1
EXHIBIT 4(a)
[THE EQUITY ANNUITY LIFE INSURANCE COMPANY LOGO]
IN CONSIDERATION of the application for this Contract made by
WASHINGTON EDUCATION ASSOCIATION
(herein called the Contract Holder)
a copy of which application is attached hereto and made a part hereof, and of
the payment of Contributions as provided herein, Equity Annuity Life Insurance
Company of the District of Columbia, herein called EALIC, agrees to pay, in
accordance with and subject to the terms and conditions of this Contract, the
Retirement Annuity and other benefits herein set forth with respect to each
Participant.
The Effective Date of this Contract is January 1, 1966, which is the date of
issue hereof.
This Contract is issued and accepted subject to all of the terms set forth on
the subsequent pages hereof which are a part of this Contract.
IN WITNESS WHEREOF, Equity Annuity Life Insurance Company of the District of
Columbia has caused this Contract to be signed by its President and Secretary,
this 1st day of January, 1966.
/s/ XXX X. XXXXXXXX /s/ XXX X. XXXXXXX
Secretary President
Group Tax Sheltered Variable Annuity Contract No. GTS-VA-1
ALL VARIABLE ANNUITY VALUES PROVIDED FOR
HEREIN ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT
2
TABLE OF CONTENTS
Section Page
------- ----
Article I - DEFINITIONS OF CERTAIN TERMS 2
Article II - RETIREMENT ANNUITY PROVISIONS 4
1 Notice to Effect an Annuity 4
2 Optional Variable Annuity Settlements 4
Options 1, 2, 3 and 4 4
Options 5, 6 and 7 5
TABLES
5 Description of Tables 5
4 Options 1. 2 and 3 7
Frequency of Payments 8
Article III - CONTRIBUTIONS VALUATION, AND
DISCONTINUANCE 9
1 Contributions 9
2 Application of Contributions 9
3 Transferred Contributions 9
4 Participant's Individual Account, Inactive
Participants 10
5 Valuation Provisions 10
6 Accumulation and Annuity Unit Value 10
7 Experience Rating 11
8 Suspension 11
9 Change to Paid-Up Contract 11
Article IV - GENERAL PROVISIONS 12
1 Changes of Contract By EALIC 12
2 Change of Contract By Mutual Agreement
Retroactive Changes 12
3 Contract 12
4 Individual Certificates 13
5 Designation of Beneficiary 13
6 Facility of Payment 13
7 Evidence of Survival 14
8 Misstatement of Age or Sex 14
9 Assignments 14
10 Basis of Reserves 14
11 Termination of Contract 14
12 Data to be Furnished to EALIC 14
13 Relation of This Contract to EALIC'S Assets 15
Page (1)
3
Section Page
------- ----
Article V - The Plan
1 Plan Description 16
2 Eligibility 16
3 Annuity Commencement Date 16
4 Annuity Benefits, Election of Optional
Annuities 16
5 Transfer at Retirement Option 16
6 Death Benefit 17
7 Withdrawal Benefits 17
8 Termination Benefits 18
9 Contributions by Contract Holder or
Participating Employer 18
10 Rates of Contribution 18
11 Vesting 18
12 Voting Rights 19
13 Service of Process 19
Table of Contents (Continued)
4
ARTICLE I - DEFINITIONS
OF
CERTAIN TERMS
1. CONTRACT DATE - The Effective Date of this Contract.
2. CONTRACT ANNIVERSARY - any anniversary of the Effective Date of this
Contract.
3. CONTRACT YEAR - the period commencing with either the Effective Date
hereof or any Contract Anniversary, and ending immediately prior to the
next Contract Anniversary.
4. RETIREMENT ANNUITY PAYMENTS - a series of variable dollar payments
purchased under this Contract for a Participant by application of the
dollar value of the accumulation units in his individual account.
5. RETIREMENT DATE - the Retirement Date of a Participant will be his
Annuity Commencement Date, as defined in Section III of Article V.
