0000950123-01-506724.txt : 20011009 0000950123-01-506724.hdr.sgml : 20011009 ACCESSION NUMBER: 0000950123-01-506724 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010926 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS FUND BD FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000916689 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 060904249 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-73466 FILM NUMBER: 1745427 BUSINESS ADDRESS: STREET 1: ONE TOWER SQUARE STREET 2: FINANCIAL SERVICES LEGAL DIVISION CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 860-277-0111 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183-2020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS FUND BD II FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000941729 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 060904249 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58131 FILM NUMBER: 1745428 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 860-277-0111 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 497 1 y52586e497.txt TRAVELERS FUND BD I/II FOR VARIABLE ANNUITIES 1 TRAVELERS VINTAGE ANNUITY PROSPECTUS: THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES THE TRAVELERS BD II FOR VARIABLE ANNUITIES This prospectus describes TRAVELERS VINTAGE ANNUITY, a flexible premium deferred variable annuity contract (the "Contract") issued by The Travelers Insurance Company or The Travelers Life and Annuity Company, depending on the state in which you purchased your Contract. The Contract is available in connection with certain retirement plans that qualify for special federal income tax treatment ("qualified Contracts") as well as those that do not qualify for such treatment ("nonqualified Contracts"). We may issue it as an individual Contract or as a group Contract. When we issue a group Contract, you will receive a certificate summarizing the Contract's provisions. For convenience, we refer to Contracts and certificates as "Contracts." You can choose to have your premium ("purchase payments") accumulate on a variable and/or fixed basis in one of our funding options. Your contract value before the maturity date and the amount of monthly income afterwards will vary daily to reflect the investment experience of the variable funding options you select. You bear the investment risk of investing in the variable funding options. The variable funding options are: AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Value Fund ALLIANCE VARIABLE PRODUCT SERIES FUND, INC. Premier Growth Portfolio -- Class B AMERICAN VARIABLE INSURANCE SERIES Global Growth Fund -- Class 2 Growth Fund -- Class 2 Growth-Income Fund -- Class 2 DREYFUS VARIABLE INVESTMENT FUND Small Cap Portfolio -- Initial Shares GREENWICH STREET SERIES FUND Equity Index Portfolio -- Class II Shares Fundamental Value Portfolio(1) SALOMON BROTHERS VARIABLE SERIES FUND INC. Investors Fund Total Return Fund SMITH BARNEY ALLOCATION SERIES INC. Select Balanced Portfolio Select Growth Portfolio SMITH BARNEY INVESTMENT SERIES Smith Barney Large Cap Core Portfolio Smith Barney Premier Selection All Cap Growth Portfolio TRAVELERS SERIES FUND, INC. AIM Capital Appreciation Portfolio Alliance Growth Portfolio MFS Total Return Portfolio Putnam Diversified Income Portfolio Salomon Brothers Global High Yield Portfolio(2) Smith Barney High Income Portfolio Smith Barney International All Cap Growth Portfolio(3) Smith Barney Large Cap Value Portfolio Smith Barney Large Capitalization Growth Portfolio Smith Barney Money Market Portfolio Travelers Managed Income Portfolio Van Kampen Enterprise Portfolio THE TRAVELERS SERIES TRUST Convertible Bond Portfolio Disciplined Mid Cap Stock Portfolio MFS Emerging Growth Portfolio MFS Research Portfolio VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Growth Opportunities Portfolio --------------- (1)formerly Total Return Portfolio (2)formerly INVESCO Strategic Income Portfolio (3)formerly Smith Barney International Equity Portfolio The Contract, certain contract features and/or some of the funding options may not be available in all states. THE CURRENT PROSPECTUSES FOR THE UNDERLYING FUNDS THAT SUPPORT THE VARIABLE FUNDING OPTIONS MUST ACCOMPANY THIS PROSPECTUS. READ AND RETAIN THEM FOR FUTURE REFERENCE. This prospectus provides the information that you should know before investing in the Contract. You can receive additional information about your Contract by requesting a copy of the Statement of Additional Information ("SAI") dated May 1, 2001. We filed the SAI with the Securities and Exchange Commission ("SEC"), and it is incorporated by reference into this prospectus. To request a copy, write to The Travelers Insurance Company, Annuity Investor Services, One Tower Square, Hartford, Connecticut 06183, call 1-800-842-8573 or access the SEC's website (http://www.sec.gov). See Appendix D for the SAI's table of contents. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. PROSPECTUS MAY 1, 2001 SUPPLEMENTED SEPTEMBER 24, 2001 2 TABLE OF CONTENTS Index of Special Terms................ 2 Summary............................... 3 Fee Table............................. 6 Condensed Financial Information....... 10 The Annuity Contract.................. 10 Contract Owner Inquiries......... 10 Purchase Payments................ 10 Accumulation Units............... 10 The Variable Funding Options..... 11 Fixed Account......................... 14 Charges and Deductions................ 14 General.......................... 14 Withdrawal Charge................ 15 Free Withdrawal Allowance........ 16 Administrative Charges........... 16 Mortality and Expense Risk Charge......................... 16 Variable Funding Option Expenses....................... 17 Premium Tax...................... 17 Changes in Taxes Based Upon Premium or Value............... 17 Transfers............................. 17 Dollar Cost Averaging............ 17 Access to Your Money.................. 18 Systematic Withdrawals........... 19 Loans............................ 19 Ownership Provisions.................. 19 Types of Ownership............... 19 Contract Owner................... 19 Beneficiary...................... 19 Annuitant........................ 20 Death Benefit......................... 20 Death Proceeds Before the Maturity Date.................. 20 Payment of Proceeds.............. 22 Death Proceeds After the Maturity Date........................... 24 The Annuity Period.................... 24 Maturity Date.................... 24 Allocation of Annuity............ 25 Variable Annuity................. 25 Fixed Annuity.................... 25 Payment Options....................... 26 Election of Options.............. 26 Annuity Options.................. 26 Income Options................... 27 Miscellaneous Contract Provisions..... 27 Right to Return.................. 27 Termination...................... 27 Required Reports................. 27 Suspension of Payments........... 28 The Separate Accounts................. 28 Performance Information.......... 28 Federal Tax Considerations............ 29 General Taxation of Annuities.... 29 Types of Contracts: Qualified or Nonqualified................... 30 Nonqualified Annuity Contracts... 30 Qualified Annuity Contracts...... 30 Penalty Tax for Premature Distributions.................. 31 Diversification Requirements for Variable Annuities............. 31 Ownership of the Investments..... 31 Mandatory Distributions for Qualified Plans................ 32 Taxation of Death Benefit Proceeds....................... 32 Other Information..................... 32 The Insurance Companies.......... 32 Financial Statements............. 32 Distribution of Variable Annuity Contracts...................... 32 Conformity with State and Federal Laws........................... 33 Voting Rights.................... 33 Legal Proceedings and Opinions... 33 Appendix A: Condensed Financial Information for The Travelers Insurance Company: Fund BD.......... A-1 Appendix B: Condensed Financial Information for The Travelers Life and Annuity Company: Fund BD II..... B-1 Appendix C: The Fixed Account......... C-1 Appendix D: Contents of the Statement of Additional Information........... D-1
INDEX OF SPECIAL TERMS The following terms are italicized throughout the prospectus. Refer to the page listed for an explanation of each term. Accumulation Unit..................... 10 Accumulation Period................... 10 Annuitant............................. 20 Annuity Payments...................... 24 Annuity Unit.......................... 11 Cash Surrender Value.................. 18 Contingent Annuitant.................. 20 Contract Date......................... 10 Contract Owner (You,)................. 19 Contract Value........................ 10 Contract Year......................... 10 Death Report Date..................... 20 Fixed Account......................... C-1 Funding Option(s)..................... 11 Joint Owner........................... 19 Maturity Date......................... 24 Purchase Payment...................... 10 Succeeding Owner...................... 19 Underlying Fund....................... 11 Written Request....................... 10
2 3 SUMMARY: TRAVELERS VINTAGE VARIABLE ANNUITY THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS CAREFULLY. WHAT COMPANY WILL ISSUE MY CONTRACT? Your issuing company is either The Travelers Insurance Company or The Travelers Life and Annuity Company, ("the Company," "We" or "Us") depending on where you reside. Each company sponsors its own segregated asset account ("Separate Account"). The Travelers Insurance Company sponsors the Travelers Fund BD for Variable Annuities ("Fund BD"); The Travelers Life and Annuity Company sponsors the Travelers BD II for Variable Annuities ("BD II"). When we refer to the Separate Account, we are referring to either Fund BD or BD II, depending upon your issuing Company. Your issuing Company is The Travelers Life and Annuity Company unless you reside in one of the following locations. The Travelers Insurance Company issues Contracts in the locations listed below: Bahamas North Carolina Oregon(1) Washington(1) British Virgin Islands New Hampshire Puerto Rico Wyoming Guam New Jersey Tennessee Maine New York U.S. Virgin Islands
--------------- (1) The Travelers Insurance Company issues only single premium contracts with variable and fixed accounts for these states. The Travelers Life and Annuity Company issues only flexible premium contracts with only variable accounts in these states. Please refer to your Contract or ask your agent for more information. You may also refer to the cover page of your Contract for the name of your issuing company. You may only purchase a Contract in states where the Contract has been approved for sale. The Contract may not currently be available for sale in all states. CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE CONTRACT? We designed the Contract for retirement savings or other long-term investment purposes. The Contract provides a death benefit as well as guaranteed payout options. You direct your payment(s) to one or more of the variable funding options and/or to the Fixed Account that is part of our general account (the "Fixed Account"). We guarantee money directed to the Fixed Account as to principal and interest. The variable funding options are designed to produce a higher rate of return than the Fixed Account; however, this is not guaranteed. You can also lose money in the variable funding options. The Contract, like all deferred variable annuity contracts, has two phases: the accumulation phase and the payout phase. During the accumulation phase generally, under a qualified contract, your pre-tax contributions accumulate on a tax-deferred basis and are taxed as income when you make a withdrawal, presumably when you are in a lower tax bracket. During the accumulation phase, under a nonqualified contract, earnings on your after-tax contributions accumulate on a tax-deferred basis and are taxed as income when you make a withdrawal. The payout phase occurs when you begin receiving payments from your Contract. The amount of money you accumulate in your Contract determines the amount of income (annuity payments) you receive during the payout phase. During the payout phase, you may choose one of a number of annuity options. You may receive income payments from the variable funding options and/or the Fixed Account. If you elect variable income payments, the dollar amount or your payments may increase or decrease. Once you choose one of the annuity options or income options and begin to receive payments, it cannot be changed. WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use in connection with (1) individual nonqualified purchases; (2) Individual Retirement Annuities (IRAs); and (3) other qualified retirement plans. Qualified contracts include contracts qualifying under Section 401(a), 3 4 403(b), or 408(b) of the Internal Revenue Code of 1986, as amended. Purchase of this Contract through a tax qualified retirement plan ("Plan") does not provide any additional tax deferral benefits beyond those provided by the Plan. Accordingly, if you are purchasing this Contract through a Plan, you should consider purchasing this Contract for its Death Benefit, Annuity Option Benefits, and other non-tax-related benefits. You may purchase the Contract with an initial payment of at least $5,000. You may make additional payments of at least $500 at any time during the accumulation phase. IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within twenty days after you receive it, you will receive a full refund of your contract value plus any Contract charges and premium taxes you paid (but not fees and charges assessed by the underlying funds). Where state law requires a longer right to return period, or the return of purchase payments, the Company will comply. You bear the investment risk on the purchase payment allocated to a variable funding option during the right to return period; therefore, the contract value we return may be greater or less than your purchase payment. If you purchased your Contract as an Individual Retirement Annuity, and you return it within the first seven days after delivery, we will refund your full purchase payment. During the remainder of the right to return period, we will refund your contract value (including charges we assessed). We will determine your contract value at the close of business on the day we receive a written request for a refund. CAN YOU GIVE A GENERAL DESCRIPTION OF THE VARIABLE FUNDING OPTIONS AND HOW THEY OPERATE? Through its subaccounts, the Separate Account uses your purchase payments to purchase units, at your direction, of one or more of the variable funding options. In turn, each variable funding option invests in an underlying mutual fund ("underlying fund") that holds securities consistent with its own investment policy. Depending on market conditions, you may make or lose money in any of these variable funding options. You can transfer between the variable funding options as frequently as you wish without any current tax implications. Currently there is no charge for transfers, nor a limit to the number of transfers allowed. We may, in the future, charge a fee for any transfer request, or limit the number of transfers allowed. At a minimum, we would always allow one transfer every six months. We reserve the right to restrict transfers that we determine will disadvantage other contract owners. You may transfer between the Fixed Account and the variable funding options twice a year (during the 30 days after the six-month contract date anniversary), provided the amount is not greater than 15% of the Fixed Account value on that date. WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance features and investment features, and there are costs related to each. We deduct an administrative expense charge and a mortality and expense risk ("M&E") charge daily from the amounts you allocate to the Separate Account. We deduct the administrative expense charge at an annual rate of 0.15% and deduct the M&E at an annual rate of 1.02% for the Standard Death Benefit, and 1.30% for the Enhanced Death Benefit. For contracts with a value of less than $40,000 we also deduct an annual contract administrative charge of $30. Each underlying fund also charges for management costs and other expenses. We will apply a withdrawal charge to withdrawals from the Contract, and will calculate it as a percentage of the purchase payments. The maximum percentage is 6%, decreasing to 0% in years seven and later. HOW WILL MY PURCHASE PAYMENTS AND WITHDRAWALS BE TAXED? Generally, the payments you make to a qualified Contract during the accumulation phase are made with before-tax dollars. Generally, you will be taxed on your purchase payments and on any earnings when you make a withdrawal or begin receiving annuity payments. Under a nonqualified Contract, payments to the Contract are made with after-tax dollars, and any credits and earnings will generally accumulate tax-deferred. You will be taxed on these earnings when they are withdrawn from the Contract. If you are 4 5 younger than 59 1/2 when you take money out, you may be charged a 10% federal penalty tax on the amount withdrawn. For owners of qualified Contracts, if you reach a certain age, you may be required by federal tax laws to begin receiving payments from your annuity or risk paying a penalty tax. In those cases, we can calculate and pay you the minimum required distribution amounts. HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the accumulation phase. Withdrawal charges, income taxes, and/or a penalty tax may apply to taxable amounts withdrawn. WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? You may choose to purchase the Standard or Enhanced Death Benefit. The death benefit applies upon the first death of the owner, joint owner, or annuitant. Assuming you are the Annuitant, the death benefit is as follows: If you die before the Contract is in the payout phase, the person you have chosen as your beneficiary will receive a death benefit. The death benefit value is calculated at the close of the business day on which the Company's Home Office receives due proof of death and written payment instructions. The Enhanced Death Benefit may not be available in all states. Please refer to the Death Benefit section in the prospectus for more details. WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed Financial Information in Appendix A or Appendix B to this prospectus provides more information about accumulation unit values. ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be interested in. These include: -- DOLLAR COST AVERAGING. This is a program that allows you to invest a fixed amount of money in variable funding options each month, theoretically giving you a lower average cost per unit over time than a single one-time purchase. Dollar Cost Averaging requires regular investments regardless of fluctuating price levels, and does not guarantee profits or prevent losses in a declining market. Potential investors should consider their financial ability to continue purchases through periods of low price levels. -- SYSTEMATIC WITHDRAWAL OPTION. Before the maturity date, you can arrange to have money sent to you at set intervals throughout the year. Of course, any applicable income and penalty taxes will apply on amounts withdrawn. -- AUTOMATIC REBALANCING. You may elect to have the Company periodically reallocate the values in your Contract to match your original (or your latest) funding option allocation request. 5 6 FEE TABLE -------------------------------------------------------------------------------- The purpose of this Fee Table is to assist Contract owners in understanding the various costs and expenses that you will bear, directly or indirectly, if you purchase this Contract. See "Charges and Deductions" in this prospectus for additional information. Expenses shown do not include premium taxes, which may be applicable. "Other Expenses" include operating costs of each underlying fund. Each fund reflects these expenses in its net asset value; the expenses are not deducted from your contract value. TRANSACTION EXPENSES WITHDRAWAL CHARGE (as a percentage of the purchase payments withdrawn):
YEARS SINCE PURCHASE WITHDRAWAL PAYMENT MADE CHARGE 0-1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7+ 0%
ANNUAL SEPARATE ACCOUNT CHARGES: (as a percentage of the average daily net assets of the Separate Account)
STANDARD ENHANCED DEATH BENEFIT DEATH BENEFIT --------------------------------------------------------------------------------------------- Mortality & Expense Risk Charge...................... 1.02% 1.30% Administrative Expense Charge........................ 0.15% 0.15% ----- ----- Total Separate Account Charges..................... 1.17% 1.45% OTHER ANNUAL CHARGES ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30 (Waived if contract value is $40,000 or more)
