) . . . - - - Mortgage Securities Portfolio, 833,620 shares at net asset value of $1.187 per share (cost $960,593) . . . . 989,176 - - Index 500 Portfolio, 2,783,694 shares at net asset value of $2.409 per share (cost $4,872,256) . . . . . . - 6,705,113 - Capital Appreciation Portfolio, 1,936,302 shares at net asset value of $2.471 per share (cost $3,457,034) . . . - - 4,784,781 ------------ ------------ ------------ 989,176 6,705,113 4,784,781 ------------ ------------ ------------ Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . . . . . . . . . . . . . . . . . 6 5,040 5,424 Receivable from Minnesota Mutual for contract purchase payments . . . . . . . . . . . . . . . . 718 7,246 4,018 Dividends receivable from MIMLIC Series Fund, Inc. . . . . . . - - - ------------ ------------ ------------ Total assets . . . . . . . . . . . . . . . . . . . . . . 989,900 6,717,399 4,794,223 LIABILITIES Payable to MIMLIC Series Fund, Inc. for investments purchased . . . . . . . . . . . . . . . . . . . 718 7,246 4,018 Payable to Minnesota Mutual for contract terminations and administrative charges . . . . . . . . . . 6 5,040 5,424 ------------ ------------ ------------ Total liabilities . . . . . . . . . . . . . . . . . . . . 724 12,286 9,442 ------------ ------------ ------------ Net assets applicable to annuity contract owners . . . . 989,176 6,705,113 4,784,781 ------------ ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY Contracts in accumulation period, accumulation units outstanding of 1,448,982 for Growth; 1,506,859 for Bond; 750,434 for Money Market; 2,029,532 for Asset Allocation; 450,065 for Mortgage Securities; 2,364,949 for Index 500 and 1,668,256 for Capital Appreciation. . . . 989,176 6,652,504 4,741,161 Contracts in annuity payment period (note 2) . . . . . . . . . - 52,609 43,620 ------------ ------------ ------------ Total contract owners' equity . . . . . . . . . . . . . . 989,176 6,705,113 4,784,781 ------------ ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . 2.198 2.813 2.842 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT. . STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MATURING MATURING INTERNATIONAL SMALL GOVERNMENT GOVERNMENT ASSETS STOCK COMPANY BOND 1998 BOND 2002 ------------ ------------ ------------ ------------ Investments in shares of MIMLIC Series Fund, Inc.: . . . . . . International Stock Portfolio, 2,832,687 shares at net asset value of $1.597 per share (cost $3,733,472) . . . $ 4,524,437 - - - Small Company Portfolio, 1,397,360 shares at net asset value of $1.535 per share (cost $1,934,795) . . . . . . - 2,144,726 - - Maturing Government Bond 1998 Portfolio, 1,460,448 shares at net asset value of $1.080 per share (cost $1,463,749) . . . . . . . . . . . . . . . . . . . - - 1,577,110 - Maturing Government Bond 2002 Portfolio, 319,022 shares at net asset value of $1.049 per share (cost $339,016) . . - - - 334,623 Maturing Government Bond 2006 Portfolio, 137,702 shares at net value of $1.094 per share (cost $139,453) . . . . . - - - - Maturing Government Bond 2010 Portfolio, 157,625 shares at net asset value of $1.172 per share (cost $168,210) . . - - - - Value Stock Portfolio, 945,201 shares at net asset value of $1.591 per share (cost $1,307,486) . . . . . . . . . - - - - ------------ ------------ ------------ ------------ 4,524,437 2,144,726 1,577,110 334,623 Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . . . . . . . . . . . . . . . . . 27 13 10 2 Receivable from Minnesota Mutual for contract purchase payments . . . . . . . . . . . . . . . . . . . . . 3,065 2,979 - - ------------ ------------ ------------ ------------ Total assets . . . . . . . . . . . . . . . . . . . . . . 4,527,529 2,147,718 1,577,120 334,625 ------------ ------------ ------------ ------------ LIABILITIES Payable to MIMLIC Series Fund, Inc. for investments purchased . . . . . . . . . . . . . . . . . . . 3,065 2,979 - - Payable to Minnesota Mutual for contract terminations and administrative charges . . . . . . . . . . 27 13 10 2 ------------ ------------ ------------ ------------ Total liabilities . . . . . . . . . . . . . . . . . . . . 3,092 2,992 10 2 ------------ ------------ ------------ ------------ Net assets applicable to annuity contract owners. . . . . $ 4,524,437 2,144,726 1,577,110 334,623 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY Contracts in accumulation period, accumulation units outstanding of 2,418,015 for International Stock; 1,237,091 for Small Company; 1,324,838 for Maturing Government Bond 1998; 269,553 for Maturing Government Bond 2002; 117,035 for Maturing Government Bond 2006; 141,772 for Maturing Government Bond 2010 and 798,596 for Value Stock . . . . . . . . . . . . . . . . . . . . . . $ 4,323,544 2,109,015 1,577,110 334,623 Contracts in annuity payment period (note 2) . . . . . . . . . 200,893 35,711 - - ------------ ------------ ------------ ------------ Total contract owners' equity . . . . . . . . . . . . . . $ 4,524,437 2,144,726 1,577,110 334,623 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . $ 1.788 1.705 1.190 1.241 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MATURING MATURING GOVERNMENT GOVERNMENT VALUE ASSETS BOND 2006 BOND 2010 STOCK ------------ ------------ ------------ Investments in shares of MIMLIC Series Fund, Inc.: International Stock Portfolio, 2,832,687 shares at net asset value of $1.597 per share (cost $3,733,472) . . . - - - Small Company Portfolio, 1,397,360 shares at net asset value of $1.535 per share (cost $1,934,795) . . . . . . - - - Maturing Government Bond 1998 Portfolio, 1,460,448 shares at net asset value of $1.080 per share (cost $1,463,749) . . . . . . . . . . . . . . . . . . . - - - Maturing Government Bond 2002 Portfolio, 319,022 shares at net asset value of $1.049 per share (cost $339,016) . . - - - Maturing Government Bond 2006 Portfolio, 137,702 shares at net value of $1.094 per share (cost $139,453) . . . . . 150,654 - - Maturing Government Bond 2010 Portfolio, 157,625 shares at net asset value of $1.172 per share (cost $168,210) . . - 184,658 - Value Stock Portfolio, 945,201 shares at net asset value of $1.591 per share (cost $1,307,486) . . . . . . . . . - - 1,503,453 ------------ ------------ ------------ 150,654 184,658 1,503,453 Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . . . . . . . . . . . . . . . . . 1 1 9 Receivable from Minnesota Mutual for contract purchase payments . . . . . . . . . . . . . . . . . . . . . - - 1,015 ------------ ------------ ------------ Total assets . . . . . . . . . . . . . . . . . . . . . . 150,655 184,659 1,504,477 ------------ ------------ ------------ LIABILITIES Payable to MIMLIC Series Fund, Inc. for investments purchased . . . . . . . . . . . . . . . . . . . - - 1,015 Payable to Minnesota Mutual for contract terminations and administrative charges . . . . . . . . . . 1 1 9 ------------ ------------ ------------ Total liabilities . . . . . . . . . . . . . . . . . . . . 1 1 1,024 ------------ ------------ ------------ Net assets applicable to annuity contract owners. . . . . 150,654 184,658 1,503,453 ------------ ------------ ------------ ------------ ------------ ------------ CONTRACT OWNERS' EQUITY Contracts in accumulation period, accumulation units outstanding of 2,418,015 for International Stock; 1,237,091 for Small Company; 1,324,838 for Maturing Government Bond 1998; 269,553 for Maturing Government Bond 2002; 117,035 for Maturing Government Bond 2006; 141,772 for Maturing Government Bond 2010 and 798,596 for Value Stock . . . . . . . . . . . . . . . . . . . . . . 150,654 184,658 1,462,170 Contracts in annuity payment period (note 2) . . . . . . . . . - - 41,283 ------------ ------------ ------------ Total contract owners' equity . . . . . . . . . . . . . . 150,654 184,658 1,503,453 ------------ ------------ ------------ ------------ ------------ ------------ NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . 1.287 1.303 1.831 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MONEY ASSET GROWTH BOND MARKET ALLOCATION ------------ ------------ ------------ ------------ Investment income (loss): Investment income distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . $ 29,537 183,550 54,843 157,420 Administrative charges (note 3) . . . . . . . . . . . . . . (4,906) (5,072) (1,702) (7,579) ------------ ------------ ------------ ------------ Investment income (loss) - net . . . . . . . . . . . . . 24,631 178,478 53,141 149,841 ------------ ------------ ------------ ------------ Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . 277,561 33,088 - 288,230 ------------ ------------ ------------ ------------ Realized gains on sales of investments: Proceeds from sales . . . . . . . . . . . . . . . . . . . 1,163,748 906,556 1,213,219 787,767 Cost of investments sold . . . . . . . . . . . . . . . . (983,143) (874,643) (1,213,219) (696,908) ------------ ------------ ------------ ------------ 180,605 31,913 - 90,859 ------------ ------------ ------------ ------------ Net realized gains on investments . . . . . . . . . . . . 458,166 65,001 - 379,089 ------------ ------------ ------------ ------------ Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . 7,972 (153,260) - 62,581 ------------ ------------ ------------ ------------ Net gains (losses) on investments . . . . . . . . . . . . 466,138 (88,259) - 441,670 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . $ 490,769 90,219 53,141 591,511 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MORTGAGE INDEX CAPITAL SECURITIES 500 APPRECIATION ------------ ------------ ------------ Investment income (loss): Investment income distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . 67,360 74,202 - Administrative charges (note 3) . . . . . . . . . . . . . . (1,564) (8,594) (7,382) ------------ ------------ ------------ Investment income (loss) - net . . . . . . . . . . . . . 65,796 65,608 (7,382) ------------ ------------ ------------ Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . - 38,410 132,227 ------------ ------------ ------------ Realized gains on sales of investments: Proceeds from sales . . . . . . . . . . . . . . . . . . . 286,163 1,241,064 1,199,827 Cost of investments sold . . . . . . . . . . . . . . . . (283,008) (929,190) (900,805) ------------ ------------ ------------ 3,155 311,874 299,022 ------------ ------------ ------------ Net realized gains on investments . . . . . . . . . . . . 3,155 350,284 431,249 ------------ ------------ ------------ Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . (17,932) 706,571 343,089 ------------ ------------ ------------ Net gains (losses) on investments . . . . . . . . . . . . (14,777) 1,056,855 774,338 ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 51,019 1,122,463 766,956 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MATURING MATURING GOVERNMENT GOVERNMENT INTERNATIONAL SMALL BOND BOND STOCK COMPANY 1998 2002 ------------ ------------ ------------ ------------ Investment income (loss): Investment income distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . . . . . . $ 103,876 4,521 973 18,374 Administrative charges (note 3) . . . . . . . . . . . . . . (6,030) (4,013) (2,024) (222) ------------ ------------ ------------ ------------ Investment income (loss) - net . . . . . . . . . . . . . 97,846 508 (1,051) 18,152 ------------ ------------ ------------ ------------ Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . . . . . . 113,719 226,067 - - ------------ ------------ ------------ ------------ Realized gains on sales of investments (note 4): Proceeds from sales . . . . . . . . . . . . . . . . . . . 898,315 1,498,534 30,824 5,123 Cost of investments sold . . . . . . . . . . . . . . . . (798,635) (1,225,493) (28,801) (4,711) ------------ ------------ ------------ ------------ 99,680 273,041 2,023 412 ------------ ------------ ------------ ------------ Net realized gains on investments . . . . . . . . . . . . 213,399 499,108 2,023 412 ------------ ------------ ------------ ------------ Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . 402,343 (370,376) 52,211 (17,036) ------------ ------------ ------------ ------------ Net gains (losses) on investments . . . . . . . . . . . . 615,742 128,732 54,234 (16,624) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . $ 713,588 129,240 53,183 1,528 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MATURING MATURING GOVERNMENT GOVERNMENT BOND BOND VALUE 2006 2010 STOCK ------------ ------------ ------------ Investment income (loss): Investment income distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . . . . . . 8,368 124 11,901 Administrative charges (note 3) . . . . . . . . . . . . . . (221) (264) (1,570) ------------ ------------ ------------ Investment income (loss) - net . . . . . . . . . . . . . 8,147 (140) 10,331 ------------ ------------ ------------ Realized and unrealized gains (losses) on investments - net: Realized gain distributions from underlying mutual fund (note 4) . . . . . . . . . . . . . . . . . . 226 - 91,968 ------------ ------------ ------------ Realized gains on sales of investments (note 4): Proceeds from sales . . . . . . . . . . . . . . . . . . . 9,142 7,983 357,014 Cost of investments sold . . . . . . . . . . . . . . . . (8,659) (7,583) (298,214) ------------ ------------ ------------ 483 400 58,800 ------------ ------------ ------------ Net realized gains on investments . . . . . . . . . . . . 709 400 150,768 ------------ ------------ ------------ Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . (11,867) (6,912) 121,335 ------------ ------------ ------------ Net gains (losses) on investments . . . . . . . . . . . . (11,158) (6,512) 272,103 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . (3,011) (6,652) 282,434 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MONEY ASSET GROWTH BOND MARKET ALLOCATION ------------ ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . $ 24,631 178,478 53,141 149,841 Net realized gains on investments . . . . . . . . . . . . . 458,166 65,001 - 379,089 Net change in unrealized appreciation or depreciation of investments. . . . . . . . . . . . . . . . . . . . . . 7,972 (153,260) - 62,581 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 490,769 90,219 53,141 591,511 ------------ ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . 997,120 804,024 1,251,160 1,136,769 Contract terminations and withdrawal payments . . . . . . . (1,156,852) (899,026) (1,211,517) (763,902) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . 738 37 - 4,142 Annuity benefit payments . . . . . . . . . . . . . . . . . . (2,728) (2,495) - (20,428) ------------ ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . (161,722) (97,460) 39,643 356,581 ------------ ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . 329,047 (7,241) 92,784 948,092 Net assets at the beginning of year . . . . . . . . . . . . . 3,136,874 3,319,566 1,123,048 4,580,600 ------------ ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . $ 3,465,921 3,312,325 1,215,832 5,528,692 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MORTGAGE INDEX CAPITAL SECURITIES 500 APPRECIATION ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . 65,796 65,608 (7,382) Net realized gains on investments . . . . . . . . . . . . . 3,155 350,284 431,249 Net change in unrealized appreciation or depreciation. . . . of investments. . . . . . . . . . . . . . . . . . . . . . (17,932) 706,571 343,089 ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 51,019 1,122,463 766,956 ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . 207,036 2,052,880 631,991 Contract terminations and withdrawal payments . . . . . . . (284,599) (1,230,391) (1,191,139) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . - 151 742 Annuity benefit payments . . . . . . . . . . . . . . . . . . - (2,230) (2,048) ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . (77,563) 820,410 (560,454) ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . (26,544) 1,942,873 206,502 Net assets at the beginning of year . . . . . . . . . . . . . 1,015,720 4,762,240 4,578,279 ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . 989,176 6,705,113 4,784,781 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS YEAR ENDED DECEMBER 31, 1996
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MATURING MATURING GOVERNMENT GOVERNMENT INTERNATIONAL SMALL BOND BOND STOCK COMPANY 1998 2002 ------------ ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . $ 97,846 508 (1,051) 18,152 Net realized gains on investments . . . . . . . . . . . . . 213,399 499,108 2,023 412 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . 402,343 (370,376) 52,211 (17,036) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . 713,588 129,240 53,183 1,528 ------------ ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . 1,195,994 963,697 239,650 189,630 Contract terminations and withdrawal payments . . . . . . . (885,851) (1,494,466) (28,800) (4,901) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . . . 3,379 1,621 - - Annuity benefit payments . . . . . . . . . . . . . . . . . . (9,813) (1,676) - - ------------ ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . . . . . . . . . . . . . . . . . . . 303,709 (530,824) 210,850 184,729 ------------ ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . 1,017,297 (401,584) 264,033 186,257 Net assets at the beginning of year . . . . . . . . . . . . . 3,507,140 2,546,310 1,313,077 148,366 ------------ ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . $ 4,524,437 2,144,726 1,577,110 334,623 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MATURING MATURING MATURING GOVERNMENT GOVERNMENT GOVERNMENT BOND BOND BOND 2006 2010 STOCK ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . 8,147 (140) 10,331 Net realized gains on investments . . . . . . . . . . . . . 709 400 150,768 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . (11,867) (6,912) 121,335 ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . (3,011) (6,652) 282,434 ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . - 41,503 978,771 Contract terminations and withdrawal payments . . . . . . . (8,922) (7,719) (355,400) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . . . - - 1,619 Annuity benefit payments . . . . . . . . . . . . . . . . . . - - (1,663) ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . . . . . . . . . . . . . . . . . . . (8,922) 33,784 623,327 ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . (11,933) 27,132 905,761 Net assets at the beginning of year . . . . . . . . . . . . . 162,587 157,526 597,692 ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . 150,654 184,658 1,503,453 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) YEAR ENDED DECEMBER 31, 1995
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MATURING MATURING GOVERNMENT GOVERNMENT INTERNATIONAL SMALL BOND BOND STOCK COMPANY 1998 2002 ------------ ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . $ (4,694) 122 68,051 8,982 Net realized gains (losses) on investments . . . . . . . . . 29,087 35,282 (26) 311 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . 377,792 476,160 107,303 20,390 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 402,185 511,564 175,328 29,683 ------------ ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . 823,154 762,194 415,821 6,496 Contract terminations and withdrawal payments . . . . . . . (689,847) (55,223) (149,851) (5,880) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . 77 (1) - - Annuity benefit payments . . . . . . . . . . . . . . . . . . (7,387) (566) - - ------------ ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . . . . . . . . . . . . . . . . . . . 125,997 706,404 265,970 616 ------------ ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . 528,182 1,217,968 441,298 30,299 Net assets at the beginning of period . . . . . . . . . . . . 2,978,958 1,328,342 871,779 118,067 ------------ ------------ ------------ ------------ Net assets at the end of period . . . . . . . . . . . . . . . $ 3,507,140 2,546,310 1,313,077 148,366 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MATURING MATURING MATURING GOVERNMENT GOVERNMENT GOVERNMENT BOND BOND BOND 2006 2010 STOCK ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . 8,819 8,387 3,807 Net realized gains (losses) on investments . . . . . . . . . 705 41,690 26,929 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . 31,418 34,589 71,175 ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 40,942 84,666 101,911 Contract transactions (notes 2, 3, 4 and 5): . . . . . . . . . Contract purchase payments . . . . . . . . . . . . . . . . . 16,567 148,821 313,145 Contract terminations and withdrawal payments . . . . . . . (12,853) (278,634) (10,573) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . - - - Annuity benefit payments . . . . . . . . . . . . . . . . . . - - - ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . 3,714 (129,813) 302,572 ------------ ------------ ------------ Increase (decrease) in net assets . . . . . . . . . . . . . . 44,656 (45,147) 404,483 Net assets at the beginning of period . . . . . . . . . . . . 117,931 202,673 193,209 ------------ ------------ ------------ Net assets at the end of period . . . . . . . . . . . . . . . 162,587 157,526 597,692 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) YEAR ENDED DECEMBER 31, 1995
SEGREGATED SUB-ACCOUNTS ------------------------------------------------------ MONEY ASSET GROWTH BOND MARKET ALLOCATION ------------ ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . $ 22,109 102,601 50,945 113,143 Net realized gains (losses) on investments . . . . . . . . . 147,998 13,748 - 150,795 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . 442,943 411,356 - 687,470 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 613,050 527,705 50,945 951,408 ------------ ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): Contract purchase payments . . . . . . . . . . . . . . . . . 451,917 427,236 845,844 605,592 Contract terminations and withdrawal payments . . . . . . . (363,401) (280,227) (757,775) (1,431,686) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . 10 24 - 67 Annuity benefit payments . . . . . . . . . . . . . . . . . . (2,393) (5,530) - (18,228) ------------ ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . 86,133 141,503 88,069 (844,255) ------------ ------------ ------------ ------------ Increase in net assets . . . . . . . . . . . . . . . . . . . . 699,183 669,208 139,014 107,153 Net assets at the beginning of year . . . . . . . . . . . . . 2,437,691 2,650,358 984,034 4,473,447 ------------ ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . $ 3,136,874 3,319,566 1,123,048 4,580,600 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ SEGREGATED SUB-ACCOUNTS ---------------------------------------- MORTGAGE INDEX CAPITAL SECURITIES 500 APPRECIATION ------------ ------------ ------------ Operations: Investment income (loss) - net . . . . . . . . . . . . . . . 60,499 51,337 (6,121) Net realized gains (losses) on investments . . . . . . . . . (407) 98,872 162,581 Net change in unrealized appreciation or depreciation of investments . . . . . . . . . . . . . . . . . . . . . 92,153 910,196 638,928 ------------ ------------ ------------ Net increase in net assets resulting from operations . . . . . 152,245 1,060,405 795,388 ------------ ------------ ------------ Contract transactions (notes 2, 3, 4 and 5): . . . . . . . . . Contract purchase payments . . . . . . . . . . . . . . . . . 68,921 1,908,482 764,766 Contract terminations and withdrawal payments . . . . . . . (52,829) (487,844) (332,044) Actuarial adjustments for mortality experience on annuities in payment period . . . . . . . . . . . . . - - 12 Annuity benefit payments . . . . . . . . . . . . . . . . . . - - (3,014) ------------ ------------ ------------ Increase (decrease) in net assets from contract transactions . 16,092 1,420,638 429,720 ------------ ------------ ------------ Increase in net assets . . . . . . . . . . . . . . . . . . . . 168,337 2,481,043 1,225,108 Net assets at the beginning of year . . . . . . . . . . . . . 847,383 2,281,197 3,353,171 ------------ ------------ ------------ Net assets at the end of year . . . . . . . . . . . . . . . . 1,015,720 4,762,240 4,578,279 ------------ ------------ ------------ ------------ ------------ ------------
See accompanying notes to financial statements. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT NOTES TO FINANCIAL STATEMENTS (1) ORGANIZATION AND BASIS FOR PRESENTATION Minnesota Mutual Variable Annuity Account (the Account) was established on September 10, 1984 as a segregated asset account of The Minnesota Mutual Life Insurance Company (Minnesota Mutual) under Minnesota law and is registered as a unit investment trust under the Investment Company Act of 1940 (as amended). There are currently four types of contracts each consisting of one to fourteen segregated sub-accounts. The financial statements presented include only the segregated sub-accounts for the type of contracts offered to the faculty and employees of the University of Minnesota, officers, directors and employees of Minnesota Mutual, other groups with sales arrangements with Minnesota Mutual for the purchase of annuity contracts and individuals purchasing one or more annuity contract with aggregated purchase payments totaling $500,000 or more. The assets of each segregated sub-account are held for the exclusive benefit of the variable annuity contract owners and are not chargeable with liabilities arising out of the business conducted by any other account or by Minnesota Mutual. Contract owners allocate their variable annuity purchase payments to one or more of the fourteen segregated sub-accounts. Such payments are then invested in shares of MIMLIC Series Fund, Inc. (the Fund) organized by Minnesota Mutual as the investment vehicle for its variable annuity contracts and variable life policies. The Fund is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. Payments allocated to the Growth, Bond, Money Market, Asset Allocation, Mortgage Securities, Index 500, Capital Appreciation, International Stock, Small Company, Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006, Maturing Government Bond 2010 and Value Stock segregated sub-accounts are invested in shares of the Growth, Bond, Money Market, Asset Allocation, Mortgage Securities, Index 500, Capital Appreciation, International Stock, Small Company, Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006, Maturing Government Bond 2010 and Value Stock Portfolios of the Fund, respectively. MIMLIC Sales Corporation acts as the underwriter for the Account. MIMLIC Asset Management Company acts as the investment adviser for the Fund. MIMLIC Sales Corporation is a wholly-owned subsidiary of MIMLIC Asset Management Company. MIMLIC Asset Management Company is a wholly-owned subsidiary of Minnesota Mutual. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets resulting from operations during the period. Actual results could differ from those estimates. INVESTMENTS IN MIMLIC SERIES FUND, INC. Investments in shares of the Fund portfolios are stated at market value which is the net asset value per share as determined daily by the Fund. Investment transactions are accounted for on the date the shares are purchased or sold. The cost of investments sold is determined on the average cost method. All dividend distributions received from the Fund are reinvested in additional shares of the Fund and are recorded by the sub-accounts on the ex-dividend date. 2 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED FEDERAL INCOME TAXES The Account is treated as part of Minnesota Mutual for federal income tax purposes. Under current interpretations of existing federal income tax law, no income taxes are payable on investment income or capital gain distributions received by the Account from the Fund. CONTRACTS IN ANNUITY PAYMENT PERIOD Annuity reserves are computed for currently payable contracts according to the Progressive Annuity Mortality Table, using an assumed interest rate of 3.5 percent. Charges to annuity reserves for mortality and risk expense are reimbursed to Minnesota Mutual if the reserves required are less than originally estimated. If additional reserves are required, Minnesota Mutual reimburses the Account. (3) ADMINISTRATIVE AND PREMIUM TAX CHARGES The administrative charge paid to Minnesota Mutual is equal, on an annual basis, to .15 percent of the average daily net assets of the Account. Under certain conditions, the charge may be increased to not more than .35 percent of the average daily net assets of the Account. Premium taxes may be deducted from purchase payments or at the commencement of annuity payments. Currently such taxes range from .5 to 2.5 percent depending on the applicable state law. No premium taxes were deducted from purchase payments for the years ended December 31, 1996 and 1995. (4) INVESTMENT TRANSACTIONS The Account's purchases of Fund shares, including reinvestment of dividend distributions, were as follows during the year ended December 31, 1996: Growth Portfolio . . . . . . . . . . . . . . . . . . . . . $ 1,304,218 Bond Portfolio . . . . . . . . . . . . . . . . . . . . . . 1,020,662 Money Market Portfolio . . . . . . . . . . . . . . . . . . 1,306,308 Asset Allocation Portfolio . . . . . . . . . . . . . . . . 1,582,419 Mortgage Securities Portfolio . . . . . . . . . . . . . . . 274,396 Index 500 Portfolio . . . . . . . . . . . . . . . . . . . . 2,165,492 Capital Appreciation Portfolio . . . . . . . . . . . . . . 764,218 International Stock Portfolio . . . . . . . . . . . . . . . 1,413,589 Small Company Portfolio . . . . . . . . . . . . . . . . . . 1,194,285 Maturing Government Bond 1998 Portfolio . . . . . . . . . . 240,623 Maturing Government Bond 2002 Portfolio . . . . . . . . . . 208,004 Maturing Government Bond 2006 Portfolio . . . . . . . . . . 8,593 Maturing Government Bond 2010 Portfolio . . . . . . . . . . 41,627 Value Stock Portfolio . . . . . . . . . . . . . . . . . . . 1,082,640 3 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (5) UNIT ACTIVITY FROM CONTRACT TRANSACTIONS Transactions in units for each segregated sub-account for the years ended December 31, 1996 and 1995 were as follows:
SEGREGATED SUB-ACCOUNTS ---------------------------------------------------------- MONEY ASSET GROWTH BOND MARKET ALLOCATION ------------ ------------ ------------ -------------- Units outstanding at December 31, 1994 . . . . . . . . . . . . . . 1,477,118 1,480,397 669,925 2,307,972 Contract purchase payments . . . . . . . . 250,759 187,577 559,670 294,811 Deductions for contract terminations and withdrawal payments . . . . . . . . (193,872) (142,183) (503,360) (731,647) ----------- ----------- ----------- ----------- Units outstanding at December 31, 1995 . . . . . . . . . . . . . . 1,534,005 1,525,791 726,235 1,871,136 Contract purchase payments . . . . . . . . 439,272 384,218 782,414 481,356 Deductions for contract terminations and withdrawal payments . . . . . . . . (524,295) (403,150) (758,215) (322,960) ----------- ----------- ----------- ----------- Units outstanding at December 31, 1996 . . . . . . . . . . . . . . 1,448,982 1,506,859 750,434 2,029,532 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- SEGREGATED SUB-ACCOUNTS ------------------------------------------------------------------------- MORTGAGE INDEX CAPITAL INTERNATIONAL SMALL SECURITIES 500 APPRECIATION STOCK COMPANY ------------ ------------ ------------ ------------- ------------- Units outstanding at December 31, 1994 . . . . . . 477,367 1,345,845 1,659,517 2,153,847 1,091,852 Contract purchase payments . . . . . . . . 35,102 962,320 339,944 583,190 528,059 Deductions for contract terminations and withdrawal payments . . (26,936) (251,800) (130,014) (482,958) (38,876) ----------- ----------- ----------- ----------- ----------- Units outstanding at December 31, 1995 . . . . . . 485,533 2,056,365 1,869,447 2,254,079 1,581,035 Contract purchase payments . . . . . . . . 98,818 800,703 236,787 720,378 557,416 Deductions for contract terminations and withdrawal payments . . (134,286) (492,119) (437,978) (556,442) (901,360) ----------- ----------- ----------- ----------- ----------- Units outstanding at . . . . . . December 31, 1996 . . . . . . 450,065 2,364,949 1,668,256 2,418,015 1,237,091 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 4 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (5) UNIT ACTIVITY FROM CONTRACT TRANSACTIONS - CONTINUED SEGREGATED SUB-ACCOUNTS ----------------------------------------------------------------------- MATURING MATURING MATURING MATURING GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT VALUE BOND 1998 BOND 2002 BOND 2006 BOND 2010 STOCK ----------- ----------- ----------- ----------- ----------- Units outstanding at December 31, 1994 . . . . . . 881,942 120,595 121,565 211,596 183,180 Contract purchase payments . . . . . . . . 410,548 6,445 14,754 131,823 252,014 Deductions for contract . . terminations and withdrawal payments . . (145,593) (5,643) (11,727) (226,784) (8,358) ---------- ---------- ---------- ---------- ---------- Units outstanding at December 31, 1995 . . . . . . 1,146,897 121,397 124,592 116,635 426,836 Contract purchase payments . . . . . . . . 202,543 152,189 - 31,314 592,532 Deductions for contract terminations and withdrawal payments . . (24,602) (4,033) (7,557) (6,177) (220,772) ---------- ---------- ---------- ---------- ---------- Units outstanding at December 31, 1996 . . . . . . 1,324,838 269,553 117,035 141,772 798,596 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS The following tables for each segregated sub-account show certain data for an accumulation unit outstanding during the periods indicated: GROWTH
YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Unit value, beginning of year. . . . . . $ 2.012 1.622 1.611 1.542 1.473 -------- -------- -------- -------- -------- Income from investment operations: Net investment income . . . . . . . . .017 .014 .011 .017 .019 Net gains on securities (both realized and unrealized) . . .325 .376 - .052 .050 -------- -------- -------- -------- -------- Total from investment operations . .342 .390 .011 .069 .069 -------- -------- -------- -------- -------- Unit value, end of year . . . . . . . . $ 2.354 2.012 1.622 1.611 1.542 -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
6 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED BOND
YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Unit value, beginning of year . . . . . . $ 2.118 1.772 1.859 1.688 1.585 -------- ------- ------- ------- ------- Income (loss) from investment operations: Net investment income . . . . . . . . . .112 .069 .073 .071 .076 Net gains or losses on securities (both realized and unrealized) . . . (.052) .277 (.160) .100 .027 -------- ------- ------- ------- ------- Total from investment operations . . .060 .346 (.087) .171 .103 -------- ------- ------- ------- ------- Unit value, end of year . . . . . . . . . $ 2.178 2.118 1.772 1.859 1.688 -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
7 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED MONEY MARKET
YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Unit value, beginning of year .. . . . . . $ 1.546 1.469 1.418 1.383 1.342 -------- ------- ------- ------- ------- Income from investment operations: Net investment income . . . . . . . . . .074 .077 .051 .035 .041 -------- ------- ------- ------- ------- Total from investment operations .. . .074 .077 .051 .035 .041 -------- ------- ------- ------- ------- Unit value, end of year . . . . . . . . . $ 1.620 1.546 1.469 1.418 1.383 -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
8 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED ASSET ALLOCATION
YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Unit value, beginning of year . . . . . . $ 2.251 1.803 1.831 1.723 1.609 -------- ------- ------- ------- ------- Income (loss) from investment operations: Net investment income . . . . . . . . . .076 .058 .036 .032 .029 Net gains or losses on securities (both realized and unrealized) . . . .202 .390 (.064) .076 .085 -------- ------- ------- ------- ------- Total from investment operations . . .278 .448 (.028) .108 .114 -------- ------- ------- ------- ------- Unit value, end of year . . . . . . . . . $ 2.529 2.251 1.803 1.831 1.723 -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
9 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED MORTGAGE SECURITIES