6. PLAN - the retirement plan described or defined in Article V.
7. PARTICIPATING EMPLOYER - a public school organization which has
elected to join the Voluntary Retirement Annuity Plan.
8. PARTICIPANT - an eligible employee, as defined in Article II of Section
V, who participates in the Plan.
9. ANNUITANT.- a Participant who is receiving Retirement Annuity payments
hereunder.
10. INACTIVE PARTICIPANT - a Participant whose contributions have ceased
before his Annuity Commencement Date but who has not elected to receive
the Accumulated Value of his individual account.
11. PARTICIPANT'S INDIVIDUAL ACCOUNT - the sum of the accumulation units
credited to a Participant.
12. ANNUITY COMMENCEMENT DATE - the date on which Retirement Annuity
payments commence.
Page (2)
5
13. VALUATION PERIOD - Valuation Period is defined herein as the period of
not more than seven (7) calendar days from the immediately preceding
valuation date and the valuation date next succeeding. The valuation
date is defined as the date at which the value of accumulation units is
calculated.
14. ACCUMULATED VALUE - The aggregate value of all accumulation units
purchased for a Participant. Such Accumulated Value is determined each
Valuation Period.
Page (3)
6
Article II RETIREMENT ANNUITY PROVISIONS
Section 1. NOTICE TO EFFECT AN ANNUITY
When a Participant is eligible for Retirement Annuity payments in accordance
with the Plan, the Contract Holder shall notify EALIC to effect an annuity for
such Participant, and on the date such annuity is to commence, EALIC shall
allocate all accumulation units in the Participant's Individual Account and
apply them to provide a Retirement Annuity on any one of the Optional Annuity
Forms. In the absence of written notice of election by the Participant in
accordance with the Plan, and given to EALIC at least 30 days prior to the date
annuity payments are to commence, the Retirement Annuity will be a Life Annuity
with 120 Monthly Payments Guaranteed as described in Option 2 of Section 2.
Section 2. OPTIONAL VARIABLE ANNUITY SETTLEMENTS
Option I - Life Annuity - An annuity payable monthly during the lifetime of an
Annuitant, ceasing with the last payment due prior to the death of the
Annuitant.
Option 2 - Life Annuity with 60, 120 or 180 Monthly Payments Guaranteed - An
annuity payable monthly during the lifetime of an Annuitant, with a guarantee
that if, at the death of the Annuitant, payments have been made for less than
60, 120 or 180 months as selected, annuity payments will be continued
thereafter to a beneficiary designated by the Participant during the remainder
of said period. If a beneficiary dies while receiving annuity payments, the
then present value of the current dollar amount of the remaining guaranteed
number of annuity payments, commuted on the basis of 3 1/2% interest compounded
annually, shall be paid in a lump sum to the estate of the beneficiary.
Option 3 - Unit Refund Life Annuity - An annuity payable monthly during the
lifetime of the Annuitant, ceasing with the last payment due prior to the death
of the Annuitant, provided that, at the death of the payee, the beneficiary
will receive an additional payment of the excess, if any, of (a) over (b) where
(a) is the total amount applied under the option and (b) is the amount of the
first monthly payment multiplied by the number of payments made.
Option 4 - Joint and Last Survivor Annuity - An annuity payable monthly during
the joint lifetime of the Annuitant and a designated joint annuitant and
thereafter during the remaining lifetime of the survivor.
Page (4)
7
Option 5 - Installments of a Designated Amount - An annuity payable in equal
annual, semiannual, quarterly, or monthly installments of a designated
dollar amount (not less than $75.00 per annum for each $1,000 of original
amount of contract proceeds left with EALIC) until such time as the balance of
the original amount of the proceeds is exhausted, where the balance at the end
of any period is defined as the balance at the end of the previous period,
reduced by the periodic payment and multiplied by the net investment factor for
such period. In general, the last payment that will exhaust the proceeds will
be for an amount less than the designated amount. In event of death of
Annuitant prior to the time such balance of proceeds is exhausted, the
beneficiary will receive the installments that would have been received by the
Annuitant, unless the beneficiary elects to receive the remaining balance in
one lump sum.