VARIABLE FUNDING OPTION EXPENSES: (as a percentage of average daily net assets of the funding option as of December 31, 2000, unless otherwise noted)
TOTAL ANNUAL OPERATING MANAGEMENT FEE OTHER EXPENSES EXPENSES (AFTER EXPENSE 12b-1 (AFTER EXPENSE (AFTER EXPENSE FUNDING OPTIONS: REIMBURSEMENT) FEES REIMBURSEMENT) REIMBURSEMENT) ------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Value Fund...................... 0.61% 0.23% 0.84% ALLIANCE VARIABLE PRODUCT SERIES FUND, INC. Premier Growth Portfolio -- Class B*..... 1.00% 0.25% 0.05% 1.30% AMERICAN VARIABLE INSURANCE SERIES Global Growth Fund -- Class 2*........... 0.66% 0.25% 0.04% 0.95% Growth Fund -- Class 2*.................. 0.36% 0.25% 0.02% 0.63% Growth-Income Fund -- Class 2*........... 0.34% 0.25% 0.01% 0.60% DREYFUS VARIABLE INVESTMENT FUND Small Cap Portfolio -- Initial Shares.... 0.75% 0.03% 0.78%(1) GREENWICH STREET SERIES FUND Equity Index Portfolio -- Class II Shares*................................ 0.21% 0.25% 0.04% 0.50%(2) Fundamental Value Portfolio.............. 0.75% 0.04% 0.79%(3) SALOMON BROTHERS VARIABLE SERIES FUND INC. Investors Fund........................... 0.70% 0.21% 0.91% - Total Return Fund........................ 0.46% 0.54% 1.00%(4) SMITH BARNEY ALLOCATION SERIES INC. Select Balanced Portfolio................ 0.35% 0.71% 1.06%(5) Select Growth Portfolio.................. 0.35% 0.77% 1.12%(5) Select High Growth Portfolio+............ 0.35% 0.79% 1.14%(5)
6 7
TOTAL ANNUAL OPERATING MANAGEMENT FEE OTHER EXPENSES EXPENSES (AFTER EXPENSE 12b-1 (AFTER EXPENSE (AFTER EXPENSE FUNDING OPTIONS: REIMBURSEMENT) FEES REIMBURSEMENT) REIMBURSEMENT) ------------------------------------------------------------------------------------------------------------ SMITH BARNEY INVESTMENT SERIES Smith Barney Large Cap Core Portfolio.... 0.75% 0.20% 0.95%(6) Smith Barney Premier Selection All Cap Growth Portfolio....................... 0.75% 0.20% 0.95%(6) THE TRAVELERS SERIES TRUST Convertible Bond Portfolio............... 0.66% 0.14% 0.80%(7) Disciplined Mid Cap Stock Portfolio...... 0.76% 0.12% 0.88% Disciplined Small Cap Stock Portfolio+... 0.86% 0.14% 1.00%(7) MFS Emerging Growth Portfolio............ 0.81% 0.05% 0.86% MFS Research Portfolio................... 0.86% 0.06% 0.92% Strategic Stock Portfolio+............... 0.66% 0.24% 0.90%(7) TRAVELERS SERIES FUND INC. AIM Capital Appreciation Portfolio....... 0.80% 0.03% 0.83%(8) Alliance Growth Portfolio................ 0.80% 0.01% 0.81%(8) MFS Total Return Portfolio............... 0.80% 0.04% 0.84%(8) Putnam Diversified Income Portfolio...... 0.75% 0.12% 0.87%(8) Salomon Brothers Global High Yield Portfolio.............................. 0.80% 0.18% 0.98%(8) Smith Barney High Income Portfolio....... 0.60% 0.06% 0.66%(8) Smith Barney International All Cap Growth Portfolio.............................. 0.90% 0.08% 0.98%(8) Smith Barney Large Cap Value Portfolio... 0.65% 0.01% 0.66%(8) Smith Barney Large Capitalization Growth Portfolio.............................. 0.75% 0.02% 0.77%(8) Smith Barney Money Market Portfolio...... 0.50% 0.03% 0.53%(8) Travelers Managed Income Portfolio....... 0.65% 0.04% 0.69%(8) Van Kampen Enterprise Portfolio.......... 0.70% 0.03% 0.73%(8) VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Growth Opportunities Portfolio................ 0.75% 0.15% 0.90%(9)
--------------- * The 12b-1 fees deducted from these classes cover certain distribution, shareholder support and administrative services provided by intermediaries (the insurance company, broker dealer or other service provider). + No longer available to new Contract Owners. (1) Total Annual Operating Expenses for the SMALL CAP PORTFOLIO -- INITIAL SHARES do not include interest expense, loan commitment fees, and dividends on securities sold short. These figures are for the year ended December 31, 2000. Actual expenses in future years may be higher or lower that the fees given. (2) The Management Fee includes 0.06% for fund administration. (3) The Management Fee includes 0.20% for fund administration. (4) The Adviser has waived all or a portion of its Management Fees for the year ended December 31, 2000. If such fees were not waived or expenses reimbursed, the Management Fee, Other Expenses, and Total Annual Operating Expenses would have been 0.80%, 0.54%, and 1.34%, respectively for the TOTAL RETURN FUND. (5) Each Portfolio of the SMITH BARNEY CONCERT ALLOCATION SERIES INC. (a "fund of funds") invests in the shares of other mutual funds ("underlying funds"). The Management Fee for each Portfolio is 0.35%. While the Portfolios have no direct expenses, the "Other Expenses" figure represents a weighted average of the total expense ratios of the underlying funds as of 1/31/00 (the fiscal year end of the Portfolios). (6) The Adviser has agreed to waive all or a portion of its fees and reimburse certain expenses for the year ended October 31, 2000 (the Fund's fiscal year end). If such fees were not waived and expenses not reimbursed, Total Annual Operating Expenses for the SMITH BARNEY PREMIER SELECTION ALL CAP GROWTH PORTFOLIO and the SMITH BARNEY LARGE CAP CORE PORTFOLIO would have been 2.14% and 1.55%, respectively. As a result of a voluntary expense limitation, the expense ratios of these funds will not exceed 0.95%. (7) Travelers Insurance Company has agreed to reimburse the CONVERTIBLE BOND PORTFOLIO, the STRATEGIC STOCK PORTFOLIO, and the DISCIPLINED SMALL CAP STOCK PORTFOLIO for expenses for the period ended December 31, 2000 which exceeded 0.80%, 0.90%, and 1.00%, respectively. Without such voluntary arrangements, the actual annualized Total Annual Operating Expenses would have been 0.90%, 0.97%, and 1.14%, respectively. (8) Expenses are as of October 31, 2000 (the Fund's fiscal year end). There were no fees waived or expenses reimbursed for these funds in 2000. (9) The Adviser has agreed to reimburse SMITH BARNEY SMALL CAP GROWTH OPPORTUNITIES PORTFOLIO for the period ended December 31, 2000. If such expenses were not voluntarily reimbursed, the actual annualized Total Annual Operating Expenses would have been 4.45%. 7 8 EXAMPLES These examples show what your costs would be under certain hypothetical situations. The examples do not represent past or future expenses. Your actual expenses may be more or less than those shown. We base examples on the annual expenses of the underlying funds for the year ended December 31, 2000, and assume that any fee waivers and expense reimbursements will continue. We cannot guarantee that these fee waivers and expense reimbursements will continue. The examples also assume that the $30 annual administrative charge is equivalent to 0.012% of the Separate Account contract value. EXAMPLE: STANDARD DEATH BENEFIT You would pay the following expenses on a $1,000 investment, assuming a 5% annual return on assets and the charges reflected in the expense table above for the Standard Death Benefit:
------------------------------------------------------------------------------------------------------------------------- IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN: ------------------------------------- ------------------------------------- FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Value Fund.................. 81 123 129 235 21 63 109 235 ALLIANCE VARIABLE PRODUCT SERIES FUND, INC. Premier Growth Portfolio -- Class B.................................. 85 137 152 282 25 77 132 282 AMERICAN VARIABLE INSURANCE SERIES Global Growth Fund -- Class 2........ 82 127 135 246 22 67 115 246 Growth Fund -- Class 2............... 78 117 118 213 18 57 98 213 Growth-Income Fund -- Class 2........ 78 116 117 210 18 56 97 210 DREYFUS VARIABLE INVESTMENT FUND Small Cap Portfolio -- Initial Shares............................. 80 122 126 229 20 62 106 229 GREENWICH STREET SERIES FUND Equity Index Portfolio -- Class II Shares............................. 77 113 111 199 17 53 91 199 Fundamental Value Portfolio.......... 80 122 126 230 20 62 106 230 SALOMON BROTHERS VARIABLE SERIES FUND INC. Investors Fund....................... 81 126 132 242 21 66 112 242 Total Return Fund.................... 82 128 137 252 22 68 117 252 SMITH BARNEY ALLOCATION SERIES INC. Select Balanced Portfolio............ 83 130 140 258 23 70 120 258 Select Growth Portfolio.............. 83 132 143 264 23 72 123 264 Select High Growth Portfolio+........ 84 133 144 266 24 73 124 266 SMITH BARNEY INVESTMENT SERIES Smith Barney Large Cap Core Portfolio.......................... 82 127 135 246 22 67 115 246 Smith Barney Premier Selection All Cap Growth Portfolio............... 82 127 135 246 22 67 115 246 THE TRAVELERS SERIES TRUST Convertible Bond Portfolio........... 80 122 127 231 20 62 107 231 Disciplined Mid Cap Stock Portfolio.......................... 81 125 131 239 21 65 111 239 Disciplined Small Cap Stock Portfolio+......................... 82 128 137 252 22 68 117 252 MFS Emerging Growth Portfolio........ 81 124 130 237 21 64 110 237 MFS Research Portfolio............... 81 126 133 243 21 66 113 243 Strategic Stock Portfolio+........... 81 125 132 241 21 65 112 241 TRAVELERS SERIES FUND INC. AIM Capital Appreciation Portfolio... 80 123 128 234 20 63 108 234 Alliance Growth Portfolio............ 80 123 127 232 20 63 107 232 MFS Total Return Portfolio........... 81 123 129 235 21 63 109 235 Putnam Diversified Income Portfolio.......................... 81 124 130 238 21 64 110 238 Salomon Brothers Global High Yield Portfolio.......................... 82 128 136 249 22 68 116 249 Smith Barney High Income Portfolio... 79 118 120 216 19 58 100 216 Smith Barney International All Cap Growth Portfolio................... 82 128 136 249 22 68 116 249 Smith Barney Large Cap Value Portfolio.......................... 79 118 120 216 19 58 100 216 Smith Barney Large Capitalization Growth Portfolio................... 80 121 125 228 20 61 105 228 Smith Barney Money Market Portfolio.......................... 77 114 113 202 17 54 93 202 Travelers Managed Income Portfolio... 79 119 121 219 19 59 101 219 Van Kampen Enterprise Portfolio...... 79 120 123 223 19 60 103 223 VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Growth Opportunities Portfolio............ 81 125 132 241 21 65 112 241
+ No longer available to new Contract Owners. 8 9 EXAMPLE*: ENHANCED DEATH BENEFIT You would pay the following expenses on a $1,000 investment, assuming a 5% annual return on assets and the charges reflected in the expense table above for the Enhanced Death Benefit:
------------------------------------------------------------------------------------------------------------------------- IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN: ------------------------------------- ------------------------------------- FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS ------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Value Fund.................. 83 132 143 264 23 72 123 264 ALLIANCE VARIABLE PRODUCT SERIES FUND, INC. Premier Growth Portfolio -- Class B.................................. 88 146 166 309 28 86 146 309 AMERICAN VARIABLE INSURANCE SERIES Global Growth Fund -- Class 2........ 84 135 149 275 24 75 129 275 Growth Fund -- Class 2............... 81 126 132 242 21 66 112 242 Growth-Income Fund -- Class 2........ 81 125 131 239 21 65 111 239 DREYFUS VARIABLE INVESTMENT FUND Small Cap Portfolio -- Initial Shares............................. 83 130 140 258 23 70 120 258 GREENWICH STREET SERIES FUND Equity Index Portfolio -- Class II Shares............................. 80 122 126 229 20 62 106 229 Fundamental Value Portfolio.......... 83 130 141 259 23 70 121 259 SALOMON BROTHERS VARIABLE SERIES FUND INC. Investors Fund....................... 84 134 147 271 24 74 127 271 Total Return Fund.................... 85 137 151 280 25 77 131 280 SMITH BARNEY ALLOCATION SERIES INC. Select Balanced Portfolio............ 86 139 154 286 26 79 134 286 Select Growth Portfolio.............. 86 140 157 292 26 80 137 292 Select High Growth Portfolio+........ 86 141 158 294 26 81 138 294 SMITH BARNEY INVESTMENT SERIES Smith Barney Large Cap Core Portfolio.......................... 84 135 149 275 24 75 129 275 Smith Barney Premier Selection All Cap Growth Portfolio............... 84 135 149 275 24 75 129 275 THE TRAVELERS SERIES TRUST Convertible Bond Portfolio........... 83 131 141 260 23 71 121 260 Disciplined Mid Cap Stock Portfolio.......................... 84 133 145 268 24 73 125 268 Disciplined Small Cap Stock Portfolio+......................... 85 137 151 280 25 77 131 280 MFS Emerging Growth Portfolio........ 84 133 144 266 24 73 124 266 MFS Research Portfolio............... 84 134 147 272 24 74 127 272 Strategic Stock Portfolio+........... 84 134 146 270 24 74 126 270 TRAVELERS SERIES FUND INC. AIM Capital Appreciation Portfolio... 83 132 143 263 23 72 123 263 Alliance Growth Portfolio............ 83 131 142 261 23 71 122 261 MFS Total Return Portfolio........... 83 132 143 264 23 72 123 264 Putnam Diversified Income Portfolio.......................... 84 133 145 267 24 73 125 267 Salomon Brothers Global High Yield Portfolio.......................... 85 136 150 278 25 76 130 278 Smith Barney High Income Portfolio... 82 126 134 245 22 66 114 245 Smith Barney International All Cap Growth Portfolio................... 85 136 150 278 25 76 130 278 Smith Barney Large Cap Value Portfolio.......................... 82 126 134 245 22 66 114 245 Smith Barney Large Capitalization Growth Portfolio................... 83 130 140 257 23 70 120 257 Smith Barney Money Market Portfolio.......................... 80 123 127 232 20 63 107 232 Travelers Managed Income Portfolio... 82 127 136 248 22 67 116 248 Van Kampen Enterprise Portfolio...... 82 129 138 253 22 69 118 253 VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Growth Opportunities Portfolio............ 84 134 146 270 24 74 126 270
+ No longer available to new Contract Owners. 9 10 CONDENSED FINANCIAL INFORMATION -------------------------------------------------------------------------------- See Appendices A and B. THE ANNUITY CONTRACT -------------------------------------------------------------------------------- Travelers Vintage Annuity is a contract between the contract owner ("you") and the Company. We describe your rights and benefits in this prospectus and in the Contract. There may be differences in your Contract because of the requirements of the state where we issued your Contract. We will include any such differences in your Contract. You make purchase payments to us and we credit them to your Contract. We promise to pay you an income, in the form of annuity or income payments, beginning on a future date that you choose, the maturity date. The purchase payments accumulate tax deferred in the funding options of your choice. We offer multiple variable funding options, and one Fixed Account option. The contract owner assumes the risk of gain or loss according to the performance of the variable funding options. The contract value is the amount of purchase payments, plus or minus any investment experience on the amounts you allocate to the Separate Account ("Separate Account contract value") or interest on the amounts you allocate to the Fixed Account ("Fixed Account contract value"). The contract value also reflects all withdrawals made and charges deducted. There is generally no guarantee that at the maturity date the contract value will equal or exceed the total purchase payments made under the Contract. The date the contract and its benefits become effective is referred to as the contract date. Each 12-month period following the contract date is called a contract year. Certain changes and elections must be made in writing to the Company. Where the term "written request" is used, it means that you must send written information to our Home Office in a form and content satisfactory to us. CONTRACT OWNER INQUIRIES Any questions you have about your Contract should be directed to our Home Office at 1-800-842-8573. PURCHASE PAYMENTS Your initial purchase payment is due and payable before the Contract becomes effective. The initial purchase payment must be at least $5,000. You may make additional payments of at least $500 at any time. Under certain circumstances, we may waive the minimum purchase payment requirement. Purchase payments over $1,000,000 may be made only with our prior consent. We will apply the initial purchase payment less any applicable premium tax (net purchase payment) within two business days after we receive it in good order at our Home Office. We will credit subsequent purchase payments to a Contract on the same business day we receive it, if it is received in good order by our Home Office by 4:00 p.m. Eastern time. A business day is any day that the New York Stock Exchange is open for regular trading (except when trading is restricted due to an emergency as defined by the Securities and Exchange Commission). ACCUMULATION UNITS The period between the contract date and the maturity date is the accumulation period. During the accumulation period, an accumulation unit is used to calculate the value of a Contract. An accumulation unit works like a share of a mutual fund. Each funding option has a corresponding accumulation unit value. The accumulation units are valued each business day and their values may 10 11 increase or decrease from day to day. The number of accumulation units we will credit to your Contract once we receive a purchase payment is determined by dividing the amount directed to each funding option by the value of its accumulation unit. We calculate the value of an accumulation unit for each funding option each day the New York Stock Exchange is open. The values are calculated as of 4:00 p.m. Eastern time. After the value is calculated, we credit your Contract. During the annuity period (i.e., after the maturity date), you are credited with annuity units. THE VARIABLE FUNDING OPTIONS You choose the variable funding options to which you allocate your purchase payments. These variable funding options are subaccounts of the Separate Account. The subaccounts invest in the underlying funds. You are not investing directly in the underlying fund. Each underlying fund is a portfolio of an open-end management investment company that is registered with the SEC under the Investment Company Act of 1940. You will find detailed information about the funds and their inherent risks in the current fund prospectuses for the underlying funds that must accompany this prospectus. Since each option has varying degrees of risk, please read the prospectuses carefully before investing. There is no assurance that any of the underlying funds will meet its investment objectives. Contact your registered representative or call 1-800-842-8573 to request additional copies of the prospectuses. The Company has entered into agreements with either the investment adviser or distributor of certain of the underlying funds in which the adviser or distributor pays us a fee for providing administrative services, which fee may vary. The fee is ordinarily based upon an annual percentage of the average aggregate net amount invested in the underlying funds on behalf of the Separate Account. In addition, an affiliated broker-dealer will receive 12b-1 fees deducted from certain underlying fund assets for providing distribution, shareholder support and administrative services to some of the underlying funds. If any of the underlying funds become unavailable for allocating purchase payments, or if we believe that further investment in an underlying fund is inappropriate for the purposes of the Contract, we may substitute another funding option. However, we will not make any substitutions without notifying you and obtaining any state and SEC approval, if necessary. From time to time we may make new funding options available. The current variable funding options are listed below, along with their investment advisers and any subadviser:
INVESTMENT FUNDING OPTION OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. Value Fund Seeks to achieve long-term growth of capital by AIM Advisers, Inc. investing primarily in equity securities of undervalued companies. Income is a secondary objective. ALLIANCE VARIABLE PRODUCT SERIES FUND, INC. Premier Growth Portfolio -- Seeks long-term growth of capital by investing Alliance Capital Management Class B primarily in equity securities of a limited number ("Alliance") of large, carefully selected, high quality U.S. companies that are judged likely to achieve superior earning momentum. AMERICAN VARIABLE INSURANCE SERIES Global Growth Fund -- Class Seeks capital appreciation by investing primarily Capital Research and Management 2 in common stocks of companies located around the Company world. Growth Fund -- Class 2 Seeks capital appreciation by investing primarily Capital Research and Management in common stocks of companies that appear to offer Company superior opportunities for growth and capital.