YEAR ENDED DECEMBER 31, -------------------------------------------------------------------- 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Unit value, beginning of year . . . . . . $ 2.091 1.775 1.839 1.686 1.588 -------- ------- ------- ------- ------- Income (loss) from investment operations: Net investment income . . . . . . . . .133 .126 .083 .078 .073 Net gains or losses on securities (both realized and unrealized) . . . (.026) .190 (.147) .075 .025 -------- ------- ------- ------- ------- Total from investment operations . . .107 .316 (.064) .153 .098 -------- ------- ------- ------- ------- Unit value, end of year . . . . . . . . . $ 2.198 2.091 1.775 1.839 1.686 -------- ------- ------- ------- ------- -------- ------- ------- ------- -------
10 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED INDEX 500
YEAR ENDED DECEMBER 31, ------------------------------------------------- 1996 1995 1994 1993 1992 --------- --------- --------- --------- --------- Unit value, beginning of year. . . . . . . . . . . . . . . . $ 2.316 1.695 1.678 1.531 1.428 --------- --------- --------- --------- --------- Income from investment operations: Net investment income . . . . . . . . . . . . . . . . . .029 .030 .024 .023 .029 Net gains or losses on securities (both realized and unrealized) . . . . . . . . . . . .468 .591 (.007) .124 .074 --------- --------- --------- --------- --------- Total from investment operations. . . . . . . . . . . .497 .621 .017 .147 .103 --------- --------- --------- --------- --------- Unit value, end of year. . . . . . . . . . . . . . . . . . . $ 2.813 2.316 1.695 1.678 1.531 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 11 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED CAPITAL APPRECIATION YEAR ENDED DECEMBER 31, ------------------------------------------------- 1996 1995 1994 1993 1992 --------- --------- --------- --------- --------- Unit value, beginning of year. . . . . . . . . . . . . . . . $ 2.420 1.974 1.933 1.754 1.672 --------- --------- --------- --------- --------- Income from investment operations: Net investment income (loss). . . . . . . . . . . . . . (.004) (.003) (.002) .002 .005 Net gains on securities (both realized and unrealized). . . . . . . . . . . . . . . .426 .449 .043 .177 .077 --------- --------- --------- --------- --------- Total from investment operations. . . . . . . . . . . .422 .446 .041 .179 .082 --------- --------- --------- --------- --------- Unit value, end of year. . . . . . . . . . . . . . . . . . . $ 2.842 2.420 1.974 1.933 1.754 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 12 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED INTERNATIONAL STOCK PERIOD FROM MAY 1, YEAR ENDED DECEMBER 31, 1992* TO --------------------------------------- DECEMBER 1996 1995 1994 1993 31, 1992 --------- --------- --------- --------- --------- Unit value, beginning of period. . . . . . . . . . . . . . . $ 1.495 1.311 1.317 .915 1.000 --------- --------- --------- --------- --------- Income from investment operations: Net investment income (loss). . . . . . . . . . . . . . .041 (.002) .028 .009 .014 Net gains or losses on securities (both realized and unrealized) . . . . . . . . . . . .252 .186 (.034) .393 (.099) --------- --------- --------- --------- --------- Total from investment operations . . . . . . . . . . .293 .184 (.006) .402 (.085) --------- --------- --------- --------- --------- Unit value, end of period .. . . . . . . . . . . . . . . . . $ 1.788 1.495 1.311 1.317 .915 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- * Commencement of the segregated sub-account's operations. 13 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED SMALL COMPANY PERIOD FROM MAY 3, YEAR ENDED DECEMBER 31, 1993* TO ----------------------------- DECEMBER 1996 1995 1994 31, 1993 --------- --------- --------- --------- Unit value, beginning of period. . . . . . . . . . . . . . . $ 1.604 1.217 1.148 1.000 --------- --------- --------- --------- Income from investment operations: Net investment income (loss) . . . . . . . . . . . . . - - - (.001) Net gains on securities (both realized and unrealized) . . . . . . . . . . . . . . .101 .387 .069 .149 --------- --------- --------- --------- Total from investment operations . . . . . . . . . . .101 .387 .069 .148 --------- --------- --------- --------- Unit value, end of period. . . . . . . . . . . . . . . . . . $ 1.705 1.604 1.217 1.148 --------- --------- --------- --------- --------- --------- --------- --------- * Commencement of the segregated sub-account's operations. 16 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED MATURING GOVERNMENT BOND 2006 PERIOD FROM YEAR ENDED MAY 2, DECEMBER 31, 1994* TO ------------------- DECEMBER 1996 1995 31, 1994 --------- --------- --------- Unit value, beginning of period .. . . . . . . . . . . . . . $ 1.305 .970 1.000 --------- --------- --------- Income (loss) from investment operations: Net investment income . . . . . . . . . . . . . . . . . .068 .072 .054 Net gains or losses on securities (both realized and unrealized) . . . . . . . . . . . (.086) .263 (.084) --------- --------- --------- Total from investment operations . . . . . . . . . . (.018) .335 (.030) --------- --------- --------- Unit value, end of period .. . . . . . . . . . . . . . . . . $ 1.287 1.305 .970 --------- --------- --------- --------- --------- --------- * Commencement of the segregated sub-account's operations. 17 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED MATURING GOVERNMENT BOND 2010 PERIOD FROM YEAR ENDED MAY 2, DECEMBER 31, 1994* TO ------------------- DECEMBER 1996 1995 31, 1994 --------- --------- --------- Unit value, beginning of period .. . . . . . . . . . . . . . $ 1.351 .958 1.000 --------- --------- --------- Income (loss) from investment operations: Net investment income (loss). . . . . . . . . . . . . . (.001) .049 .089 Net gains or losses on securities (both realized and unrealized) . . . . . . . . . . . (.047) .344 (.131) --------- --------- --------- Total from investment operations . . . . . . . . . . (.048) .393 (.042) --------- --------- --------- Unit value, end of period .. . . . . . . . . . . . . . . . . $ 1.303 1.351 .958 --------- --------- --------- --------- --------- --------- * Commencement of the segregated sub-account's operations. 18 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (6) FINANCIAL HIGHLIGHTS - CONTINUED VALUE STOCK PERIOD FROM YEAR ENDED MAY 2, DECEMBER 31, 1994* TO ------------------- DECEMBER 1996 1995 31, 1994 --------- --------- --------- Unit value, beginning of period. . . . . . . . . . . . . . . $ 1.400 1.055 1.000 --------- --------- --------- Income from investment operations: Net investment income . . . . . . . . . . . . . . . . . .017 .013 .012 Net gains on securities (both realized and unrealized) . . . . . . . . . . . . . . .414 .332 .043 --------- --------- --------- Total from investment operations . . . . . . . . . . .431 .345 .055 --------- --------- --------- Unit value, end of period .. . . . . . . . . . . . . . . . . $ 1.831 1.400 1.055 --------- --------- --------- --------- --------- ---------
* Commencement of the segregated sub-account's operations. INDEPENDENT AUDITORS' REPORT The Board of Trustees The Minnesota Mutual Life Insurance Company We have audited the accompanying consolidated balance sheets of The Minnesota Mutual Life Insurance Company and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations and policyowners' surplus and cash flows for each of the years in the three-year period ended December 31, 1996. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Minnesota Mutual Life Insurance Company and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1996 in conformity with generally accepted accounting principles. As discussed in Note 2 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long- Duration Participating Contracts," in 1996. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in the accompanying schedules is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG Peat Marwick LLP Minneapolis, Minnesota February 10, 1997 53 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1996 AND 1995 ASSETS
1996 1995 ----------- ----------- (IN THOUSANDS) Fixed maturity securities: Available-for-sale, at fair value (amortized cost $4,558,975 and $4,525,352) $ 4,674,082 $ 4,761,561 Held-to-maturity, at amortized cost (fair value $1,179,112 and $1,281,523) 1,125,638 1,180,654 Equity securities, at fair value (cost $429,509 and $277,554) 549,797 384,882 Mortgage loans, net 608,808 608,537 Real estate, net 43,082 47,256 Policy loans 204,178 198,716 Short-term investments 122,772 72,841 Other invested assets 98,247 91,530 ----------- ----------- Total investments 7,426,604 7,345,977 Cash 57,140 48,358 Finance receivables, net 259,192 226,720 Deferred policy acquisition costs 589,517 539,732 Accrued investment income 90,996 98,373 Premiums receivable 77,140 85,247 Property and equipment, net 55,050 50,809 Reinsurance recoverables 126,629 102,198 Other assets 54,798 46,530 Separate account assets 3,706,256 2,609,460 ----------- ----------- Total assets $12,443,322 $11,153,404 =========== =========== LIABILITIES AND POLICYOWNERS' SURPLUS Liabilities: Policy and contract account balances $ 4,310,015 $ 4,287,083 Future policy and contract benefits 1,638,720 1,554,898 Pending policy and contract claims 70,577 55,812 Other policyowner funds 396,848 371,537 Policyowner dividends payable 49,899 50,450 Unearned premiums and fees 207,111 210,494 Federal income tax liability: Current 25,643 39,516 Deferred 149,665 173,905 Other liabilities 286,042 320,607 Notes payable 319,000 279,967 Separate account liabilities 3,691,374 2,596,285 ----------- ----------- Total liabilities 11,144,894 9,940,554 Policyowners' surplus: Unassigned surplus 1,190,116 1,059,598 Net unrealized investment gains 108,312 153,252 ----------- ----------- Total policyowners' surplus 1,298,428 1,212,850 ----------- ----------- Total liabilities and policyowners' surplus $12,443,322 $11,153,404 =========== ===========
See accompanying notes to consolidated financial statements. 54 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND POLICYOWNERS' SURPLUS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 STATEMENTS OF OPERATIONS
1996 1995 1994 ---------- ---------- --------- (IN THOUSANDS) Revenues: Premiums $ 612,359 $ 603,770 $ 562,018 Policy and contract fees 245,966 214,203 188,115 Net investment income 530,987 515,047 486,101 Net realized investment gains 59,546 66,643 25,769 Finance charge income 46,932 39,937 34,258 Other income 51,630 40,250 30,106 ---------- ---------- --------- Total revenues 1,547,420 1,479,850 1,326,367 ---------- ---------- --------- Benefits and expenses: Policyowner benefits 541,520 517,771 498,424 Interest credited to policies and con- tracts 288,967 297,145 283,626 General operating expenses 302,618 273,425 253,317 Commissions 103,370 93,465 87,631 Administrative and sponsorship fees 79,360 76,223 71,143 Dividends to policyowners 24,804 27,282 26,672 Interest on notes payable 22,798 11,128 7,295 Increase in deferred policy acquisition costs (15,312) (29,822) (43,974) ---------- ---------- --------- Total benefits and expenses 1,348,125 1,266,617 1,184,134 ---------- ---------- --------- Income from operations before taxes 199,295 213,233 142,233 Federal income tax expense: Current 68,033 71,379 63,641 Deferred 744 11,995 (1,511) ---------- ---------- --------- Total federal income tax expense 68,777 83,374 62,130 Net income $ 130,518 $ 129,859 $ 80,103 ========== ========== ========= STATEMENTS OF POLICYOWNERS' SURPLUS Policyowners' surplus, beginning of year $1,212,850 $ 874,577 $ 892,510 Net income 130,518 129,859 80,103 Change in net unrealized investment gains and losses (44,940) 208,414 (98,036) ---------- ---------- --------- Policyowners' surplus, end of year $1,298,428 $1,212,850 $ 874,577 ========== ========== =========
See accompanying notes to consolidated financial statements. 55 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994 ---------- ---------- ---------- (IN THOUSANDS) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 130,518 $ 129,859 $ 80,103 Adjustments to reconcile net income to net cash provided by operating activities: Interest credited to annuity and insur- ance contracts 275,968 288,218 277,863 Fees deducted from policy and contract balances (206,780) (201,575) (188,226) Change in future policy benefits 84,389 100,025 63,328 Change in other policyowner liabilities 16,099 (4,762) (16,794) Change in deferred policy acquisition costs (15,312) (29,822) (43,974) Change in premiums due and other receiv- ables (26,142) (18,039) 38,166 Change in federal income tax liabilities (12,055) 18,376 17,854 Net realized investment gains (59,546) (66,643) (25,769) Other, net 29,987 36,561 28,958 ---------- ---------- ---------- Net cash provided by operating activi- ties 217,126 252,198 231,509 ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of: Fixed maturity securities, available- for-sale 877,682 1,349,348 653,498 Equity securities 352,901 203,493 88,645 Mortgage loans 15,567 4,315 20,912 Real estate 11,678 15,948 17,571 Other invested assets 12,280 10,775 28,305 Proceeds from maturities and repayments of: Fixed maturity securities, available- for-sale 329,550 253,576 327,337 Fixed maturity securities, held-to-matu- rity 114,222 127,617 75,648 Mortgage loans 94,703 104,730 126,134 Cost of purchases of: Fixed maturity securities, available- for-sale (1,228,048) (1,975,130) (1,123,125) Fixed maturity securities, held-to-matu- rity (60,612) (140,763) (131,820) Equity securities (446,599) (212,142) (131,483) Mortgage loans (108,691) (209,399) (145,964) Real estate (3,786) (16,554) (10,985) Other invested assets (29,271) (20,517) (12,732) Finance receivable originations or pur- chases (175,876) (167,298) (134,867) Finance receivable principal payments 142,723 123,515 104,539 Other, net (43,662) (19,292) 15,309 ---------- ---------- ---------- Net cash used for investing activities (145,239) (567,778) (233,078) ---------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Deposits credited to annuity and insurance contracts 657,405 710,525 647,237 Withdrawals from annuity and insurance contracts (702,681) (563,569) (645,969) Proceeds from issuance of surplus notes -- 124,967 -- Proceeds from issuance of debt by subsidi- ary 60,000 50,000 30,000 Payments on debt by subsidiary (21,000) (10,000) (9,100) Other, net (6,898) (3,801) (5,940) ---------- ---------- ---------- Net cash provided by (used for) fi- nancing activities (13,174) 308,122 16,228 ---------- ---------- ---------- Net increase (decrease) in cash and short- term investments 58,713 (7,458) 14,659 Cash and short-term investments, beginning of year 121,199 128,657 113,998 ---------- ---------- ---------- Cash and short-term investments, end of year $ 179,912 $ 121,199 $ 128,657 ========== ========== ==========
See accompanying notes to consolidated financial statements. 56 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) NATURE OF OPERATIONS The Minnesota Mutual Life Insurance Company (the Company), both directly and through its subsidiaries, provides a diversified array of insurance and financial products and services designed principally to protect and enhance the long-term financial well-being of individuals and families. The Company's strategy is to be successful in carefully selected niche markets, primarily in the United States, while focusing on the retention of existing business and the maintenance of profitability. To achieve this objective, the Company has divided its businesses into four strategic business units which focus on various markets: Individual, Financial Services, Group, and Pension. Revenues reported in 1996 by these business units were $780,250,000, $279,554,000, $213,461,000 and $104,059,000, respectively. Additional revenues of $170,096,000 were reported by the Company's subsidiaries. At December 31, 1996, the Company was one of the 11 largest mutual life insurance company groups in the United States, as measured by total assets. The Company serves nearly seven million people through more than 4,000 associates located at its St. Paul headquarters and in 81 general agencies and 43 regional offices throughout the United States. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP), which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. The consolidated financial statements include the accounts of The Minnesota Mutual Life Insurance Company and its subsidiaries (collectively, "the Company"). All material intercompany transactions and balances have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could vary from management's estimates. New Accounting Principles In 1995 and prior years, the Company prepared its financial statements according to statutory accounting practices prescribed or permitted by the Commerce Department of the State of Minnesota (Department of Commerce), and these accounting practices were considered GAAP for mutual life insurance companies. In April 1993, the Financial Accounting Standards Board (FASB) issued Interpretation No. 40 (the Interpretation), "Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises." The Interpretation was supposed to become effective for fiscal years beginning after December 15, 1994 and stated that financial statements prepared in accordance with statutory accounting practices would no longer be considered to be in conformity with GAAP. The Interpretation requires all mutual life insurance companies that report their financial statements in conformity with GAAP to apply all applicable authoritative GAAP pronouncements, with the exception of Statements of Financial Accounting Standards (SFAS) No. 60, "Accounting and Reporting by Insurance Enterprises," No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long Duration Contracts and Realized Gains and Losses from the Sale of Investments," and No. 113, "Accounting for Reinsurance of Short-Duration and Long-Duration Contracts." In January 1995, the FASB issued SFAS 120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long Duration Participating Contracts." This statement deferred the implementation of the Interpretation to fiscal years beginning after December 15, 1995 and extended the requirements of SFAS Nos. 60, 97 and 113 to mutual life insurance enterprises. SFAS No. 120 also requires mutual life insurance enterprises to adopt Statement of Position 95-1, "Accounting for Certain Insurance Activities of Mutual Life Insurance Enterprises," which was issued by the American Institute of Certified Public Accountants. 57 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The Company adopted SFAS No. 120 on January 1, 1996, and the accompanying 1994 and 1995 financial statements and related notes have been restated to conform with the presentation of the 1996 GAAP financial statements. The Company will continue to prepare financial statements according to statutory accounting practices prescribed or permitted by the Department of Commerce for purposes of filing with the Department of Commerce, the National Association of Insurance Commissioners and states in which the Company is licensed to do business. The significant differences between statutory and GAAP financial results are presented in Note 12. Insurance Revenues and Expenses Premiums on traditional life products, which include individual whole life and term insurance and immediate annuities, are credited to revenue when due. For accident and health and group life products, premiums are credited to revenue over the contract period as earned. Benefits and expenses are recognized in relation to premiums over the contract period via a provision for future policy benefits and the amortization of deferred policy acquisition costs. Nontraditional life products include individual adjustable and variable life insurance and group universal and variable life insurance. Revenue from nontraditional life products and deferred annuities is comprised of policy and contract fees charged for the cost of insurance, policy administration and surrenders. Expenses include the portion of claims not covered by and interest credited to the related policy and contract account balances. Policy acquisition costs are amortized relative to gross margins. Deferred Policy Acquisition Costs The costs of acquiring new and renewal business, which vary with and are primarily related to the production of new and renewal business, are generally deferred to the extent recoverable from future premiums or expected gross profits. Deferrable costs include commissions, underwriting expenses and certain other selling and issue costs. For traditional life, accident and health and group life products, deferred acquisition costs are amortized over the premium paying period in proportion to the ratio of annual premium revenues to ultimate anticipated premium revenues. The ultimate premium revenues are estimated based upon the same assumptions used to calculate the future policy benefits. For nontraditional life products and deferred annuities, deferred acquisition costs are amortized over the estimated lives of the contracts in relation to the present value of estimated gross profits from surrender charges and investment, mortality and expense margins. Deferred acquisition costs amortized were $125,978,000, $104,940,000 and $86,477,000 for the years ended December 31, 1996, 1995 and 1994, respectively. Finance Charge Income and Receivables Finance charge income represents fees and interest charged on consumer loans. The Company uses the interest (actuarial) method of accounting for finance charges and interest on finance receivables. Accrual of finance charges and interest is suspended when a loan is contractually delinquent for more than 60 days and is subsequently recognized when received. Accrual is resumed when the loan is contractually less than 60 days past due. An allowance for uncollectible amounts is maintained by direct charges to operations at an amount which management believes, based upon historical losses and economic conditions, is adequate to absorb probable losses on existing receivables that may become uncollectible. The reported receivables are net of this allowance. Valuation of Investments Fixed maturity securities (bonds) which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at amortized cost, net of write-downs for other than temporary declines in value. Premiums and discounts are amortized or accreted over the estimated lives of the securities based on the interest yield method. Fixed maturity securities which may be sold prior to maturity are classified as available-for- sale and carried at fair value. 58 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Equity securities (common stocks and preferred stocks) are carried at fair value. Equity securities also include initial contributions to affiliated registered investment funds that are managed by a subsidiary of the Company. These contributions are carried at the market value of the underlying net assets of the funds. Mortgage loans are carried at amortized cost less an allowance for uncollectible amounts. Premiums and discounts are amortized or accreted over the terms of the mortgage loans based on the interest yield method. A mortgage loan is considered impaired if it is probable that contractual amounts due will not be collected. Impaired mortgage loans are valued at the fair value of the underlying collateral. Interest income on impaired mortgage loans is recorded on an accrual basis. However, when the likelihood of collection is doubtful, interest income is recognized when received. Fair values of fixed maturity securities and equity securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are estimated using values obtained from independent pricing services which specialize in matrix pricing and modeling techniques for estimating fair values. Fair values of mortgage loans are based upon discounted cash flows, quoted market prices and matrix pricing. Real estate is carried at cost less accumulated depreciation and an allowance for estimated losses. Accumulated depreciation on real estate at December 31, 1996 and 1995, was $5,968,000 and $8,342,000, respectively. Policy loans are carried at the unpaid principal balance. Derivative Financial Instruments The Company entered into equity swaps in 1996 as part of an overall risk management strategy. The swaps are used to hedge exposure to market risk on $400,000,000 of the Company's common stock portfolio. The swaps are based upon certain stock indices, and settlement with the counterparties will take place in January 1998. If, at the time of settlement for a particular swap, the designated stock index has fallen below a specified level, the counterparty will pay the Company an amount based upon the decline in the index and the stock portfolio value protected by the swap. If, at the time of settlement, the designated stock index has risen, the Company will pay the counterparty an amount based upon the increase in the index and 25% of the stock portfolio value protected by the swap. The basic types of risks associated with derivatives are market risk (that the value of the derivative will be adversely affected by changes in the market) and credit risk (that the counterparty will not perform according to the contract terms). To reduce credit risk, the swap contracts require that the counterparties maintain sufficient credit ratings and provide collateral under certain circumstances. The swaps are carried at fair value, which is based upon dealer quotes. Changes in fair value are recorded directly in policyowners' surplus. Upon settlement of the swaps, gains or losses are recognized in income. Capital Gains and Losses Realized and unrealized capital gains and losses are determined on the specific identification method. Write-downs of held-to-maturity securities and the provision for credit losses on mortgage loans and real estate are recorded as realized losses. Changes in the fair value of fixed maturity securities available-for-sale and equity securities are recorded as a separate component of policyowners' surplus, net of taxes and related adjustments to deferred policy acquisition costs and unearned policy and contract fees. Property and Equipment Property and equipment are carried at cost, net of accumulated depreciation of $81,962,000 and $75,507,000 at December 31, 1996 and 1995, respectively. Buildings are depreciated over 40 years and equipment is generally depreciated over 5 to 10 years. Depreciation expense for the years ended December 31, 1996, 1995 and 1994, was $6,454,000, $5,941,000 and $8,136,000, respectively. 59 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Separate Accounts Separate account assets and liabilities represent segregated funds administered and invested by the Company for the exclusive benefit of certain policyowners and contractholders. The Company receives administrative and investment advisory fees for services rendered on behalf of these funds. Separate account assets and liabilities are carried at fair value, based upon the market value of the investments held in the segregated funds. The Company periodically invests money in its separate accounts. The market value of such investments is included with separate account assets and amounted to $14,882,000 and $13,175,000 as of December 31, 1996 and 1995, respectively. Policyowner Liabilities Policy and contract account balances represent the net accumulation of funds associated with nontraditional life products and deferred annuities. Additions to the account balances include premiums, deposits and interest credited by the Company. Decreases in the account balances include surrenders, withdrawals, benefit payments, and charges assessed for the cost of insurance, policy administration and surrenders. Future policy and contract benefits are comprised of reserves for traditional life, group life, and accident and health products. The reserves were calculated using the net level premium method based upon assumptions regarding investment yield, mortality, morbidity, and withdrawal rates determined at the date of issue, commensurate with the Company's experience. Provision has been made in certain cases for adverse deviations from these assumptions. Other policyowner funds are comprised of dividend accumulations, premium deposit funds and supplementary contracts without life contingencies. Participating Business Substantially all of the Company's premium revenues are derived from participating policies. Dividends and other discretionary payments are declared by the Board of Trustees based upon actuarial determinations which take into consideration current mortality, interest earnings, expense factors and federal income taxes. Dividends are recognized as expenses consistent with the recognition of premiums. Income Taxes Current income taxes are charged to operations based upon amounts estimated to be payable as a result of taxable operations for the current year. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to the differences between financial statement carrying amounts and income tax bases of assets and liabilities. Reinsurance Recoverables Insurance liabilities are reported before the effects of ceded reinsurance. Reinsurance recoverables represent amounts due from reinsurers for paid and unpaid benefits, expense reimbursements, prepaid premiums and future policy benefits. 60 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (3) INVESTMENTS Net investment income for the years ended December 31 was as follows:
1996 1995 1994 -------- -------- -------- (IN THOUSANDS) Fixed maturity securities $433,985 $426,114 $417,698 Equity securities 14,275 8,883 4,485 Mortgage loans 63,865 58,943 49,676 Real estate (475) 497 648 Policy loans 13,828 12,821 11,800 Short-term investments 6,535 6,716 4,262 Other invested assets 4,901 5,168 3,212 -------- -------- -------- Gross investment income 536,914 519,142 491,781 Investment expenses (5,927) (4,095) (5,680) -------- -------- -------- Total $530,987 $515,047 $486,101 ======== ======== ========
Net realized capital gains (losses) for the years ended December 31 were as follows:
1996 1995 1994 ------- ------- ------- (IN THOUSANDS) Fixed maturity securities $(6,536) $24,025 $(2,528) Equity securities 57,770 36,374 11,268 Mortgage loans (721) (207) (82) Real estate 7,088 2,436 3,915 Other invested assets 1,945 4,015 13,196 ------- ------- ------- Total $59,546 $66,643 $25,769 ======= ======= =======
Gross realized gains (losses) on the sales of fixed maturity securities and equity securities for the years ended December 31 were as follows:
1996 1995 1994 -------- -------- -------- (IN THOUSANDS) Fixed maturity securities, available-for-sale: Gross realized gains $ 19,750 $ 34,898 $ 13,375 Gross realized losses (26,286) (10,873) (15,903) Equity securities: Gross realized gains 79,982 52,670 21,538 Gross realized losses (22,212) (16,296) (10,270)
Net unrealized gains (losses) included in policyowners' surplus at December 31 were as follows:
1996 1995 -------- -------- (IN THOUSANDS) Gross unrealized gains $314,576 $358,877 Gross unrealized losses (77,337) (13,713) Adjustment to deferred policy acquisition costs (65,260) (99,732) Adjustment to unearned policy and contract fees (8,192) (11,665) Deferred federal income taxes (55,475) (80,515) -------- -------- Net unrealized gains $108,312 $153,252 ======== ========
61 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (3)INVESTMENTS (CONTINUED) The amortized cost and fair value of investments in marketable securities by type of investment were as follows:
GROSS UNREALIZED AMORTIZED ---------------- FAIR COST GAINS LOSSES VALUE ---------- -------- ------- ---------- (IN THOUSANDS) DECEMBER 31, 1996 Available-for-sale: United States government and gov- ernment agencies and authorities $ 302,820 $ 2,397 $ 6,756 $ 298,461 States, municipalities, and polit- ical subdivisions 11,296 759 -- 12,055 Foreign governments 1,926 -- 54 1,872 Corporate securities 2,450,126 115,846 19,554 2,546,418 Mortgage-backed securities 1,792,807 64,834 42,365 1,815,276 ---------- -------- ------- ---------- Total fixed maturities 4,558,975 183,836 68,729 4,674,082 Equity securities--unaffiliated 353,983 107,172 5,168 455,987 Equity securities--affiliated 75,526 18,284 -- 93,810 ---------- -------- ------- ---------- Total equity securities 429,509 125,456 5,168 549,797 ---------- -------- ------- ---------- Total available-for-sale 4,988,484 309,292 73,897 5,223,879 Held-to-maturity: Corporate securities 904,994 50,187 3,130 952,051 Mortgage-backed securities 220,644 7,833 1,416 227,061 ---------- -------- ------- ---------- Total held-to-maturity 1,125,638 58,020 4,546 1,179,112 ---------- -------- ------- ---------- Total $6,114,122 $367,312 $78,443 $6,402,991 ========== ======== ======= ========== DECEMBER 31, 1995 Available-for-sale: United States government and gov- ernment agencies and authorities $ 261,669 $ 10,911 $ 440 $ 272,140 States, municipalities, and polit- ical subdivisions 26,317 3,262 -- 29,579 Foreign governments 1,704 223 -- 1,927 Corporate securities 2,523,889 169,329 6,098 2,687,120 Mortgage-backed securities 1,711,773 62,510 3,488 1,770,795 ---------- -------- ------- ---------- Total fixed maturities 4,525,352 246,235 10,026 4,761,561 Equity securities--unaffiliated 196,355 91,269 1,590 286,034 Equity securities--affiliated 81,199 17,649 -- 98,848 ---------- -------- ------- ---------- Total equity securities 277,554 108,918 1,590 384,882 ---------- -------- ------- ---------- Total available-for-sale 4,802,906 355,153 11,616 5,146,443 Held-to-maturity: United States government and gov- ernment agencies and authorities 250 3 -- 253 States, municipalities, and polit- ical subdivisions 525 6 -- 531 Corporate securities 953,511 89,962 525 1,042,948 Mortgage-backed securities 226,368 11,540 117 237,791 ---------- -------- ------- ---------- Total held-to-maturity 1,180,654 101,511 642 1,281,523 ---------- -------- ------- ---------- Total $5,983,560 $456,664 $12,258 $6,427,966 ========== ======== ======= ==========
62 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (3)INVESTMENTS (CONTINUED) The amortized cost and estimated fair value of fixed maturity securities at December 31, 1996, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
AVAILABLE-FOR-SALE HELD-TO-MATURITY --------------------- --------------------- AMORTIZED FAIR AMORTIZED FAIR COST VALUE COST VALUE ---------- ---------- ---------- ---------- (IN THOUSANDS) Due in one year or less $ 33,390 $ 33,429 $ 4,889 $ 4,948 Due after one year through five years 435,040 459,870 163,206 168,527 Due after five years through ten years 1,383,954 1,429,460 223,848 235,754 Due after ten years 913,784 936,047 513,051 542,822 ---------- ---------- ---------- ---------- 2,766,168 2,858,806 904,994 952,051 Mortgage-backed securities 1,792,807 1,815,276 220,644 227,061 ---------- ---------- ---------- ---------- Total $4,558,975 $4,674,082 $1,125,638 $1,179,112 ========== ========== ========== ==========
At December 31, 1996 and 1995, bonds and certificates of deposit with a carrying value of $12,934,000 and $15,296,000, respectively, were on deposit with various regulatory authorities as required by law. Allowances for credit losses on investments are reflected on the consolidated balance sheets as a reduction of the related assets and were as follows:
1996 1995 ------- ------- (IN THOUSANDS) Mortgage loans $ 1,895 $ 1,711 Foreclosed real estate 535 400 Investment real estate 2,529 2,565 ------- ------- Total $ 4,959 $ 4,676 ======= =======
At December 31, 1996, the recorded investment in mortgage loans that were considered to be impaired was $6,518,000 before allowance for credit losses. Included in this amount is $2,225,000 of impaired loans, for which the related allowance for credit losses is $395,000, and $4,293,000 of impaired loans that, as a result of adequate fair market value of underlying collateral, do not have an allowance for credit losses. At December 31, 1995, the recorded investment in mortgage loans that were considered to be impaired was $12,232,000 before allowance for credit losses. Included in this amount is $3,256,000 of impaired loans, for which the related allowance for credit losses is $211,000, and $8,976,000 of impaired loans that, as a result of adequate fair market value of underlying collateral, do not have an allowance for credit losses. In addition to the allowance for credit losses on impaired mortgage loans, a general allowance for credit losses was established for potential impairments in the remainder of the mortgage loan portfolio. The general allowance was $1,500,000 at December 31, 1996, 1995 and 1994. Changes in the allowance for credit losses on mortgage loans were as follows:
1996 1995 1994 ------ ------ ------ (IN THOUSANDS) Balance at beginning of year $1,711 $2,449 $2,412 Provision for credit losses 381 127 622 Charge-offs (197) (865) (585) ------ ------ ------ Balance at end of year $1,895 $1,711 $2,449 ====== ====== ======
63 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (3)INVESTMENTS (CONTINUED) Below is a summary of interest income on impaired mortgage loans.