Option 6 - Net Investment Income - The amount of contract proceeds may be left
with EALIC for a designated period, not to exceed thirty years, and an amount
will be paid annually, semiannually, quarterly, or monthly, as selected, which
will be equal to the net investment rate for the period of such payment,
determined in accordance with the Valuation Provisions, applied to the amount
of the remaining balance of contract proceeds. If the net investment rate is
negative, no such payment will be made and the amount of the remaining balance
of contract proceeds will be reduced by the product of such balance and such
negative rate. If at any time the amount of remaining balance of contract
proceeds is reduced to $1,000 or less, such amount shall then be paid in one
lump sum.
At the end of the designated period, the amount of remaining balance of
contract proceeds will be paid in one lump sum. If the death of the payee
occurs prior to the end of the designated period, the amount of remaining
balance of contract proceeds will be paid in one lump sum to the designated
beneficiary of the payee.
Option 7 - Installments for a Designated Period - An annuity payable monthly
for the number of years selected by the Annuitant, which shall be from one to
thirty years.
The first payment under any of these options will be determined in accordance
with Section 4 of this Article. No payments will be made under options 1, 2, 3
and 4 prior to the receipt by EALIC of satisfactory evidence of the date of
birth of the Annuitant and any joint annuitant.
TABLES
Section 3. DESCRIPTION OF TABLES
The Tables contained herein show the dollar value of accumulation units
required to purchase a first monthly payment of $1.00, and the accumulation
units applied to effect an annuity for an Annuitant will be at the
Page (5)
8
accumulation unit value as of the last day of the second Valuation Period
immediately preceding the date annuity payments commence. Amounts shown in the
Tables are based on the a2-1949 Annuity Table with interest at the rate of 3%
per annum. The amount of each payment will depend upon the sex of the Annuitant
and the Annuitant's age nearest birthday at the time the first payment is due.
The amount of the FIRST monthly Variable Annuity payment shall be divided by
the value, as of the date of the FIRST monthly Variable Annuity payment, of an
annuity unit to determine the number of annuity units on which subsequent
payments are based. The amount of each monthly Variable Annuity payment after
the FIRST shall be equal to such number of annuity units multiplied by the
value of an annuity unit as of the date each annuity payment becomes due.
Page (6)
9
DOLLAR VALUE OF ACCUMULATION UNITS
REQUIRED TO PURCHASE AN ANNUITY WITH
A FIRST MONTHLY PAYMENT OF $1.00
Options 1, 2, and 3 - Single Life Annuities
Age Straight Monthly Payments Guaranteed Unit Refund
Male Female Life 60 120 180 Life Annuity
---- ------ -------- ------- -------- ---------- -----------
50 54 $208.98 $209.95 $213.14 $218.73 $224.52
51 55 204.43 205.51 208.98 215.01 220.63
52 56 199.86 201.05 204.82 211.32 216.70
53 57 195.27 196.57 200.65 207.65 212.76
54 58 190.67 192.09 196.49 204.02 208.79
55 59 186.05 187.59 192.34 200.42 204.76
56 60 181.41 183.08 188.19 196.87 200.73
57 61 176.75 178.55 184.05 193.37 196.67
58 62 172.07 174.01 179.93 189.93 192.54
59 63 167.37 169.46 175.82 186.56 188.43
60 64 162.64 164.89 171.74 183.26 184.27
61 65 157.88 160.30 167.68 180.04 180.06
62 66 153.10 155.71 163.66 176.93 175.87
63 67 148.30 151.12 159.69 173.92 171.63
64 68 143.48 146.53 155.78 171.03 167.35
65 69 139.66 141.96 151.94 168.27 163.10
66 70 133.84 137.42 148.19 165.66 158.81
67 71 129.02 132.91 144.53 163.20 154.50
68 72 124.23 128.44 140.98 160.90 150.23
69 73 119.46 124.03 137.55 158.77 145.90
70 74 114.72 119.69 134.26 156.82 141.62
71 75 110.02 115.42 131.11 155.04 137.35
72 76 105.36 111.24 128.12 153.45 133.04
73 77 100.77 107.16 125.30 152.03 128.82
74 78 96.24 103.18 122.65 150.79 124.60
75 79 91.78 99.33 120.19 149.72 120.34
The settlement option figures provided by Options 4, 5, 6, and 7, as described
in Article II, Section 2 of this Contract will be determined on the same
actuarial basis as Options 1, 2, and 3 and will be furnished individually upon
request by the Participant.