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INVESTMENT FUNDING OPTION OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- AMERICAN VARIABLE INSURANCE SERIES, CONT. Growth-Income Fund -- Class Seeks capital appreciation and income by investing Capital Research and Management 2 primarily in common stocks or other securities Company which demonstrate the potential for appreciation and/or dividends. DREYFUS VARIABLE INVESTMENT FUND Small Cap Portfolio -- Seeks to maximize capital appreciation by The Dreyfus Corporation Initial Shares investing primarily in small-cap companies with total market values of less than $1.5 billion at the time of purchase. GREENWICH STREET SERIES FUND Equity Index Portfolio -- Seeks to replicate, before deduction of expenses, Travelers Investment Management Class II Shares the total return performance of the S&P 500 Index. Co. ("TIMCO") Fundamental Value Portfolio Seeks long-term capital growth with current income Smith Barney Fund Management, as a secondary objective. LLC ("SBFM") SALOMON BROTHERS VARIABLE SERIES FUND, INC. Investors Fund Seeks long-term growth of capital, and, Salomon Brothers Asset secondarily, current income, through investments Management ("SBAM") in common stocks of well-known companies. Total Return Fund Seeks above-average income (compared to a portfo- SBAM lio invested entirely in equity securities). Secondarily, seeks opportunities for growth of capital and income. SMITH BARNEY ALLOCATION SERIES, INC. Select Balanced Portfolio Seeks a balance of growth of capital and income by Travelers Investment Advisers investing in a select group of mutual funds. ("TIA") Select Growth Portfolio Seeks long term growth of capital by investing in TIA a select group of mutual funds. Select High Growth Seeks capital appreciation by investing in a TIA Portfolio+ select group of mutual funds. SMITH BARNEY INVESTMENT SERIES Large Cap Core Portfolio Seeks capital appreciation by investing primarily SBFM in U.S. common stocks and other equity securities, typically of established companies with large market capitalization. Premier Selection All Cap Seeks long term growth of capital using a multi- SBFM Growth Portfolio manager approach investing in small, medium and large sized companies. TRAVELERS SERIES FUND INC. AIM Capital Appreciation Seeks capital appreciation by investing TIA Portfolio principally in common stock, with emphasis on Subadviser: AIM Capital medium-sized and smaller emerging growth Management Inc. companies. Alliance Growth Portfolio Seeks long-term growth of capital. Current income TIA is only an incidental consideration. The Portfolio Subadviser: Alliance Capital invests predominantly in equity securities of Management L.P. companies with a favorable outlook for earnings and whose rate of growth is expected to exceed that of the U.S. economy over time. MFS Total Return Portfolio Seeks to obtain above-average income (compared to TIA a portfolio entirely invested in equity Subadviser: Massachusetts securities) consistent with the prudent employment Financial Services Company of capital. Generally, at least 40% of the ("MFS") Portfolio's assets will be invested in equity securities. Putnam Diversified Income Seeks high current income consistent with TIA Portfolio preservation of capital. The Portfolio will Subadviser: Putnam Investment allocate its investments among the U.S. Government Management, Inc. Sector, the High Yield Sector, and the International Sector of the fixed income securities markets. Salomon Brothers Global Seeks primarily high current income and, TIA High Yield Portfolio secondarily, capital appreciation. The Portfolio Subadviser: Chancellor LGT allocates its assets among debt securities of Asset Management, Inc. issuers in the U.S., developed foreign countries and emerging markets.
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INVESTMENT FUNDING OPTION OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- TRAVELERS SERIES FUND INC., CONT. Smith Barney High Income Seeks high current income. Capital appreciation is SBFM Portfolio a secondary objective. The Portfolio will invest at least 65% of its assets in high-yielding corporate debt obligations and preferred stock. Smith Barney International Seeks total return on assets from growth of SBFM All Cap Growth Portfolio capital and income by investing at least 65% of its assets in a diversified portfolio of equity securities of established non-U.S. issuers. Smith Barney Large Seeks long-term growth of capital by investing in SBFM Capitalization Growth equity securities of companies with large market Portfolio capitalizations. Smith Barney Large Cap Seeks current income and long-term growth of SBFM Value Portfolio income and capital by investing primarily, but not exclusively, in common stocks. Smith Barney Money Market Seeks maximum current income and preservation of SBFM Portfolio capital. Travelers Managed Income Seeks high current income consistent with prudent TIA Portfolio risk of capital through investments in corporate Subadviser: Travelers Asset debt obligations, preferred stocks, and Management International obligations issued or guaranteed by the U.S. Company LLC ("TAMIC") Government or its agencies or instrumentalities. Van Kampen Enterprise Seeks capital appreciation through investment in SBFM Portfolio securities believed to have above-average Subadviser: Van Kampen Asset potential for capital appreciation. Any income Management Inc. received on such securities is incidental to the objective of capital appreciation. THE TRAVELERS SERIES TRUST Convertible Bond Portfolio Seeks current income and capital appreciation by TAMIC investing in convertible bond securities and in combinations of nonconvertible fixed-income securities and warrants or call options that together resemble convertible securities. Disciplined Mid Cap Stock Seeks growth of capital by investing primarily in TAMIC Portfolio a broadly diversified portfolio of U.S. common Subadviser: TIMCO stocks. Disciplined Small Cap Stock Seeks long-term capital appreciation by investing TAMIC Portfolio++ primarily (at least 65% of its total assets) in Subadviser: TIMCO the common stocks of U.S. Companies with relatively small market capitalizations at the time of investment. MFS Emerging Growth Seeks to provide long-term growth of capital. TAMIC Portfolio Dividend and interest income from portfolio Subadviser: MFS securities, if any, is incidental to the MFS Portfolio's investment objective. MFS Research Portfolio Seeks to provide long-term growth of capital and TAMIC future income. Subadviser: MFS Strategic Stock Portfolio++ Seeks to provide an above average total return TAMIC through a combination of potential capital Subadviser: TIMCO appreciation and dividend income by investing primarily in high dividend yielding stocks periodically selected from companies included in (i) the Dow Jones Industrial Average and (ii) a subset of the S&P Industrial Index.
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INVESTMENT FUNDING OPTION OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------------------------------------------------------------------------------------- VARIABLE ANNUITY PORTFOLIOS Smith Barney Small Cap Seeks long-term capital growth by investing in Citi Fund Management, Inc. Growth Opportunities equity securities of U.S. companies with market Portfolio capitalizations below the top 1,000 stocks of the equity market. Under normal circumstances, at least 65% of the fund's total assets will be invested in such companies. Dividend income, if any, is incidental to the investment objective.
--------------- + No longer available to new contract owners. ++ ANTICIPATED CHANGES TO VARIABLE FUNDING OPTIONS Subject to shareholder approval, we anticipate the Disciplined Small Cap Stock Portfolio will be liquidated on or about October 26, 2001. On this date, liquidation proceeds will be used to purchase shares of the Smith Barney Money Market Portfolio of the Travelers Series Fund. Also subject to shareholder approval, we anticipate that the Strategic Stock Portfolio will merge into the Investors Fund of the Salomon Brothers Variable Series Fund Inc. on or about October 26, 2001. On this date, all shares of the Strategic Stock Portfolio will be exchanged for the number of shares of the Investors Fund that is equal in value at the time of the merger to the value of such shares in the Strategic Stock Portfolio. When making any investment decisions, please consider these anticipated changes. As of May 1, 2001, the Disciplined Small Cap Stock Portfolio and the Strategic Stock Portfolio are closed to new contract owners. FIXED ACCOUNT -------------------------------------------------------------------------------- We offer our Fixed Account as a funding option. Please see Appendix C for more information. CHARGES AND DEDUCTIONS -------------------------------------------------------------------------------- GENERAL We deduct the charges described below. The charges are for the service and benefits we provide, costs and expenses we incur, and risks we assume under the Contracts. Services and benefits we provide include: - the ability for you to make withdrawals and surrenders under the Contracts; - the death benefit paid on the death of the contract owner, annuitant, or first of the joint owners, - the available funding options and related programs (including dollar-cost averaging, portfolio rebalancing, and systematic withdrawal programs); - administration of the annuity options available under the Contracts; and - the distribution of various reports to contract owners. 14 15 Costs and expenses we incur include: - losses associated with various overhead and other expenses associated with providing the services and benefits provided by the Contracts, - sales and marketing expenses including commission payments to your Smith Barney Financial Consultant, and - other costs of doing business. Risks we assume include: - that annuitants may live longer than estimated when the annuity factors under the Contracts were established; - that the amount of the death benefit will be greater than the contract value, and - that the costs of providing the services and benefits under the Contracts will exceed the charges deducted. We may also deduct a charge for taxes. Unless otherwise specified, charges are deducted proportionately from all funding options in which you are invested. We may reduce or eliminate the withdrawal charge, the administrative charges and/or the mortality and expense risk charge under the Contract when certain sales or administration of the Contract result in savings or reduced expenses and/or risks. For certain trusts, we may change the order in which purchase payments and earnings are withdrawn in order to determine the withdrawal charge. We will not reduce or eliminate the withdrawal charge or the administrative charge where such reduction or elimination would be unfairly discriminatory to any person. The amount of a charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designated charge. (For example, the withdrawal charge we collect may not fully cover all of the sales and distribution expenses we actually incur.) We may also profit on one or more of the charges. We may use any such profits for any corporate purpose, including the payment of sales expenses. WITHDRAWAL CHARGE We do not deduct a sales charge from purchase payments when they are made to the Contract. However, a withdrawal charge will apply if purchase payments are withdrawn before they have been in the Contract for seven years. We will assess the charge as a percentage of the purchase payment withdrawn as follows:
YEARS SINCE PURCHASE WITHDRAWAL PAYMENT MADE CHARGE 0-1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7+ 0%
For purposes of the withdrawal charge calculation, withdrawals are deemed to be taken first from: (a) any purchase payment to which no withdrawal charge applies, then 15 16 (b) any remaining free withdrawal allowance (as described below) (after being reduced by (a)), then (c) any purchase payment to which a withdrawal charge applies (on a first-in, first-out basis), then (d) any Contract earnings. Unless you instruct us otherwise, we will deduct the withdrawal charge from the amount requested. We will not deduct a withdrawal charge: - due to the death of the contract owner or the annuitant (with no contingent annuitant surviving); - if an annuity payout has begun - due to a minimum distribution under our minimum distribution rules then in effect; or - if an income option of at least five year's duration is begun after the first contract year. FREE WITHDRAWAL ALLOWANCE Beginning in the second contract year, you may withdraw up to 15% of the contract value annually. We calculate the available withdrawal amount as of the end of the previous contract year. The free withdrawal provision applies to partial withdrawals only. ADMINISTRATIVE CHARGES There are two administrative charges: the annual contract administrative charge and the administrative expense charge. We will deduct the $30 annual contract administrative charge on the fourth Friday of each August. This charge compensates us for expenses incurred in maintaining and establishing the contract, and we will prorate this charge (i.e. calculate) from the date of purchase. We will also prorate this charge if you surrender your Contract, or if we terminate your Contract. We will not deduct a contract administrative charge: (1) from the distribution of death proceeds; (2) after an annuity payout has begun, or (3) if the contract value on the date of assessment equals or is greater than $40,000. We deduct the administrative expense charge (sometimes called "sub-account administrative charge") on each business day from amounts allocated to the variable funding options to compensate the Company for certain related administrative and operating expenses. The charge equals, on an annual basis, 0.15% of the daily net asset value allocated to each of the variable funding options, and is reflected in our accumulation and annuity unit value calculations. MORTALITY AND EXPENSE RISK CHARGE Each business day, we deduct a mortality and expense risk ("M&E") charge from amounts held in the variable funding options. We reflect the deduction in our calculation of accumulation and annuity unit values. The charges stated are the maximum for this product. We reserve the right to lower this charge at any time. If you choose the Standard Death Benefit, the M&E charge is 1.02% annually. If you choose the Enhanced Death Benefit, the M&E charge is 1.30% annually. This charge compensates the company for risks assumed, benefits provided and expenses incurred, including payment of commissions to your sales agent. 16 17 VARIABLE FUNDING OPTION EXPENSES We summarized the charges and expenses of the underlying funds in the fee table. Please review the prospectus for each underlying fund for a more complete description of that fund and its expenses. PREMIUM TAX Certain state and local governments charge premium taxes ranging from 0% to 5%, depending upon jurisdiction. We are responsible for paying these taxes and will determine the method used to recover premium tax expenses incurred. We will deduct any applicable premium taxes from your contract value either upon death, surrender, annuitization, or at the time you make purchase payments to the Contract, but no earlier than when we have a tax liability under state law. CHANGES IN TAXES BASED UPON PREMIUM OR VALUE If there is any change in a law assessing taxes against the Company based upon premiums, contract gains or value of the Contract, we reserve the right to charge you proportionately for this tax. TRANSFERS -------------------------------------------------------------------------------- Up to 30 days before the maturity date, you may transfer all or part of the contract value between variable funding options. We will make transfers at the value(s) next determined after we receive your request at our Home Office. There are no restrictions on the amount or frequency of transfers currently; however, we reserve the right to limit the number of transfers to one in any six-month period. We also reserve the right to restrict transfers by any market timing firm or any other third party authorized to initiate transfers on behalf of multiple contract owners. We may, among other things, not accept: 1) the transfer instructions of any agent acting under a power of attorney on behalf of more than one owner, or 2) the transfer or exchange instructions of individual owners who have executed pre-authorized transfer forms which are submitted by market timing firms or other third parties on behalf of more than one owner. We further reserve the right to limit transfers that we determine will disadvantage other contract owners. Since different underlying funds have different expenses, a transfer of contract values from one variable funding option to another could result in your investment becoming subject to higher or lower expenses. Also, you should consider the inherent risks involved in making transfers. Frequent transfers based on short-term expectations may increase the risk that you will make a transfer at an inopportune time. After the maturity date, you may make transfers between funding options only with our consent. DOLLAR COST AVERAGING Dollar cost averaging or the pre-authorized transfer program (the "DCA Program") allows you to transfer a set dollar amount to other funding options on a monthly or quarterly basis during the accumulation phase of the Contract. Using this method, you will purchase more accumulation units in a funding option if the value per unit is low and will purchase fewer accumulation units if the value per unit is high. Therefore, you may achieve a lower-than-average cost per unit in the long run if you have the financial ability to continue the program over a long enough period of time. Dollar cost averaging does not assure a profit or protect against a loss. 17 18 You may elect the DCA Program through written request or other method acceptable to us. You must have a minimum total contract value of $5,000 to enroll in the DCA Program. The minimum amount that may be transferred through this program is $400. You may establish pre-authorized transfers of contract values from the Fixed Account, subject to certain restrictions. Under the DCA Program, automated transfers from the Fixed Account may not deplete your Fixed Account Value in less than twelve months from your enrollment in the DCA Program. In addition to the DCA Program, we may credit increased interest rates to contract owners under an administrative Special DCA Program established at our discretion, depending on availability and state law. Under this program, the contract owner may pre-authorize level transfers to any of the funding options under either a 6 Month Program or 12 Month Program. The 6 Month Program and the 12 Month Program will generally have different credited interest rates. Under the 6 Month Program, the interest rate can accrue up to 6 months on amounts in the Special DCA Program and we must transfer all purchase payments and accrued interest on a level basis to the selected funding options in 6 months. Under the 12 Month Program, the interest rate can accrue up to 12 months on funds in the Special DCA Program and we must transfer all purchase payments and accrued interest in this Program on a level basis to the selected funding options in 12 months. The pre-authorized transfers will begin after the initial Program purchase payment and complete enrollment instructions are received by Travelers. If complete Program enrollment instructions are not received by the Company within 15 days of receipt of the initial Program purchase payment, the entire balance in the Program will be credited with the non-Program interest rate then in effect for the Fixed Account. You may start or stop participation in the DCA Program at any time, but you must give the Company at least 30 days' notice to change any automated transfer instructions that are currently in place. If you stop the Special DCA Program and elect to remain in the Fixed Account, we will credit your contract value for the remainder of 6 or 12 months with the interest rate for non-Program funds. You may only have one DCA Program or Special DCA Program in place at one time. We will allocate any subsequent purchase payments we receive within the Program period selected to the current funding options over the remainder of that Program transfer period, unless you otherwise direct. All provisions and terms of the Contract apply to the DCA and Special DCA Programs, including provisions relating to the transfer of money between funding options. We reserve the right to suspend or modify transfer privileges at any time and to assess a processing fee for this service. ACCESS TO YOUR MONEY -------------------------------------------------------------------------------- Any time before the maturity date, you may redeem all or any portion of the cash surrender value, that is, the contract value less any withdrawal charge and any premium tax not previously deducted. Unless you submit a written request specifying the fixed or variable funding option(s) from which we are to withdraw amounts, we will make the withdrawal on a pro rata basis. We will determine the cash surrender value as of the close of business after we receive your surrender request at our Home Office. The cash surrender value may be more or less than the purchase payments you made. You may not make withdrawals during the annuity period. We may defer payment of any cash surrender value for a period of up to seven days after the written request is received, but it is our intent to pay as soon as possible. We cannot process requests for withdrawals that are not in good order. We will contact you if there is a deficiency causing a delay and will advise what is needed to act upon the withdrawal request. 