1996 1995 1994 ------ ------- ------- (IN THOUSANDS) Average impaired mortgage loans $9,375 $15,845 $20,236 Interest income on impaired mortgage loans--contractual 1,796 1,590 2,103 Interest income on impaired mortgage loans--collected 1,742 1,515 1,963
(4) NET FINANCE RECEIVABLES Finance receivables as of December 31 were as follows:
1996 1995 -------- -------- (IN THOUSANDS) Direct installment loans $204,038 $178,262 Retail installment notes 30,843 32,345 Retail revolving credit 24,863 14,864 Credit card receivables 3,541 4,479 Accrued interest 3,404 3,147 -------- -------- Gross receivables 266,689 233,097 Allowance for uncollectible amounts (7,497) (6,377) -------- -------- Finance receivables, net $259,192 $226,720 ======== ========
Direct installment loans at December 31, 1996 consisted of $93,127,000 of discount basis loans (net of unearned finance charges) and $110,911,000 of interest-bearing loans. As of December 31, 1995, discount basis loans amounted to $92,351,000 and interest-bearing loans amounted to $85,911,000. Direct installment loans generally have a maximum term of 84 months. Retail installment notes are principally discount basis, arise from the sale of household appliances, furniture, and sundry services, and generally have a maximum term of 48 months. Experience has shown that a substantial portion of finance receivables will be renewed, converted or paid in full prior to maturity. Principal cash collections of direct installment loans amounted to $92,438,000, $75,865,000 and $70,941,000, and the percentage of these cash collections to average net balances was 48%, 47% and 55% for the years ended December 31, 1996, 1995 and 1994, respectively. Changes in the allowance for uncollectible amounts for the years ended December 31 were as follows:
1996 1995 1994 ------- ------ ------ (IN THOUSANDS) Balance at beginning of year $ 6,377 $5,360 $4,801 Provision for credit losses 10,086 6,140 4,652 Charge-offs (11,036) (6,585) (5,305) Recoveries 2,070 1,462 1,212 ------- ------ ------ Balance at end of year $ 7,497 $6,377 $5,360 ======= ====== ======
64 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (5) INCOME TAXES Income tax expense varies from the amount computed by applying the federal income tax rate of 35% to income from operations before taxes. The significant components of this difference were as follows:
1996 1995 1994 ------- ------- ------- (IN THOUSANDS) Computed tax expense $69,753 $74,631 $49,781 Differences between computed and actual tax expense: Dividends received deduction (2,534) (1,710) (1,293) Special tax on mutual life insurance companies 2,760 10,134 9,880 Tax credits (3,475) (1,840) (1,150) Expense adjustments and other 2,273 2,159 4,912 ------- ------- ------- Total tax expense $68,777 $83,374 $62,130 ======= ======= =======
The tax effects of temporary differences that give rise to the Company's net deferred federal tax liability were as follows:
1996 1995 -------- -------- (IN THOUSANDS) Deferred tax assets: Policyowner liabilities $ 15,854 $ 22,151 Unearned fee income 43,232 43,576 Pension and post-retirement benefits 21,815 20,187 Tax deferred policy acquisition costs 58,732 47,228 Net realized capital losses 8,275 7,881 Other 19,229 17,997 -------- -------- Gross deferred tax assets 167,137 159,020 Deferred tax liabilities: Deferred policy acquisition costs 206,331 188,906 Real estate and property and equipment depreciation 10,089 9,049 Basis difference on investments 8,605 7,402 Net unrealized capital gains 81,339 119,604 Other 10,438 7,964 -------- -------- Gross deferred tax liabilities 316,802 332,925 -------- -------- Net deferred tax liability $149,665 $173,905 ======== ========
A valuation allowance for deferred tax assets was not considered necessary as of December 31, 1996 and 1995, because the Company believes that it is more likely than not that the deferred tax assets will be realized through future reversals of existing taxable temporary differences and future taxable income. Income taxes paid for the years ended December 31, 1996, 1995 and 1994, were $79,026,000, $64,390,000 and $45,268,000, respectively. 65 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (6) LIABILITY FOR UNPAID ACCIDENT AND HEALTH CLAIMS AND CLAIM ADJUSTMENT EXPENSES Activity in the liability for unpaid accident and health claims and claim adjustment expenses is summarized as follows:
1996 1995 1994 -------- -------- -------- (IN THOUSANDS) Balance at January 1 $377,302 $349,311 $323,304 Less: reinsurance recoverable 80,333 61,624 51,549 -------- -------- -------- Net balance at January 1 296,969 287,687 271,755 -------- -------- -------- Incurred related to: Current year 134,727 129,896 129,028 Prior years 4,821 (4,014) 860 -------- -------- -------- Total incurred 139,548 125,882 129,888 -------- -------- -------- Paid related to: Current year 51,695 47,620 46,270 Prior years 70,073 68,980 67,686 -------- -------- -------- Total paid 121,768 116,600 113,956 -------- -------- -------- Net balance at December 31 314,749 296,969 287,687 Plus: reinsurance recoverable 102,161 80,333 61,624 -------- -------- -------- Balance at December 31 $416,910 $377,302 $349,311 ======== ======== ========
The liability for unpaid accident and health claims and claim adjustment expenses is included in future policy and contract benefits and pending policy and contract claims on the consolidated balance sheets. Incurred claims related to prior years are due to the differences between actual and estimated claims incurred as of the end of the prior year and interest credited to future policy and contract benefits. (7) EMPLOYEE BENEFIT PLANS Pension Plans The Company has noncontributory defined benefit retirement plans covering substantially all employees and certain agents. Benefits are based upon years of participation and the employee's average monthly compensation or the agent's adjusted annual compensation. Plan assets are comprised of mostly stocks and bonds which are held in the general and separate accounts of the Company and administered under group annuity contracts issued by the Company. The Company's funding policy is to contribute annually the minimum amount required by applicable regulations. The Company also has an unfunded noncontributory defined benefit retirement plan which provides certain employees with benefits in excess of limits for qualified retirement plans. Net periodic pension cost for the years ended December 31 included the following components:
1996 1995 1994 -------- -------- ------- (IN THOUSANDS) Service cost--benefits earned during the period $ 6,019 $ 5,294 $ 4,880 Interest accrued on projected benefit obligation 8,541 7,935 7,382 Actual return on plan assets (12,619) (18,061) (1,331) Net amortization and deferral 4,698 11,811 (5,094) -------- -------- ------- Net periodic pension cost $ 6,639 $ 6,979 $ 5,837 ======== ======== =======
66 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (7) EMPLOYEE BENEFIT PLANS (CONTINUED) The funded status for the Company's plans as of December 31 was calculated as follows:
FUNDED PLANS UNFUNDED PLAN ------------------ ---------------- 1996 1995 1996 1995 -------- -------- ------- ------- (IN THOUSANDS) Actuarial present value of benefit ob- ligations: Vested benefit obligation $ 61,328 $ 56,428 $ -- $ -- Non-vested benefit obligation 19,119 16,599 5,912 4,539 -------- -------- ------- ------- Accumulated benefit obligation $ 80,447 $ 73,027 $ 5,912 $ 4,539 ======== ======== ======= ======= Pension liability included in other li- abilities: Projected benefit obligation $117,836 $105,180 $12,576 $10,430 Plan assets at fair value 115,107 102,594 -- -- -------- -------- ------- ------- Plan assets less than projected bene- fit obligation 2,729 2,586 12,576 10,430 Unrecognized net gain (loss) 3,633 2,095 (2,332) (1,187) Unrecognized prior service cost (364) (213) -- -- Unamortized transition asset (obliga- tion) 2,422 2,643 (8,451) (9,219) Additional minimum liability -- -- 4,119 4,515 -------- -------- ------- ------- Net pension liability $ 8,420 $ 7,111 $ 5,912 $ 4,539 ======== ======== ======= =======
A weighted average discount rate of 7.5% and a weighted average rate of increase in future compensation levels of 5.8% were used in determining the actuarial present value of the projected benefit obligation at December 31, 1996 and 1995. The assumed long-term rate of return on plan assets was either 7.5% or 8.5%, depending on the plan. Profit Sharing Plans The Company also has profit sharing plans covering substantially all employees and agents. The Company's contribution rate to the employee plan is determined annually by the trustees of the Company and is applied to each participant's prior year earnings. The Company's contribution to the agent plan is made as a certain percentage, based upon years of service, applied to each agent's total annual compensation. The Company recognized contributions to the plans during 1996, 1995 and 1994 of $6,092,000, $6,595,000 and $6,866,000, respectively. Participants may elect to receive a portion of their contributions in cash. Postretirement Benefits Other than Pensions The Company also has unfunded postretirement plans that provide certain health care and life insurance benefits to substantially all retired employees and agents. Eligibility is determined by age at retirement and years of service after age 30. Health care premiums are shared with retirees, and other cost- sharing features include deductibles and co-payments. Components of net periodic postretirement benefit cost for the years ended December 31 were as follows:
1996 1995 1994 ------ ------ ------ (IN THOUSANDS) Service cost--benefits earned during the period $1,011 $1,276 $1,760 Interest accrued on projected benefit obligation 2,041 2,452 2,298 Amortization of prior service cost (513) (513) (223) Amortization of net gain (177) -- -- ------ ------ ------ Net periodic postretirement benefit cost $2,362 $3,215 $3,835 ====== ====== ======
67 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (7) EMPLOYEE BENEFIT PLANS (CONTINUED) The accumulated postretirement benefit obligation and the accrued postretirement benefit liability for the years ended December 31 were as follows:
1996 1995 ------- ------- (IN THOUSANDS) Accumulated postretirement benefit obligation: Retirees $10,238 $11,875 Other fully eligible plan participants 4,594 5,535 Other active plan participants 9,514 9,809 ------- ------- Total accumulated postretirement benefit obligation 24,346 27,219 Unrecognized prior service cost 4,107 4,620 Unrecognized net gain 9,880 4,743 ------- ------- Accrued postretirement benefit liability $38,333 $36,582 ======= =======
The discount rate used in determining the accumulated postretirement benefit obligation for 1996 and 1995 was 7.5%. The 1996 net health care cost trend rate was 9.0%, graded to 5.5% over 7 years, and the 1995 rate was 11.0%, graded to 5.5% over 11 years. The assumptions presented herein are based on pertinent information available to management as of December 31, 1996 and 1995. Actual results could differ from those estimates and assumptions. For example, increasing the assumed health care cost trend rates by one percentage point in each year would increase the postretirement benefit obligation as of December 31, 1996 by $4,262,000 and the estimated eligibility cost and interest cost components of net periodic postretirement benefit costs for 1996 by $583,000. (8) REINSURANCE In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance companies. To the extent that a reinsurer is unable to meet its obligations under the reinsurance agreement, the Company remains liable. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies. Reinsurance is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. The effect of reinsurance on premiums for the years ended December 31 was as follows:
1996 1995 1994 -------- -------- -------- (IN THOUSANDS) Direct premiums $615,098 $600,841 $558,066 Reinsurance assumed 64,489 64,792 60,939 Reinsurance ceded (67,228) (61,863) (56,987) -------- -------- -------- Net premiums $612,359 $603,770 $562,018 ======== ======== ========
Reinsurance recoveries on ceded reinsurance contracts were $72,330,000, $58,338,000 and $60,970,000 during 1996, 1995 and 1994, respectively. 68 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (9) FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value of the Company's financial instruments has been determined using available market information as of December 31, 1996 and 1995. Although management is not aware of any factors that would significantly affect the estimated fair values, such amounts have not been comprehensively revalued since those dates. Therefore, estimates of fair value subsequent to the valuation dates may differ significantly from the amounts presented herein. Considerable judgment is required to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Please refer to Note 2 for additional fair value disclosures concerning fixed maturity securities, equity securities, mortgages and derivatives. The carrying amounts for policy loans, cash, short term investments and finance receivables approximate the assets' fair values. The interest rates on the finance receivables outstanding as of December 31, 1996 and 1995, are consistent with the rates at which loans would currently be made to borrowers of similar credit quality and for the same maturity; as such, the carrying value of the finance receivables outstanding as of December 31, 1996 and 1995, approximate the fair value for those respective dates. The fair values of deferred annuities, annuity certain contracts, and other fund deposits, which have guaranteed interest rates and surrender charges, are estimated to be the amount payable on demand as of December 31, 1996 and 1995. The amount payable on demand equates to the account balance less applicable surrender charges. Contracts without guaranteed interest rates and surrender charges have fair values equal to their accumulation values plus applicable market value adjustments. The fair values of guaranteed investment contracts and supplementary contracts without life contingencies are calculated using discounted cash flows, based on interest rates currently offered for similar products with maturities consistent with those remaining for the contracts being valued. Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of notes payable. The carrying amounts and fair values of the Company's financial instruments which were classified as assets as of December 31 were as follows:
1996 1995 --------------------- --------------------- CARRYING FAIR CARRYING FAIR AMOUNT VALUE AMOUNT VALUE ---------- ---------- ---------- ---------- (IN THOUSANDS) Fixed maturity securities: Available-for-sale $4,674,082 $4,674,082 $4,761,561 $4,761,561 Held-to-maturity 1,125,638 1,179,112 1,180,654 1,281,523 Equity securities 549,797 549,797 384,882 384,882 Mortgage loans: Commercial 432,198 445,976 373,897 391,089 Residential 176,610 180,736 234,640 239,723 Policy loans 204,178 204,178 198,716 198,716 Short-term investments 122,772 122,772 72,841 72,841 Cash 57,140 57,140 48,358 48,358 Finance receivables, net 259,192 259,192 226,720 226,720 Derivatives 1,197 1,197 -- -- ---------- ---------- ---------- ---------- Total financial assets $7,602,804 $7,674,182 $7,482,269 $7,605,413 ========== ========== ========== ==========
69 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (9) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) The carrying amounts and fair values of the Company's financial instruments which were classified as liabilities as of December 31 were as follows:
1996 1995 --------------------- --------------------- CARRYING FAIR CARRYING FAIR AMOUNT VALUE AMOUNT VALUE ---------- ---------- ---------- ---------- (IN THOUSANDS) Deferred annuities $2,178,355 $2,152,636 $2,178,223 $2,156,886 Annuity certain contracts 52,636 53,962 48,492 50,732 Other fund deposits 808,592 805,709 856,535 847,975 Guaranteed investment contracts 18,770 18,866 47,426 47,987 Supplementary contracts without life contingencies 47,966 47,536 41,431 39,962 Notes payable 319,000 325,974 279,967 294,103 ---------- ---------- ---------- ---------- Total financial liabilities $3,425,319 $3,404,683 $3,452,074 $3,437,645 ========== ========== ========== ==========
(10) NOTES PAYABLE In September 1995, the Company issued surplus notes with a face value of $125,000,000, at 8.25%, due in 2025. The surplus notes are subordinate to all current and future policyowners' interests, including claims, and indebtedness of the Company. All payments of interest and principal on the notes are subject to the approval of the Department of Commerce. The approved accrued interest was $3,008,000 as of December 31, 1996 and 1995. The issuance costs of $1,403,000 are deferred and amortized over 30 years on a straight-line basis. Notes payable as of December 31 were as follows:
1996 1995 -------- -------- (IN THOUSANDS) Corporate--surplus notes, 8.25%, 2025 $125,000 $124,967 Consumer finance subsidiary--senior, 6.53%--8.77%, through 2003 194,000 155,000 -------- -------- Total notes payable $319,000 $279,967 ======== ========
At December 31, 1996, the aggregate minimum annual notes payable maturities for the next five years were as follows: 1997, $21,000,000; 1998, $31,000,000; 1999, $49,000,000; 2000, $33,000,000; 2001, $26,000,000. Long-term borrowing agreements involving the consumer finance subsidiary include provisions with respect to borrowing limitations, payment of cash dividends on or purchases of common stock, and maintenance of liquid net worth. As of December 31, 1996, the consumer finance subsidiary was required to have a minimum liquid net worth of $41,354,000. Liquid net worth at that date was $51,803,000. Interest paid on debt for the years ended December 31, 1996, 1995 and 1994, was $21,849,000, $6,504,000 and $5,378,000, respectively. (11) COMMITMENTS AND CONTINGENCIES The Company is involved in various pending or threatened legal proceedings arising out of the normal course of business. In the opinion of management, the ultimate resolution of such litigation will not have a material adverse effect on operations or the financial position of the Company. The Company has issued certain participating group annuity and life insurance contracts jointly with another life insurance company. The joint contract issuer has liabilities related to these contracts of 70 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (11) COMMITMENTS AND CONTINGENCIES (CONTINUED) $328,346,000 as of December 31, 1996. To the extent the joint contract issuer is unable to meet its obligation under the agreement, the Company remains liable. The Company has long-term commitments to fund venture capital and real estate investments totaling $142,469,000 as of December 31, 1996. The Company estimates that $35,000,000 of these commitments will be invested in 1997, with the remaining $107,469,000 invested over the next four years. As of December 31, 1996, the Company had committed to purchase bonds and mortgage loans totaling $74,123,000 but had not completed the purchase transactions. At December 31, 1996, the Company had guaranteed the payment of $68,700,000 in policyowner dividends and discretionary amounts payable in 1997. The Company has pledged bonds, valued at $70,336,000, to secure this guarantee. The Company is contingently liable under state regulatory requirements for possible assessments pertaining to future insolvencies and impairments of unaffiliated insurance companies. The Company records a liability for future guaranty fund assessments based upon known insolvencies, according to data received from the National Organization of Life and Health Insurance Guaranty Associations. An asset is held for the amount of guaranty fund assessments paid which can be recovered through future premium tax credits. (12) STATUTORY FINANCIAL DATA Statutory accounting is primarily focused on solvency and surplus adequacy. Therefore, fundamental differences exist between statutory and GAAP accounting, and their effects on income and policyowners' surplus are illustrated below:
POLICYOWNERS' SURPLUS NET INCOME ---------------------- ---------------------------- 1996 1995 1996 1995 1994 ---------- ---------- -------- -------- -------- (IN THOUSANDS) Statutory basis $ 682,886 $ 601,565 $115,797 $ 88,706 $ 65,123 Adjustments: Deferred policy acquisi- tion costs 589,517 539,732 15,312 29,822 43,974 Net unrealized invest- ment gains 111,575 235,143 -- -- -- Statutory asset valua- tion reserve 240,474 201,721 -- -- -- Statutory interest main- tenance reserve 24,707 32,899 (8,192) 12,976 (4,426) Premiums and fees de- ferred or receivable (75,716) (77,444) 1,587 497 (2,310) Change in reserve basis 98,406 77,464 20,114 12,382 (1,444) Separate accounts (40,755) (36,010) (6,304) (854) (5,837) Unearned policy and con- tract fees (121,843) (122,786) (2,530) (4,410) (10,406) Surplus notes (125,000) (124,967) -- -- -- Net deferred taxes (149,665) (173,905) 744 (11,995) 1,511 Nonadmitted assets 31,531 28,211 -- -- -- Policyowner dividends 57,765 57,263 502 4,660 2,446 Other (25,454) (26,036) (6,512) (1,925) (8,528) ---------- ---------- -------- -------- -------- As reported in the accompanying consolidated financial statements $1,298,428 $1,212,850 $130,518 $129,859 $ 80,103 ========== ========== ======== ======== ========
71 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES SCHEDULE I SUMMARY OF INVESTMENTS--OTHER THAN INVESTMENTS IN RELATED PARTIES DECEMBER 31, 1996
AS SHOWN MARKET ON THE BALANCE TYPE OF INVESTMENT COST(3) VALUE SHEET(1) - ------------------ ---------- ---------- -------------- (IN THOUSANDS) Bonds: United States government and government agencies and authorities $ 302,820 $ 298,461 $ 298,461 States, municipalities and political subdivisions 11,296 12,055 12,055 Foreign governments 1,926 1,872 1,872 Public utilities 547,228 590,445 573,030 Mortgage-backed securities 2,013,451 2,042,337 2,035,920 All other corporate bonds 2,807,892 2,908,024 2,878,382 ---------- ---------- ---------- Total bonds 5,684,613 5,853,194 5,799,720 ---------- ---------- ---------- Equity securities: Common stocks: Public utilities 510 611 611 Banks, trusts and insurance companies 12,824 21,484 21,484 Industrial, miscellaneous and all other 329,792 422,401 422,401 Nonredeemable preferred stocks 10,857 11,491 11,491 ---------- ---------- ---------- Total equity securities 353,983 455,987 455,987 ---------- ---------- ---------- Mortgage loans on real estate 608,808 xxxxxx 608,808 Real estate (2) 43,082 xxxxxx 43,082 Policy loans 204,178 xxxxxx 204,178 Other long-term investments 98,247 xxxxxx 98,247 Short-term investments 122,772 xxxxxx 122,772 ---------- ---------- Total $1,077,087 xxxxxx $1,077,087 ---------- ---------- Total investments $7,115,683 xxxxxx $7,332,794 ========== ==========
- ------- (1) Amortized cost for bonds classified as held-to-maturity and fair value for common stocks and bonds classified as available-for-sale. (2) The carrying value of real estate acquired in satisfaction of indebtedness is $1,810,000. (3) Original cost for equity securities and original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts for bonds and other investments. 72 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES SCHEDULE III SUPPLEMENTARY INSURANCE INFORMATION (IN THOUSANDS)
AS OF DECEMBER 31, FOR THE YEARS ENDED DECEMBER 31, --------------------------------------------------- ------------------------------------------------------------ FUTURE POLICY AMORTIZATION DEFERRED BENEFITS OTHER POLICY BENEFITS, OF DEFERRED POLICY LOSSES, CLAIMS CLAIMS AND NET CLAIMS, LOSSES POLICY OTHER ACQUISITION AND SETTLEMENT UNEARNED BENEFITS PREMIUM INVESTMENT AND SETTLEMENT ACQUISITION OPERATING SEGMENT COSTS EXPENSES(1) PREMIUMS(2) PAYABLE REVENUE(3) INCOME EXPENSES COSTS EXPENSES - ------- ----------- -------------- ----------- ------------ ---------- ---------- -------------- ------------ ---------- (IN THOUSANDS) 1996: Life insurance $456,461 $2,123,148 $149,152 $51,772 $568,874 $223,762 $478,228 $ 97,386 $290,525 Accident and health insurance 62,407 437,118 33,770 18,774 160,097 34,202 96,743 14,017 87,222 Annuity 70,649 3,360,614 -- 31 79,245 267,473 243,387 14,575 111,366 Property and liability insurance -- 27,855 24,189 -- 50,109 5,550 36,933 -- 19,033 -------- ---------- -------- ------- -------- -------- -------- -------- -------- $589,517 $5,948,735 $207,111 $70,577 $858,325 $530,987 $855,291 $125,978 $508,146 ======== ========== ======== ======= ======== ======== ======== ======== ======== 1995: Life insurance $430,829 $2,009,154 $151,864 $41,212 $540,353 $203,487 $454,299 $ 80,896 $266,090 Accident and health insurance 55,888 400,950 34,847 14,567 153,505 33,358 93,482 11,448 83,345 Annuity 53,015 3,401,760 -- 33 74,899 272,499 260,854 12,596 86,716 Property and liability insurance -- 30,117 23,783 -- 49,216 5,703 33,563 -- 18,090 -------- ---------- -------- ------- -------- -------- -------- -------- -------- $539,732 $5,841,981 $210,494 $55,812 $817,973 $515,047 $842,198 $104,940 $454,241 ======== ========== ======== ======= ======== ======== ======== ======== ======== 1994: Life insurance $510,117 $1,867,170 $133,221 $47,099 $505,300 $192,141 $443,233 $ 59,351 $245,791 Accident and health insurance 46,506 352,955 36,529 17,142 136,619 30,119 93,359 12,401 75,380 Annuity 92,664 3,263,042 -- 12 60,479 258,196 238,301 14,725 79,498 Property and liability insurance -- 32,807 21,865 -- 47,735 5,645 33,829 -- 18,717 -------- ---------- -------- ------- -------- -------- -------- -------- -------- $649,287 $5,515,974 $191,615 $64,253 $750,133 $486,101 $808,722 $ 86,477 $419,386 ======== ========== ======== ======= ======== ======== ======== ======== ======== FOR THE YEARS ENDED DECEMBER 31, -------------------------------- PREMIUMS SEGMENT WRITTEN(4) - ------- ---------- (IN THOUSANDS) 1996: Life insurance Accident and health insurance Annuity Property and liability insurance 50,515 ------- $50,515 ======= 1995: Life insurance Accident and health insurance Annuity Property and liability insurance 51,133 ------- $51,133 ======= 1994: Life insurance Accident and health insurance Annuity Property and liability insurance 47,073 ------- $47,073 =======
- ----- (1) Includes policy and contract account balances (2) Includes unearned policy and contract fees (3) Includes policy and contract fees (4) Applies only to property and liability insurance 73 THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES SCHEDULE IV REINSURANCE FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
PERCENTAGE CEDED TO ASSUMED OF AMOUNT OTHER FROM OTHER NET ASSUMED TO GROSS AMOUNT COMPANIES COMPANIES AMOUNT NET ------------ ----------- ----------- ------------ ---------- (IN THOUSANDS) 1996: Life insurance in force $116,445,975 $15,164,764 $22,957,287 $124,238,498 18.5% ============ =========== =========== ============ Premiums: Life insurance $ 347,056 $ 45,988 $ 63,044 $ 364,112 17.3% Accident and health insurance 174,219 15,511 1,389 160,097 0.9% Annuity 38,041 -- -- 38,041 -- Property and liability insurance 55,782 5,729 56 50,109 0.1% ------------ ----------- ----------- ------------ Total premiums $ 615,098 $ 67,228 $ 64,489 $ 612,359 10.5% ============ =========== =========== ============ 1995: Life insurance in force $106,228,277 $15,620,303 $24,289,241 $114,897,215 21.1% ============ =========== =========== ============ Premiums: Life insurance $ 342,433 $ 44,778 $ 62,169 $ 359,824 17.3% Accident and health insurance 163,412 12,296 2,389 153,505 1.6% Annuity 41,225 -- -- 41,225 -- Property and liability insurance 53,771 4,789 234 49,216 0.5% ------------ ----------- ----------- ------------ Total premiums $ 600,841 $ 61,863 $ 64,792 $ 603,770 10.7% ============ =========== =========== ============ 1994: Life insurance in force $ 99,220,067 $13,570,369 $23,520,616 $109,170,314 21.5% ============ =========== =========== ============ Premiums: Life insurance $ 322,799 $ 38,088 $ 59,064 $ 343,775 17.2% Accident and health insurance 145,333 10,007 1,293 136,619 0.9% Annuity 33,889 -- -- 33,889 -- Property and liability insurance 56,045 8,892 582 47,735 1.2% ------------ ----------- ----------- ------------ Total premiums $ 558,066 $ 56,987 $ 60,939 $ 562,018 10.8% ============ =========== =========== ============
74 PART C OTHER INFORMATION Minnesota Mutual Variable Annuity Account Cross Reference Sheet to Other Information Form N-4 Item Number Caption in Other Information 24. Financial Statements and Exhibits 25. Directors and Officers of the Depositor 26. Persons Controlled by or Under Common Control with the Depositor or Registrant 27. Number of Contract Owners 28. Indemnifications 29. Principal Underwriters 30. Location of Accountrsa and Records 31. Management Services 32. Undertakings PART C. OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) Audited Financial Statements of Minnesota Mutual Variable Annuity Account for the fiscal year ended December 31, 1996, are included in Part B of this filing and consist of the following: 1. Independent Auditors' Report. 2. Statements of Assets and Liabilities. 3. Statements of Operations. 4. Statements of Changes in Net Assets. 5. Notes to Financial Statements. (b) Audited Financial Statements of the Depositor, The Minnesota Mutual Life Insurance Company, for the fiscal year ended December 31, 1996 and 1995, are included in Part B of this filing and consist of the following: 1. Independent Auditors' Report - The Minnesota Mutual Life Insurance Company. 2. Balance Sheets - The Minnesota Mutual Life Insurance Company. 3. Statements of Operations and Policyowners' Surplus - The Minnesota Mutual Life Insurance Company. 4. Statements of Cash Flows - The Minnesota Mutual Life Insurance Company. 5. Notes to Financial Statements - The Minnesota Mutual Life Insurance Company. 6. Summary of Investments-Other than Investments in Related Parties - The Minnesota Mutual Life Insurance Company. 7. Supplementary Insurance Information - The Minnesota Mutual Life Insurance Company. 8. Reinsurance - The Minnesota Mutual Life Insurance Company. (c) Exhibits 1. The Resolution of The Minnesota Mutual Life Insurance Company's Executive Committee of its Board of Trustees establishing the Variable Annuity Account. 2. Not applicable. 3. (a) The Distribution Agreement between The Minnesota Mutual Life Insurance Company and MIMLIC Sales Corporation. (b) Schedule A. 4. (a) Flexible Payment Deferred Variable Annuity Contract, form 87-9154. (b) Individual Retirement Annuity Agreement, form 83-9058 Rev. 3-1997. (c) Endorsement, form 87-9157. (d) Endorsement, form 87-9164. (e) Flexible Payment Deferred Variable Annuity Contract, form 87-9154 Rev. 2-88. (f) Endorsement, form 87-9172. (g) Tax Sheltered Annuity Amendment, form 88-9213. (h) Endorsement, form 91-9258. (i) Flexible Payment Deferred Variable Annuity Contract, form 87-9154 Rev. 3-91. 5. (a) Application, form 87-9155 Rev. 6-87. (b) Application, form 87-9156 Rev. 6-87. (c) Application, form 84-9093 Rev. 2-94. 6. Certificate of Incorporation and Bylaws. (a) The Articles of Re-Incorporation of the Depositor. (b) The Bylaws of the Depositor. 7. Not applicable. 8. Not applicable. 9. Opinion and consent of Donald F. Gruber, Esq. 10. Consent of KPMG Peat Marwick LLP. 11. Not applicable. 12. Not applicable. 13. Schedule for Computation of Performance Quotation (a) Stock Segregated Sub-Account Performance Calculations. (b) Bond Segregated Sub-Account Performance Calculations. (c) Money Market Segregated Sub-Account Performance Calculations. (d) Managed Segregated Sub-Account Performance Calculations. (e) Mortgage Securities Segregated Sub-Account Performance Calculations. (f) Index Segregated Sub-Account Performance Calculations. (g) Aggressive Growth Segregated Sub-Account Performance Calculations. (h) International Stock Segregated Sub-Account Performance Calculations. (i) Small Company Segregated Sub-Account Performance Calculations. (j) Value Stock Segregated Sub-Account Performance Calculations. (k) Maturing Government Bond - 1998 Segregated Sub-Account Performance Calculations. (l) Maturing Government Bond - 2002 Segregated Sub-Account Performance Calculations. (m) Maturing Government Bond - 2006 Segregated Sub-Account Performance Calculations. (n) Maturing Government Bond - 2010 Segregated Sub-Account Performance Calculations. 14. (a) Financial Data Schedule - MIMLIC Growth Sub-Account (b) Financial Data Schedule - MIMLIC Bond Sub-Account (c) Financial Data Schedule - MIMLIC Money Market Sub-Account (d) Financial Data Schedule - MIMLIC Asset Allocation Sub-Account (e) Financial Data Schedule - MIMLIC Mortgage Securities Sub-Account (f) Financial Data Schedule - MIMLIC Index 500 Sub-Account (g) Financial Data Schedule - MIMLIC Capital Appreciation Sub-Account (h) Financial Data Schedule - MIMLIC International Stock Sub-Account (i) Financial Data Schedule - MIMLIC Small Company Sub-Account (j) Financial Data Schedule - MIMLIC MGB 1998 Sub-Account (k) Financial Data Schedule - MIMLIC MGB 2002 Sub-Account (l) Financial Data Schedule - MIMLIC MGB 2006 Sub-Account (m) Financial Data Schedule - MIMLIC MGB 2010 Sub-Account (n) Financial Data Schedule - MIMLIC Value Stock Sub-Account 15. The Minnesota Mutual Life Insurance Company Power of Attorney To Sign Registration Statements, previously filed as this Exhibit to Registrant's Form N-4, File Number 33-12333, Post-Effective Amendment Number 9, is hereby incorporated by reference. ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR Name and Principal Positions and Offices Positions and Offices Business Address with Insurance Company with Registrant - ------------------ ---------------------- --------------------- Giulio Agostini Trustee None 3M 3M Center - Executive 220-14W-08 St. Paul, MN 55144-1000 Anthony L. Andersen Trustee None H. B. Fuller Company 2424 Territorial Road St. Paul, MN 55114 John F. Bruder Senior Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Keith M. Campbell Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Paul H. Gooding Vice President and None The Minnesota Mutual Life Treasurer Insurance Company 400 Robert Street North St. Paul, MN 55101 John F. Grundhofer Trustee None First Bank System, Inc. 601 2nd Avenue South Suite 2900 Minneapolis, MN 55402-4302 Harold V. Haverty Trustee None Deluxe Corporation 401 Woodduck Lane North Oaks, MN 55127 Robert E. Hunstad Executive Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 James E. Johnson Senior Vice President None The Minnesota Mutual Life and Actuary Insurance Company 400 Robert Street North St. Paul, MN 55101 David S. Kidwell, Ph.D. Trustee None The Curtis L. Carlson School of Management University of Minnesota 271 19th Avenue South Minneapolis, MN 55455 Reatha C. King, Ph.D. Trustee None General Mills Foundation P. O. Box 1113 Minneapolis, MN 55440 Richard D. Lee Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Joel W. Mahle Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Dennis E. Prohofsky Senior Vice President, None The Minnesota Mutual Life General Counsel and Insurance Company Secretary 400 Robert Street North St. Paul, MN 55101 Thomas E. Rohricht Trustee None Doherty, Rumble & Butler Professional Association 2800 Minnesota World Trade Center 30 East Seventh Street St. Paul, MN 55101-4999 Terry Tinson Saario, Ph.D. Trustee None 3141 Dean Court #1202 Minneapolis, MN 55416 Robert L. Senkler Chairman, President and None The Minnesota Mutual Life Chief Executive Officer Insurance Company 400 Robert Street North St. Paul, MN 55101 Michael E. Shannon Trustee None Ecolab, Inc. 370 Wabasha Street Ecolab Center St. Paul, MN 55102 Gregory S. Strong Vice President and None The Minnesota Mutual Life Actuary Insurance Company 400 Robert Street North St. Paul, MN 55101 Terrence M. Sullivan Senior Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Randy F. Wallake Senior Vice President None The Minnesota Mutual Life Insurance Company 400 Robert Street North St. Paul, MN 55101 Frederick T. Weyerhaeuser Trustee None Clearwater Investment Trust 332 Minnesota Street Suite W-2090 St. Paul, MN 55101-1308 ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT Wholly-owned subsidiaries of The Minnesota Mutual Life Insurance Company: MIMLIC Asset Management Company The Ministers Life Insurance Company MIMLIC Corporation Minnesota Fire and Casualty Company Northstar Life Insurance Company (New York) Robert Street Energy, Inc. Open-end registered investment company offering shares solely to separate accounts of The Minnesota Mutual Life Insurance Company and Northstar Life Insurance Company: Advantus Series Fund, Inc. Wholly-owned subsidiaries of MIMLIC Asset Management Company: MIMLIC Sales Corporation Advantus Capital Management, Inc. Wholly-owned subsidiaries of MIMLIC Corporation: DataPlan Securities, Inc. (Ohio) MIMLIC Imperial Corporation MIMLIC Funding, Inc. MIMLIC Venture Corporation Personal Finance Company (Delaware) Wedgewood Valley Golf, Inc. Ministers Life Resources, Inc. Enterprise Holding Corporation HomePlus Insurance Agency, Inc. MCM Funding 1997-1, Inc. Wholly-owned subsidiaries of Enterprise Holding Corporation: Oakleaf Service Corporation Lafayette Litho, Inc. Financial Ink Corporation Concepts in Marketing Research Corporation Concepts in Marketing Services Corporation Wholly-owned subsidiary of Minnesota Fire and Casualty Company: HomePlus Insurance Company Majority-owned subsidiaries of MIMLIC Imperial Corporation: J. H. Shoemaker Advisory Corporation (Tennessee) Consolidated Capital Advisors, Inc. (Tennessee) Majority-owned subsidiary of MIMLIC Sales Corporation: MIMLIC Insurance Agency of Ohio, Inc. (Ohio) Fifty percent-owned subsidiary of MIMLIC Imperial Corporation: C.R.I. Securities, Inc. Majority-owned subsidiaries of The Minnesota Mutual Life Insurance Company: MIMLIC Life Insurance Company (Arizona) MIMLIC Cash Fund, Inc. Advantus Cornerstone Fund, Inc. Advantus Enterprise Fund, Inc. Advantus International Balanced Fund, Inc. Advantus Venture Fund, Inc. Advantus Index 500 Fund, Inc. Less than majority-owned, but greater than 25% owned, subsidiaries of The Minnesota Mutual Life Insurance Company: Advantus Horizon Fund, Inc. Advantus Money Market Fund, Inc. Less than 25% owned subsidiaries of The Minnesota Mutual Life Insurance Company: Advantus Spectrum Fund, Inc. Advantus Mortgage Securities Fund, Inc. Advantus Bond Fund, Inc. Unless indicated otherwise, parenthetically, each of the above corporations is a Minnesota corporation. ITEM 27. NUMBER OF CONTRACT OWNERS As of February 23, 1997, the number of holders of securities of the Registrant were as follows: Number of Record Title of Class Holders -------------- ---------------- Variable Annuity Contracts 1,234 ITEM 28. INDEMNIFICATION The statement with respect to indemnification. Previously filed. ITEM 29. PRINCIPAL UNDERWRITERS (a) The principal underwriter is MIMLIC Sales Corporation. MIMLIC Sales Corporation also is the principal underwriter for eleven mutual funds (Advantus Horizon Fund, Inc.; Advantus Spectrum Fund, Inc.; Advantus Money Market Fund, Inc.; Advantus Mortgage Securities Fund, Inc.; Advantus Bond Fund, Inc.; Advantus Cornerstone Fund, Inc.; Advantus Enterprise Fund, Inc.; Advantus International Balanced Fund, Inc.; Advantus Venture Fund, Inc.; Advantus Index 500 Fund, Inc.; and the MIMLIC Cash Fund, Inc.) and for four additional registered separate accounts of The Minnesota Mutual Life Insurance Company, all of which offer annual contracts and life insurance policies on a variable basis. (b) Directors and Officers of Underwriter. DIRECTORS AND OFFICERS OF UNDERWRITER Positions and Positions and Name and Principal Offices Offices Business Address with Underwriter with Registrant - ------------------ ---------------- --------------- Robert E. Hunstad Chairman of the Board Executive Vice 400 Robert Street North and Director President St. Paul, Minnesota 55101 George I. Connolly President, Chief Director, 400 Robert Street North Executive Officer and Broker-Dealer St. Paul, Minnesota 55101 Director Margaret Milosevich Vice President, Chief Manager 400 Robert Street North Operations Officer and St. Paul, Minnesota 55101 Treasurer Dennis E. Prohofsky Secretary and Director Senior Vice 400 Robert Street North President, St. Paul, Minnesota 55101 General Counsel and Secretary Thomas L. Clark Assistant Treasurer Compliance Analyst 400 Robert Street North St. Paul, Minnesota 55101 Margaret A. Berg Assistant Secretary Manager 400 Robert Street North St. Paul, Minnesota 55101 (c) All commissions and other compensation received by each principal underwriter, directly or indirectly, from the Registrant during the Registrant's last fiscal year: Name of Net Underwriting Compensation on Principal Discounts and Redemption or Brokerage Other Underwriter Commissions Annuitization Commissions Compensation - ----------- ---------------- ---------------- ----------- ------------ MIMLIC Sales, $13,034,146 Inc. ITEM 30. LOCATION OF ACCOUNTS AND RECORDS The accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the Rules promulgated thereunder are in the physical possession of The Minnesota Mutual Life Insurance Company, St. Paul, Minnesota 55101-2098. ITEM 31. MANAGEMENT SERVICES None. ITEM 32. UNDERTAKINGS (a) Previously filed. (b) Previously filed. (c) Previously filed. (d) The Minnesota Mutual Life Insurance Company hereby represents that, as to the variable annuity contract which is the subject of this Registration Statement, File, No. 33-12333, the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred and the risks assumed by The Minnesota Mutual Life Insurance Company. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Minnesota Mutual Variable Annuity Account certifies that it meets the requirements of Securities Act Rule 485(b) for effectivenss of this Amendment to the Registration Statement and has duly caused this amendment to the Registration Statement to be signed on its behalf by the Undersigned, thereunto duly authorized, in the City of Saint Paul, and State of Minnesota, on the 23rd day of April, 1997. MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT (Registrant) By: THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY (Depositor) By ----------------------------------------------- Robert L. Senkler Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Depositor, The Minnesota Mutual Life Insurance Company, has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Saint Paul, and State of Minnesota, on the 23rd day of April, 1997. THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY By ----------------------------------------------- Robert L. Senkler Chairman, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below by the following persons in their capacities with the Depositor and on the date indicated. Signature Title Date --------- ----- ---- * Chairman, President and - ------------------------------ Chief Executive Officer Robert L. Senkler * Trustee - ------------------------------ Giulio Agostini * Trustee - ------------------------------ Anthony L. Andersen * Trustee - ------------------------------ John F. Grundhofer * Trustee - ------------------------------ Harold V. Haverty * Trustee - ------------------------------ David S. Kidwell, Ph.D. * Trustee - ------------------------------ Reatha C. King, Ph.D. * Trustee - ------------------------------ Thomas E. Rohricht * Trustee - ------------------------------ Terry N. Saario, Ph.D. * Trustee - ------------------------------ Michael E. Shannon * Trustee - ------------------------------ Frederick T. Weyerhaeuser Vice President April 23, 1997 - ------------------------------ and Treasurer Paul H. Gooding (chief financial officer) Vice President April 23, 1997 - ------------------------------ (chief accounting officer) Gregory S. Strong *By Attorney-in-Fact April 23, 1997 --------------------------- Dennis E. Prohofsky * Pursuant to power of attorney dated February 12, 1996, previously filed as Exhibit 15 to this Registration Statement. EXHIBIT INDEX Exhibit Number Description of Exhibit - -------------- ---------------------- 1. The Resolution of The Minnesota Mutual Life Insurance Company's Executive Committee of its Board of Trustees establishing the Variable Annuity Account 3.(a) The Distribution Agreement between The Minnesota Mutual Life Insurance Company and MIMLIC Sales Corporation (b) Schedule A 4.(a) Flexible Payment Deferred Variable Annuity Contract, form 87-9154 (b) Individual Retirement Annuity Agreement, form 83-9058 Rev. 3-1997 (c) Endorsement, form 87-9157 (d) Endorsement, form 87-9164 (e) Flexible Payment Deferred Variable Annuity Contract, form 87-9154 Rev. 2-88 (f) Endorsement, form 87-9172 (g) Tax Sheltered Annuity Amendment, form 88-9213 (h) Endorsement, form 91-9258. (i) Flexible Payment Deferred Variable Annuity Contract, form 87-9154 Rev. 3-91 5.(a) Application, form 87-9155 Rev. 6-87 (b) Application, form 87-9156 Rev. 6-87 (c) Application, form 84-9093 Rev. 2-94 6.(a) The Articles of Re-Incorporation of the Depositor (b) The Bylaws of the Depositor 9. Opinion and consent of Donald F. Gruber, Esq. 10. Consent of KPMG Peat Marwick LLP. 13.