Page (7)
10
Section 4. FREQUENCY OF PAYMENTS
Annuity payments under this Contract will be made monthly, except that if such
payments would amount to less than $10 each, EALIC reserves the right to make
payment at less frequent intervals; provided however, that if at any time the
annual rate of payment to any payee is less than $120, EALIC may make such
other settlement as may be equitable to the Annuitant.
Page (8)
11
ARTICLE III - CONTRIBUTIONS, VALUATION,
AND DISCONTINUANCE
Section 1. CONTRIBUTIONS
Each Contract Year EALIC shall receive such Contributions from the
Participating Employers as are made in accordance with the requirements of the
Plan. Such Contributions will be applied by EALIC to provide accumulation units
for each Participant in accordance with section 2 of this Article and
instructions of the Contract Holder.
Section.2. APPLICATION OF CONTRIBUTIONS
The Net Contribution shall be equal to 94% of the total Contribution. The exact
per cent of any premium tax which may be levied against such Contributions will
be added to the annuity rates when such benefits are purchased. The Net
Contributions shall be applied as of the last day of the Valuation Period in
which payment is received by EALIC, to provide accumulation units on the basis
of the then current value of such Units.
The number of accumulation units credited to a Participant's Individual
Account, by any such application shall be determined by dividing the Net
Contribution applicable to the Participant by the current dollar value of one
accumulation unit. The number of accumulation units so determined will not be
affected by any subsequent changes in the dollar value of accumulation units.
Section 3. TRANSFERRED CONTRIBUTIONS
If any person who is covered under another Contract issued to the Contract
Holder, which provides benefits in accordance with Section 403 (b) of the
Internal Revenue Code of 1954, elects to have funds transferred from that
Contract to EALIC:
(a) such person shall be deemed to be a Participant under this Contract as
of the date of transfer if he is not already a Participant,
(b) the funds so transferred shall be deemed Contributions when received by
EALIC, and
(c) such person's Annuity Commencement Date for the funds transferred
shall be the first of the month immediately following the date of
transfer.
Page (9)
12
Section 4. PARTICIPANT'S INDIVIDUAL ACCOUNT, INACTIVE PARTICIPANTS
A Participant's Individual Account under this Contract shall, at any time,
consist of a number of accumulation units equal to the number provided by the
application of the Net Contributions described in Section 2 of this Article in
accordance with the Plan, plus any additional accumulation units created in
accordance with Section 7 of this Article, and less any accumulation units
withdrawn in accordance with Section 7 of Article 5.
As of the day a Participant becomes an Inactive Participant, the number of
accumulation units to be continued in his Individual Account shall be
determined in accordance with instructions from the Contract Holder, and such
number will remain constant, except for any additional accumulation units
credited in accordance with Section 7 of this Article, until an annuity is
purchased for such Inactive Participant on his Annuity Commencement Date.
Section 5. VALUATION PROVISIONS
(a) Adjusted Gross Investment Rate: The Adjusted Gross Investment Rate for
any Valuation Period is equal to the investment income for the
Valuation Period, plus realized and unrealized capital gains or losses
for the Valuation Period divided by the investable assets at the
beginning of the Valuation Period.
