-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WF5uuwkoHX3GlXgBQL3BDFIir9fk7HjgP6gFLrYzeCDjo9m8qFIMmDraR7XP5yLi oreiW5lSWvJISk1iSX96WA== 0000908812-95-000032.txt : 19950615 0000908812-95-000032.hdr.sgml : 19950615 ACCESSION NUMBER: 0000908812-95-000032 CONFORMED SUBMISSION TYPE: N-4 EL PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19950317 SROS: NONE 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: N-4 EL SEC ACT: 1933 Act SEC FILE NUMBER: 033-58131 FILM NUMBER: 95521690 FILING VALUES: FORM TYPE: N-4 EL SEC ACT: 1940 Act SEC FILE NUMBER: 811-07259 FILM NUMBER: 95521691 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 2032777379 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 N-4 EL 1 As filed with the Securities and Exchange Commission on March ____, 1995. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES (Exact name of Registrant) THE TRAVELERS LIFE AND ANNUITY COMPANY (Name of Depositor) ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183 (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including area code: (203) 277-0111 ERNEST J. WRIGHT Assistant Secretary The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 (Name and Address of Agent for Service) Approximate Date of Proposed Public Offering: As soon as posssible after effective date of Registration Statement., PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HEREBY DECLARES THAT AN INDEFINITE AMOUNT OF VARIABLE ANNUITY CONTRACTS IS BEING REGISTERED UNDER THE SECURITIES ACT OF 1933. AMOUNT OF REGISTRATION FEE: $500. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES Cross-Reference Sheet Form N-4 Item No. Caption in Prospectus 1. Cover Page Prospectus 2. Definitions Glossary of Special Terms 3. Synopsis Prospectus Summary 4. Condensed Financial Information Not Applicable 5. General Description of Registrant, The Insurance Company; The Separate Depositor, and Portfolio Companies Account and the Underlying Funds 6. Deductions Charges and Deductions; Distribution of Variable Annuity Contracts 7. General Description of Variable The Contract Annuity Contracts 8. Annuity Period The Annuity Period 9. Death Benefit Death Benefit 10. Purchases and Contract Value The Contract 11. Redemptions Surrenders and Redemptions 12. Taxes Federal Tax Considerations 13. Legal Proceedings Legal Proceedings and Opinions 14. Table of Contents of the Statement Appendix B - Contents of the of Additional Information Statement of Additional Information CAPTION IN STATEMENT OF ADDITIONAL INFORMATION 15. Cover Page The Separate Account 16. Table of Contents Table of Contents 17. General Information and History The Insurance Company; The Separate Account and The Underlying Funds 18. Services Principal Underwriter 19. Purchase of Securities Being Offered Valuation of Assets 20. Underwriters Principal Underwriter 21. Calculation of Performance Data Not Applicable 22. Annuity Payments Not Applicable 23. Financial Statements Financial Statements PART A INFORMATION REQUIRED IN A PROSPECTUS PROSPECTUS This Prospectus describes an individual flexible premium variable annuity contract (the "Contract") offered by The Travelers Life and Annuity Company (the "Company"). The Contract is currently available for use in connection with (1) individual nonqualified purchases; (2) Individual Retirement Annuities (IRAs) pursuant to Section 408 of the Internal Revenue Code of 1986, as amended (the "Code"); and (3) qualified retirement plans. Purchase Payments made under the Contract will accumulate on a fixed and/or a variable basis, as selected by the Contract Owner. If on a variable basis, the value of the Contract prior to the Maturity Date will vary continuously to reflect the investment experience of The Travelers Fund BD II for Variable Annuities ("Fund BD II"). Purchase Payments may currently be allocated to any one or more of the sub-accounts (the "Sub-Accounts") available under Fund BD II. The assets in each Sub-Account are invested in a separate series of shares of the Smith Barney/Travelers Series Fund Inc., a "series" type of mutual fund. Each series of shares is a separate investment portfolio. The investment portfolios currently available are: Smith Barney Income and Growth Portfolio, Alliance Growth Portfolio, American Capital Enterprise Portfolio, Smith Barney International Equity Portfolio, Smith Barney Pacific Basin Portfolio, TBC Managed Income Portfolio, Putnam Diversified Income Portfolio, G.T. Global Strategic Income Portfolio, Smith Barney High Income Portfolio, MFS Total Return Portfolio, Smith Barney Money Market Portfolio; and Smith Barney Total Return Portfolio of the Smith Barney Series Fund (collectively, the "Underlying Funds"). This Prospectus provides the information about Fund BD II that you should know before investing. Please read it and retain it for future reference. Additional information about Fund BD II is contained in a Statement of Additional Information dated _________ 1995 which has been filed with the Securities and Exchange Commission and is incorporated by reference into this Prospectus. A copy may be obtained, without charge, by writing to The Travelers Life and Annuity Company, Annuity Investor Services--5SHS, One Tower Square, Hartford, Connecticut 06183-9061, or by calling 1-800-842-8573. The Table of Contents of the Statement of Additional Information appears in Appendix B of this Prospectus. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS FOR THE UNDERLYING FUNDS. BOTH THE CONTRACT PROSPECTUS AND THE UNDERLYING FUND PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY; THEY ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTMENT. THIS PROSPECTUS IS DATED _________, 1995 THIS PAGE INTENTIONALLY LEFT BLANK TABLE OF CONTENTS GLOSSARY OF SPECIAL TERMS.............................GLOSSARY 1 PROSPECTUS SUMMARY....................................SUMMARY 1 FEE TABLE.............................................FEE TABLE 1 THE INSURANCE COMPANY...........................................1 THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS...................1 THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES (FUND BD)......1 THE UNDERLYING FUNDS .....................................1 PERFORMANCE INFORMATION.........................................4 THE CONTRACT....................................................4 Purchase Payments ............................................5 Right to Return ..............................................5 Accumulation Units............................................5 Net Investment Factor.........................................5 CHARGES AND DEDUCTIONS .........................................6 Contingent Deferred Sales Charge .............................6 Administrative Charges .......................................6 Insurance Charge .............................................7 Reduction or Elimination of Contract Charges..................7 Underlying Fund Charges.......................................8 Premium Tax ..................................................8 OWNERSHIP PROVISIONS............................................8 Types of Ownership............................................8 Beneficiary ..................................................8 Annuitant.....................................................9 TRANSFERS ......................................................9 Dollar-Cost Averaging (Automated Transfers) ..................9 Telephone Transfers..........................................10 SURRENDERS AND REDEMPTIONS ....................................10 Systematic Withdrawals ......................................10 DEATH BENEFIT .................................................11 THE ANNUITY PERIOD ...........................................12 Maturity Date................................................12 Allocation of Annuity........................................13 Variable Annuity.............................................13 Fixed Annuity................................................14 PAYMENT OPTIONS................................................14 Election of Options..........................................14 Annuity Options .............................................14 Income Options...............................................15 MISCELLANEOUS CONTRACT PROVISIONS..............................15 Termination .................................................15 Misstatement.................................................16 Required Reports.............................................16 Suspension of Payments.......................................16 FEDERAL TAX CONSIDERATIONS ....................................16 VOTING RIGHTS .................................................19 DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS.....................20 STATE REGULATION...............................................20 Conformity with State and Federal Laws.......................20 LEGAL PROCEEDINGS AND OPINIONS.................................20 THE FIXED ACCOUNT .............................................22 APPENDIX A.....................................................24 Election of Options..........................................24 APPENDIX B.....................................................25 GLOSSARY OF SPECIAL TERMS The following terms are used throughout the Prospectus and have the indicated meanings: ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value of a Contract before Annuity Payments begin. ANNUITANT -- the person on whose life the Maturity Date and the amount of the monthly Annuity Payments depend. ANNUITY PAYMENTS -- a series of periodic payments for life; for life with either a minimum number of payments or a determinable sum assured; or for the joint lifetime of the Annuitant and another person and thereafter during the lifetime of the survivor. ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of Annuity Payments. CASH SURRENDER VALUE -- the amount payable to the Contract Owner or other payee upon full or partial surrender of the Contract during the lifetime of the Annuitant. COMPANY'S HOME OFFICE -- the principal offices of The Travelers Life and Annuity Company located at One Tower Square, Hartford, Connecticut 06183-9061. CONTRACT OWNER (YOU, YOUR) -- the person or entity to whom the Contract is issued. CONTRACT VALUE -- the current value of Accumulation Units credited to the Contract less any administrative charges. CONTRACT DATE -- the date on which the Contract, benefits and the contract provisions become effective. CONTRACT YEARS -- twelve-month periods beginning on the Contract Date. FIXED ACCOUNT -- an additional account into which Purchase Payments may be allocated and which is included in the Contract Value. Purchase Payments allocated to the Fixed Account will earn interest at a rate guaranteed by the Company; this rate will change from time to time. INCOME PAYMENTS -- optional forms of payments made by the Company which are based on an agreed-upon number of payments or payment amount. MATURITY DATE -- the date on which the first Annuity or Income Payment is to begin. PURCHASE PAYMENT -- a gross amount paid to the Company during the accumulation period. SEPARATE ACCOUNT -- assets set aside by the Company, the investment experience of which is kept separate from that of other assets of the Company; for example, Fund BD II. SUB-ACCOUNT -- the portion of the assets of the Separate Account which is allocated to a particular Underlying Fund. UNDERLYING FUND(S) -- an open-end diversified management investment company which serves as an investment option under the Separate Account. VALUATION DATE -- generally, a day on which the Sub-Account is valued. A Valuation Date is any day on which the New York Stock Exchange is open for trading and the Company is open for business. The value of Accumulation Units and Annuity Units will be determined as of the close of trading on the New York Stock Exchange. VALUATION PERIOD -- the period between the close of business on successive Valuation Dates. VARIABLE ANNUITY -- an annuity contract which provides for accumulation and for Annuity Payments which vary in amount in accordance with the investment experience of a Separate Account. PROSPECTUS SUMMARY INTRODUCTION The Contract described in this Prospectus is issued by The Travelers Life and Annuity Company (the "Company"), a subsidiary of The Travelers Inc. The Company has established The Travelers Fund BD II for Variable Annuities ("Fund BD II"), a registered unit investment trust separate account, for the purpose of investing exclusively in shares of the Underlying Funds described herein. The purpose of the Contract is to provide for an individual flexible premium variable annuity which allows you to invest in any or all of the Sub-Accounts currently available under Fund BD II, as well as in the Fixed Account. Certain changes and elections must be made in writing to the Company. Where the term "written request" is used, it means that written information must be sent to the Company's Home Office in a form and content satisfactory to the Company. RIGHT TO RETURN You may return the Contract and receive a full refund of the Contract Value (including charges) within twenty days after the Contract is delivered to you, unless state law requires a longer period. The Contract Value returned may be greater or less than your Purchase Payment; however, if applicable state law so requires, your Purchase Payment will be refunded in full for some or all of the free-look period. If you purchased the Contract as an Individual Retirement Annuity (IRA), your Purchase Payment will be refunded in full for the first seven days of the free-look period. (See "Right to Return," page 5.) THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS Fund BD II is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. Purchase Payments allocated to the Sub-Accounts of Fund BD II will be invested at net asset value in shares of the following Underlying Funds in accordance with the selection made by the Contract Owner: Smith Barney Income and Growth Portfolio Alliance Growth Portfolio American Capital Enterprise Portfolio Smith Barney International Equity Portfolio Smith Barney Pacific Basin Portfolio TBC Managed Income Portfolio Putnam Diversified Income Portfolio G.T. Global Strategic Income Portfolio Smith Barney High Income Portfolio MFS Total Return Portfolio Smith Barney Money Market Portfolio Smith Barney Total Return Portfolio Each Underlying Fund is a separate series of shares of the Smith Barney/Travelers Series Fund Inc., except for Smith Barney Total Return Portfolio, which is a separate series of the Smith Barney Series Fund Inc. For a description of each Fund's investment objectives, as well as the investment advisers that provide investment management and advisory services for the funds, please refer to "The Underlying Funds" on page 1, and the prospectuses for the Underlying Funds. PURCHASE PAYMENTS An initial lump-sum Purchase Payment of at least $5,000 must be made to the Contract, and additional Purchase Payments of at least $500 may be made at any time following the initial payment. All Purchase Payments will be allocated to the Sub-Account(s) or the Fixed Account, as chosen by the Contract Owner. (See "Purchase Payments," page 5.) CHARGES AND EXPENSES There is no sales charge deducted from Purchase Payments when they are received. However, a Contingent Deferred Sales Charge ("surrender charge") applies if you make a full or partial surrender of the Contract Value during the first six years following a Purchase Payment. The maximum surrender charge that could be assessed is 6% of the amount withdrawn. (See "Contingent Deferred Sales Charge," page 6.) The Company will deduct $30 annually from the Contract to cover administrative expenses associated with the Contract. This charge will not apply (1) at the time of a distribution resulting from the death of the Contract Owner, or the death of the Annuitant with no Contingent Annuitant surviving; (2) after an annuity payout has begun; or (3) if the Contract Value is equal to or greater than $40,000 on the date of the assessment of the charge. The Company will also deduct from each Sub-Account an amount equal to 0.15% on an annual basis of the daily net asset value of the Sub-Account for administrative and operating expenses related to the Sub-Accounts. (See "Administrative Charges," page 6.) An insurance charge is deducted daily from the Sub-Accounts of Fund BD II to compensate for mortality and expense risks assumed by the Company. For those Contract Owners who elect a standard death benefit, the insurance charge will be equivalent on an annual basis to 1.02% of the daily net assets of the Sub-Account. For those Contract Owners who elect an enhanced death benefit, the insurance charge will be equivalent on an annual basis to 1.30% of the daily net assets of the Sub-Account. (See "Insurance Charge," page 7.) Premium taxes may apply to annuities in a few states. These taxes currently range from 0.5% to 5.0%, depending upon jurisdiction. Where required, the Company will deduct any applicable premium tax from the Contract Value either upon death, surrender or annuitization, or at the time Purchase Payments are made to the Contract, but no earlier than when the Company has a tax liability under state law. (See "Premium Tax," page 8.) TRANSFERS Prior to the Maturity Date, your investments may be reallocated among the Fixed Account and any of the Sub-Accounts available under Fund BD II. You may request a reallocation of your investment either in writing, sent to the Company's Home Office, or by telephone in accordance with the Company's telephone transfer procedures. Transfers between the Fixed Account and any of the variable Sub-Accounts are subject to certain restrictions. (See "Transfers," page 9, and "The Fixed Account," page 22.) You may also request that the Company establish automated transfers of Contract Values from the Fixed Account or any of the Sub-Accounts to other Sub-Accounts through written request or other method acceptable to the Company. The minimum automated transfer amount is $400. (See "Dollar-Cost Averaging (Automated Transfers)," on page 9.) SURRENDERS You may also elect to surrender all or part of the Contract Value prior to the Maturity Date, subject to certain charges and limitations. You will be liable for income tax on the taxable portion of any full or partial surrender, and you may incur tax penalties if such surrender is made prior to the age of 59-1/2. (See "Surrenders and Redemptions," page 10.) You may elect to take systematic withdrawals from the Contract by surrendering a specified dollar amount of at least $100 on a monthly, quarterly, semiannual or annual basis. All applicable surrender charges and premium taxes will be deducted. The minimum Contract Value required to begin systematic withdrawals is $15,000. (See "Systematic Withdrawals," on page 10.) DEATH BENEFIT A death benefit is payable to the Beneficiary upon the death of the Annuitant prior to the Maturity Date with no Contingent Annuitant surviving. Two different types of death benefits are available under the Contract: a Standard Death Benefit and an Enhanced Death Benefit. The insurance charges under the Contract will be higher for Contract Owners who elect the Enhanced Death Benefit. The death benefits will vary based on the Annuitant's age at the time of death. In addition, for nonqualified Contracts, upon distributions resulting from the death of the Contract Owner prior to the Maturity Date and with the Annuitant or Contingent Annuitant surviving, the value of the Contract will be recalculated as if a Death Benefit had been payable based on the Contract Owner's age at the time of death. Such value will be credited to the party taking distributions upon the death of the Contract Owner with the Annuitant or Contingent Annuitant surviving. This party may be either the surviving joint owner, the succeeding owner, or the Beneficiary, depending upon all the circumstances and the terms of the Contract. (See "Death Benefit," page 11.) THE ANNUITY PERIOD On the Maturity Date, or other agreed-upon payment date, the Company will provide Annuity or Income Payments to the Contract Owner or his or her designee in accordance with the payment option selected by the Contract Owner. If a payment option has not been selected at or prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly payments based on the life of the Annuitant, in accordance with Annuity Option 2 (Life Annuity with 120 Monthly Payments Assured), or for certain qualified contracts, in accordance with Annuity Option 4 (Joint and Last Survivor Joint Life Annuity - Annuity Reduced on Death of Primary Payee) (the "Automatic Option"). If a variable payout is selected, the payments will continue to vary with the investment performance of the selected Underlying Fund. If monthly Annuity Payments are less than $100, the Company reserves the right to reduce the frequency of payments or to pay the Contract Value in one lump-sum payment. (See "Annuity Period," page 12.) THE FIXED ACCOUNT Although this Prospectus specifically applies only to the variable features of the Contract, the Contract also allows you to allocate Purchase Payments to a Fixed Account where they will earn interest at a rate guaranteed by the Company, which interest rate will not be less than 3% per year. Transfers may also be made from the Fixed Account to the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary in an amount of up to 15% of the Fixed Account value on the semi-annual Contract Date anniversary. Additionally, automated transfers from the Fixed Account to any of the Sub-Accounts may begin at any time. Other restrictions may also apply. (See "The Fixed Account," page 22.) FEE TABLE FUND BD II AND ITS UNDERLYING FUNDS The purpose of the Fee Table is to assist Contract Owners in understanding the various costs and expenses that will be borne, directly or indirectly, under the Contract. The information listed reflects expenses of the Sub-Accounts as well as of the Underlying Fund Expenses. Additional information regarding the charges and deductions assessed under the Contract can be found on page 6. Expenses shown do not include premium taxes, which may be applicable. CONTRACT OWNER TRANSACTION EXPENSES Contingent Deferred Sales Charge (as a percentage of purchase payments):
LENGTH OF TIME FROM PURCHASE PAYMENT SURRENDER (NUMBER OF YEARS) CHARGE 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 and thereafter 0% Annual Contract Administrative Charge........................$30.00 (Waived if Contract Value is $40,000 or more) ANNUAL SUB-ACCOUNT CHARGES STANDARD ENHANCED DEATH BENEFIT DEATH BENEFIT Mortality and Expense Risk Fee (as a percentage of daily net asset value)........1.02% 1.30% Sub-Account Administrative Charge (as a percentage of daily net asset value).....0.15% 0.15% TOTAL SUB-ACCOUNT CHARGES....................................................1.17% 1.45% UNDERLYING FUND EXPENSES TOTAL MANAGEMENT OTHER UNDERLYING FUND FEE EXPENSES* EXPENSES Smith Barney Income and Growth Portfolio 0.65% Alliance Growth Portfolio 0.80% American Capital Enterprise Portfolio 0.70% Smith Barney International Equity Portfolio 0.90% Smith Barney Pacific Basin Portfolio 0.90% TBC Managed Income Portfolio 0.65% Putnam Diversified Income Portfolio 0.75% G.T. Global Strategic Income Portfolio 0.80% Smith Barney High Income Portfolio 0.60% MFS Total Return Portfolio 0.80% Smith Barney Money Market Portfolio 0.60% Smith Barney Total Return Portfolio 0.75% * "Other Expenses" are based on an estimate of expenses for the current fiscal year. The fund manager has agreed to reimburse the Portfolios for the amount by which their aggregate expenses (including management fees, but excluding brokerage commissions and interest charges) exceed a certain expense cap. For the Income and Growth, Growth, Enterprise, Managed Income, Diversified Income, High Income, Total Return and Money Market Portfolios, the expense cap is 1.25%; for the International Equity, Pacific Basin and Strategic Income Portfolios, the expense cap is 1.50%.
EXAMPLE* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. STANDARD DEATH BENEFIT ELECTION A $1,000 investment would be subject If the Contract is NOT surrendered at to the following expenses, assuming a the end of the period shown, a $1,000 5% annual return on assets, if the Con- investment would be subject to the tract is surrendered or if certain income following expenses, assuming a 5% options are elected at the end of the annual return on assets: period shown**:
One Year Three Years One Year Three Years Smith Barney Income and Growth Portfolio Alliance Growth Portfolio American Capital Enterprise Portfolio Smith Barney International Equity Portfolio Smith Barney Pacific Basin Portfolio TBC Managed Income Portfolio Putnam Diversified Income Portfolio G.T. Global Strategic Income Portfolio Smith Barney High Income Portfolio MFS Total Return Portfolio Smith Barney Money Market Portfolio Smith Barney Total Return Portfolio ENHANCED DEATH BENEFIT ELECTION A $1,000 investment would be subject If the Contract is NOT surrendered at to the following expenses, assuming a the end of the period shown, a $1,000 5% annual return on assets, if the Con- investment would be subject to the tract is surrendered or if certain income following expenses, assuming a 5%: options are elected at the end of the annual return on assets: period shown**: One Year Three Years One Year Three Years Smith Barney Income and Growth Portfolio Alliance Growth Portfolio American Capital Enterprise Portfolio Smith Barney International Equity Portfolio Smith Barney Pacific Basin Portfolio TBC Managed Income Portfolio Putnam Diversified Income Portfolio G.T. Global Strategic Income Portfolio Smith Barney High Income Portfolio MFS Total Return Portfolio Smith Barney Money Market Portfolio Smith Barney Total Return Portfolio * The Example reflects the $30 Annual Contract Administrative Charge as an annual charge of 0.075% of assets based on an anticipated average account value of $40,000. ** The Contingent Deferred Sales Charge is waived if an annuity payout has begun or if an income option of at least five years duration is begun after the first Contract Year (see "Charges and Deductions - Contingent Deferred Sales Charge," page 6.)
THE INSURANCE COMPANY The Travelers Life and Annuity Company (the "Company"), an indirect wholly owned subsidiary of The Travelers Inc., is a stock insurance company chartered in 1864 in the State of Connecticut and continuously engaged in the insurance business since that time. The Company is licensed to conduct a life insurance business in all states of the United States, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, Canada and the Bahamas. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183. THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES (FUND BD) Fund BD II was established on October 22, 1993 and is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). The assets of Fund BD II will be invested exclusively in the shares of the Underlying Funds. Fund BD II meets the definition of a separate account under the federal securities laws, and will comply with the provisions of the 1940 Act. Additionally, the operations of Fund BD II are subject to the provisions of Section 38a-433 of the Connecticut General Statutes which authorizes the Connecticut Insurance Commissioner to adopt regulations under it. Section 38a-433 contains no restrictions on the investments of the Separate Account, and the Commissioner has adopted no regulations under the Section that affect the Separate Account. Under Connecticut law, the assets of Fund BD II will be held for the exclusive benefit of the owners of, and the persons entitled to payment under, the Contract offered by this Prospectus and under all other contracts which provide for accumulated values or dollar amount payments to reflect investment results of the Separate Account. Incomes, gains and losses, whether or not realized, for assets allocated to Fund BD II are in accordance with the Contracts, credited to or charged against Fund BD II without regard to other gains and losses of the Company. The assets held in Fund BD II are not chargeable with liabilities arising out of any other business which the Company may conduct. The obligations arising under the Contract are obligations of the Company. THE UNDERLYING FUNDS Purchase Payments applied to the Sub-Accounts of Fund BD II will be invested in one or more of the available Underlying Funds at net asset value in accordance with the selection made by the Contract Owner. Contract Owners may change their selection in accordance with the provisions of the Contract. Underlying Funds available under the Contract may be added or withdrawn as permitted by applicable law. Fund BD II currently invests in the following Underlying Funds, each of which is a separate series of shares of the Smith Barney/Travelers Series Fund Inc.: SMITH BARNEY INCOME AND GROWTH PORTFOLIO. The objective of the Income and Growth Portfolio is current income and long-term growth of income and capital by investing primarily, but not exclusively, in common stocks. ALLIANCE GROWTH PORTFOLIO. The objective of the Growth Portfolio is long-term growth of capital by investing predominantly in equity securities of companies with a favorable outlook for earnings and whose rate of growth is expected to exceed that of the U.S. economy over time. Current income is only an incidental consideration. AMERICAN CAPITAL ENTERPRISE PORTFOLIO. The Enterprise Portfolio's objective is capital appreciation through investment in securities believed to have above-average potential for capital appreciation. Any income received on such securities is incidental to the objective of capital appreciation. SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO. The objective of the International Equity Portfolio is total return on assets from growth of 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 PACIFIC BASIN PORTFOLIO. The Pacific Basin Portfolio's objective is long-term capital appreciation through investment primarily in equity securities of companies in Asian Pacific Countries. TBC MANAGED INCOME PORTFOLIO. The objective of the Managed Income Portfolio is to seek high current income consistent with prudent risk of capital through investments in corporate debt obligations, preferred stocks, and obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities. PUTNAM DIVERSIFIED INCOME PORTFOLIO. The objective of the Diversified Income Portfolio is to seek high current income consistent with preservation of capital. The Portfolio will allocate its investments among the U.S. Government Sector, the High Yield Sector, and the International Sector of the fixed income securities markets. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) G.T. GLOBAL STRATEGIC INCOME PORTFOLIO. The Strategic Income Portfolio's investment objective is primarily to seek high current income and secondarily to seek capital appreciation. The Portfolio allocates its assets among debt securities of issuers in the United States, developed foreign countries, and emerging markets. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) SMITH BARNEY HIGH INCOME PORTFOLIO. The investment objective of the High Income Portfolio is high current income. Capital appreciation is a secondary objective. The Portfolio will invest at least 65% of its assets in high-yielding corporate debt obligations and preferred stock. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) MFS TOTAL RETURN PORTFOLIO. The Total Return Portfolio's objective is to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with the prudent employment of capital. Generally, at least 40% of the Portfolio's assets will be invested in equity securities. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) SMITH BARNEY MONEY MARKET PORTFOLIO. The investment objective of the Money Market Portfolio is maximum current income and preservation of capital by investing in high quality, short-term money market instruments. The following is a separate series of shares of the Smith Barney Series Fund Inc., and is also an investment option under Fund BD II: SMITH BARNEY TOTAL RETURN PORTFOLIO. The investment objective of the Smith Barney Total Return Portfolio is to provide total return, consisting of long-term capital appreciation and income. The Portfolio will seek to achieve its goal by investing primarily in a diversified portfolio of dividend-paying common stock. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) UNDERLYING FUND INVESTMENT MANAGERS The Underlying Funds receive investment management and advisory services from the following investment professionals:
FUND INVESTMENT MANAGER SUB-ADVISER Smith Barney Income and Smith Barney Mutual Funds Growth Portfolio Management Inc. Alliance Growth Portfolio Smith Barney Mutual Funds Management Inc. Alliance Capital Management L.P. American Capital Smith Barney Mutual Funds American Capital Enterprise Portfolio Management Inc. Asset Management, Inc. Smith Barney Int'l Smith Barney Mutual Funds Equity Portfolio Management Inc. Smith Barney Pacific Smith Barney Mutual Funds Basin Portfolio Management Inc. TBC Managed Income Portfolio Smith Barney Mutual Funds The Boston Company Asset Management Inc. Management, Inc. Putnam Diversified Smith Barney Mutual Funds Putnam Investment Income Portfolio Management Inc. Management, Inc. G.T. Global Strategic Smith Barney Mutual Funds G.T. Capital Management, Inc. Income Portfolio Management Inc. Smith Barney High Smith Barney Mutual Funds Income Portfolio Management Inc. MFS Total Return Portfolio Smith Barney Mutual Funds Massachusetts Financial Management Inc. Services Company Smith Barney Money Smith Barney Mutual Funds Market Portfolio Management Inc. Smith Barney Total Smith Barney Mutual Funds Return Portfolio Management Inc.
