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Registration No. 333-08877
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 13 ON FORM S-3 TO
FORM S-1 ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
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ANCHOR NATIONAL LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
California 6311 86-0198983
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification Number)
incorporation or Number) organization)
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Address, including zip code, and telephone number,
including area code, or registrant's
principal executive offices)
Christine A. Nixon, Esquire
Anchor National Life Insurance Company
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Name, address, including zip code, and telephone number,
including area code of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon
after the effective date of this Registration Statement as is practicable.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________
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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 become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Registrant is filing this Post-Effective Amendment No. 13 on Forms S-3 to Form
S-1 on Form S-3 under the Securities Act of 1933 (the "1933 Act"), for the sole
purpose of adding to the Registration Statement and Statement of Additional
Information certain other mutual fund for sale through its Seasons
Select(II) contract. Registrant does not intend for this Post Effective
Amendment No. 12 to delete from the Registration Statement, any document
included in the Registration Statement, including any currently effective
Prospectus, supplement thereto, or Statement of Additional Information.
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(Seasons Select II LOGO)
PROSPECTUS
October 1, 2001
ALLOCATED FIXED AND VARIABLE GROUP ANNUITY
issued by
VARIABLE ANNUITY ACCOUNT FIVE
and
ANCHOR NATIONAL LIFE INSURANCE COMPANY
The annuity contract has 24 investment choices - 7 fixed investment options (5
fixed investment options if the Seasons Rewards Program is elected) which offer
interest rates guaranteed by Anchor National for different periods of time, 9
variable investment SELECT PORTFOLIOS, 4 variable investment FOCUSED PORTFOLIOS
and 4 variable investment SEASONS STRATEGIES:
<Table>
<Caption>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS SEASONS STRATEGIES
LARGE CAP GROWTH FOCUS GROWTH GROWTH
LARGE CAP COMPOSITE FOCUS GROWTH AND INCOME MODERATE GROWTH
LARGE CAP VALUE FOCUS VALUE BALANCED GROWTH
MID CAP GROWTH FOCUS TECHNET CONSERVATIVE GROWTH
MID CAP VALUE
SMALL CAP
INTERNATIONAL EQUITY
DIVERSIFIED FIXED INCOME
CASH MANAGEMENT
</Table>
all of which invest in the underlying portfolios of
SEASONS SERIES TRUST
which is managed by:
<Table>
<Caption>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS SEASONS STRATEGIES
DEUTSCHE ASSET MANAGEMENT AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. PUTNAM INVESTMENT MANAGEMENT, INC.
GOLDMAN SACHS ASSET MANAGEMENT DRESDNER RCM GLOBAL FUNDS T. ROWE PRICE ASSOCIATES, INC.
JANUS CAPITAL CORPORATION FRED ALGER MANAGEMENT JANUS CAPITAL CORPORATION
LORD, ABBETT & COMPANY HARRIS ASSOCIATES L.P. SUNAMERICA ASSET MANAGEMENT CORPORATION
CORPORATION JENNISON ASSOCIATES WELLINGTON MANAGEMENT COMPANY, LLP
SUNAMERICA ASSET MANAGEMENT MARSICO CAPITAL MANAGEMENT LLC
CORPORATION SUNAMERICA ASSET MANAGEMENT CORPORATION
T. ROWE PRICE ASSOCIATES, INC. THIRD AVENUE FUNDS
GOLDMAN SACHS ASSET MANAGEMENT/ THORNBERG INVESTMENT MANAGEMENT
GOLDMAN SACHS ASSET MANAGEMENT VANWAGONER CAPITAL MANAGEMENT
INT'L
WELLINGTON MANAGEMENT COMPANY,
LLP
</Table>
You can put your money into any one or all of the SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS, SEASONS STRATEGIES and/or fixed investment options.
Please read this prospectus carefully before investing and keep it for your
future reference. It contains important information you should know about the
Seasons Select(II) Variable Annuity. This variable annuity provides an optional
bonus feature called "Seasons Rewards." If you elect this feature, in exchange
for bonuses credited to your contract, your surrender charge schedule will be
longer and greater than if you chose not to elect this feature. These withdrawal
charges may offset the value of any bonus, if you make an early withdrawal.
To learn more about the annuity offered by this prospectus, you can obtain a
copy of the Statement of Additional Information ("SAI") dated October 1, 2001.