18 19 SYSTEMATIC WITHDRAWALS Before the maturity date, you may choose to withdraw a specified dollar amount (at least $100) on a monthly, quarterly, semiannual or annual basis. We will deduct any applicable premium taxes and withdrawal charge. To elect systematic withdrawals, you must have a contract value of at least $15,000 and you must make the election on the form we provide. We will surrender accumulation units pro rata from all investment options in which you have an interest, unless you instruct us otherwise. You may begin or discontinue systematic withdrawals at any time by notifying us in writing, but you must give at least 30 days' notice to change any systematic withdrawal instructions that are currently in place. We reserve the right to discontinue offering systematic withdrawals or to assess a processing fee for this service upon 30 days' written notice to contract owners (where allowed by state law). Each systematic withdrawal is subject to federal income taxes on the taxable portion. In addition, a 10% federal penalty tax may be assessed on systematic withdrawals if the contract owner is under age 59 1/2. You should consult with your tax adviser regarding the tax consequences of systematic withdrawals. LOANS Loans may be available under your Contract. If available, all loan provisions are described in your Contract or loan agreement. OWNERSHIP PROVISIONS -------------------------------------------------------------------------------- TYPES OF OWNERSHIP CONTRACT OWNER CONTRACT OWNER (you). The Contract belongs to the contract owner named in the Contract (on the Specifications page), or to any other person to whom you subsequently assign the Contract. You may only make an assignment of ownership or a collateral assignment for nonqualified contracts. You have sole power during the annuitant's lifetime to exercise any rights and to receive all benefits given in the Contract provided you have not named an irrevocable beneficiary and provided you have not assigned the Contract. You receive all payments while the annuitant is alive unless you direct them to an alternate recipient. An alternate recipient does not become the contract owner. JOINT OWNER. For nonqualified contracts only, you may name joint owners (e.g., spouses) in a written request before the Contract is in effect. Joint owners may independently exercise transfers allowed under the Contract. All other rights of ownership must be exercised by both owners. Joint owners own equal shares of any benefits accruing or payments made to them. SUCCEEDING OWNER. For nonqualified contracts only, if joint owners are not named, the contract owner may name a succeeding owner in a written request. The succeeding owner becomes the contract owner if living when the contract owner dies. The succeeding owner had no interest in the Contract before then. The contract owner may change or delete a succeeding owner by written request. BENEFICIARY You name the beneficiary in a written request. The beneficiary has the right to receive any death benefit proceeds remaining under the Contract upon the death of the annuitant or the contract owner. If more than one beneficiary survives the annuitant or contract owner, they will share equally in benefits unless you recorded different shares with the Company by written request 19 20 before the death of the annuitant or contract owner. In the case of a non-spousal beneficiary or a spousal beneficiary who has not chosen to assume the Contract, we will not transfer or otherwise remove the death benefit proceeds from either the variable funding options or the Fixed Account, as most recently elected by the contract owner, until the death report date. Unless you have named an irrevocable beneficiary you have the right to change any beneficiary by written request during the lifetime of the annuitant and while the Contract continues. ANNUITANT The annuitant is designated in the Contract (on the Specifications page), and is the individual on whose life the maturity date and the amount of the monthly annuity payments depend. You may not change the annuitant after your Contract is in effect. You may not change, delete or add a contingent annuitant after the Contract becomes effective. DEATH BENEFIT -------------------------------------------------------------------------------- Before the maturity date, when there is no surviving annuitant, a death benefit is payable when either the annuitant or a contract owner dies. At purchase, you elect either the Standard Death Benefit, or the Enhanced Death Benefit (also referred to as the "Roll-Up Death Benefit"). The death benefit is calculated at the close of the business day on which the Company's Home Office receives due proof of death and written payment instructions (the death report date). DEATH PROCEEDS BEFORE THE MATURITY DATE STANDARD DEATH BENEFIT DEATH OF ANY OWNER OR THE ANNUITANT BEFORE AGE 75. We will pay to the beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, each reduced by any applicable premium tax, withdrawals or outstanding loans not previously deducted: (1) the contract value; (2) the total purchase payments made under the Contract; or (3) the contract value on the latest fifth contract year anniversary immediately preceding the date on which the Company receives due proof of death. DEATH OF ANY OWNER OR THE ANNUITANT ON OR AFTER AGE 75. We will pay to the beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, each reduced by any applicable premium tax, withdrawals or outstanding loans not previously deducted: (1) the contract value; (2) the total purchase payments made under the Contract; or (3) the contract value on the latest fifth contract year anniversary occurring on or before the annuitant's 75th birthday. 20 21 ENHANCED DEATH BENEFIT (ROLL-UP DEATH BENEFIT) (NOT AVAILABLE WHEN EITHER THE ANNUITANT OR OWNER IS AGE 76 OR OLDER ON THE CONTRACT DATE) --------------------------------------------------------------------------------------------------------------- AGE AT TIME OF DEATH DEATH BENEFIT --------------------------------------------------------------------------------------------------------------- If the annuitant dies before age 80, the - the contract value death benefit will be the greatest of: - the roll-up death benefit value (as described below): - the step-up value, if any, as described below. --------------------------------------------------------------------------------------------------------------- If the annuitant dies on or after age 80, the death - the contract value benefit will be the greatest of: - the roll-up death benefit value (as described below) on the annuitant's 80(th) birthday, plus any additional purchase payments and minus any partial surrender reductions (as described below) that occur after the annuitant's 80(th) birthday; or - the step-up value, if any, as described below. ---------------------------------------------------------------------------------------------------------------
THE ROLL-UP DEATH BENEFIT VALUE. On the contract date, the roll-up death benefit value is equal to the purchase payment. On each contract date anniversary, the roll-up death benefit value will be recalculated to equal a) plus b) minus c), increased by 5%, where: a) is the roll-up death benefit value as of the previous contract date anniversary; b) is any purchase payment during the previous contract year; c) is any partial surrender reduction (as described below) during the previous contract year; On dates other than the contract date anniversary, the roll-up death benefit value equals a) plus b) minus c) where: a) is the roll-up death benefit value as of the previous contract date anniversary; b) is any purchase payment made during the previous contract year; c) is any partial surrender reduction (as described below) during the previous contract year; The maximum roll-up death benefit payable equals 200% of the difference between all purchase payments and all partial surrender reductions (as described below). STEP-UP VALUE. The step-up value will initially equal the first purchase payment. Whenever you make a purchase payment, we will increase the step-up value by the amount of that purchase payment. Whenever you take a withdrawal, we will reduce the step-up value by a partial surrender reduction as described below. On each contract date anniversary that occurs before the annuitant's 80th birthday and before the annuitant's death, if the contract value is greater than the step-up value, we will reset the step-up value to equal the contract value on that date. If the step-up value is greater than the contract value, the step-up value will remain unchanged. We will not reduce the step-up value on these anniversary recalculations (provided no withdrawals are made on that day). The only changes made to the step-up value on or after the annuitant's 80th birthday will be those related to additional purchase payments or withdrawals as described below. THE PARTIAL SURRENDER REDUCTION referenced above is equal to (1) the amount of a death benefit value (step-up or roll-up) immediately prior to the reduction for the withdrawal, multiplied by (2) the amount of the withdrawal divided by the contract value immediately prior to the withdrawal. 21 22 For example, assume your current contract value is $55,000. If your original step-up value is $50,000, and you decide to make a withdrawal of $10,000, we would reduce the step-up value as follows: 50,000 X (10,000/55,000) = 9,090 Your new step-up value would be 50,000 - 9,090 or $40,910. The following example shows what would happen in a declining market. Assume your current contract value is $30,000. If your original step-up value is $50,000, an you decide to make a withdrawal of $10,000, we would reduce the step-up value as follows: 50,000 X (10,000/30,000) = 16,666 Your new step-up value would be 50,000 - 16,666, or $33,334. PAYMENT OF PROCEEDS We describe the process of paying death benefit proceeds before the maturity date in the charts below. The charts do not encompass every situation and are merely intended as a general guide. More detailed information is provided in your Contract. Generally, the person(s) receiving the benefit may request that the proceeds be paid in a lump sum, or be applied to one of the settlement options available under the Contract. 22 23 NONQUALIFIED CONTRACTS
Owner (who is not the The beneficiary(ies), or Unless, the beneficiary is the Yes annuitant) (with no joint if none, to the contract contract owner's spouse and owner) owner's estate. the spouse elects to continue the contract as the new owner rather than receive the distribution. --------------------------------------------------------------------------------------------------------------- Owner (who is the annuitant) The beneficiary(ies), or Unless, the beneficiary is the Yes (with no joint owner) if none, to the contract contract owner's spouse and owner's estate. the spouse elects to continue the contract as the new owner rather than receive the distribution. --------------------------------------------------------------------------------------------------------------- Joint Owner (who is not the The surviving joint Unless the surviving joint Yes annuitant) owner. owner is the spouse and elects to continue the contract. --------------------------------------------------------------------------------------------------------------- Joint Owner (who is the The beneficiary(ies), or Unless the Yes annuitant) if none, to the beneficiary/surviving joint surviving joint owner. owner is the contract owner's spouse and the spouse elects to continue the contract. Or, unless there is a contingent annuitant the contingent annuitant becomes the annuitant and the proceeds will be paid to the surviving joint owner. If the surviving joint owner is the spouse, the spouse may elect to continue the contract. --------------------------------------------------------------------------------------------------------------- Annuitant (who is not the The beneficiary(ies), Unless the beneficiary is the Yes contract owner) or, if none, to the contract owner's spouse and contract owner. the spouse elects to continue the contract, or, unless, there is a contingent annuitant. Then, the contingent annuitant becomes the annuitant and the Contract continues in effect (generally using the original maturity date). The proceeds will then be paid upon the death of the contingent annuitant or owner. --------------------------------------------------------------------------------------------------------------- Annuitant (who is the contract See death of "owner who Yes owner) is the annuitant" above. --------------------------------------------------------------------------------------------------------------- Annuitant (where owner is a The beneficiary(ies) Yes (Death of nonnatural person/trust) (e.g. the trust). annuitant is treated as death of the owner in these circumstances.) --------------------------------------------------------------------------------------------------------------- Contingent Annuitant (assuming No death proceeds are N/A annuitant is still alive) payable; contract continues. --------------------------------------------------------------------------------------------------------------- Beneficiary No death proceeds are N/A payable; contract continues. --------------------------------------------------------------------------------------------------------------- Contingent Beneficiary No death proceeds are N/A payable; contract continues. ---------------------------------------------------------------------------------------------------------------
23 24 * Certain payout rules of the Internal Revenue Code (IRC) are triggered upon the death of any Owner. Non-spousal Beneficiaries (as well as spousal beneficiaries who choose not to assume the contract) must begin taking distributions based on the Beneficiary's life expectancy within one year of death or take a complete distribution of contract proceeds within 5 years of death. If Mandatory Distribution has begun, the 5 year payout option is not available. QUALIFIED CONTRACTS
-------------------------------------------------------------------------------------------------------------- BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT THE DEATH OF THE PROCEEDS TO: RULES APPLY (SEE * ABOVE) -------------------------------------------------------------------------------------------------------------- Owner/Annuitant The beneficiary(ies), or Yes if none, to the contract owner's estate. -------------------------------------------------------------------------------------------------------------- Beneficiary No death proceeds are N/A payable; contract continues. -------------------------------------------------------------------------------------------------------------- Contingent Beneficiary No death proceeds are N/A payable; contract continues. --------------------------------------------------------------------------------------------------------------