SUBSTITUTION If shares of any of the Underlying Funds should not be available for purchase by the appropriate Sub-Account, or if, in the judgment of the Company further investment in such shares becomes inappropriate for the purposes of the Contract, shares of another registered, open-end management investment company may be substituted for shares of the Underlying Funds held in the Sub-Accounts. Substitution may be made with respect to both existing investments and the investment of any future Purchase Payments. However, no such substitution will be made without notice to Contract Owners and without prior approval of the Securities and Exchange Commission, to the extent required by the 1940 Act, or other applicable law. The Company may also add other available Underlying Funds under the Contract as it deems appropriate. GENERAL All investment income and other distributions of Fund BD II are reinvested in shares of the Underlying Funds at net asset value. The Underlying Funds are required to redeem fund shares at net asset value and to make payment within seven days. Shares of the Underlying Funds listed above are currently sold only to life insurance company separate accounts to fund benefits under variable annuity and variable life insurance contracts issued by insurance companies. Fund shares are not sold to the general public. More detailed information may be found in the current prospectus for the Underlying Funds; this prospectus is included with and must accompany this Prospectus. Read it carefully before investing. PERFORMANCE INFORMATION From time to time, the Company may advertise different types of historical performance for the Sub-Accounts of Fund BD II. The Company may advertise the "standardized average annual total returns" of the Sub-Accounts, calculated in a manner prescribed by the Securities and Exchange Commission, as well as the "non-standardized total return," as described below. "Standardized average annual total return" will show the percentage rate of return of a hypothetical initial investment of $1,000 for the most recent one, five and ten year periods (or fractional periods thereof). This standardized calculation reflects the deduction of all applicable charges made to the Contract, except for premium taxes which may be imposed by certain states. "Non-standardized total return" will be calculated in a similar manner, except non-standardized total returns will not reflect the deduction of any applicable Contingent Deferred Sales Charge or the $30 annual contract administrative charge, which would decrease the level of performance shown if reflected in these calculations. 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 and 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 Fund BD II and the Underlying Funds. The total return quotations are based upon historical earnings and are not necessarily representative of future performance. A Contract Owner's Contract Value at redemption may be more or less than original cost. THE CONTRACT The Contract described in this Prospectus is both an insurance product and a security. As an insurance product, it is subject to the insurance laws and regulations of each state in which it is available for distribution. The underlying product is an Annuity whereby Purchase Payments are paid to the Company and credited to the Contract Owner's account to accumulate until the Maturity Date. A variable annuity differs from a fixed annuity in that during the accumulation period, the Contract Value may vary from day to day. The Contract Owner assumes the risk of gain or loss according to the performance of the selected investment(s). There is generally no guarantee that the Contract Value at the Maturity Date will equal or exceed the total Purchase Payments made under the Contract, except as specified or elected under the Death Benefit provisions described on page 11. PURCHASE PAYMENTS An initial-lump sum Purchase Payment must be made to the Contract with certain limitations. The minimum initial Purchase Payment must be at least $5,000, and additional payments of at least $500 may be made under the Contract at any time following the initial payment. The initial Purchase Payment is due and payable before the Contract becomes effective. The Company will apply each Purchase Payment to purchase Accumulation Units of the designated Sub-Account(s). The Company will apply the initial Purchase Payment within two business days following its receipt at the Company's Home Office; all subsequent Purchase Payments will be applied as of the next valuation following their receipt. RIGHT TO RETURN The Company may be returned for a full refund of the Contract Value (including charges) within twenty days after delivery of the Contract to the Contract Owners (the "free-look period"), unless state law requires a longer period. The Contract Owner bears the investment risk during the free-look period; therefore, the Contract Value returned may be greater or less than your Purchase Payment. However, if you purchased the Contract as an Individual Retirement Annuity, (1) your Purchase Payment will be refunded in full if you return the Contract within the first seven days after delivery, and (2) the Contract Value (including charges) will be refunded if you return the Contract during the remainder of the free-look period. In addition, certain states require that Purchase Payments be refunded in full for all Contracts or for Contracts issued in replacement situations, during the entire free-look period or for some portion of it. All Contract Values will be determined as of the next valuation following the Company's receipt of the Owner's written request for refund. ACCUMULATION UNITS The number of Accumulation Units of each Sub-Account to be credited to the Contract once a Purchase Payment has been received by the Company will be determined by dividing the Purchase Payment applied to the Sub-Account by the current Accumulation Unit Value of the Sub-Account. The Accumulation Unit Value for each Sub-Account was established at $1.00 at inception. The value of an Accumulation Unit on any Valuation Date is determined by multiplying the value on the immediately preceding Valuation Date by the net investment factor for the Valuation Period just ended. The value of an Accumulation Unit on any date other than a Valuation Date will be equal to its value as of the next succeeding Valuation Date. The value of an Accumulation Unit may increase or decrease. NET INVESTMENT FACTOR The net investment factor is used to measure the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for a Sub-Account for any Valuation Period is equal to the sum of 1.000000 plus the net investment rate (the gross investment rate less any applicable Sub-Account deductions during the Valuation Period relating to the Insurance Charge and the Sub-Account Administrative Charge). The gross investment rate of a Sub-Account is equal to (a) minus (b) divided by (c) where: (A) = investment income plus capital gains and losses (whether realized or unrealized); (B) = any deduction for applicable taxes (presently zero); and (C)= the value of the assets of the Underlying Fund at the beginning of the Valuation Period. The gross investment rate may be either positive or negative. A Sub-Account's assets are based on the net asset value of the Underlying Fund, and investment income includes any distribution whose ex-dividend date occurs during the Valuation Period. CHARGES AND DEDUCTIONS CONTINGENT DEFERRED SALES CHARGE There are no sales charges deducted from Purchase Payments when they are received and applied under the Contract. However, a Contingent Deferred Sales Charge ("surrender charge") will be applied if a full or partial surrender of the Contract Value is made during the first six years following a Purchase Payment. The length of time from receipt of the Purchase Payment to the time of surrender determines the amount of the charge. The purpose of the surrender charge is to help defray expenses incurred in the sale of the Contract, including commissions and other expenses associated with the printing and distribution of prospectuses and sales material. However, the Company expects that the Contingent Deferred Sales Charges assessed under the Contract will be insufficient to cover these expenses; the difference will be covered by the general assets of the Company which are attributable, in part, to mortality and expense risk charges under the Contract which are described below. The surrender charge is equal to a percentage of the amount withdrawn from the Contract (not to exceed the aggregate amount of the Purchase Payments made under the Contract), and is calculated as follows: LENGTH OF TIME FROM PURCHASE PAYMENT SURRENDER (NUMBER OF YEARS) CHARGE 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 and thereafter 0%
For purposes of determining the amount of any surrender charge, surrenders will be deemed to be taken first from any applicable free withdrawal amount (as described below); next from remaining Purchase Payments (on a first-in, first-out basis); and then from contract earnings (in excess of any free withdrawal amount). Unless the Company receives instructions to the contrary, the surrender charge will be deducted from the amount requested. No Contingent Deferred Sales Charge will be assessed (1) in the event of distributions resulting from the death of the Contract Owner or the death of the Annuitant with no Contingent Annuitant surviving; (2) if an annuity payout has begun; or (3) if an income option of at least five years' duration is begun after the first Contract Year. FREE WITHDRAWAL ALLOWANCE. There is a 15% free withdrawal allowance available each year after the first Contract Year. The available withdrawal amount will be calculated as of the first Valuation Date of any given Contract Year. The free withdrawal allowance applies to partial surrenders of any amount and to full surrenders, except those full surrenders transferred directly to annuity contracts issued by other financial institutions. ADMINISTRATIVE CHARGES Contract Administrative Charge. An administrative charge of $30 will be deducted annually from the Contract to compensate the Company for expenses incurred in establishing and administering the Contract. The contract administrative charge will be deducted from the Contract Value on the fourth Friday of August of each year by cancelling Accumulation Units in each Sub-Account on a pro rata basis. This charge will be prorated from the date of purchase to the next date of assessment of charge. A prorated charge will also be assessed upon voluntary or involuntary surrender of the Contract. The Contract Administrative Charge will not be assessed upon distributions resulting from the death of the Contract Owner or the Annuitant with no Contingent Annuitant surviving, or after an annuity payout has begun, or if the Contract Value is equal to or greater than $40,000 on the date of the assessment of the charge. SUB-ACCOUNT ADMINISTRATIVE CHARGE. A sub-account administrative charge is deducted daily from the Sub-Accounts of Fund BD II in order to compensate the Company for certain administrative and operating expenses of the Sub-Accounts. The charge is equivalent, on an annual basis, to 0.15% of the daily net asset value of the Sub-Accounts and is deducted on each Valuation Date at the rate of 0.000411% for each day in the Valuation Period. Neither the Contract Administrative Charge nor the Sub-Account Administrative Charge can be increased. The charges are set at a level which does not exceed the average expected cost of the administrative services to be provided while the Contract is in force, and the Company does not expect to make a profit from these charges. INSURANCE CHARGE An insurance charge is deducted daily from the Sub-Accounts of Fund BD II. This charge is intended to cover the mortality and expense risks associated with guarantees which the Company provides under the Contract. As discussed below, a portion of the insurance charge is for the assumption of mortality risk, while the remainder is for the assumption of expense risk. The mortality risk portion of the insurance charge compensates the Company for guaranteeing to provide Annuity Payments to an Annuitant according to the terms of the Contract regardless of how long the Annuitant lives and no matter what the actual mortality experience of other Annuitants under the Contract might be, and for guaranteeing to provide the standard or the enhanced death benefit if an Annuitant dies prior to the Maturity Date. The expense risk charge compensates the Company for the risk that the charges under the Contract, which cannot be increased during the duration of the Contract, will be insufficient to cover actual costs. For those Contract Owners who have elected a standard death benefit provision, the insurance charge is equivalent, on an annual basis, to 1.02% of the daily net asset value of the Sub-Accounts. The Company reserves the right to lower this charge at any time. The charge is deducted on each Valuation Date at the rate of 0.002795% for each day in the Valuation Period. The Company estimates that approximately 75% of the standard death benefit insurance charge is for the assumption of mortality risk. For those Contract Owners who have elected an enhanced death benefit provision, the insurance charge is equivalent, on an annual basis, to 1.30% of the daily net asset value of the Sub-Accounts. The Company reserves the right to lower this charge at any time. The charge is deducted on each Valuation Date at the rate of .003562% for each day in the Valuation Period. The Company estimates that approximately 80% of the enhanced death benefit insurance charge is for the assumption of mortality risk. If the amount deducted for mortality and expense risks is not sufficient to cover the mortality costs and expense shortfalls, the loss is borne by the Company. If the deduction is more than sufficient, the excess will be a profit to the Company. The Company expects to make a profit from the insurance charge. REDUCTION OR ELIMINATION OF CONTRACT CHARGES The Contingent Deferred Sales Charge and the administrative charges under the Contract may be reduced or eliminated when certain sales of the Contract result in savings or reduction of sales expenses. The entitlement to such a reduction in the Contingent Deferred Sales Charges or the administrative charge will be based on the following: (1) the size and type of group to which sales are to be made; (2) the total amount of Purchase Payments to be received; and (3) any prior or existing relationship with the Company. There may be other circumstances, of which the Company is not presently aware, which could result in fewer sales expenses. In no event will reduction or elimination of the Contingent Deferred Sales Charge or the administrative charge be permitted where such reduction or elimination will be unfairly discriminatory to any person. UNDERLYING FUND CHARGES Fund BD II purchases shares of the Underlying Funds at net asset value. The net asset value of each Underlying Fund reflects investment management fees and other expenses already deducted from the assets of the Underlying Funds. For a complete description of these investment advisory fees and other expenses, refer to the prospectus for the Underlying Funds. PREMIUM TAX Certain state and local governments impose premium taxes. These taxes currently range from 0.5% to 5.0%, depending upon jurisdiction. The Company, in its sole discretion and in compliance with any applicable state law, will determine the method used to recover premium tax expenses incurred. Where required, the Company will deduct any applicable premium taxes from the Contract Value either upon death, surrender, annuitization, or at the time Purchase Payments are made to the Contract, but no earlier than when the Company has a tax liability under state law. OWNERSHIP PROVISIONS TYPES OF OWNERSHIP OWNER. The Contract belongs to the Owner designated on the Contract Specifications page, or to any other person subsequently named pursuant to a valid assignment. An assignment of ownership or a collateral assignment may be made only for nonqualified contracts. The Owner has sole power during the Annuitant's lifetime to exercise any rights and to receive all benefits given in the contract provided the Owner has not named an irrevocable beneficiary and provided the Contract is not assigned. The Owner is the recipient of all payments while the Annuitant is alive unless the Owner directs them to an alternate recipient. An alternate recipient under a payment direction does not become the Owner. JOINT OWNER. For nonqualified contracts only, Joint Owners may be named in a written request prior to the Contract Date. Joint Owners may independently exercise transfers between the Sub-Accounts or between the Fixed Account and the Sub-Accounts. All other rights of ownership must be exercised by joint action. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a Joint Owner end at death if another Joint Owner survives. The entire interest of the deceased Joint Owner in the Contract will pass to the surviving Joint Owner. 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 Owner if living when the Owner dies. The Succeeding Owner has no interest in the Contract before then. The Owner may change or delete a Succeeding Owner by written request. BENEFICIARY The Beneficiary is the party named by the Owner in a written request. The Beneficiary has the right to receive any remaining contractual benefits upon the death of the Annuitant. If there is more than one Beneficiary surviving the Annuitant, the Beneficiaries will share equally in benefits unless different shares are recorded with the Company by written request prior to the death of the Annuitant. With nonqualified contracts, the Beneficiary may differ from the designated beneficiary as defined by the distribution provisions of the Contract. The designated beneficiary may take the contract benefits in lieu of the Beneficiary upon the death of the Contract Owner. Unless an irrevocable Beneficiary has been named, the Owner has 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 on the Contract Specifications page, and is the individual on whose life the Maturity Date and the amount of the monthly annuity payments depend. The Annuitant may not be changed after the Contract Date. For nonqualified contracts only, the Contract Owner may also name one individual as a Contingent Annuitant by written request prior to the Contract Date. A Contingent Annuitant may not be changed, deleted or added to the Contract after the Contract Date. If the Annuitant dies prior to the Maturity Date while this Contract is in effect and while the Contingent Annuitant is living: 1) the Contract Value will not be payable upon the Annuitant's death; 2) the Contingent Annuitant becomes the Annuitant; and 3) all other rights and benefits provided by this Contract will continue in effect. When a Contingent Annuitant becomes the Annuitant, the Maturity Date remains the same as previously in effect, unless otherwise provided. TRANSFERS Prior to the Maturity Date, the Contract Owner may transfer all or part of the Contract Value between Sub-Accounts. Although there are currently no charges, penalties or restrictions on the amount or frequency of transfers, the Company reserves the right to charge a fee for any transfer request, and to limit the number of transfers to no more than one in any six month period. Some Underlying Funds have higher investment advisory fees than others; therefore, a transfer from one Sub-Account to another could result in a Contract Owner's investment becoming subject to higher or lower investment advisory fees. A transfer between Sub-Accounts has no other effect on the amount or timing of any of the other charges under the Contract. Specifically, for purposes of computing the applicability of the Contingent Deferred Sales Charge, the date of the Purchase Payments made pursuant to the Contract will not be affected by transfers among Sub-Accounts. DOLLAR-COST AVERAGING (AUTOMATED TRANSFERS) You may establish automated transfers of Contract Values on a monthly or quarterly basis from the Fixed Account and certain of the Sub-Accounts to other Sub-Accounts through written request or other method acceptable to the Company. You must have a minimum total Contract Value of $5,000 to enroll in the dollar-cost averaging program. The minimum total automated transfer amount is $400. Certain restrictions apply for automated transfers from the Fixed Account that do not apply to automated transfers from any of the Sub-Accounts. You may establish automated transfers of Contract Values from the Fixed Account at any time following the date on which you make a deposit of at least $5,000 to the Fixed Account. 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. You may start or stop participation in the Dollar-Cost Averaging 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. Automated transfers are subject to all of the other provisions and terms of the Contract, including provisions relating to the transfer of money between Sub-Accounts. The Company reserves the right to suspend or modify transfer privileges at any time and to assess a processing fee for this service. Before transferring any part of the Contract Value, Contract Owners should consider the risks involved in switching between investments available under this Contract. Dollar-cost averaging requires regular investments regardless of fluctuating price levels, and does not guarantee profits or prevent losses in a declining market. A potential investor should consider their financial ability to continue purchases through periods of low price levels. TELEPHONE TRANSFERS A Contract Owner may also place a request for all or part of the Contract Value to be transferred by telephone. The telephone transfer privilege is available automatically; no special election is necessary for a Contract Owner to have this privilege available. All transfers must be in accordance with the terms of the Contract. Transfer instructions are currently accepted on each Valuation Date between 9:00 a.m. and 4:00 p.m., Eastern time, at 1-800-842-8573. Once instructions have been accepted, they may not be rescinded; however, new telephone instructions may be given the following day. If the transfer instructions are not in good order, the Company will not execute the transfer and will promptly notify the caller. The Company will make a reasonable effort to record each telephone transfer conversation, but in the event that no recording is effective or available, the Contract Owner will remain liable for each telephone transfer effected. Additionally, the Company is not liable for acting upon instructions believed to be genuine and in accordance with the procedures described above. As a result of this policy, the Contract Owner may bear the risk of loss in the event that the Company follows instructions that prove to be fraudulent. The Securities and Exchange Commission is currently considering the propriety of such a policy. SURRENDERS AND REDEMPTIONS A Contract Owner may redeem all or any portion of the Cash Surrender Value of the Contract at any time prior to the Maturity Date. The Contract Owner must submit a written request (in the proper form) specifying the Sub-Account (or the Fixed Account) from which surrender is to be made. The Cash Surrender Value will be determined as of the next valuation following receipt of the Owner's surrender request at the Company's Home Office. The Company may defer payment of any Cash Surrender Value for a period of not more than seven days after the request is received in the mail, but it is its intent to pay as soon as possible. Requests for surrender that are not in good order will not be processed until the deficiencies are corrected. The Company will contact the Contract Owner to advise of the reason for the delay and what is needed to act upon the surrender request. The Cash Surrender Value on any date will be equal to the Contract Value less any applicable surrender charge and any premium tax not previously deducted. The Cash Surrender Value may be more or less than the Purchase Payments made depending on the Contract Value at the time of surrender. SYSTEMATIC WITHDRAWALS Prior to the Maturity Date of the Contract, a Contract Owner may elect in writing on a form provided by the Company to take systematic withdrawals from the Contract by surrendering a specified dollar amount of at least $100 on a monthly, quarterly, semiannual or annual basis. Any applicable surrender charges above the free withdrawal allowance and any applicable premium taxes will be deducted. The minimum Contract Value required to begin systematic withdrawals is $15,000. The Company will process the withdrawals as directed by surrendering on a pro-rata basis Accumulation Units from all Sub-Accounts and/or the Fixed Account in which the Contract Owner has an interest, unless otherwise directed. The Contract Owner may begin or discontinue systematic withdrawals at any time by notifying the Company in writing, but at least 30 days' notice must be given to change any systematic withdrawal instructions that are currently in place. The Company reserves the right to discontinue offering systematic withdrawals or to assess a processing fee for this service upon 30 days' written notice to Contract Owners. 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. Contract Owners should consult with their tax adviser regarding the tax consequences of systematic withdrawals. DEATH BENEFIT A Death Benefit is payable to the Beneficiary upon the death of the Annuitant prior to the Maturity Date with no Contingent Annuitant surviving. Two different types of death benefits are available under the Contract: a Standard Death Benefit and an Enhanced Death Benefit (the Enhanced Death Benefit may not be available in all jurisdictions). Death Benefits are payable upon the Company's receipt of due proof of death at its Home Office. A Beneficiary may request that a death benefit payable under the Contract be applied to one of the settlement options available under the Contract, subject to the contract provisions. (See also "Nonqualified Annuity Contracts," page 17.) See Appendix A for Contracts issued in the state of Florida. In addition, for nonqualified contracts, if the Contract Owner dies (including the first of joint owners) before the Maturity Date with the Annuitant or Contingent Annuitant surviving, and if a distribution is made as a result of such death, as required by the minimum distribution rules of the federal tax law, the Company will recalculate the value of the Contract under the provisions of "Death Proceeds Prior to the Maturity Date," below. The value of the Contract, as recalculated, will be credited to the party taking distributions upon the death of the Contract Owner with the Annuitant or Contingent Annuitant surviving. This will generally be the surviving joint owner or succeeding owner, or otherwise the Beneficiary in accordance with all the circumstances and the terms of the Contract. This party may differ from the Beneficiary who was named by the Owner in a written request and who would receive any remaining contractual benefits upon the death of the Annuitant. This party may be paid in a single lump sum, or by other options, but should take distributions as required by minimum distribution rules of the federal tax law. If the Contract Owner's spouse is the surviving joint or succeeding owner, the spouse may elect to continue the Contract as owner in lieu of taking a distribution under the Contract. (See generally, "Nonqualified Annuity Contracts," page 17.) All references to age in the "Death Proceeds Prior to Maturity Date" section will be based on the Contract Owner's age rather than the Annuitant's age. DEATH PROCEEDS PRIOR TO THE MATURITY DATE STANDARD DEATH BENEFIT. Under the standard death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: 1) the Contract Value; 2) the total Purchase Payments made under the Contract; or 3) the Contract Value on the fifth contract year anniversary immediately preceding the date on which the Company receives due proof of death. If the Annuitant dies ON OR AFTER AGE 75, BUT BEFORE AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders 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. If the Annuitant dies ON OR AFTER AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the Contract Value, less any applicable premium tax. See Apendix A for Contracts issued in the State of Florida. ENHANCED DEATH BENEFIT. Under the enhanced death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit equal to the greater of (1) the guaranteed death benefit, or (2) the Contract Value less any applicable premium tax. The guaranteed death benefit is equal to the Purchase Payments made to the Contract (minus surrenders and applicable premium tax) increased by 5% on each contract date anniversary, but not beyond the contract date anniversary following the Annuitant's 75th birthday, with a maximum guaranteed death benefit of 200% of the total of Purchase Payments minus surrenders and minus applicable premium tax. If the Annuitant dies ON OR AFTER AGE 75, BUT BEFORE AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greater of (1) the guaranteed death benefit as of the Annuitant's 75th birthday, plus additional purchase payments, minus surrenders and applicable premium tax; or (2) the Contract Value less any applicable premium tax. If the Annuitant dies ON OR AFTER AGE 85 but before the Maturity Date, the Company will pay to the Beneficiary a death benefit equal to the Contract Value less any applicable premium tax. DEATH PROCEEDS AFTER THE MATURITY DATE If the Annuitant dies on or after the Maturity Date, the Company 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 Annuity Payments will ordinarily begin on the Maturity Date stated in the Contract. If no Maturity Date is elected, the Maturity Date will be the Annuitant's 70th birthday for qualified contracts and the Annuitant's 75th birthday, or ten years after the Contract Date, if later, for nonqualified contracts. The Maturity Date is the date on which the Company will begin paying the first of a series of Annuity or Income Payments in accordance with the Settlement Option selected by the Contract Owner. Annuity or Income Payments will begin on the Maturity Date unless the Contract has been fully surrendered or the proceeds have been paid to the Beneficiary prior to that date. The Company may require proof that the Annuitant is alive before Annuity Payments are made. 