(a) Stock Segregated Sub-Account Performance Calculations (b) Bond Segregated Sub-Account Performance Calculations (c) Money Market Segregated Sub-Account Performance Calculations (d) Managed Segregated Sub-Account Performance Calculations (e) Mortgage Securities Segregated Sub-Account Performance Calculations (f) Index Segregated Sub-Account Performance Calculations (g) Aggressive Growth Segregated Sub-Account Performance Calculations (h) International Stock Segregated Sub-Account Performance Calculations (i) Small Company Segregated Sub-Account Performance Calculations (j) Value Stock Segregated Sub-Account Performance Calculations (k) Maturing Government Bond - 1998 Segregated Sub-Account Performance Calculations (l) Maturing Government Bond - 2002 Segregated Sub-Account Performance Calculations (m) Maturing Government Bond - 2006 Segregated Sub-Account Performance Calculations (n) Maturing Government Bond - 2010 Segregated Sub-Account Performance Calculations 14.(a) Financial Data Schedule - MIMLIC Growth Sub-Account (b) Financial Data Schedule - MIMLIC Bond Sub-Account (c) Financial Data Schedule - MIMLIC Money Market Sub-Account (d) Financial Data Schedule - MIMLIC Asset Allocation Sub-Account (e) Financial Data Schedule - MIMLIC Mortgage Securities Sub-Account (f) Financial Data Schedule - MIMLIC Index 500 Sub-Account (g) Financial Data Schedule - MIMLIC Capital Appreciation Sub-Account (h) Financial Data Schedule - MIMLIC International Stock Sub-Account (i) Financial Data Schedule - MIMLIC Small Company Sub-Account (j) Financial Data Schedule - MIMLIC MGB 1998 Sub-Account (k) Financial Data Schedule - MIMLIC MGB 2002 Sub-Account (l) Financial Data Schedule - MIMLIC MBG 2006 Sub-Account (m) Financial Data Schedule - MIMLIC MGB 2010 Sub-Account (n) Financial Data Schedule - MIMLIC Value Stock Sub-Account EX-99.C1 2 EXHIBIT 99.C1 CERTIFICATE OF SECRETARY I, Robert J. Hasling, hereby certify that I am the Secretary of The Minnesota Mutual Life Insurance Company, Saint Paul, Minnesota; that I have charge, custody and control of the record books and corporate seal of said Company; that the following is a true and correct copy of a resolution adopted by the Executive Committee of said Company at a meeting held September 10, 1984, at which meeting a quorum was present and acting throughout; and that the meeting was duly called for the purpose of acting upon the attached "Resolution - - Separate Account H". I hereby certify that the attached resolution has not been modified, amended or rescinded and continues in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of The Minnesota Mutual Life Insurance Company this first day of May, 1985. /S/ ROBERT J. HASLING --------------------- Secretary [SEAL] RESOLUTION-SEPARATE ACCOUNT H "RESOLVED, That the Company hereby establishes a separate account in accordance with Subdivision 1 of Section 61A.14 of Minnesota Statutes 1967, as amended, for the purpose of issuing contracts on a variable basis, which account shall be known as Minnesota Mutual Variable fund H, or by such other name as the Chief Executive Officer may determine; FURTHER RESOLVED, That such separate account be registered as unit investment trust pursuant to the provisions of the Investment company Act of 1940, as amended, and that application be made for such exemptions from that Act as may be necessary or desirable; FURTHER RESOLVED, That there be prepared and filed with the Securities and Exchange Commission in accordance with the provisions, of the Securities Act of 1933, as amended, a registration statement, and any amendments thereto, relating to such contracts on a variable basis as may be offered to the public; FURTHER RESOLVED, That the chief executive officer of the Company or such officer or officers as he may designate be, and they hereby are, authorized to seek such exemptive or other relief as may be necessary or appropriate in connection with the separate account or the offered contracts; and FURTHER RESOLVED, That the chief executive officer of the Company or such officer or officers as he may designate be, and they hereby are, authorized and directed to take such further actions as may in their judgment be necessary and desirable to implement the foregoing resolutions." EX-99.C3A 3 EXHIBIT 99.C3A DISTRIBUTION AGREEMENT AGREEMENT made this _____ day of _____________, 1985, between and among The Minnesota Mutual Life Insurance Company, a Minnesota corporation ("Minnesota Mutual"), and MIMLIC Sales Corporation, a Minnesota corporation ("Distributor"). WITNESSETH: WHEREAS, Minnesota Mutual is the depositor of Minnesota Mutual Variable Annuity Account, (the "Account"); and WHEREAS, Minnesota Mutual proposes to offer for sale certain variable annuity contracts (the "contracts") which may be deemed to be securities under the Securities Act of 1933 ("1933 Act") and the laws of some states; and WHEREAS, the Distributor, a wholly-owned subsidiary of MIMLIC Corporation, which is in turn a wholly-owned subsidiary of Minnesota Mutual, is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 ("1934 Act") and is a member of the National Association of Securities Dealers, Inc. ("NASD"); and WHEREAS, the parties desire to have the Distributor act as principal underwriter of the contracts and assume full responsibility for the securities activities of each "person associated" (as that term is defined in Section 3(a)(18) of the 1934 Act) with the Distributor and engaged directly or indirectly in the sale of the contracts (the "associated persons"); and WHEREAS, the parties desire to have Minnesota Mutual perform certain services in connection with the sale of the contracts; NOW, THEREFORE, in consideration of the covenants and mutual promises of the parties made to each other, it is hereby covenanted and agreed as follows: 1. The Distributor will act as the exclusive principal underwriter of the contracts and as such will assume full responsibility for the securities activities of all the associated persons. The Distributor will train the associated persons, use its best efforts to prepare them to complete satisfactorily the applicable NASD and state examinations so that they may be qualified, register the associated persons as its registered representatives before they engage in securities activities, and supervise and control them in the performance of such activities. Unless otherwise permitted by applicable state law, all persons engaged in the sale of the contracts must also be agents of Minnesota Mutual. 2. The Distributor will assume full responsibility for the continued compliance by itself and the associated persons with the NASD Rules of Fair Practice and Federal and state laws, to the extent applicable, in connection with the sale of the contracts. The Distributor will make timely filings with the SEC, NASD, and any other regulatory authorities of all reports and any sales literature relating to the contracts required by law to be filed by the Distributor. Minnesota Mutual will make available to the Distributor copies of any agreements or plans intended for use in connection with the sale of contracts in sufficient number and in adequate time for clearance by the appropriate regulatory authorities before they are used, and it is agreed that the parties will use their best efforts to obtain such clearance as expeditiously as is reasonably possible. 3. With the consent of Minnesota Mutual, Distributor may enter into agreements with other broker-dealers duly licensed under applicable Federal and state laws for the sale and distribution of the contracts and may perform such duties as may be provided for in such agreements. 4. Minnesota Mutual, with respect to the contracts, will prepare and file all registration statements and prospectuses (including amendments) and all reports required by law to be filed with Federal and state regulatory authorities. Minnesota Mutual will bear the cost of printing and mailing all notices, proxies, proxy statements, and periodic reports that are to be transmitted to persons having voting rights under the contracts. Minnesota Mutual will make prompt and reasonable efforts to effect and keep in effect, at its expense, the registration or qualification of its contracts in such jurisdictions as may be required by federal and state regulatory authorities. 5. Minnesota Mutual will (a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under the 1934 Act all books and records required to be maintained by it in connection with the offer and sale of the contracts, which books and records shall be and remain the property of the Distributor and shall at all times be subject to inspection by the SEC in accordance with Section 17(a) of the 1934 Act and by all other regulatory bodies having jurisdiction, and (b) upon or prior to completion of each "transaction" as that term is used in Rule 10b-10 of the 1934 Act, send a written confirmation for each such transaction reflecting the facts of the transaction and showing that it is being sent by Minnesota Mutual acting in the capacity of agent for the Distributor. 6. All purchase payments and any other monies payable upon the sale, distribution, renewal or other transaction involving the contracts shall be paid or remitted directly to, and all checks shall be drawn to the order of, Minnesota Mutual, and the Distributor shall not have or be deemed to have any interest in such payments or monies. All such payments and monies received by the Distributor shall be remitted daily by the Distributor to Minnnesota Mutual for allocation to the Account in accordance with the contracts and any prospectus with respect to the contracts. 7. Minnesota Mutual will, in connection with the sale of the contracts, pay on behalf of the Distributor all amounts (including sales commissions) due to the sales representatives of the Distributor or to broker-dealers who have entered into sales agreements with the Distributor. The records in respect of such payments shall be properly reflected on the books and records maintained by the Minnesota Mutual. 8. As compensation for the Distributor's assuming the expenses and performing the services to be assumed and performed by it pursuant to this Agreement, the Distributor shall receive from Minnesota Mutual the following amounts: (a) Upon receipt of proper evidence of expenditures, an amount sufficient to reimburse the Distributor for its expenses incurred in carrying out the terms of this Agreement, and (b) such other amounts as may from time to time be agreed upon by the Distributor and Minnesota Mutual. 9. As compensation for its services performed and expenses incurred under this Agreement, Minnesota Mutual will receive all amounts deducted as administrative, sales, mortality and expense risk charges under the contracts, as specified in the contracts and in the prospectus or prospectuses forming a part of any registration statement with respect to the contracts filed with the SEC under the 1933 Act. It is understood that Minnesota Mutual assumes the risk that the above compensation for its services under the contracts may not prove sufficient to cover its actual expenses in connection therewith and that its compensation for assuming such risk shall be included in and limited to the foregoing charges described in said prospectus(es). 10. Minnesota Mutual will, except as otherwise provided in this Agreement, bear the cost of all services and expenses, including legal services and expenses and registration, filing and other fees, in connection with (a) registering and qualifying the contracts and (to the extent requested by the Distributor) the associated persons with Federal and state regulatory authorities and the NASD and (b) printing and distributing all contracts and all registration statements and prospectuses (including amendments), notices, periodic reports, sales literature and advertising prepared, filed or distributed with respect to the contracts. 11. Each party hereto shall advise the others promptly of (a) any action of the SEC or any authorities of any state or territory, of which it has knowledge, affecting registration or qualification of the contracts, or the right to offer the contracts for sale, and (b) the happening of any event which makes untrue any statement, or which requires the making of any change, in the registration statement or prospectus in order to make the statements therein not misleading. 12. The services of the Distributor and Minnesota Mutual under this Agreement are not deemed to be exclusive and the Distributor and Minnesota Mutual shall be free to render similar services to others, including, without implied limitation, such other separate accounts as are now or hereafter established by Minnesota Mutual, so long as the services of the Distributor and Minnesota Mutual hereunder are not impaired or interfered with thereby. 13. This Agreement shall upon execution become effective as of the date first above written, and shall continue in effect indefinitely unless terminated by either party on 60 days' written notice to the other. 14. This Agreement may be amended at any time by mutual consent of the parties. 15. This Agreement shall be governed by and construed in accordance with the laws of Minnesota. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY Witness: By: ------------------------ ---------------------------------------- Secretary Chairman of the Board MIMLIC SALES CORPORATION Witness: By: ------------------------ ---------------------------------------- Vice President President EX-99.C3B 4 EXHIBIT 99.C3B SCHEDULE A SCHEDULE OF COMMISSION EXPENSES UNDER FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT (FILE NUMBER 33-12333) - -------------------------------------------------------------------------------- Commissions to registered agent: .20% per annum of accumulation value In addition, MIMLIC Sales or Minnesota Mutual may pay, based uniformly on the sale of variable annuity contracts by such broker-dealers, credits which allow registered representatives who are responsible for sales of variable annuity contracts to attend conventions and other meetings sponsored by Minnesota Mutual or its affiliates for the purpose of promoting the sale of the insurance and/or investment products offered by Minnesota Mutual and its affiliates. Such credits may cover the registered representatives' transportation, hotel accommodations, meals, registration fees and the like. Minnesota Mutual may also pay those registered representatives amounts based upon their production and the persistency of life insurance an annuity business placed with Minnesota Mutual. EX-99.C4A 5 EXHIBIT 99.C4A Read your contract carefully. This is a legal contract. We promise to pay, subject to the provisions of this contract, the benefits described by this contract. We make this promise and issue this contract in consideration of the application for this contract and the payment of the purchase payments. The owner and the beneficiary are as named in the application unless they are changed as provided for in this contract. You are a member of The Minnesota Mutual Life Insurance Company. Our annual meetings are held at our home office on the first Tuesday in March of each year at three o'clock in the afternoon. Signed for The Minnesota Mutual Life Insurance Company at St. Paul, Minnesota, on the contract date. Notice of your right to examine this contract for 10 days. It is important to us that you are satisfied with this contract. If you are not satisfied, you may return the contract to us or to your agent within 10 days of its receipt. If you exercise this right, you will receive the greater of (a) the Accumulation Value of this contract or (b) the amount of purchase payments paid under this contract. We will pay this refund within 7 days after we receive your notice of cancellation. All payments and values provided by this contract, when based on the investment experience of a separate account, are variable and are not guaranteed as to fixed dollar amount. When we use the following words, this is what we mean: The person named on page 1 who may receive lifetime benefits under the contract. The owner of this contract. The owner may be the annuitant or someone else. The owner shall be that person named in the application. The Minnesota Mutual Life Insurance Company. The effective date of this contract. It is also the date from which we determine contract anniversaries and contract years. The same day and month as the contract date for each succeeding year of this contract. A period of one year beginning with the contract date or a contract anniversary. The mutual fund or separate investment portfolio within a series mutual fund which is designated as an eligible investment for the separate account. Any date on which a fund is valued. The period between successive valuation dates measured from the time of one determination to the next. Your interest in this contract. It is composed of your interest in one or more sub-accounts of the separate account. Your interest in the sub-accounts shall be valued separately. The total of those values will be the accumulation value. A separate investment account titled Minnesota Mutual Variable Annuity Account. This separate account was established by us for this class of contract under Minnesota law. The separate account is composed of several sub-accounts. The assets of the separate account are ours. Those assets are not subject to claims arising out of any other business in which we engage. The Investment Company Act of 1940, as amended, or any similar successor federal legislation. A request in writing signed by you. In some cases, we may provide a form for your use. We also may require that this contract be sent to our home office with your written request. Amounts paid to us as consideration for the benefits provided by this contract. Payments made at regular intervals to the annuitant or any other payee. Annuity payments will be due and payable only on the first day of a calendar month. Annuity payments of equal amounts during the payment period. Annuity payments which increase or decrease in amount to reflect the investment experience of the separate account and its sub-accounts. The age of a person at nearest birthday. WHAT IS YOUR AGREEMENT WITH US? This contract and the copy of the application attached to is contain the entire contract between you and us. Any statements made in the application either by you or the annuitant will, in the absence of fraud, be considered representations and not warranties. Also, any statement made either by you or the annuitant will not be used to avoid this contract or defend against a claim under this contract unless the statement is contained in the application. No charge or waiver of any of the provisions of this contract will be valid unless made in writing by us. It must also be signed by our president, a vice president, our secretary or an assistant secretary. No agent or other person has the authority to change or waive any provision of this contract. Any additional agreement attached to this contract will become a part of this contract and will be subject to all the terms and conditions of this contract unless we state otherwise in the agreement. HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT? You can exercise all the rights under this contract by making a written request to us. You have these rights during the annuitant's lifetime and before annuity payments begin. We will deal with you, unless this contract provides otherwise, on the basis that you have full ownership and control of this contract. HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT? Each year we will send you a report. This report will summarize the year's transactions and will show the current accumulation value of this contract. It will also show the current accumulation unit values. The report will be as of a date within two months of its mailing. WHERE DO YOU MAKE PURCHASE PAYMENTS? All purchase payments must be made at our home office. Our home office is at 400 North Robert Street, St. Paul, Minnesota. When we receive a purchase payment from you at our home office, we will send you a confirmation. WHEN DO YOU MAKE PURCHASE PAYMENTS? You may choose when to make purchase payments. ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS? Yes. It may be possible for you to arrange with your employer to make your purchase payments by payroll deduction. Or, under some plans, your employer may make purchase payments on your behalf. Also, your bank or other financial institution may consent to have your purchase payments automatically withdrawn from your account and paid directly to us. WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS? There are usually no deductions made from the purchase payments. However, we do reserve the right to make a deduction from purchase payments for state premium taxes, where applicable. HOW ARE PURCHASE PAYMENTS ALLOCATED? They are allocated among the sub-accounts of the separate account as you direct. Initially, you indicate your allocation in the application. Later, you may change your allocation for future purchase payments by giving us written notice. We will allocate purchase payments received without allocation instructions to the money market sub-account. ARE SEPARATE ACCOUNT OPTIONS AVAILABLE? The separate account currently is composed of the following sub-accounts. Purchase payments may be applied to one or more of these sub-accounts or any other which may be established by us under the separate account for contracts of this class. We reserve the right to add, combine or remove any sub-accounts of the separate account. WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT? The separate accounts is divided into sub-accounts. For each sub-account, there is a fund for the investment of that sub-account's assets. Purchase payments are invested in the funds at their net asset value. If investment in a fund should no longer be possible or if we determine it becomes inappropriate for contracts of this class, we may substitute another fund. Substitution may be with respect to existing accumulation values, future purchase payments and future annuity payments. IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT? No. WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT? We reserve the right to transfer assets of the separate account, which we determine to be associated with the class of contracts to which this contract belongs, to another separate account. If this type of transfer is made, the term "separate account", as used in this contract, shall then mean the separate account to which the assets were transferred. We reserve the right, when permitted by law, to deregister the separate account under the Investment Company Act of 1940; restrict or eliminate any voting rights of contract owners or other persons who have voting rights as to the separate account; and combine the separate account with one or more other separate accounts. WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT? Purchase payments are credited to the contract on the valuation date coincident with or next following the day they are received in our home office. If they are received on a day which is not a valuation date, those amounts will be credited on the next valuation date. MAY YOU STOP MAKING PURCHASE PAYMENTS? Yes. You may stop making purchase payments at any time. If you stop making purchase payments, the contract remains in force as a paid-up annuity according to is terms. Its value may be applied to provide annuity payments at a later date. You may make purchase payments again at any time before annuity payments start unless the contract has been surrendered. MAY WE CANCEL THE CONTRACT? We may, in our discretion, cancel a contract if no purchase payments are made for a period of two or more full contract and both the total purchase payments made, less any withdrawals, and the accumulation value of the contract, are less than $2,000. If such a cancellation takes place, we will pay the accumulation value to you. We will notify you of our intention to exercise these rights in our annual report. We will act 90 days after the contract anniversary unless an additional purchase payment is received before the end of that 90 day period. WHAT CHARGES MAY BE MADE UNDER THIS CONTRACT? An administrative charge is made directly to the separate account. On an annual basis it may be as much as .35% of the net asset value of the separate account. HOW IS YOUR ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED? Your accumulation value is your interest in one or more sub-accounts of the separate account. For each sub-account of the separate account, the accumulation value is equal to the accumulation units multiplied by the accumulation unit value. WHAT IS AN ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED? An accumulation unit is a measure of your interest in each sub-account of the separate account. The number of accumulation units credited with respect to each purchase payment is determined by dividing the portion of the purchase payment allocated to each sub-account by the then current accumulation unit value for that sub-account. This determination is made as of the valuation date coincident with or next following the date on which we receive your purchase payment at our home office. Once determined, the number of accumulation units will not be affected by changes in the accumulation unit value. However, the total number of accumulation units under this contract will be affected by future contract transactions. In addition, the units of each sub-account will be increased by subsequent purchase payments and transfers to that sub-account. The units of each sub-account will be decreased by transfers or withdrawals from that sub-account. The accumulation unit value will increase or decrease on each valuation date. The amount of any increase or decrease will depend on the net investment experience of the sub-account of the separate account. The value of an accumulation unit for each sub-account was originally set at $1.00 on the first valuation date. For any subsequent valuation date, its value is equal to its value on the preceding valuation date multiplied by the net investment factor for that sub-account for the valuation period ending on the subsequent valuation date. WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT? The net investment factor for a valuation period is the gross investment rate for such valuation period, less a deduction for the charges associated with the separate account at a rate of not more than .35% per annum. The gross investment rate is equal to the net asset value per share of a fund share held in the sub-account of the separate account determined at the end of the current valuation period; plus the per share amount of any dividend or capital gain distributions by the fund if the "ex-dividend" date occurs during the current valuation period; divided by the net asset value per share of that fund share held in the sub-account determined at the end of the preceding valuation period. WILL THIS CONTRACT RECEIVE DIVIDENDS? Each year we determine if this contract will share in our divisible surplus. We call your share a dividend. HOW WILL DIVIDENDS BE APPLIED? Dividends, if received, may be added to the accumulation value or applied to increase annuity payments. If you so elect, they may be paid in cash. WHAT IS A TRANSFER? A transfer is a reallocation of funds under this contract among the sub-accounts of the separate account. MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT? Yes. These transfers may be made on your written request. We will make the transfer on the basis of accumulation unit values on the valuation date coincident with or next following the day we receive the request at our home office. DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS? No. MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS? Yes. However, transfers are limited. They may be made only with respect to any variable annuity payments. See the Annuity Payment Options section of this contract. MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT? Yes. At any time before annuity payments begin, you may request a partial withdrawal from the accumulation value. You must make a written request for any withdrawal, and it must be for at least $250. The accumulation value will be reduced by the amount withdrawn. Unless instructed otherwise by you, withdrawals will be made from each sub-account of the separate account in the same proportion that the value of your interest in the sub-account bears to your total accumulation value. Systematic withdrawal plans of a fixed amount or over a fixed period are also available. MAY YOU SURRENDER THE CONTRACT? Yes. At any time before annuity payments begin, you may surrender this contract for its accumulation value. It will be determined as of the valuation date coincident with or next following the date your written request is received at our home office. HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID? We will pay these benefits in a single sum. However, if this contract is surrendered you may elect one of the annuity payment options, subject to the provisions of this contract. WHEN DO ANNUITY PAYMENTS BEGIN? You must notify us in writing that annuity payments are to be made to the annuitant, when these payments are to begin, the form of the annuity and what annuity payment option has been selected. We must receive this notice at least 30 days in advance of the date annuity payments are to begin. This contract permits annuity payments to begin on the first day of any month after the 50th birthday and before the 75th birthday of the annuitant. However, the beginning date for annuity payments must be consistent with any restrictions applicable to the plan under which this contract may have been purchased. WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS? The accumulation value will be applied to provide annuity payments. WHAT TYPES OF ANNUITIES ARE AVAILABLE? Both fixed and variable annuities are available under this contract. ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS? Yes. We require that the first monthly fixed or variable annuity payment must be at least $20 unless a payment of a smaller minimum amount is required by law. If the first monthly fixed or variable annuity payment would be less than that amount, we reserve the right to pay you the accumulation value in a lump sum. This payment would be in lieu of all other rights under this contract. WHAT INFORMATION MAY WE NEED? We reserve the right to require proof satisfactory to us of the age of the annuitant and of any joint annuitant before payments begin. We may also require proof that a person is alive before making any annuity payment which is based on the survival of that person. IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN? If you do not elect another date, annuity payments will begin on the later of the first day of the month immediately following the 65th birthday of the annuitant, or the first day of the month immediately following the fifth contract anniversary. IF YOU FAIL TO ELECT AN ANNUITY OPTION, UNDER WHAT OPTION WILL ANNUITY PAYMENTS BE MADE? If you do not elect an annuity payment option, we will make monthly payments on the basis of Option 2A, a life annuity with a period certain of 120 months. IF YOU FAIL TO ELECT AN ANNUITY FORM, HOW WILL ANNUITY PAYMENTS BE MADE? If you do not elect any annuity payment form, we will make annuity payments in the form of a variable annuity. MUST AN ANNUITY PAYMENT OPTION BE ELECTED? No. You may elect a lump sum payment instead. If you do so, you and the annuitant shall have no further rights under this contract. WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE? The following annuity payments options are available: Option 1 - Life Annuity - annuity payments payable monthly for the lifetime of the annuitant, ending with the last payment due prior to the annuitant's death. Option 2 - Life Annuity with a Period Certain - annuity payments payable monthly for the lifetime of the annuitant; provided, if the annuitant dies before payments have been made for the entire period certain, those remaining certain payments will be made to the beneficiary. The period certain may be for 120 months (Option 2A); for 180 months (Option 2B); or for 240 months (Option 2C). Option 3 - Joint and Last Survivor Annuity - annuity payments payable monthly for the lifetimes of the annuitant and a designated joint annuitant. The payments end with the last payment due before the survivor's death. If this option is elected, the contract and payments shall be the joint property of the annuitant and the designated joint annuitant. Option 4 - Fixed Period Annuity - annuity payments payable monthly for a fixed period of from one to twenty years. If the annuitant dies before all payments for the fixed period are received, payments will continue for the remainder of the fixed period to the beneficiary. ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE? Yes. Other options may be available as agreed upon between you and us. MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT INSTEAD OF THE REMAINING ANNUITY PAYMENTS? Yes. The beneficiary may elect to have the present value of the remaining payments paid in a lump sum. This right exists under Options 2 and 4. The lump sum payment will be the commuted value of the remaining payments. It will be based on the then current dollar amount of one payment, using the same interest rate which served as a basis for the annuity. HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED? The dollar amount of the first monthly variable annuity payment is determined by applying the available value (after deduction of any premium taxes not previously deducted) to the table below using the adjusted age of the annuitant and any joint annuitant. A number of annuity units is then determined by dividing this dollar amount by then current annuity unit value. Thereafter, the number of annuity units remains unchanged during the period of annuity payments. This determination is made separately for each sub-account as of the date annuity payments are to begin. The dollar amount determined for each sub-account will then be aggregated for purposes of making payment. The dollar amount of the second and later variable annuity payments is equal to the number of annuity units determined for each sub-account times the annuity unit value for that sub-account as of the due date of the payment. This amount may increase or decrease from month to month. The value of an annuity unit for a sub-account is determined each month as of the first day of the month. The value is equal to the annuity unit value for that sub-account as of the first day of the preceding month times the product of .997137, and a sub-account investment factor. This investment factor is the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the preceding month divided by the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the second preceding month. For any date other than the first of a month, the annuity unit value is that on the first day of the next month. HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED? The tables shown below are used to determine the amount of guaranteed monthly fixed annuity payments. They show the dollar amount of each payment that can be provided with each $1,000 of available value, after the deduction of any applicable premium taxes not previously deducted. Amounts shown here are based on the Progressive Annuity Table with interest at the rate of 3.5% per annum, assuming births in the year 1900 and with an age setback of eight years. The amount of each payment depends upon the adjusted age of the annuitant and any joint annuitant. The adjusted age is determined from the actual age nearest birthday at the time the first payment is due in the following manner. Rates shown for Options 1, 2 and 3 are for an annuity with the first payment due immediately. They must be adjusted for any applicable state premium taxes and the contract fee. WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES? Not necessarily. If, when annuity payments are elected, we are using tables of annuity purchase rates for this class of contract which would result in larger annuity payments, we will use those tables instead. ONCE ANNUITY PAYMENTS BEGIN, MAY A FIXED ANNUITY OPTION BE CHANGED? No. ONCE ANNUITY PAYMENTS BEGIN, MAY A VARIABLE ANNUITY OPTION BE CHANGED? No. MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD? Yes. Amounts held as annuity reserves may be transferred among the variable annuity sub-accounts during the annuity period. Annuity reserves may also be transferred from a variable annuity to a fixed annuity during this time. HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A FIXED ANNUITY? The change must be by written request. The annuitant and joint annuitant, if any, must make such an election. HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE? A transfer will be made on the basis of annuity unit values. The number of annuity units from the sub-account being transferred will be converted to a number of annuity units in the new sub-account. The annuity payment option will stay the same. After this conversion, a number of annuity units in the new sub-account will be payable under the elected option. The first payment after conversion will be of the same amount as it would have been without the transfer. The number of annuity units will be set at that number of units which are needed to pay that same amount on the transfer date. ARE THERE RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS? Yes. The transfer of an annuity reserve amount from any sub-account must be at least equal to $5,000; or, the entire amount of the reserve remaining in that sub-account. In addition, annuity payments must have been in effect for a period of 12 months before a change may be made. Such transfers can be made only once every 12 months. Your written request for an annuity transfer must be received by us more than 30 days in advance of the due date of the annuity payment subject to the transfer. MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED ANNUITY? Yes. However, the restrictions which apply to annuity sub-account transfers will apply here as well. The amount transferred will then be applied to provide a fixed annuity amount. This amount will be based upon the adjusted age of the annuitant and any joint annuitant at the time of the transfer. The payment option will remain the same. MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY? No. WHAT AMOUNT IS PAYABLE AT DEATH? If you die before annuity payments have started, we will pay the accumulation value. The accumulation value will be determined as of the valuation date coincident with or next following the day we receive due proof of death at our home office. If the annuitant dies after annuity payments have started, we will pay whatever amount may be called for by the terms of the annuity payment option selected. The remaining interest in the contract must be distributed at least as rapidly as under the option in effect at the annuitant's death. IS THERE A GUARANTEED DEATH BENEFIT? Yes. This contract has a guaranteed death benefit if you die before annuity payments have started. The death benefit shall be equal to the greater of: the amount of the accumulation value payable at death; or the amount of the initial purchase payment paid to us as consideration for this contract, less all contract withdrawals. TO WHOM WILL WE PAY THOSE BENEFITS? When we receive due proof of death satisfactory to us, we will pay the amount payable at death under this contract to the beneficiary or beneficiaries. The beneficiary will be the person or persons named in the application for this contract unless you subsequently change the beneficiary. In that event, we will pay the amount payable at death to the beneficiary named in your last change of beneficiary request as provided in this contract. HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID? We will pay that amount in a single sum unless another form of settlement has been requested and agreed to by us. All payments by us are payable at our home office. Proof of any claim under this contract must be submitted in writing to us at our home office. WHEN MUST DEATH BENEFITS BE PAID? If you die on or before the date on which annuity payments begin and if the designated beneficiary is a person other than your spouse, that beneficiary may elect an annuity option measured by a period not longer than that beneficiary's life expectancy only so long as annuity payments begin not later than one year after your death. If there is no designated beneficiary, then the entire interest in this contract must be distributed within five years after your death. If the annuitant dies after annuity payments have begun, any payments received by a non-spouse beneficiary must be distributed at least as rapidly as under the method selected by the annuitant as of the date of death. If any portion of the contract interest is payable to your designated beneficiary who is your surviving spouse, that spouse shall be treated as the contract owner for purposes of when payments must begin; and the time of distribution in the event of your spouse's death. Payments must be made in substantially equal installments. WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE ANNUITANT? If a beneficiary dies before the annuitant, that beneficiary's interest in this contract ends with that beneficiary's death. Only those beneficiaries who survive will be eligible to share in a death benefit. If no beneficiary survives the annuitant prior to the date an annuity begins we will pay the accumulation value of this contract to the executors or administrators of the annuitant's estate. CAN YOU CHANGE THE BENEFICIARY? Yes. You can file a written request with us to change the beneficiary. Your written request will not be effective until it is recorded in our home office records. After it has been recorded, it will take effect as of the date you signed the request. However, if the annuitant dies before the request has been recorded, the request will not be effective as to those death proceeds we have paid before the request was recorded in our home office records. CAN YOU ASSIGN THIS CONTRACT? Unless this contract provides otherwise, you may assign all rights to this contract during the lifetime of the annuitant. We will not be bound by any assignment until we have recorded written notice of it at our home office. We are not responsible for the validity of any assignment. An assignment will not apply to any payment or action made by us before it was recorded. Any proceeds which become payable to an assignee will be payable in a single sum. Any claim made by an assignee will be subject to proof of the assignee's interest and the extent of the assignment. If this contract is issued pursuant to a retirement plan which receives favorable tax treatment under the provisions of Section 401, 403, 404, 408 or 457 of the Internal Revenue Code, then, it may not be assigned, pledged or otherwise transferred except under such conditions as may be allowed under applicable law. ARE THE CONTRACT BENEFITS PROTECTED? Yes. To the extent permitted by law, no benefit provided by this contract will be subject to any creditor's claim or process of law. HOW WILL BENEFITS BE DETERMINED? Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit described by this contract shall be calculated as of the date the provisions of the contract are exercised. WHAT IF A PERSON'S AGE IS MISSTATED? If a person's age has been misstated, the amount payable under this contract as an annuity will be that amount which would have been paid based upon that person's correct age. In the case of an overpayment, we may either deduct the required amount from that person's payments under this contract; or, we may require you to pay us in cash; or we may do both until we are fully repaid. In the case of an underpayment, we will pay the required amount with the next payment. WHAT INFORMATION MUST YOU PROVIDE? You must provide any other information we need to administer this contract. If you cannot do so, we may ask the person concerned for that information. We shall not be liable for any payment based upon information given to us in error or not given to us. DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS? Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation values and the paid-up annuity benefit described by this contract are not less than the minimum benefits required by any statute of the state in which this contract is delivered. WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT? Reserves held by us for annuity payments under this contract shall not be less than those reserves required by the law in the state in which this contract is delivered. MAY THIS CONTRACT BE MODIFIED? This contract may be modified at any time by written agreement between you and us. However, no such modification will adversely affect the rights of an annuitant under this contract unless the modification is made to comply with a law or government regulation. Such modification will be in writing. You will have the right to accept or reject such a modification. HOW DOES THIS CONTRACT RELATE TO THE OWNERSHIP OF THE SEPARATE ACCOUNT? We have exclusive and absolute ownership of the separate account. WHEN WILL LUMP SUM PAYMENTS BE MADE? Usually, we will make payment within seven days after payment is called for by the terms of the contract. However, we reserve the right to defer payment for such period as may be allowed under the 1940 Act. DO YOU HAVE ADDITIONAL VOTING RIGHTS? Yes. You may direct us with respect to the voting rights of fund shares held by us and attributable to this contract. EX-99.C4B 6 EXHIBIT 99.C4B MINNESOTA MUTUAL INDIVIDUAL RETIREMENT ANNUITY (IRA) AGREEMENT WHAT DOES THIS AGREEMENT PROVIDE? This agreement modifies the contract. Provisions are changed before issue. In the event of a conflict between the provisions of this agreement and the contract to which it is attached, the provisions of this agreement will control. These changes will allow its use: (a) with a Simplified Employee Pension (herein "SEP"); and/or (b) as an Individual Retirement Annuity under the Employee Retirement Income Security Act of 1974, as amended (herein "IRA"), or (c) with a Savings Incentive Match Plan for Employees (herein SIMPLE-IRA). PURCHASE PAYMENTS - -------------------------------------------------------------------------------- ARE IRA PURCHASE PAYMENTS LIMITED? Yes. Where the annuitant has an IRA, purchase payments may be limited. An annual cash purchase payment may not exceed the lesser of: (a) the amount of compensation includible in gross income in any taxable year; or (b) $2,000, or such other maximum amount as may be allowed by law. Where an annuitant establishes an IRA along with a nonemployed spouse, purchase payments may be limited. They are also limited if the annuitant is the nonemployed spouse. The cash purchase payments for both annuities and accounts must then be considered together. They may not exceed the lesser of: (a) the amount of compensation includible in the working spouse's compensation includible in gross income in any taxable year; or (b) $4,000, or such other maximum amount as may be allowed by law. In no event may an annuitant's annual purchase payment exceed the cash amount of: (a) $2,000; or (b) the maximum annual contribution allowed for an IRA. ARE SIMPLE-IRA PURCHASE PAYMENTS LIMITED? Yes. Where the annuitant's employer establishes a SIMPLE-IRA, purchase payments may be limited. The annual cash purchase payment must be the lesser of: (a) an amount equal to 100% of the compensation included in gross income in any taxable year; or (b) $6,000, or such other maximum amount as may be allowed by law. Mandated employer purchase payments, in addition to your purchase payments, can range from 0% to 3% or your annual compensation. DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER? No. Limits on purchase payments to the contract do not apply with a rollover contribution. A rollover contribution is one within the meaning of sections 408(d)(3), 402(c), 403(a)(4) or 403(b)(8) of the Internal Revenue Code (herein "Code") or a purchase payment made in accordance with the terms of a SEP as described in Section 408(k) of the Code. In that case, a cash purchase payment may be the amount received by or on behalf of an annuitant as all or any portion of a distribution which is a rollover contribution. The distribution may be one from an individual retirement account, annuity or bond plan; or an eligible rollover distribution from a tax-exempt employee's trust, a qualified employee annuity plan or such other plan as may be allowed by law. A rollover contribution must be received by us not later than 60 days after the annuitant receives it. A direct rollover payment may be made to us from the plan making the distribution. A purchase payment may not include contributions to a tax-qualified plan made by the annuitant as an employee. MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS? No. We will not accept purchase payments under this contract as of a date the annuitant is not eligible for an IRA, SEP, or SIMPLE-IRA. In addition, no additional cash contributions or rollover contributions may be accepted under the contract if: (a) the owner dies before the distribution of the entire interest in the contract; and (b) the beneficiary is not the surviving spouse. Purchase payments which exceed those allowed for an IRA may be returned. We will send them to the annuitant. Return is without regard to the provisions of this contract dealing with withdrawals. Excess purchase payments to a SEP or SIMPLE-IRA may similarly be returned. We will send them to the payer. DISTRIBUTION PROVISIONS - -------------------------------------------------------------------------------- ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS? Yes. The distribution of an annuitant's value shall be made in accordance with the minimum distribution requirements of section 408(b)(3) of the Code and the regulations thereunder, including the incidental death benefit provisions of section 1.401(a)(9)-2 of the proposed regulations. All of these rules are incorporated herein by reference. The annuitant's accumulation value, or withdrawal value if applicable, must be distributed or begin to be distributed, by the annuitant's required beginning date. This is the April 1 following the calendar year in which the annuitant reaches age 70 1/2. For each succeeding year, a distribution must be made on or before December 31. WHAT FORMS OF DISTRIBUTION ARE AVAILABLE? By the required beginning date the annuitant may elect to have the accumulation value, or withdrawal value if 83-9058 Rev.3-1997 The Minnesota Mutual Life Insurance Company applicable, distributed. It must be in one of the following forms: (a) a single sum payment; (b) equal or substantially equal payments over the life of the annuitant; (c) equal or substantially equal payments over the joint lives of the annuitant and spouse; (d) equal or substantially equal payments over a specified period that may not be longer than the annuitant's life expectancy; (e) equal or substantially equal payments over a specified period that may not be longer than the joint life and last survivor expectancy of the annuitant and spouse. Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by the annuitant or by systematic withdrawal. Payments must be made in periodic payments at intervals of no longer than one year. In addition, payments must be either nonincreasing or they may increase only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax Regulations or such final regulations as adopted. ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE CONTRACT IS DISTRIBUTED? Yes. If the annuitant dies on or after the date distributions have begun, the entire remaining value must be distributed at least as rapidly as under the method of distribution being used as of the date of the annuitant's death. If the annuitant dies before distributions have begun, the entire remaining value must be distributed as elected by the annuitant or, if the annuitant has not so elected, as elected by the beneficiary or beneficiaries, as follows: (a) by December 31st of the year containing the fifth anniversary of the annuitant's death; or (b) in equal or substantially equal payments over the life or life expectancy of the designated beneficiary or beneficiaries starting by December 31st of the year following the year of the annuitant's death. If, however, the beneficiary is the annuitant's surviving spouse, then this distribution is not required to begin until later. It must begin by December 31st of the year in which the annuitant would have turned 70 1/2. ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY? Yes. In addition to the options discussed above, the spouse beneficiary has other options. He or she may elect to treat the annuitant's IRA as his or her own. This is done by either: (a) not taking a distribution within the required time period; or (b) making eligible IRA contributions to it. If the beneficiary chooses one of these options then he or she is the contract owner. He or she will assume all rights and privileges under the contract. This right is available only to the spouse of the annuitant. HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED? Life expectancy is computed by use of the expected return multiples in Table V and VI of section 1.72-9 of the Income Tax Regulations. Unless otherwise elected by the annuitant prior to the commencement of distributions or, if applicable, by the surviving spouse where the annuitant dies before distributions have commenced, life expectancies of an annuitant or spouse beneficiary shall be recalculated annually for purposes of required distributions. An election not to recalculate shall be irrevocable and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary shall not be recalculated. Instead, life expectancy will be calculated using the attained age of such beneficiary during the calendar year in which the annuitant attains age 70 1/2, and payments for subsequent years shall be calculated based on such life expectancy reduced by one for each calendar year which has elapsed since the calendar year life expectancy was first calculated. Instead, life expectancy will be calculated using the attained age of such beneficiary during the calendar year in which the annuitant attains age 70 1/2, and payments for subsequent years shall be calculated based on such life expectancy reduced by one for each calendar year which has elapsed since the calendar year life expectancy was first calculated. MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A DISTRIBUTION FROM ANOTHER IRA? Yes. An annuitant may satisfy the minimum distribution requirements under sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from one IRA that is equal to the amount required to satisfy the minimum distribution requirements for two or more IRAs. For this purpose, the owner of two or more IRAs may use the "alternative method" described in Notice 88-38, to satisfy the minimum distribution requirements described above. WITHDRAWAL BENEFITS - -------------------------------------------------------------------------------- ARE THERE LIMITS ON WITHDRAWALS? Yes. These limits apply to a partial withdrawal or a surrender of the contract before the annuitant's age 59 1/2. In that case, we must receive notice of the intended disposition of the proceeds. This will not apply if the annuitant dies or is disabled. MAY TAX PENALTIES APPLY? Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2, the annuitant may be subject to tax penalties. These penalties are imposed under the Code. The annuitant may not be subject to tax penalties on amounts received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by the Code; (2) the amount received is in excess of the allowed deduction and returned to the annuitant before the required tax return filing date for that year, together with any earned 2 Minnesota Mutual interest; or (3) if the entire amount in the contract is received and reinvested in a similar plan entitled to similar tax treatment. Additional exceptions to tax penalties may be available to the annuitant. We will not be liable for any tax penalties under this contract. We are not liable for penalties on amounts received or paid by us under this contract. Any transaction treated by law as a contract distribution may be treated by us as a complete contract surrender. GENERAL INFORMATION - -------------------------------------------------------------------------------- IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE? Yes. The entire interest of the annuitant in this contract is nonforfeitable. The annuitant shall possess the entire benefit provided by this contract. This contract is established for the exclusive benefit of the annuitant and his or her beneficiaries. HOW WILL DIVIDENDS BE APPLIED? Dividends, if received, must be added to the accumulation value or applied to increase annuity payments. HOW WILL A REFUND OF PREMIUMS BE APPLIED? Any refund of premiums (other than those attributable to excess purchase payments) will be applied, before the close of the calendar year following the year of the refund, toward the payment of future premiums or the purchase of additional benefits. MAY THIS AGREEMENT BE AMENDED? Yes. This contract may be amended as required to reflect any change in the Code, regulations or published revenue rulings. The annuitant will be deemed to have consented to any such amendment. We will promptly furnish any such amendment to the annuitant. This agreement is effective as of the original contract date unless a different effective date is shown here. /s/ Dennis E. Prohofsky Secretary /s/ Robert L. Senkler President 83-9058 Rev. 3-1997 Minnesota Mutual 3 EX-99.C4C 7 EXHIBIT 99.C4C - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [LOGO] MINNESOTA MUTUAL LIFE ENDORSEMENT - -------------------------------------------------------------------------------- Before we issued your contract, we made the following change to the contract. It is part of your contract and is effective as of the contract date, unless a different date is shown here. ADDITIONAL INFORMATION CAN YOU ASSIGN THIS CONTRACT? No. Your contract may not be assigned. In addition, it may not be sold, transferred or used as security for a loan. /s/ Robert J. Hasling /s/ Coleman Bloomfield Secretary Registrar President 87-9157 EX-99.C4D 8 EXHIBIT 99.C4D - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [Logo] MINNESOTA MUTUAL LIFE ENDORSEMENT - -------------------------------------------------------------------------------- Before we issued your contract, we made the following change to the contract. It is part of your contract and is effective as of the contract date, unless a different date is shown here. GENERAL INFORMATION ARE ALL SEPARATE ACCOUNT OPTIONS AVAILABLE FOR ANY PURCHASE PAYMENT? No. When this contract is used in association with the University of Minnesota Faculty Retirement Plan ("Basic Plan"), purchase payments may be allocated only to the following sub-accounts: Money Market Account Bond Account When this contract is used in association with the purchase of tax sheltered annuities by University of Minnesota Staff for the purchase of optional annuities ("Optional Plan") under section 403(b), purchase payments may be allocated to any sub-account offered under the contract. TRANSFER PROVISIONS MAY AMOUNTS BE TRANSFERRED BETWEEN THE BASIC PLAN SUB-ACCOUNTS AND THE OPTIONAL PLAN SUB-ACCOUNTS? No. /s/ Robert J. Hasling /s/ Coleman Bloomfield Secretary Registrar President 87-9164 EX-99.C4E 9 EXHIBIT 99.C4E - -------------------------------------------------------------------------------- READ YOUR CONTRACT CAREFULLY THIS IS A LEGAL CONTRACT We promise to pay, subject to the provisions of this contract, the benefits described by this contract. We make this promise and issue this contract in consideration of the application for this contract and the payment of the purchase payments. The owner and the beneficiary are as named in the application unless they are changed as provided for in this contract. You are a member of The Minnesota Mutual Life Insurance Company. Our annual meetings are held at our home office on the first Tuesday in March of each year at three o'clock in the afternoon. Signed for The Minnesota Mutual Life Insurance Company at St. Paul, Minnesota, on the contract date. /s/ Coleman Bloomfield President /s/ Robert J. Hasling Secretary Registrar NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS. It is important to us that you are satisfied with this contract. If you are not satisfied, you may return the contract to us or to your agent within 10 days of its receipt. If you exercise this right, you will receive the greater of (a) the Accumulation Value of this contract or (b) the amount of purchase payments paid under this contract. We will pay this refund within 7 days after we receive your notice of cancellation. ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. - -------------------------------------------------------------------------------- The Minnesota Mutual Life Insurance Company 400 North Robert Street St. Paul, Minnesota 55101-2098 [LOGO] MINNESOTA MUTUAL LIFE 87-9154 Rev. 2-88 CONTRACT INDEX Alphabetical Index to the Provisions of Your Contract Page Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Allocation of Purchase Payments. . . . . . . . . . . . . . . . . . . . . . 3 Amount Payable at Death. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Annuity Payment Options. . . . . . . . . . . . . . . . . . . . . . . . . . 5 Annuity Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Contract Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Misstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Purchase Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Withdrawal and Surrender . . . . . . . . . . . . . . . . . . . . . . . . . 4 YOUR CONTRACT INFORMATION - -------------------------------------------------------------------------------- ANNUITANT: John C. Doe ----------- DATE OF BIRTH: May 1, 1952 ----------- OWNER: John C. Doe ----------- JURISDICTION: Your State ---------- CONTRACT NUMBER: 1-234-567 --------- CONTRACT DATE: July 1, 1987 ------------ ANNUITY COMMENCEMENT DATE: August 1, 2007 -------------- ANTICIPATED ANNUAL PURCHASE PAYMENT: $1,000.00 --------- - -------------------------------------------------------------------------------- FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT FIXED OR VARIABLE ANNUITY BENEFITS A PARTICIPATING CONTRACT - -------------------------------------------------------------------------------- 87-9154 Rev. 2-88 Minnesota Mutual Life 1 DEFINITIONS - -------------------------------------------------------------------------------- When we use the following words, this is what we mean: THE ANNUITANT The person named on page 1 who may receive lifetime benefits under the contract. YOU, YOUR The owner of this contract. The owner may be the annuitant or someone else. The owner shall be that person named in the application. WE, OUR, US The Minnesota Mutual Life Insurance Company. CONTRACT DATE The effective date of this contract. It is also the date from which we determine contract anniversaries and contract years. CONTRACT ANNIVERSARY The same day and month as the contract date for each succeeding year of this contract. CONTRACT YEAR A period of one year beginning with the contract date or a contract anniversary. FUND The mutual fund or separate investment portfolio within a series mutual fund which is designated as an eligible investment for the separate account. VALUATION DATE Any date on which a fund is valued. VALUATION PERIOD The period between successive valuation dates measured from the time of one determination to the next. ACCUMULATION VALUE Your interest in this contract. It is composed of your interest in one or more sub-accounts of the separate account. Your interest in the sub-accounts shall be valued separately. The total of those values will be the accumulation value. SEPARATE ACCOUNT A separate investment account titled Minnesota Mutual Variable Annuity Account. This separate account was established by us for this class of contract under Minnesota law. The separate account is composed of several sub-accounts. The assets of the separate account are ours. Those assets are not subject to claims arising out of any other business in which we engage. 1940 ACT The Investment Company Act of 1940, as amended, or any similar successor federal legislation. WRITTEN REQUEST A request in writing signed by you. In some cases, we may provide a form for your use. We also may require that this contract be sent to our home office with your written request. PURCHASE PAYMENTS Amounts paid to us as consideration for the benefits provided by this contract. ANNUITY PAYMENTS Payments made at regular intervals to the annuitant or any other payee. Annuity payments will be due and payable only on the first day of a calendar month. FIXED ANNUITY Annuity payments of equal amounts during the payment period. VARIABLE ANNUITY Annuity payments which increase or decrease in amount to reflect the investment experience of the separate account and its sub-accounts. AGE The age of a person at nearest birthday. GENERAL INFORMATION - -------------------------------------------------------------------------------- WHAT IS YOUR AGREEMENT WITH US? This contract and the copy of the application attached to it contain the entire contract between you and us. Any statements made in the application either by you or the annuitant will, in the absence of fraud, be considered representations and not warranties. Also, any statement made either by you or the annuitant will not be used to avoid this contract or defend against a claim under this contract unless the statement is contained in the application. No change or waiver of any of the provisions of this contract will be valid unless made in writing by us. It must also be signed by our president, a vice president, our secretary or an assistant secretary. No agent or other person has the authority to change or waive any provision of this contract. Any additional agreement attached to this contract will become a part of this contract and will be subject to all the terms and conditions of this contract unless we state otherwise in the agreement. HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT? You can exercise all the rights under this contract by making a written request to us. You have these rights during the annuitant's lifetime and before annuity payments begin. We will deal with you, unless this contract provides otherwise, on the basis that you have full ownership and control of this contract. HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT? Each year we will send you a report. This report will 87-9154 Rev. 2-88 Minnesota Mutual Life 2 summarize the year's transactions and will show the current accumulation value of this contract. It will also show the current accumulation unit values. The report will be as of a date within two months of its mailing. PURCHASE PAYMENTS - -------------------------------------------------------------------------------- WHERE DO YOU MAKE PURCHASE PAYMENTS? All purchase payments must be made at our home office. Our home office is at 400 North Robert Street, St. Paul, Minnesota 55101-2098. When we receive a purchase payment from you at our home office, we will send you a confirmation. WHEN DO YOU MAKE PURCHASE PAYMENTS? You may choose when to make purchase payments. Each purchase payment must be in an amount of at least $25. ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS? Yes. It may be possible for you to arrange with your employer to make your purchase payments by payroll deduction. Or, under some plans, your employer may make purchase payments on your behalf. Also, your bank or other financial institution may consent to have your purchase payments automatically withdrawn from your account and paid directly to us. WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS? There are usually no deductions made from the purchase payments. However, we do reserve the right to make a deduction from purchase payments for state premium taxes, where applicable. HOW ARE PURCHASE PAYMENTS ALLOCATED? They are allocated among the sub-accounts of the separate account as you direct. Initially, you indicate your allocation in the application. Later, you may change your allocation for future purchase payments by giving us written notice. We will allocate purchase payments received without allocation instructions to the money market sub-account. ARE SEPARATE ACCOUNT OPTIONS AVAILABLE? The separate account currently is composed of the following sub-accounts: Stock Account Aggressive Growth Account Index Account Bond Account Mortgage Securities Account Money Market Account Managed Account Purchase payments may be applied to one or more of these sub-accounts or any other which may be established by us under the separate account for contracts of this class. We reserve the right to add, combine or remove any sub-accounts of the separate account. WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT? The separate account is divided into sub-accounts. For each sub-account, there is a fund for the investment of that sub-account's assets. Purchase payments are invested in the funds at their net asset value. If investment in a fund should no longer be possible or if we determine it becomes inappropriate for contracts of this class, we may substitute another fund. Substitution may be with respect to existing accumulation values, future purchase payments and future annuity payments. IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT? Yes. The minimum purchase payment to any sub-account of the separate account is also $25. WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT? We reserve the right to transfer assets of the separate account, which we determine to be associated with the class of contracts to which this contract belongs, to another separate account. If this type of transfer is made, the term "separate account", as used in this contract, shall then mean the separate account to which the assets were transferred. We reserve the right, when permitted by law, to: (a) deregister the separate account under the Investment Company Act of 1940; (b) restrict or eliminate any voting rights of contract owners or other persons who have voting rights as to the separate account; and (c) combine the separate account with one or more other separate accounts. WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT? Purchase payments are credited to the contract on the valuation date coincident with or next following the day they are received in our home office. If they are received on a day which is not a valuation date, those amounts will be credited on the next valuation date. MAY YOU STOP MAKING PURCHASE PAYMENTS? Yes. You may stop making purchase payments at any time. If you stop making purchase payments, the contract remains in force as a paid-up annuity according to its terms. Its value may be applied to provide annuity payments at a later date. You may make purchase payments again at any time before annuity payments start unless the contract has been surrendered. MAY WE CANCEL THE CONTRACT? We may, in our discretion, cancel a contract if no purchase payments are made for a period of two or more full contract years and both (a) the total purchase payments made, less any withdrawals, and (b) the accumulation value of the contract, are less than $2,000. If such a cancellation takes place, we will pay the accumulation value to you. We will notify you of our intention to exercise these rights in our annual report. We will act 90 days after the contract anniversary unless an additional purchase payment is received before the end of that 90 day period. 3 Minnesota Mutual Life 87-9154 Rev. 2-88 CONTRACT CHARGES - -------------------------------------------------------------------------------- WHAT CHARGES MAY BE MADE UNDER THIS CONTRACT? An administrative charge is made directly to the separate account. On an annual basis it may be as much as .35% of the net asset value of the separate account. VALUATION - -------------------------------------------------------------------------------- HOW IS YOUR ACCUMULATION VALUE DETERMINED? Your accumulation value is your interest in one or more sub-accounts of the separate account. For each sub-account of the separate account, the accumulation value is equal to the accumulation units multiplied by the accumulation unit value. WHAT IS AN ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED? An accumulation unit is a measure of your interest in each sub-account of the separate account. The number of accumulation units credited with respect to each purchase payment is determined by dividing the portion of the purchase payment allocated to each sub-account by the then current accumulation unit value for that sub-account. This determination is made as of the valuation date coincident with or next following the date on which we receive your purchase payment at our home office. Once determined, the number of accumulation units will not be affected by changes in the accumulation unit value. However, the total number of accumulation units under this contract will be affected by future contract transactions. In addition, the units of each sub-account will be increased by subsequent purchase payments and transfers to that sub-account. The units of each sub-account will be decreased by transfers or withdrawals from that sub-account. The accumulation unit value will increase or decrease on each valuation date. The amount of any increase or decrease will depend on the net investment experience of the sub-account of the separate account. The value of an accumulation unit for each sub-account was originally set at $1.00 on the first valuation date. For any subsequent valuation date, its value is equal to its value on the preceding valuation date multiplied by the net investment factor for that sub-account for the valuation period ending on the subsequent valuation date. WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT? The net investment factor for a valuation period is the gross investment rate for such valuation period, less a deduction for the charges associated with the separate account at a rate of not more than .35% per annum. The gross investment rate is equal to: (a) the net asset value per share of a fund share held in the sub-account of the separate account determined at the end of the current valuation period; plus (b) the per-share amount of any dividend or capital gain distributions by the fund if the "ex-dividend" date occurs during the current valuation period; divided by (c) the net asset value per share of that fund share held in the sub-account determined at the end of the preceding valuation period. DIVIDENDS - -------------------------------------------------------------------------------- WILL THIS CONTRACT RECEIVE DIVIDENDS? Each year we determine if this contract will share in our divisible surplus. We call your share a dividend. HOW WILL DIVIDENDS BE APPLIED? Dividends, if received, may be added to the accumulation value or applied to increase annuity payments. If you so elect, they may be paid in cash. TRANSFER PROVISIONS - -------------------------------------------------------------------------------- WHAT IS A TRANSFER? A transfer is a reallocation of funds under this contract among the sub-accounts of the separate account. MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT? Yes. These transfers may be made on your written request. We will make the transfer on the basis of accumulation unit values on the valuation date coincident with or next following the day we receive the request at our home office. DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS? Yes. In every case, the amount to be transferred must be $250 or more. MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS? Yes. However, transfers are limited. They may be made only with respect to any variable annuity payments. See the Annuity Payment Options section of this contract. WITHDRAWAL AND SURRENDER - -------------------------------------------------------------------------------- MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT? Yes. At any time before annuity payments begin, you may request a partial withdrawal from the accumulation value. You must make a written request for any withdrawal, and it must be for at least $250. The accumulation value will be reduced by the amount withdrawn. Unless instructed otherwise by you, withdrawals will be made from each sub-account of the separate account in the same proportion that the value of your interest in the sub-account bears to your total accumulation value. Systematic withdrawal plans of a fixed amount or over a fixed period are also available. MAY YOU SURRENDER THE CONTRACT? Yes. At any time before annuity payments begin, you may surrender this contract for its accumulation value. It will be determined as of the valuation date coincident with or next following the date your written request is received at our home office. 87-9154 Rev. 2-88 Minnesota Mutual Life 4 HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID? We will pay these benefits in a single sum. However, if this contract is surrendered you may elect one of the annuity payment options, subject to the provisions of this contract. ANNUITY PROVISIONS - -------------------------------------------------------------------------------- WHEN DO ANNUITY PAYMENTS BEGIN? You must notify us in writing that annuity payments are to be made to the annuitant, when these payments are to begin, the form of the annuity and what annuity payment option has been selected. We must receive this notice at least 30 days in advance of the date annuity payments are to begin. This contract permits annuity payments to begin on the first day of any month after the 50th birthday and before the 75th birthday of the annuitant. However, the beginning date for annuity payments must be consistent with any restrictions applicable to the plan under which this contract may have been purchased. WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS? The accumulation value will be applied to provide annuity payments. WHAT TYPES OF ANNUITIES ARE AVAILABLE? Both fixed and variable annuities are available under this contract. ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS? Yes. We require that the first monthly fixed or variable annuity payment must be at least $20 unless a payment of a smaller minimum amount is required by law. If the first monthly fixed or variable annuity payment would be less than that amount, we reserve the right to pay you the accumulation value in a lump sum. This payment would be in lieu of all other rights under this contract. WHAT INFORMATION MAY WE NEED? We reserve the right to require proof satisfactory to us of the age of the annuitant and of any joint annuitant before payments begin. We may also require proof that a person is alive before making any annuity payment which is based on the survival of that person. IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN? If you do not elect another date, annuity payments will begin on the later of: the first day of the month immediately following the 65th birthday of the annuitant, or the first day of the month immediately following the fifth contract anniversary. IF YOU FAIL TO ELECT AN ANNUITY OPTION, UNDER WHAT OPTION WILL ANNUITY PAYMENTS BE MADE? If you do not elect an annuity payment option, we will make monthly payments on the basis of Option 2A, a life annuity with a period certain of 120 months. IF YOU FAIL TO ELECT AN ANNUITY FORM, HOW WILL ANNUITY PAYMENTS BE MADE? If you do not elect an annuity payment form, we will make annuity payments in the form of a variable annuity. MUST AN ANNUITY PAYMENT OPTION BE ELECTED? No. You may elect a lump sum payment instead. If you do so, you and the annuitant shall have no further rights under this contract. ANNUITY PAYMENT OPTIONS - -------------------------------------------------------------------------------- WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE? The following annuity payment options are available: Option 1 -- Life Annuity -- annuity payments payable monthly for the lifetime of the annuitant, ending with the last payment due prior to the annuitant's death. Option 2 -- Life Annuity with a Period Certain -- annuity payments payable monthly for the lifetime of the annuitant; provided, if the annuitant dies before payments have been made for the entire period certain, those remaining certain payments will be made to the beneficiary. The period certain may be for 120 months (Option 2A); for 180 months (Option 2B); or for 240 months (Option 2C). Option 3 -- Joint and Last Survivor Annuity -- annuity payments payable monthly for the joint lifetimes of the annuitant and a designated joint annuitant. The payments end with the last payment due before the survivor's death. If this option is elected, the contract and payments shall be the joint property of the annuitant and the designated joint annuitant. Option 4 -- Fixed Period Annuity -- annuity payments payable monthly for a fixed period of from one to twenty years. If the annuitant dies before all payments for the fixed period are received, payments will continue for the remainder of the fixed period to the beneficiary. ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE? Yes. Other options may be available as agreed upon between you and us. MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT INSTEAD OF THE REMAINING ANNUITY PAYMENTS? Yes. The beneficiary may elect to have the present value of the remaining payments paid in a lump sum. This right exists under Options 2 and 4. The lump sum payment will be the commuted value of the remaining payments. It will be based on the then current dollar amount of one payment, using the same interest rate which served as a basis for the annuity. HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED? The dollar amount of the first monthly variable annuity payment is determined by applying the available value (after deduction of any premium taxes not previously deducted) to the table below using the adjusted age of the annuitant and any joint annuitant. A number of annuity units is then determined by dividing this dollar amount by 5 Minnesota Mutual Life 87-9154 Rev. 2-88 the then current annuity unit value. Thereafter, the number of annuity units remains unchanged during the period of annuity payments. This determination is made separately for each sub-account of the separate account. The number of annuity units is based upon the available value in each sub-account as of the date annuity payments are to begin. The dollar amount determined for each sub-account will then be aggregated for purposes of making payment. The dollar amount of the second and later variable annuity payments is equal to the number of annuity units determined for each sub-account times the annuity unit value for that sub-account as of the due date of the payment. This amount may increase or decrease from month to month. The value of an annuity unit for a sub-account is determined each month as of the first day of the month. The value is equal to the annuity unit value for that sub-account as of the first day of the preceding month times the product of (a) .997137, and (b) a sub-account investment factor. This investment factor is the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the preceding month divided by the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the second preceding month. For any date other than the first of a month, the annuity unit value is that on the first day of the next month. HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED? The tables shown below are used to determine the amount of guaranteed monthly fixed annuity payments. They show the dollar amount of each payment that can be provided with each $1,000 of available value, after the deduction of any applicable premium taxes not previously deducted. Amounts shown here are based on the Progressive Annuity Table with interest at the rate of 3.5% per annum, assuming births in the year 1900 and with an age setback of eight years. The amount of each payment depends upon the adjusted age of the annuitant and any joint annuitant. The adjusted age is determined from the actual age nearest birthday at the time the first payment is due in the following manner: CALENDAR YEAR ADJUSTED AGE IS OF BIRTH IS EQUAL TO - ---------------- ------------------ Prior to 1900 Age Plus 1 1900 - 1919 Actual Age 1920 - 1939 Age Minus 1 1940 - 1959 Age Minus 2 1960 and Later Age Minus 3 DOLLAR AMOUNT OF THE FIRST MONTHLY PAYMENT WHICH IS PURCHASED WITH EACH $1,000 OF VALUE APPLIED (Rates shown for Options 1, 2 and 3 are for an annuity with the first payment due immediately. They must be adjusted for any applicable state premium taxes and the contract fee.) ADJUSTED AGE OF ANNUITANT SINGLE LIFE ANNUITIES ------------ ------------------------------------------------------ OPTION 1 OPTION 2A OPTION 2B OPTION 2C -------- --------- --------- --------- 50 $4.15 $4.14 $4.11 $4.08 51 4.21 4.20 4.17 4.12 52 4.28 4.26 4.22 4.18 53 4.34 4.32 4.28 4.23 54 4.42 4.39 4.35 4.28 55 4.49 4.46 4.41 4.34 56 4.57 4.53 4.48 4.40 57 4.65 4.61 4.55 4.46 58 4.74 4.69 4.62 4.52 59 4.84 4.78 4.70 4.58 60 4.94 4.87 4.78 4.65 61 5.04 4.97 4.87 4.71 62 5.16 5.07 4.95 4.78 63 5.28 5.18 5.04 4.85 64 5.40 5.29 5.13 4.91 65 5.54 5.41 5.23 4.98 66 5.69 5.53 5.33 5.05 67 5.84 5.66 5.43 5.11 68 6.01 5.79 5.53 5.18 69 6.18 5.94 5.63 5.24 70 6.37 6.08 5.74 5.30 71 6.57 6.24 5.84 5.36 72 6.79 6.40 5.95 5.41 73 7.02 6.57 6.05 5.46 74 7.27 6.74 6.15 5.51 75 7.54 6.91 6.26 5.55 87-9154 Rev. 2-88 Minnesota Mutual Life 6 OPTION 3 -- JOINT AND LAST SURVIVOR LIFE ANNUITY ADJUSTED AGE OF JOINT ANNUITANT* ADJUSTED AGE OF ANNUITANT* ---------------- -------------------------------------------------- 55 60 62 65 67 70 75 ---- ---- ---- ---- ---- ---- ---- 54 $3.98 $4.09 $4.13 $4.19 $4.22 $4.26 $4.32 59 4.10 4.27 4.34 4.43 4.48 4.55 4.66 61 4.15 4.34 4.42 4.52 4.59 4.68 4.81 64 4.21 4.44 4.53 4.67 4.76 4.88 5.05 66 4.25 4.50 4.61 4.76 4.87 5.01 5.23 69 4.30 4.59 4.71 4.90 5.03 5.22 5.50 74 4.37 4.71 4.86 5.10 5.27 5.54 5.98 * Dollar amounts of the first monthly payments for ages not shown in this table will be calculated on the same basis as those shown and may be obtained from us. OPTION 4 -- FIXED PERIOD ANNUITY FIXED PERIOD DOLLAR AMOUNT FIXED PERIOD DOLLAR AMOUNT (YEARS) OF PAYMENT (YEARS) OF PAYMENT ------------ ------------- ------------ ------------- 1 $84.65 11 $9.09 2 43.05 12 8.46 3 29.19 13 7.94 4 22.27 14 7.49 5 18.18 15 7.10 6 15.35 16 6.76 7 13.38 17 6.47 8 11.90 18 6.20 9 10.75 19 5.97 10 9.83 20 5.75 WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES? Not necessarily. If, when annuity payments are elected, we are using tables of annuity purchase rates for this class of contract which would result in larger annuity payments, we will use those tables instead. ONCE ANNUITY PAYMENTS BEGIN, MAY A FIXED ANNUITY OPTION BE CHANGED? No. ONCE ANNUITY PAYMENTS BEGIN, MAY A VARIABLE ANNUITY OPTION BE CHANGED? No. MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD? Yes. Amounts held as annuity reserves may be transferred among the variable annuity sub-accounts during the annuity period. Annuity reserves may also be transferred from a variable annuity to a fixed annuity during this time. HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A FIXED ANNUITY? The change must be by written request. The annuitant and joint annuitant, if any, must make such an election. HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE? A transfer will be made on the basis of annuity unit values. The number of annuity units from the sub-account being transferred will be converted to a number of annuity units in the new sub-account. The annuity payment option will stay the same. After this conversion, a number of annuity units in the new sub-account will be payable under the elected option. The first payment after conversion will be of the same amount as it would have been without the transfer. The number of annuity units will be set at that number of units which are needed to pay that same amount on the transfer date. ARE THERE RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS? Yes. The transfer of an annuity reserve amount from any sub-account must be at least equal to: 1) $5,000; or, 2) the entire amount of the reserve remaining in that sub-account. In addition, annuity payments must have been in effect for a period of 12 months before a change may be made. Such transfers can be made only once every 12 months. Your written request for an annuity transfer must be received by us more than 30 days in advance of the due date of the annuity payment subject to the transfer. 