The SAI has been filed with the Securities and Exchange Commission ("SEC") and
can be considered part of this prospectus.
The table of contents of the SAI appears on page 42 of this prospectus. For a
free copy of the SAI, call us at 800/445-SUN2 or write our Annuity Service
Center at, P.O. Box 54299, Los Angeles, California 90054-0299.
A registration statement has been filed with the SEC under the Securities Act of
1933 relating to the contract. This prospectus does not contain all the
information in the registration statement as permitted by SEC regulations. The
omitted information can be obtained from the SEC's principal office in
Washington, D.C., upon payment of a prescribed fee.
In addition, the SEC maintains a website (http://www.sec.gov) that contains the
SAI, materials incorporated by reference and other information filed
electronically with the SEC.
ANNUITIES INVOLVE RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL, AND ARE NOT A
DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY BANK. THEY ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Anchor National's Annual Report on Form 10-K for the year ended December 31,
2000, and its quarterly report on Form 10-Q for the quarter ended March 31, and
June 30, 2001 are incorporated herein by reference.
All documents or reports filed by Anchor National under Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") after the effective date of this prospectus are also incorporated by
reference. Statements contained in this prospectus and subsequently filed
documents which are incorporated by reference or deemed to be incorporated by
reference are deemed to modify or supersede documents incorporated herein by
reference.
Anchor National files its Exchange Act documents and reports, including its
annual and quarterly reports on Form 10-K and Form 10-Q, electronically pursuant
to EDGAR under CIK No. 0000006342.
Anchor National is subject to the informational requirements of the Securities
and Exchange Act of 1934 (as amended). We file reports and other information
with the SEC to meet those requirements. You can inspect and copy this
information at SEC public facilities at the following locations:
WASHINGTON, DISTRICT OF COLUMBIA
450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549
CHICAGO, ILLINOIS
500 West Madison Street
Chicago, IL 60661
NEW YORK, NEW YORK
7 World Trade Center, 13th Fl.
New York, NY 10048
To obtain copies by mail, contact the Washington, D.C. location. After you pay
the fees as prescribed by the rules and regulations of the SEC, the required
documents are mailed.
Registration statements under the Securities Act of 1933, as amended, related to
the contracts offered by this prospectus are on file with the SEC. This
prospectus does not contain all of the information contained in the registration
statements and exhibits. For further information regarding the separate account,
Anchor National and its general account, the Variable Portfolios and the
contract, please refer to the registration statements and exhibits.
The SEC also maintains a website (http://www.sec.gov) that contains the SAI,
materials incorporated by reference and other information filed electronically
with the SEC by Anchor National.
Anchor National will provide without charge to each person to whom this
prospectus is delivered, upon written or oral request, a copy of the documents
incorporated by reference. Requests for these documents should be directed to
Anchor National's Annuity Service Center, as follows:
Anchor National Life Insurance Company
Annuity Service Center
P.O. Box 54299
Los Angeles, California 90054-0299
Telephone Number: (800) 445-SUN2
SECURITIES AND EXCHANGE
COMMISSION POSITION ON
INDEMNIFICATION
Indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") is provided to Anchor National's officers, directors and controlling
persons. The SEC has advised that it believes such indemnification is against
public policy under the Act and unenforceable. If a claim for indemnification
against such liabilities (other than for Anchor National's payment of expenses
incurred or paid by its directors, officers or controlling persons in the
successful defense of any legal action) is asserted by a director, officer or
controlling person of Anchor National in connection with the securities
registered under this prospectus, Anchor National will submit to a court with
jurisdiction to determine whether the indemnification is against public policy
under the Act. Anchor National will be governed by final judgment of the issue.
However, if in the opinion of Anchor National's counsel this issue has been
determined by controlling precedent, Anchor National will not submit the issue
to a court for determination.