DEATH PROCEEDS AFTER THE MATURITY DATE If any contract owner or the annuitant dies on or after the maturity date, we will pay the beneficiary a death benefit consisting of any benefit remaining under the annuity or income option then in effect. THE ANNUITY PERIOD -------------------------------------------------------------------------------- MATURITY DATE Under the Contract, you can receive regular income payments (annuity payments). You can choose the month and the year in which those payments begin (maturity date). You can also choose among income plans (annuity or income options). While the annuitant is alive, you can change your selection any time up to the maturity date. Annuity or income payments will begin on the maturity date stated in the Contract unless the Contract has been fully surrendered or the proceeds have been paid to the beneficiary before that date, or unless you elect another date. Annuity payments are a series of periodic payments (a) for life; (b) for life with either a minimum number of payments or a specific amount assured; or (c) for the joint lifetime of the annuitant and another person, and thereafter during the lifetime of the survivor. We may require proof that the annuitant is alive before annuity payments are made. Not all options may be available in all states. You may choose to annuitize at any time after you purchase the contract. Unless you elect otherwise, the maturity date will be the annuitant's 70th birthday for qualified contracts, or, for nonqualified contracts, the annuitant's 75(th) birthday or ten years after the effective date of the contract, if later. (For Contracts issued in Florida and New York, the maturity date elected may not be later than the annuitant's 90th birthday.) At least 30 days before the original maturity date, a contract owner may elect to extend the maturity date to any time prior to the annuitant's 85(th) birthday or for qualified contracts, or, for all contracts, to a later date with our consent. Certain annuity options taken at the maturity date may be used to meet the minimum required distribution requirements of federal tax law, or a program of partial surrenders may be used instead. These mandatory distribution requirements take effect generally upon the death of the contract owner, or with qualified contracts upon either the later of the April 1 following the contract owner's attainment of age 70 1/2 or year of retirement; or the 24 25 death of the contract owner. You should seek independent tax advice regarding the election of minimum required distributions. ALLOCATION OF ANNUITY You may elect to receive your annuity payments in the form of a variable annuity, a fixed annuity, or a combination of both. If, at the time annuity payments begin, you have not made an election, we will apply your cash surrender value to provide an annuity funded by the same investment options as you have selected during the accumulation period. At least 30 days before the maturity date, you may transfer the contract value among the funding options in order to change the basis on which we will determine annuity payments. (See "Transfers.") VARIABLE ANNUITY You may choose an annuity payout that fluctuates depending on the investment experience of the variable funding options. We determine the number of annuity units credited to the Contract by dividing the first monthly annuity payment attributable to each variable funding option by the corresponding accumulation unit value as of 14 days before the date annuity payments begin. We use an annuity unit to measure the dollar value of an annuity payment. The number of annuity units (but not their value) remains fixed during the annuity period. DETERMINATION OF FIRST ANNUITY PAYMENT. Your Contract contains the tables we use to determine your first monthly annuity payment. If you elect a variable annuity, the amount we apply to it will be the cash surrender value as of 14 days before the date annuity payments begin less any applicable premium tax not previously deducted. The amount of your first monthly payment depends on the annuity option you elected and the annuitant's adjusted age. Your Contract contains the formula for determining the adjusted age. We determine the total first monthly annuity payment by multiplying the benefit per $1,000 of value shown in the Contract tables (or, if they would produce a larger payment, the tables then in effect on the maturity date) by the number of thousands of dollars of contract value you apply to that annuity option. and factors in an assumed daily net investment factor. We call this your net investment rate. Your net investment rate corresponds to an annual interest rate of 3%. This means that if the annualized investment performance, after expenses, of your variable funding options is less than 3%, then the dollar amount of your variable annuity payment will decrease. However, if the annualized investment performance, after expenses, of your variable funding options is greater than 3%, then the dollar amount of your variable annuity payments will increase. DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of all subsequent annuity payments changes from month to month based on the investment experience of the applicable funding options. The total amount of each annuity payment will equal the sum of the basic payments in each funding option. We determine the actual amounts of these payments by multiplying the number of annuity units we credited to each funding option by the corresponding annuity unit value as of the date 14 days before the date the payment is due. FIXED ANNUITY You may choose a fixed annuity that provides payments which do not vary during the annuity period. We will calculate the dollar amount of the first fixed annuity payment as described under "Variable Annuity," except that the amount we apply to begin the annuity will be your cash surrender value as of the date annuity payments begin. Payout rates will not be lower than those shown in the Contract. If it would produce a larger payment, the fixed annuity payment will be determined using the Life Annuity Tables in effect on the maturity date. 25 26 PAYMENT OPTIONS -------------------------------------------------------------------------------- ELECTION OF OPTIONS While the annuitant is alive, you can change your annuity or income option selection any time up to the maturity date. Once annuity or income payments have begun, no further elections are allowed. During the annuitant's lifetime, if you do not elect otherwise before the maturity date, we will pay you (or another designated payee) the first of a series of monthly annuity or income payments based on the life of the annuitant, in accordance with Annuity Option 2 (Life Annuity with 120 monthly payments assured). For certain qualified contracts, Annuity Option 4 (Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of Primary Payee) will be the automatic option as described in the Contract. The minimum amount that can be placed under an annuity or income option will be $1,000 unless we agree to a lesser amount. If any monthly periodic payment due is less than $100, the Company reserves the right to make payments at less frequent intervals, or to pay the contract value in a lump-sum. On the maturity date, we will pay the amount due under the Contract in accordance with the payment option that you select. You may choose to receive a single lump-sum payment. You must elect an option in writing, in a form satisfactory to the Company. Any election made during the lifetime of the annuitant must be made by the contract owner. ANNUITY OPTIONS Subject to the conditions described in "Election of Options" above, we may pay all or any part of the cash surrender value under one or more of the following annuity options. Payments under the annuity options are generally made on a monthly basis. We may offer additional options. Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments during the lifetime of the annuitant ending with the last payment before death. This option offers the maximum periodic payment, since there is no assurance of a minimum number of payments or provision for a death benefit for beneficiaries. Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The Company will make monthly annuity payments during the lifetime of the annuitant, with the agreement that if, at the death of that person, payments have been made for less than 120, 180 or 240 months as elected, we will continue making payments to the beneficiary during the remainder of the period. Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will make regular annuity payments during the lifetime of the annuitant and a second person. When either person dies, we will continue making payments to the survivor. No further payments will be made following the death of the survivor. Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of Primary Payee. The Company will make annuity payments during the lifetimes of the annuitant and a second person. You will designate one as primary payee, and the other will be designated as secondary payee. On the death of the secondary payee, the Company will continue to make monthly annuity payments to the primary payee in the same amount that would have been payable during the joint lifetime of the two persons. On the death of the primary payee, the Company will continue to make annuity payments to the secondary payee in an amount equal to 50% of the payments which would have been made during the lifetime of the primary payee. No further payments will be made once both payees have died. 26 27 Option 5 -- Other Annuity Options. The Company will make any other arrangements for annuity payments as may be mutually agreed upon. INCOME OPTIONS Instead of one of the annuity options described above, and subject to the conditions described under "Election of Options," all or part of the Contract's cash surrender value (or, if required by state law, contract value) may be paid under one or more of the following income options, provided that they are consistent with federal tax law qualification requirements. Payments under the income options may be elected on a monthly, quarterly, semiannual or annual basis: Option 1 -- Payments of a Fixed Amount. We will make equal payments of the amount elected until the cash surrender value applied under this option has been exhausted. We will pay the first payment and all later payments from each funding option or the Fixed Account in proportion to the cash surrender value attributable to each funding option and/or Fixed Account. The final payment will include any amount insufficient to make another full payment. Option 2 -- Payments for a Fixed Period. We will make payments for the period selected. The amount of each payment will be equal to the remaining cash surrender value applied under this option divided by the number of remaining payments. Option 3 -- Other Income Options. We will make any other arrangements for Income Options as may be mutually agreed upon. MISCELLANEOUS CONTRACT PROVISIONS -------------------------------------------------------------------------------- RIGHT TO RETURN You may return the Contract for a full refund of the contract value plus any contract charges and premium taxes you paid (but not any fees and charges the underlying fund assessed) within ten days after you receive it (the "right to return period"). You bear the investment risk of investing in the variable funding options during the right to return period; therefore, the contract value we return may be greater or less than your purchase payment. If you purchase the Contract as an Individual Retirement Annuity, and return it within the first seven days after delivery, we will refund your purchase payment in full; during the remainder of the right to return period, we will refund the contract value (including charges). TERMINATION You do not need to make any purchase payments after the first to keep the Contract in effect. However, we reserve the right to terminate the Contract on any business day if your contract value as of that date is less than $1,000 and you have not made purchase payments for at least two years, unless otherwise specified by state law. Termination will not occur until 31 days after we have mailed notice of termination to your last known address and to any assignee of record. If we terminate the Contract, we will pay you the cash surrender value less any applicable taxes. REQUIRED REPORTS As often as required by law, but at least once in each contract year before the due date of the first annuity payment, we will furnish a report showing the number of accumulation units credited to the Contract and the corresponding accumulation unit value(s) as of the report date for each funding option to which the contract owner has allocated amounts during the applicable period. The Company will keep all records required under federal and state laws. 27 28 SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment or determination of values on any business day (1) when the New York Stock Exchange ("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3) when an emergency exists as determined by the SEC so that the sale of securities held in the Separate Account may not reasonably occur or so that the Company may not reasonably determine the value the Separate Account's net assets; or (4) during any other period when the SEC, by order, so permits for the protection of security holders. Payments from the Fixed Account may be delayed up to 6 months. THE SEPARATE ACCOUNTS -------------------------------------------------------------------------------- The Travelers Insurance Company and the Travelers Life and Annuity Company each sponsor separate accounts: Fund BD and BD II, respectively. Fund BD was established on October 22, 1993 and Fund II was established on February 22, 1995, and both are registered with the SEC as unit investment trusts (separate account) under the Investment Company Act of 1940, as amended. We will invest Separate Account assets attributable to the Contracts exclusively in the shares of the variable funding options. We hold the assets of Fund BD and BD II for the exclusive and separate benefit of the owners of each separate account, according to the laws of Connecticut. Income, gains and losses, whether or not realized, from assets allocated to the Separate Account are, in accordance with the Contracts, credited to or charged against the Separate Account without regard to other income, gains and losses of the Company. The assets held by the Separate Account are not chargeable with liabilities arising out of any other business which we may conduct. Obligations under the Contract are obligations of the Company. All investment income and other distributions of the funding options are payable to the Separate Account. We reinvest all such income and/or distributions in shares of the respective funding option at net asset value. Shares of the funding options are currently sold only to life insurance company separate accounts to fund variable annuity and variable life insurance contracts. Shares of the variable funding options are currently sold only to life insurance company separate accounts to fund variable annuity and variable life insurance contracts. Certain variable annuity separate accounts and variable life insurance separate accounts may invest in the funding options simultaneously (called "mixed" and "shared" funding). It is conceivable that in the future it may be disadvantageous to do so. Although the Company and the variable funding options do not currently foresee any such disadvantages either to variable annuity contract owners or variable life policy owners, each variable funding option's Board of Directors intends to monitor events in order to identify any material conflicts between them and to determine what action, if any, should be taken. If a Board of Directors was to conclude that separate funds should be established for variable life and variable annuity separate accounts, the variable annuity contract owners would not bear any of the related expenses, but variable annuity contract owners and variable life insurance policy owners would no longer have the economies of scale resulting from a larger combined fund. PERFORMANCE INFORMATION From time to time, we may advertise several types of historical performance for the Contract's variable funding options. We may advertise the "standardized average annual total returns" of the variable funding option, calculated in a manner prescribed by the SEC, and the "nonstandardized total return," as described below. Specific examples of the performance information appear in the SAI. STANDARDIZED METHOD. We compute quotations of average annual total returns according to a formula in which a hypothetical initial investment of $1,000 is applied to the variable funding 28 29 option, and then related to ending redeemable values over one-, five-, and ten-year periods, or for a period covering the time during which the funding option has been in existence, if less. These quotations reflect the deduction of all recurring charges during each period (on a pro rata basis in the case of fractional periods). We convert the deduction for the annual contract administrative charge to a percentage of assets based on the actual fee collected, divided by the average net assets for Contracts sold. Each quotation assumes a total redemption at the end of each period with the applicable withdrawal charge deducted at that time. NONSTANDARDIZED METHOD. We calculate nonstandardized "total returns" in a similar manner based on the performance of the funding options over a period of time, usually for the calendar year-to-date, and for the past one-, three-, five- and ten-year periods. Nonstandardized total returns will not reflect the deduction of the annual contract administrative charge, which, if reflected, would decrease the level of performance shown. These returns also do not reflect the withdrawal charge because we designed the Contract for long-term investment. For underlying funds that were in existence before they became available as a funding option, the nonstandardized average annual total return quotations reflects the investment performance that such funding options would have achieved (reduced by the applicable charges) had the underlying fund been held under the Contract for the period quoted. The total return quotations are based upon historical earnings and are not necessarily representative of future performance. GENERAL. Within the guidelines prescribed by the SEC and the National Association of Securities Dealers, Inc. ("NASD"), performance information may be quoted numerically or may be presented in a table, graph or other illustration. Advertisements may include data comparing performance to well-known indices of market performance (including, but not limited to, the Dow Jones Industrial Average, the Standard & Poor's (S&P) 500 Index, the S&P 400 Index, the Lehman Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value Line Index, and the Morgan Stanley Capital International's EAFE Index). Advertisements may also include published editorial comments and performance rankings compiled by independent organizations (including, but not limited to, Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that monitor the performance of the Separate Account and the variable funding options. FEDERAL TAX CONSIDERATIONS -------------------------------------------------------------------------------- The following general discussion of the federal income tax consequences under this Contract is not intended to cover all situations, and is not meant to provide tax advice. Because of the complexity of the law and the fact that the tax results will vary depending on many factors, you should consult your tax adviser regarding your personal situation. For your information, a more detailed tax discussion is contained in the SAI. GENERAL TAXATION OF ANNUITIES Congress has recognized the value of saving for retirement by providing certain tax benefits, in the form of tax deferral, for money put into an annuity. The Internal Revenue Code (Code) governs how this money is ultimately taxed, depending upon the type of contract, qualified or non-qualified, and the manner in which the money is distributed, as briefly described below. TAX-FREE EXCHANGES: The Internal Revenue Code Section provides that, generally, no gain or loss is recognized when an annuity contract is received in exchange for a life, endowment, or annuity contract. Since different annuity contracts have different expenses, fees and benefits, a tax-free exchange could result in your investment becoming subject to higher or lower fees and/or expenses. 