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 85th birthday or to a later date with the Company's 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 Contract Owner's attainment of age 70 1/2 or the death of the Contract Owner. Independent tax advice should be sought regarding the election of minimum required distributions. See Appendix A for Contracts issued in the state of Florida. ALLOCATION OF ANNUITY At the time election of one of the Annuity Options is made, the person electing the Option may further elect to have the Contract Value applied to provide a Variable Annuity, a Fixed Annuity, or a combination of both. If at the time when Annuity Payments begin no election has been made to the contrary, the value of a Sub-Account or the Fixed Account shall be applied to provide an annuity funded by that same Sub-Account or Fixed Account. A Contract Owner may elect to transfer Contract Values from one account to another prior to the date Annuity Payments commence in order to reallocate the basis on which Annuity Payments will be determined. (See "Transfers," page 9.) VARIABLE ANNUITY ANNUITY UNIT VALUE. The initial value of an Annuity Unit for each Sub-Account was established at $1. The Annuity Unit Value for each Sub-Account as of any Valuation Date is equal to (a) the value of the Annuity Unit on the immediately preceding Valuation Date, multiplied by (b) the net investment factor for that Sub-Account for the Valuation Period just ended, divided by (c) the assumed net investment factor for the Valuation Period. (For example, the assumed net investment factor based on an annual assumed net investment rate of 3.0% for a Valuation Period of one day is 1.000081 and, for a period of two days, is 1.000081 x 1.000081.) The value of an Annuity Unit as of any date other than a Valuation Date is equal to its value on the next succeeding Valuation Date. The number of Annuity Units credited to the Contract is determined by dividing the first monthly Annuity Payment attributable to each Sub-Account by the Sub-Account's Annuity Unit Value as of 14 days prior to the date Annuity Payments commence. The number of Annuity Units remains fixed during the annuity period. DETERMINATION OF FIRST ANNUITY PAYMENT. The Contract contains tables used to determine the first monthly Annuity Payment. The amount applied to effect an Annuity will be the Contract Value as of 14 days before the date Annuity Payments commence less any applicable premium taxes not previously deducted. The amount of the first monthly payment depends on the Annuity Option elected. A formula for determining the adjusted age is contained in the Contract. The total first monthly Annuity Payment is determined by multiplying the benefit per $1,000 of value shown in the tables of the Contract by the number of thousands of dollars of value of the Contract applied to that Annuity Option. The Company reserves the right to require satisfactory proof of age of any person on whose life Annuity Payments are based before making the first payment under any of the Settlement Options. DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of the second and subsequent Annuity Payments is not predetermined and may change from month to month based on the investment experience of the applicable Sub-Account. The total amount of each Annuity Payment will be equal to the sum of the basic payments in each Sub-Account. The actual amounts of these payments are determined by multiplying the number of Annuity Units credited to each Sub-Account by the corresponding Annuity Unit Value as of the date 14 days prior to the date before payment is due. FIXED ANNUITY A Fixed Annuity is an annuity with payments which remain fixed as to dollar amount throughout the payment period. The dollar amount of the first Fixed Annuity Payment will be calculated as described under "Variable Annuity" above. All subsequent payments will be made in the same amount, and that amount will be assured throughout the payment period. If it would produce a larger payment, the Company agrees that the first Fixed Annuity Payment will be determined using the Life Annuity Tables in effect on the Maturity Date. PAYMENT OPTIONS ELECTION OF OPTIONS On the Maturity Date, or other agreed-upon date, the Company will pay an amount payable under the Contract in one lump sum, or in accordance with the payment option selected by the Contract Owner. Election of an option must be made 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. While the Annuitant is alive, the Contract Owner may change a Settlement Option election by written request at any time prior to the Maturity Date. Once Annuity or Income Payments have begun, no further election changes are allowed. During the Annuitant's lifetime, if no election has been made prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly Annuity 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 Joint 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 $2,000 unless the Company consents to a lesser amount. If any monthly periodic payment due any payee is less than $100.00, the Company reserves the right to make payments at less frequent intervals, or to pay the Contract Value in one lump-sum payment. See Appendix A for Contracts issued in the state of Florida. ANNUITY OPTIONS Subject to the conditions described in "Election of Options" above, all or any part of the Cash Surrender Value of the Contract may be paid under one or more of the following Annuity Options. Annuity Options may be elected on a monthly, quarterly, semiannual or annual basis. OPTION 1--LIFE ANNUITY--NO REFUND. The Company will make Annuity Payments during the lifetime of the Annuitant, terminating with the last payment preceding 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. (It would be possible under this option to receive only ONE Annuity Payment if the Annuitant died before the due date of the second Annuity Payment, only TWO if the Annuitant died before the third Annuity Payment, etc.) 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, payments will be continued during the remainder of the period to the Beneficiary designated. OPTION 3--JOINT AND LAST SURVIVOR LIFE ANNUITY--NO REFUND. The Company will make Annuity Payments during the joint lifetime of the two persons on whose lives payments are based, and during the lifetime of 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 lifetime of the two persons on whose lives payments are based. One of the two persons will be designated as the primary payee, the other will be designated as the secondary payee. On the death of the secondary payee, if survived by the primary 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, if survived by the secondary 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 following the death of the survivor. 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 Cash Surrender Value of the Contract 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. The Company will make equal payments of the amount elected until the Contract Value applied under this option has been exhausted. The first payment and all later payments will be paid from each Sub-Account or the Fixed Account in proportion to the Cash Surrender Value attributable to that Account. The final payment will include any amount insufficient to make another full payment. OPTION 2--PAYMENTS FOR A FIXED PERIOD. The Company will make payments for the period selected. The amount of each payment will be equal to the remaining Contract Value applied under this option divided by the number of remaining payments. OPTION 3--OTHER INCOME OPTIONS. The Company will make any other arrangements for Income Payments as may be mutually agreed upon. The amount applied to effect an Income Option will be the Contract Value as of 14 days before the date Income Payments commence, less any applicable premium taxes not previously deducted and any applicable contingent deferred sales charge. The Contract Value used to determine the amount of any Income Payment will be determined on the same basis as the Contract Value during the Accumulation Period, including the deduction for mortality and expense risks and the Sub-Account Administrative Charge. Income Options differ from Annuity Options in that the amount of the payments made under Income Options are unrelated to the length of life of any person. Although the Company continues to deduct the charge for mortality and expense risks, it assumes no mortality risks for amounts applied under any Income Option. Moreover, payments are unrelated to the actual life span of any person. Thus, the Annuitant may outlive the payment period. MISCELLANEOUS CONTRACT PROVISIONS TERMINATION No Purchase Payments after the first are required to keep the Contract in effect. However, the Company reserves the right to terminate the Contract on any Valuation Date if the Contract Value as of that date is less than $1,000 and no Purchase Payments have been made for at least two years, unless otherwise specified by state law. Termination will not occur until 31 days after the Company has mailed notice of termination to the Contract Owner at his or her last known address and to any assignee of record. If the Contract is terminated, the Company will pay to the Contract Owner the Cash surrender Value, (Contract Calue, in the states of Washington, New York and New Jersey), less any applicable administrative charge or premium tax. MISSTATEMENT If the Annuitant's or Contract Owner's sex or date of birth was misstated, all benefits under the Contract are what the Purchase Payment paid would have purchased at the correct sex and age. Proof of the Annuitant's or Contract Owner's age may be filed at any time at the Company's Home Office. 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, the Company will furnish a report showing the number of Accumulation Units credited to the Contract and the corresponding Accumulation Unit Value as of the date of the report for each Sub-Account in which the Contract Owner has invested during the applicable period. The Company will keep all records required under federal or state laws. SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment of any benefit or values for any Valuation Period (1) when the New York Stock Exchange is closed; (2) when trading on the Exchange is restricted; (3) an emergency exists as determined by the Securities and Exchange Commission so that disposal of the securities held in the Sub-Accounts is not reasonably practicable or it is not reasonably practicable to determine the value of the Sub-Account's net assets; or (4) during any other period when the Securities and Exchange Commission, by order, so permits for the protection of securityholders. FEDERAL TAX CONSIDERATIONS The following description of the federal income tax consequences under this Contract is not exhaustive and is not intended to cover all situations. Because of the complexity of the law and the fact that the tax results will vary according to the factual status of the individual involved, tax advice may be needed by a person contemplating purchase of an annuity contract and by a Contract Owner or Beneficiary who may make elections under a contract. For further information, a qualified tax adviser should be consulted. GENERAL TAXATION OF ANNUITIES Amounts credited to the Contract are not generally taxable until they are received by the Contract Owner or the Beneficiary, either in the form of Annuity Payments or other distributions. Distributions from annuities that include previously taxed amounts may be taxed on either an income-first basis or an income-last basis, or on a pro-rata basis according to the type of plan or due to other circumstances. INVESTOR CONTROL In certain circumstances, owners of variable annuity insurance contracts may be considered the owners, for federal income tax purposes, of the assets of the separate accounts used to support their contract. In those circumstances, income and gains from the separate account assets would be includable annually in the variable contract owner's gross income. The IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury has also announced, in connection with the issuance of regulations concerning diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor (i.e., the Contract Owner), rather than the insurance company, to be treated as the owner of the assets in the account." This announcement also stated that guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular Sub-Accounts without being treated as owners of the underlying assets." As of the date of this prospectus, no such guidance has been issued. The ownership rights under the Policy are similar to, but different in certain respects from, those described by the IRS in rulings in which it determined that the owners were not owners of separate account assets. For example, a Contract Owner of this Policy has additional flexibility in allocating payments and cash values. These differences could result in the Contract Owner being treated as the owner of the assets of Fund BD II. In addition, the Company does not know what standard will be set forth in the regulations or rulings which the Treasury is expected to issue, nor does the Company know if such guidance will be issued. The Company therefore reserves the right to modify the Contract as necessary to attempt to prevent the Contract Owner from being considered the owner of a pro rata share of the assets of Fund BD II. The remaining tax discussion assumes that the Policy qualifies as a life insurance contract for federal income tax purposes. PENALTY TAX FOR PREMATURE DISTRIBUTIONS Taxable distributions taken before the Contract Owner has attained 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 tax-benefited plans. 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 a participant under a qualified plan, a Section 403(b) annuity, or an IRA attains age 70 1/2. Distributions must also begin or be continued according to required patterns following the death of the Owner or the Annuitant. NONQUALIFIED ANNUITY CONTRACTS Individuals may purchase tax-deferred annuities without tax law funding limits. The Purchase Payments receive no tax benefit, deduction or deferral, but increases in the value of the contract are generally deferred from tax until distribution. If a nonqualified annuity is owned by other than an individual, however, (e.g., by a corporation), the increases in value attributable to Purchase Payments made after February 28, 1986 are includable in income annually. Furthermore, for contracts issued after April 22, 1987, all deferred increases in value will be includable in the income of a Contract Owner when the Contract Owner transfers the contract without adequate consideration. If two or more annuity contracts are purchased from the same insurer within the same calendar year, distributions from any of them will be taxed based upon the amount of income in all of the same calendar year series of annuities. This will generally have the effect of causing taxes to be paid sooner on the deferred gain in the contracts. Those receiving partial distributions made before annuitization of a contract will generally be taxed on an income-first basis to the extent of income in the contract. Certain pre-August 14, 1982 deposits into an annuity contract that have been placed in the contract by means of a tax-deferred exchange under Section 1035 of the Code may be withdrawn first without income tax liability. This information on deposits must be provided to the Company by the other insurance company at the time of the exchange. There is income in the contract generally to the extent the Cash Value exceeds the investment in the contract. The investment in the contract is equal to the amount of premiums paid less any amount received previously which was excludable 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 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. Failure to meet these requirements will cause the surviving joint owner, the succeeding Contract Owner, or the Beneficiary to lose the tax benefits associated with annuity contracts, i.e., primarily the tax deferral 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. Contracts will be administered by the Company in accordance with these rules and the Company will make a notification when payments should be commenced. INDIVIDUAL RETIREMENT ANNUITIES To the extent of earned income for the year and not exceeding $2,000 per individual, an individual may make deductible contributions to an individual retirement annuity (IRA). There are certain limits on the deductible amount based on the adjusted gross income of the individual and spouse and based on their participation in a retirement plan. If an individual is married and the spouse does not have earned income, the individual may establish IRAs for the individual and spouse. Purchase Payments may then be made annually into IRAs for both spouses in the maximum amount of 100% of earned income up to a combined limit of $2,250. The Code provides for the purchase of a Simplified Employee Pension (SEP) plan. A SEP is funded through an IRA with an annual employer contribution limit of 15% of compensation up to $30,000 for each participant. QUALIFIED PENSION AND PROFIT-SHARING PLANS Under a qualified pension or profit-sharing plan, Purchase Payments made by an employer are not currently taxable to the participant and increases in the value of a contract are not subject to taxation until received by a participant or Beneficiary. Distributions are taxable to the participant or Beneficiary as ordinary income in the year of receipt. Any distribution that is considered the participant's "investment in the contract" is treated as a return of capital and is not taxable. Certain lump-sum distributions may be eligible for special forward averaging tax treatment for certain classes of individuals. FEDERAL INCOME TAX WITHHOLDING The portion of a distribution which is taxable income to the recipient will be subject to federal income tax withholding as follows: 1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(B) PLANS OR ARRANGEMENTS OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS There is a mandatory 20% tax withholding for plan distributions that are eligible for rollover to an IRA or to another retirement plan but that are not directly rolled over. A distribution made directly to a participant or Beneficiary may avoid this result if: (a) a periodic settlement distribution is elected based upon a life or life expectancy calculation, or (b) a term-for-years settlement distribution is elected for a period of ten years or more, payable at least annually, or (c) a minimum required distribution as defined under the tax law is taken after the attainment of the age of 70-1/2 or as otherwise required by law. A distribution including a rollover that is not a direct rollover will be subject to the 20% withholding, and a 10% additional tax penalty may apply to any amount not added back in the rollover. The 20% withholding may be recovered when the participant or Beneficiary files a personal income tax return for the year if a rollover was completed within 60 days of receipt of the funds, except to the extent that the participant or spousal Beneficiary is otherwise underwithheld or short on estimated taxes for that year. 2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS) To the extent not described as requiring 20% withholding in 1 above, the portion of a non-periodic distribution which constitutes taxable income will be subject to federal income tax withholding, if the aggregate distributions exceed $200 for the year, unless the recipient elects not to have taxes withheld. If no such election is made, 10% of the taxable distribution will be withheld as federal income tax. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. 3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE YEAR) The portion of a periodic distribution which constitutes taxable income will be subject to federal income tax withholding under the wage withholding tables as if the recipient were married claiming three exemptions. A recipient may elect not to have income taxes withheld or have income taxes withheld at a different rate by providing a completed election form. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. As of January 1, 1994, a recipient receiving periodic payments (e.g., monthly or annual payments under an Annuity Option) which total $13,700 or less per year, will generally be exempt from periodic withholding. Recipients who elect not to have withholding made are liable for payment of federal income tax on the taxable portion of the distribution. All recipients may also be subject to penalties under the estimated tax payment rules if withholding and estimated tax payments are not sufficient to cover tax liabilities. Recipients who do not provide a social security number or other taxpayer identification number will not be permitted to elect out of withholding. Additionally, United States citizens residing outside of the country, or U.S. legal residents temporarily residing outside the country, are not permitted to elect out of withholding. VOTING RIGHTS The Contract Owner has certain voting rights in Fund BD II and the Underlying Funds. The number of votes which a Contract Owner may cast in the accumulation period is equal to the number of Accumulation Units credited to the account under the Contract. During the annuity period, the Contract Owner may cast the number of votes equal to (i) the reserve related to the Contract divided by (ii) the value of an Accumulation Unit, and a Contract Owner's voting rights will decline as the reserve for the Contract declines. Upon the death of the Contract Owner, all voting rights will vest in the Beneficiary of the Contract, except in the case of contracts where the surviving spouse may succeed to the ownership. In accordance with its view of present applicable law, the Company will vote shares of Underlying Funds held by Fund BD II at regular and special meetings of the Underlying Fund shareholders in accordance with instructions received from persons having a voting interest in Fund BD II. The Company will vote shares for which it has not received instructions in the same proportion as it votes shares for which it has received instructions. However, if the 1940 Act or any regulation thereunder should be amended, or if the present interpretation thereof should change, and as a result the Company determines that it is permitted to vote shares of the Underlying Funds in its own right, it may elect to do so. The number of shares which a person has a right to vote will be determined as of the date concurrent with the date established by the respective Underlying Fund for determining shareholders eligible to vote at the meeting of the fund, and voting instructions will be solicited by written communication before the meeting in accordance with the procedures established by the Underlying Fund. Each person having a voting interest in Fund BD II will receive periodic reports relating to the Underlying Fund(s) in which he or she has an interest, as well as any proxy materials, including a form on which to give voting instructions with respect to the proportion of the Underlying Fund shares held by Fund BD II which correspond to his or her interest in the Sub-Account. DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS The Company intends to sell the Contracts in all jurisdictions where it is licensed to do business and where the Contract is approved. The Contracts will be sold by life insurance sales agents who represent the Company, and who are licensed registered representatives of the Company or certain other registered broker-dealers. The compensation paid to sales representatives will not exceed 6.25% of the payments made under the Contracts. From time to time the Company may pay or permit other promotional incentives, in cash, credit or other compensation. Any sales representative or employee will have been qualified to sell Variable Annuities under applicable federal and state laws. Each broker-dealer is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, and all are members of the National Association of Securities Dealers, Inc. Effective February 1, 1995, Travelers Equities Sales, Inc., an affiliate of the Company, became the principal underwriter for the Contracts. STATE REGULATION The Company is subject to the laws of the state of Connecticut governing insurance companies and to regulation by the Insurance Commissioner of the state of Connecticut. An annual statement covering the operations of the Company for the preceding year, as well as its financial conditions as of December 31 of such year, must be filed with the Commissioner in a prescribed format on or before March 1 of each year. The Company's books and assets are subject to review or examination by the Commissioner or his agents at all times, and a full examination of its operations is conducted by the National Association of Insurance Commissioners ("NAIC") at least once every four years. The Company is also subject to the insurance laws and regulations of all other states in which it is licensed to operate. However, the insurance departments of each of these states generally apply the laws of the jurisdiction of domicile in determining the field of permissible investments. CONFORMITY WITH STATE AND FEDERAL LAWS The Contract is governed by the laws of the state in which it is delivered. 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 the Contract is delivered. The Company may at any time 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. LEGAL PROCEEDINGS AND OPINIONS There are no pending material legal proceedings affecting Fund BD II. 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 Company, its 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 reviewed by the General Counsel of the Life and Annuities Division of the Company. THE FIXED ACCOUNT Purchase Payments allocated to the Fixed Account portion of the Contract and any transfers made to the Fixed Account become part of the general account of the Company which supports insurance and annuity obligations. Because of exemptive and exclusionary provisions, interests in the general account have not been registered under the Securities Act of 1933 ("1933 Act"), nor is the general account registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interest therein is generally subject to the provisions of the 1933 or 1940 Acts, and the staff of the Securities and Exchange Commission 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 generally applicable 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 Fund BD II or any of the Sub-Accounts does not affect the Fixed Account portion of the Contract Owner's Contract Value, or the dollar amount of fixed annuity payments made under any payout option. The Fixed Account is secured by part of the general assets of the Company. The general assets of the Company include all assets of the Company other than those held in Fund BD II or any other separate account sponsored by the Company or its affiliates. Purchase Payments will be allocated to the Fixed Account at the direction of the Contract Owner at the time of purchase or at a later date. The Company will invest the assets of the Fixed Account in those assets chosen by the Company and allowed by applicable law. Investment income from such Fixed Account assets will be allocated by the Company between itself and the Contracts participating in the Fixed Account. Investment income from the Fixed Account allocated to the Company includes compensation for mortality and expense risks borne by the Company in connection with Fixed Account Contracts. The amount of such investment income allocated to the Contracts will vary from year to year in the sole discretion of the Company at such rate or rates as the Company prospectively declares from time to time. The initial rate for any deposit into the Fixed Account is guaranteed for one year from the date of such deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. The Company also guarantees that for the life of the Contract it will credit interest at not less than 3% per year. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF THE COMPANY. THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO THE FIXED ACCOUNT MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR. The Company guarantees 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 above, less any applicable premium taxes or prior surrenders. If the Contract Owner effects a surrender, the amount available from the Fixed Account will be reduced by any applicable Contingent Deferred Sales Charge. TRANSFERS Transfers from the Fixed Account to any of the Sub-Accounts will be permitted twice a year during the 30 days following the semiannual Contract Date anniversary in an amount of up to 15% of the Fixed Account Value on the semiannual Contract Date anniversary. (This restriction does not apply to transfers from the Dollar-Cost Averaging Program.) Amounts previously transferred from the Fixed Account to the Sub-Accounts may begin at any time after you make a deposit to the Fixed Account. The Company reserves the right to waive either of these restrictions in its discretion. Automated transfers from the Fixed Account to any of the Sub-Accounts may begin within 30 days of the date you allocate amounts to the Fixed Account. 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. APPENDIX A FOR CONTRACTS ISSUED IN THE STATE OF FLORIDA DEATH BENEFIT The Enhanced Death Benefit is NOT available in Florida. STANDARD DEATH BENEFIT. Under the standard death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: 1) the Contract Value; 2) the total Purchase Payments made under the Contract; or 3) the Contract Value on the fifth contract year anniversary immediately preceding the date on which the Company receives due proof of death. IF THE ANNUITANT DIES ON OR AFTER AGE 75, BUT BEFORE AGE 90 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders 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. THE ANNUITY PERIOD MATURITY DATE The maturity date may not be any date beyond the annuitant's 90th birthday. THE VARIABLE ANNUITY Variable payouts are not permitted in Florida. Contract Owners may only have their Contract Values applied to provide a Fixed Annuity. Disregard the "Variable Annuity" section described on page 13. ELECTION OF OPTIONS ON THE MATURITY DATE, OR OTHER AGREED-UPON DATE, THE COMPANY WILL PAY AN AMOUNT PAYABLE UNDER THE CONTRACT IN ACCORDANCE WITH THE PAYMENT OPTION SELECTED BY THE CONTRACT OWNER. Election of an option must be made 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. While the Annuitant is alive, the Contract Owner may change a Settlement Option election by Written Request at any time prior to the Maturity Date. Once Annuity or Income Payments have begun, no further election changes are allowed. During the Annuitant's lifetime, if no election has been made prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly Annuity Payments based on the life of the Annuitant, in accordance with Annuity Option 2 (Life Annuity with 120 monthly payments assured). For certain tax-qualified contracts, Annuity Option 4 (Joint and Last Survivor Joint 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 $2,000 unless the Company consents to a lesser amount. If any monthly periodic payment due any payee is less than $100.00, the Company reserves the right to make payments at less frequent intervals, or to pay the Contract Value in one lump-sum payment. APPENDIX B CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION The Statement of Additional Information contains more specific information and financial statements relating to the Separate Account and The Travelers Life and Annuity Company. A list of the contents of the Statement of Additional Information is set forth below: The Insurance Company The Separate Account and the Underlying Funds The Travelers Fund BD II for Variable Annuities The Underlying Funds Valuation of Assets Distribution and Management Services Principal Underwriter Securities Custodian Independent Accountants Financial Statements - ----------------------------------------------------------- COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1995 (FORM NO. L-12253S) 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 06183-9061. Name: _________________________________________________________________ Address: _________________________________________________________________ _________________________________________________________________ THIS PAGE INTENTIONALLY LEFT BLANK. THE TRAVELRS FUND BD II FOR VARIABLE ANNUITIES Individual Variable Annuity Contracts issued by The Travelers Life and Annuity Company L-12540 TLAC Ed. ___ 1995 PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION STATEMENT OF ADDITIONAL INFORMATION dated ___________, 1995 for THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES This Statement of Additional Information is not a prospectus but relates to, and should be read in conjunction with, the Individual Variable Annuity Contract Prospectus dated __________, 1995. A copy of the Prospectus may be obtained by writing to The Travelers Life and Annuity Company, Annuity Services - 5 SHS, One Tower Square, Hartford, Connecticut 06183-9061, or by calling 1-800-842-8573. TABLE OF CONTENTS THE INSURANCE COMPANY....................................... 1 THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS .............. 1 The Travelers Fund BD II for Variable Annuities (Fund BD II) ........................................ 1 The Underlying Funds................................... 1 VALUATION OF ASSETS ........................................ 3 PRINCIPAL UNDERWRITER ...................................... 4 INDEPENDENT ACCOUNTANTS .................................... 4 FINANCIAL STATEMENTS ....................................... 4 THE INSURANCE COMPANY The Travelers Life and Annuity Company (the "Company"), an indirect wholly owned subsidiary of The Travelers Inc., is a stock insurance company chartered in 1973 in the state of Connecticut and continuously engaged in the insurance business since that time. The Company is licensed to conduct a life insurance business in a majority of the states of the United States and intends to seek licensure in the remaining states, except New York. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183. THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES (FUND BD II) Fund BD II was established on February 22, 1995 and is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940, as amended (the "1940 Act"). The assets of Fund BD II will be invested exclusively in the shares of the Underlying Funds. Fund BD II meets the definition of a separate account under the federal securities laws, and will comply with the provisions of the 1940 Act. Additionally, the operations of Fund BD II are subject to the provisions of Section 38a-433 of the Connecticut General Statutes which authorizes the Connecticut Insurance Commissioner to adopt regulations under it. The Section contains no restrictions on the investments of the Separate Account, and the Commissioner has adopted no regulations under the Section that affect the Separate Account. Under Connecticut law, the assets of Fund BD II will be held for the exclusive benefit of the owners of, and the persons entitled to payment under, the Contracts offered by this Prospectus and under all other contracts which provide for accumulated values or dollar amount payments to reflect investment results of the Separate Account. Incomes, gains and losses, whether or not realized, for assets allocated to Fund BD II are in accordance with the Contracts, credited to or charged against Fund BD II without regard to other gains and losses of the Company. The assets held in Fund BD II are not chargeable with liabilities arising out of any other business which the Company may conduct. The obligations arising under the Contract are obligations of the Company. THE UNDERLYING FUNDS Purchase Payments applied to the Sub-Accounts of Fund BD II will be invested in one or more of the available Underlying Funds at net asset value in accordance with the selection made by the Contract Owner. Contract Owners may change their selection in accordance with the provisions of the Contract. Underlying Funds available under the Contract may be added or withdrawn as permitted by applicable law. Fund BD II currently invests in the following Underlying Funds: SMITH BARNEY/TRAVELERS SERIES FUND INC.: SMITH BARNEY INCOME AND GROWTH PORTFOLIO. The objective of the Income and Growth Portfolio is current income and long-term growth of income and capital by investing primarily, but not exclusively, in common stocks. ALLIANCE GROWTH PORTFOLIO. The objective of the Growth Portfolio is long-term growth of capital by investing predominantly in equity securities of companies with a favorable outlook for earnings and whose rate of growth is expected to exceed that of the U.S. economy over time. Current income is only an incidental consideration. AMERICAN CAPITAL ENTERPRISE PORTFOLIO. The Enterprise Portfolio's objective is capital appreciation through investment in securities believed to have above-average potential for capital appreciation. Any income received on such securities is incidental to the objective of capital appreciation. SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO. The objective of the International Equity Portfolio is total return on assets from growth of 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 PACIFIC BASIN PORTFOLIO. The Pacific Basin Portfolio's objective is long-term capital appreciation through investment primarily in equity securities of companies in Asian Pacific Countries. TBC MANAGED INCOME PORTFOLIO. The objective of the Managed Income Portfolio is to seek high current income consistent with prudent risk of capital through investments in corporate debt obligations, preferred stocks, and obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities. PUTNAM DIVERSIFIED INCOME PORTFOLIO. The objective of the Diversified Income Portfolio is to seek high current income consistent with preservation of capital. The Portfolio will allocate its investments among the U.S. Government Sector, the High Yield Sector, and the International Sector of the fixed income securities markets. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) G.T. GLOBAL STRATEGIC INCOME PORTFOLIO. The Strategic Income Portfolio's investment objective is primarily to seek high current income and secondarily to seek capital appreciation. The Portfolio allocates its assets among debt securities of issuers in the United States, developed foreign countries, and emerging markets. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) SMITH BARNEY HIGH INCOME PORTFOLIO. The investment objective of the High Income Portfolio is high current income. Capital appreciation is a secondary objective. The Portfolio will invest at least 65% of its assets in high-yielding corporate debt obligations and preferred stock. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) MFS TOTAL RETURN PORTFOLIO. The Total Return Portfolio's objective is to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with the prudent employment of capital. Generally, at least 40% of the Portfolio's assets will be invested in equity securities. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) SMITH BARNEY MONEY MARKET PORTFOLIO. The investment objective of the Money Market Portfolio is maximum current income and preservation of capital by investing in high quality, short-term money market instruments. The following is a separate series of shares of the Smith Barney Series Fund and is also an investment option under Fund BD II: SMITH BARNEY TOTAL RETURN PORTFOLIO. The investment objective of the Smith Barney Total Return Portfolio is to provide total return, consisting of long-term capital appreciation and income. The Portfolio will seek to achieve its goal by investing primarily in a diversified portfolio of dividend-paying common stock. (Please read carefully the complete risk disclosure in the Portfolio's prospectus before investing.) Each Underlying Fund is subject to certain investment restrictions which may not be changed without the approval of a "majority vote of the outstanding voting securities" of that Portfolio (as defined in the 1940 Act). There is no assurance that the Underlying Funds will achieve their stated objectives. More detailed information regarding the Underlying Funds may be found in the current Prospectuses and Statements of Additional Information for the Underlying Funds. VALUATION OF ASSETS The value of the assets of each Underlying Fund is determined on each Valuation Date as of the close of the New York Stock Exchange. If the New York Stock Exchange is not open for trading on any such day, then such computation shall be made as of the normal close of the New York Stock Exchange. Each security traded on a national securities exchange is valued at the last reported sale price on the Valuation Date. If there has been no sale on that day, then the value of the security is taken to be the mean between the reported bid and asked prices on the Valuation Date or on the basis of quotations received from a reputable broker or any other recognized source. Any security not traded on a securities exchange but traded in the over-the-counter market and for which market quotations are readily available is valued at the mean between the quoted bid and asked prices on the Valuation Date or on the basis of quotations received from a reputable broker or any other recognized source. Securities traded on the over-the-counter-market and listed securities with no reported sales are valued at the mean between the last reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. Short-term investments for which a quoted market price is available are valued at market. Short-term investments maturing in more than sixty days for which there is no reliable quoted market price are valued by "marking to market" (computing a market value based upon quotations from dealers or issuers for securities of a similar type, quality and maturity). "Marking to market" takes into account unrealized appreciation or depreciation due to changes in interest rates or other factors which would influence the current fair values of such securities. Short-term investments maturing in sixty days or less for which there is no reliable quoted market price are valued at amortized cost which approximates market. PRINCIPAL UNDERWRITER Travelers Equities Sales, Inc. ("TESI"), an affiliate of the Company, serves as principal underwriter for Fund BD II and the Contracts. The offering is continuous. TESI is an indirect wholly owned subsidiary of The Travelers Inc. and its principal executive offices are located at One Tower Square, Hartford, Connecticut. DISTRIBUTION AND MANAGEMENT AGREEMENT Under the terms of the Distribution and Management Agreement among Fund BD II, the Company and TESI, the Company provides all administrative services and mortality and expense risk guarantees related to variable annuity contracts sold by the Company in connection with the Fund BD II. TESI performs the sales functions related to the Contracts. The Company reimburses TESI for commissions paid, other sales expenses and certain overhead expenses connected with sales functions. The Company also pays all costs (including costs associated with the preparation of sales literature); all costs of qualifying the Fund BD II and the variable annuity contract with regulatory authorities; the costs of proxy solicitation; and all custodian, accountant's and legal fees. The Company also provides without cost to the Fund BD II all necessary office space, facilities, and personnel to manage its affairs. INDEPENDENT ACCOUNTANTS Coopers & Lybrand, L.L.P., Independent Accountants, 100 Pearl Street, Hartford, Connecticut, are the independent auditors for Fund BD II. The services provided to Fund BD II include primarily the examination of the Fund's financial statements. FINANCIAL STATEMENTS Financial Statements for The Travelers Fund BD II are not available since the Fund had no assets as of the effective date of this Statement of Additional Information. THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES STATEMENT OF ADDITIONAL INFORMATION The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 L-12540 TLAC Ed. ____ PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) The consolidated financial statements of The Travelers Life and Annuity Company and Subsidiaries and the Report of Independent Accountants will be filed in a subsequent Pre-Effective Amendment. (b) Exhibits 1. Resolution of The Travelers Life and Annuity Company Board of Directors authorizing the establishment of the Registrant. 2. Exempt. 3. Form of Distribution and Management Agreement among the Registrant, The Travelers Life and Annuity Company and Travelers Equities Sales, Inc. 4. Form of Variable Annuity Contracts. 5. Form of Applications - To be filed by amendment. 6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10, 1990. 6(b). By-Laws of The Travelers Life and Annuity Company, as amended on October 20, 1994. 7. None. 8. None. 9. Opinion of Counsel as to the legality of securities being registered. 10(a). To be filed by amendment. 10(b). To be filed by amendment. 11. None. 12. None. 13. Not Applicable. 14. Representation concerning reliance upon No-Action Letter IP-6-88. 15. Powers of Attorney authorizing Jay S. Fishman as a signatory for Michael A. Carpenter, Robert I. Lipp, Charles O. Prince, III, Marc P. Weill, James F. Calvano, Irwin R. Ettinger and James L. Morgan. Item 25. Directors and Officers of the Depositor Name and Principal Positions and Offices Business Address with Depositor Michael A. Carpenter* Director and Chairman Robert I. Lipp* Director Jay S. Fishman* Director and Chief Financial Officer Charles O. Prince, III** Director Marc P. Weill* Director and Chief Investment Officer James F. Calvano* Director Irwin R. Ettinger** Director Jay S. Benet* Senior Vice President Robert E. Evans* Senior Vice President James L. Morgan* Senior Vice President and Chief Accounting Officer William H. White* Vice President and Treasurer Ian R. Stuart* Vice President and Financial Officer Kathleen M. D'Auria* Vice President George C. Kokulis* Vice President Mary Jean Thornton* Vice President Charles N. Vest* Vice President and Actuary Robert Hamilton* Second Vice President Gene S. Lunman* Second Vice President and Actuary Kyle Rotherie* Second Vice President Donald T. DeCarlo* General Counsel and Secretary Ernest J. Wright* Assistant Secretary Kathleen A. McGah* Assistant Secretary Principal Business Address: * The Travelers Life and Annuity Company ** The Travelers Inc. One Tower Square 65 East 55th Street Hartford, Connecticut 06183 New York, New York 10022 Item 26. Persons Controlled by or under Common Control with Depositor or Registrant To be filed by Amendment Item 27. Number of Contract Owners Not Applicable. Item 28. Indemnification Section 33-320a of the Connecticut General Statutes regarding indemnification of directors and officers of Connecticut corporations provides in general that Connecticut corporations shall indemnify their officers, directors and certain other defined individuals against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred in connection with proceedings against the corporation. The corporation's obligation to provide such indemnification generally does not apply unless (1) the individual is successful on the merits in the defense of any such proceeding; or (2) a determination is made (by persons specified in the statute) that the individual acted in good faith and in the best interests of the corporation; or (3) the court, upon application by the individual, determines in view of all of the circumstances that such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. With respect to proceedings brought by or in the right of the corporation, the statute provides that the corporation shall indemnify its officers, directors and certain other defined individuals, against reasonable expenses actually incurred by them in connection with such proceedings, subject to certain limitations. C.G.S. Section 33-320a provides an exclusive remedy; a Connecticut corporation cannot indemnify a director or officer to an extent either greater or less than that authorized by the statute, e.g., pursuant to its certificate of incorporation, by-laws, or any separate contractual arrangement. However, the statute does specifically authorize a corporation to procure indemnification insurance to provide greater indemnification rights. The premiums for such insurance may be shared with the insured individuals on an agreed basis. The Travelers Inc. also provides liability insurance for its directors and officers and the directors and officers of its subsidiaries, including the Depositor. This insurance provides for coverage against loss from claims made against directors and officers in their capacity as such, including, subject to certain exceptions, liabilities under the Federal securities laws. Item 29. Principal Underwriter (a) Travelers Equities Sales, Inc. One Tower Square Hartford, Connecticut 06183 Travelers Equities Sales, Inc. also serves as principal underwriter for the following : The Travelers Growth and Income Stock Account for Variable Annuities The Travelers Quality Bond Account for Variable Annuities The Travelers Money Market Account for Variable Annuities The Travelers Timed Growth and Income Stock Account for Variable Annuities The Travelers Timed Short-Term Bond Account for Variable Annuities The Travelers Timed Aggressive Stock Account for Variable Annuities The Travelers Timed Bond Account for Variable Annuities The Travelers Fund U for Variable Annuities The Travelers Fund UL for Variable Life Insurance The Travelers Variable Life Insurance Separate Account One The Travelers Variable Life Insurance Separate Account Three The Travelers Fund BD for Variable Annuities The Travelers Fund VA for Variable Annuities (b) Name and Principal Positions and Offices Business Address * With Underwriter George C. Kokulis President Gregory C. MacDonald Director Robert E. Evans Director Robert C. Hamilton Senior Vice President Kathleen A. Preston Director and Executive Vice President William F. Scully, III Treasurer Ernest J. Wright Corporate Secretary Alison K. George Director of Compliance and Assistant Corporate Secretary Thomas P. Tooley Vice President, Life Marketing Donald R. Munson, Jr. Vice President, Annuity Marketing George A. Ryan Vice President Mary L. Gregory Director, Licensing William H. White Assistant Treasurer Charles B. Chamberlain Assistant Treasurer George M. Quaggin Assistant Treasurer *Principal business address: One Tower Square, Hartford, Connecticut 06183 (c) Not applicable. Item 30. Location of Accounts and Records (1) The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 Item 31. Management Services Not applicable. Item 32. Undertakings The undersigned Registrant hereby undertakes: (a) To file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for so long as payments under the variable annuity contracts may be accepted; (b) To include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; (c) To deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-4 promptly upon written or oral request; and (d) To include in any registration statement filed in connection with a contract used as a funding vehicle for retirement plans meeting the requirements of Section 403(b) of the Internal Revenue Code, a representation that the Registrant is relying upon No-Action Letter IP-6-88 issued to the American Council of Life Insurance. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hartford, State of Connecticut, on March __,1995. THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES By: The Travelers Life and Annuity Company By: _____ /s/ Jay S. Fishman________ Jay S. Fishman Chief Financial Officer SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hartford, State of Connecticut, on March ____, 1995. THE TRAVELERS LIFE AND ANNUITY COMPANY (Depositor) By: /s/JAY S. FISHMAN Jay S. Fishman Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on March ____, 1995. ___*MICHAEL A. CARPENTER____ Director, Chairman of the Board (Michael A. Carpenter) and principal executive officer ___*ROBERT I. LIPP__________ Director (Robert I. Lipp) ___/s/JAY S. FISHMAN________ Director and Chief Financial Officer (Jay S. Fishman) ___*CHARLES O. PRINCE, III_ Director (Charles O. Prince, III) ___*MARC P. Weill___________ Director (Marc P. Weill) ___*JAMES F. CALVANO________ Director (James F. Calvano) ___*IRWIN R. ETTINGER_______ Director (Irwin R. Ettinger) ___*JAMES L. MORGAN_________ Senior Vice President and (James L. Morgan) Chief Accounting Officer *By: _____/s/Jay S. Fishman_____________ Jay S. Fishman, Attorney-in-Fact EXHIBIT INDEX Exhibit Page in Sequential No. Description Numbering System 1. Resolution of The Travelers Life and Annuity Company Board of Directors authorizing the establishment of the Registrant. 3. Form of Distribution and Management Agreement. 4. Form of Variable Annuity Contracts. 5. To be filed by amendment. 6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10, 1990. 6(b). By-Laws of The Travelers Life and Annuity Company, as amended on October 20, 1994. 9. Opinion of Counsel as to the legality of securities being registered by Registrant. 10(a). To be filed by amendment. 10(b). To be filed by amendment. 14. Representation concerning reliance upon No-Action Letter IP-6-88. 15. Powers of Attorney authorizing Jay S. Fishman as a signatory for Michael A Carpenter, Robert I. Lipp, Charles O. Prince, III, Marc P. Weill, James F. Calvano, Irwin R. Ettinger and James L. Morgan. EX-1 2 EXHIBIT 1 CERTIFICATE I, ERNEST J. WRIGHT, Assistant Secretary of THE TRAVELERS LIFE AND ANNUITY COMPANY, DO HEREBY CERTIFY that at a meeting of the Board of Directors of The Travelers Life and Annuity Company held on the 9th day of July, 1993, at which a quorum was present and voting, the following resolutions were adopted: VOTED: That pursuant to authority granted by Section 38a-433 of the Connecticut General Statutes, the proper officers of the Company are authorized to establish a separate account or accounts to invest in shares of investment companies pursuant to plans and contracts issued and sold by the Company in connection therewith. VOTED: That the proper officers of the Company are authorized to take such action as may be necessary to register the separate account or accounts as a unit investment trust investment company under the Investment Company Act of 1940; to file any necessary or appropriate exemptive requests, and any amendments thereto, for such separate account or accounts under the Investment Company Act of 1940; to file a registration statement, and any amendments, exhibits and other documents thereto, in order to register plans and contracts of the Company and interests in such separate account or accounts in connection therewith under the Securities Act of 1933; and to take any and all action as may in their judgment be necessary or appropriate in connection therewith. I FURTHER CERTIFY that by unanimous consent action of the Board of Directors of The Travelers Life and Annuity Company effective the 21st day of September, 1994, the following resolution was adopted: VOTED: That each officer and director who may be required, on their own behalf and in the name and on behalf of the Company, to execute one or more registration statements, and any amendments thereto, under the Securities Act of 1933 and the Investment Company Act of 1940 relating to the separate account or accounts to be established to invest in shares of investment companies is authorized to execute a power of attorney appointing representatives to act as their attorney and agent to execute said registration statement, and any amendments thereto, in their name, place and stead; and that the Secretary, or any Assistant Secretary designated by the Secretary, is designated and appointed the agent for service of process of the Company under the Securities Act of 1933 and the Investment Company Act of 1940 in connection with such registration statement, and any amendments thereto, with all the powers incident to such appointment. AND I DO FURTHER CERTIFY that the foregoing actions of the said Board of Directors is still in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and the seal of THE TRAVELERS LIFE AND ANNUITY COMPANY at Hartford, Connecticut, this 15th day of March, 1995. /s/ Ernest J. Wright SEAL Ernest J. Wright Assistant Secretary EX-3 3 FORM OF DISTRIBUTION AND MANAGEMENT AGREEMENT DISTRIBUTION AND MANAGEMENT AGREEMENT made this ___ day of ________, 1995, by and among The Travelers Life and Annuity Company, a Connecticut stock insurance company (hereinafter the "Company"), Travelers Equities Sales, Inc., a Connecticut general business corporation (hereinafter "TESI"), and The Travelers Fund BD II for Variable Annuities (hereinafter "Fund BD II"), a separate account of the Company established by its Chairman pursuant to a resolution of the Company's Board of Directors on February 22, 1995, pursuant to Section 38-433 of the Connecticut General Statutes. 1. The Company hereby agrees to provide all administrative services relative to variable annuity contracts and revisions thereof (hereinafter " Contracts" ) sold by the Company, the net proceeds of which or reserves for which are maintained in Fund BD II. 2. TESI hereby agrees to perform all sales functions relative to the Contracts. The Company agrees to reimburse TESI for commissions paid, other sales expenses and properly allocable overhead expenses incurred in performance thereof. 3. For providing the administrative services referred to in paragraph 1 above and reimbursing TESI for the sales functions referred to in paragraph 2 above, the Company will receive the deductions for sales and administrative expenses which are stated in the Contracts. 4. The Company will furnish at its own expense and without cost to Fund BD II the administrative expenses of Fund BD II, including but not limited to: (a) office space in the offices of the Company or in such other place as may be agreed upon from time to time, and all necessary office facilities and equipment; (b) necessary personnel for managing the affairs of Fund BD II, including clerical, bookkeeping, accounting and other office personnel; (c) all information and services, including legal services, required in connection with registering and qualifying Fund BD II or the Contracts with federal and state regulatory authorities, preparation of registration statements and prospectuses, including amendments and revisions thereto, and annual, semi-annual and periodic reports, notices and proxy solicitation materials furnished to variable annuity Contract Owners or regulatory authorities, including the costs of printing and mailing such items; (d) the costs of preparing, printing, and mailing all sales literature; (e) all registration, filing and other fees in connection with compliance requirements of federal and state regulatory authorities; (f) the charges and expenses of any custodian or depository appointed by Fund BD II for the safekeeping of its cash, securities and other property; and (g) the charges and expenses of independent accountants retained by Fund BD II. 5. The services of the Company and TESI to Fund BD II hereunder are not to be deemed exclusive and the Company and TESI shall be free to render similar services to others so long as its services hereunder are not impaired or interfered with thereby. 6. The Company agrees to guarantee that the annuity payments will not be affected by mortality experience (under Contracts the reserves for which are invested in Fund BD II) and as such assumes the risks (a) that the actuarial estimate of mortality rates among annuitants may prove erroneous and that reserves set up on the basis of such estimates will not be sufficient to meet the Company's variable annuity payment obligations, and (b) that the charges for services and expenses of the Company set forth in the Contracts may not prove sufficient to cover its actual expenses. For providing these mortality and expense risk guarantees, the Company will receive from Fund BD II an amount per valuation period of Fund BD II, as provided from time to time. 7. This Agreement will be effective on the date executed, and will remain effective until terminated by any party upon sixty (60) days notice; provided, however, that this agreement will terminate automatically in the event of its assignment by any of the parties hereto. 8. Notwithstanding termination of this Agreement, the Company shall continue to provide administrative services and mortality and expense risk guarantees provided for herein with respect to Contracts in effect on the date of termination, and the Company shall continue to receive the compensation provided under this Agreement. 9. This Agreement is subject to the provisions of the Investment Company Act of 1940, as amended, and the rules of the Securities and Exchange Commission. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officials thereunto duly authorized and, in the case of the Company and TESI, seals to be affixed as of the day and year first above written. THE TRAVELERS LIFE AND ANNUITY COMPANY (Seal) By:___________________________________________ Title:_________________________________________ ATTEST: ____________________________ Assistant Secretary THE TRAVELERS FUND BD FOR VARIABLE ANNUITIES By:___________________________________________ Title:_________________________________________ WITNESS: ____________________________ TRAVELERS EQUITIES SALES, INC. By: ___________________________________________ Title: _________________________________________ ATTEST: (SEAL) ____________________________ Corporate Secretary EX-4 4 EXHIBIT 4-A THE TRAVELERS (logo with umbrella) THE TRAVELERS LIFE AND ANNUITY COMPANY ONE TOWER SQUARE HARTFORD, CONNECTICUT 06183 A STOCK COMPANY We are pleased to provide you the benefits of this Variable Annuity Contract. Please read your contract and all attached forms carefully. RIGHT TO EXAMINE THIS CONTRACT If this contract is returned to us at Our Office or to our Agent to be cancelled within 20 days after its delivery to you, we will pay you the Contract Value determined as of the next valuation after we receive the Written Request at Our Office, plus any premium tax charges and contract charges paid. After the contract is returned, it will be considered as never in effect. This contract is issued in consideration of the purchase payment. It is subject to the terms and conditions stated on the attached pages, all of which are a part of it. Executed at Hartford, Connecticut /s/ Robert J. Lipp Chairman This is a legal contract between you and us. READ YOUR CONTRACT CAREFULLY. INDIVIDUAL VARIABLE ANNUITY CONTRACT NON TAX QUALIFIED LIFE ANNUITY COMMENCING AT MATURITY DATE ELECTIVE OPTIONS NON--PARTICIPATING ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. TABLE OF CONTENTS Right to Examine this Contract Cover Page Contract Specifications Page 3 Definitions Page 4 Owner, Beneficiary and Annuitant Provisions Pages 5 & 6 Purchase Payment and Valuation Provisions Pages 7 - 9 Death Benefit Provisions Page 10 Settlement Provisions Pages 11 - 13 General Provisions Pages 14 - 15 Table of Values Page 16 & 17 Life Annuity Tables Pages 18 & 19 Any Riders or Endorsements follow the Life Annuity Tables. CONTRACT SPECIFICATIONS OWNER JOHN DOE JOINT OWNER ANNUITANT CONTINGENT ANNUITANT CONTRACT NUMBER SPECIMEN 06/01/94 CONTRACT DATE MONTHLY LIFE ANNUITY 06-01-24 MATURITY DATE PURCHASE PAYMENTS: Minimum Initial Purchase Payment: $5,000 Minimum Subsequent Purchase Payment: $500 Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount
SUBACCOUNT SEPARATE ACCOUNT: THE TRAVELERS FUND BD DEDUCTION PER DAY Underlying Funds - Smith Barney/Travelers Series Fund, Inc. Smith Barney Income & Growth Portfolio .0000321 Alliance Growth Portfolio .0000321 American Capital Enterprise Portfolio .0000321 Smith Barney International Equity Portfolio .0000321 Smith Barney Pacific Basin Portfolio .0000321 TBC Managed Income Portfolio .0000321 Putnam Diversified Income Portfolio .0000321 GT Global Strategic Income Portfolio .0000321 Smith Barney High Income Portfolio .0000321 MFS Total Return Portfolio .0000321 Smith Barney Money Market Portfolio .0000321 Smith Barney Series Fund Total Return Portfolio .0000321
Information about the Separate Account is provided in the prospectus for Fund BD. FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is guaranteed for one year from date of deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. TRANSFER CHARGE: $0.00 You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary. AMOUNTS DEDUCTED ON SURRENDER (FIRST IN, FIRST OUT BASIS):
YEARS SINCE PURCHASE PERCENT OF PURCHASE PAYMENT WAS PAID PAYMENTS (NOT PREVIOUSLY SURRENDERED) 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 AND THEREAFTER 0%
After the first Contract Year, you may take partial surrenders annually of up to 15% of your Contract Value as of the first Valuation Date of any given Contract Year without imposition of amounts deducted on surrender. CONTRACT CHARGE $30.00, Annually. This charge will be taken on the fourth Friday of August of each year. This charge will be waived if your Contract Value is equal or greater than $40,000 on the date the charge would be taken. No Contract Charge will be deducted from the Fixed Account. ASSUMED DAILY NET INVESTMENT FACTOR is 1.000081 for all Sub-Accounts. TERMINATION We reserve the right to terminate this contract when the Contract Value is less than the Termination Amount of $1,000 and no purchase payments have been made for at least two years. CONTRACT SPECIFICATIONS OWNER JOHN DOE JOINT OWNER ANNUITANT CONTINGENT ANNUITANT CONTRACT NUMBER SPECIMEN 06/01/94 CONTRACT DATE MONTHLY LIFE ANNUITY 06-01-24 MATURITY DATE PURCHASE PAYMENTS: Minimum Initial Purchase Payment: $5,000 Minimum Subsequent Purchase Payment: $500 Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount
SUBACCOUNT SEPARATE ACCOUNT: THE TRAVELERS FUND BD DEDUCTION PER DAY Underlying Funds - Smith Barney/Travelers Series Fund, Inc. Smith Barney Income & Growth Portfolio .0000397 Alliance Growth Portfolio .0000397 American Capital Enterprise Portfolio .0000397 Smith Barney International Equity Portfolio .0000397 Smith Barney Pacific Basin Portfolio .0000397 TBC Managed Income Portfolio .0000397 Putnam Diversified Income Portfolio .0000397 GT Global Strategic Income Portfolio .0000397 Smith Barney High Income Portfolio .0000397 MFS Total Return Portfolio .0000397 Smith Barney Money Market Portfolio .0000397 Smith Barney Series Fund Total Return Portfolio .0000397
Information about the Separate Account is provided in the prospectus for Fund BD. FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is guaranteed for one year from date of deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. TRANSFER CHARGE: $0.00 You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary. AMOUNTS DEDUCTED ON SURRENDER (FIRST IN, FIRST OUT BASIS):
YEARS SINCE PURCHASE PERCENT OF PURCHASE PAYMENT WAS PAID PAYMENTS (NOT PREVIOUSLY SURRENDERED) 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 AND THEREAFTER 0%