7 Minnesota Mutual Life 87-9154 Rev. 2-88 MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED ANNUITY? Yes. However, the restrictions which apply to annuity sub-account transfers will apply here as well. The amount transferred will then be applied to provide a fixed annuity amount. This amount will be based upon the adjusted age of the annuitant and any joint annuitant at the time of the transfer. The payment option will remain the same. MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY? No. AMOUNT PAYABLE AT DEATH - -------------------------------------------------------------------------------- WHAT AMOUNT IS PAYABLE AT DEATH? If you die before annuity payments have started, we will pay the accumulation value. The accumulation value will be determined as of the valuation date coincident with or next following the day we receive due proof of death at our home office. If the annuitant dies after annuity payments have started, we will pay whatever amount may be called for by the terms of the annuity payment option selected. The remaining interest in the contract must be distributed at least as rapidly as under the option in effect at the annuitant's death. TO WHOM WILL WE PAY THOSE BENEFITS? When we receive due proof of death satisfactory to us, we will pay the amount payable at death under this contract to the beneficiary or beneficiaries. The beneficiary will be the person or persons named in the application for this contract unless you subsequently change the beneficiary. In that event, we will pay the amount payable at death to the beneficiary named in your last change of beneficiary request as provided in this contract. HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID? We will pay that amount in a single sum unless another form of settlement has been requested and agreed to by us. All payments by us are payable at our home office. Proof of any claim under this contract must be submitted in writing to us at our home office. WHEN MUST DEATH BENEFITS BE PAID? If you die on or before the date on which annuity payments begin and if the designated beneficiary is a person other than your spouse, that beneficiary may elect an annuity option measured by a period not longer than that beneficiary's life expectancy only so long as annuity payments begin not later than one year after your death. If there is no designated beneficiary, then the entire interest in this contract must be distributed within five years after your death. If the annuitant dies after annuity payments have begun, any payments received by a non-spouse beneficiary must be distributed as least as rapidly as under the method elected by the annuitant as of the date of death. If any portion of the contract interest is payable to your designated beneficiary who is your surviving spouse, that spouse shall be treated as the contract owner for purposes of: (a) when payments must begin; and (2) the time of distribution in the event of your spouse's death. Payments must be made in substantially equal installments. WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE ANNUITANT? If a beneficiary dies before the annuitant, that beneficiary's interest in this contract ends with that beneficiary's death. Only those beneficiaries who survive will be eligible to share in a death benefit. If no beneficiary survives the annuitant prior to the date an annuity begins we will pay the accumulation value of this contract to the executors or administrators of the annuitant's estate. CAN YOU CHANGE THE BENEFICIARY? Yes. You can file a written request with us to change the beneficiary. Your written request will not be effective until it is recorded in our home office records. After it has been recorded, it will take effect as of the date you signed the request. However, if the annuitant dies before the request has been recorded, the request will not be effective as to those death proceeds we have paid before the request was recorded in our home office records. ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- CAN YOU ASSIGN THIS CONTRACT? Unless this contract provides otherwise, you may assign all rights to this contract during the lifetime of the annuitant. We will not be bound by any assignment until we have recorded written notice of it at our home office. We are not responsible for the validity of any assignment. An assignment will not apply to any payment or action made by us before it was recorded. Any proceeds which become payable to an assignee will be payable in a single sum. Any claim made by an assignee will be subject to proof of the assignee's interest and the extent of the assignment. If this contract is issued pursuant to a retirement plan which receives favorable tax treatment under the provisions of Section 401, 403, 404, 408 or 457 of the Internal Revenue Code, then, it may not be assigned, pledged or otherwise transferred except under such conditions as may be allowed under applicable law. ARE THE CONTRACT BENEFITS PROTECTED? Yes. To the extent permitted by law, no benefit provided by this contract will be subject to any creditor's claim or process of law. HOW WILL BENEFITS BE DETERMINED? Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit described by this contract shall be calculated as of the date the provisions of the contract are exercised. WHAT IF A PERSON'S AGE IS MISSTATED? If a person's age has been misstated, the amount payable under this contract as an annuity will be that amount 87-9154 Rev. 2-88 Minnesota Mutual Life 8 which would have been paid based upon that person's correct age. In the case of an overpayment, we may either deduct the required amount from that person's payments under this contract; or, we may require you to pay us in cash; or we may do both until we are fully repaid. In the case of an underpayment, we will pay the required amount with the next payment. WHAT INFORMATION MUST YOU PROVIDE? You must provide any other information we need to administer this contract. If you cannot do so, we may ask the person concerned for that information. We shall not be liable for any payment based upon information given to us in error or not given to us. DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS? Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation values and the paid-up annuity benefit described by this contract are not less than the minimum benefits required by any statute of the state in which this contract is delivered. WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT? Reserves held by us for annuity payments under this contract shall not be less than those reserves required by the law in the state in which this contract is delivered. MAY THIS CONTRACT BE MODIFIED? This contract may be modified at any time by written agreement between you and us. However, no such modification will adversely affect the rights of an annuitant under this contract unless the modification is made to comply with a law or government regulation. Such modification will be in writing. You will have the right to accept or reject such a modification. HOW DOES THIS CONTRACT RELATE TO THE OWNERSHIP OF THE SEPARATE ACCOUNT? We have exclusive and absolute ownership of the separate account. WHEN WILL LUMP SUM PAYMENTS BE MADE? Usually, we will make payment within seven days after payment is called for by the terms of the contract. However, we reserve the right to defer payment for such period as may be allowed under the 1940 Act. DO YOU HAVE ADDITIONAL VOTING RIGHTS? Yes. You may direct us with respect to the voting rights of fund shares held by us and attributable to this contract. 9 Minnesota Mutual Life 87-9154 Rev. 2-88 [LOGO] MINNESOTA MUTUAL LIFE - -------------------------------------------------------------------------------- FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT FIXED OR VARIABLE ANNUITY BENEFITS A PARTICIPATING CONTRACT - -------------------------------------------------------------------------------- EX-99.C4F 10 EXHIBIT 99.C4F - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [Logo] MINNESOTA MUTUAL LIFE ENDORSEMENT - -------------------------------------------------------------------------------- Before we issued your contract, we made the following changes. They modify the contract and are considered to be a part of it. This agreement is effective as of the original contract date unless a different effective date is shown here. TRANSFER PROVISIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS? Yes. However, transfers are limited. They may be made only with respect to any variable annuity payments. See the Annuity Payment Options section of this contract. ANNUITY PAYMENT OPTIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE? In lieu of Option 3 stated in the contract, the following option is available: OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY - annuity payments payable monthly for the joint lifetimes of the annuitant and a designated joint annuitant. The payments end with the last payment due before the survivor's death. If this option is elected, the contract and payments shall be the joint property of the annuitant and the designated joint annuitant. ONCE ANNUITY PAYMENTS BEGIN, MAY A FIXED ANNUITY OPTION BE CHANGED? No. ONCE ANNUITY PAYMENTS BEGIN, MAY A VARIABLE ANNUITY OPTION BE CHANGED? No. MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD? Yes. Amounts held as annuity reserves may be transferred among the variable annuity sub-accounts during the annuity period. Annuity reserves may also be transferred from a variable annuity to a fixed annuity during this time. /s/ Robert J. Hasling Secretary 87-9172 HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A FIXED ANNUITY? The change must be by written request. The annuitant and joint annuitant, if any, must make such an election. HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE? A transfer will be made on the basis of annuity unit values. The number of annuity units from the sub-account being transferred will be converted to a number of annuity units in the new sub-account. The annuity payment option will stay the same. After this conversion, a number of annuity units in the new sub-account will be payable under the elected option. The first payment after conversion will be of the same amount as it would have been without the transfer. The number of annuity units will be set at that number of units which are needed to pay that same amount on the transfer date. ARE THERE ANY RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS? Yes. The transfer of an annuity reserve amount from any sub-account must be at least equal to: 1) $5,000; or, 2) the entire amount of the reserve remaining in that sub-account. In addition, annuity payments must have been in effect for a period of 12 months before a change may be made. Such transfers can be made only once every 12 months. Your written request for an annuity transfer must be received by us more than 30 days in advance of the due date of the annuity payment subject to the transfer. MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED ANNUITY? Yes. However, the restrictions which apply to annuity sub-account transfers will apply here as well. The amount transferred will then be applied to provide a fixed annuity amount. This amount will be based upon the adjusted age of the annuitant and any joint annuitant at the time of the transfer. The payment option will remain the same. MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY? No. /s/ Robert J. Hasling /s/ Coleman Bloomfield Secretary Registrar President 87-9172 EX-99.C4G 11 EXHIBIT 99.C4G MINNESOTA MUTUAL TAX SHELTERED ANNUITY AMENDMENT We have made the following changes to your contract. They modify the contract. They are considered to be a part of it. This agreement is effective as of the original contract date unless a different effective date is shown here. WHAT DOES THIS AGREEMENT PROVIDE? This Agreement modifies your contract. The Agreement is used when the contract is issued to fund a tax sheltered annuity program. This is as described in Section 403(b) of the Internal Revenue Code (hereinafter "Code"), as amended. PURCHASE PAYMENTS - -------------------------------------------------------------------------------- ARE PURCHASE PAYMENTS LIMITED? Yes. Where the annuitant has a tax sheltered annuity, purchase payments may be limited. Elective deferrals which are purchase payments made by salary reduction are limited to: (a) $9,500; or (b) an indexed amount, if greater. A special increased limit in the case of an annuitant who has completed 15 years of service with an educational organization, a hospital, a home health service agency, a church, a convention or association of churches, or a health and welfare service agency may be available. The limit for any one year is increased by the lesser of: (a) $3,000; (b) $15,000 reduced by amounts already excluded for prior taxable years by reason of this special exception; or (c) the excess of $5,000 multiplied by the number of years of service the annuitant has with the employer less all prior elective deferrals. The amount of salary reduction excludable from an annuitant's gross income may actually be less than the amount permitted under this limit on elective deferrals. This may be true if the annuitant's exclusion allowance, described in Section 403(b)(2), of the Code or the overall limit as described in Section 415(c) of the Code is less. WITHDRAWAL AND SURRENDERS - -------------------------------------------------------------------------------- ARE THERE RESTRICTIONS ON WHEN WITHDRAWALS FROM THIS CONTRACT MAY BE MADE? Yes. Contracts issued to fund 403(b) tax sheltered annuity programs must restrict certain withdrawals. Any purchase payment made after January 1, 1989 pursuant to a salary reduction agreement between you and your employer may be paid only when: 88-9213 The Minnesota Mutual Life Insurance Company (a) you attain age 59 1/2; (b) when you separate from service with your employer; (c) when you die; (d) when you become disabled; or (e) if you qualify for a hardship withdrawal. WHAT IS MEANT BY A HARDSHIP WITHDRAWAL? A hardship withdrawal is one that is made on account of an immediate and heavy financial need and a withdrawal is necessary to satisfy that financial need. You may be required to provide us with information so that we may be satisfied that your hardship is one described in the Code and its regulations. WHAT AMOUNT MAY BE WITHDRAWN UNDER THE HARDSHIP PROVISION? You may withdraw only the amount represented by your salary reduction contributions. Any earnings attributable to such contributions may not be withdrawn. MAY TAX PENALTIES APPLY? Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2, the annuitant may be subject to tax penalties. These penalties are imposed under the Code. The annuitant may not be subject to tax penalties on amounts received before age 59 1/2 if: (a) the annuitant becomes disabled as defined by the Code; (b) The amount received is in excess of the allowed elective deferral and returned to the annuitant before the required tax return filing date for that year, together with any earned interest; or (c) if the entire amount in the contract is received and reinvested in a similar plan entitled to similar tax treatment. We will not be liable for any tax penalties on amounts received or paid by us under this contract. We also retain the right to treat any transaction treated by law as a contract distribution as a complete contract surrender. 88-9213 The Minnesota Mutual Life Insurance Company GENERAL INFORMATION IS THERE A TIME WHEN DISTRIBUTIONS FROM THIS CONTRACT MUST BE MADE? Yes. Distributions must begin within 90 days after the end of the year in which the annuitant reaches age 70 1/2. Distributions may be made as withdrawals or under one of the available annuity forms. In order to avoid tax penalties, you will have to meet certain minimum distribution requirements. IS THIS CONTRACT TRANSFERABLE? No. This contract is non-transferable. It may not be sold or assigned. /s/ Dennis E. Prohofsky Secretary /s/ Robert L. Senkler President 88-9213 The Minnesota Mutual Life Insurance Company EX-99.C4H 12 EXHIBIT 99.C4H - -------------------------------------------------------------------------------- MINNESOTA MUTUAL LIFE ENDORSEMENT - -------------------------------------------------------------------------------- We have made the following changes to your contract. They modify the contract. They are considered to be a part of it. This endorsement is effective as of the original contract date unless a different effective date is shown here. PURCHASE PAYMENTS WHEN DO YOU MAKE PURCHASE PAYMENTS? You may choose when to make purchase payments. IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT? No. TRANSFER PROVISIONS DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS? No. AMOUNT PAYABLE AT DEATH IS THERE A GUARANTEED DEATH BENEFIT? Yes. This contract has a guaranteed death benefit if you die before annuity payments have started. The death benefit shall be equal to the greater of: (1) the amount of the accumulation value payable at death; or (2) the amount of the initial purchase payment paid to us as consideration for this contract, less all contract withdrawals. /s/ Robert J. Hasling /s/ Coleman Bloomfield Secretary Registrar President 91-9258 EX-99.C4I 13 EXHIBIT 99.C4I - -------------------------------------------------------------------------------- READ YOUR CONTRACT CAREFULLY THIS IS A LEGAL CONTRACT We promise to pay, subject to the provisions of this contract, the benefits described by this contract. We make this promise and issue this contract in consideration of the application for this contract and the payment of the purchase payments. The owner and the beneficiary are as named in the application unless they are changed as provided for in this contract. You are a member of The Minnesota Mutual Life Insurance Company. Our annual meetings are held at our home office on the first Tuesday in March of each year at three o'clock in the afternoon. Signed for The Minnesota Mutual Life Insurance Company at St. Paul, Minnesota, on the contract date. /s/ Coleman Bloomfield President /s/ Robert J. Hasling Secretary Registrar NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS. It is important to us that you are satisfied with this contract. If you are not satisfied, you may return the contract to us or to your agent within 10 days of its receipt. If you exercise this right, you will receive the greater of (a) the Accumulation Value of this contract or (b) the amount of purchase payments paid under this contract. We will pay this refund within 7 days after we receive your notice of cancellation. ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. - -------------------------------------------------------------------------------- The Minnesota Mutual Life Insurance Company 400 North Robert Street St. Paul, Minnesota 55101-2098 [LOGO] MINNESOTA MUTUAL LIFE - -------------------------------------------------------------------------------- FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT FIXED OR VARIABLE ANNUITY BENEFITS A PARTICIPATING CONTRACT - -------------------------------------------------------------------------------- 87-9154 Rev. 3-91 CONTRACT INDEX Alphabetical Index to the Provisions of Your Contract Page Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Allocation of Purchase Payments. . . . . . . . . . . . . . . . . . . . . . 3 Amount Payable at Death. . . . . . . . . . . . . . . . . . . . . . . . . . 8 Annuity Payment Options. . . . . . . . . . . . . . . . . . . . . . . . . . 5 Annuity Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Contract Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Misstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Purchase Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Withdrawal and Surrender . . . . . . . . . . . . . . . . . . . . . . . . . 4 YOUR CONTRACT INFORMATION - -------------------------------------------------------------------------------- ANNUITANT: John C. Doe ----------- DATE OF BIRTH: December 1, 1955 ---------------- OWNER: John C. Doe ----------- JURISDICTION: Your State ---------- CONTRACT NUMBER: 1-234-567 --------- CONTRACT DATE: October 1, 1991 --------------- ANNUITY COMMENCEMENT DATE: January 1, 2020 --------------- ANTICIPATED ANNUAL PURCHASE PAYMENT: $1,000.00 --------- - -------------------------------------------------------------------------------- FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT FIXED OR VARIABLE ANNUITY BENEFITS A PARTICIPATING CONTRACT - -------------------------------------------------------------------------------- 87-154 Rev. 3-91 Minnesota Mutual Life 1 DEFINITIONS - -------------------------------------------------------------------------------- When we use the following words, this is what we mean: THE ANNUITANT The person named on page 1 who may receive lifetime benefits under the contract. YOU, YOUR The owner of this contract. The owner may be the annuitant or someone else. The owner shall be that person named in the application. WE, OUR, US The Minnesota Mutual Life Insurance Company. CONTRACT DATE The effective date of this contract. It is also the date from which we determine contract anniversaries and contract years. CONTRACT ANNIVERSARY The same day and month as the contract date for each succeeding year of this contract. CONTRACT YEAR A period of one year beginning with the contract date or a contract anniversary. FUND The mutual fund or separate investment portfolio within a series mutual fund which is designated as an eligible investment for the separate account. VALUATION DATE Any date on which a fund is valued. VALUATION PERIOD The period between successive valuation dates measured from the time of one determination to the next. ACCUMULATION VALUE Your interest in this contract. It is composed of your interest in one or more sub-accounts of the separate account. Your interest in the sub-accounts shall be valued separately. The total of those values will be the accumulation value. SEPARATE ACCOUNT A separate investment account titled Minnesota Mutual Variable Annuity Account. This separate account was established by us for this class of contract under Minnesota law. The separate account is composed of several sub-accounts. The assets of the separate account are ours. Those assets are not subject to claims arising out of any other business in which we engage. 1940 ACT The Investment Company Act of 1940, as amended, or any similar successor federal legislation. WRITTEN REQUEST A request in writing signed by you. In some cases, we may provide a form for your use. We also may require that this contract be sent to our home office with your written request. PURCHASE PAYMENTS Amounts paid to us as consideration for the benefits provided by this contract. ANNUITY PAYMENTS Payments made at regular intervals to the annuitant or any other payee. Annuity payments will be due and payable only on the first day of a calendar month. FIXED ANNUITY Annuity payments of equal amounts during the payment period. VARIABLE ANNUITY Annuity payments which increase or decrease in amount to reflect the investment experience of the separate account and its sub-accounts. AGE The age of a person at nearest birthday. GENERAL INFORMATION - -------------------------------------------------------------------------------- WHAT IS YOUR AGREEMENT WITH US? This contract and the copy of the application attached to it contain the entire contract between you and us. Any statements made in the application either by you or the annuitant will, in the absence of fraud, be considered representations and not warranties. Also, any statement made either by you or the annuitant will not be used to avoid this contract or defend against a claim under this contract unless the statement is contained in the application. No change or waiver of any of the provisions of this contract will be valid unless made in writing by us. It must also be signed by our president, a vice president, our secretary or an assistant secretary. No agent or other person has the authority to change or waive any provision of this contract. Any additional agreement attached to this contract will become a part of this contract and will be subject to all the terms and conditions of this contract unless we state otherwise in the agreement. HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT? You can exercise all the rights under this contract by making a written request to us. You have these rights during the annuitant's lifetime and before annuity payments begin. We will deal with you, unless this contract provides otherwise, on the basis that you have full ownership and control of this contract. HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT? Each year we will send you a report. This report will 2 Minnesota Mutual Life 87-9154 Rev. 3-91 summarize the year's transactions and will show the current accumulation value of this contract. It will also show the current accumulation unit values. The report will be as of a date within two months of its mailing. PURCHASE PAYMENTS - -------------------------------------------------------------------------------- WHERE DO YOU MAKE PURCHASE PAYMENTS? All purchase payments must be made at our home office. Our home office is at 400 North Robert Street, St. Paul, Minnesota 55101-2098. When we receive a purchase payment from you at our home office, we will send you a confirmation. WHEN DO YOU MAKE PURCHASE PAYMENTS? You may choose when to make purchase payments. ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS? Yes. It may be possible for you to arrange with your employer to make your purchase payments by payroll deduction. Or, under some plans, your employer may make purchase payments on your behalf. Also, your bank or other financial institution may consent to have your purchase payments automatically withdrawn from your account and paid directly to us. WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS? There are usually no deductions made from the purchase payments. However, we do reserve the right to make a deduction from purchase payments for state premium taxes, where applicable. HOW ARE PURCHASE PAYMENTS ALLOCATED? They are allocated among the sub-accounts of the separate account as you direct. Initially, you indicate your allocation in the application. Later, you may change your allocation for future purchase payments by giving us written notice. We will allocate purchase payments received without allocation instructions to the money market sub-account. ARE SEPARATE ACCOUNT OPTIONS AVAILABLE? The separate account currently is composed of the following sub-accounts: Stock Account Aggressive Growth Account Index Account Bond Account Mortgage Securities Account Money Market Account Managed Account Purchase payments may be applied to one or more of these sub-accounts or any other which may be established by us under the separate account for contracts of this class. We reserve the right to add, combine or remove any sub-accounts of the separate account. WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT? The separate account is divided into sub-accounts. For each sub-account, there is a fund for the investment of that sub-account's assets. Purchase payments are invested in the funds at their net asset value. If investment in a fund should no longer be possible or if we determine it becomes inappropriate for contracts of this class, we may substitute another fund. Substitution may be with respect to existing accumulation values, future purchase payments and future annuity payments. IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT? No. WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT? We reserve the right to transfer assets of the separate account, which we determine to be associated with the class of contracts to which this contract belongs, to another separate account. If this type of transfer is made, the term "separate account", as used in this contract, shall then mean the separate account to which the assets were transferred. We reserve the right, when permitted by law, to: (a) deregister the separate account under the Investment Company Act of 1940; (b) restrict or eliminate any voting rights of contract owners or other persons who have voting rights as to the separate account; and (c) combine the separate account with one or more other separate accounts. WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT? Purchase payments are credited to the contract on the valuation date coincident with or next following the day they are received in our home office. If they are received on a day which is not a valuation date, those amounts will be credited on the next valuation date. MAY YOU STOP MAKING PURCHASE PAYMENTS? Yes. You may stop making purchase payments at any time. If you stop making purchase payments, the contract remains in force as a paid-up annuity according to its terms. Its value may be applied to provide annuity payments at a later date. You may make purchase payments again at any time before annuity payments start unless the contract has been surrendered. MAY WE CANCEL THE CONTRACT? We may, in our discretion, cancel a contract if no purchase payments are made for a period of two or more full contract years and both (a) the total purchase payments made, less any withdrawals, and (b) the accumulation value of the contract, are less than $2,000. If such a cancellation takes place, we will pay the accumulation value to you. We will notify you of our intention to exercise these rights in our annual report. We will act 90 days after the contract anniversary unless an additional purchase payment is received before the end of that 90 day period. 3 Minnesota Mutual Life 87-9154 Rev. 3-91 CONTRACT CHARGES - -------------------------------------------------------------------------------- WHAT CHARGES MAY BE MADE UNDER THIS CONTRACT? An administrative charge is made directly to the separate account. On an annual basis it may be as much as .35% of the net asset value of the separate account. VALUATION - -------------------------------------------------------------------------------- HOW IS YOUR ACCUMULATION VALUE DETERMINED? Your accumulation value is your interest in one or more sub-accounts of the separate account. For each sub-account of the separate account, the accumulation value is equal to the accumulation units multiplied by the accumulation unit value. WHAT IS AN ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED? An accumulation unit is a measure of your interest in each sub-account of the separate account. The number of accumulation units credited with respect to each purchase payment is determined by dividing the portion of the purchase payment allocated to each sub-account by the then current accumulation unit value for that sub-account. This determination is made as of the valuation date coincident with or next following the date on which we receive your purchase payment at our home office. Once determined, the number of accumulation units will not be affected by changes in the accumulation unit value. However, the total number of accumulation units under this contract will be affected by future contract transactions. In addition, the units of each sub-account will be increased by subsequent purchase payments and transfers to that sub-account. The units of each sub-account will be decreased by transfers or withdrawals from that sub-account. The accumulation unit value will increase or decrease on each valuation date. The amount of any increase or decrease will depend on the net investment experience of the sub-account of the separate account. The value of an accumulation unit for each sub-account was originally set at $1.00 on the first valuation date. For any subsequent valuation date, its value is equal to its value on the preceding valuation date multiplied by the net investment factor for that sub-account for the valuation period ending on the subsequent valuation date. WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT? The net investment factor for a valuation period is the gross investment rate for such valuation period, less a deduction for the charges associated with the separate account at a rate of not more than .35% per annum. The gross investment rate is equal to: (a) the net asset value per share of a fund share held in the sub-account of the separate account determined at the end of the current valuation period; plus (b) the per-share amount of any dividend or capital gain distributions by the fund if the "ex-dividend" date occurs during the current valuation period; divided by (c) the net asset value per share of that fund share held in the sub-account determined at the end of the preceding valuation period. DIVIDENDS - -------------------------------------------------------------------------------- WILL THIS CONTRACT RECEIVE DIVIDENDS? Each year we determine if this contract will share in our divisible surplus. We call your share a dividend. HOW WILL DIVIDENDS BE APPLIED? Dividends, if received, may be added to the accumulation value or applied to increase annuity payments. If you so elect, they may be paid in cash. TRANSFER PROVISIONS - -------------------------------------------------------------------------------- WHAT IS A TRANSFER? A transfer is a reallocation of funds under this contract among the sub-accounts of the separate account. MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT? Yes. These transfers may be made on your written request. We will make the transfer on the basis of accumulation unit values on the valuation date coincident with or next following the day we receive the request at our home office. DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS? No. MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS? Yes. However, transfers are limited. They may be made only with respect to any variable annuity payments. See the Annuity Payment Options section of this contract. WITHDRAWAL AND SURRENDER - -------------------------------------------------------------------------------- MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT? Yes. At any time before annuity payments begin, you may request a partial withdrawal from the accumulation value. You must make a written request for any withdrawal, and it must be for at least $250. The accumulation value will be reduced by the amount withdrawn. Unless instructed otherwise by you, withdrawals will be made from each sub-account of the separate account in the same proportion that the value of your interest in the sub-account bears to your total accumulation value. Systematic withdrawal plans of a fixed amount or over a fixed period are also available. MAY YOU SURRENDER THE CONTRACT? Yes. At any time before annuity payments begin, you may surrender this contract for its accumulation value. It will be determined as of the valuation date coincident with or next following the date your written request is received at our home office. 4 Minnesota Mutual Life 87-9154 Rev. 3-91 HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID? We will pay these benefits in a single sum. However, if this contract is surrendered you may elect one of the annuity payment options, subject to the provisions of this contract. ANNUITY PROVISIONS - -------------------------------------------------------------------------------- WHEN DO ANNUITY PAYMENTS BEGIN? You must notify us in writing that annuity payments are to be made to the annuitant, when these payments are to begin, the form of the annuity and what annuity payment option has been selected. We must receive this notice at least 30 days in advance of the date annuity payments are to begin. This contract permits annuity payments to begin on the first day of any month after the 50th birthday and before the 75th birthday of the annuitant. However, the beginning date for annuity payments must be consistent with any restrictions applicable to the plan under which this contract may have been purchased. WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS? The accumulation value will be applied to provide annuity payments. WHAT TYPES OF ANNUITIES ARE AVAILABLE? Both fixed and variable annuities are available under this contract. ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS? Yes. We require that the first monthly fixed or variable annuity payment must be at least $20 unless a payment of a smaller minimum amount is required by law. If the first monthly fixed or variable annuity payment would be less than the amount, we reserve the right to pay you the accumulation value in a lump sum. This payment would be in lieu of all other rights under this contract. WHAT INFORMATION MAY WE NEED? We reserve the right to require proof satisfactory to us of the age of the annuitant and of any joint annuitant before payments begin. We may also require proof that a person is alive before making any annuity payment which is based on the survival of that person. IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN? If you do not elect another date, annuity payments will begin on the later of: the first day of the month immediately following the 65th birthday of the annuitant, or the first day of the month immediately following the fifth contract anniversary. IF YOU FAIL TO ELECT AN ANNUITY OPTION, UNDER WHAT OPTION WILL ANNUITY PAYMENTS BE MADE? If you do not elect an annuity payment option, we will make monthly payments on the basis of Option 2A, a life annuity with a period certain of 120 months. IF YOU FAIL TO ELECT AN ANNUITY FORM, HOW WILL ANNUITY PAYMENTS BE MADE? If you do not elect an annuity payment form, we will make annuity payments in the form of a variable annuity. MUST AN ANNUITY PAYMENT OPTION BE ELECTED? No. You may elect a lump sum payment instead. If you do so, you and the annuitant shall have no further rights under this contract. ANNUITY PAYMENT OPTIONS - -------------------------------------------------------------------------------- WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE? The following annuity payment options are available: Option 1 - Life Annuity - annuity payments payable monthly for the lifetime of the annuitant, ending with the last payment due prior to the annuitant's death. Option 2 - Life Annuity with a Period Certain - annuity payments payable monthly for the lifetime of the annuitant; provided, if the annuitant dies before payments have been made for the entire period certain, those remaining certain payments will be made to the beneficiary. The period certain may be for 120 months (Option 2A); for 180 months (Option 2B); or for 240 months (Option 2C). Option 3 - Joint and Last Survivor Annuity - annuity payments payable monthly for the joint lifetimes of the annuitant and a designated joint annuitant. The payments end with the last payment due before the survivor's death. If this option is elected, the contract and payments shall be the joint property of the annuitant and the designated joint annuitant. Option 4 - Fixed Period Annuity - annuity payments payable monthly for a fixed period of from one to twenty years. If the annuitant dies before all payments for the fixed period are received, payments will continue for the remainder of the fixed period to the beneficiary. ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE? Yes. Other options may be available as agreed upon between you and us. MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT INSTEAD OF THE REMAINING ANNUITY PAYMENTS? Yes. The beneficiary may elect to have the present value of the remaining payments paid in a lump sum. This right exists under Options 2 and 4. The lump sum payment will be the commuted value of the remaining payments. It will be based on the then current dollar amount of one payment, using the same interest rate which served as a basis for the annuity. HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED? The dollar amount of the first monthly variable annuity payment is determined by applying the available value (after deduction of any premium taxes not previously deducted) to the table below using the adjusted age of the annuitant and any joint annuitant. A number of annuity units is then determined by dividing this dollar amount by 5 Minnesota Mutual Life 87-9154 Rev. 3-91 the then current annuity unit value. Thereafter, the number of annuity units remains unchanged during the period of annuity payments. This determination is made separately for each sub-account of the separate account. The number of annuity units is based upon the available value in each sub-account as of the date annuity payments are to begin. The dollar amount determined for each sub-account will then be aggregated for purposes of making payment. The dollar amount of the second and later variable annuity payments is equal to the number of annuity units determined for each sub-account times the annuity unit value for that sub-account as of the due date of the payment. This amount may increase or decrease from month to month. The value of an annuity unit for a sub-account is determined each month as of the first day of the month. The value is equal to the annuity unit value for that sub-account as of the first day of the preceding month times the product of (a) .997137, and (b) a sub-account investment factor. This investment factor is the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the preceding month divided by the accumulation unit value for that sub-account on the valuation date next following the fourteenth day of the second preceding month. For any date other than the first of a month, the annuity unit value is that on the first day of the next month. HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED? The tables shown below are used to determine the amount of guaranteed monthly fixed annuity payments. They show the dollar amount of each payment that can be provided with each $1,000 of available value, after the deduction of any applicable premium taxes not previously deducted. Amounts shown here are based on the Progressive Annuity Table with interest at the rate of 3.5% per annum, assuming births in the year 1900 and with an age setback of eight years. The amount of each payment depends upon the adjusted age of the annuitant and any joint annuitant. The adjusted age is determined from the actual age nearest birthday at the time the first payment is due in the following manner: CALENDAR YEAR ADJUSTED AGE IS OF BIRTH IS EQUAL TO - ---------------- ------------------ Prior to 1900 Age Plus 1 1900 - 1919 Actual Age 1920 - 1939 Age Minus 1 1940 - 1959 Age Minus 2 1960 and Later Age Minus 3 DOLLAR AMOUNT OF THE FIRST MONTHLY PAYMENT WHICH IS PURCHASED WITH EACH $1,000 OF VALUE APPLIED (Rates shown for Options 1,2 and 3 are for an annuity with the first payment due immediately. They must be adjusted for any applicable state premium taxes and the contract fee.) ADJUSTED AGE OF ANNUITANT SINGLE LIFE ANNUITIES ------------ ------------------------------------------------------ OPTION 1 OPTION 2A OPTION 2B OPTION 2C -------- --------- --------- --------- 50 $4.15 $4.14 $4.11 $4.08 51 4.21 4.20 4.17 4.12 52 4.28 4.26 4.22 4.18 53 4.34 4.32 4.28 4.23 54 4.42 4.39 4.35 4.28 55 4.49 4.46 4.41 4.34 56 4.57 4.53 4.48 4.40 57 4.65 4.61 4.55 4.46 58 4.74 4.69 4.62 4.52 59 4.84 4.78 4.70 4.58 60 4.94 4.87 4.78 4.65 61 5.04 4.97 4.87 4.71 62 5.16 5.07 4.95 4.78 63 5.28 5.18 5.04 4.85 64 5.40 5.29 5.13 4.91 65 5.54 5.41 5.23 4.98 66 5.69 5.53 5.33 5.05 67 5.84 5.66 5.43 5.11 68 6.01 5.79 5.53 5.18 69 6.18 5.94 5.63 5.24 70 6.37 6.08 5.74 5.30 71 6.57 6.24 5.84 5.36 72 6.79 6.40 5.95 5.41 73 7.02 6.57 6.05 5.46 74 7.27 6.74 6.15 5.51 75 7.54 6.91 6.26 5.55 6 Minnesota Mutual Life 87-9154 Rev. 3-91 OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY ADJUSTED AGE OF JOINT ANNUITANT* ADJUSTED AGE OF ANNUITANT* ---------------- --------------------------------------------------- 55 60 62 65 67 70 75 ----- ----- ----- ----- ----- ----- ----- 54 $3.98 $4.09 $4.13 $4.19 $4.22 $4.26 $4.32 59 4.10 4.27 4.34 4.43 4.48 4.55 4.66 61 4.15 4.34 4.42 4.52 4.59 4.68 4.81 64 4.21 4.44 4.53 4.67 4.76 4.88 5.05 66 4.25 4.50 4.61 4.76 4.87 5.01 5.23 69 4.30 4.59 4.71 4.90 5.03 5.22 5.50 74 4.37 4.71 4.86 5.10 5.27 5.54 5.98 * Dollar amounts of the first monthly payments for ages not shown in this table will be calculated on the same basis as those shown and may be obtained from us. OPTION 4 - FIXED PERIOD ANNUITY FIXED PERIOD DOLLAR AMOUNT FIXED PERIOD DOLLAR AMOUNT (YEARS) OF PAYMENT (YEARS) OF PAYMENT ------------ ------------- ------------ ------------- 1 $84.65 11 $9.09 2 43.05 12 8.46 3 29.19 13 7.94 4 22.27 14 7.49 5 18.12 15 7.10 6 15.35 16 6.76 7 13.38 17 6.47 8 11.90 18 6.20 9 10.75 19 5.97 10 9.83 20 5.75 WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES? Not necessarily. If, when annuity payments are elected, we are using tables of annuity purchase rates for this class of contract which would result in larger annuity payments, we will use those tables instead. ONCE ANNUITY PAYMENTS BEGIN, MAY A FIXED ANNUITY OPTION BE CHANGED? No. ONCE ANNUITY PAYMENTS BEGIN, MAY A VARIABLE ANNUITY OPTION BE CHANGED? No. MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD? Yes. Amounts held as annuity reserves may be transferred among the variable annuity sub-accounts during the annuity period. Annuity reserves may also be transferred from a variable annuity to a fixed annuity during this time. HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A FIXED ANNUITY? The change must be by written request. The annuitant and joint annuitant, if any, must make such an election. HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE? A transfer will be made on the basis of annuity unit values. The number of annuity units from the sub-account being transferred will be converted to a number of annuity units in the new sub-account. The annuity payment option will stay the same. After this conversion, a number of annuity units in the new sub-account will be payable under the elected option. The first payment after conversion will be of the same amount as it would have been without the transfer. The number of annuity units will be set at that number of units which are needed to pay that same amount on the transfer date. ARE THERE RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS? Yes. The transfer of an annuity reserve amount from any sub-account must be at least equal to: 1) $5,000; or, 2) the entire amount of the reserve remaining in that sub-account. In addition, annuity payments must have been in effect for a period of 12 months before a change may be made. Such transfers can be made only once every 12 months. Your written request for an annuity transfer must be received by us more than 30 days in advance of the due date of the annuity payment subject to the transfer. 