29 30 TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED If you purchase an annuity contract with proceeds of an eligible rollover distribution from any pension plan, specially sponsored program, or individual retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a qualified contract. Some examples of qualified contracts are: IRAs, 403(b) annuities, pension and profit-sharing plans (including 401(k) plans), Keogh Plans, and certain other qualified deferred compensation plans. An exception to this is a qualified plan called a Roth IRA. Under Roth IRAs, after-tax contributions accumulate until maturity, when amounts (including earnings) may be withdrawn tax-free. If you purchase the contract on an individual basis with after-tax dollars and not under one of the programs described above, your contract is referred to as nonqualified. NONQUALIFIED ANNUITY CONTRACTS As the owner of a nonqualified annuity, you do not receive any tax benefit (deduction or deferral of income) on purchase payments, but you will not be taxed on increases in the value of your contract until a distribution occurs -- either as a withdrawal (distribution made prior to the maturity date), or as annuity payments. When a withdrawal is made, you are taxed on the amount of the withdrawal that is considered earnings. Similarly, when you receive an annuity payment, part of each payment is considered a return of your purchase payments and will not be taxed. The remaining portion of the annuity payment (i.e., any earnings) will be considered ordinary income for tax purposes. If a nonqualified annuity is owned by other than an individual, however, (e.g., by a corporation), increases in the value of the contract attributable to purchase payments made after February 28, 1986 are includible in income annually. Furthermore, for contracts issued after April 22, 1987, if you transfer the contract without adequate consideration all deferred increases in value will be includible in your income at the time of the transfer. If you make a partial withdrawal, this money will generally be taxed as first coming from earnings, (income in the contract), and then from your purchase payments. These withdrawn earnings are includible in your income. (See "Penalty Tax for Premature Distributions" below.) There is income in the contract to the extent the contract value exceeds your investment in the contract. The investment in the contract equals the total purchase payments you paid less any amount received previously which was excludible from gross income. Any direct or indirect borrowing against the value of the contract or pledging of the contract as security for a loan will be treated as a cash distribution under the tax law. The Contract provides one or more optional enhanced death benefits that in some cases may exceed the greater of the purchase price or the contract value. It is possible that the IRS may take a position that the charges for the optional enhanced death benefit(s) are deemed to be taxable distributions to you. Although we do not believe that a charge under such optional death benefit should be treated as a taxable withdrawal, you should consult your tax adviser before selecting any rider or endorsement to the Contract. Federal tax law requires that nonqualified annuity contracts meet minimum mandatory distribution requirements upon the death of the contract owner, including the first of joint owners. If these requirements are not met, the surviving joint owner, or the beneficiary, will have to pay taxes prior to distribution. The distribution required depends, among other things, upon whether an annuity option is elected or whether the new contract owner is the surviving spouse. We will administer Contracts in accordance with these rules and we will notify you when you should begin receiving payments. QUALIFIED ANNUITY CONTRACTS Under a qualified annuity, since amounts paid into the contract have not yet been taxed, the full amount of all distributions, including lump-sum withdrawals and annuity payments, are taxed at the 30 31 ordinary income tax rate unless the distribution is transferred to an eligible rollover account or contract. The Contract is available as a vehicle for IRA rollovers and for other qualified contracts. There are special rules which govern the taxation of qualified contracts, including withdrawal restrictions, requirements for mandatory distributions, and contribution limits. We have provided a more complete discussion in the SAI. The Contract includes one or more optional enhanced death benefits that in some cases may exceed the greater of the purchase payments or the contract value. The IRS has not reviewed the Contract for qualification as an IRA, and has not addressed in a ruling of general applicability, whether a death benefit such as the optional death benefit(s) in the Contract comports with IRA qualification requirements. Although Travelers regards the optional enhanced death benefit as a permissible benefit under an IRA, the IRS may take a contrary position regarding tax qualification resulting in deemed distributions and penalty taxes. You should consult your tax adviser prior to selecting any optional enhanced death benefit for an IRA. PENALTY TAX FOR PREMATURE DISTRIBUTIONS Taxable distributions taken before the contract owner has reached the age of 59 1/2 will be subject to a 10% additional tax penalty unless the distribution is taken in a series of periodic distributions, for life or life expectancy, or unless the distribution follows the death or disability of the contract owner. Other exceptions may be available in certain qualified plans. DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES The Code requires that any nonqualified variable annuity contracts based on a separate account shall not be treated as an annuity for any period if investments made in the account are not adequately diversified. Final tax regulations define how separate accounts must be diversified. The Company monitors the diversification of investments constantly and believes that its accounts are adequately diversified. The consequence of any failure to diversify is essentially the loss to the Contract Owner of tax deferred treatment. The Company intends to administer all contracts subject to this provision of law in a manner that will maintain adequate diversification. OWNERSHIP OF THE INVESTMENTS Assets in the separate accounts, also referred to as segregated asset accounts, must be owned by the Company and not by the Contract Owner for federal income tax purposes. Otherwise, the deferral of taxes is lost and income and gains from the accounts would be includable annually in the Contract Owner's gross income. The Internal Revenue Service has stated in published rulings that a variable contract owner will be considered the owner of the assets of a segregated asset account if the owner possesses an incident of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury Department announced, in connection with the issuance of temporary regulations concerning investment diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor, rather than the insurance company, to be treated as the owner of the assets of the account." This announcement, dated September 15, 1986, also stated that the guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular subaccounts [of a segregated asset account] without being treated as owners of the underlying assets." As of the date of this prospectus, no such guidance has been issued. The Company does not know if such guidance will be issued, or if it is, what standards it may set. Furthermore, the Company does not know if such guidance may be issued with retroactive effect. New regulations are generally issued with a prospective-only effect as to future sales or as to future voluntary transactions in existing contracts. The Company therefore reserves the right to modify the 31 32 contract as necessary to attempt to prevent Contract Owners from being considered the owner of the assets of the separate account. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the calendar year in which an IRA owner attains age 70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum distributions until the later of April 1st of the calendar year following the calendar year in which they attain age 70 1/2 or the year of retirement. Distributions must begin or be continued according to required patterns following the death of the contract owner or annuitant of both qualified and nonqualified annuities. TAXATION OF DEATH BENEFIT PROCEEDS Amounts may be distributed from a Contract because of the death of an owner or annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a full surrender of the contract; or (ii) if distributed under a payment option, they are taxed in the same way as annuity payments. OTHER INFORMATION -------------------------------------------------------------------------------- THE INSURANCE COMPANIES Please refer to your Contract or the first page of the Summary of this prospectus to determine which Company issued your Contract. The Travelers Insurance Company is a stock insurance company chartered in 1864 in Connecticut and continuously engaged in the insurance business since that time. It is licensed to conduct life insurance business in all states of the United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The Company is an indirect wholly owned subsidiary of Citigroup Inc. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183. The Travelers Life and Annuity Company is a stock insurance company chartered in 1973 in Connecticut and continuously engaged in the insurance business since that time. It is licensed to conduct life insurance business in a majority of the states of the United States, the District of Columbia and Puerto Rico, and intends to seek licensure in the remaining states, except New York. The Company is an indirect wholly owned subsidiary of Citigroup Inc. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183. FINANCIAL STATEMENTS The financial statements for the Company and its separate account are located in the Statement of Additional Information. DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS We intend to sell the Contracts in all jurisdictions where we are licensed to do business and where the Contract is approved. Any registered representative of affiliated or independent broker-dealers who sell the Contracts will be qualified to sell variable annuities under applicable federal and state laws. Each broker-dealer is registered with the SEC under the Securities Exchange Act of 1934, and all are members of the NASD. The principal underwriter of the Contracts is our affiliate, Travelers Distribution LLC, One Tower Square, Hartford, CT. Up-front compensation paid to sales representatives will not exceed 7% of the purchase payments made under the Contracts. If asset based compensation is paid, it will not exceed 2% of the 32 33 average account value annually. From time to time, we may pay or permit other promotional incentives, in cash, credit or other compensation. CONFORMITY WITH STATE AND FEDERAL LAWS The laws of the state in which we deliver a Contract govern that Contract. Where a state has not approved a contract feature or funding option, it will not be available in that state. Any paid-up annuity, cash surrender value or death benefits that are available under the Contract are not less than the minimum benefits required by the statutes of the state in which we delivered the Contract. We reserve the right to make any changes, including retroactive changes, in the Contract to the extent that the change is required to meet the requirements of any law or regulation issued by any governmental agency to which the Company, the Contract or the contract owner is subject. VOTING RIGHTS The Company is the legal owner of the shares of the underlying funds. However, we believe that when an underlying fund solicits proxies in conjunction with a vote of shareholders we are required to obtain from you and from other owners instructions on how to vote those shares. When we receive those instructions, we will vote all of the shares we own in proportion to those instructions. This will also include any shares we own on our own behalf. Should we determine that we are no longer required to comply with the above, we will vote on the shares in our own right. LEGAL PROCEEDINGS AND OPINIONS Legal matters in connection with the federal laws and regulations affecting the issue and sale of the contract described in this prospectus, as well as the organization of the Companies, their authority to issue variable annuity contracts under Connecticut law and the validity of the forms of the variable annuity contracts under Connecticut law, have been passed on by the General Counsel of the Companies. THE TRAVELERS INSURANCE COMPANY There are no pending legal proceedings affecting the Separate Account. There is one material pending legal proceeding, other than ordinary routine litigation incidental to business, to which the Company is a party. In March 1997, a purported class action entitled Patterman v. The Travelers, Inc., et al. was commenced in the Superior Court of Richmond County, Georgia, alleging, among other things, violations of the Georgia RICO statute and other state laws by an affiliate of the Company, Primerica Financial Services, Inc. and certain of its affiliates. Plaintiffs seek unspecified compensatory and punitive damages and other relief. From February 1998 through April 2000, various motions for transfer of the lawsuit were heard and appealed. In April 2000, the matter was remanded to the Superior Court of Richmond County by the Georgia Supreme Court. Also, in April 2000 defendants moved for summary judgement on all counts of the complaint. Discovery commenced in May 2000. Defendants intend to vigorously contest the litigation. THE TRAVELERS LIFE AND ANNUITY COMPANY There are no pending material legal proceedings affecting the Separate Account, the principal underwriter or the Company. 33 34 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------------------------------------------------------------------------------------- DREYFUS VARIABLE INVESTMENT FUND SMALL CAP PORTFOLIO (5/98) Unit Value at beginning of period... $ 1.038 $ 1.033 $ .852 $ .851 $ 1.000 $ 1.000 Unit Value at end of period......... 1.162 1.153 1.038 1.033 .852 .851 Number of units outstanding at end of period (thousands)............. 3,583,484 475,404 2,130 302 1,025 49 GREENWICH STREET SERIES FUND: TOTAL RETURN PORTFOLIO (11/94)* Unit Value at beginning of period... 2.240 2.208 $ 1.857 $ 1.836 $ 1.790 $ 1.775 Unit Value at end of period......... 2.667 2.622 2.240 2.208 1.857 1.836 Number of units outstanding at end of period (thousands)............. 55,492,830 8,605,537 65,203 10,465 73,468 11,654 EQUITY INDEX PORTFOLIO -- CLASS II (5/99) Unit Value at beginning of period... $ 1.088 $ 1.086 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period......... 0.976 0.971 1.088 1.086 -- -- Number of units outstanding at end of period (thousands)............. 2,024,943 172,120 1,740 78 -- -- SALOMON BROTHERS VARIABLE SERIES FUND INVESTORS FUND (5/98) Unit Value at beginning of period... $ 1.119 $ 1.114 $ 1.014 $ 1.012 $ 1.000 $ 1.000 Unit Value at end of period......... 1.275 1.265 1.119 1.114 1.014 1.012 Number of units outstanding at end of period (thousands)............. 1,901,624 250,413 1,846 171 704 76 TOTAL RETURN FUND (5/98) Unit Value at beginning of period... $ 0.994 $ 0.989 $ .997 $ .996 $ 1.000 $ 1.000 Unit Value at end of period......... 1.060 1.052 .994 .989 .997 .996 Number of units outstanding at end of period (thousands)............. 845,563 112,584 769 116 397 70 SMITH BARNEY CONCERT ALLOCATION SERIES INC.: SELECT HIGH GROWTH PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.558 $ 1.546 $ 1.242 $ 1.236 $ 1.090 $ 1.087 Unit Value at end of period......... 1.429 1.414 1.558 1.546 1.242 1.236 Number of units outstanding at end of period (thousands)............. 707,214 226,088 807 319 724 326 PERIOD FROM JUNE 2, 1994 YEAR ENDED YEAR ENDED YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------- ------------------------------------------------------------------------------------- DREYFUS VARIABLE INVESTMENT FUND SMALL CAP PORTFOLIO (5/98) Unit Value at beginning of period... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. -- -- -- -- -- -- -- -- GREENWICH STREET SERIES FUND: TOTAL RETURN PORTFOLIO (11/94)* Unit Value at beginning of period... $ 1.550 $ 1.541 $ 1.251 $ 1.247 $ 1.010 $ 1.010 $ 1.000 $1.000 Unit Value at end of period......... 1.790 1.775 1.550 1.541 1.251 1.247 1.010 1.010 Number of units outstanding at end of period (thousands)............. 75,812 11,853 58,898 9,169 32,564 4,874 1,109 277 EQUITY INDEX PORTFOLIO -- CLASS II (5/99) Unit Value at beginning of period... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. -- -- -- -- -- -- -- -- SALOMON BROTHERS VARIABLE SERIES FUND INVESTORS FUND (5/98) Unit Value at beginning of period... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. -- -- -- -- -- -- -- -- TOTAL RETURN FUND (5/98) Unit Value at beginning of period... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. -- -- -- -- -- -- -- -- SMITH BARNEY CONCERT ALLOCATION SERIES INC.: SELECT HIGH GROWTH PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... 1.090 1.087 -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. 603 231 -- -- -- -- -- --
A-1 35 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------------------------------------------------------------------------------------- SELECT GROWTH PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.421 $ 1.410 $ 1.238 $ 1.232 $ 1.099 $ 1.097 Unit Value at end of period......... 1.338 1.323 1.421 1.410 1.238 1.232 Number of units outstanding at end of period (thousands)............. 2,951,807 1,838,058 3,487 1,847 3,135 1,839 SELECT BALANCED PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.258 $ 1.248 $ 1.183 $ 1.177 $ 1.093 $ 1.091 Unit Value at end of period......... 1.303 1.290 1.258 1.248 1.183 1.177 Number of units outstanding at end of period (thousands)............. 3,561,033 778,489 3,959 922 4,047 1,087 SELECT CONSERVATIVE PORTFOLIO (3/97)++ Unit Value at beginning of period... $ 1.196 $ 1.187 $ 1.162 $ 1.156 $ 1.108 $ 1.105 Unit Value at end of period......... 1.235 1.222 1.196 1.187 1.162 1.156 Number of units outstanding at end of period (thousands)............. 1,044,878 132,036 1,408 137 1,466 184 SELECT INCOME PORTFOLIO (3/97)++ Unit Value at beginning of period... $ 1.148 $ 1.139 $ 1.154 $ 1.148 $ 1.106 $ 1.104 Unit Value at end of period......... 1.178 1.166 1.148 1.139 1.154 1.148 Number of units outstanding at end of period (thousands)............. 613,526 144,994 831 165 753 185 TRAVELERS SERIES FUND INC. AIM CAPITAL APPRECIATION PORTFOLIO (11/95) Unit Value at beginning of period... $ 1.974 $ 1.951 $ 1.397 $ 1.385 $ 1.206 $ 1.198 Unit Value at end of period......... 1.748 1.723 1.974 1.951 1.397 1.385 Number of units outstanding at end of period (thousands)............. 74,130,562 12,252,599 81,401 14,475 90,905 15,792 ALLIANCE GROWTH PORTFOLIO (6/94) Unit Value at beginning of period... $ 3.795 $ 3.737 $ 2.903 $ 2.867 $ 2.276 $ 2.254 Unit Value at end of period......... 3.068 3.012 3.795 3.737 2.903 2.867 Number of units outstanding at end of period (thousands)............. 110,497,118 20,965,025 131,228 26,576 142,802 28,710 PERIOD FROM JUNE 2, 1994 YEAR ENDED YEAR ENDED YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------- ------------------------------------------------------------------------------------- SELECT GROWTH PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... 1.099 1.097 -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. 2,262 1,403 -- -- -- -- -- -- SELECT BALANCED PORTFOLIO (3/97) Unit Value at beginning of period... $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... 1.093 1.091 -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. 3,115 778 -- -- -- -- -- -- SELECT CONSERVATIVE PORTFOLIO (3/97)++ Unit Value at beginning of period... $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... 1.108 1.105 -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. 640 188 -- -- -- -- -- -- SELECT INCOME PORTFOLIO (3/97)++ Unit Value at beginning of period... $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period......... 1.106 1.104 -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............. 425 279 -- -- -- -- -- -- TRAVELERS SERIES FUND INC. AIM CAPITAL APPRECIATION PORTFOLIO (11/95) Unit Value at beginning of period... $ 1.088 $ 1.084 $ 0.958 $ 0.957 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period......... 1.206 1.198 1.088 1.084 0.958 0.957 -- -- Number of units outstanding at end of period (thousands)............. 91,234 15,591 71,085 12,862 20,366 5,394 -- -- ALLIANCE GROWTH PORTFOLIO (6/94) Unit Value at beginning of period... $ 1.785 $ 1.772 $ 1.396 $ 1.390 $ 1.047 $ 1.046 $ 1.000 $1.000 Unit Value at end of period......... 2.276 2.254 1.785 1.772 1.396 1.390 1,047 1,046 Number of units outstanding at end of period (thousands)............. 144,293 30,063 123,294 27,251 79,334 20,571 16,522 7,338