After the first Contract Year, you may take partial surrenders annually of up to 15% of your Contract Value as of the first Valuation Date of any given Contract Year without imposition of amounts deducted on surrender. CONTRACT CHARGE $30.00, Annually. This charge will be taken on the fourth Friday of August of each year. This charge will be waived if your Contract Value is equal or greater than $40,000 on the date the charge would be taken. No Contract Charge will be deducted from the Fixed Account. DEATH BENEFIT: You have selected an enhanced death benefit which is described in the attached Death Benefit Endorsement. ASSUMED DAILY NET INVESTMENT FACTOR is 1.000081 for all Sub-Accounts. TERMINATION We reserve the right to terminate this contract when the Contract Value is less than the Termination Amount of $1,000 and no purchase payments have been made for at least two years. DEFINITIONS (a) ACCOUNT(S) -- the Sub-Accounts and/or the Fixed Account under this contract. (b) ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value of this contract before Annuity payments begin. (c) AGE -- age last birthday. (d) ANNUITANT -- the person on whose life the Maturity Date and Annuity payments depend. (e) ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of Annuity payments. (f) CODE -- the Internal Revenue Code of 1986, as amended, and all related laws and regulations which are in effect during the term of this contract. (g) CONTRACT DATE -- the date on which the contract is issued. (h) CONTRACT YEARS -- twelve month periods beginning with the Contract Date. (i) DEATH REPORT DATE -- the Valuation Date coincident with or next following the day on which we have received 1) Due Proof of Death and 2) Written Request for an election of a single sum payment or an alternate Settlement Option as described in the contract. (j) DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy of a certified decree of a court of competent jurisdiction as to the finding of death; (iii) a written statement by a medical doctor who attended the deceased; or (iv) any other proof satisfactory to us. (k) FIXED ACCOUNT -- an account that consists of all the assets under this contract other than those in the Separate Account. (l) MATURITY DATE -- the date on which the Annuity or Income payments are to begin. (m) OUR OFFICE -- the Home Office of The Travelers Insurance Company or any other office which we may designate for the purpose of administering this contract. (n) RECORDED -- a Written Request is recorded when the information is noted in our file for this contract. (o) SEPARATE ACCOUNTS -- those Separate Accounts indicated in the CONTRACT SPECIFICATIONS which we established for this class of contracts and certain other contracts. (p) SETTLEMENT OPTION -- an Annuity or Income option elected under this contract. (q) SUB-ACCOUNT -- that portion of the assets of a Separate Account which is allocated to a particular Underlying Fund. (r) UNDERLYING FUND -- an open-end investment management company indicated in the CONTRACT SPECIFICATIONS, which serves as an investment option under the Separate Account. (s) VALUATION DATE -- a date on which a Sub-Account is valued. (t) VALUATION PERIOD -- the period between successive valuations. (u) WE, US, OUR -- The Travelers Life and Annuity Company. (v) WRITTEN REQUEST -- written information including requests for contract changes sent to us in a form and content satisfactory to us and received at Our Office. (w) YOU, YOUR -- the owner including a joint owner. OWNER, BENEFICIARY AND ANNUITANT PROVISIONS OWNER This contract belongs to the owner shown on the CONTRACT SPECIFICATIONS or to any person subsequently named in a Written Request of transfer of owner as provided below. As owner, you have sole power during the Annuitant's lifetime to exercise any rights and to receive all benefits given in this contract provided you have not named an irrevocable Beneficiary and provided the contract is not assigned. You will be the recipient of all payments while the Annuitant is alive unless you direct them to an alternate recipient under a Recorded payment direction. An alternate recipient under a payment direction does not become the owner. A payment direction is revocable by you at any time by Written Request giving 30 days advance notice. JOINT OWNER Joint owners may be named in a Written Request prior to the Contract Date. Joint owners may independently exercise transfers between Accounts. All other rights of ownership must be exercised by joint action. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a joint owner end at death if another joint owner survives. The entire interest of the deceased joint owner in this contract will pass to the surviving joint owner. If a joint owner dies and is survived by the Annuitant before payment of an Annuity or Income Option begins, any surviving joint owner is the "designated beneficiary" referred to in Section 72(s) of the Code, and his or her rights pre-empt those of the Beneficiary named in a Written Request. SUCCEEDING OWNER If joint owners are not named, you may name a succeeding owner by Written Request prior to the Contract Date. The succeeding owner becomes the owner if living when you die. The succeeding owner has no interest in this contract before then. You may change or delete a succeeding owner by Written Request. If the owner dies and is survived by the Annuitant before payment of an Annuity or Income Option begins, any surviving succeeding owner is the "designated beneficiary" referred to in Section 72(s) of the Code, and his or her rights pre-empt those of the Beneficiary named in a Written Request. TRANSFER OF OWNER You may transfer ownership by Written Request. You may not revoke any transfer after the effective date. Once the transfer of owner is Recorded by us, it will take effect as of the date of your Request, subject to any payments made or other actions taken by us before the recording. Unless provided otherwise, a transfer does not affect the interest of any Beneficiary designated prior to the effective date of the transfer. We are not responsible for advising you or the proposed new owner about the income tax consequences of a transfer of owner. ASSIGNMENT You may collaterally assign ownership of all or a portion of this contract by Written Request without the approval of any Beneficiary unless irrevocably named. You may not exercise any rights of ownership while the assignment remains in effect without the approval of the collateral assignee. We are not responsible for the validity of any assignment. Once the collateral assignment is Recorded by us, it will take effect as of the date of your Written Request, subject to any payments made or other actions taken by us before the Request is received. If a claim is made based on an assignment, we may require proof of interest of the claimant. A Recorded assignment takes precedence over any rights of a Beneficiary. Any amounts due under a Recorded assignment will be paid in a single sum. We are not responsible for advising you about the income tax consequences of an assignment. CREDITOR CLAIMS To the extent permitted by law, no right or benefit of the owner or Beneficiary under this contract shall be subject to the claims of creditors or any legal process except as may be provided by an assignment. BENEFICIARY The Beneficiary is the party named in a Written Request. The Beneficiary has the right to receive any remaining contractual benefits upon the death of the Annuitant, or under certain circumstances, upon the death of the owner. If there is more than one Beneficiary surviving the Annuitant, the Beneficiaries will share equally in benefits unless different shares are Recorded with us by Written Request prior to the death of the Annuitant. If the owner dies and is survived by the Annuitant before payment of an Annuity or Income Option begins, any surviving joint or succeeding owner is the "designated beneficiary" referred to in Section 72(s) of the Code, and his or her rights pre-empt those of the Beneficiary named in a Written Request. Unless an irrevocable Beneficiary has been named, you have the right to change any Beneficiary by Written Request during the lifetime of the Annuitant and while the contract continues. Once a change in Beneficiary is Recorded by us, it will take effect as of the date of the Written Request, subject to any payments made or other actions taken by us before the recording. If no Beneficiary has been named by you, or if no Beneficiary is living when the Annuitant dies, the interest of any Beneficiary will pass: a. if you are living, to you; b. if you have died and there is a surviving joint owner, to the joint owner; c. if you have died and there is a surviving succeeding owner, to the succeeding owner, or; d. if you have died and there is neither a joint owner nor succeeding owner surviving, to your estate. ANNUITANT The Annuitant is the individual shown on the CONTRACT SPECIFICATIONS on whose life the first Annuity payment is made. The Annuitant may not be changed after the Contract Date. CONTINGENT ANNUITANT You may name one individual as a contingent annuitant by Written Request prior to the Contract Date. A contingent annuitant may not be changed, deleted or added to the contract after the Contract Date. If the Annuitant dies prior to the Maturity Date while this contract is in effect and while the contingent annuitant is living: a. the death benefit will not be payable upon the Annuitant's death; b. the contingent annuitant becomes the Annuitant; and c. all other rights and benefits provided by this contract will continue in effect. When a contingent annuitant becomes the Annuitant, the Maturity Date remains the same as previously in effect, unless otherwise provided. PURCHASE PAYMENT AND VALUATION PROVISIONS PURCHASE PAYMENTS PURCHASE PAYMENT Purchase payments are the payments you make for this contract and the benefits it provides. An initial lump sum purchase payment must be made to the contract and is due and payable before the contract becomes effective. Each purchase payment is payable as shown on the CONTRACT SPECIFICATIONS to us at Our Office or to one of our authorized representatives. No purchase payments after the initial purchase payment are required to continue this contract in force, except as provided in the "Termination" provision. Net purchase payments are that part of your purchase payments applied to the Contract Value. A net purchase payment is equal to the purchase payment less any applicable premium tax charge. ALLOCATION OF PURCHASE PAYMENTS We will apply any net purchase payments to provide Accumulation Units of selected Sub-Accounts and/or the Fixed Account of this contract. The initial payment will be applied within two business days following its receipt at Our Office. Any subsequent purchase payments will be applied as of the next valuation following receipt of those payments at Our Office. The net purchase payment will be allocated to the Accounts in the proportion specified by you for this contract. By Written Request, you may change your choice of Accounts or allocation percentages. The available Underlying Funds to which Sub-Account assets are allocated are shown on the CONTRACT SPECIFICATIONS; funds may be subsequently added or may be deleted. SUB-ACCOUNT VALUATION NUMBER OF ACCUMULATION UNITS The number of Accumulation Units to be credited to each Sub-Account once a purchase payment has been received by us will be determined by dividing the net purchase payment applied to that Sub-Account by the then Accumulation Unit Value of that Sub-Account. ACCUMULATION UNIT VALUE The initial value of an Accumulation Unit for each Sub-Account was set at $1.00. We determine the value of an Accumulation Unit in each Sub-Account on each Valuation Date by multiplying the value on the immediately preceding Valuation Date by the net investment factor for that Sub-Account for the Valuation Period just ended. The value of an Accumulation Unit on any date other than a Valuation Date will be equal to its value as of the next Valuation Date. NET INVESTMENT FACTOR The net investment factor is a factor applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for a Sub-Account for any Valuation Period is equal to the sum of 1.0000 plus the net investment rate. Each Sub-Account's net investment rate for a Valuation Period is equal to the gross investment rate for that Sub-Account, less the applicable Sub-Account deduction for the Valuation Period. All Sub-Account deductions are shown on the CONTRACT SPECIFICATIONS. The gross investment rate of a Sub-Account for a Valuation Period is equal to (1) divided by (2) where (1) is: a. investment income, plus b. capital gains and losses, whether realized or unrealized; less c. a deduction for any tax levied against the Separate Account and its Underlying Funds; and (2) is the amount of the assets at the beginning of the Valuation Period. The gross investment rate for a Sub-Account may be either positive or negative. If a Sub-Account is invested in shares of an Underlying Fund, assets are based on the net asset value of the Underlying Fund. Investment income includes any distribution whose ex-dividend date occurs during the Valuation Period. FIXED ACCOUNT VALUATION NUMBER OF ACCUMULATION UNITS -- We will determine the number of Accumulation Units to be credited to the Fixed Account on receipt of a purchase payment by dividing the net purchase payment applied to the Fixed Account by the then dollar value of one Accumulation Unit Value of the Fixed Account. ACCUMULATION UNIT VALUE -- We determine the value of an Accumulation Unit in the Fixed Account on any day by multiplying the value on the immediately preceding day by the net interest factor for the day on which the value is being determined. NET INTEREST FACTOR -- The net interest factor for any day is the guaranteed net interest rate which is equivalent to an effective annual interest rate of 3.00%, plus 1.0000. The method of crediting additional interest will be at our discretion. Interest is declared in advance. Before Annuity or Income payments begin, we may credit the Fixed Account with annual interest rates higher than the minimum guaranteed interest rate of 3.00%. Interest rates may be higher or lower than the initial interest rates, but not less than the minimum guaranteed interest rate of 3.00%. Additional amounts may be credited by us at our discretion for the guaranteed interest periods shown on the CONTRACT SPECIFICATIONS. TRANSFER BETWEEN ACCOUNTS You may transfer all or any part of the Contract Value from one Sub-Account to any other Sub-Account at any time up to 30 days before the due date of the first Annuity or Income payment. Additionally, you may transfer a part of the Fixed Account value to any of the Sub-Accounts, twice a year during the 30 days following the semi-annual Contract Date anniversary in the amount shown on the CONTRACT SPECIFICATIONS. Amounts may generally be transferred from the Sub-Accounts to the Fixed Account at any time, up to 30 days before the due date of the first Annuity or Income payment. Amounts previously transferred from the Fixed Account to the Sub-Accounts may not be transferred back to the Fixed Account for a period of at least 6 months from the date of transfer. We reserve the right to limit the number of transfers from one Sub-Account to any other Sub-Account or to the Fixed Account. We will not limit these transfers to less than one in any six month period. Transfers between Accounts will result in the addition or deletion of Accumulation Units having a total value equal to the dollar amount being transferred to or from a particular Account. The number of Accumulation Units will be determined by using the Accumulation Unit Value of the Accounts involved as of the next valuation after we receive notification of request for transfer. Transfers will be subject to any applicable Transfer charge stated on the CONTRACT SPECIFICATIONS. CONTRACT VALUES CONTRACT VALUE The Contract Value of this contract on any date equals the sum of the accumulated values in the Accounts. The accumulated value in an Account equals the number of outstanding Accumulation Units credited to that Account, multiplied by the then Accumulation Unit Value for that Account. The Guaranteed Value of the Fixed Account equals the accumulated value of the Fixed Account calculated by using the guaranteed net interest factor. The Guaranteed Values of the Fixed Account are shown in the Table of Values. CONTRACT CHARGE A Contract Charge in the amount and for the period shown on the CONTRACT SPECIFICATIONS will be deducted from the Contract Value to reimburse us for administrative expenses relating to the contract. The Contract Charge will be deducted by surrendering on a pro rata basis Accumulation Units from all Sub-Accounts in which you have an interest. We will deduct the charge on a pro rata basis if the contract has been in effect for less than a full period on the date a Contract Charge is deducted. The Contract Charge will also be prorated upon full surrender or termination of the contract. CASH SURRENDER You may elect by Written Request to receive the Cash Surrender Value of this contract before the due date of the first Annuity or Income payment and without the consent of any Beneficiary unless irrevocably named. You may elect either a full or partial surrender of the Cash Surrender Value. In the case of a full surrender, this contract will be cancelled. A partial surrender will result in a reduction in your Contract Value. If you have a balance in more than one Account, your Contract Value will be reduced from all your Accounts on a pro rata basis, unless you request otherwise. The Cash Surrender Value will be determined as of the next valuation following receipt of your Written Request. We may delay payment of the Cash Surrender Value of the Sub-Accounts for a period of not more than seven days after we receive your Written Request. We may delay payment of the Cash Surrender Value of the Fixed Account for a period of not more than six months after we receive your Written Request. CASH SURRENDER VALUE The Cash Surrender Value is equal to the Contract Value less any amounts deducted on surrender which are shown on the CONTRACT SPECIFICATIONS and any applicable premium tax not previously deducted. The Guaranteed Cash Surrender Value of the Fixed Account equals the Guaranteed Value of the Fixed Account less any amounts deducted on surrender which are shown on the CONTRACT SPECIFICATIONS and less any applicable premium tax not previously deducted. For Guaranteed Cash Surrender Values of the Fixed Account, see the Table of Values. CONTRACT CONTINUATION Except as provided in the "Termination" provision, this contract does not require continuing purchase payments and will automatically continue as a paid-up contract during the lifetime of the Annuitant until the Maturity Date or until it is surrendered. DEATH BENEFIT PROVISIONS DEATH OF ANNUITANT A death benefit is payable to the Beneficiary upon the death of the Annuitant before the Maturity Date, unless prior to the Maturity Date there is a contingent annuitant surviving. A death benefit is also payable under those Settlement Options which provide for death benefits. We will pay the Beneficiary the death benefit in a single sum as described below upon receiving Due Proof of Death. A Beneficiary may request that a death benefit payable under this contract be applied to a Settlement Option subject to the provisions of this contract and the current Tax Law Qualification Rider. DEATH OF OWNER WITH ANNUITANT SURVIVING If the owner dies (including the first of joint owners) before the Maturity Date and with the Annuitant surviving, we will recalculate the value of the death benefit under provisions of DEATH PROCEEDS PRIOR TO THE MATURITY DATE below. The value of the contract, as recalculated, will be paid in a single lump sum or by other election to the party taking proceeds under the current Tax Law Qualification Rider. The party must take distributions no later than under the applicable elections of that provision. All references to annuitant in the DEATH PROCEEDS PRIOR TO MATURITY DATE provision will be replaced with the reference to the owner. DEATH PROCEEDS PRIOR TO THE MATURITY DATE If the Annuitant dies before age 75 and before the Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below, less any applicable premium tax or prior surrenders not previously deducted as of the Death Report Date: a. the Contract Value of the contract; b. the total purchase payments under the contract; or c. the Contract Value of the Contract on the most recent quinquennial Contract Date Anniversary immediately preceding the Death Report Date. If the Annuitant dies on or after age 75, but before age 85 and before the Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below, less any applicable premium tax or prior surrenders not previously deducted as of the Death Report Date: a. the Contract Value of the contract; b. the total purchase payments under the contract; or c. the Contract Value of the Contract on the most recent quinquennial Contract Date Anniversary occurring on or before the Annuitant's 75th birthday. If the Annuitant dies on or after age 85 and before the Maturity Date, we will pay the Beneficiary the Contract Value of the contract less any applicable premium tax as of the Death Report Date. DEATH PROCEEDS AFTER THE MATURITY DATE If 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. SETTLEMENT PROVISIONS MATURITY DATE The Maturity Date is shown on the CONTRACT SPECIFICATIONS. This is the date on which we will begin paying to you the first of a series of Annuity or Income payments in accordance with the Settlement Option elected by you. Annuity or Income payments will begin under this contract on the Maturity Date unless the contract has been fully surrendered or the proceeds have been paid to the Beneficiary prior to that date. We may require proof that the Annuitant is alive before Annuity payments are made. If no Maturity Date is specified, the automatic Maturity Date will be the greater of when the Annuitant reaches age 75 or ten years after the Contract Date. Additionally, at least 30 days before the original Maturity Date, you may change the Maturity Date by Written Request to any time prior to the Annuitant's 85th birthday or to a later date with our consent. ELECTION OF SETTLEMENT OPTIONS On the Maturity Date, or other agreed upon date, we will pay any amount payable under this contract to you in one lump sum or in accordance with the option elected by you. While the Annuitant is alive, you may change your Settlement Option election by Written Request, but only before the Maturity Date. Once Annuity or Income payments have commenced, no further election changes are allowed. During the Annuitant's lifetime, if no election has been made on the Maturity Date, we will pay to you the first of a series of monthly Annuity payments based on the life of the Annuitant, in accordance with Annuity Option 2, with 120 monthly payments assured. MINIMUM AMOUNTS The minimum amount that can be placed under a Settlement Option is $2,000 unless we consent to a lesser amount. If any periodic payments due are less than $100.00, we reserve the right to make payments at less frequent intervals. ALLOCATION OF ANNUITY At the time election of one of the Annuity Options is made, the person electing the option may further elect to have the Contract Value applied to provide a Variable Annuity, a Fixed Annuity or a combination of both. If no election is made to the contrary, the value of a Sub-Account will be applied when Annuity payments start to provide an Annuity which varies with the investment experience of that same Sub-Account and the value of the Fixed Account will be applied to provide a Fixed Annuity. You may elect to transfer Contract Value from one Account to another, as described in the provision "Transfer Between Accounts," in order to reallocate the basis on which Annuity payments will be determined. Once Annuity payments have begun, no further transfers are allowed. VARIABLE ANNUITY AMOUNT OF BASIC FIRST PAYMENT The LIFE ANNUITY TABLES are used to determine the basic first monthly Annuity payment. They show the dollar amount of the basic first monthly Annuity payment which can be purchased with each $1,000 applied. The amount applied to an Annuity will be the Cash Surrender Value as of 14 days before the date Annuity payments start. We reserve the right to require satisfactory proof of the age of any person on whose life Annuity payments are based before making the first payment under any of these options. ANNUITY UNIT VALUE The initial value of an Annuity Unit for each Sub-Account was set at $1.00. On any Valuation Date, the Annuity Unit Value for a Sub-Account equals the Sub-Account Annuity Unit Value on the immediately preceding Valuation Date, multiplied by the net investment factor for that Sub-Account for the Valuation Period just ended, divided by the Assumed Daily Net Investment Factor. The Assumed Daily Net Investment Factor is shown on the CONTRACT SPECIFICATIONS. The value of an Annuity Unit as of any date other than a Valuation Date will be equal to its value as of the next succeeding Valuation Date. NUMBER OF ANNUITY UNITS We determine the number of Annuity Units credited to this contract in each Sub-Account by dividing the basic first monthly Annuity payment attributable to that Sub-Account by the Sub-Account's Annuity Unit Value as of 14 days before the due date of the first Annuity payment. AMOUNT OF SECOND AND SUBSEQUENT BASIC PAYMENTS The dollar amount of the second and subsequent payments may change from month to month. The total amount of each Annuity payment will be equal to the sum of the basic payments in each Sub-Account. The actual amount of the basic payments in each Sub-Account is found by multiplying the number of Annuity Units credited to the contract in that Sub-Account by the Annuity Unit Value of the Sub-Account as of the date 14 days prior to the date on which the payment is due. FIXED ANNUITY A Fixed Annuity is an Annuity with payments which remain fixed as to dollar amount throughout the payment period. The dollar amount of the first Fixed Annuity payment will be calculated as described above in the "Amount of Basic First Payment" provision. All subsequent payments will be in the same amount and that amount will be assured throughout the payment period. If it would produce a larger payment, we agree that the first Fixed Annuity payment will be determined using the Life Annuity Tables in effect on the Maturity Date. ANNUITY OPTIONS Subject to conditions stated in ELECTIONS OF SETTLEMENT OPTIONS and MINIMUM AMOUNTS, all or any part of the Cash Surrender Value of this contract may be paid under one or more of the Annuity Options below. OPTION 1. LIFE ANNUITY--NO REFUND We will make monthly Annuity payments during the lifetime of the person on whose life the payments are based, ending with the last monthly payment preceding death. OPTION 2. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED We will make monthly Annuity payments during the lifetime of the person on whose life the payments are based and under the conditions stated below. If at the death of that person, payments have been made for less than 120, 180 or 240 months, as elected, we will continue to make payments to the designated Beneficiary during the remainder of the period. OPTION 3. JOINT AND LAST SURVIVOR LIFE ANNUITY We will make monthly Annuity payments during the joint lifetime of two persons on whose lives payments are based and during the lifetime of the survivor. No more payments will be made after the death of the survivor. OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY--ANNUITY REDUCED ON DEATH OF PRIMARY PAYEE We will make monthly Annuity payments during the joint lifetime of two persons on whose lives payments are based. One of the two persons will be designated as the primary payee. The other will be designated the secondary payee. On the death of the secondary payee, if survived by the primary payee, we 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, if survived by the secondary payee, we will continue to make monthly 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 following the death of the survivor. OPTION 5. OTHER ANNUITY OPTIONS We will make any other arrangements for Annuity payments as may be mutually agreed. INCOME OPTIONS We will pay all or any part of the Cash Surrender Value to you under one or more of the Income Options below subject to the conditions stated in ELECTION OF SETTLEMENT OPTIONS and MINIMUM AMOUNTS and the currently effective Tax Law Qualification Rider. The Cash Surrender Value used to determine the amount of any Income payment will be based on the Accumulation Unit Value as of 14 days before the date an Income payment is due and will be determined the same way as in the Accumulation period. OPTION 1. PAYMENTS OF A FIXED AMOUNT We will make equal payments each month in the amount elected until the Cash Surrender Value applied under this option is gone. The first monthly payment will be paid from each Sub-Account in proportion to its Cash Surrender Values applied. The second payment and all later payments from each Sub-Account will be the same as the first payment under this option. The final payment will include any amount that is not enough to make another full payment. OPTION 2. PAYMENTS FOR A FIXED PERIOD We will make monthly payments for the period selected. The amount of each payment will be equal to the then 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 payments as may be mutually agreed. GENERAL PROVISIONS THE CONTRACT The entire contract between you and us consists of the contract and all attached pages. CONTRACT CHANGES The only way this contract may be changed is by a written endorsement signed by one of our officers. SUBSTITUTION OF SEPARATE ACCOUNT OR UNDERLYING FUNDS If it is not possible to continue to offer a Separate Account or Underlying Fund, or in our judgment becomes inappropriate for the purposes of this contract, we may substitute another Separate Account or Underlying Fund without your consent. Substitution may be made with respect to both existing investments and investment of future premium payments. However, no such substitution will be made without notice to you and without prior approval of the Securities and Exchange Commission, to the extent required by law. MISSTATEMENT If the Annuitant's or owner's sex or date of birth was misstated, all benefits of this contract are what the purchase payment paid would have purchased at the correct sex and age. Proof of the Annuitant's and owner's ages may be filed at any time at Our Office. INCONTESTABILITY We will not contest this contract from its Contract Date. TERMINATION We reserve the right to terminate this contract on any Valuation Date if the Contract Value as of the date is less than the Termination Amount shown on the CONTRACT SPECIFICATIONS, and purchase payments have not been made to this contract for at least two years. Termination will not occur until 31 days after we have mailed notice of termination to you at your last known address and to any assignee of record. If this contract is terminated, we will pay you the Cash Surrender Value, if any. REQUIRED REPORTS We will furnish a report to the owner as often as required by law, but at least once in each Contract Year before the due date of the first Annuity or Income payment. The report will show the number of Accumulation Units credited to the contract in each Account and the corresponding Accumulation Unit Value as of the date of the report. VOTING RIGHTS So long as federal law requires, you may have the right to vote at the meetings of the shareholders of the Underlying Funds. If you have voting rights, we will send a notice to you telling you the time and place of a meeting. The notice will also explain matters to be voted upon and how many votes you get. MORTALITY AND EXPENSES Our actual mortality and expense experience will not affect the amount of any Annuity or Income payments or any other values under this contract. NON-PARTICIPATING This contract does not share in our surplus earnings, so you will receive no dividends under it. CONFORMITY WITH STATE AND FEDERAL LAWS This contract is governed by the law of the state in which it is delivered. Any paid-up Annuity, Cash Surrender or death benefits that are available under this contract are not less than the minimum benefits required by the statutes of the state in which this contract is delivered. Upon receiving appropriate state approval, we may at any time make any changes, including retroactive changes, in this 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 we or you are subject. EMERGENCY PROCEDURE We reserve the right to suspend or postpone the date of any payment of any benefit or values for any Valuation Period (1) when the New York Stock Exchange is closed; (2) when trading on the Exchange is restricted; (3) when an emergency exists as determined by the Securities and Exchange Commission so that disposal of the securities held in the Sub-Accounts is not reasonably practicable or it is not reasonably practicable to determine the value of the Sub-Account's net assets, or (4) during any other period when the Securities and Exchange Commission, by order, so permits for the protection of security holders. Any provision of this contract which specifies a Valuation Date will be superseded by this Emergency Procedure. RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNTS AND SUB-ACCOUNTS We will have exclusive and absolute ownership and control of the assets of our Separate Account and the Sub-Accounts. That portion of the assets of a Separate Account or Sub-Account equal to the reserves and other contract liabilities with respect to such Separate Account or Sub-Account shall not be chargeable with liabilities arising out of any other business we conduct. Our determination of the value of an Accumulation Unit and an Annuity Unit by the method described in this contract will be conclusive.