7 Minnesota Mutual Life 87-9154 Rev. 3-91 MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED ANNUITY? Yes. However, the restrictions which apply to annuity sub-account transfers will apply here as well. The amount transferred will then be applied to provide a fixed annuity amount. This amount will be based upon the adjusted age of the annuitant and any joint annuitant at the time of the transfer. The payment option will remain the same. MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY? No. AMOUNT PAYABLE AT DEATH - -------------------------------------------------------------------------------- WHAT AMOUNT IS PAYABLE AT DEATH? If you die before annuity payments have started, we will pay the accumulation value. The accumulation value will be determined as of the valuation date coincident with or next following the day we receive due proof of death at our home office. If the annuitant dies after annuity payments have started, we will pay whatever amount may be called for by the terms of the annuity payment option selected. The remaining interest in the contract must be distributed at least as rapidly as under the option in effect at the annuitant's death. IS THERE A GUARANTEED DEATH BENEFIT? Yes. This contract has a guaranteed death benefit if you die before annuity payments have started. The death benefit shall be equal to the greater of: (1) the amount of the accumulation value payable at death; or (2) the amount of the initial purchase payment paid to us as consideration for this contract, less all contract withdrawals. TO WHOM WILL WE PAY THOSE BENEFITS? When we receive due proof of death satisfactory to us, we will pay the amount payable at death under this contract to the beneficiary or beneficiaries. The beneficiary will be the person or persons named in the application for this contract unless you subsequently change the beneficiary. In that event, we will pay the amount payable at death to the beneficiary named in your last change of beneficiary request as provided in this contract. HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID? We will pay that amount in a single sum unless another form of settlement has been requested and agreed to by us. All payments by us are payable at our home office. Proof of any claim under this contract must be submitted in writing to us at our home office. WHEN MUST DEATH BENEFITS BE PAID? If you die on or before the date on which annuity payments begin and if the designated beneficiary is a person other than your spouse, that beneficiary may elect an annuity option measured by a period not longer than that beneficiary's life expectancy only so long as annuity payments begin not later than one year after your death. If there is no designated beneficiary, then the entire interest in this contract must be distributed within five years after your death. If the annuitant dies after annuity payments have begun, any payments received by a non-spouse beneficiary must be distributed as least as rapidly as under the method elected by the annuitant as of the date of death. If any portion of the contract interest is payable to your designated beneficiary who is your surviving spouse, that spouse shall be treated as the contract owner for purposes of: (a) when payments must begin; and (2) the time of distribution in the event of your spouse's death. Payments must be made in substantially equal installments. WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE ANNUITANT? If a beneficiary dies before the annuitant, that beneficiary's interest in this contract ends with that beneficiary's death. Only those beneficiaries who survive will be eligible to share in a death benefit. If no beneficiary survives the annuitant prior to the date an annuity begins we will pay the accumulation value of this contract to the executors or administrators of the annuitant's estate. CAN YOU CHANGE THE BENEFICIARY? Yes. You can file a written request with us to change the beneficiary. Your written request will not be effective until it is recorded in our home office records. After it has been recorded, it will take effect as of the date you signed the request. However, if the annuitant dies before the request has been recorded, the request will not be effective as to those death proceeds we have paid before the request was recorded in our home office records. ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- CAN YOU ASSIGN THIS CONTRACT? Unless this contract provides otherwise, you may assign all rights to this contract during the lifetime of the annuitant. We will not be bound by any assignment until we have recorded written notice of it at our home office. We are not responsible for the validity of any assignment. An assignment will not apply to any payment or action made by us before it was recorded. Any proceeds which become payable to an assignee will be payable in a single sum. Any claim made by an assignee will be subject to proof of the assignee's interest and the extent of the assignment. If this contract is issued pursuant to a retirement plan which receives favorable tax treatment under the provisions of Section 401, 403, 404, 408 or 457 of the Internal Revenue Code, then, it may not be assigned, pledged or otherwise transferred except under such conditions as may be allowed under applicable law. ARE THE CONTRACT BENEFITS PROTECTED? Yes. To the extent permitted by law, no benefit provided by this contract will be subject to any creditor's claim or process of law. 8 Minnesota Mutual Life 87-9154 Rev. 3-91 HOW WILL BENEFITS BE DETERMINED? Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit described by this contract shall be calculated as of the date the provisions of the contract are exercised. WHAT IF A PERSON'S AGE IS MISSTATED? If a person's age has been misstated, the amount payable under this contract as an annuity will be that amount which would have been paid based upon that person's correct age. In the case of an overpayment, we may either deduct the required amount from that person's payments under this contract; or, we may require you to pay us in cash; or we may do both until we are fully repaid. In the case of an underpayment, we will pay the required amount with the next payment. WHAT INFORMATION MUST YOU PROVIDE? You must provide any other information we need to administer this contract. If you cannot do so, we may ask the person concerned for that information. We shall not be liable for any payment based upon information given to us in error or not given to us. DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS? Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation values and the paid-up annuity benefit described by this contract are not less than the minimum benefits required by any statute of the state in which this contract is delivered. WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT? Reserves held by us for annuity payments under this contract shall not be less than those reserves required by the law in the state in which this contract is delivered. MAY THIS CONTRACT BE MODIFIED? This contract may be modified at any time by written agreement between you and us. However, no such modification will adversely affect the rights of an annuitant under this contract unless the modification is made to comply with a law or government regulation. Such modification will be in writing. You will have the right to accept or reject such a modification. HOW DOES THIS CONTRACT RELATE TO THE OWNERSHIP OF THE SEPARATE ACCOUNT? We have exclusive and absolute ownership of the separate account. WHEN WILL LUMP SUM PAYMENTS BE MADE? Usually, we will make payment within seven days after payment is called for by the terms of the contract. However, we reserve the right to defer payment for such period as may be allowed under the 1940 Act. DO YOU HAVE ADDITIONAL VOTING RIGHTS? Yes. You may direct us with respect to the voting rights of fund shares held by us and attributable to this contract. 9 Minnesota Mutual Life 87-9154 Rev. 3-91 [LOGO] MINNESOTA MUTUAL LIFE - -------------------------------------------------------------------------------- FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT FIXED OR VARIABLE ANNUITY BENEFITS A PARTICIPATING CONTRACT - -------------------------------------------------------------------------------- EX-99.C5A 14 EXHIBIT 99.C5A
ROUTE TO: 19-3669 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ [LOGO] APPLICATION FOR PARTICIPATION MINNESOTA UNIVERSITY OF MINNESOTA MUTUAL LIFE FACULTY RETIREMENT PLAN - ------------------------------------------------------------------------------------------------------------------------------------ 400 North Robert Street - St. Paul, Minnesota 55101-2098 - ------------------------------------------------------------------------------------------------------------------------------------ NAME SOCIAL SECURITY NUMBER EFFECTIVE DATE - ------------------------------------------------------------------------------------------------------------------------------------ STREET BIRTHDATE / / Male RED/DED / / Female - ------------------------------------------------------------------------------------------------------------------------------------ CITY, STATE, ZIP BENEFICIARY DESIGNATION - ------------------------------------------------------------------------------------------------------------------------------------ NAME OF BENEFICIARY (GIVE FULL NAME) RELATIONSHIP - ------------------------------------------------------------------------------------------------------------------------------------ ALLOCATION - ------------------------------------------------------------------------------------------------------------------------------------ I elect that total contributions made for retirement annuity coverage on and after the effective date specified above be applied in the following manner: PLEASE SPECIFY PERCENTAGE ELECTED FOR EACH ACCOUNT. TOTAL ELECTIONS MUST EQUAL 100% I. JOINT GROUP ANNUITY ---------------------------------------------------------------------- GENERAL ACCOUNT (FIXED) SEPARATE ACCOUNT A % % ---------------------------------------------------------------------- II. INDIVIDUAL ANNUITY SUB-ACCOUNTS ---------------------------------------------------------------------- BOND MONEY MARKET % % ---------------------------------------------------------------------- PLEASE NOTE: ALL CONTRIBUTIONS WILL BE DEPOSITED INTO THE GENERAL ACCOUNT (FIXED) UNTIL THIS FORM IS COMPLETED AND RETURNED. - ------------------------------------------------------------------------------------------------------------------------------------ SIGNATURE OF PARTICIPANT DATE OF APPLICATION X - ------------------------------------------------------------------------------------------------------------------------------------ IF THE ALLOCATION IS 100% GENERAL ACCOUNT (FIXED), IT IS NOT NECESSARY TO COMPLETE THE REMAINDER OF THE FORM. - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT SUITABILITY - TO BE COMPLETED BY PARTICIPANT: NASD rules require inquiry concerning the financial conditions of individuals applying under a variable annuity contract. You are urged to supply such information in order for us to make an informed judgment as to the suitability of the investment for you. You may choose not to provide this information, in which case, the Registered Principal will provide the data based upon information known by the Registered Principal. - ------------------------------------------------------------------------------------------------------------------------------------ 1) MARITAL STATUS 2) DEPENDENTS 3) CURRENT ESTIMATED 4) FACE AMOUNT OF 5) OTHER RETIREMENT RESOURCES / / Single / / Spouse Family Income $_________ Life Insurance / / Social Security / / Married / / Children Family Assets $_________ $____________________ / / Insurance or Annuity / / Widowed AGES: Family Debt $_________ Contracts / / Pension Benefit / / Other_____________________ - ------------------------------------------------------------------------------------------------------------------------------------ / / I HAVE PROVIDED THIS INFORMATION / / I DO NOT WISH TO PROVIDE THIS INFORMATION - ------------------------------------------------------------------------------------------------------------------------------------ Would you like us to send you a Statement of Additional Information, referred to in the Prospectuses for the Variable Annuity Account and the Series Fund? / / Yes / / No I represent that the statements and answers in this application are full, complete, and true to the best of my knowledge. I agree that they are to be considered the basis of any contract issued to me. I ACKNOWLEDGE RECEIPT OF A CURRENT VARIABLE ANNUITY ACCOUNT PROSPECTUS AND A CURRENT PROSPECTUS FOR THE MIMLIC SERIES FUND, INC. I UNDERSTAND THAT ALL PAYMENTS AND VALUES OF ANY CONTRACT ISSUED, WHEN BASED UPON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. - ------------------------------------------------------------------------------------------------------------------------------------ SIGNATURE OF PARTICIPANT DATE OF APPLICATION X - ------------------------------------------------------------------------------------------------------------------------------------ TO BE COMPLETED BY HOME OFFICE - ------------------------------------------------------------------------------------------------------------------------------------ ACCEPTED BY REGISTERED PRINCIPAL DATE CONTRACT NUMBER - ------------------------------------------------------------------------------------------------------------------------------------
87-9155 Rev. 6-87 EX-99.C5B 15 EXHIBIT 99.C5B
- ------------------------------------------------------------------------------------------------------------------------------------ - ----------------------------------------------------------------------------------------------------------------------------------- [Logo] APPLICATION FOR PARTICIPATION MINNESOTA UNDER THE UNIVERSITY OF MINNESOTA MUTUAL LIFE OPTIONAL ANNUITY PLAN - ----------------------------------------------------------------------------------------------------------------------------------- Pension Administration - 400 North Robert Street - St, Paul, Minnesota 55101-2098 - ----------------------------------------------------------------------------------------------------------------------------------- CONTRACTHOLDER CONTRACT NUMBER ROUTE TO: 19-3669 - ----------------------------------------------------------------------------------------------------------------------------------- NAME OF PARTICIPANT (First, Middle, Last) / / Male BIRTHDATE (Mo., Day, Year) SOCIAL SECURITY NUMBER / / Female - ----------------------------------------------------------------------------------------------------------------------------------- PARTICIPANT'S ADDRESS (Street, City, State, Zip) - ----------------------------------------------------------------------------------------------------------------------------------- BENEFICIARY DESIGNATION NAME OF BENEFICIARY (GIVE FULL NAME) RELATIONSHIP - ----------------------------------------------------------------------------------------------------------------------------------- ALLOCATION I elect to participate in the retirement annuity coverage available under the Optional Retirement Annuity Plan. Such participation shall be to the extent authorized by present or future salary reduction agreements entered into for this specific purpose. PLEASE SPECIFY PERCENTAGE ELECTED FOR EACH ACCOUNT. TOTAL ELECTIONS MUST EQUAL 100%. I. JOINT GROUP ANNUITY ----------------------------------------------------------------------- GENERAL ACCOUNT (FIXED) % ----------------------------------------------------------------------- II. INDIVIDUAL ANNUITY SUB-ACCOUNTS ----------------------------------------------------------------------- STOCK INDEX AGGRESSIVE GROWTH BOND % % % % ----------------------------------------------------------------------- MONEY MARKET MORTGAGE SECURITIES MANAGED ACCOUNT % % % ----------------------------------------------------------------------- PLEASE NOTE: ALL CONTRIBUTIONS WILL BE DEPOSITED INTO THE GENERAL ACCOUNT (FIXED) UNTIL THIS FORM IS COMPLETED AND RETURNED. - ----------------------------------------------------------------------------------------------------------------------------------- SIGNATURE OF PARTICIPANT DATE OF APPLICATION X - ----------------------------------------------------------------------------------------------------------------------------------- IF THE ALLOCATION IS 100% GENERAL ACCOUNT (FIXED), IT IS NOT NECESSARY TO COMPLETE THE REMAINDER OF THE FORM. INVESTMENT SUITABILITY - TO BE COMPLETED BY PARTICIPANT: NASD rules require inquiry concerning the financial conditions of individuals applying under a variable annuity contract. You are urged to supply such information in order for us to make an informed judgment as to the suitability of the investment for you. You may choose not to provide this information, in which case, the Registered Principal will provide the data based upon information known by the Registered Principal. - ----------------------------------------------------------------------------------------------------------------------------------- 1) MARITAL STATUS 2) DEPENDENTS 3) CURRENT ESTIMATED 4) FACE AMOUNT OF 5) OTHER RETIREMENT RESOURCES / / Single / / Spouse Family Income $_________ Life Insurance / / Social Security / / Pension Benefit / / Married / / Children Family Assets $_________ $________________ / / Insurance or Annuity Contracts / / Widowed AGES: Family Debt $_________ / / Other _______________________________ - ----------------------------------------------------------------------------------------------------------------------------------- / / I HAVE PROVIDED THIS INFORMATION / / I DO NOT WISH TO PROVIDE THIS INFORMATION - ----------------------------------------------------------------------------------------------------------------------------------- Would you like us to send you a Statement of Additional Information, referred to in the Prospectuses for the Variable Annuity Account and the Series Fund? / / Yes / / No I represent that the statements and answers in this application are full, complete, and true to the best of my knowledge. I agree that they are to be considered the basis of any contract issued to me. I ACKNOWLEDGE RECEIPT OF A CURRENT VARIABLE ANNUITY ACCOUNT PROSPECTUS AND A CURRENT PROSPECTUS FOR THE MIMLIC SERIES FUND, INC. I UNDERSTAND THAT ALL PAYMENTS AND VALUES OF ANY CONTRACT ISSUED, WHEN BASED UPON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. - ----------------------------------------------------------------------------------------------------------------------------------- SIGNATURE OF PARTICIPANT DATE OF APPLICATION X - ----------------------------------------------------------------------------------------------------------------------------------- TO BE COMPLETED BY HOME OFFICE - ----------------------------------------------------------------------------------------------------------------------------------- ACCEPTED BY REGISTERED PRINCIPAL DATE CONTRACT NUMBER - -----------------------------------------------------------------------------------------------------------------------------------
87-9156 Rev. 6-87 EX-99.C5C 16 EXHIBIT 99.C5C MINNESOTA MUTUAL VARIABLE ANNUITY APPLICATION (MultiOption Annuity) The Minnesota Mutual Life Insurance Company - Annuity Services - 400 Robert Street North - St. Paul, Minnesota 55101-2098 - Toll Free 1-800-362-3141 - -------------------------------------------------------------------------------------------------------------------- OWNER (PLEASE PRINT) ANNUITANT (IF OTHER THAN OWNER) - -------------------------------------------------------------------------------------------------------------------- NAME NAME - -------------------------------------------------------------------------------------------------------------------- ADDRESS ADDRESS - -------------------------------------------------------------------------------------------------------------------- CITY, STATE, ZIP CITY, STATE, ZIP - -------------------------------------------------------------------------------------------------------------------- DATE OF BIRTH SEX TAXPAYER I.D.(Soc Sec # or EIN) DATE OF BIRTH SEX SOCIAL SECURITY NUMBER / /M / /F / /M / /F - -------------------------------------------------------------------------------------------------------------------- JOINT OWNER (OPTIONAL - MUST BE SPOUSE OF OWNER) JOINT ANNUITANT (OPTIONAL - MUST BE SPOUSE OF ANNUITANT) - -------------------------------------------------------------------------------------------------------------------- NAME NAME - -------------------------------------------------------------------------------------------------------------------- DATE OF BIRTH SEX SOCIAL SECURITY NUMBER DATE OF BIRTH SEX SOCIAL SECURITY NUMBER / /M / /F / /M / /F - -------------------------------------------------------------------------------------------------------------------- BENEFICIARY - -------------------------------------------------------------------------------------------------------------------- CLASS NAME RELATIONSHIP DATE OF BIRTH SEX SOCIAL SECURITY NUMBER - -------------------------------------------------------------------------------------------------------------------- / /M / /F - -------------------------------------------------------------------------------------------------------------------- / /M / /F - -------------------------------------------------------------------------------------------------------------------- EMPLOYER (IF OTHER THAN OWNER) - -------------------------------------------------------------------------------------------------------------------- NAME ADDRESS CITY, STATE, ZIP - -------------------------------------------------------------------------------------------------------------------- TYPE OF PLAN (PLEASE CHECK ONLY ONE BOX) - SEE REVERSE FOR ADDITIONAL INSTRUCTIONS - -------------------------------------------------------------------------------------------------------------------- / / Non-Qualified / / Salary Reduction Simplified Employee Pension (SARSEP) / / Under the ______ (State) Uniform Transfers / / Tax Sheltered Annuity (IRC Section 403(b)) to Minor Act Annual Earned Income $______________ / / Individual Retirement Annuity (IRA) / / Qualified Retirement Plan (IRC Section 401) for tax year ________ / / Public Employee Deferred Compensation / / IRA Rollover (IRC Section 457) / / IRA Transfer from existing IRA / / Non-Qualified Deferred Compensation / / Simplified Employee Pension (SEP) - -------------------------------------------------------------------------------------------------------------------- TYPE OF CONTRACT AND AMOUNT OF PAYMENT PAYMENT METHOD - -------------------------------------------------------------------------------------------------------------------- / / MultiOption SELECT Flexible Payment Deferred / / APP (Automatic Payment Plan) Variable Annuity of $________________ per Commencing on Month _________ Day __________ __________________ or, $_______________ as a / / Bill employer commencing on Month __________ and single payment. continuing / / MultiOption Flexible Payment Deferred Variable / /Annually (1) / /Semi-Annually (2) / /Quarterly (4) Annuity of $_______________ per __________________ / /Monthly (12) / /Semi-Monthly (24) / /Bi-Weekly(26) or, $______________ as a single payment. / / Individual Billing. Commencing on the 1st day / / MultiOption Single Payment Deferred Variable of (month) ____________ and continuing Annuity of $______________ - $5,000 minimum. / / Quarterly / / Semi-Annually / / Annually - -------------------------------------------------------------------------------------------------------------------- PURCHASE PAYMENT ACCOUNT ALLOCATION REPLACEMENT - -------------------------------------------------------------------------------------------------------------------- _____% General - not _____% Bond Will this contract applied for replace or change an available for _____% Money Market existing insurance or annuity contract? MultiOption SELECT _____% Asset Allocation _____% Maturing Government _____% Mortgage Securities / / Yes* / / No Bond - 1998 _____% Index 500 _____% Maturing Government _____% Capital Appreciation *If yes, please provide your contract number and the Bond - 2002 _____% International Stock name of the insurance company under Special Instructions. _____% Maturing Government _____% Small Company --------------------------------------------------------- Bond - 2006 _____% Value Stock The Prospectuses for the Variable Annuity Account and the _____% Maturing Government Fund each refer to a Statement of Additional Information. Bond - 2010 Would you like us to send you a copy? / / Yes / / No _____% Growth - -------------------------------------------------------------------------------------------------------------------- SPECIAL INSTRUCTIONS OR REMARKS - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- OWNER/ANNUITANT SIGNATURES - -------------------------------------------------------------------------------------------------------------------- I represent that the statements and answers in this application are full, complete and true to the best of my knowledge. I agree that they are to be considered the basis of any contract issued to me. I ACKNOWLEDGE RECEIPT OF A CURRENT VARIABLE ANNUITY ACCOUNT PROSPECTUS AND A CURRENT PROSPECTUS FOR THE MIMLIC SERIES FUND, INC. I UNDERSTAND THAT ALL PAYMENTS AND VALUES OF ANY CONTRACT ISSUED, WHEN BASED UPON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. - -------------------------------------------------------------------------------------------------------------------- SIGNED AT (City, State) DATE AMOUNT REMITTED WITH APPLICATION - -------------------------------------------------------------------------------------------------------------------- SIGNATURE OF OWNER SIGNATURE OF ANNUITANT (if other than owner) X X - -------------------------------------------------------------------------------------------------------------------- SIGNATURE OF JOINT OWNER SIGNATURE OF JOINT ANNUITANT (if other than joint owner) X X - -------------------------------------------------------------------------------------------------------------------- TO BE COMPLETED BY AGENT - -------------------------------------------------------------------------------------------------------------------- To the best of my knowledge this contract / / will / / will not replace or change an existing insurance or annuity contract. I certify that a current prospectus was delivered. No written sales materials were used other than those furnished by the Home Office. - -------------------------------------------------------------------------------------------------------------------- REPRESENTATIVE NAME (PRINT) REPRESENTATIVE SIGNATURE AGENCY CODE AGENT'S CODE X % - -------------------------------------------------------------------------------------------------------------------- X % - -------------------------------------------------------------------------------------------------------------------- TO BE COMPLETED BY DEALER - -------------------------------------------------------------------------------------------------------------------- DEALER NAME DATE SIGNATURE OF AUTHORIZED DEALER X - -------------------------------------------------------------------------------------------------------------------- THIS APPLICATION BECOMES EFFECTIVE ONLY UPON ITS ACCEPTANCE BY MIMLIC SALES CORPORATION - -------------------------------------------------------------------------------------------------------------------- ACCEPTED BY DATE CONTRACT NUMBER CASE NUMBER - -------------------------------------------------------------------------------------------------------------------- 84-9093 Rev. 2-94
IMPORTANT INSTRUCTIONS 1. ATTACH NEW ACCOUNT INFORMATION, F. 38487 2. COMPLETE ALL ITEMS ON THE APPLICATION 3. IF YOU ARE REQUESTING: PLEASE SUBMIT: * TSA contract - TSA Withdrawal Disclosure F. 38754 - Salary Modification Agreement F. 23251 - Calculation worksheet if the contribution is to exceed the maximum exclusion allowance * Qualified Retirement Plan - Employee Benefit Plan Statement F. 23273 * SEP contract - Completed IRS form 5305-SEP or 5305A-SEP or - Prototype Request and Document Services Agreement and service fee * Immediate Annuity contract - Variable Annuity Service Request F. 35264 (Includes W-4P. If Deferred Compensation, submit W-4) - Proof of age for annuitant(s) if a life option is selected (Copy of driver's license or birth certificate) * Automatic Payment Plan (APP) - APP Authorization F. 25744.2 - Voided Check * Systematic Dollar Cost Averaging - Variable Annuity Service Request F. 35264 * Systematic Withdrawal - Variable Annuity Service Request F. 35264 * Replacement of another life insurance or annuity contract - Appropriate replacement forms as required by the state of jurisdiction * 1035 Exchange (non-qualified) - Agreement for Exchange F. 32059 - Original contract * Transfer (Available for use with transfers from - Transfer Authorization F. 28325 TSA to TSA or IRA/SEP to IRA/SEP only) * Direct Rollover (Client initiated distribution) - Request for Direct Rollover F. 45256 (send to existing institution) * MultiOption Annuity Exchange - Exchange Authorization F. 35079 If more than one beneficiary is specified, indicate the class of each. All living Class 1 beneficiaries receive an equal share of the death proceeds. If no Class 1 beneficiaries are living, all living Class 2 beneficiaries receive an equal share and so on. Class 1 beneficiaries are considered the primary beneficiaries. Class 2 beneficiaries and so on, are considered the contingent beneficiaries.
EX-99.C6A 17 EXHIBIT 99.C6A RE-INCORPORATION OF "THE BANKERS LIFE ASSOCIATION OF MINNESOTA" and Change of Name to "THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY" (as adopted on August 5, 1901) "Resolved, that THE BANKERS LIFE ASSOCIATION OF MINNESOTA, hereby authorizes and declares its Re-incorporation, and does hereby Re-incorporate under and by virtue of Chapter One Hundred and Seventy-five (175), as amended, of the General Laws of the State of Minnesota for the year Eighteen Hundred and Ninety-five entitled 'An Act to Revise and Codify the Insurance Laws of the State'; and to that end does hereby adopt the following Articles of Incorporation, in lieu of, and as a substitute for, any and all Articles of Incorporation, heretofore existing, viz: ARTICLE I. The future corporate name of this corporation is THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY. ARTICLE II. The location and Home Office of the Company is and shall be in the City of Saint Paul, State of Minnesota. ARTICLE III. This Company is re-incorporated for the purpose of transacting and it proposes, upon the Mutual Plan, to transact, the business of, and to make, insurance upon the lives of individuals, and every insurance appertaining thereto or connected therewith; to grant, purchase or dispose of annuities and endowments of any kind whatsoever; and to take risks, and insure, against accident to or sickness of persons. It is proposed and intended that the duration and continuance of this corporation and its corporate powers shall be perpetual, and that it shall have perpetual succession. - 2 - ARTICLE IV. By-laws not in conflict herewith or with the law, may be adopted, and from time to time amended, repealed or abrogated in whole or in part, by the Board of Trustees. ARTICLE V. Except as herein otherwise expressly provided, all of the corporate powers of the company shall be exercised and the amount of compensation of Officers and Trustees shall be regulated by a Board of Trustees, and authority is vested in the Board of Trustees to appoint, and delegate power and authority to, such Officers, Servants and Agents as said Board shall by resolution or by-law determine. ARTICLE VI. The Board of Trustees shall consist of at least five persons, and may consist of a greater number, if the by-laws shall at any time so provide. All of the members of the Board of Trustees shall be residents and citizens of the State of Minnesota, until such time as the By-laws otherwise provide. The names of the members of the present Board of Trustees are CHARLES H. BIGELOW, MAURICE AUERBACH, JOHN B. SANBORN, CRAWFORD LIVINGSTON and J.F.R. FOSS. ARTICLE VII. The first meeting of members hereafter shall be held at three o'clock in the afternoon on the first Tuesday in March, A.D. Nineteen Hundred and Two at the Home Office of the Company; provided, that a special meeting, or special meetings of members may be held prior to said date upon due notice. ARTICLE VIII. The regular annual meeting of members shall be held at three o'clock in the afternoon of the first Tuesday in March of each year, at the Home Office, for the election of Trustees, whenever any are to be elected, and for the transaction of such other business as may properly come before it. - 3 - ARTICLE IX. Article ten of these Articles relates solely to a Guaranty Trust Fund heretofore created by the deposits of members who became such under the assessment plan. ARTICLE X. All amounts pledged to this Company to secure payment of assessments occasioned by death of its members shall be used only for that purpose, and meanwhile the same shall be and remain invested in United States Registered Bonds, and shall constitute and be known as "The Guaranty Trust Fund". Such bonds shall be made payable to this company, and shall be transferable or convertible only upon resolution of its Board of Trustees, and such board shall have the exclusive charge and control thereof. All interest realized from such bonds shall meanwhile be used to defray the Company's operating expenses. This article shall never be amended or in any way at all changed without the consent of every member of this Company, to be given in writing, signed by him and filed with the Company's Secretary, and reciting in full the proposed amendment or change. ARTICLE XI. These Articles may be amended at any time to any extent, not in violation of law, by resolution adopted by a two-thirds vote of all the votes cast by the members at any special meeting lawfully called for that purpose, or by such two-thirds vote at any regular meeting of the members." EX-99.C6B 18 EXHIBIT 99.C6B BY-LAWS THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY ST. PAUL, MINNESOTA As Amended by Resolution of the Board of Trustees July 22, 1994 BY-LAWS THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY TABLE OF CONTENTS Page ---- ARTICLE I. MEMBERS Section 1. Regular Annual Meetings. . . . . . . . 1 Section 2. Special Meetings . . . . . . . . . . . 1 Section 3. Number of Votes. . . . . . . . . . . . 2 Section 4. Proxies. . . . . . . . . . . . . . . . 2 Section 5. Quorum . . . . . . . . . . . . . . . . 2 Section 6. Presiding Officer and Recording of Minutes . . . . . . . . . . . . . 3 ARTICLE II. BOARD OF TRUSTEES Section 1. Composition of the Board of Trustees . 3 (a) Number of Trustees . . . . . . . . . . . 3 (b) Qualifications . . . . . . . . . . . . . 4 (c) Election . . . . . . . . . . . . . . . . 4 (d) Term of Office of Elected Trustee. . . . 4 (e) Appointment by the Board . . . . . . . . 5 Section 2. Meetings of the Board. . . . . . . . . 5 (a) Place of Meetings. . . . . . . . . . . . 5 (b) Regular Meetings . . . . . . . . . . . . 5 (c) Special Meetings . . . . . . . . . . . . 6 (d) Notice . . . . . . . . . . . . . . . . . 6 (e) Quorum . . . . . . . . . . . . . . . . . 7 (f) Action without Meeting . . . . . . . . . 7 Section 3. Removal. . . . . . . . . . . . . . . . 7 Section 4. Chair of the Board . . . . . . . . . . 8 Section 5. Compensation . . . . . . . . . . . . . 8 ARTICLE III. COMMITTEES OF THE BOARD Section 1. Standing and Other Committees of the Board. . . . . . . . . . . . 9 (a) Creation of Committees . . . . . . . . . 9 (b) Appointments . . . . . . . . . . . . . . 9 (c) Qualifications . . . . . . . . . . . . . 9 (d) Committee Chairs . . . . . . . . . . . . 10 (e) Meetings . . . . . . . . . . . . . . . . 10 (f) Quorum . . . . . . . . . . . . . . . . . 10 (g) Vacancies. . . . . . . . . . . . . . . . 11 (h) Minutes and Reports. . . . . . . . . . . 11 Section 2. Audit Committee. . . . . . . . . . . . 11 Section 3. Corporate Governance and Public Affairs Committee. . . . . . . . . . 12 Section 4. Executive Committee. . . . . . . . . . 14 Section 5. Investment Committee . . . . . . . . . 14 Section 6. Personnel and Compensation Committee . 15 Page ---- ARTICLE IV. OFFICERS Section 1. Number . . . . . . . . . . . . . . . . 17 Section 2. Election . . . . . . . . . . . . . . . 17 Section 3. Term of Office . . . . . . . . . . . . 17 Section 4. Removal. . . . . . . . . . . . . . . . 18 Section 5. Vacancies. . . . . . . . . . . . . . . 18 Section 6. Duties of Officers . . . . . . . . . . 18 (a) Chief Executive Officer. . . . . . . . . 18 (b) President. . . . . . . . . . . . . . . . 18 (c) Vice Presidents. . . . . . . . . . . . . 19 (d) Secretary. . . . . . . . . . . . . . . . 19 (e) Treasurer. . . . . . . . . . . . . . . . 20 (f) Controller . . . . . . . . . . . . . . . 20 (g) Actuary. . . . . . . . . . . . . . . . . 20 (h) Other Officers . . . . . . . . . . . . . 20 Section 7. Absence or Disability. . . . . . . . . 21 ARTICLE V. DISPOSITION OF FUNDS AND INVESTMENTS Section 1. Fund and Investments . . . . . . . . . 21 Section 2. Deposits . . . . . . . . . . . . . . . 21 ARTICLE VI. INDEMNIFICATION Section 1. Trustees and Officers. . . . . . . . . 22 Section 2. Employees and Agents . . . . . . . . . 23 Section 3. Insurance. . . . . . . . . . . . . . . 24 Section 4. Other Indemnification Permitted. . . . 24 ARTICLE VII. CORPORATE SEAL. . . . . . . . . . . . . . 24 ARTICLE VIII. AMENDMENTS . . . . . . . . . . . . . . . 