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TABLE OF CONTENTS
<Table>
GLOSSARY.................................................... 4
HIGHLIGHTS.................................................. 5
FEE TABLES.................................................. 6
Owner Transaction Expenses............................... 6
Annual Separate Account Expenses......................... 6
The Optional Income Protector Fee........................ 6
The Optional Seasons Estate Advantage Fee................ 6
Investment Portfolio Expenses of Portfolios and Seasons
Strategies............................................. 7
EXAMPLES.................................................... 8
THE SEASONS SELECT(II) VARIABLE ANNUITY..................... 12
PURCHASING A SEASONS SELECT(II) VARIABLE ANNUITY............ 13
Allocation of Purchase Payments.......................... 13
Seasons Rewards Program.................................. 13
Current Enhancement Levels............................... 15
Accumulation Units....................................... 15
Free Look................................................ 16
INVESTMENT OPTIONS.......................................... 16
Variable Investment Options.............................. 17
The PORTFOLIOS......................................... 17
The SEASONS STRATEGIES................................. 18
Market Value Adjustment.................................. 20
Transfers During the Accumulation Phase.................. 21
Dollar Cost Averaging.................................... 22
Asset Allocation Rebalancing Program..................... 23
Principal Advantage Program.............................. 23
Voting Rights............................................ 23
Substitution............................................. 24
ACCESS TO YOUR MONEY........................................ 24
Free Withdrawal Provision................................ 24
Systematic Withdrawal Program............................ 25
Minimum Contract Value................................... 26
Qualified Contract Owners................................ 26
DEATH BENEFIT............................................... 26
Standard Death Benefit................................... 27
Seasons Estate Advantage................................. 27
Spousal Continuation..................................... 29
EXPENSES.................................................... 29
Insurance Charges........................................ 29
Withdrawal Charges....................................... 30
Investment Charges....................................... 30
Contract Maintenance Fee................................. 31
Transfer Fee............................................. 31
Seasons Estate Advantage Fee............................. 31
Optional Income Protector Fee............................ 31
Premium Tax.............................................. 31
Income Taxes............................................. 31
Reduction or Elimination of Charges and Expenses, and
Additional Amounts Credited............................ 31
INCOME OPTIONS.............................................. 32
Annuity Date............................................. 32
Income Options........................................... 32
Allocation of Annuity Payments........................... 33
Transfers During the Income Phase........................ 34
Deferment of Payments.................................... 34
Income Protector......................................... 34
TAXES....................................................... 36
Annuity Contracts in General............................. 36
Tax Treatment of Distributions--Non-qualified
Contracts.............................................. 36
Tax Treatment of Distributions--Qualified Contracts...... 36
Tax Treatment of Death Benefits.......................... 37
Tax Treatment of Non-Qualified Contracts Owned by a Trust
or Corporation......................................... 37
Tax Treatment of Gifts, Pledges and/or Assignments of a
Non-Qualified Annuity Contract......................... 37
Minimum Distributions.................................... 38
Diversification.......................................... 38
PERFORMANCE................................................. 38
OTHER INFORMATION........................................... 40
Anchor National.......................................... 40
The Separate Account..................................... 40
Custodian................................................ 40
The General Account...................................... 40
Distribution of the Contract............................. 40
Administration........................................... 41
Legal Proceedings........................................ 41
INDEPENDENT ACCOUNTANTS..................................... 41
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.... 42
APPENDIX A--CONDENSED FINANCIAL INFORMATION................. A-1
APPENDIX B--SEASONS REWARDS PROGRAM EXAMPLES................ B-1
APPENDIX C--MARKET VALUE ADJUSTMENT......................... C-1
APPENDIX D--DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION... D-1
APPENDIX E--PREMIUM TAXES................................... E-1
</Table>
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GLOSSARY
We have capitalized some of the technical terms used in this prospectus. To help
you understand these terms, we define them in this glossary.
ACCUMULATION PHASE--The period during which you invest money in your contract.
ACCUMULATION UNITS--A measurement we use to calculate the value of the variable
portion of your contract during the Accumulation Phase.
ANNUITANT(S)--The person(s) on whose life (lives) we base annuity payments.
ANNUITY DATE--The date on which annuity payments are to begin, as selected by
you.
ANNUITY UNITS--A measurement we use to calculate the amount of annuity payments
you receive from the variable portion of your contract during the Income Phase.
BENEFICIARY(IES)--The person(s) designated to receive any benefits under the
contract if you or the Annuitant dies.
COMPANY--Anchor National Life Insurance Company ("Anchor National"), We, Us, the
issuer of this annuity contract.
INCOME PHASE--The period during which we make annuity payments to you.
IRS--The Internal Revenue Service.
NON-QUALIFIED (CONTRACT)--A contract purchased with after-tax dollars. In
general, these contracts are not under any pension plan, specially sponsored
program or individual retirement account ("IRA").