TABLE OF VALUES GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF NET PURCHASE PAYMENT APPLIED GUARANTEED NO. OF FULL GUARANTEED NO. OF FULL YEARS CASH YEARS FROM CASH FROM DATE PAYMT. GUARANTEED SURRENDER DATE PAYMT. GUARANTEED SURRENDER IS APPLIED VALUE VALUE IS APPLIED VALUE VALUE 1 1030 970 36 2898 2898 2 1060 1000 37 2985 2985 3 1092 1032 38 3074 3074 4 1125 1095 39 3167 3167 5 1159 1139 40 3262 3262 6 1194 1184 41 3359 3359 7 1229 1229 42 3460 3460 8 1266 1266 43 3564 3564 9 1304 1304 44 3671 3671 10 1343 1343 45 3781 3781 11 1384 1384 46 3895 3895 12 1425 1425 47 4011 4011 13 1468 1468 48 4132 4132 14 1512 1512 49 4256 4256 15 1557 1557 50 4383 4383 16 1604 1604 51 4515 4515 17 1652 1652 52 4650 4650 18 1702 1702 53 4790 4790 19 1753 1753 54 4934 4934 20 1806 1806 55 5082 5082 21 1860 1860 56 5234 5234 22 1916 1916 57 5391 5391 23 1973 1973 58 5553 5553 24 2032 2032 59 5720 5720 25 2093 2093 60 5891 5891 26 2156 2156 61 6068 6068 27 2221 2221 62 6250 6250 28 2287 2287 63 6437 6437 29 2356 2356 64 6631 6631 30 2427 2427 65 6829 6829 31 2500 2500 66 7034 7034 32 2575 2575 67 7245 7245 33 2652 2652 68 7463 7463 34 2731 2731 69 7687 7687 35 2813 2813 70 7917 7917
THIS PAGE INTENTIONALLY LEFT BLANK LIFE ANNUITY TABLES DOLLAR AMOUNT OF THE FIRST MONTHLY ANNUITY PAYMENT WHICH IS PURCHASED WITH EACH $1,000 APPLIED OPTIONS 1 AND 2 - SINGLE LIFE ANNUITIES
120 ADJUSTED ADJUSTED MONTHLY AGE AGE NO PAYMENTS MALE FEMALE REFUND ASSURED 50 54 $4.13 $4.10 51 55 4.20 4.17 52 56 4.28 4.25 53 57 4.37 4.33 54 58 4.46 4.41 55 59 4.55 4.50 56 60 4.65 4.59 57 61 4.76 4.69 58 62 4.87 4.79 59 63 4.99 4.90 60 64 5.12 5.01 61 65 5.26 5.13 62 66 5.40 5.25 63 67 5.56 5.39 64 68 5.72 5.52 65 69 5.90 5.67 66 70 6.09 5.82 67 71 6.29 5.97 68 72 6.51 6.13 69 73 6.74 6.30 70 74 6.99 6.48 71 75 7.26 6.66 72 76 7.54 6.84 73 77 7.86 7.03 74 78 8.19 7.22 75 79 8.55 7.41 180 240 ADJUSTED ADJUSTED MONTHLY MONTHLY AGE AGE PAYMENTS PAYMENTS MALE FEMALE ASSURED ASSURED 50 54 $4.06 $4.00 51 55 4.13 4.06 52 56 4.20 4.12 53 57 4.27 4.18 54 58 4.35 4.25 55 59 4.42 4.31 56 60 4.51 4.38 57 61 4.59 4.44 58 62 4.68 4.51 59 63 4.77 4.58 60 64 4.86 4.65 61 65 4.96 4.72 62 66 5.06 4.79 63 67 5.16 4.85 64 68 5.27 4.92 65 69 5.37 4.99 66 70 5.48 5.05 67 71 5.59 5.11 68 72 5.69 5.16 69 73 5.80 5.21 70 74 5.90 5.26 71 75 6.01 5.31 72 76 6.11 5.34 73 77 6.20 5.38 74 78 6.29 5.41 75 79 6.38 5.43 OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY ADJUSTED AGE OF ADJUSTED AGE OF SECOND LIFE FIRST LIFE M-51 M-56 M-58 M-61 M-63 M-66 M-71 Male Female F-55 F-60 F-62 F-65 F-67 F-70 F-75 50 54 $3.69 $3.81 $3.85 $3.91 $3.94 $3.98 $4.04 55 59 3.82 3.99 4.06 4.15 4.20 4.28 4.38 57 61 3.87 4.06 4.14 4.25 4.32 4.41 4.53 60 64 3.93 4.17 4.26 4.40 4.48 4.61 4.78 62 66 3.97 4.23 4.34 4.49 4.60 4.74 4.96 65 69 4.02 4.32 4.44 4.63 4.76 4.95 5.24 70 74 4.09 4.43 4.59 4.83 5.01 5.27 5.72
Dollar amounts of the first monthly payments for ages not shown in these Tables will be calculated on the same basis as those shown and may be obtained from us. Amounts shown in these Tables are based on the Progressive Annuity Table, with a two year set-back, (assuming births in the year 1900) with interest at the rate of 3% per annum. The adjusted age of the person on whose life the Annuity is based is determined from the actual age last birthday on the due date of the first Annuity payment in the following manner. Calendar Year in which First Payment is Due . . 1991-2000 2001-2010 2011 & later Adjusted Age is Actual Age plus 2 plus 1 plus 0 OPTION 4-JOINT AND LAST SURVIVOR LIFE ANNUITY ANNUITY REDUCES ON DEATH OF PRIMARY PAYEE
ADJUSTED AGE OF PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE MALE 50 55 60 65 50 $3.82 $3.90 $3.96 $4.01 55 4.05 4.15 4.25 4.34 60 4.31 4.45 4.59 4.73 65 4.60 4.78 4.98 5.19 70 4.93 5.16 5.43 5.71 ADJUSTED AGE OF PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE FEMALE 50 55 60 65 50 $3.70 $3.75 $3.79 $3.81 55 3.93 4.00 4.06 4.11 60 4.19 4.30 4.40 4.48 65 4.48 4.64 4.79 4.92 70 4.81 5.03 5.25 5.46
Dollar amounts of the monthly payments for ages not shown in these Tables will be calculated on the same basis as those shown and may be obtained from us. Amounts shown in these Tables are based on the Progressive Annuity Table, with a two year set-back, (assuming births in the year 1900) with interest at the rate of 3% per annum. The adjusted age of the person on whose life the annuity is based is determined from the actual age last birthday on the due date of the first annuity payment in the following manner. Calendar Year in Which First Payment is Due . . . 1991-2000 2001-2010 2011 & Later Adjusted Age is Actual Age . . plus 2 plus 1 plus 0 INDIVIDUAL VARIABLE ANNUITY CONTRACT NON-TAX QUALIFIED NON-PARTICIPATING INDIVIDUAL VARIABLE ANNUITY CONTRACT NON-TAX QUALIFIED NON-PARTICIPATING TAX LAW QUALIFICATION RIDER This rider is made a part of this contract at its Contract Date in order to comply with the tax rules under Section 72(s) of the Code for required distributions upon the death of any contract owner. The following conditions, restrictions and limitations must apply to maintain the tax qualified status of your Annuity. REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DIE SIMULTANEOUSLY If you are the owner and the Annuitant or you are the owner and you die simultaneously with the Annuitant before payment of an Annuity or Income option begins, an amount equal to the Death Benefit will be distributed within five years of your death to the contract Beneficiary unless: a. the Beneficiary elects by Written Request to have the proceeds distributed over the Beneficiary's life or over a period not extending beyond life expectancy, and the payments begin within one year of your death; or b. the sole Beneficiary is your spouse who elects by Written Request to continue the contract as the owner and Annuitant. If you are the owner and the Annuitant or you are the owner and you die simultaneously with the Annuitant after an Annuity or Income option begins but before your entire interest has been distributed, the remaining proceeds of the contract will be distributed at least as rapidly as they were being distributed under the method of payment in effect at the time of your death. The death of the first joint owner triggers these distribution requirements. NON-NATURAL OWNER HOLDING FOR NATURAL PERSONS The above rules also apply if you are not an individual and the primary Annuitant dies before payment of an Annuity or Income option begins. Payments will be made to the Beneficiary. The primary Annuitant is the first-named Annuitant and the individual who is of primary importance in affecting the timing or amount of payments under the contract. If you are not an individual and the primary annuitant dies after payment of an Annuity or Income option begins, the remaining proceeds of the contract will be distributed at least as rapidly as they were being distributed under the method of payment in effect at the time of the primary Annuitant's death. REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DO NOT DIE SIMULTANEOUSLY If you are the owner but not the Annuitant, and you die before the Annuitant and before payment of an Annuity or Income option begins, an amount equal to the Death Benefit will be distributed within five years of your death to the joint or succeeding owner surviving you. In this circumstance, the joint or succeeding owner is the "designated beneficiary" referred to in Section 72(s) of the Code, and his or her rights preempt those of the Beneficiary named in a Written Request unless: a. the joint or succeeding owner elects by Written Request to have the proceeds distributed over his or her life or over a period not extending beyond life expectancy, and the payments begin within one year of your death; or b. the sole joint or succeeding owner is your spouse, who elects by Written Request to continue the contract as owner. The joint owner is determined by contract designation. The succeeding owner is the owner who succeeds to your interest by contract designation, by Recorded administrative change, or if no contract designation or subsequent change was made, the succeeding owner in this circumstance is the Beneficiary. If there is no joint or succeeding owner or Beneficiary surviving you, ownership of this contract passes to your estate. The individual taking the contract benefits through your estate must take complete distribution within five years of your death. If you are the owner but not the Annuitant, and you die before the Annuitant but after payment of an Annuity or Income option begins, the remaining proceeds of the contract will be distributed at least as rapidly as they were being distributed under the method of payment in effect at the time of your death. The death of the first joint owner triggers these distribution requirements. ADMINISTRATIVE COMPLIANCE If the Code and related law, regulations and rulings require a distribution other than described above in order to keep this Annuity contract qualified under the Code, we will administer the contract in accordance with these laws, regulations and rulings. We will provide you with a revised rider describing any necessary changes, following all regulatory approvals. THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman DEATH BENEFIT ENDORSEMENT This endorsement is made a part of the contract to which it is attached and will take effect as of the Contract Date shown on the CONTRACT SPECIFICATIONS. The endorsement modifies the determination of the value of the death benefit in the DEATH PROCEEDS PRIOR TO THE MATURITY DATE provision. If the Annuitant dies before age 75 and before the Maturity Date, the death benefit payable under the contract as of the Death Report Date will be the greater of 1) the guaranteed death benefit; or 2) the Contract Value less any applicable premium tax or amounts taken as loans. The guaranteed death benefit is: 1. On the Contract Date, the death benefit is equal to the purchase payment made to the Contract; 2. On each Contract Date anniversary, but not beyond the Contract Date anniversary following the Annuitant's 75th birthday, the guaranteed death benefit will be recalculated as follows: a. the guaranteed death benefit as of the previous Contract Date anniversary; b. plus any purchase payments made during the previous Contract Year; c. minus any amounts surrendered during the previous Contract Year; d. minus any applicable premium tax or amounts taken as loans; e. the sum of a through d multiplied by 1.05 equals the new guaranteed death benefit. 3. On dates other than the Contract Date or the Contract Date anniversary, the guaranteed death benefit equals: a. the guaranteed death benefit on the previous Contract Date anniversary; b. plus purchase payments made since the previous Contract Date anniversary; c. minus any amounts surrendered since the previous Contract Date anniversary; d. minus any applicable premium tax or amounts taken as loans. The maximum guaranteed death benefit payable equals 200% of the total of the purchase payments minus surrenders, minus applicable premium taxes. If the Annuitant dies on or after age 75, but before age 85 and before the Maturity Date, the death benefit payable as of the Death Report Date will be the greater of 1) the guaranteed death benefit as of the Annuitant's 75th birthday, plus additional purchase payments, minus surrenders, applicable premium tax and amounts taken as loans; or 2) the Contract Value less any applicable premium tax or amounts taken as loans. If the Annuitant dies on or after age 85 and before the Maturity Date, the death benefit payable will be the Contract Value less any applicable premium tax and amounts taken as loans as of the Death Report Date. THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman EXHIBIT 4-B THE TRAVELERS (logo with umbrella) THE TRAVELERS LIFE AND ANNUITY COMPANY ONE TOWER SQUARE HARTFORD, CONNECTICUT 06183 A STOCK COMPANY We are pleased to provide you the benefits of this Variable Annuity Contract. Please read your contract and all attached forms carefully. RIGHT TO EXAMINE THIS CONTRACT If this contract is returned to us at Our Office or to our Agent to be cancelled within 20 days after its delivery to you, we will pay you the Contract Value determined as of the next valuation after we receive the Written Request at Our Office, plus any premium tax charges and contract charges paid. After the contract is returned, it will be considered as never in effect. This contract is issued in consideration of the purchase payment. It is subject to the terms and conditions stated on the attached pages, all of which are a part of it. Executed at Hartford, Connecticut /s/ Robert J. Lipp Chairman This is a legal contract between you and us. READ YOUR CONTRACT CAREFULLY. INDIVIDUAL VARIABLE ANNUITY CONTRACT TAX QUALIFIED LIFE ANNUITY COMMENCING AT MATURITY DATE ELECTIVE OPTIONS NON--PARTICIPATING ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. TABLE OF CONTENTS Right to Examine this Contract Cover Page Contract Specifications Page 3 Definitions Page 4 Owner, Beneficiary and Annuitant Provisions Pages 5 - 6 Purchase Payment and Valuation Provisions Pages 7 - 9 Death Benefit Provisions Page 10 Settlement Provisions Pages 11 - 13 General Provisions Pages 14 - 15 Table of Values Page 16 Life Annuity Tables Pages 18 - 19 Any Riders or Endorsements follow the Life Annuity Tables. CONTRACT SPECIFICATIONS OWNER JOHN DOE JOHN DOE ANNUITANT CONTRACT NUMBER SPECIMEN 06/01/94 CONTRACT DATE MONTHLY LIFE ANNUITY 06/01/24 MATURITY DATE PURCHASE PAYMENTS: Minimum Initial Purchase Payment: $5,000 Minimum Subsequent Purchase Payment: $500 Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount SEPARATE ACCOUNT SUB-ACCOUNT THE TRAVELERS FUND BD DEDUCTION PER DAY Underlying Funds - Smith Barney/Travelers Series Fund, Inc. Smith Barney Income & Growth Portfolio .0000397 Alliance Growth Portfolio .0000397 AmCap Enterprise Portfolio .0000397 Smith Barney International Equity Portfolio .0000397 Smith Barney Pacific Basin Portfolio .0000397 TBC Managed Income Portfolio .0000397 Putnam Diversified Income Portfolio .0000397 GT Global Strategic Income Portfolio .0000397 Smith Barney High Income Portfolio .0000397 MFS Total Return Portfolio .0000397 Smith Barney Money Market Portfolio .0000397 Smith Barney Series Fund Total Return Portfolio .0000397
Information about the Separate Account is provided in the prospectus for Fund BD. FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is guaranteed for one year from date of deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. TRANSFER CHARGE: $0.00 You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary. AMOUNTS DEDUCTED ON SURRENDER (FIRST IN, FIRST OUT BASIS):
YEARS SINCE PURCHASE PERCENT OF PURCHASE PAYMENT WAS PAID PAYMENTS (NOT PREVIOUSLY SURRENDERED) 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 AND THEREAFTER 0%
After the first Contract Year and to the extent permitted under the currently effective tax law qualification rider, you may take partial surrenders annually of up to 15% of your Contract Value as of the first Valuation Date of any given Contract Year without imposition of amounts deducted on surrender. CONTRACT CHARGE $30.00, Annually. This charge will be taken on the fourth Friday of August of each year. This charge will be waived if your Contract Value is equal or greater than $40,000 on the date the charge would be taken. No Contract Charge will be deducted from the Fixed Account. DEATH BENEFIT: You have selected an enhanced death benefit which is described in the attached Death Benefit Endorsement. ASSUMED DAILY NET INVESTMENT FACTOR is 1.000081 for all Sub-Accounts. TERMINATION We reserve the right to terminate this contract when the Contract Value is less than the Termination Amount of $1,000 and no purchase payments have been made for at least two years. CONTRACT SPECIFICATIONS OWNER JOHN DOE JOHN DOE ANNUITANT CONTRACT NUMBER SPECIMEN 06/01/94 CONTRACT DATE MONTHLY LIFE ANNUITY 06/01/24 MATURITY DATE PURCHASE PAYMENTS: Minimum Initial Purchase Payment: $5,000 Minimum Subsequent Purchase Payment: $500 Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount SEPARATE ACCOUNT: SUB-ACCOUNT THE TRAVELERS FUND BD DEDUCTION PER DAY Underlying Funds - Smith Barney/Travelers Series Fund, Inc. Smith Barney Income & Growth Portfolio .0000321 Alliance Growth Portfolio .0000321 American Capital Enterprise Portfolio .0000321 Smith Barney International Equity Portfolio .0000321 Smith Barney Pacific Basin Portfolio .0000321 TBC Managed Income Portfolio .0000321 Putnam Diversified Income Portfolio .0000321 GT Global Strategic Income Portfolio .0000321 Smith Barney High Income Portfolio .0000321 MFS Total Return Portfolio .0000321 Smith Barney Money Market Portfolio .0000321 Smith Barney Series Fund Total Return Portfolio .0000321 Information about the Separate Account is provided in the prospectus for Fund BD. FIXED ACCOUNT GUARANTEED INTEREST PERIODS : The initial rate for any deposit is guaranteed for one year from date of deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. TRANSFER CHARGE : $0.00 You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary. AMOUNTS DEDUCTED ON SURRENDER (FIRST IN, FIRST OUT BASIS):
YEARS SINCE PURCHASE PERCENT OF PURCHASE PAYMENT WAS PAID PAYMENTS (NOT PREVIOUSLY SURRENDERED) 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 AND THEREAFTER 0%
After the first Contract Year and to the extent permitted under the currently effective tax law qualification rider, you may take partial surrenders annually of up to 15% of your Contract Value as of the first Valuation Date of any given Contract Year without imposition of amounts deducted on surrender. CONTRACT CHARGE $30.00, Annually. This charge will be taken on the fourth Friday of August of each year. This charge will be waived if your Contract Value is equal or greater than $40,000 on the date the charge would be taken. No Contract Charge will be deducted from the Fixed Account. ASSUMED DAILY NET INVESTMENT FACTOR is 1.000081 for all Sub-Accounts. TERMINATION We reserve the right to terminate this contract when the Contract Value is less than the Termination Amount of $1,000 and no purchase payments have been made for at least two years. DEFINITIONS (a) ACCOUNT(S) -- the Sub-Accounts and/or the Fixed Account under this contract. (b) ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value of this contract before Annuity payments begin. (c) AGE -- age last birthday. (d) ANNUITANT -- the person on whose life the Maturity Date and Annuity payments depend. (e) ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of Annuity payments. (f) CODE -- the Internal Revenue Code of 1986, as amended, and all related laws and regulations which are in effect during the term of this contract. (g) CONTRACT DATE -- the date on which the contract is issued. (h) CONTRACT YEARS -- twelve month periods beginning with the Contract Date. (i) DEATH REPORT DATE -- the Valuation Date coincident with or next following the day on which we received 1) Due Proof of Death and 2) a Written Request for an election of a single sum payment or an alternate Settlement Option as described in the contract. (j) DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy of a certified decree of a court of competent jurisdiction as to the finding of death; (iii) a written statement by a medical doctor who attended the deceased; or (iv) any other proof satisfactory to us. (k) FIXED ACCOUNT -- an account that consists of all of the assets under this contract other than those in the Separate Account. (l) MATURITY DATE -- the date on which the Annuity payments are to begin. (m) OUR OFFICE -- the Home Office of The Travelers Insurance Company or any other office which we may designate for the purpose of administering this contract. (n) RECORDED -- a Written Request is recorded when the information is noted in our file for this contract. (o) SEPARATE ACCOUNTS -- those Separate Accounts indicated in the CONTRACT SPECIFICATIONS which we established for this class of contracts and certain other contracts. (p) SETTLEMENT OPTION -- an Annuity or Income option elected under this contract. (q) SUB-ACCOUNT -- that portion of the assets of a Separate Account which is allocated to a particular Underlying Fund. (r) TAX QUALIFIED CONTRACT -- a contract used in a retirement plan or program that is intended to qualify under Sections 401, 403, 408 or 414(d) of the Code. (s) UNDERLYING FUND -- an open-end investment management company indicated in the CONTRACT SPECIFICATIONS, which serves as an investment option under the Separate Account. (t) VALUATION DATE -- a date on which a Sub-Account is valued. (u) VALUATION PERIOD -- the period between successive valuations. (v) WE, US, OUR -- The Travelers Life and Annuity Company. (w) WRITTEN REQUEST -- written information including requests for contract changes sent to us in a form and content satisfactory to us and received at Our Office. (x) YOU, YOUR -- the Owner. OWNER, BENEFICIARY AND ANNUITANT PROVISIONS OWNER This contract belongs to the owner shown on the CONTRACT SPECIFICATIONS. As owner, you have sole power to exercise rights and receive benefits under this contract during the Annuitant's lifetime. In order to maintain tax qualification, this contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose except as may be required or permitted under applicable sections of the Code. We will administer this contract only as a Tax Qualified Contract. You will be the recipient of all payments while the Annuitant is alive unless you direct them to an alternative recipient under a Recorded payment direction. An alternative recipient under a payment direction does not become the owner. A payment direction is revocable by you at any time by Written Request giving 30 days advance notice. CREDITOR CLAIMS To the extent permitted by law, no right or benefit of the owner, Annuitant or Beneficiary under this contract shall be subject to the claims of creditors or any legal process. BENEFICIARY The Beneficiary is the party named in a Written Request. The Beneficiary receives any remaining contractual benefits upon the death of the Annuitant. You may change or add a Beneficiary by Written Request during the lifetime of the Annuitant and while this contract continues. Once a change of Beneficiary is Recorded by us, it will take effect as of the date of the request, subject to any payments made or other actions taken by us before the recording. If no Beneficiary has been named by you, or none survives when the Annuitant dies, the interest of any Beneficiary will pass: a. to the estate of the owner of a Tax Qualified Contract qualifying under Section 408 of the Code, or to the estate of the owner of a non-trusteed Tax Qualified Contract under other than Section 408 of the Code; or b. to the trustee or plan administrator of a trusteed Tax Qualified plan contract for further distribution in accordance with the plan. ANNUITANT The Annuitant is the individual shown on the CONTRACT SPECIFICATIONS on whose life the first Annuity payment is made. The Annuitant may not be changed after the Contract Date except as may be provided under a provision of the tax law qualification rider currently in effect for this contract. PURCHASE PAYMENT AND VALUATION PROVISIONS PURCHASE PAYMENTS PURCHASE PAYMENT Purchase payments are the payments you make for this contract and the benefits it provides. An initial lump sum purchase payment must be made to the contract and is due and payable before the contract becomes effective. Each purchase payment is payable as shown on the CONTRACT SPECIFICATIONS to us at Our Office or to one of our authorized representatives. No purchase payments after the initial purchase payment are required to continue this contract in force, except as provided in the "Termination" provision. Net purchase payments are that part of your purchase payments applied to the Contract Value. A net purchase payment is equal to the purchase payment less any applicable premium tax charge. ALLOCATION OF PURCHASE PAYMENTS We will apply any net purchase payments to provide Accumulation Units of selected Sub-Accounts and/or the Fixed Account of this contract. The initial purchase payment will be applied within two business days following its receipt at Our Office. Any subsequent purchase payments will be applied as of the next valuation following receipt of those payments at Our Office. The net purchase payment will be allocated to the Accounts in the proportion specified by you for this contract. By Written Request, you may change your choice of Accounts or allocation percentages. The available Underlying Funds to which Sub-Account assets are allocated are shown on the CONTRACT SPECIFICATIONS; funds may be subsequently added or deleted. SUB-ACCOUNT VALUATION NUMBER OF ACCUMULATION UNITS The number of Accumulation Units to be credited to each Sub-Account once a purchase payment has been received by us will be determined by dividing the net purchase payment applied to that Sub-Account by the then Accumulation Unit Value of that Sub-Account. ACCUMULATION UNIT VALUE The initial value of an Accumulation Unit for each Sub-Account was set at $1.00. We determine the value of an Accumulation Unit in each Sub-Account on each Valuation Date by multiplying the value on the immediately preceding Valuation Date by the net investment factor for that Sub-Account for the Valuation Period just ended. The value of an Accumulation Unit on any date other than a Valuation Date will be equal to its value as of the next Valuation Date. NET INVESTMENT FACTOR The net investment factor is a factor applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for a Sub-Account for any Valuation Period is equal to the sum of 1.0000 plus the net investment rate. Each Sub-Account's net investment rate for a Valuation Period is equal to the gross investment rate for that Sub-Account, less the applicable Sub-Account deduction for the Valuation Period. All Sub-Account deductions are shown on the CONTRACT SPECIFICATIONS. The gross investment rate of a Sub-Account for a Valuation Period is equal to (1) divided by (2) where (1) is: a. investment income, plus b. capital gains and losses, whether realized or unrealized; less c. a deduction for any tax levied against the Separate Account and its Underlying Funds; and (2) is the amount of the assets at the beginning of the Valuation Period. The gross investment rate for a Sub-Account may be either positive or negative. If a Sub-Account is invested in shares of an Underlying Fund, assets are based on the net asset value of the Underlying Fund. Investment income includes any distribution whose ex-dividend date occurs during the Valuation Period. FIXED ACCOUNT VALUATION NUMBER OF ACCUMULATION UNITS -- We will determine the number of Accumulation Units to be credited to the Fixed Account on receipt of a purchase payment by dividing the net purchase payment applied to the Fixed Account by the then dollar value of one Accumulation Unit Value of the Fixed Account. ACCUMULATION UNIT VALUE -- We determine the value of an Accumulation Unit in the Fixed Account on any day by multiplying the value on the immediately preceding day by the net interest factor for the day on which the value is being determined. NET INTEREST FACTOR -- The net interest factor for any day is the guaranteed net interest rate which is equivalent to an effective annual interest rate of 3.00%, plus 1.0000. The method of crediting additional interest will be at our discretion. Interest is declared in advance. Before Annuity or Income payments begin, we may credit the Fixed Account with annual interest rates higher than the minimum guaranteed interest rate of 3.00%. Interest rates may be higher or lower than the initial interest rates, but not less than the minimum guaranteed interest rate of 3.00%. Additional amounts may be credited by us at our discretion for the guaranteed interest periods shown on the CONTRACT SPECIFICATIONS. TRANSFER BETWEEN ACCOUNTS You may transfer all or any part of the Contract Value from one Sub-Account to any other Sub-Account at any time up to 30 days before the due date of the first Annuity or Income payment. Additionally, you may transfer a part of the Fixed Account value to any of the Sub-Accounts, twice a year during the 30 days following the semi-annual Contract Date Anniversary in the amount shown on the CONTRACT SPECIFICATIONS. Amounts may generally be transferred from the Sub-Accounts to the Fixed Account at any time, up to 30 days before the due date of the first Annuity or Income payment. Amounts previously transferred from the Fixed Account to the Sub-Accounts may not be transferred back to the Fixed Account for a period of at least 6 months from the date of transfer. We reserve the right to limit the number of transfers from one Sub-Account to any other Sub-Account or to the Fixed Account. We will not limit these transfers to less than one in any six month period. Transfers between Accounts will result in the addition or deletion of Accumulation Units having a total value equal to the dollar amount being transferred to or from a particular Account. The number of Accumulation Units will be determined by using the Accumulation Unit Value of the Accounts involved as of the next valuation after we receive notification of request for transfer. Transfers will be subject to any applicable Transfer charge stated on the CONTRACT SPECIFICATIONS. CONTRACT VALUES CONTRACT VALUE The Contract Value of this contract on any date equals the sum of the accumulated values in the Accounts. The accumulated value in an Account equals the number of outstanding Accumulation Units credited to that Account, multiplied by the then Accumulation Unit Value for that Account. The Guaranteed Value of the Fixed Account equals the accumulated values of the Fixed Account calculated by using the guaranteed net interest factor. The Guaranteed Values of the Fixed Account are shown in the Table of Values. CONTRACT CHARGE A Contract Charge in the amount and for the period shown on the CONTRACT SPECIFICATIONS will be deducted from the Contract Value to reimburse us for administrative expenses relating to the contract. The Contract Charge will be deducted by surrendering on a pro rata basis Accumulation Units from all Sub-Accounts in which you have an interest. We will deduct the charge on a pro rata basis if the contract has been in effect for less than a full period on the date a Contract Charge is deducted. The Contract Charge will also be prorated upon full surrender or termination of the contract. CASH SURRENDER You may elect by Written Request to receive the Cash Surrender Value of this contract before the due date of the first Annuity or Income payment and without the consent of any Beneficiary unless irrevocably named. You may elect either a full or partial surrender of the Cash Surrender Value. In the case of a full surrender, this contract will be cancelled. A partial surrender will result in a reduction in your Contract Value. If you have a balance in more than one Account, your Contract Value will be reduced from all your Accounts on a pro rata basis, unless you request otherwise. The Cash Surrender Value will be determined as of the next valuation following receipt of your Written Request. We