(b) Net Investment Rate: The Net Investment Rate for any Valuation Period
shall be equal to the Adjusted Gross Investment Rate of such Valuation
Period decreased by.000833 monthly. Such monthly decrease is determined
each year by the Board of Directors of EALIC and shall not exceed .0015
monthly.
(c) Net Investment Factor: The Net Investment Factor is the sum of 1.000000
plus the Net Investment Rate.
Section 6. ACCUMULATION AND ANNUITY UNIT VALUE
The dollar value of an accumulation unit as of October 22, 1965, was
$1.908589. The dollar value of an accumulation unit as of the last day of
any Valuation Period thereafter shall be determined by multiplying the dollar
value of an accumulation unit as of the last day of the immediately preceding
Valuation Period by the Net Investment Factor for the Valuation Period for
which the Accumulation Unit Value is being determined. The dollar value of an
accumulation unit as of any other date thereafter is equal to the corresponding
value as of the last day of the Valuation Period immediately preceding the
Valuation Period in which such date occurs.
Page (10)
13
The value of an annuity unit on November 5, 1965 was fixed at $1.000000. The
value of an annuity unit for a Valuation Period thereafter shall be determined
by multiplying the value of an annuity unit for the preceding Valuation Period
by the product of (a).999443, and (b) the Net Investment Factor for the second
Valuation Period preceding the Valuation Period for which the value of an
annuity unit is being calculated.
Section 7. EXPERIENCE RATING
This Contract is subject to experience rating by EALIC (by action of its
Directors). The amount of any experience credit applicable to this Contract at
the end of any Contract Year, if any, as determined by EALIC shall be applied
on the Contract Anniversary to increase the Individual Accounts of the
Participants.
Section 8. SUSPENSION
This Contract shall be suspended automatically on a Contract Anniversary if
the Contract Holder fails to assent to any modification of this Contract
initiated by XXXXX as provided in Section 1 of Article IV; which modification
would have been effective on that Contract Anniversary.
Effective with such suspension, no new Participants may enter the Plan but
further Contributions will be accepted by EALIC under the Contract as they are
applicable to Participants in the Plan prior to such suspension.
Section 9. CHANGE TO PAID-UP CONTRACT
This Contract shall become paid-up automatically on a Contract Anniversary
if:
(a) During the Contract Year Immediately-preceding such anniversary, the
Contract Holder shall have failed to remit to EALIC contributions as
provided in the Plan.
(b) EALIC has given written notice to the Contract Holder of such suspension
because the total of Active Participants at any time is less than 25.
Effective with such change to a paid-up Contract, no further
Contributions of any kind shall be accepted by EALIC, and each
Participant remaining in the Plan shall be considered an Inactive
Participant until his Annuity Commencement Date.
Page (11)
14
ARTICLE IV - GENERAL PROVISIONS
Section 1. CHANGES OF CONTRACT BY XXXXX
On the first anniversary of the Effective Date and the first day of any
Contract Year thereafter, EALIC upon written notice given 90 days in advance
to, the Contract Holder, may, from time to time, change any or all of the
terms of this Contract, provided that (a) any such change will not affect in
any way the amount or terms of any Retirement Annuity purchased prior to the
Effective Date of such change and (b) any such change shall not affect Section
4 of Article II or Sections 5, 6, 7 and 8 of Article III as they apply to
accumulation unit purchases by Contributions made on behalf of Participants
who were in the Plan prior to the Effective Date of such change, to the extent
that such Contributions in any year are not in excess of twice the first annual
Contribution made on behalf of such Participant.
Section 2. CHANGE OF CONTRACT BY MUTUAL AGREEMENT -- RETROACTIVE CHANGES
(a) By agreement in writing, the Contract Holder and EALIC may change, from
time to time, any or all of the terms of this Contract provided that
any such change will not in any way affect the amount or terms of any
Retirement Annuity already purchased prior to the Effective Date of
such change.