PAYMENT ENHANCEMENT(S)--The amount(s) allocated to your contract by Us under the
Seasons Rewards Program. Payment enhancements are calculated as a percentage of
your Purchase Payments and are considered earnings.
PORTFOLIO(S)--A sub-account of Variable Annuity Account Five which provides for
the variable investment options available under the contract. Each SELECT and
FOCUSED PORTFOLIO has a distinct investment objective and is invested in the
underlying investment portfolios of the Seasons Series Trust. This investment
option allocates assets to an underlying fund in which a portion of the assets
is managed by three different advisors.
PURCHASE PAYMENTS--The money you give us to buy the contract, as well as any
additional money you give us to invest in the contract after you own it.
QUALIFIED (CONTRACT)--A contract purchased with pretax dollars. These contracts
are generally purchased under a pension plan, specially sponsored program or
individual retirement account ("IRA").
STRATEGY(IES)--A sub-account of Variable Annuity Account Five which provides for
the variable investment options available under the contract. Each SEASONS
STRATEGY has its own investment objective and is invested in the underlying
investment portfolios of the Seasons Series Trust. This investment option
allocates assets to three out of six available portfolios, each of which is
managed by a different investment advisor.
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HIGHLIGHTS
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The Seasons Select(II) Variable Annuity is a contract between you and Anchor
National Life Insurance Company ("Anchor National"). It is designed to help you
invest on a tax-deferred basis and meet long-term financial goals. There are
minimum Purchase Payment amounts required to purchase a contract. Purchase
payments may be invested in the Select Portfolios, Focused Portfolios and/or
pre-allocated Strategies ("Variable Portfolios") and fixed account options. You
may also elect to participate in the Seasons Rewards feature of the contract
that can provide you with Payment Enhancements to invest in your contract. If
you elect participation in this feature, your contract will be subject to a
longer surrender charge schedule. Like all deferred annuities, the contract has
an Accumulation Phase and an Income Phase. During the Accumulation Phase, you
invest money in your contract. The Income Phase begins when you start receiving
income payments from your annuity to provide for your retirement.
FREE LOOK: If you cancel your contract within 10 days after receiving it (or
whatever period is required in your state), we will cancel the contract without
charging a withdrawal charge. You will receive whatever your contract is worth
on the day that we receive your request. This amount may be more or less than
your original Purchase Payment. We will return your original Purchase Payment if
required by law. If you elected to participate in Seasons Rewards, you receive
any again and we bear any loss on any Payment Enhancement(s) if you decide to
cancel your contract during the free look period. Please see PURCHASING A
SEASONS SELECT(II) VARIABLE ANNUITY in the prospectus.
EXPENSES: There are fees and charges associated with the contract. Each year, we
deduct a $35 contract maintenance fee from your contract, which may be waived
for contracts of $50,000 or more. We also deduct insurance charges, which equal
1.40% annually of the average daily value of your contract allocated to the
Variable Portfolios. There are investment charges on amounts invested in the
Variable Portfolios. If you elect optional features available under the contract
we may charge additional fees for these features. A separate withdrawal charge
schedule applies to each Purchase Payment. The percentage of the withdrawal
charge declines over time. After a Purchase Payment has been in the contract for
seven complete years, or nine complete years if you participate in the Seasons
Rewards Program, withdrawal charges no longer apply to that portion of the
Purchase Payment. Please see the FEE TABLE, PURCHASING A SEASONS SELECT(II)
VARIABLE ANNUITY and EXPENSES in the prospectus.
ACCESS TO YOUR MONEY: You may withdraw money from your contract during the
Accumulation Phase. If you do so, earnings are deemed to be withdrawn first. You
will pay income taxes on earnings and untaxed contributions when you withdraw
them. Payments received during the Income Phase are considered partly a return
of your original investment. A federal tax penalty may apply if you make
withdrawals before age 59 1/2. As noted above, a withdrawal charge may apply.
Please see ACCESS TO YOUR MONEY and TAXES in the prospectus.
DEATH BENEFIT: A death benefit feature is available under the contract to
protect your Beneficiaries in the event of your death during the Accumulation
Phase. Please see DEATH BENEFITS in the prospectus.
INCOME OPTIONS: When you are ready to begin taking income, you can choose to
receive income payments on a variable basis, fixed basis or a combination of
both. You may also chose from five different income options, including an option
for income that you cannot outlive. Please see INCOME OPTIONS in the prospectus.