may delay payment of the Cash Surrender Value of the Sub-Accounts for a period of not more than seven days after we receive your Written Request. We may delay payment of the Cash Surrender Value of the Fixed Account for a period of not more than six months after we receive your Written Request. CASH SURRENDER VALUE The Cash Surrender Value is equal to the Contract Value less any amounts deducted on surrender which are shown on the CONTRACT SPECIFICATIONS, any applicable premium tax not previously deducted, and any outstanding loan balance. The Guaranteed Cash Surrender Value of the Fixed Account equals the Guaranteed Value of the Fixed Account less any amounts deducted on surrender which are shown on the CONTRACT SPECIFICATIONS, less any applicable premium tax not previously deducted and less any outstanding loan balance. For Guaranteed Cash Surrender Values of the Fixed Account, see the Table of Values. CONTRACT CONTINUATION Except as provided in the "Termination" provision, this contract does not require continuing purchase payments and will automatically continue as a paid-up contract during the lifetime of the Annuitant until the Maturity Date or until it is surrendered. DEATH BENEFITS PROVISIONS A death benefit is payable to the Beneficiary upon the death of the Annuitant before the Maturity Date. A death benefit is also payable under those Settlement Options which provide for death benefits. We will pay the Beneficiary the death benefit in a single sum as described below upon receiving Due Proof of Death. A Beneficiary may request that a death benefit payable under this contract be applied to a Settlement Option subject to the provisions of this contract. DEATH PROCEEDS PRIOR TO THE MATURITY DATE If the Annuitant dies before age 75 and before the Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below, less any applicable premium tax, prior surrenders not previously deducted or outstanding loans as of the Death Report Date: a. the Contract Value of the contract; b. the total purchase payments under the contract; or c. the Contract Value of the contract on the most recent quinquennial Contract Date anniversary immediately preceding the Death Report Date. If the Annuitant dies on or after age 75, but before age 85 and before the Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below, less any applicable premium tax, prior surrenders not previously deducted or outstanding loans as of the Death Report Date: a. the Contract Value of the contract; b. the total purchase payments under the contract; or c. the Contract Value of the contract on the most recent quinquennial Contract Date anniversary occurring on or before the Annuitant's 75th birthday. If the Annuitant dies on or after age 85 and before the Maturity Date, we will pay the Beneficiary the Contract Value of the contract, less any applicable premium tax or outstanding loans as of the Death Report Date. DEATH PROCEEDS AFTER THE MATURITY DATE If 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. SETTLEMENT PROVISIONS MATURITY DATE The Maturity Date is shown on the CONTRACT SPECIFICATIONS. This is the date on which we will begin paying to you the first of a series of Annuity or Income payments in accordance with the Settlement Option elected by you. Annuity or Income payments will begin under this contract on the Maturity Date unless the contract has been fully surrendered or the proceeds have been paid to the Beneficiary prior to that date. We may require proof that the Annuitant is alive before Annuity payments are made. If no Maturity Date is specified, the automatic Maturity Date will be the greater of when the Annuitant reaches age 75 or ten years after the Contract Date. Additionally, at least 30 days before the original Maturity Date, you may change the Maturity Date by Written Request to any time prior to the Annuitant's 70th birthday or to a later date with our consent. ELECTION OF SETTLEMENT OPTIONS On the Maturity Date, or other agreed upon date, we will pay any amount payable under this contract to you in one lump sum or in accordance with the option elected by you. While the Annuitant is alive, you may change your Settlement Option election by Written Request, but only before the Maturity Date. Once Annuity or Income payments have commenced, no further election changes are allowed. If no election has been made on the Maturity Date and if the Annuitant is living and has a spouse, we will pay to you the first of a series of monthly Annuity payments based on the life of the Annuitant as primary payee and the Annuitant's spouse as secondary payee, in accordance with Annuity Option 4. During the Annuitant's lifetime, if no election has been made and the Annuitant has no spouse on the Maturity Date, we will pay to you the first of a series of monthly Annuity payments based on the life of the Annuitant, in accordance with Annuity Option 2, with 120 monthly payments assured. MINIMUM AMOUNTS The minimum amount that can be placed under a Settlement Option is $2,000 unless we consent to a lesser amount. If any periodic payments due are less than $100.00, we reserve the right to make payments at less frequent intervals. ALLOCATION OF ANNUITY At the time election of one of the Annuity Options is made, the person electing the option may further elect to have the Contract Value applied to provide a Variable Annuity, a Fixed Annuity or a combination of both. If no election is made to the contrary, the value of a Sub-Account will be applied when Annuity payments start to provide an Annuity which varies with the investment experience of that same Sub-Account and the value of the Fixed Account will be applied to provide a Fixed Annuity. You may elect to transfer Contract Value from one Account to another, as described in the provision "Transfer Between Accounts," in order to reallocate the basis on which Annuity payments will be determined. Once Annuity payments have begun, no further transfers are allowed. VARIABLE ANNUITY AMOUNT OF BASIC FIRST PAYMENT The LIFE ANNUITY TABLES are used to determine the basic first monthly annuity payment. They show the dollar amount of the basic first monthly Annuity payment which can be purchased with each $1,000 applied. The amount applied to an Annuity will be the Cash Surrender Value as of 14 days before the date Annuity payments start. We reserve the right to require satisfactory proof of the age of any person on whose life Annuity payments are based before making the first payment under any of these options. ANNUITY UNIT VALUE The initial value of an Annuity Unit for each Sub-Account was set at $1.00. On any Valuation Date, the Annuity Unit Value for a Sub-Account equals the Sub-Account Annuity Unit Value on the immediately preceding Valuation Date, multiplied by the net investment factor for that Sub-Account for the Valuation Period just ended, divided by the Assumed Daily Net Investment Factor. The Assumed Daily Net Investment Factor is shown on the CONTRACT SPECIFICATIONS. The value of an Annuity Unit as of any date other than a Valuation Date will be equal to its value as of the next succeeding Valuation Date. NUMBER OF ANNUITY UNITS We determine the number of Annuity Units credited to this contract in each Sub-Account by dividing the basic first monthly Annuity payment attributable to that Sub-Account by the Sub-Account's Annuity Unit Value as of 14 days before the due date of the first Annuity payment. AMOUNT OF SECOND AND SUBSEQUENT BASIC PAYMENTS The dollar amount of the second and subsequent payments may change from month to month. The total amount of each Annuity payment will be equal to the sum of the basic payments in each Sub-Account. The actual amount of the basic payments in each Sub-Account is found by multiplying the number of Annuity Units credited to the contract in that Sub-Account by the Annuity Unit Value of the Sub-Account as of the date 14 days prior to the date on which the payment is due. FIXED ANNUITY A Fixed Annuity is an Annuity with payments which remain fixed as to dollar amount throughout the payment period. The dollar amount of the first Fixed Annuity payment will be calculated as described above in the "Amount of Basic First Payment" provision. All subsequent payments will be in the same amount and that amount will be assured throughout the payment period. If it would produce a larger payment, we agree that the Fixed Annuity payment will be determined using the Life Annuity Tables in effect on the Maturity Date. ANNUITY OPTIONS Subject to conditions stated in ELECTIONS OF SETTLEMENT OPTIONS and MINIMUM AMOUNTS, all or any part of the Cash Surrender Value of this contract may be paid under one or more of the Annuity Options below. OPTION 1. LIFE ANNUITY--NO REFUND We will make monthly Annuity payments during the lifetime of the person on whose life the payments are based, ending with the last monthly payment preceding death. OPTION 2. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED We will make monthly Annuity payments during the lifetime of the person on whose life the payments are based and under the conditions stated below. If at the death of that person, payments have been made for less than 120, 180 or 240 months, as elected, we will continue to make payments to the designated Beneficiary during the remainder of the period. OPTION 3. JOINT AND LAST SURVIVOR LIFE ANNUITY We will make monthly Annuity payments during the joint lifetime of two persons on whose lives payments are based and during the lifetime of the survivor. No more payments will be made after the death of the survivor. OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY--ANNUITY REDUCED ON DEATH OF PRIMARY PAYEE We will make monthly Annuity payments during the joint lifetime of two persons on whose lives payments are based. One of the two persons will be designated as the primary payee. The other will be designated the secondary payee. On the death of the secondary payee, if survived by the primary payee, we 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, if survived by the secondary payee, we will continue to make monthly 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 following the death of the survivor. OPTION 5. OTHER ANNUITY OPTIONS We will make any other arrangements for Annuity payments as may be mutually agreed. INCOME OPTIONS We will pay all or any part of the Cash Surrender Value to you under one or more of the Income Options below subject to the conditions stated in ELECTION OF SETTLEMENT OPTIONS and MINIMUM AMOUNTS. The Cash Surrender Value used to determine the amount of any Income payment will be based on the Accumulation Unit Value as of 14 days before the date an Income payment is due and will be determined the same way as in the Accumulation period. OPTION 1. PAYMENTS OF A FIXED AMOUNT We will make equal payments each month in the amount elected until the Cash Surrender Value applied under this option is gone. The first monthly payment will be paid from each Sub-Account in proportion to its Cash Surrender Values applied. The second payment and all later payments from each Sub-Account will be the same as the first payment under this option. The final payment will include any amount that is not enough to make another full payment. OPTION 2. PAYMENTS FOR A FIXED PERIOD We will make monthly payments for the period selected. The amount of each payment will be equal to the then 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 payments as may be mutually agreed. GENERAL PROVISIONS THE CONTRACT The entire contract between you and us consists of the contract and all attached pages. CONTRACT CHANGES The only way this contract may be changed is by a written endorsement signed by one of our officers. SUBSTITUTION OF SEPARATE ACCOUNT OR UNDERLYING FUNDS If it is not possible to continue to offer a Separate Account or Underlying Fund, or in our judgment becomes inappropriate for the purposes of this contract, we may substitute another Separate Account or Underlying Fund without your consent. Substitution may be made with respect to both existing investments and investment of future premium payments. However, no such substitution will be made without notice to you and without prior approval of the Securities and Exchange Commission, to the extent required by law. MISSTATEMENT If the Annuitant's date of birth was misstated, all benefits of this contract are what the purchase payment paid would have purchased at the correct age. Proof of the Annuitant's age may be filed at any time at Our Office. INCONTESTABILITY We will not contest this contract from its Contract Date. TERMINATION We reserve the right to terminate this contract on any Valuation Date if the Contract Value as of the date is less than the Termination Amount shown on the CONTRACT SPECIFICATIONS, and purchase payments have not been made to this contract for at least two years. Termination will not occur until 31 days after we have mailed notice of termination to you at your last known address. If this contract is terminated, we will pay you the Cash Surrender Value, if any. REQUIRED REPORTS We will furnish a report to the owner as often as required by law, but at least once in each Contract Year before the due date of the first Annuity or Income payment. The report will show the number of Accumulation Units credited to the contract in each Account and the corresponding Accumulation Unit Value as of the date of the report. VOTING RIGHTS So long as federal law requires, you may have the right to vote at the meetings of the Shareholders of the Underlying Funds. If you have voting rights, we will send a notice to you telling you the time and place of a meeting. The notice will also explain matters to be voted upon and how many votes you get. MORTALITY AND EXPENSES Our actual mortality and expense experience will not affect the amount of any Annuity or Income payments or any other values under this contract. NON-PARTICIPATING This contract does not share in our surplus earnings, so you will receive no dividends under it. CONTRACT MODIFICATION We reserve the right to modify this contract to qualify it under provision of Sections 401, 403, 408 or 414(d) of the Code and all related laws and regulations which are in effect during the term of this contract. We will obtain the approval of any regulatory authority needed for the modifications. STATE LAWS This contract is governed by the law of the state in which it is delivered. Any paid-up Annuity, Cash Surrender or death benefits that are available under this contract are not less than the minimum benefits required by the statutes of the state in which this contract is delivered. EMERGENCY PROCEDURE We reserve the right to suspend or postpone the date of any payment of any benefit or values for any Valuation Period (1) when the New York Stock Exchange is closed; (2) when trading on the Exchange is restricted; (3) when an emergency exists as determined by the Securities and Exchange Commission so that disposal of the securities held in the Sub-Accounts is not reasonably practicable or it is not reasonably practicable to determine the value of the Sub-Account's net assets, or (4) during any other period when the Securities and Exchange Commission, by order, so permits for the protection of security holders. Any provision of this contract which specifies a Valuation Date will be superseded by this Emergency Procedure. RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNTS AND SUB-ACCOUNTS We will have exclusive and absolute ownership and control of the assets of our Separate Account and the Sub-Accounts. That portion of the assets of a Separate Account or Sub-Account equal to the reserves and other contract liabilities with respect to such Separate Account or Sub-Account shall not be chargeable with liabilities arising out of any other business we conduct. Our determination of the value of an Accumulation Unit and an Annuity Unit by the method described in this contract will be conclusive. TABLE OF VALUES GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF NET PURCHASE PAYMENT APPLIED
NO. OF FULL GUARANTEED NO. OF FULL YEARS FROM CASH YEARS FROM DATE PAYMT. GUARANTEED SURRENDER DATE PAYMT. IS APPLIED VALUE VALUE IS APPLIED 1 1030 970 36 2 1060 1000 37 3 1092 1032 38 4 1125 1095 39 5 1159 1139 40 6 1194 1184 41 7 1229 1229 42 8 1266 1266 43 9 1304 1304 44 10 1343 1343 45 11 1384 1384 46 12 1425 1425 47 13 1468 1468 48 14 1512 1512 49 15 1557 1557 50 16 1604 1604 51 17 1652 1652 52 18 1702 1702 53 19 1753 1753 54 20 1806 1806 55 21 1860 1860 56 22 1916 1916 57 23 1973 1973 58 24 2032 2032 59 25 2093 2093 60 26 2156 2156 61 27 2221 2221 62 28 2287 2287 63 29 2356 2356 64 30 2427 2427 65 31 2500 2500 66 32 2575 2575 67 33 2652 2652 68 34 2731 2731 69 35 2813 2813 70 NO. OF FULL GUARANTEED YEARS FROM CASH DATE PAYMT. GUARANTEED SURRENDER IS APPLIED VALUE VALUE 1 2898 2898 2 2985 2985 3 3074 3074 4 3167 3167 5 3262 3262 6 3359 3359 7 3460 3460 8 3564 3564 9 3671 3671 10 3781 3781 11 3895 3895 12 4011 4011 13 4132 4132 14 4256 4256 15 4383 4383 16 4515 4515 17 4650 4650 18 4790 4790 19 4934 4934 20 5082 5082 21 5234 5234 22 5391 5391 23 5553 5553 24 5720 5720 25 5891 5891 26 6068 6068 27 6250 6250 28 6437 6437 29 6631 6631 30 6829 6829 31 7034 7034 32 7245 7245 33 7463 7463 34 7687 7687 35 7917 7917
LIFE ANNUITY TABLES DOLLAR AMOUNT OF THE FIRST MONTHLY ANNUITY PAYMENT WHICH IS PURCHASED WITH EACH $1,000 APPLIED OPTIONS 1 AND 2-SINGLE LIFE ANNUITIES
120 180 240 MONTHLY MONTHLY MONTHLY ADJUSTED NO PAYMENTS PAYMENTS PAYMENTS AGE REFUND ASSURED ASSURED ASSURED 50 $4.13 $4.10 $4.06 $4.00 51 4.20 4.17 4.13 4.06 52 4.28 4.25 4.20 4.12 53 4.37 4.33 4.27 4.18 54 4.46 4.41 4.35 4.25 55 4.55 4.50 4.42 4.31 56 4.65 4.59 4.51 4.38 57 4.76 4.69 4.59 4.44 58 4.87 4.79 4.68 4.51 59 4.99 4.90 4.77 4.58 60 5.12 5.01 4.86 4.65 61 5.26 5.13 4.96 4.72 62 5.40 5.25 5.06 4.79 63 5.56 5.39 5.16 4.85 64 5.72 5.52 5.27 4.92 65 5.90 5.67 5.37 4.99 66 6.09 5.82 5.48 5.05 67 6.29 5.97 5.59 5.11 68 6.51 6.13 5.69 5.16 69 6.74 6.30 5.80 5.21 70 6.99 6.48 5.9 5.26 71 7.26 6.66 6.01 5.31 72 7.54 6.84 6.11 5.34 73 7.86 7.03 6.20 5.38 74 8.19 7.22 6.29 5.41 75 8.55 7.41 6.38 5.43 OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY ADJUSTED AGE OF ADJUSTED AGE OF SECOND LIFE FIRST LIFE 51 56 58 61 63 66 71 50 $3.69 $3.81 $3.85 $3.91 $3.94 $3.98 $4.04 55 3.82 3.99 4.06 4.15 4.20 4.28 4.38 57 3.87 4.06 4.14 4.25 4.32 4.41 4.53 60 3.93 4.17 4.26 4.40 4.48 4.61 4.78 62 3.97 4.23 4.34 4.49 4.60 4.74 4.96 65 4.02 4.32 4.44 4.63 4.76 4.95 5.24 70 4.09 4.43 4.59 4.83 5.01 5.27 5.72
Dollar amounts of the first monthly payments for ages not shown in these Tables will be calculated on the same basis as those shown and may be obtained from us. Amounts shown in these Tables are based on the Progressive Annuity Table, with a two year set-back, (assuming births in the year 1900) with interest at the rate of 3% per annum. The adjusted age of the person on whose life the Annuity is based is determined from the actual age last birthday on the due date of the first Annuity payment in the following manner. Calendar Year in which First Payment is Due . . 1991-2000 2001-2010 2011 & later Adjusted Age is Actual Age minus 0 minus 1 minus 2 OPTION 4-JOINT AND LAST SURVIVOR LIFE ANNUITY ANNUITY REDUCES ON DEATH OF PRIMARY PAYEE
ADJUSTED AGE OF PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE 46 51 56 61 50 $3.82 $3.90 $3.96 $4.01 55 4.05 4.15 4.25 4.34 60 4.31 4.45 4.59 4.73 65 4.60 4.78 4.98 5.19 70 4.93 5.16 5.43 5.71
Dollar amounts of the monthly payments for ages not shown in these Tables will be calculated on the same basis as those shown and may be obtained from us. Amounts shown in these Tables are based on the Progressive Annuity Table, with a two year set-back, (assuming births in the year 1900) with interest at the rate of 3% per annum. The adjusted age of the person on whose life the annuity is based is determined from the actual age last birthday on the due date of the first annuity payment in the following manner. Calendar Year in Which First Payment is Due . . . 1991-2000 2001-2010 2011 & Later Adjusted Age is Actual Age . . minus 0 minus 1 minus 2 INDIVIDUAL VARIABLE ANNUITY CONTRACT TAX QUALIFIED NON-PARTICIPATING INDIVIDUAL RETIREMENT ANNUITY QUALIFICATION RIDER As requested by the owner, this Contract is amended as follows to qualify as an Individual Retirement Annuity (IRA) under Section 408(b) of the Code of 1986, as amended. I. EXCLUSIVE BENEFIT This Contract is established for the exclusive benefit of you or your Beneficiaries. II. PROHIBITION OF ASSIGNMENT OR LOAN This Contract shall not be pledged or otherwise encumbered and it shall not be sold, assigned or otherwise transferred to any person or entity other than us. No loans shall be made under this Contract. III. LIMITATION ON PREMIUMS Notwithstanding the provisions of the Contract and except in the case of a rollover contribution (as permitted by Section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of the Code) or a contribution made in accordance with the terms of a Simplified Employee Pension (SEP) program as described in Section 408(k) of the Code, the total contributions shall not exceed the lesser of $2,000 or 100% of compensation for any taxable year. In the case of a spousal IRA, the maximum contribution shall not exceed the lesser of $2,250 or 100% of compensation, but no more than $2,000 can be contributed to either spouse's IRA. In the case of a Simplified Employee Pension Plan qualifying under Section 408(k), the annual contribution under the Contract may not exceed the lesser of $30,000 or 15% of compensation. No contributions will be accepted unless they are in cash. The purchase payments under this Contract are not fixed. Any refund of purchase payments (other than those attributable to excess contributions) will be applied, before the close of the calendar year following the year of the refund, toward the payment of future purchase payments or the purchase of additional benefits. Purchase payments after the first will not be required to continue this Contract in force. We reserve the right, however, to terminate this Contract when no purchase payments have been made for at least two consecutive years and the Contract Value of the Contract is less than the termination amount of $1000 or the paid up Annuity benefit at maturity would be less than $20 per month. If this Contract is terminated, we will pay you the Cash SurrenderValue, if any. IV. COMPENSATION Compensation means wages, salaries, professional fees, or other amounts derived from or received from personal service actually rendered (including, but not limited to, commissions) and includes earned income as defined in Code Section 401(c)(2). Compensation does not include amounts received as earnings or profits from property or amounts not includible in gross income. Compensation also does not include any amount received as a pension or Annuity or as deferred compensation. The term "compensation" shall include any amount includible in the individual's gross income under Code Section 71 with respect to a divorce or separation instrument. V. DISTRIBUTION OF BENEFITS Notwithstanding any provision of this contract to the contrary, the distribution of an individual's interest shall be made in accordance with the minimum distribution requirements of Section 408(a)(6) or Section 408(b)(3) of the Code and the regulations thereunder, including the incidental death benefit provisions of Section 1.401(a)(9)-2 of the proposed regulations, all of which are herein incorporated by reference. Your entire interest in the account must be distributed, or begin to be distributed, by your required beginning date, which is the April 1 following the calendar year in which you reach age 70 1/2. For each succeeding year, a distribution must be made on or before December 31. By the required beginning date you may elect to have the balance in the account distributed in one of the following forms: 1. a single sum payment; 2. equal or substantially equal payments over your life; 3. equal or substantially equal payments over the lives of you and your designated Beneficiary; 4. equal or substantially equal payments over a specified period that may not be longer than your life expectancy; 5. equal or substantially equal payments over a specified period that may not be longer than the joint life and last survivor expectancy of you and your designated Beneficiary. Minimum Amounts to be Distributed. If your interest is to be distributed in other than a lump sum or substantially equal amounts as discussed above, then the amount to be distributed each year, commencing at your required beginning date, must be at least an amount equal to the quotient obtained by dividing your entire interest by your life expectancy or the joint and last survivor expectancy of you and your designated Beneficiary. Life expectancy and joint and last survivor expectancy are computed by use of the return multiples contained in section 1.72-9 of the Income Tax Regulations. For purposes of this computation, the owner's life expectancy may be recalculated no more frequently than annually; however, the life expectancy of a nonspouse Beneficiary may not be recalculated. If your designated Beneficiary is not your spouse, then the minimum amount required to be distributed shall be the greater of the amount determined above, or the amount determined under the incidental benefit rules set forth in Treasury Regulation Section 1.401(a)(9)-2. VI. DEATH If you die before your entire interest is distributed, the entire remaining interest will be distributed as follows: 1. If you die on or after distributions have begun under the DISTRIBUTION OF BENEFITS section, the entire remaining interest must be distributed at least as rapidly as provided under the DISTRIBUTION OF BENEFITS section. 2. If you die before distributions have begun under the DISTRIBUTION OF BENEFITS section, the entire remaining interest must be distributed as elected by you, or, if you have not so elected, as elected by the Beneficiary or Beneficiaries, as follows: a. by December 31st of the year containing the fifth anniversary of your death; or b. in equal or substantially equal payments over the life or life expectancy of the designated Beneficiary or Beneficiaries starting by December 31st of the year following the year of your death. If, however, the Beneficiary is your surviving spouse, then this distribution is not required to begin before December 31st of the year in which you would have turned 70 1/2. If your surviving spouse dies before distributions begin, he or she shall be treated as the IRA contract owner and the restrictions in the preceding paragraph shall apply. Unless otherwise elected by you prior to the commencement of distributions under the DISTRIBUTION OF BENEFITS section or, if applicable, by the surviving spouse where you die before distributions have commenced, life expectancies of you or your spousal Beneficiary shall be recalculated annually for purposes of distributions under the DISTRIBUTION OF BENEFITS section and the DEATH section. An election not to recalculate shall be irrevocable and shall apply to all subsequent years. The life expectancy of a non-spouse Beneficiary shall not be recalculated. VII. ALTERNATIVE CALCULATION METHOD An individual may satisfy the minimum distribution requirements under section 408(a)(6) and 408(b)(3) of the Code by receiving a distribution for one IRA that is equal to the amount required to satisfy the minimum distribution requirements for two or more IRAs. For this purpose, the owner of two or more IRAs may use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements described above. VIII. NONFORFEITABILITY Your entire interest in this Contract is nonforfeitable. IX. NONTRANSFERABLE This Contract is not transferable. X. ROLLOVERS A. Subject to subparagraphs (B) and (C) hereof, and the limitations stated in the Contract, you may transfer to this Contract your interest in any of the following: 1. the entire amount, or any portion thereof, under any other individual retirement account or individual retirement Annuity qualified under Section 408 of the Code; 2. the entire amount, or any portion thereof, excluding nondeductible employee voluntary contributions, under a trust described in Section 401(a) of the Code which is exempt from tax under Section 501(a) of the Code or under a qualified annuity plan described in Section 403(a) of the Code. 3. the entire amount or any portion thereof to which you are entitled under a tax sheltered annuity described in Section 403(b) of the Code. 4. distributions you roll over from retirement plans or arrangements described in A.2. and A.3. above to this contract must be completed by means of a direct transfer or rollover in accordance with Code Section 401(a)(31) in order to avoid mandatory 20% income tax withholding from the distribution and a possible 10% additional tax penalty under Code Section 72(t). You may replace amounts withheld from other sources to complete the full rollover, but the 10% penalty may continue to be due, if you do not specify that the transfer of the distribution be conducted by direct transfer or rollover. B. You shall not make a rollover under subparagraph (A)(1) hereof during the 12 month period commencing on the date you last made a rollover contribution of the type described in subparagraph (A)(1). C. We must receive any amount which qualifies for a rollover within 60 days after you receive the distribution. XI. DISTRIBUTIONS PRIOR TO AGE 59 1/2 Except in the event of your death, disability or attainment of age 59 1/2, we shall receive from you a declaration of your intention as to the disposition of the amounts distributed before making any distribution from this Contract. XII. REPORTS As the issuer of this Contract, we will furnish reports concerning the status of the Annuity at least annually. XIII. DISABILITY PAYMENTS If the Contract contains a Rider for waiver of premium and disability payments benefits, any disability payments provided for in the CONTRACT SPECIFICATIONS will be applied as purchase payments under the contract. XIV. AMENDMENT This Contract may be amended by us at any time to maintain its qualified status under Section 408(b) of the Code, following all regulatory approvals. Any such amendment may be made retroactively effective if necessary or appropriate to conform to the requirements of the Code (or any State law granting IRA tax benefits.) THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman TAX-SHELTERED ANNUITY QUALIFICATION RIDER This endorsement is made a part of this contract in order to comply with Section 403(b) of the Code. The following conditions, restrictions and limitations apply. OWNERSHIP - NON-TRANSFERABLE You may not sell, assign, or discount this contract or pledge this contract as collateral for a loan or as security for the performance of an obligation or for any other purpose, to any person or organization other than to us. This provision supersedes any provisions of the contract which may be inconsistent with it. ELECTIVE DEFERRAL CONTRIBUTION LIMITS In order to meet the qualification requirements of Code Section 403(b), elective deferral contributions may not exceed the limitations in effect under Code Section 402(g). This rule applies to all elective deferral plans, contracts or arrangements. WITHDRAWAL