25 BY-LAWS OF THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY ST. PAUL, MINNESOTA AS AMENDED BY RESOLUTION OF THE BOARD OF TRUSTEES JULY 22, 1994 ARTICLE I MEMBERS Section 1. REGULAR ANNUAL MEETINGS. The regular annual meeting of members shall be held at three o'clock in the afternoon of the first Tuesday in March of each year, at the Home Office of the Company, as required by Article VIII of the Articles of Re-incorporation. Notice of the meeting shall be as prescribed in Section 61A.32 of Minnesota Statutes, as amended from time to time. Section 2. SPECIAL MEETINGS. A special meeting of the members may be called at any time by the Board of Trustees or by the joint action of either the Chair of the Board or the Chief Executive Officer and not less than three other Trustees. The Secretary shall give notice of the special meeting by causing to be mailed to each member, at the member's address then appearing on the books of the Company, a notice of the time, place and purpose of the meeting at least thirty days before the date set for the meeting. -1- Section 3. NUMBER OF VOTES. At each meeting of the members, every person insured by this Company will be a member entitled to one vote, and one additional vote for each one thousand dollars of insurance in excess of the first one thousand dollars, subject to a maximum of one hundred votes; provided, however, that, in the case of group insurance, voting rights shall be determined by Section 61A.32 of Minnesota Statutes, as amended from time to time. The Company has no cumulative voting. Section 4. PROXIES. Any member may vote by proxy at any meeting of members. To be valid, the proxy appointment must be in writing and must be filed with, and received by, the Secretary at the Home Office of the Company at least five days before the meeting at which it is to be used, exclusive of the day of the meeting, but inclusive of the day of receipt and filing of the proxy. A proxy appointment may be for a specified period of time or may provide that it will be in effect until revoked. A proxy may be revoked by a member at any time by written notice to the Secretary, or by executing a new proxy appointment and filing it as required herein, or by personally appearing and exercising his or her rights as a member at any meeting of the members. Section 5. QUORUM. Insurance of an amount not less than One Hundred Million Dollars, represented in person or by proxy, or partly in person and partly by proxy, shall constitute a quorum at any regular or special meeting of members. In the -2- absence of a quorum, those members present may adjourn the meeting from time to time until a quorum shall be present. If a quorum is present when a duly called or held meeting is convened, the members present may continue to transact business until adjournment, even though member(s) may have left the meeting so that less than a quorum is present at the meeting. Section 6. PRESIDING OFFICER AND RECORDING OF MINUTES. Meetings of the members shall be presided over by the Chair of the Board, if present, otherwise by the Chief Executive Officer, if present, otherwise by the President, if present, otherwise by a Vice President; provided that if none of those designated are present, then by a chair to be chosen by a majority of the members who are present in person or by proxy. The Secretary, if present, otherwise an Assistant Secretary, shall record the minutes of every meeting; provided that if none of those designated are present, then a person to record the minutes of that meeting shall be chosen by a majority of the members who are present in person or by proxy. ARTICLE II BOARD OF TRUSTEES Section 1. COMPOSITION OF THE BOARD OF TRUSTEES. The composition of the Board of Trustees shall be as follows: (a) NUMBER OF TRUSTEES. The property, affairs and business of the Company shall be managed by a Board of Trustees which shall consist of not fewer than five (as required by -3- Article VI of the Articles of Re-incorporation) or more than sixteen persons, the number of which for each year shall be determined by the members at their regular annual meeting. The person or persons who hold the offices of Chief Executive Officer and President shall, without the necessity of election, be Trustees by virtue of the office. (b) QUALIFICATIONS. Trustees need not be members of the Company, nor residents or citizens of Minnesota. Additional qualifications for initial or continued Board membership may be prescribed from time to time by the Board. (c) ELECTION. Except as otherwise provided in these By-Laws, Trustees shall be elected at regular annual meetings of the members. Nominations for the office of Trustee shall be made before voting for that office commences. Votes for persons not so nominated shall be disregarded. The election of each Trustee shall be by a plurality of the votes cast for the office. In the event the members fail to elect nominees to fill all of the offices to be elected, then the Board of Trustees shall have the authority to choose qualified persons to fill such office or offices by appointment as provided in Section 1(e) of this Article II. (d) TERM OF OFFICE OF ELECTED TRUSTEE. The term of office of each elected Trustee shall be to such of the next three regular annual meetings of the members as is stated in his or her nomination, or, if none is stated, to the third such meeting following the date of his or her election, or until his -4- or her earlier death, resignation or removal. No Trustee shall be elected to the Board for a term of office which extends beyond the annual meeting of members which coincides with or next follows his or her seventieth birthday. (e) APPOINTMENT BY THE BOARD. If the office of any Trustee is not filled by the members at a regular annual meeting of members, a majority of the Trustees may choose a person to fill that office. If the office of any Trustee becomes vacant for any reason, a majority of the remaining Trustees may choose a successor. Each Trustee so chosen shall hold office until the next regular annual meeting of the members. Not more than one-third of the maximum number of Trustees may be so chosen by the Board between regular annual meetings of the members. Section 2. MEETINGS OF THE BOARD. Meetings of the Board of Trustees shall be as follows: (a) PLACE OF MEETINGS. Meetings of the Board may be held either within or without the State of Minnesota. (b) REGULAR MEETINGS. Regular meetings of the Board shall be held at such times and places as are fixed from time to time by resolution of the Board. Notice need not be given of those regular meetings of the Board held at the times and places fixed by resolution, nor need notice be given of adjourned meetings. If either or both the time or place of a regular meeting are other than that fixed by resolution, a telephonic or written notice shall be given to each Trustee not -5- less than twenty-four hours prior to the time of that regular meeting. (c) SPECIAL MEETINGS. Special meetings of the Board may be held at any time upon call either of the Chair of the Board, or of the Chief Executive Officer, or upon written request of any three or more Trustees. Except as otherwise provided, notice of a special meeting shall be given to each Trustee either in writing or by telephone. Notice of at least seventy-two hours prior to the meeting time is required if written notice is deposited in the United States mail in the City of Saint Paul. Notice of at least twenty-four hours prior to the meeting time is required if written notice is left at either the place of business or residence of each Trustee. Notice of at least six hours prior to the meeting time is required if all Trustees are personally either served with a written notice or contacted by telephone. Notice need not be given to the Trustees of adjourned special meetings. Also, special meetings may be held at any time without notice if all of the Trustees are present, or if, before the meeting, those not present waive such notice in writing. Notice of a special meeting shall state the purpose of the meeting. (d) NOTICE. All notices of meetings of the Board required to be given under these By-Laws shall be given either by the person or persons who called the meeting, or by the Secretary, or, in his or her absence, by an Assistant Secretary. -6- (e) QUORUM. A majority of the Trustees shall constitute a quorum for the transaction of business at any meeting of the Board. In the absence of a quorum, those Trustees present may adjourn the meeting from time to time until a quorum shall be present. Except as otherwise provided in these By-Laws, the acts of a majority of the Trustees present at any meeting at which a quorum is present shall be the acts of the Board. The Trustees present at a duly called or held meeting at which a quorum is present, may continue to transact business until adjournment, even though Trustee(s) may have left the meeting so that less than a quorum is present at the meeting. (f) ACTION WITHOUT MEETING. Any action which may be taken at a meeting of the Board may be taken without a meeting if a consent in writing, setting forth the actions to be taken, shall be signed by all of the Trustees. The action so taken shall be effective on the date on which the last signature is placed on the writing or writings, or on such earlier effective date as is stated in the writing. Section 3. REMOVAL. A member of the Board of Trustees who fails to meet the standards set by the Board for Board members, or who is deemed by the remaining members of the Board to be untrustworthy, or incapable by reason of total and permanent disability of fulfilling the duties of his or her office, may be removed from office by the unanimous vote of the remaining Trustees then in office. -7- Section 4. CHAIR OF THE BOARD. The Board of Trustees shall elect annually from among its members a Chair of the Board. The Chair of the Board shall continue to serve at the will and pleasure of the Board, for the term of his or her election or until his or her prior death, resignation, or removal from the Board. The Chair of the Board shall preside at meetings of the members, of the Board and of the Executive Committee. In addition, the Chair shall have such other powers, duties and responsibilities as may be determined and assigned by the Board or these By-Laws. Section 5. COMPENSATION. Except as provided in this Section, Trustees shall be entitled to reasonable compensation for their services, and to reimbursement for reasonable expenses incurred, as Trustees and as members of committees of the Board. The amount of compensation shall be set from time to time by resolution of the Board of Trustees. Except as otherwise expressly provided by the Board, no such compensation or reimbursement shall be paid to an officer of the Company who also serves as a Trustee. Any Trustee receiving compensation under this Section shall not be barred from serving the Company in a non-officer capacity and receiving reasonable compensation for such other services. -8- ARTICLE III COMMITTEES OF THE BOARD Section 1. STANDING AND OTHER COMMITTEES OF THE BOARD. The Board of Trustees shall have the following committees: (a) CREATION OF COMMITTEES. The following designated standing committees of the Board are hereby authorized and created: Audit, Corporate Governance and Public Affairs, Executive, Investment, and Personnel and Compensation. In addition, the Board is authorized to create any other committee or committees of the Board as the Board from time to time deems necessary. The name, duration and duties of each other committee and the number of members thereof shall be as prescribed in the action creating the committee. (b) APPOINTMENTS. Except as provided in Section 4 of this Article III, the members of each standing Board committee shall consist of those Trustees appointed by the Board of Trustees. Each Trustee appointed to a Board committee shall continue to serve on that committee at the will and pleasure of the Board for the period specified in his or her appointment or until his or her earlier death, resignation or removal. (c) QUALIFICATIONS. Each Trustee is qualified to be appointed and successively reappointed to one or more committees, except that a Trustee who also acts as an officer or employee of the Company shall not serve as a member of the Audit Committee. -9- (d) COMMITTEE CHAIRS. The Board shall appoint one of the members of each of the Board committees, except the Executive Committee, to chair that committee and, in its discretion, may also appoint one of the members of each of the committees to serve as a vice chair of that committee. If neither the committee chair nor the committee vice chair is present at a meeting of a committee, the committee members present at that committee meeting shall elect another committee member to chair that meeting. (e) MEETINGS. Each committee shall meet at such times as the chair of that committee may designate or as a majority of that committee may determine, subject to a minimum of not less than two meetings per calendar year, except that the Executive Committee is not subject to a minimum number of meetings requirement. (f) QUORUM. A majority of each Board committee shall constitute a quorum at each meeting of that committee. At any meeting of a committee at which a quorum is present, the committee may continue to transact business until adjournment, even though committee member(s) may have left the meeting so that less than a quorum is present at the meeting. If a quorum is not present for a committee meeting, the chair of that committee may request the Board to appoint a sufficient number of other Trustees to serve as members of the committee only for that meeting, so as to obtain a quorum. If the Board makes the -10- requested appointments, any action so taken at the committee meeting shall be valid and binding. (g) VACANCIES. In the case of the death, resignation or removal of a member of a committee, the Board may appoint another Trustee to fill the vacancy so created on that committee for the balance of the unexpired appointment. The appointment shall be subject to the qualifications set forth for that committee. (h) MINUTES AND REPORTS. Each committee shall keep a written record of its acts and proceedings and shall submit that record to the Board of Trustees at a regular meeting of the Board and at such other times as requested by the Board or when a majority of the committee deems it desirable to do so. Failure to submit a record will not, however, invalidate any action taken by the committee prior to the time the record of the action was, or should have been submitted to the Board. The minutes of the Corporate Governance and Public Affairs, Executive, and Personnel and Compensation Committees shall be recorded by the Secretary. The minutes of each of the other committees shall be recorded by the person designated by the chair of that committee. Section 2. AUDIT COMMITTEE. The Audit Committee shall consist of not fewer than four non-management Trustees and shall have the following powers and duties: -11- (a) Annually recommend to the Board a firm of independent certified public accountants to audit the Company's books, records and accounts. (b) Approve the scope of audits to be conducted by the independent certified public accountants, taking into account the principal risks inherent in the Company's business and the recommendations from the independent accountants as to scope of audit. (c) Review all recommendations made by the independent certified public accountants in their audit reports to the Board. (d) Approve the scope of audits to be conducted by the Company's internal auditors and review the reports of those audits. (e) Review the reports which result from the examinations of the Company conducted by state insurance authorities. (f) Review corporate litigation involving extra-contractual damages. (g) Periodically review the Company's plans for data security and disaster recovery. (h) Advise the Board of the results of Committee reviews and recommendations resulting therefrom. Section 3. CORPORATE GOVERNANCE AND PUBLIC AFFAIRS COMMITTEE. The Corporate Governance and Public Affairs Committee shall consist of not fewer than four Trustees and shall have the following powers and duties: -12- (a) Annually review the size and composition of the Board. (b) Periodically develop and recommend to the Board the standards to be met by persons selected for nomination to the Board. (c) Prior to the annual meeting of members each year, recommend to the Board a slate of persons to be nominated to serve on the Board for whom the Company should solicit proxies. (d) On the recommendation of the Chair of the Board or the Chief Executive Officer, review the ongoing affiliation with the Board of any member who fails to meet the standards set by the Board for Board members, or who is deemed by the remaining members of the Board to be untrustworthy, or incapable by reason of total and permanent disability of fulfilling the duties of his or her office. (e) Periodically, review the powers and duties of Board committees. (f) Annually review and approve the methods and levels of compensation for members of the Board, including but not limited to benefit plans and compensation deferral plans; and review and make changes in the method and timing of benefits for individuals covered under any such plans in accordance with the terms of such plans. (g) Annually review and approve the contributions policy. (h) Annually review Company contributions to be made to the foundation. -13- (i) Review Company's code of ethics and conflict of interest disclosures. (j) Review Company policy on major issues in areas of social responsibility and public affairs, including such matters as voting and solicitation of proxies, "social purpose" investments, and other like matters as may properly come before it. (k) Periodically review Company by-laws. (l) Advise the Board of the results of Committee reviews and recommendations resulting therefrom. Section 4. EXECUTIVE COMMITTEE. The Executive Committee shall consist of the Chairs of the other standing Board committees and the Chair of the Board and, in the interim between meetings of the Board, shall have and exercise all of the powers and authority of the Board (including the determination of whether a person is entitled to indemnification under Article VI of these By-Laws as required by Section 300.083, Subdivision 6(b) of Minnesota Statutes, as amended from time to time), except the Committee shall not: (a) alter or amend the By-Laws; (b) make appointments to the Board of Trustees; (c) elect, appoint or terminate the Chairman of the Board, Chief Executive Officer, President, any Vice President, Secretary, or Treasurer. Section 5. INVESTMENT COMMITTEE. The Investment Committee shall consist of not fewer than four Trustees and -14- shall have the following powers and duties which shall be exercised not less than once every twelve months: (a) Review the written investment policy for Company investments, the procedures for the valuation of real estate owned by the Company and commercial loans held by the Company, recommend changes thereto, and submit to the Board for its approval and adoption the policy and procedures for the ensuing twelve months. (b) Review all investments, except policy loans, of Company funds, including their acquisition and sale and report findings to the Board. (c) Furnish the Board with summaries of investment transactions. (d) Review compliance with the written investment policy and valuation procedures and submit findings to the Board. Section 6. PERSONNEL AND COMPENSATION COMMITTEE. The Personnel and Compensation Committee shall consist of not fewer than four Trustees and shall have the following powers and duties: (a) For senior management, annually review performance and total compensation, including salary, bonus plans, employee benefits and perquisites. Senior management is defined as Chief Executive Officer, Chief Operating Officer, President and all vice presidents. Approve and report to the Board for ratification total compensation for the Chief Executive -15- Officer, President and Chief Operating Officer. Approve total compensation for the vice presidents. (b) Review qualifications of candidates for election as officers of the Company. Recommend to the Board for approval officer candidates for the positions of Chief Executive Officer, Chief Operating Officer, President, all vice presidents, controller, secretary, treasurer, assistant secretary and assistant treasurer. (c) Periodically review succession plans for Chief Executive Officer, Chief Operating Officer and senior vice presidents. (d) Review and report to the Board organization changes that have significant Company and business impact. (e) Review and approve special employment or compensation contracts for active, retired or terminated employees. (f) Annually review and approve salary policies for Company employees. (g) Annually review and recommend to the Board a PSP distribution to covered employees. (h) Periodically review and approve changes to compensation deferral plans for officers and employees, including the designation of plan trustees and plan administrators. Review and make changes in the method of timing of benefits for individuals covered under any of said plans in accordance with the terms of said plans. Annually determine and approve the interest crediting rates for amounts -16- held under deferred compensation plans for officers, employees and Trustees and make any other determination necessary or advisable in the administration of those plans. (i) Periodically review and approve major changes to benefit plans. (j) Annually review programs and progress made for developing diversity at all levels of the Company and submit findings to the Board. ARTICLE IV OFFICERS Section 1. NUMBER. The officers of the Company shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Treasurer, an Actuary, a Controller, a Secretary, and one or more Assistant Secretaries. In addition, there may be such other officers as the Board of Trustees from time to time may deem necessary. One individual may hold two or more offices, except that of President and Secretary. Section 2. ELECTION. Officers shall be elected or appointed by the Board of Trustees. Section 3. TERM OF OFFICE. Each officer shall serve for the term stated in his or her election or appointment or until his or her earlier death, resignation or removal. -17- Section 4. REMOVAL. Any officer may be removed from office, with or without cause, at any time by the affirmative vote of the majority of the Board of Trustees then in office. Section 5. VACANCIES. Any vacancy in any office from any cause may be filled by the Board of Trustees at its next meeting. Section 6. DUTIES OF OFFICERS. The duties of the officers shall be as follows: (a) CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have general active management of the business of the Company and, in the absence of the Chair of the Board, shall preside at all meetings of the members and the Board of Trustees, and shall see that all orders and resolutions of the Board are carried into effect. Except where, by law, the signature of the President is required, the Chief Executive Officer shall possess the same power as the President to sign and execute all authorized certificates, contracts, bonds, and other obligations of the Company. (b) PRESIDENT. The President, in the absence of the Chair of the Board and the Chief Executive Officer, shall preside at all meetings of the members and the Board of Trustees. The President shall be the chief administrative officer of the Company and shall have the power to sign and execute all authorized certificates, contracts, bonds, and other obligations of the Company. The President also shall perform such other duties as are incident to the office or are -18- properly required of him or her by the Board or the Chief Executive Officer. (c) VICE PRESIDENTS. Each Vice President will perform those duties as from time to time may be assigned by the Chief Executive Officer. In the absence of the President, a Vice President designated by the Board of Trustees shall perform the duties of the President. A Vice President shall have the power to sign and execute all authorized certificates, contracts, bonds and other obligations of the Company. One or more of the Vice Presidents may be entitled Executive Vice President, Senior Vice President, Vice President, Second Vice President, Group Vice President, Assistant Vice President, or such other variation thereof as may be designated by the Board. (d) SECRETARY. The Secretary shall give notice and keep the minutes of all meetings of the members, the Board of Trustees, the Corporate Governance and Public Affairs Committee, the Executive Committee and the Personnel and Compensation Committees and shall give and serve all notices of the Company. The Secretary or an Assistant Secretary shall have the power to sign with the Chief Executive Officer, President, or any Vice President in the name of the Company all authorized certificates, contracts, bonds, or other obligations of the company and may affix the Company Seal thereto. The Secretary shall have charge and custody of the books and papers of the Company and in general shall perform all duties incident to the office of Secretary, except as otherwise specifically -19- provided in these By-Laws, and such other duties as from time to time may be assigned by the Chief Executive Officer. If Assistant Secretaries are elected or appointed, they shall have those powers and perform those duties as from time to time may be assigned to them by the Chief Executive Officer and, in the absence of the Secretary, one of them shall perform the duties of the Secretary. (e) TREASURER. The Treasurer shall have those powers and shall perform those duties as from time to time may be assigned by the Chief Executive Officer. If Assistant Treasurers are elected or appointed, they shall have those powers and perform those duties as from time to time may be assigned to them by the Chief Executive Officer and, in the absence of the Treasurer, one of them shall perform the duties of the Treasurer. (f) CONTROLLER. The Controller shall have those powers and shall perform those duties as from time to time may be assigned by the Chief Executive Officer. (g) ACTUARY. The Actuary shall have those powers and shall perform those duties as from time to time may be assigned by the Chief Executive Officer. (h) OTHER OFFICERS. Other officers elected or appointed by the Board of Trustees shall have those powers and perform those duties as from time to time may be assigned by the Chief Executive Officer. -20- Section 7. ABSENCE OR DISABILITY. In the case of the absence or disability of any officer of the Company or of any person authorized to act in his or her place during such period of absence or disability, the Board of Trustees from time to time may delegate the powers and duties of such officer to any other officer, or any Trustee, or any other person whom they may select. ARTICLE V DISPOSITION OF FUNDS AND INVESTMENTS Section 1. FUNDS AND INVESTMENTS. All funds and investments of the Company shall be held in the name of "The Minnesota Mutual Life Insurance Company" or its nominee or as otherwise provided in accordance with applicable Minnesota Statutes, as amended from time to time. In no event shall any funds or investments be held in the name of any individual who is an officer or employee of the Company. Section 2. DEPOSITS. The Board of Trustees shall designate those banks and financial institutions in which Company funds shall be deposited. The Board by separate resolution also shall designate the persons authorized to withdraw or transfer funds held in those accounts. No funds shall be withdrawn or transferred from those accounts except upon the authorization of the person or persons so authorized. -21- ARTICLE VI INDEMNIFICATION Section 1. TRUSTEES AND OFFICERS. To the fullest extent permitted by applicable Minnesota Statutes, as amended from time to time, the Company shall indemnify each person (and the legal representatives of the person) who has been, or is, a Trustee or officer of the Company. This indemnification shall extend to all judgments, penalties, and fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorney's fees and disbursements incurred by the person in connection with the defense of a threatened, pending, or completed claim, action, suit or other proceeding, whether it be civil, criminal, administrative, arbitration, or investigative proceeding. This shall include any proceeding by or in the right of the Company, in which the person becomes involved as a party or otherwise by reason of his or her being or having been a Trustee or officer of the Company or who, while a Trustee or officer of the Company, is or was serving at the request of the Company or whose duties in that position involve or involved service as a director, officer, partner, trustee, employee, or agent of another organization or of an employee benefit plan. However, indemnification for appeals from any determination in a proceeding shall be subject to prior approval of the Board by Trustees. -22- Section 2. EMPLOYEES AND AGENTS. Subject to the provisions of applicable Minnesota Statutes, as amended from time to time, the Board of Trustees may, but need not, decide to indemnify a person (and the legal representatives of the person), other than a Trustee or officer, who has been or is an employee or agent of the Company. The indemnification, if any, shall extend to all judgments, penalties, and fines, including, without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorney's fees and disbursements incurred by the person in connection with the defense of a threatened, pending, or completed claim, action, suit or other proceeding, whether it be civil, criminal, administrative, arbitration, or investigative proceeding. This shall include any proceeding by or in the right of the Company, in which the person becomes involved as a party or otherwise by reason of his or her being or having been an employee or agent of the Company or who, while an employee or agent of the Company, is or was serving at the request of the Company or whose duties in that position involve or involved service as a director, officer, partner, trustee, employee or agent of another organization or of an employee benefit plan. Also, indemnification for appeals from any determination in a proceeding, where indemnification was previously granted by the Board, shall be subject to prior approval by the Board. -23- Section 3. INSURANCE. The Board of Trustees may authorize the purchase and maintenance of such form or forms of insurance as the Board may deem necessary or prudent to indemnify the Company and/or those persons who have been, are or may be Trustees, officers, employees, or agents of the Company, or who, while a Trustee, officer, employee or agent of the Company, is or was serving at the request of the Company as a director, officer, partner, trustee, employee, or agent of another organization or of an employee benefit plan against any liability asserted against and incurred by the person in or arising from that capacity, whether or not the Company would have been required to indemnify the person against the liability under the provisions of this Article VI or under applicable Minnesota Statutes, as amended from time to time. Section 4. OTHER INDEMNIFICATION PERMITTED. Nothing contained in this Article shall affect the rights to indemnification to which Company personnel other than Trustees and officers may be entitled by contract or otherwise under law. ARTICLE VII CORPORATE SEAL The corporate seal of this Company shall be the words "Corporate Seal" encircled with the words "The Minnesota Mutual Life Insurance Company". -24- ARTICLE VIII AMENDMENTS By the affirmative vote of a majority of the Board of Trustees, these By-Laws, or any part thereof, may be amended, repealed, or abrogated. -25- EX-99.C9 19 EXHIBIT 99.C9 April 23, 1997 The Minnesota Mutual Life Insurance Company Minnesota Mutual Life Center 400 Robert Street North St. Paul, Minnesota 55101 Gentlepersons: In my capacity as counsel for The Minnesota Mutual Life Insurance Company (the "Company"), I have reviewed certain legal matters relating to the Company's Separate Account entitled Minnesota Mutual Variable Annuity Account (the "Account") in connection with Post-Effective Amendment No. 10 to its Registration Statement on Form N-4.This Post-Effective Amendment is to be filed by the Company and the Account with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to certain variable annuity contracts (Securities and Exchange Commission File No. 33-12333). Based upon that review, I am of the following opinion: 1. The Account is a separate account of the Company duly created and validly existing pursuant of the laws of the State of Minnesota; and 2. The issuance and sale of the variable annuity contracts funded by the Account have been duly authorized by the Company and such contracts, when issued in accordance with and as described in the current Prospectus contained in the Registration Statement, and upon compliance with applicable local and federal laws, will be legal and binding obligations of the Company in accordance with their terms. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Sincerely, Donald F. Gruber Senior Counsel EX-99.C10 20 EXHIBIT 99.C10 (KPMG Peat Marwick LLP Letterhead) INDEPENDENT AUDITORS' CONSENT The Board of Directors The Minnesota Mutual Life Insurance Company and Contract Owners of Minnesota Mutual Variable Annuity Account: We consent to the use of our reports included herein and to the reference to our Firm under the heading "AUDITORS" in Part B of the Registration Statement. KPMG Peat Marwick LLP Minneapolis, Minnesota April 23, 1997 EX-99.C13A 21 EXHIBIT 99.C13A MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT STOCK SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $ 873.41 873.41 - 1,000.00 = -12.66% ----------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 - .0822) = $873.41 T = -8.22% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 + .1217) = $1,121.72 T = 12.17% The following information is used in the total return calculations: Accumulation Date Unit Value ---- ------------ 06/03/87 $ 1.000000 01/01/88 0.778634 12/31/88 0.873408 EX-99.C13B 22 EXHIBIT 99.C13B MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT BOND SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $1,121.22 1,121.22 - 1,000.00 = 12.12% ------------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 + .0752) = $1,121.22 T = 7.52% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.0654) = $1,065.44 T = 6.54% The following information is used in the total return calculations: Accumulation Date Unit Value ---- ------------ 06/03/87 $1.000000 01/01/88 1.052347 12/31/88 1.121216 EX-99.C13C 23 EXHIBIT 99.C13C MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MONEY MARKET SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS SIMPLE YIELD CALCULATION Simple yields are computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one accumulation unit of the Money Market sub-account at the beginning of the most recent seven calendar day period, subtracting a hypothetical charge reflecting deductions from contractowner accounts, and dividing the difference by the value of the account at the beginning of the seven day period to determine the base period return, and multiplying the base period return by 365/7. The simple yield for the Money Market segregated sub-account at December 31, 1988 is calculated as follows: 365 [ (1.092493 - 1.090860)/1.090860 ] * ___ = 7.81% 7 EFFECTIVE YIELD CALCULATION Effective yields are computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one accumulation unit of the Money Market sub-account at the beginning of the most recent seven calendar day period, subtracting a hypothetical charge reflecting deductions from contractowner accounts, and dividing the difference by the value of the account at the beginning of the seven day period to determine the base period return, and then compounding the based period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result. Effective yield calculation for the Money Market segregated sub-account at December 31, 1988 is calculated as follows: 365/7 ( [( 1.092493 - 1.090860)/1.090860] + 1.000000) - 1.000000 = 8.11% TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $1,092.49 1,092.49 - 1,000.00 = 9.25% ------------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 + .0577) = $1,092.49 T = 5.77% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.0638) = $1,063.82 T = 6.38% The following information is used in the total return calculations: Accumulation Date Unit Value ---- ------------ 06/03/87 $1.000000 01/01/88 1.026952 12/31/88 1.092493 EX-99.C13D 24 EXHIBIT 99.C13D MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MANAGED SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $1,006.32 1,006.32 - 1,000.00 = 0.63% ------------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 + .0040) = $1,006.32 T = 0.40% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.0895) = $1,089.50 T = 8.95% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 06/03/87 $1.000000 01/01/88 0.923651 12/31/88 1.006318 EX-99.C13E 25 EXHIBIT C13E MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MORTGAGE SECURITIES SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $1,104.29 1,104.29 - 1,000.00 = 10.43% ------------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 + .0649) = $1,104.29 T = 6.49% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.0787) = $1,078.69 T = 7.87% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 06/03/87 $1.000000 01/01/88 1.023727 12/31/88 1.104285 EX-99.C13F 26 EXHIBIT 99.C13F MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT INDEX SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $ 882.05 882.05 - 1,000.00 = -11.80% ----------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 - .0765) = $882.05 T = -7.65% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.1191) = $1,119.11 T = 11.91% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 06/03/87 $1.000000 01/01/88 0.788168 12/31/88 0.882048 EX-99.C13G 27 EXHIBIT 99.C13G MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT AGGRESSIVE GROWTH SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. The formula for total return is as follows: TOTAL RETURN = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return is based on an initial $1,000 investment made on June 3, 1987. Using the accumulation unit value information attached, the cumulative total return at December 31, 1988 is as follows: ENDING VALUE TOTAL RETURN $ 873.81 873.81 - 1,000.00 = -12.62% ----------------- 1,000.00 In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P(1 + T) = ERV Average annual total return for the period from June 3, 1987 to December 31, 1988 is as follows: 1.58 $1,000.00 (1 - .0819) = $873.81 T = -8.19% Average annual total return for the period from January 1, 1988 to December 31, 1988 is as follows: 1 $1,000.00 (1 +.0411) = $1,041.07 T = 4.11% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 06/03/87 $1.000000 01/01/88 0.839332 12/31/88 0.873807 EX-99.C13H 28 EXHIBIT 99.C13H MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT INTERNATIONAL STOCK SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 1, 1992. Using the accumulation unit value information attached, the cumulative total return at December 31, 1992 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 ------------------------------------------------- TOTAL RETURN INITIAL AMOUNT INVESTED Cumulative total return for the period from May 1, 1992 to December 31, 1992 is as follows: 914.90 - 1,000.00 ----------------- 1,000.00 * 100 = -8.51% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 1, 1992 to December 31, 1992 is as follows: .67 $1,000.00 [(1 - .1249) ] = $914.90 T = -12.49% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 05/01/92 $1.000000 12/31/92 .914900 EX-99.C13I 29 EXHIBIT 99.C13I MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT SMALL COMPANY SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 3, 1993. Using the accumulation unit value information attached, the cumulative total return at December 31, 1993 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 ------------------------------------------------- TOTAL RETURN INITIAL AMOUNT INVESTED Cumulative total return for the period from May 3, 1993 to December 31, 1993 is as follows: 1,147.70 - 1,000.00 ------------------- 1,000.00 * 100 = 14.77% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 3, 1993 to December 31, 1993 is as follows: .67 $1,000.00 [(1 - .2295) ] = $1,147.70 T = 22.95% The following information is used in the total return calculations: Accumulation Date unit value ---- ------------ 05/03/93 $1.000000 EX-99.C13J 30 EXHIBIT 99.C13J MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT VALUE STOCK SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 2, 1994. Using the accumulation unit value information attached, the cumulative total return at December 31, 1994 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 TOTAL RETURN ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1,044.67 - 1,000.00 ------------------- 1,000.00 * 100 = 4.47% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1 $1,000.00 [(1 + .0447)] = $1,044.67 T = 4.47% The above total return calculation for the period from May 2, 1994, commencement of operations, to December 31, 1994 has not been annualized as results are not indicative of anticipated annual results. The following information is used in the total return calculations: Accumulation Date Unit value -------- ------------ 05/02/94 $1.000000 12/31/94 1.054772 EX-99.C13K 31 EXHIBIT 99.C13K MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MATURING GOVERNMENT BOND 1998 SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 2, 1994. Using the accumulation unit value information attached, the cumulative total return at December 31, 1994 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 TOTAL RETURN ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return for the period from May 2, 1994 to December 31, 1994 is as follows: 999.54 - 1,000.00 ----------------- 1,000.00 * 100 = -.05% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1 $1,000.00 [(1 - .0005)] = $999.54 T = -.05% The above total return calculation for the period from May 2, 1994, commencement of operations, to December 31, 1994 has not been annualized as results are not indicative of anticipated annual results. The following information is used in the total return calculations: Accumulation Date Unit Value ---- ------------ 05/02/94 $.988939 12/31/94 .988482 EX-99.C13L 32 EXHIBIT 99.C13L MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MATURING GOVERNMENT BOND 2002 SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 2, 1994. Using the accumulation unit value information attached, the cumulative total return at December 31, 1994 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 TOTAL RETURN ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1,001.80 - 1,000.00 ------------------- 1,000.00 * 100 = .18% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1 $1,000.00 [(1 + .0018)] = $1,001.80 T = .18% The above total return calculation for the period from May 2, 1994, commencement of operations, to December 31, 1994 has not been annualized as results are not indicative of anticipated annual results. The following information is used in the total return calculations: Accumulation Date Unit Value -------- ------------ 05/02/94 $.977277 12/31/94 .979040 EX-99.C13M 33 EXHIBIT 99.C13M MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MATURING GOVERNMENT BOND 2006 SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 2, 1994. Using the accumulation unit value information attached, the cumulative total return at December 31, 1994 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 TOTAL RETURN ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1,000.33 - 1,000.00 ------------------- 1,000.00 * 100 = .03% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1 $1,000.00 [(1 + .0003)] = $1,000.33 T = .03% The above total return calculation for the period from May 2, 1994, commencement of operations, to December 31, 1994 has not been annualized as results are not indicative of anticipated annual results. The following information is used in the total return calculations: Accumulation Date Unit Value ---- ---------- 05/02/94 $.969798 12/31/94 .970118 EX-99.C13N 34 EXHIBIT 99.C13N MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT MATURING GOVERNMENT BOND 2010 SEGREGATED SUB-ACCOUNT PERFORMANCE CALCULATIONS TOTAL RETURN CALCULATIONS Total return is the percentage change between the offering price of one accumulation unit at the beginning of a period and the redeemable value of that accumulation unit at the end of a period. A data base file is kept and updated monthly with respect to accumulation unit values. From this data base file, total return can be calculated for any specified number of periods since the segregated sub-account's date of beginning operations. CUMULATIVE TOTAL RETURN Cumulative total return is based on an initial $1,000 investment made on May 2, 1994. Using the accumulation unit value information attached, the cumulative total return at December 31, 1994 is as follows: CUMULATIVE = ENDING REDEEMABLE VALUE - INITIAL AMOUNT INVESTED * 100 TOTAL RETURN ------------------------------------------------- INITIAL AMOUNT INVESTED Cumulative total return for the period from May 2, 1994 to December 31, 1994 is as follows: 996.02 - 1,000.00 ----------------- 1,000.00 * 100 = -.40% AVERAGE ANNUAL TOTAL RETURN In accordance with the SEC, average annual total return (T) allocates equal value among each period (N) by comparing the initial amount invested (P) to the ending redeemable value (ERV). The formula prescribed by the SEC is as follows: N P[(1 + T) ] = ERV Average annual total return for the period from May 2, 1994 to December 31, 1994 is as follows: 1 $1,000.00 [(1 - .0040)] = $996.02 T = -.40% The above total return calculation for the period from May 2, 1994, commencement of operations, to December 31, 1994 has not been annualized as results are not indicative of anticipated annual results. The following information is used in the total return calculations: Accumulation Date Unit Value ---- ------------ 05/02/94 $.961666 12/31/94 .957840 EX-27.A 35 EXHIBIT 27.A (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 2 MIMLIC GROWTH SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 2895086 3465921 7667 0 0 3473588 2746 0 4921 7667 0 0 1448982 1534005 0 0 0 0 0 3465921 29537 0 0 4906 24631 458166 7972 490769 0 0 0 0 439272 524295 0 329047 0 0 0 0 0 0 4906 3270258 2.012 .017 .325 0 0 0 2.354 1 0 0
EX-27.B 36 EXHIBIT 27.B (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 3 MIMLIC BOND SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 3121605 3312325 39057 0 0 3351382 1765 0 37292 39057 0 0 1506859 1525791 0 0 0 0 0 3312325 183550 0 0 5072 178478 65001 (153260) 90219 0 0 0 0 384218 403150 0 (7241) 0 0 0 0 0 0 5072 3382084 2.118 .112 (.052) 0 0 0 2.178 1 0 0
EX-27.C 37 EXHIBIT 27.C (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 1 MIMLIC MONEY MARKET SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 1215828 1215828 1113 0 0 1216941 1102 0 7 1109 0 0 750434 726235 0 0 0 0 0 1215832 54843 0 0 1702 53141 0 0 53141 0 0 0 0 782414 758215 0 92784 0 0 0 0 0 0 1702 1140041 1.546 .074 0 0 0 0 1.620 1 0 0
EX-27.D 38 EXHIBIT 27.D (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 4 MIMLIC ASSET ALLOCATION SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 4717264 5528692 4970 0 0 5533662 4936 0 34 4970 0 0 2029532 1871136 0 0 0 0 0 5528692 157420 0 0 7579 149841 379089 62581 591511 0 0 0 0 481356 322960 0 948092 0 0 0 0 0 0 7579 5062507 2.251 .076 .202 0 0 0 2.529 1 0 0
EX-27.E 39 EXHIBIT 27.E (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 5 MIMLIC MORTGAGE SECURTIES SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 960593 989176 724 0 0 989900 718 0 6 724 0 0 450065 485533 0 0 0 0 0 989176 67360 0 0 1564 65796 3155 (17932) 51019 0 0 0 0 98818 134286 0 (26544) 0 0 0 0 0 0 1564 1042502 2.094 .133 (.026) 0 0 0 2.198 1 0 0
EX-27.F 40 EXHIBIT 27.F (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 6 MIMLIC INDEX 500 SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 4872256 6705113 12286 0 0 6717399 7246 0 5040 12286 0 0 2364949 2056365 0 0 0 0 0 6705113 74202 0 0 8594 65608 350284 706571 1122463 0 0 0 0 800703 492119 0 1942873 0 0 0 0 0 0 8594 5740910 2.316 .029 .468 0 0 0 2.813 1 0 0
EX-27.G 41 EXHIBIT 27.G (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 7 MIMLIC CAPITAL APPRECIATION SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 3457034 4784781 9442 0 0 4794223 4018 0 5424 9442 0 0 1668256 1869447 0 0 0 0 0 4784781 0 0 0 7382 (7382) 431249 343089 766956 0 0 0 0 236787 437978 0 206502 0 0 0 0 0 0 7382 4914912 2.420 (.004) .426 0 0 0 2.842 1 0 0
EX-27.H 42 EXHIBIT 27.H (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 8 MIMLIC INTERNATIONAL STOCK SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 3733472 4524437 3092 0 0 4527529 3065 0 27 3092 0 0 2418015 2254079 0 0 0 0 0 4524437 103876 0 0 6030 97846 213399 402343 713588 0 0 0 0 720378 556442 0 1017297 0 0 0 0 0 0 6030 4017843 1.495 .041 .252 0 0 0 1.788 1 0 0
EX-27.I 43 EXHIBIT 27.I (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 9 MIMLIC SMALL COMPANY SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 1934795 2144726 2992 0 0 2147718 2979 0 13 2992 0 0 1237091 1581035 0 0 0 0 0 2144726 4521 0 0 4013 508 499108 (370376) 129240 0 0 0 0 557416 901360 0 (401584) 0 0 0 0 0 0 4013 2667534 1.604 0 .101 0 0 0 1.705 1 0 0
EX-27.J 44 EXHIBIT 27.J (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 11 MIMLIC MGB 1998 SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 1463749 1577110 10 0 0 1577120 0 0 10 10 0 0 1324838 1146897 0 0 0 0 0 1577110 973 0 0 2024 (1051) 2023 52211 53183 0 0 0 0 202543 24602 0 264033 0 0 0 0 0 0 2024 1347243 1.145 (.001) .046 0 0 0 1.190 1 0 0
EX-27.K 45 EXHIBIT 27.K (FDS)
6 0000768609 MINESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 12 MIMLIC MGB 2002 SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 339016 334623 2 0 0 334625 0 0 2 2 0 0 269553 121397 0 0 0 0 0 334623 18374 0 0 222 18152 412 (17036) 1528 0 0 0 0 152189 4033 0 186257 0 0 0 0 0 0 222 148594 1.222 .146 (.127) 0 0 0 1.241 1 0 0
EX-27.L 46 EXHIBIT 27.L (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 13 MIMLIC MGB 2006 SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 139453 150654 1 0 0 150655 0 0 1 1 0 0 117035 124592 0 0 0 0 0 150654 8368 0 0 221 8147 709 (11867) (3011) 0 0 0 0 0 7557 0 (11933) 0 0 0 0 0 0 221 147083 1.305 .068 (.086) 0 0 0 1.287 1 0 0
EX-27.M 47 EXHIBIT 27.M (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 14 MIMLIC MGB 2010 SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 168210 184658 1 0 0 184659 0 0 1 1 0 0 141772 116635 0 0 0 0 0 184658 124 0 0 264 (140) 400 (6912) (6652) 0 0 0 0 31314 6177 0 27132 0 0 0 0 0 0 124 175857 1.351 (.001) (.047) 0 0 0 1.303 1 0 0
EX-27.N 48 EXHIBIT 27N (FDS)
6 0000768609 MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT 10 MIMLIC VALUE STOCK SUB-ACCOUNT (MEGA) 1 US 12-MOS DEC-31-1996 JAN-01-1996 DEC-31-1996 1 1307486 1503453 1024 0 0 1504477 1015 0 9 1024 0 0 798596 426836 0 0 0 0 0 1503453 11901 0 0 (1570) 10331 150768 121335 282434 0 0 0 0 592532 220772 0 905761 0 0 0 0 0 0 11901 1048257 1.4 .017 .414 0 0 0 1.831 1 0 0
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