INQUIRIES: If you have questions about your contract call your financial
representative or contact us at Anchor National Life Insurance Company Annuity
Service Center P.O. Box 54299 Los Angeles, California 90054-0299. Telephone
Number: (800) 445-SUN2.
ANCHOR NATIONAL OFFERS SEVERAL DIFFERENT VARIABLE ANNUITY PRODUCTS TO MEET THE
DIVERSE NEEDS OF OUR INVESTORS. EACH PRODUCT MAY OFFER DIFFERENT FEATURES AND
BENEFITS AND CORRESPONDINGLY DIFFERENT FEES AND CHARGES. WE ALSO OFFER PRODUCTS
THAT DO NOT OFFER THE SEASONS REWARDS PROGRAM. PRODUCTS WITHOUT THE SEASONS
REWARDS PROGRAM HAVE THE SAME MORTALITY AND EXPENSE RISK CHARGES AS THE CONTRACT
WITH THE SEASONS REWARDS PROGRAM. HOWEVER, CONTRACTS WITHOUT THE SEASONS REWARDS
PROGRAM HAVE A SHORTER AND LOWER SURRENDER CHARGE SCHEDULE. WHEN WORKING WITH
YOUR FINANCIAL ADVISOR TO DETERMINE THE BEST PRODUCT TO MEET YOUR NEEDS YOU
SHOULD CONSIDER, AMONG OTHER THINGS, WHETHER THE FEATURES OF THIS CONTRACT AND
THE RELATED FEES PROVIDE THE MOST APPROPRIATE PACKAGE TO HELP MEET YOUR
LONG-TERM RETIREMENT SAVINGS GOALS.
PLEASE READ THE PROSPECTUS CAREFULLY FOR MORE DETAILED INFORMATION REGARDING
THESE AND OTHER FEATURES AND BENEFITS OF THE CONTRACT, AS WELL AS THE RISKS OF
INVESTING.
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SEASONS SELECT(II) VARIABLE ANNUITY FEE TABLES
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OWNER TRANSACTION EXPENSES
Withdrawal Charge as a percentage of Purchase Payments:
<Table>
<Caption>
YEARS: 1 2 3 4 5 6 7 8 9 10
Schedule A*.......... 7% 6% 6% 5% 4% 3% 2% 0% 0% 0%
Schedule B**......... 9% 8% 7% 6% 6% 5% 4% 3% 2% 0%
</Table>
* This schedule applies to each Purchase Payment if you are NOT participating
in the Seasons Rewards Program.
** This schedule applies to each Purchase Payment if you are participating in
the Seasons Rewards Program.
<Table>
Contract Maintenance
Charge.............. $35 each year ($30 in North
Dakota) (waived for contracts
over $50,000)
</Table>
ANNUAL SEPARATE ACCOUNT EXPENSES
(as a percentage of daily net asset value)
<Table>
Mortality Risk Charge.......................... 0.90%
Expense Risk Charge............................ 0.35%
Distribution Expense Charge.................... 0.15%
----
Total Separate Account Expenses....... 1.40%
</Table>
THE OPTIONAL INCOME PROTECTOR FEE
(The Income Protector Program is optional and if elected the fee is deducted
annually from your contract value.)
<Table>
Fee as a percentage of your
Income Benefit Base*.......... 0.10%
</Table>
* The Income Benefit Base is calculated by using your contract value on the date
of your effective enrollment in the program and then each subsequent contract
anniversary, adding purchase payments made since the prior contract anniversary,
less proportional withdrawals since the prior contract anniversary and fees and
charges applicable to those withdrawals.
THE OPTIONAL SEASONS ESTATE ADVANTAGE FEE
(Seasons Estate Advantage, which offers a choice of two enhanced death benefits
and an Earnings Advantage benefit, is optional and, if elected, the fee is an
annualized charge that is deducted daily from your contract value.)