RESTRICTIONS To qualify as a contract which can defer compensation under a Code Section 403(b) plan or arrangement, the withdrawal restrictions under Code Section 403(b)(11) must be met. Withdrawals attributable to contributions made pursuant to a salary reduction agreement may be paid only upon or after attainment of age 59 1/2, separation from service, death, total or permanent disability (as defined in Code Section 72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations). The hardship exception applies only to the salary reduction contribution and not to any income attributable to such contribution. These withdrawal restrictions apply to years beginning after December 31, 1988 but only with respect to assets other than those assets held as of the close of the last year beginning before January 1, 1989. If contributions attributable to a custodial account described in Section 403(b)(7) of the Code are transferred to this contract, the following conditions, restrictions and limitations apply. Withdrawals attributable to these transferred contributions may be paid only upon or after attainment of age 59 1/2, separation from service, death, or total and permanent disability (as defined in Code Section 72(m)(7)). Withdrawals on account of hardship may be made only with respect to assets attributable to a custodial account as of the close of the last year beginning before January 1, 1989 and amounts contributed thereafter under a salary reduction agreement but not to any income attributable to such contributions. MANDATORY DISTRIBUTION RESTRICTIONS In order to meet the qualification requirements of Code Section 403(b), all plans must meet the required mandatory distribution rules in Code Section 401(a)(9). Code Section 401(a)(9) states that a plan will not be qualified unless the entire interest of each employee is distributed to such employee not later than the "required beginning date" or over the life or life expectancy of such employee or over the lives or joint life expectancy of such employee and a designated Beneficiary. Generally, the "required beginning date" means April 1 of the calendar year following the calendar year in which the employee attains age 70 1/2. If the employee dies before his/her entire interest has been distributed, the remaining interest must be paid out at least as rapidly as it was being paid out under the method of payment in effect at the time of death. If the employee dies before the distribution of his/her entire interest has begun, the entire interest must be distributed within five years after the employee's death or an Annuity payable over no longer than life or life expectancy must be distributed to an electing designated Beneficiary starting within one year of the employee's death. A spousal designated Beneficiary may elect to defer distributions until the employee would have attained the age of 70 1/2 . ADMINISTRATIVE COMPLIANCE If the Code and related law, regulations and rulings require a distribution other than described above in order to keep this Annuity qualified under the Code, we will administer the contract in accordance with these laws, regulations and rulings. We will provide you with a revised rider describing any necessary changes, following all regulatory approvals. THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman PENSION/PROFIT SHARING PLAN QUALIFICATION RIDER If the owner of this contract requested that it be issued to comply with Section 401(a) of the Code, the following conditions, restrictions and limitations apply to this contract. OWNERSHIP - NON-TRANSFERABLE You may not sell, assign, or discount this contract or pledge this contract as collateral for a loan or as security for the performance of an obligation or for any other purpose, to any person or organization other than The Travelers Insurance Company; provided, however, the restrictions of this provisions will not apply to the Trustee of any Trust described in Section 401(a) or the Administrator of any Annuity Plan described in Section 403(a) of the Code. This provision supersedes any provisions of the contract which may be inconsistent with it. MANDATORY DISTRIBUTION RESTRICTIONS In order to meet the qualification requirements of Code Section 401(a), all plans must meet the required mandatory distribution rules in Code Section 401(a)(9). Code Section 401(a)(9) states that a plan will not be qualified unless the entire interest of each employee is distributed to such employee not later than the "required beginning date" or over no longer than the life or life expectancy of such employee or the lives or joint life expectancy of such employee and a designated Beneficiary. Generally, the "required beginning date" means April 1 of the calendar year following the calendar year in which the employee attains age 70 1/2. If the employee dies before his/her entire interest has been distributed, the remaining interest must be paid out at least as rapidly as it was being paid out under the method of payment in effect at the time of death. If the employee dies before the distribution of his/her entire interest has begun, the entire interest must be distributed within five years after the employee's death or an Annuity payable over no longer than life or life expectancy must be distributed to an electing designated Beneficiary starting within one year of the employee's death. A spousal designated Beneficiary may elect to defer distributions until the employee would have attained the age of 70 1/2. ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS If the applicant for this contract requested that it be issued to comply with Section 401(a) of the Code, and this contract has subsequently been transferred to the Annuitant, the following conditions, restrictions and limitations apply to this contract in addition to the above. Spousal Consent Death Benefit - If the Annuitant dies while the contract continues and the Annuitant has a spouse at the time of the Annuitant's death, we will pay the death benefit to a person other than the current spouse of the Annuitant only if proof of spousal consent, which meets the requirements of Section 417 of the Code, is furnished to us. If the Beneficiary is not the current spouse and such spousal consent is not furnished, we will pay 50% of the death benefit to the current spouse. We will pay the balance of the death benefit to the Beneficiary. Cash Surrender - Before the due date of the first Annuity Payment, 1) if you do not have a spouse and without the consent of any Beneficiary unless irrevocably named; or, 2) if you do have a current spouse then only with the written consent of your spouse, as required by Section 417 of the Code; we will pay to you all or any portion of the Cash Surrender Value of the contract upon receipt of your Written Request for it. Settlement Option - If the Annuitant is living on the Maturity Date, payment must be made in accordance with Option 5 under ANNUITY OPTIONS unless you elect another form of Annuity or Income Option and furnish us a qualified election which meets the requirements of Section 417 of the Code. THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman DEATH BENEFIT ENDORSEMENT This endorsement is made a part of the contract to which it is attached and will take effect as of the Contract Date shown on the CONTRACT SPECIFICATIONS. The endorsement modifies the determination of the value of the death benefit in the DEATH PROCEEDS PRIOR TO THE MATURITY DATE provision. If the Annuitant dies before age 75 and before the Maturity Date, the death benefit payable under the contract as of the Death Report Date will be the greater of 1) the guaranteed death benefit; or 2) the Contract Value less any applicable premium tax or amounts taken as loans. The guaranteed death benefit is: 1. On the Contract Date, the death benefit is equal to the purchase payment made to the Contract; 2. On each Contract Date anniversary, but not beyond the Contract Date anniversary following the Annuitant's 75th birthday, the guaranteed death benefit will be recalculated as follows: a. the guaranteed death benefit as of the previous Contract Date anniversary; b. plus any purchase payments made during the previous Contract Year; c. minus any amounts surrendered during the previous Contract Year; d. minus any applicable premium tax or amounts taken as loans; e. the sum of a through d multiplied by 1.05 equals the new guaranteed death benefit. 3. On dates other than the Contract Date or the Contract Date anniversary, the guaranteed death benefit equals: a. the guaranteed death benefit on the previous Contract Date anniversary; b. plus purchase payments made since the previous Contract Date anniversary; c. minus any amounts surrendered since the previous Contract Date anniversary; d. minus any applicable premium tax or amounts taken as loans. The maximum guaranteed death benefit payable equals 200% of the total of the purchase payments minus surrenders, minus applicable premium taxes. If the Annuitant dies on or after age 75, but before age 85 and before the Maturity Date, the death benefit payable as of the Death Report Date will be the greater of 1) the guaranteed death benefit as of the Annuitant's 75th birthday, plus additional purchase payments, minus surrenders, applicable premium tax and amounts taken as loans; or 2) the Contract Value less any applicable premium tax or amounts taken as loans. If the Annuitant dies on or after age 85 and before the Maturity Date, the death benefit payable will be the Contract Value less any applicable premium tax and amounts taken as loans as of the Death Report Date. THE TRAVELERS LIFE AND ANNUITY COMPANY /s/ Robert J. Lipp Chairman EX-6 5 EXHIBIT 6A COPY OF THE CHARTER OF THE TRAVELERS LIFE AND ANNUITY COMPANY Hartford, Connecticut AS EFFECTIVE April 10, 1990 CHARTER OF THE TRAVELERS LIFE AND ANNUITY COMPANY Section 1. J. Doyle DeWitt, Sterling T. Tooker and Millard Bartels with such other persons as may be associated with them, their successors and assigns, are created a body politic and corporate by the name of The Travelers Life and Annuity Company and under that name shall have all the powers granted by the general statutes, as now enacted or hereafter amended, to corporations formed under the Stock Corporation Act. Section 2. The corporation shall have to the power to write life insurance, endowments and annuities, and to issue policies and contracts therfor with benefits payable in fixed or variable amounts, or both; to accept and to cede reinsurance of any such risks or hazards; and to issue policies and contracts either with or without participation in profits. The corporation is authorized to exercise the powers herein granted in any state, territory or jurisdiction of the United States or in any foreign country. Section 3. The authorized capital of the corporation shall be ten million dollars divided into one hundred thousand shares of common capital stock with a par value of one hundred dollars each. Section 4. The business, property and affairs of the corporation shall be managed by the chief executive officer and his delegated officers under the direction of the Board of Directors. The Board of Directors shall be charged with the following responsibilities and duties: selection, surveillance and removal of the chief executive officer and, subject to the provisions of any applicable by-laws, other corporate officers; provision of periodic statements to the shareholders concerning the operation and financial status of the corporation; amendment of the charter and by-laws; authorization or approval of major acquisitions and dispositions of assets; authorization or approval of mergers, consolidations and reorganizations; the taking of action with respect to the issuance, acquisition, retirement or cancellation, redemption or determination of terms, limitations and relative rights and preferences of the corporation's capital stock or any class thereof; the incurrence of major corporate indebtedness; declaration of dividends with respect to outstanding shares of the corporation's capital stock; action with respect to the dissolution of the corporation; and such other responsibilities and duties as may be required by law. The number of directorships shall be fixed in the by-laws. The number of directorships so fixed shall be filled by an election of directors at each annual meeting of the shareholders to serve until the next annual meeting or until their respective successors shall be elected and shall qualify, except as provided in the Connecticut Stock Corporation Act. Section 5. The incorporators named in Section 1 of this act shall form the corporation in the manner provided for specially chartered corporations in the Stock Corporation Act. Section 6. The personal liability to the corporation or its shareholders of a person who is or was a director of the corporation for monetary damages for breach of duty as a director shall be limited to the amount of the compensation received by the director for serving the corporation during the year of the violation if such breach did not (a) involve a knowing and culpable violation of law by the director, (b) enable the director or an associate, as defined in subdivision (3) of Section 33-374d of the Connecticut Stock Corporation Act as in effect on the effective date hereof or as it may be amended from time to time, to receive an improper personal economic gain, (c) show a lack of good faith and a conscious disregard for the duty of the director to the corporation under circumstances in which the director was aware that his conduct or omission created an unjustifiable risk of serious injury to the corporation, (d) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the director's duty to the corporation, or (e) create liability under Section 33-321 of the Connecticut Stock Corporation Act as in effect on the effective date hereof or as it may be amended from time to time. This Section 6 shall not limit or preclude the liability of a person who is or was a director for any act or omission occurring prior to the effective date hereof on the date of filing of a Certificate of Amendment amending the Charter of the corporation with the Secretary of the State of the State of Connecticut. The personal liability of a person who is or was a director to the corporation or its shareholders for breach of duty as a director shall further be limited to the full extent allowed by the Connecticut Stock Corporation Act as it may be amended from time to time. Any lawful repeal or modification of this Section 6 or the adoption of any provision inconsistent herewith by the Board of Directors and the shareholders of the corporation shall not, with respect to a person who is or was a director, adversely affect any limitation of liability, right or protection existing at or prior to the effective date of such repeal, modification or adoption of a provision inconsistent herewith. EXHIBIT 6B BY-LAWS of THE TRAVELERS LIFE AND ANNUITY COMPANY OCTOBER 20, 1994 ARTICLE I. SHAREHOLDERS AND SHAREHOLDERS' MEETINGS. Section 1. The annual meeting of the shareholders of The Travelers Life and Annuity Company shall be held at such time and place as the directors may appoint. Section 2. Special meetings of the shareholders may be held at such time and place as may be designated in the notice thereof and may be called at any time by the Chairman of the Board or the President or by a majority of the directors. Section 3. At each meeting of the shareholders the Chairman of the Board, or in his absence the President, or, in the absence of both, such other person as may be appointed by the Board of Directors, shall act as chairman of the meeting and the Corporate Secretary shall act as clerk of the meeting, and in his absence, an Assistant Corporate Secretary, or in the absence of the Corporate Secretary or an Assistant Corporate Secretary, such company officer as the Chairman may appoint shall act as clerk of the meeting. Section 4(a). There shall be a minimum of three and a maximum of twelve directorships and the number of directorships at any time within such minimum and maximum shall be the number fixed by resolution of the Board of Directors. At each annual meeting of the company directors shall be elected, each to hold office until the next succeeding annual meeting of shareholders following such election or until a successor has been elected and qualified, except as provided hereafter. Whenever any vacancy shall occur in the Board of Directors by death, resignation or otherwise, such vacancy may be filled by a majority of the directors then in office whether or not they constitute a quorum. (b). The Board of Directors may increase the number of directorships, within a minimum of three and a maximum of twelve, and fill any vacancy created by reason of such increase in the number of directorships, by the concurring vote of directors holding a majority of the directorships, which number of directorships shall be the number prior to the vote on the increase. Directors elected to fill such vacancies shall serve until the next annual meeting of shareholders and until a successor has been elected and qualified. (c). Any adult person in good standing in his/her community is eligible to be a director of the Company provided that he/she shall not be elected for a term commencing after he/she shall have attained age seventy. An officer of the Company, other than a director who has been chief executive officer of the Company, who is a member of the Board of Directors upon retirement or resignation as an officer of the Company, shall thereafter be ineligible for reelection to the board. Section 5. A majority of the shares of voting capital stock outstanding of all classes shall constitute a quorum for the transaction of business at such meetings. ARTICLE II. DIRECTORS. Section 1. The regular meetings of the directors shall be held at such place and at such time as the directors may by vote designate. The directors may authorize the Chairman of the Board or the President to change the time of any regular meeting. Section 2. Special meetings of the directors may be called at any time by the Chairman of the Board or the President or by any three directors. Section 3. Written notice by mail shall be given by the Corporate Secretary of each regular and special meeting of the board and each committee thereof to all directors or members of the committee, as the case may be, at least two days before the time appointed therefor or notice to such directors or committee members may be personally delivered or given by telegraph or telephone not later than the day before the meeting. Section 4. Not less than one-third of the board shall constitute a quorum for the transaction of business at any meeting of the board, and at every meeting the presiding officer shall have the right to vote, but at any special meeting called by three directors not less than seven directors shall constitute a quorum. Section 5. The Board of Directors annually at the first meeting of the board held after the annual election of directors or at some adjourned meeting thereof by a majority vote of the directors present shall elect from their own number a Chairman of the Board and may elect from their own number a President and one or more Vice Chairmen, each to hold office for one year and until his successor is chosen, and may at any time fill any vacancy which may occur in said offices for the unexpired term. In the absence of the Chairman of the Board, the President, if he is a member of the Board of Directors, shall preside when present at all meetings of the board; in the absence of the Chairman of the Board and the President, the Board of Directors may choose from among their own number a Chairman or a President pro tem to preside at its meetings. Any two or more offices may be held by the same person, except the offices of President and Corporate Secretary. Section 6. By the same vote but at any time and from time to time the Board of Directors shall appoint a President (if not elected from there own number) and may appoint one or more Executive Vice Presidents, Senior Vice Presidents, a General Counsel, a Corporate Secretary, a Treasurer, an Auditor and such other officers under appropriate titles as the board may deem necessary for the proper conduct of the Company's business, to hold office during the pleasure of the chief executive officer. ARTICLE III. COMMITTEES. Section 1. The Board of Directors by resolution adopted by the affirmative vote of the directors holding a majority of the directorships shall annually appoint an Investment Committee and an Audit Committee, the members of which may be selected from the members of the Board of Directors or otherwise, and may from time to time appoint and prescribe the duties and authority of other committees. Appointments to any committee may be revoked and annulled and new appointments made by the board at any time in its discretion. The Board of Directors may appoint from among its members two directors as alternates to each such committee to serve in the order of their appointment and the chairman of any committee may appoint a director as an alternate to serve as a member of such committee in the absence or disqualification of any committee member and any alternate appointed by the Board of Directors. Section 2. The Investment Committee shall consist of not less than three members. It shall be the duty of the Investment Committee to authorize or approve each loan or investment transaction made by the Company and to review the investment policy and program of the Company. Section 3. Not less than two members of the Investment Committee shall constitute a quorum for the transaction of business at any meeting of the Committee, and at every meeting the presiding officer shall have the right to vote. Section 4. The Investment Committee may appoint from among the officers of the Company or an affiliated company a Management Investment Committee and assign to the Management Investment Committee, subject to such limitations as the Investment Committee may from time to time establish, the review and authorization of loans and investments of the Company. ARTICLE IV. OFFICERS. Section 1. The Chairman of the Board shall be the chief executive officer, charged with the management of the business, property and affairs of the Company under the direction of the Board of Directors. The Board of Directors may appoint as the chief executive officer the President or some other officer, provided that no such appointment shall become effective unless notice thereof is included in a notice of the meeting at which the change is made, or such appointment was considered at a meeting of the board at which a majority of the directors were present held at least twenty-four hours prior to the appointment. At his discretion, the chief executive officer may act as Chairman of any Committee of which he is a member. When present, the Chairman of the Board shall preside at all meetings of the board. He shall be a member ex officio of all committees, except the Audit Committee. The chief executive officer may at any time and from time to time appoint such other officers, not specified in or appointed by the Board of Directors pursuant to Section 6 of Article II, under appropriate titles as he may deem necessary for the proper conduct of the Company's business to hold office during his pleasure. The chief executive officer may at his discretion delegate such power of appointment to any of the officers designated in Sections 5 and 6 of Article II. Section 2. In the absence of the chief executive officer or his inability to act, the Board of Directors may designate the Chairman of the Board or the President or such other officer of the Company as it may select to perform the duties imposed upon the chief executive officer by these by-laws. Section 3. Each officer appointed by the Board of Directors shall be subject to the direction of and shall have such authority and perform such duties as may be assigned to him from time to time by the Board of Directors, the chief executive officer and his delegated officers. Each officer appointed pursuant to Section 1 of this Article IV shall be subject to the direction of and shall have such authority and perform such duties as may be assigned to him from time to time by the chief executive officer and his delegated officers. Section 4. The compensation of all officers, agents and employees of the Company may be fixed either by the Board of Directors, by a committee appointed by the board for that purpose or by the chief executive officer or other officer within the limits of authority conferred upon him by the board or by such committee. ARTICLE V. CORPORATE SEAL. The corporate seal shall hereafter, as heretofore, consist of the corporate name in a circle enclosing the word "seal." The Corporate Secretary shall be the keeper of the corporate seal with authority in him and in each Department Secretary or Assistant Corporate Secretary or Assistant Department Secretary to affix the same and attest it by his signature to all sealed instruments. ARTICLE VI. AMENDMENTS. These by-laws may be altered, repealed or amended and additional by-laws enacted at any annual or special meeting of the shareholders provided notice be given of the action proposed in the notice of such meeting, or by vote of a majority of the entire Board of Directors at a meeting of said board called for the purpose upon notice to each director of the action proposed to be taken in regard to said by-laws, provided, however, that Article I, Section 4(b), Article II, Section 4, and Article III, Section 3 of the by-laws shall not be amended except at a meeting of the shareholders. State of Connecticut, } } ss: Hartford, Conn.................19 County of Hartford. } The foregoing is a true copy of the by-laws of THE TRAVELERS LIFE AND ANNUITY COMPANY. Attest: ________________________________ Secretary. EXHIBIT 6(b). EX-9 6 March 15, 1995 The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 Gentlemen: With reference to the Registration Statement on Form N-4 filed by The Travelers Life and Annuity Company and The Travelers Fund BD II for Variable Annuities with the Securities and Exchange Commission covering Flexible Premium Variable Annuity contracts, I have examined such documents and such law as I have considered necessary and appropriate, and on the basis of such examination, it is my opinion that: 1. The Travelers Life and Annuity Company is duly organized and existing under the laws of the State of Connecticut and has been duly authorized to do business and to issue variable annuity contracts by the Insurance Commissioner of the State of Connecticut. 2. The Travelers Fund BD II for Variable Annuities is a duly authorized and validly existing separate account established pursuant to Section 38a-433 of the Connecticut General Statutes. 3. The variable annuity contracts covered by the above Registration Statement, and all pre- and post-effective amendments relating thereto, will be approved and authorized by the Insurance Commissioner of the State of Connecticut and when issued will be valid, legal and binding obligations of The Travelers Life and Annuity Company and The Travelers Fund BD II for Variable Annuities. I hereby consent to the filing of this opinion as an exhibit to the above-referenced Registration Statement and to the reference to this opinion under the caption "Legal Proceedings and Opinion" in the Prospectus constituting a part of the Registration Statement. _______/s/ Ernest J. Wright______________ Ernest J. Wright General Counsel Life and Annuities Division The Travelers Life and Annuity Company EX-14 7 EXHIBIT 14 REPRESENTATION CONCERNING RELIANCE UPON NO-ACTION LETTER IP-6-88 In connection with the solicitation and sale of variable annuity contracts to participants of plans qualified under Section 403(b) of the Internal Revenue Code, the Registrant hereby represents, in reliance upon No-Action Letter IP-6-88, that it has: (1) included appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in each registration statement, including the prospectus, used in connection with the offer of the contract; (2) included appropriate disclosure regarding the redemption restrictions imposed by Section 403(b)(11) in any sales literature used in connection with the offer of the contract; (3) instructed sales representatives who solicit participants to purchase the contract specifically to bring the redemption restrictions imposed by Section 403(b)(11) to the attention of the potential participants; and (4) obtained from each plan participant who purchases a Section 403(b) annuity contact, prior to or at the time of such purchase, a signed statement acknowledging the participant's understanding of (i) the restrictions on redemption imposed by Section 403(b)(11), and (ii) the investment alternatives available under the employer's Section 403(b) arrangement, to which the participant may elect to transfer his or her contract value. By: _____ /s/Robert C. Hamilton_______ Name: Robert C. Hamilton Title: Second Vice President Date: March 15, 1995 EX-15 8 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, Charles O. Prince of Weston, Connecticut, director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 27th day of February, 1995. /s/Charles O. Prince, III Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, Robert I. Lipp of Scarsdale, New York, director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 24th day of February, 1995. /s/Robert I. Lipp Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, Marc P. Weill of New York, New York, director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company, and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 24th day of February, 1995. /s/Marc P. Weill Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, James F. Calvano of Norwood, New Jersey, director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company, and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 28th day of February, 1995. /s/James F. Calvano Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, Irwin R. Ettinger of Stamford, Connecticut, director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company, and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 28th day of February, 1995. /s/Irwin R. Ettinger Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, Michael A. Carpenter of Greenwich, Connecticut, a director of The Travelers Life and Annuity Company (hereafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company, and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 7th day of March, 1995. /s/Michael A. Carpenter Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I, James L. Morgan of Simsbury, Connecticut, Senior Vice President and Chief Accounting Officer of The Travelers Life and Annuity Company (hereinafter the "Company"), do hereby make, constitute and appoint Jay S. Fishman, Director and Chief Financial Officer of said Company and Ernest J. Wright, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. In Witness Whereof, I have hereunto set my hand this 24th day of February, 1995. /s/James L. Morgan Senior Vice President and Chief Accounting Officer The Travelers Life and Annuity Company -----END PRIVACY-ENHANCED MESSAGE-----