(b) Notwithstanding any of the terms of this Contract, the Contract Holder
and EALIC, by an agreement in writing on any date agreed upon by the
Contract Holder and EALIC may change, from time to time, any or all
terms of this Contract if it is deemed advisable to do so in order to
conform the Contract to requirements of Section 403(b) of the Federal
Internal Revenue Code or such section or sections as may from time
to time revise or replace said Section 403(b).
(c) Consent of any Participant, Beneficiary, or Participating Employer
shall not be requisite to any change in this Contract.
Section 3. CONTRACT
This Contract and the application of the Contract Holder, a copy of which is
attached hereto and made a part hereof, will constitute the entire Contract.
All statements made by the Contract Holder will be deemed representations and
not warranties, and no statement will void any payment under this Contract or
be used in defense of a claim unless it is contained in the application of the
Contract Holder. Only the President, a Vice President, and Secretary or an
Assistant Secretary has power on behalf of EALIC to make or modify this
Contract.
Page (12)
15
Section 4. INDIVIDUAL CERTIFICATES
EALIC shall issue a Certificate to the Contract Holder for delivery to each
Participant. Each such Certificate shall set forth in substance the benefits to
which such Participant is entitled under this Contract. Certificates described
in this section shall not constitute a part of this Contract.
Section 5. DESIGNATION OF BENEFICIARY
Each Participant shall have a sole right to designate the beneficiary to which
any death benefit hereunder will be payable and, from time to time, without the
consent of such beneficiary, change the beneficiary designated by filing
written notice of such change with FALIC on a written form satisfactory to
EALIC. After such notice is so filed the change will relate back to and take
effect as of the date the Participant signed such written notice, whether or
not the Participant is living on the date such notice is received by EALIC, but
without prejudice to EALIC on account of any payment made by it before such
notice is received. If at the death of a Participant there is more than one
beneficiary designated and in such designation the Participant has failed to
specify their respective interests, the beneficiaries will share equally. If
any designated beneficiary predeceases the Participant, the rights and
interests of such beneficiary will thereupon terminate.
In the event the designated beneficiary predeceases the Participant or if
no beneficiary has been named, the mount of any death benefit will be paid to
the executors or administrators of the Participant's estate except that EALIC
may in such case, at its option, pay such amount to the wife or the husband, if
living; if not living, in equal shares to the then living children of the
Participant; if none, to either parent of the Participant, or to both equally,
if both are living; if neither parent is living, equal shares to the then
living brothers and sisters of such Participant.
Section 6. FACILITY OF PAYMENT
If any payee under this Contract is, in the opinion of XXXXX, physically or
mentally incapable of giving valid receipt and discharge for any payment due
under this Contract, then EALIC may, at its option, make payment thereof in
installments of not more than $50 per month to the person or persons who, in
its opinion, are caring for and supporting such payee until claim is made by a
duly appointed guardian or other legal representative of such payee. Payment to
such person or persons will constitute a complete discharge of the liability of
EALIC to the extent of such payments and it will assume no responsibility
for proper application of the money paid.
Page (13)
16
Section 7. EVIDENCE OF SURVIVAL
XXXXX will have the right to require of any person entitled to a payment under
this Contract, satisfactory evidence that he is living on each and every date
when such payment is due.
Section 8. MISSTATEMENT OF AGE OR SEX
If the age or sex of any payee his been misstated, the correct amount paid or
payable by EALIC shall be such as the contribution would have provided for the
correct age or sex. For Variable Annuity payments subsequent to such a
correction of age or sex, the number of annuity units will be corrected and the
dollar amount of payments will be adjusted for any underpayments or
overpayments previously made.
Any adjustment made in accordance with this section shall be conclusive upon
any person affected thereby.
Section 9. ASSIGNMENT
Except insofar as may be contrary to any applicable laws, all payments under
this Contract of benefits arising under the Plan are not assignable or subject
to any claims of any creditor.