A-2 36 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ----------------------------------------------------------------------------------------------------------------- INVESCO STRATEGIC INCOME PORTFOLIO (FORMERLY G.T. GLOBAL STRATEGIC PORTFOLIO) (6/94) Unit Value at beginning of period........................... $ 1.319 $ 1.299 $ 1.359 $ 1.342 $ 1.397 $ 1.383 Unit Value at end of period........ 1.378 1.353 1.319 1.299 1.359 1.342 Number of units outstanding at end of period (thousands)............ 6,890,790 1,562,190 8,991 2,351 11,299 2,624 MFS TOTAL RETURN PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.845 $ 1.817 $ 1.819 $ 1.796 $ 1.648 $ 1.632 Unit Value at end of period........ 2.127 2.089 1.845 1.817 1.819 1.796 Number of units outstanding at end of period (thousands)............ 64,462,636 12,764,698 78,484 16,860 86,950 18,459 PUTNAM DIVERSIFIED INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.325 $ 1.304 $ 1.326 $ 1.309 $ 1.332 $ 1.319 Unit Value at end of period........ 1.304 1.281 1.325 1.304 1.326 1.309 Number of units outstanding at end of period (thousands)............ 37,822,307 8,635,386 45,595 11,060 53,053 12,925 SMITH BARNEY HIGH INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.472 $ 1.450 $ 1.452 $ 1.434 $ 1.463 $ 1.448 Unit Value at end of period........ 1.338 1.314 1.472 1.450 1.452 1.434 Number of units outstanding at end of period (thousands)............ 28,815,813 5,829,718 38,357 8,210 44,406 9,312 SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO (6/94)* Unit Value at beginning of period........................... $ 2.164 $ 2.131 $ 1.305 $ 1.289 $ 1.240 $ 1.228 Unit Value at end of period........ 1.630 1.601 2.164 2.131 1.305 1.289 Number of units outstanding at end of period (thousands)............ 63,128,881 11,816,707 72,748 15,530 82,330 17,670 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO (5/98) Unit Value at beginning of period........................... $ 1.599 $ 1.592 $ 1.237 $ 1.234 $ 1.000 $ 1.000 Unit Value at end of period........ 1.471 1.460 1.599 1.592 1.237 1.234 Number of units outstanding at end of period (thousands)............ 27,150,091 3,984,628 25,852 3,416 12,224 1,022 PERIOD FROM JUNE 2, 1994 YEAR ENDED YEAR ENDED YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------ ------------------------------------------------------------------------------------- INVESCO STRATEGIC INCOME PORTFOLIO (FORMERLY G.T. GLOBAL STRATEGIC PORTFOLIO) (6/94) Unit Value at beginning of period........................... $ 1.316 $ 1.306 $ 1.121 $ 1.116 $ 0.945 0.944 $ 1.000 $1.000 Unit Value at end of period........ 1.397 1.383 1.316 1.306 1.121 1.116 0.945 0.944 Number of units outstanding at end of period (thousands)............ 12,827 2,883 11,505 2,795 6,840 2,180 2,400 1,063 MFS TOTAL RETURN PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.376 $ 1.366 $ 1.216 $ 1.211 $ 0.979 $ 0.977 $ 1.000 $1.000 Unit Value at end of period........ 1.648 1.632 1.376 1.366 1.216 1.211 0.979 0.977 Number of units outstanding at end of period (thousands)............ 83,811 17,373 68,236 14,690 41,813 9,473 9,099 3,479 PUTNAM DIVERSIFIED INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.252 $ 1.243 $ 1.170 $ 1.165 $ 1.009 $ 1.007 $ 1.000 $1.000 Unit Value at end of period........ 1.332 1.319 1.252 1.243 1.170 1.165 1.009 1.007 Number of units outstanding at end of period (thousands)............ 51,751 12,724 43,898 11,789 26,078 8,650 5,803 3,683 SMITH BARNEY HIGH INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.300 $ 1.291 $ 1.162 $ 1.157 $ 0.988 $ 0.986 $ 1.000 $1.000 Unit Value at end of period........ 1.463 1.448 1.300 1.291 1.162 1.157 0.988 0.986 Number of units outstanding at end of period (thousands)............ 42,964 8,927 33,737 6,932 20,136 3,772 3,105 1,162 SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO (6/94)* Unit Value at beginning of period........................... $ 1.222 $ 1.213 $ 1.050 $ 1.046 $ 0.955 $ 0.954 $ 1.000 $1.000 Unit Value at end of period........ 1.240 1.228 1.222 1.213 1.050 1.046 0.955 0.954 Number of units outstanding at end of period (thousands)............ 87,385 18,731 77,554 16,662 47,317 12,187 14,141 5,898 SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO (5/98) Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- --
A-3 37 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ----------------------------------------------------------------------------------------------------------------- SMITH BARNEY LARGE CAP VALUE PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 2.053 $ 2.022 $ 2.076 $ 2.050 $ 1.913 $ 1.894 Unit Value at end of period........ 2.296 2.254 2.053 2.022 2.076 2.050 Number of units outstanding at end of period (thousands)............ 55,091,429 10,588,184 67,688 13,629 71,417 14,891 SMITH BARNEY MONEY MARKET PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.226 $ 1.207 $ 1.184 1.169 $ 1.140 $ 1.129 Unit Value at end of period........ 1.285 1.262 1.226 1.207 1.184 1.169 Number of units outstanding at end of period (thousands)............ 33,979,596 4,483,257 45,053 6,609 47,121 8,254 SMITH BARNEY PACIFIC BASIN PORTFOLIO (6/94)++ Unit Value at beginning of period........................... $ 1.435 $ 1.413 $ 0.742 $ 0.733 $ 0.700 $ 0.693 Unit Value at end of period........ 0.666 0.654 1.435 1.413 0.742 0.733 Number of units outstanding at end of period (thousands)............ 7,371,258 1,956,590 8,994 2,507 8,930 2,803 TRAVELERS MANAGED INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.306 $ 1.286 $ 1.309 $ 1.293 $ 1.261 $ 1.248 Unit Value at end of period........ 1.392 1.367 1.306 1.286 1.309 1.293 Number of units outstanding at end of period (thousands)............ 13,842,174 3,447,356 17,251 4,234 20,492 3,895 VAN KAMPEN ENTERPRISE PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 3.238 $ 3.188 $ 2.601 $ 2.568 $ 2.103 $ 2.083 Unit Value at end of period........ 2.731 2.682 3.238 3.188 2.601 2.568 Number of units outstanding at end of period (thousands)............ 43,294,726 9,306,589 50,446 11,752 55,903 12,561 THE TRAVELERS SERIES TRUST: CONVERTIBLE BOND PORTFOLIO (5/98) Unit Value at beginning of period........................... $ 1.175 $ 1.169 $ 1.001 $ 0.999 $ 1.000 $ 1.000 Unit Value at end of period........ 1.306 1.297 1.175 1.169 1.001 0.999 Number of units outstanding at end of period (thousands)............ 1,168,231 141,023 627 181 249 24 PERIOD FROM JUNE 2, 1994 YEAR ENDED YEAR ENDED YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------ ------------------------------------------------------------------------------------- SMITH BARNEY LARGE CAP VALUE PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.528 $ 1.517 $ 1.291 $ 1.285 $ 0.981 $ 0.980 $ 1.000 $1.000 Unit Value at end of period........ 1.913 1.894 1.528 1.517 1.291 1.285 0.981 0.980 Number of units outstanding at end of period (thousands)............ 71,149 15,383 57,479 12,170 31,343 7,140 6,654 3,015 SMITH BARNEY MONEY MARKET PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.098 $ 1.090 $ 1.058 $ 1.054 $ 1.016 $ 1.014 $ 1.000 $1.000 Unit Value at end of period........ 1.140 1.129 1.098 1.090 1.058 1.054 1.016 1.014 Number of units outstanding at end of period (thousands)............ 38,097 8,610 49,672 10,176 36,637 9,063 7,171 3,748 SMITH BARNEY PACIFIC BASIN PORTFOLIO (6/94)++ Unit Value at beginning of period........................... $ 0.983 $ 0.977 $ 0.910 $ 0.906 $ 0.899 $ 0.898 $ 1.000 $1.000 Unit Value at end of period........ 0.700 0.693 0.983 0.977 0.910 0.906 0.899 0.898 Number of units outstanding at end of period (thousands)............ 10,584 3,223 10,513 3,487 6,024 2,351 1,657 878 TRAVELERS MANAGED INCOME PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.163 $ 1.154 $ 1.142 $ 1.137 $ 0.997 $ 0.995 $ 1.000 $1.000 Unit Value at end of period........ 1.261 1.248 1.163 1.154 1.142 1.137 0.997 0.995 Number of units outstanding at end of period (thousands)............ 17,887 3,091 15,376 2,502 11,294 1,783 2,849 980 VAN KAMPEN ENTERPRISE PORTFOLIO (6/94) Unit Value at beginning of period........................... $ 1.655 $ 1.643 $ 1.362 $ 1.356 $ 1.039 $ 1.037 $ 1.000 $1.000 Unit Value at end of period........ 2.103 2.083 1.655 1.643 1.362 1.356 1,039 1,037 Number of units outstanding at end of period (thousands)............ 55,871 13,032 45,338 10,652 26,473 6,569 2,941 1,618 THE TRAVELERS SERIES TRUST: CONVERTIBLE BOND PORTFOLIO (5/98) Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- --
A-4 38 THIS PAGE INTENTIONALLY LEFT BLANK. 39 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ----------------------------------------------------------------------------------------------------------------- DISCIPLINED MID CAP STOCK PORTFOLIO (5/98) Unit Value at beginning of period........................... $ 1.194 $ 1.188 $ 1.064 $ 1.063 $ 1.000 $ 1.000 Unit Value at end of period........ 1.376 1.366 1.194 1.188 1.064 1.063 Number of units outstanding at end of period (thousands)............ 3,158,684 801,701 1,843 330 398 54 DISCIPLINED SMALL CAP STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period........................... $ 1.066 $ 1.061 $ 0.896 $ 0.894 $ 1.000 $ 1.000 Unit Value at end of period........ 1.076 1.068 1.066 1.061 0.896 0.894 Number of units outstanding at end of period (thousands)............ 966,590 191,897 810 68 299 4 MFS EMERGING GROWTH PORTFOLIO (11/96) Unit Value at beginning of period........................... $ 2.793 $ 2.769 $ 1.599 $ 1.589 $ 1.204 $ 1.200 Unit Value at end of period........ 2.205 2.180 2.793 2.769 1.599 1,589 Number of units outstanding at end of period (thousands)............ 26,758,939 5,768,911 28,193 6,685 25,200 6,079 MFS RESEARCH PORTFOLIO (5/98) Unit Value at beginning of period........................... $ 1.267 $ 1.261 $ 1.037 $ 1.035 $ 1.000 $ 1.000 Unit Value at end of period........ 1.183 1.174 1.267 1.261 1.037 1.035 Number of units outstanding at end of period (thousands)............ 3,989,985 1,310,179 3,898 1,160 1,354 1,039 STRATEGIC STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period........................... $ 0.971 0.966 $ 0.936 $ 0.934 $ 1.000 $ 1.000 Unit Value at end of period........ 1.057 1.050 0.971 0.966 0.936 0.934 Number of units outstanding at end of period (thousands)............ 740,422 51,194 751 180 540 121 PERIOD FROM JUNE 2, 1994 YEAR ENDED YEAR ENDED YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995 DECEMBER 31, 1994 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED ------------------------------------ ------------------------------------------------------------------------------------- DISCIPLINED MID CAP STOCK PORTFOLIO (5/98) Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- -- DISCIPLINED SMALL CAP STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- -- MFS EMERGING GROWTH PORTFOLIO (11/96) Unit Value at beginning of period........................... $ 1.005 $ 1.005 $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- Unit Value at end of period........ 1.204 1.200 1.005 1.005 -- -- -- -- Number of units outstanding at end of period (thousands)............ 19,166 4,600 4,790 780 -- -- -- -- MFS RESEARCH PORTFOLIO (5/98) Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- -- STRATEGIC STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period........................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Unit Value at end of period........ -- -- -- -- -- -- -- -- Number of units outstanding at end of period (thousands)............ -- -- -- -- -- -- -- --
Date shown next to fund's name reflects date money first came into the fund through the Separate Account. The financial statements of Fund BD and the financial statements of The Travelers Insurance Company and subsidiaries are contained in the SAI. Funding options not listed above were not yet available through the Separate Account as of December 31, 2000. "Number of Units outstanding at end of period" may include units for contract owners in the payout phase. * Fund's name has changed. Refer to prospectus for new name. + Not available to new contract owners after May 1, 1998 in most states. ++ Fund is closed. 40 THIS PAGE INTENTIONALLY LEFT BLANK. 41 APPENDIX B -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED -------------------------------------------------------------------------------------------------------------------------------- DREYFUS VARIABLE INVESTMENT FUND SMALL CAP PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ 1.038 $ 1.033 $ 0.852 $ 0.851 $ 1.000 $ 1.000 -- -- Unit Value at end of period....... 1.162 1.153 1.038 1.033 0.852 0.851 -- -- Number of units outstanding at end of period (thousands)........... 8,748,382 804,861 4,918 450 1,713 252 -- -- GREENWICH STREET SERIES FUND: TOTAL RETURN PORTFOLIO (11/95)* Unit Value at beginning of period.......................... $ 2.240 $ 2.208 $ 1.857 $ 1.836 $ 1.790 $ 1.775 $ 1.550 $ 1.541 Unit Value at end of period....... 2.667 2.622 2.240 2.208 1.857 1.836 1.790 1.775 Number of units outstanding at end of period (thousands)........... 39,497,604 7,852,821 42,818 8,588 42,830 9,425 33,686 5,975 EQUITY INDEX PORTFOLIO -- CLASS II (5/99) Unit Value at beginning of period.......................... $ 1.088 $ 1.086 $ 1.000 $ 1.000 $ -- $ -- $ -- $ -- Unit Value at end of period....... 0.976 0.971 1.088 1.086 -- -- -- -- Number of units outstanding at end of period (thousands)........... 5,833,690 88,601 4,475 157 -- -- -- -- SALOMON BROTHERS VARIABLE SERIES FUNDS, INC. INVESTORS FUND (5/98) Unit Value at beginning of period.......................... $ 1.119 $ 1.114 $ 1.014 $ 1.012 $ 1.000 $ 1.000 -- -- Unit Value at end of period....... 1.275 1.265 1.119 1.114 1.014 1.012 -- -- Number of units outstanding at end of period (thousands)........... 3,800,664 858,755 2,903 529 1,024 199 -- -- TOTAL RETURN FUND (5/98) Unit Value at beginning of period.......................... $ 0.994 $ 0.989 $ 0.997 $ 0.996 $ 1.000 $ 1.000 -- -- Unit Value at end of period....... 1.060 1.052 0.994 0.989 0.997 0.996 -- -- Number of units outstanding at end of period (thousands)........... 1,806,837 214,225 1,620 208 761 128 -- -- SMITH BARNEY CONCERT ALLOCATION SERIES INC.: SELECT HIGH GROWTH PORTFOLIO (3/97)+ Unit Value at beginning of period.......................... $ 1.558 $ 1.546 $ 1.242 $ 1.236 $ 1.090 $ 1.087 $ 1.000 $ 1.000 Unit Value at end of period....... 1.429 1.414 1.558 1.546 1.242 1.236 1.090 1.087 Number of units outstanding at end of period (thousands)........... 2,672,372 403,429 2,931 447 3,435 622 2,657 391 SELECT GROWTH PORTFOLIO (3/97) Unit Value at beginning of period.......................... $ 1.421 $ 1.410 $ 1.238 $ 1.232 $ 1.099 $ 1.097 $ 1.000 $ 1.000 Unit Value at end of period....... 1.338 1.323 1.421 1.410 1.238 1.232 1.099 1.097 Number of units outstanding at end of period (thousands)........... 4,479,543 1,580,483 5,037 2,157 5,356 2,329 3,396 1,191 PERIOD FROM 11/8/95 YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1996 DECEMBER 31, 1995 STANDARD ENHANCED STANDARD ENHANCED ----------------------------------- ----------------------------------------- DREYFUS VARIABLE INVESTMENT FUND SMALL CAP PORTFOLIO (5/98) Unit Value at beginning of period.......................... -- -- -- -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- GREENWICH STREET SERIES FUND: TOTAL RETURN PORTFOLIO (11/95)* Unit Value at beginning of period.......................... $ 1.251 $ 1.247 $ 1.010 $ 1.010 Unit Value at end of period....... 1.550 1.541 1.251 1.247 Number of units outstanding at end of period (thousands)........... 14,921 2,044 651 149 EQUITY INDEX PORTFOLIO -- CLASS II (5/99) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SALOMON BROTHERS VARIABLE SERIES FUNDS, INC. INVESTORS FUND (5/98) Unit Value at beginning of period.......................... -- -- -- -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- TOTAL RETURN FUND (5/98) Unit Value at beginning of period.......................... -- -- -- -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SMITH BARNEY CONCERT ALLOCATION SERIES INC.: SELECT HIGH GROWTH PORTFOLIO (3/97)+ Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SELECT GROWTH PORTFOLIO (3/97) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- --