<Table>
Fee as a percentage of
your daily net asset value.... 0.25%
</Table>
INVESTMENT PORTFOLIO EXPENSES OF PORTFOLIOS
(as a percentage of daily net asset value after any applicable reimbursement or
waiver of expenses, as of the fiscal year end of the Trust ending March 31,
2001)
<Table>
<Caption>
MANAGEMENT 12b-1 OTHER TOTAL ANNUAL
FEE FEES+ EXPENSES EXPENSES
- ---------------------------------------------------------------------------------------------------
SELECT PORTFOLIOS(1)
- ----------------------------------------------------
Large Cap Growth 0.80% 0.15% 0.30% 1.25%
Large Cap Composite 0.80% 0.15% 0.30% 1.25%
Large Cap Value 0.80% 0.15% 0.30% 1.25%
Mid Cap Growth 0.85% 0.15% 0.30% 1.30%
Mid Cap Value 0.85% 0.15% 0.30% 1.30%
Small Cap 0.85% 0.15% 0.30% 1.30%
International Equity 1.00% 0.15% 0.30% 1.45%
Diversified Fixed Income 0.70% 0.15% 0.30% 1.15%
Cash Management 0.55% 0.15% 0.30% 1.00%
- ---------------------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS
- ----------------------------------------------------
Focus Growth* 1.00% 0.15% 0.30% 1.45%
Focus Growth and Income* 1.00% 0.15% 0.30% 1.45%
Focus Value* 1.00% 0.15% 0.30% 1.45%
Focus TechNet* 1.20% 0.15% 0.30% 1.65%
- ---------------------------------------------------------------------------------------------------
</Table>
* This portfolio was not available for sale during the entire fiscal year of the
Trust. The percentages are based on estimated amounts for the current fiscal
year.
(1) Absent fee waivers or reimbursement of expenses by the adviser, you would
have incurred the following expenses during the last fiscal year: Large Cap
Growth (1.30%), Large Cap Composite (1.48%), Large Cap Value (1.39%), Mid
Cap Growth (1.35%), Mid Cap Value (1.47%), Small Cap (1.45%), International
Equity (1.91%), Diversified Fixed Income (1.31%), and Cash Management
(2.95%).
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INVESTMENT PORTFOLIO EXPENSES BY SEASONS STRATEGY
(based on the total annual expenses of the underlying investment portfolios
reflected below after any applicable reimbursement or waiver of expenses, as of
the fiscal year end of the Trust ending March 31, 2001)
<Table>
<Caption>
MANAGEMENT 12b-1 OTHER TOTAL ANNUAL
FEE FEES+ EXPENSES EXPENSES
- ---------------------------------------------------------------------------------------------------
SEASONS STRATEGY(2)
- ----------------------------------------------------
Growth 0.87% 0.15% 0.12% 1.14%
Moderate Growth 0.85% 0.15% 0.12% 1.12%
Balanced Growth 0.83% 0.15% 0.16% 1.14%
Conservative Growth 0.80% 0.15% 0.21% 1.16%
- ---------------------------------------------------------------------------------------------------
</Table>
(2) Absent recoupment of expenses by the adviser for the underlying investment
portfolios, you would have incurred the following expenses for the
strategies during the last fiscal year: Growth (1.28%), Moderate Growth
(1.26%), Balanced Growth (1.25%) and Conservative Growth (1.24%).
IMPORTANT INFORMATION ABOUT PORTFOLIO EXPENSES IF INVESTED IN SEASONS
STRATEGIES:
The Investment Portfolio Expenses table set forth below identifies the total
investment expenses charged by the underlying investment portfolios of Seasons
Series Trust. Each contractholder invested in a SEASONS STRATEGY will incur only
a portion of the investment expense of those portfolios in which the SEASONS
STRATEGY invests. The table above entitled "Investment Portfolio Expenses by
SEASONS STRATEGY" shows an approximation of the total investment expenses a
contractholder may incur if invested in each respective SEASONS STRATEGY, after
the automatic quarterly rebalancing of such SEASONS STRATEGY as described on
page 18. The actual investment expenses incurred by contractholders within a
SEASONS STRATEGY will vary depending upon the daily net asset value of each
investment portfolio in which such SEASONS STRATEGY is invested.