Section 10. BASIS OF RESERVES
Reserves held under this Contract will be at least equal to 100% of the dollar
value of accumulation units purchased under the provisions of this contract,
plus the reserve for such Retirement Annuities as have been purchased under
this Contract.
Section 11. TERMINATION OF CONTRACT
This Contract will terminate at the close of the first day upon which the
performance and fulfillment by EALIC of all its duties and obligations arising
hereunder have been completed.
Section 12. DATA TO BE FURNISHED TO EALIC
The Contract Holder shall furnish all information which EALIC may reasonably
require for the administration of this Contract. If the Contract Holder cannot
furnish any required item of information, EALIC may request the person
concerned to furnish such information. EALIC shall not be liable for the
fulfillment of any obligations in any way dependent on such information until
it received such information recorded thereon.
Page (14)
17
Section 13. RELATION OF THIS CONTRACT TO XXXXX'S ASSETS
EALIC shall have exclusive and absolute ownership and control of its assets.
Neither the Contract Holder nor any Participant shall have any individual or
equitable ownership of any investments or other assets and the records and
accounts kept by EALIC in connection with this Contract shall not be deemed to
constitute any recognition of any ownership by the Contract Holder or any
Participant of any portion of EALIC'S Assets.
The method of determination by EALIC of the value of an accumulation or annuity
unit will be conclusive upon the Contract Holder and any Participant.
Page (15)
18
ARTICLE V - THE PLAN
Section 1. PLAN DESCRIPTION
The Plan shall mean the Voluntary Retirement Annuity Plan for employees of
public school organizations located in the state of Washington, which
organizations have become Participating Employers under the Plan by so electing
to join.
Section 2. ELIGIBILITY
All full-time employees of any public school organization located in the state
of Washington are eligible to become Participants in the plan after their
employer has joined the plan.
Section 3. ANNUITY COMMENCEMENT DATE
The date elected by the Participant for the commencement of annuity payments.
Such date may be the first day of any calendar month following the
Participant's 50th birthday but may not be later than the Participant's 75th
birthday.
Section 4. ANNUITY BENEFITS, ELECTION OF OPTIONAL ANNUITIES
The Retirement Annuity payments commencing on the Annuity Commencement Date
will be determined as set forth in Article II. A Participant may elect to have
his payments made under any of the Optional Annuity Settlements provided such
election is received by XXXXX at least 30 days prior to his Annuity Commencement
Date.
Section 5. TRANSFER AT RETIREMENT OPTION
A Participant may, by filing written request with EALIC at its Home Office on a
form furnished by XXXXX, elect to transfer a portion of his Accumulated Value as
determined by Article III, Section 4 of the Contract, as of the day immediately
preceding his Annuity Commencement Date. Such request must be filed more than 30
days before the Participant's Annuity Commencement Date. Such transfer shall be
made to any other insurance company which is approved by EALIC and which has
issued a group annuity contract to the Contract Holder, and shall be applied to
provide benefits in accordance with Section 403(b) of the Internal Revenue Code
of 1954 under the other company's group contract.
Page (16)
19
The amount so transferred shall be paid in cash to such insurance company and
shall, by the amount so transferred, be in lieu of the benefits otherwise
provided under this Contract as to such Participant, his beneficiary, and his
contingent annuitant.
Section 6. DEATH BENEFIT
In the event of the death of a Participant prior to his Annuity Commencement
Date, the beneficiary will receive a Death Benefit determined as of the end of
the Valuation Period in which notice of death is received at the Home Office of
EALIC. The Death Benefit will be equal to (a) or (b) below:
(a) A lump sum equal to the Accumulated Value of the Participant's
Individual Account determined as of the end of the Valuation Period in
which notice of death is received at the Home Office of EALIC.