B-1 42 APPENDIX B -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED -------------------------------------------------------------------------------------------------------------------------------- SELECT BALANCED PORTFOLIO (3/97) Unit Value at beginning of period.......................... $ 1.258 $ 1.248 $ 1.183 $ 1.177 $ 1.093 $ 1.091 $ 1.000 $ 1.000 Unit Value at end of period....... 1.303 1.290 1.258 1.248 1.183 1.177 1.093 1.091 Number of units outstanding at end of period (thousands)........... 7,372,297 2,325,059 8,078 2,375 7,216 2,594 4,148 1,789 SELECT CONSERVATIVE PORTFOLIO (3/97)++ Unit Value at beginning of period.......................... $ 1.196 1.187 $ 1.162 $ 1.156 $ 1.108 $ 1.105 $ 1.000 $ 1.000 Unit Value at end of period....... 1.235 1.222 1.196 1.187 1.162 1.156 1.108 1.105 Number of units outstanding at end of period (thousands)........... 1,338,717 334,497 1,316 427 1,424 305 863 105 SELECT INCOME PORTFOLIO (3/97)++ Unit Value at beginning of period.......................... $ 1.148 $ 1.139 $ 1.154 $ 1.148 $ 1.106 $ 1.104 $ 1.000 $ 1.000 Unit Value at end of period....... 1.178 1.166 1.148 1.139 1.154 1.148 1.106 1.104 Number of units outstanding at end of period (thousands)........... 812,127 28,712 791 30 1,102 76 364 25 TRAVELERS SERIES FUND INC. AIM CAPITAL APPRECIATION PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.974 $ 1.951 $ 1.397 $ 1.385 $ 1.206 $ 1.198 $ 1.088 $ 1.084 Unit Value at end of period....... 1.748 1.723 1.974 1.951 1.397 1.385 1.206 1.198 Number of units outstanding at end of period (thousands)........... 58,458,248 10,759,671 59,795 10,758 59,824 11,522 48,942 8,845 ALLIANCE GROWTH PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 3.795 $ 3.737 $ 2.903 $ 2.867 $ 2.276 $ 2.254 $ 1.785 $ 1.772 Unit Value at end of period....... 3.068 3.012 3.795 3.737 2.903 2.867 2.276 2.254 Number of units outstanding at end of period (thousands)........... 72,884,231 12,646,207 76,734 13,423 67,640 13,083 47,935 8,482 INVESCO STRATEGIC INCOME PORTFOLIO (FORMERLY G.T. GLOBAL STRATEGIC INCOME) (11/95)+ Unit Value at beginning of period.......................... $ 1.319 $ 1.299 $ 1.359 $ 1.342 $ 1.397 $ 1.383 $ 1.316 $ 1.306 Unit Value at end of period....... 1.378 1.353 1.319 1.299 1.359 1.342 1.397 1.383 Number of units outstanding at end of period (thousands)........... 4,408,007 733,479 5,149 850 5,481 973 5,016 954 MFS TOTAL RETURN PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.845 $ 1.817 $ 1.819 $ 1.796 $ 1.648 $ 1.632 $ 1.376 $ 1.366 Unit Value at end of period....... 2.127 2.089 1.845 1.817 1.819 1.796 1.648 1.632 Number of units outstanding at end of period (thousands)........... 55,043,366 10,057,271 64,327 11,574 58,653 11,646 34,928 6,139 PUTNAM DIVERSIFIED INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.325 $ 1.304 $ 1.326 $ 1.309 $ 1.332 $ 1.319 $ 1.252 $ 1.243 Unit Value at end of period....... 1.304 1.281 1.325 1.304 1.326 1.309 1.332 1.319 Number of units outstanding at end of period (thousands)........... 27,997,652 5,666,775 31,303 7,149 29,566 7,312 19,504 3,953 PERIOD FROM 11/8/95 YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1996 DECEMBER 31, 1995 STANDARD ENHANCED STANDARD ENHANCED ----------------------------------- ----------------------------------------- SELECT BALANCED PORTFOLIO (3/97) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SELECT CONSERVATIVE PORTFOLIO (3/97)++ Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SELECT INCOME PORTFOLIO (3/97)++ Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- TRAVELERS SERIES FUND INC. AIM CAPITAL APPRECIATION PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 0.958 $ 0.957 $ 1.000 $ 1.000 Unit Value at end of period....... 1.088 1.084 0.958 0.957 Number of units outstanding at end of period (thousands)........... 29,460 4,246 2,537 908 ALLIANCE GROWTH PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.396 $ 1.390 $ 1.047 $ 1.046 Unit Value at end of period....... 1.785 1.772 1.396 1.390 Number of units outstanding at end of period (thousands)........... 24,031 3,613 1,574 453 INVESCO STRATEGIC INCOME PORTFOLIO (FORMERLY G.T. GLOBAL STRATEGIC INCOME) (11/95)+ Unit Value at beginning of period.......................... $ 1.121 $ 1.116 $ 0.945 $ 0.944 Unit Value at end of period....... 1.316 1.306 1.121 1.116 Number of units outstanding at end of period (thousands)........... 1,833 463 33 80 MFS TOTAL RETURN PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.216 $ 1.211 $ 0.979 $ 0.977 Unit Value at end of period....... 1.376 1.366 1.216 1.211 Number of units outstanding at end of period (thousands)........... 16,651 1,810 913 102 PUTNAM DIVERSIFIED INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.170 $ 1.165 $ 1.009 $ 1.007 Unit Value at end of period....... 1.252 1.243 1.170 1.165 Number of units outstanding at end of period (thousands)........... 10,424 1,461 824 126
B-2 43 APPENDIX B -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED -------------------------------------------------------------------------------------------------------------------------------- SMITH BARNEY HIGH INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.472 $ 1.450 $ 1.452 $ 1.434 $ 1.463 $ 1.448 $ 1.300 $ 1.291 Unit Value at end of period....... 1.338 1.314 1.472 1.450 1.452 1.434 1.463 1.448 Number of units outstanding at end of period (thousands)........... 25,994,496 3,605,110 30,633 4,266 31,054 4,740 21,213 2,640 SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO (11/95)* Unit Value at beginning of period.......................... $ 2.164 $ 2.131 $ 1.305 $ 1.289 $ 1.240 $ 1.228 $ 1.222 $ 1.213 Unit Value at end of period....... 1.630 1.601 2.164 2.131 1.305 1.289 1.240 1.228 Number of units outstanding at end of period (thousands)........... 39,840,894 5,396,144 40,313 5,907 38,529 6,199 31,311 4,872 SMITH BARNEY LARGE CAPITALIZATION GROWTH (5/98) Unit Value at beginning of period.......................... $ 1.599 $ 1.592 $ 1.237 $ 1.234 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.471 1.460 1.599 1.592 1.237 1.234 -- -- Number of units outstanding at end of period (thousands)........... 48,151,480 4,219,549 46,288 3,491 12,176 1,447 -- -- SMITH BARNEY LARGE CAP VALUE PORTFOLIO (11/95) (formerly Smith Barney Income and Growth Portfolio) Unit Value at beginning of period.......................... $ 2.053 $ 2.022 $ 2.076 $ 2.050 $ 1.913 $ 1.894 $ 1.528 $ 1.517 Unit Value at end of period....... 2.296 2.254 2.053 2.022 2.076 2.050 1.913 1.894 Number of units outstanding at end of period (thousands)........... 41,043,899 7,279,634 45,773 8,114 40,967 8,249 27,117 4,645 SMITH BARNEY MONEY MARKET PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.226 $ 1.207 $ 1.184 $ 1.169 $ 1.140 $ 1.129 $ 1.098 $ 1.090 Unit Value at end of period....... 1.285 1.262 1.226 1.207 1.184 1.169 1.140 1.129 Number of units outstanding at end of period (thousands)........... 45,585,702 3,371,813 48,631 5,841 41,370 6,024 25,661 2,417 SMITH BARNEY PACIFIC BASIN PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.435 $ 1.413 $ 0.742 $ 0.733 $ 0.700 $ 0.693 $ 0.983 $ 0.977 Unit Value at end of period....... 0.666 0.654 1.435 1.413 0.742 0.733 0.700 0.693 Number of units outstanding at end of period (thousands)........... 6,296,388 923,579 9,217 967 5,083 1,023 5,124 862 TRAVELERS MANAGED INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.306 $ 1.286 $ 1.309 $ 1.293 $ 1.261 $ 1.248 $ 1.163 $ 1.154 Unit Value at end of period....... 1.392 1.367 1.306 1.286 1.309 1.293 1.261 1.248 Number of units outstanding at end of period (thousands)........... 18,462,380 2,585,253 20,425 2,551 11,544 2,823 4,489 1,001 PERIOD FROM 11/8/95 YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1996 DECEMBER 31, 1995 STANDARD ENHANCED STANDARD ENHANCED ----------------------------------- ----------------------------------------- SMITH BARNEY HIGH INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.162 $ 1.157 $ 0.988 $ 0.986 Unit Value at end of period....... 1.300 1.291 1.162 1.157 Number of units outstanding at end of period (thousands)........... 7,719 970 243 332 SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO (11/95)* Unit Value at beginning of period.......................... $ 1.050 $ 1.046 $ 0.955 $ 0.954 Unit Value at end of period....... 1.222 1.213 1.050 1.046 Number of units outstanding at end of period (thousands)........... 16,855 2,010 556 201 SMITH BARNEY LARGE CAPITALIZATION GROWTH (5/98) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- SMITH BARNEY LARGE CAP VALUE PORTFOLIO (11/95) (formerly Smith Barney Income and Growth Portfolio) Unit Value at beginning of period.......................... $ 1.291 $ 1.285 $ 0.981 $ 0.980 Unit Value at end of period....... 1.528 1.517 1.291 1.285 Number of units outstanding at end of period (thousands)........... 11,906 1,606 596 146 SMITH BARNEY MONEY MARKET PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.058 $ 1.054 $ 1.016 $ 1.014 Unit Value at end of period....... 1.098 1.090 1.058 1.054 Number of units outstanding at end of period (thousands)........... 22,962 2,362 2,374 820 SMITH BARNEY PACIFIC BASIN PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 0.910 $ 0.906 $ 0.899 $ 0.898 Unit Value at end of period....... 0.983 0.977 0.910 0.906 Number of units outstanding at end of period (thousands)........... 2,755 467 37 20 TRAVELERS MANAGED INCOME PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.142 $ 1.137 $ 0.997 $ 0.995 Unit Value at end of period....... 1.163 1.154 1.142 1.137 Number of units outstanding at end of period (thousands)........... 2,636 266 226 90
B-3 44 APPENDIX B -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ACCUMULATION UNIT VALUES (CONTINUED)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED STANDARD ENHANCED -------------------------------------------------------------------------------------------------------------------------------- VAN KAMPEN ENTERPRISE PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 3.238 $ 3.188 $ 2.601 $ 2.568 $ 2.103 $ 2.083 $ 1.655 $ 1.643 Unit Value at end of period....... 2.731 2.682 3.238 3.188 2.601 2.568 2.103 2.083 Number of units outstanding at end of period (thousands)........... 37,059,764 6,225,353 39,297 6,615 35,644 6,741 24,635 4,385 TRAVELERS SERIES TRUST: CONVERTIBLE BOND PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ 1.175 $ 1.169 $ 1.001 $ 0.999 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.306 1.297 1.175 1.169 1.001 0.999 -- -- Number of units outstanding at end of period (thousands)........... 2,705,833 425,068 1,597 429 418 22 -- -- DISCIPLINED MID CAP STOCK PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ 1.194 $ 1.188 $ 1.064 $ 1.063 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.376 1.366 1.194 1.188 1.064 1.063 -- -- Number of units outstanding at end of period (thousands)........... 7,288,284 833,708 3,984 256 550 28 -- -- DISCIPLINED SMALL CAP STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period.......................... $ 1.066 $ 1.061 $ 0.896 $ 0.894 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.076 1.068 1.066 1.061 0.896 0.894 -- -- Number of units outstanding at end of period (thousands)........... 1,550,746 181,191 1,074 87 365 17 -- -- MFS EMERGING GROWTH PORTFOLIO (11/96) Unit Value at beginning of period.......................... $ 2.793 $ 2.769 $ 1.599 $ 1.589 $ 1.204 $ 1.200 $ 1.005 $ 1.005 Unit Value at end of period....... 2.205 2.180 2.793 2.769 1.599 1.589 1.204 1.200 Number of units outstanding at end of period (thousands)........... 38,334,239 7,629,810 38,199 7,825 29,937 7,522 17,295 4,256 MFS RESEARCH PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ 1.267 $ 1.261 $ 1.037 $ 1.035 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.183 1.174 1.267 1.261 1.037 1.035 -- -- Number of units outstanding at end of period (thousands)........... 8,594,088 1,788,003 7,721 1,495 3,295 1,243 -- -- STRATEGIC STOCK PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ 0.971 $ 0.966 $ 0.936 $ 0.934 $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.057 1.050 0.971 0.966 0.936 0.934 -- -- Number of units outstanding at end of period (thousands)........... 3,018,348 55,440 3,336 80 3,336 44 -- -- PERIOD FROM 11/8/95 YEAR ENDED (EFFECTIVE DATE) TO DECEMBER 31, 1996 DECEMBER 31, 1995 STANDARD ENHANCED STANDARD ENHANCED ----------------------------------- ----------------------------------------- VAN KAMPEN ENTERPRISE PORTFOLIO (11/95) Unit Value at beginning of period.......................... $ 1.362 $ 1.356 $ 1.039 $ 1.037 Unit Value at end of period....... 1.655 1.643 1.362 1.356 Number of units outstanding at end of period (thousands)........... 11,360 1,644 765 329 TRAVELERS SERIES TRUST: CONVERTIBLE BOND PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- DISCIPLINED MID CAP STOCK PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- DISCIPLINED SMALL CAP STOCK PORTFOLIO (5/98)+ Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- MFS EMERGING GROWTH PORTFOLIO (11/96) Unit Value at beginning of period.......................... $ 1.000 $ 1.000 $ -- $ -- Unit Value at end of period....... 1.005 1.005 -- -- Number of units outstanding at end of period (thousands)........... 2,506 466 -- -- MFS RESEARCH PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- -- STRATEGIC STOCK PORTFOLIO (5/98) Unit Value at beginning of period.......................... $ -- $ -- $ -- $ -- Unit Value at end of period....... -- -- -- -- Number of units outstanding at end of period (thousands)........... -- -- -- --
The date shown next to each fund's name reflects the date money first came into the fund through the Separate Account. Funds not listed had no money allocated to them as of December 31, 2000. The financial statements of Fund BD II and The Travelers Life and Annuity Company are contained in the SAI. * Fund's name has changed. Refer to the prospectus for the new name. + No longer available to new contract owners. ++ Fund is closed. B-4 45 APPENDIX C -------------------------------------------------------------------------------- THE FIXED ACCOUNT The Fixed Account is part of the Company's general account assets. These general account assets include all assets of the Company other than those held in the separate accounts sponsored by the Company or its affiliates. The staff of the SEC does not generally review the disclosure in the prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account and the general account may, however, be subject to certain provisions of the federal securities laws relating to the accuracy and completeness of statements made in the prospectus. Under the Fixed Account, the Company assumes the risk of investment gain or loss, guarantees a specified interest rate, and guarantees a specified periodic annuity payment. The investment gain or loss of the Separate Account or any of the funding options does not affect the Fixed Account contract value, or the dollar amount of fixed annuity payments made under any payout option. We guarantee that, at any time, the Fixed Account contract value will not be less than the amount of the purchase payments allocated to the Fixed Account, plus interest credited as described below, less any applicable premium taxes or prior withdrawals. Purchase payments allocated to the Fixed Account and any transfers made to the Fixed Account become part of the Company's general account which supports insurance and annuity obligations. Neither the general account nor any interest therein is registered under, nor subject to the provisions of, the Securities Act of 1933 or Investment Company Act of 1940. We will invest the assets of the Fixed Account at our discretion. Investment income from such Fixed Account assets will be allocated to us and to the Contracts participating in the Fixed Account. Investment income from the Fixed Account allocated to us includes compensation for mortality and expense risks borne by us in connection with Fixed Account Contracts. The amount of such investment income allocated to the Contracts will vary from year to year in our sole discretion at such rate or rates as we prospectively declare from time to time. We guarantee the initial rate for any allocations into the Fixed Account for one year from the date of such allocation. We guarantee subsequent renewal rates for the calendar quarter. We also guarantee that for the life of the Contract we will credit interest at not less than 3% per year. We will determine any interest we credit to amounts allocated to the Fixed Account in excess of 3% per year in our sole discretion. You assume the risk that interest credited to the Fixed Account may not exceed the minimum guarantee of 3% for any given year. TRANSFERS You may make transfers from the Fixed Account to any other available variable funding option(s) twice a year during the 30 days following the semiannual anniversary of the contract effective date. We limit transfers to an amount of up to 15% of the Fixed Account contract value on the semiannual contract effective date anniversary. (This restriction does not apply to transfers under the Dollar Cost Averaging Program.) Amounts previously transferred from the Fixed Account to variable funding options may not be transferred back to the Fixed Account for a period of at least six months from the date of transfer. We reserve the right to waive either of these restrictions. Automated transfers from the Fixed Account to any of the variable funding options may begin at any time. Automated transfers from the Fixed Account may not deplete your Fixed Account value in a period of less than twelve months from your enrollment in the Dollar Cost Averaging Program. C-1 46 THIS PAGE INTENTIONALLY LEFT BLANK. 47 APPENDIX D -------------------------------------------------------------------------------- CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION The Statement of Additional Information contains more specific information and financial statements relating to The Travelers Insurance Company or The Travelers Life and Annuity Company. A list of the contents of the Statement of Additional Information is set forth below: The Insurance Company Principal Underwriter Distribution and Principal Underwriting Agreement Valuation of Assets Performance Information Federal Tax Considerations Independent Accountants Financial Statements -------------------------------------------------------------------------------- Copies of the Statement of Additional Information dated May 1, 2001 are available without charge. To request a copy, please clip this coupon on the dotted line above, enter your name and address in the spaces provided below, and mail to: The Travelers Life and Annuity Company, Annuity Investor Services, One Tower Square, Hartford, Connecticut 06183. The Travelers Insurance Company Statement of Additional Information is printed on Form L-12253S, and The Travelers Life and Annuity Statement of Additional Information is printed on Form L-12540S. Name: ----------------------------------- Address: ----------------------------------- ----------------------------------- D-1 48 THIS PAGE INTENTIONALLY LEFT BLANK. 49 L-12253 September 24, 2001 50 SEPTEMBER 24, 2001 SUPPLEMENT TO THE TRAVELERS VINTAGE ANNUITY PROSPECTUS DATED MAY 1, 2001 The following sections of the prospectus are amended as indicated below: WHAT COMPANY WILL ISSUE MY CONTRACT? (Summary) Add the following language: You may also refer to the cover page of your Contract for the name of your issuing company. You may only purchase a Contract in states where the Contract has been approved for sale. The Contract may not currently be available for sale in all states. WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? (This section should be added to the Summary) The Condensed Financial Information in Appendix A or Appendix B to this prospectus provides more information about accumulation unit values. THE VARIABLE FUNDING OPTIONS The investment objective of the Small Cap Portfolio-Initial Shares of the Dreyfus Variable Investment Fund is deleted and replaced with the following: Seeks to maximize capital appreciation by investing primarily in small-cap companies with total market values of less than $2 billion at the time of purchase. The following language is added to the end of the Investment Objective/Adviser table: + ANTICIPATED CHANGES TO VARIABLE FUNDING OPTIONS Subject to shareholder approval, we anticipate the Disciplined Small Cap Stock Portfolio will be liquidated on or about October 26, 2001. On this date, liquidation proceeds will be used to purchase shares of the Smith Barney Money Market Portfolio of the Travelers Series Fund. Also subject to shareholder approval, we anticipate that the Strategic Stock Portfolio will merge into the Investors Fund of the Salomon Brothers Variable Series Fund Inc. on or about October 26, 2001. On this date, all shares of the Strategic Stock Portfolio will be exchanged for the number of shares of the Investors Fund that is equal in value at the time of the merger to the value of such shares in the Strategic Stock Portfolio. When making any investment decisions, please consider these anticipated changes. As of May 1, 2001, the Disciplined Small Cap Stock Portfolio and the Strategic Stock Portfolio are closed to new contract owners. 1 51 VARIABLE ANNUITY The last sentence of the paragraph entitled "Determination of First Annuity Payment" is deleted and replaced with the following: If you elect a variable annuity, the amount we apply to it will be the cash surrender value as of 14 days before the date annuity payments begin less any applicable premium tax not previously deducted. L-12253-EV September 24, 2001 2