INVESTMENT PORTFOLIO EXPENSES
FOR SEASONS STRATEGY UNDERLYING PORTFOLIOS
(as a percentage of daily net asset value of each investment portfolio as of the
fiscal year end of the Trust ending March 31, 2001)
<Table>
<Caption>
MANAGEMENT 12b-1 OTHER TOTAL ANNUAL
FEE FEES+ EXPENSES EXPENSES
- ---------------------------------------------------------------------------------------------------
SEASONS STRATEGY UNDERLYING
PORTFOLIOS
Stock 0.85% 0.15% 0.08% 1.08%
Asset Allocation: Diversified Growth(3) 0.85% 0.15% 0.12% 1.12%
Multi-Managed Growth 0.89% 0.15% 0.15% 1.19%
Multi-Managed Moderate Growth 0.85% 0.15% 0.14% 1.14%
Multi-Managed Income/Equity(3) 0.81% 0.15% 0.20% 1.16%
Multi-Managed Income(3) 0.77% 0.15% 0.28% 1.20%
- ---------------------------------------------------------------------------------------------------
</Table>
(3) Absent recoupment of expenses by the adviser, you would have incurred the
following expenses during the last fiscal year: Asset Allocation:
Diversified Growth (1.16%), Multi-Managed Income (1.08%) and Multi-Managed
Income/Equity (1.09%).
+ The 12b-1 plan became effective on the commencement of sales of the Seasons
Select(II) contract. Although the 12b-1 fee is reflected in the numbers shown
here, it was not in effect for the entire fiscal year ended 2001.
THE ABOVE INVESTMENT PORTFOLIO EXPENSES WERE PROVIDED BY SEASONS SERIES TRUST.
WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.
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EXAMPLES
You will pay the following expenses on a $1,000 investment, assuming a 5% annual
return on assets, Investment Portfolio Expenses after any waiver, reimbursement
or recoupment, (assuming the waiver, reimbursement or recoupment will continue
for the period shown) if applicable, and you did NOT PARTICIPATE IN THE SEASONS
REWARDS PROGRAM:
(a) If the contract is surrendered at the end of the stated time period.
(b) If the contract is surrendered and you elect Seasons Estate
Advantage and the Income Protector Program.
(c) If the contract is not surrendered or is annuitized.*
(d) If the contract is not surrendered and you elect Seasons Estate
Advantage and the Income Protector Program.
<Table>
<Caption>
TIME PERIODS
- ----------------------------------------------------------------------------------------
SELECT PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Large Cap Growth (a) $ 98 (a) $145 (a) $185 (a) $307
(b) $101 (b) $155 (b) $202 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Large Cap Composite (a) $ 98 (a) $145 (a) $185 (a) $307
(b) $101 (b) $155 (b) $202 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Large Cap Value (a) $ 98 (a) $145 (a) $185 (a) $307
(b) $101 (b) $155 (b) $202 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Mid Cap Growth (a) $ 98 (a) $146 (a) $187 (a) $312
(b) $102 (b) $157 (b) $204 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
Mid Cap Value (a) $ 98 (a) $146 (a) $187 (a) $312
(b) $102 (b) $157 (b) $204 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
Small Cap (a) $ 98 (a) $146 (a) $187 (a) $312
(b) $102 (b) $157 (b) $204 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
International Equity (a) $100 (a) $151 (a) $195 (a) $326
(b) $103 (b) $161 (b) $212 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Diversified Fixed Income (a) $ 97 (a) $142 (a) $180 (a) $297
(b) $100 (b) $152 (b) $197 (b) $331
(c) $ 27 (c) $ 82 (c) $140 (c) $297
(d) $ 30 (d) $ 92 (d) $157 (d) $331
Cash Management (a) $ 95 (a) $137 (a) $172 (a) $282
(b) $ 99 (b) $148 (b) $190 (b) $316
(c) $ 25 (c) $ 77 (c) $132 (c) $282
(d) $ 29 (d) $ 88 (d) $150 (d) $316
- ----------------------------------------------------------------------------------------
</Table>
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<Table>
<Caption>
- ----------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Focus Growth (a) $100 (a) $151 (a) $195 (a) $326
(b) $103 (b) $161 (b) $212 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus Growth and Income (a) $100 (a) $151 (a) $195 (a) $326
(b) $103 (b) $161 (b) $212 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus Value (a) $100 (a) $151 (a) $195 (a) $326