(b) That Accumulated Value of the Participant's Individual Account
determined as of the and of the Valuation Period in which notice of
death is received at the Home Office of EALIC, applied under one of the
Optional Variable Annuity Settlements, in the event the Participant has
filed a written election (delivered to EALIC and approved by it at its
Home Office together with delivery to EALIC of his Certificate). If no
such election is in force at the time of his death such election may be
made by, but only for the benefit of, such beneficiary.
If the death of a Participant occurs on or after his Annuity Commencement Date
there shall be no Death Benefit payable, other than the Death Benefit, if any,
as may be payable under one of the Optional Variable Annuity Settlements,
previously elected.
Section 7. WITHDRAWAL BENEFITS
A Participant may elect to withdraw a portion of his Accumulated Value prior to
his Annuity Commencement Date by filing a written request with EALIC at its
Home Office an a form furnished by XXXXX. The amount of such withdrawal shall
not be less than $3,000 or the Participant's entire Accumulated Value,
whichever is smaller. Such withdrawal shall be paid in cash and shall, by the
amounts withdrawn, be in lieu of the benefits otherwise provided under this
Contract as to such Participant, his beneficiary, and his contingent annuitant.
Page (17)
20
If an Active Participant makes such a request more than twice, he will cease to
be an Active Participant under this Contract. Such an employee will cease to be
eligible to become an Active Participant under this Contract and no further
contributions shall be made on his behalf, except as provided in Section 3 of
Article III.
Section 8. TERMINATION BENEFITS
Upon termination of participation in the Plan, the Participant may elect to:
(a) Have the Accumulated Value of his Individual Account applied to provide
Retirement Annuity payments under one of the annuity forms described in
Article II, if he is at least 50 years of age;
(b) Leave the Accumulated Value of this Individual Account in the Contract,
in which case the number of accumulation units in his Individual
Account will remain fixed except as provided in Section 7, of Article
III.
(c) Receive the Accumulated Value of his Individual Account on the basis of
the Accumulation Unit Value determined as of the last day of the
Valuation Period in which surrender was received.
Section 9. CONTRIBUTIONS BY CONTRACT HOLDER OR PARTICIPATING EMPLOYER
Once each month the Participating Employer will remit to EALIC all
Contributions required on behalf of the Participants for that month in
accordance with the individual agreements between the Contract Holder, the
Participating Employer and the Individual Participant.
Section 10. RATES OF CONTRIBUTION
The Rate of Contribution shall be specified for each Participant by the
Participating Employer and shall not be less than $10.00 per month. The
Participating Employer may elect to modify his Rate of Contribution with
respect to any Participant on any Contract Anniversary, and if Contributions on
behalf of a given Participant are suspended and the Individual Account is not
withdrawn, Contributions may be resumed on any Contract Anniversary following
one full year of suspended Contributions.
Section 11. VESTING
Each Participant will at all times have a 100% vested and non-forfeitable
interest in his Individual Account. It is understood that in all cases
Page (18)
21
where the Contract calls for EALIC to act upon the instructions of the Contract
Holder, such instructions shall come from the Contract Holder acting on behalf
of and in accordance with the request of the Participant.
Section 12. VOTING RIGHTS
The Contract Holder is entitled to one (1) vote at meetings of XXXXX's
stockholders so long as it is the Contract Holder on the date to the
determination of the vote is made and the date of issuance of written
notification of the right to vote.
Section 13. SERVICE OF PROCESS
XXXXX agrees to appear in any action at law or suit in equity against EALIC
upon this Contract in any court of competent jurisdiction in the United States,
Puerto Rico, Canal Zone, or Canada 30 days after receipt, at EALIC's Home
Office of a copy of process in such action or suit, sent by registered mail,
provided the plaintiff is bona fide resident of the state, district, territory
or province in which such action or suit is brought. Except for its effect in
conferring jurisdiction on the local court, nothing in such appearance shall be
construed to waive any rights of EALIC, including the right, if it exists, to
remove such action or suit from any such court to a United States District
Court.
Page (19)