(b) $103 (b) $161 (b) $212 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus TechNet (a) $102 (a) $157 (a) $204 (a) $345
(b) $105 (b) $167 (b) $221 (b) $376
(c) $ 32 (c) $ 97 (c) $164 (c) $345
(d) $ 35 (d) $107 (d) $181 (d) $376
- ----------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------------------------------------
SEASONS STRATEGY 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Growth (a) $ 97 (a) $142 (a) $179 (a) $296
(b) $100 (b) $152 (b) $197 (b) $330
(c) $ 27 (c) $ 82 (c) $139 (c) $296
(d) $ 30 (d) $ 92 (d) $157 (d) $330
Moderate Growth (a) $ 96 (a) $141 (a) $178 (a) $294
(b) $100 (b) $151 (b) $196 (b) $328
(c) $ 26 (c) $ 81 (c) $138 (c) $294
(d) $ 30 (d) $ 91 (d) $156 (d) $328
Balanced Growth (a) $ 97 (a) $142 (a) $179 (a) $296
(b) $100 (b) $152 (b) $197 (b) $330
(c) $ 27 (c) $ 82 (c) $139 (c) $296
(d) $ 30 (d) $ 92 (d) $157 (d) $330
Conservative Growth (a) $ 97 (a) $142 (a) $180 (a) $298
(b) $100 (b) $153 (b) $198 (b) $332
(c) $ 27 (c) $ 82 (c) $140 (c) $298
(d) $ 30 (d) $ 93 (d) $158 (d) $332
- ----------------------------------------------------------------------------------------
</Table>
* We do not currently charge a surrender charge upon annuitization, unless the
contract is annuitized under the Income Protector Program. We will assess any
applicable surrender charges upon annuitizations effected using the Income
Protector Program as if you had fully surrendered your contract.
9
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You will pay the following expenses on a $1,000 investment, assuming a 5% annual
return on assets, Investment Portfolio Expenses after any waiver, reimbursement
or recoupment, (assuming the waiver, reimbursement or recoupment will continue
for the period shown) if applicable, and YOU ELECTED TO PARTICIPATE IN THE
SEASONS REWARDS PROGRAM:
(a) If the contract is surrendered at the end of the stated time period.
(b) If the contract is surrendered at the end of the stated time period
and you elect Seasons Estate Advantage and Income Protector.
(c) If the contract is not surrendered or is annuitized at the end of
the stated time period.
(d) If the contract is not surrendered at the end of the stated time
period and you elect Seasons Estate Advantage and the Income
Protector Program.
<Table>
<Caption>
TIME PERIODS
- ----------------------------------------------------------------------------------------
SELECT PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Large Cap Growth (a) $118 (a) $155 (a) $195 (a) $307
(b) $121 (b) $165 (b) $212 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Large Cap Composite (a) $118 (a) $155 (a) $195 (a) $307
(b) $121 (b) $165 (b) $212 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Large Cap Value (a) $118 (a) $155 (a) $195 (a) $307
(b) $121 (b) $165 (b) $212 (b) $340
(c) $ 28 (c) $ 85 (c) $145 (c) $307
(d) $ 31 (d) $ 95 (d) $162 (d) $340
Mid Cap Growth (a) $118 (a) $156 (a) $197 (a) $312
(b) $122 (b) $167 (b) $214 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
Mid Cap Value (a) $118 (a) $156 (a) $197 (a) $312
(b) $122 (b) $167 (b) $214 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
Small Cap (a) $118 (a) $156 (a) $197 (a) $312
(b) $122 (b) $167 (b) $214 (b) $345
(c) $ 28 (c) $ 86 (c) $147 (c) $312
(d) $ 32 (d) $ 97 (d) $164 (d) $345
International Equity (a) $120 (a) $161 (a) $205 (a) $326
(b) $123 (b) $171 (b) $222 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Diversified Fixed Income (a) $117 (a) $152 (a) $190 (a) $297
(b) $120 (b) $162 (b) $207 (b) $331
(c) $ 27 (c) $ 82 (c) $140 (c) $297
(d) $ 30 (d) $ 92 (d) $157 (d) $331
Cash Management (a) $115 (a) $147 (a) $182 (a) $282
(b) $119 (b) $158 (b) $200 (b) $316
(c) $ 25 (c) $ 77 (c) $132 (c) $282
(d) $ 29 (d) $ 88 (d) $150 (d) $316
- ----------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
- ----------------------------------------------------------------------------------------
FOCUSED PORTFOLIOS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Focus Growth (a) $120 (a) $161 (a) $205 (a) $326
(b) $123 (b) $171 (b) $222 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus Growth and Income (a) $120 (a) $161 (a) $205 (a) $326
(b) $123 (b) $171 (b) $222 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus Value (a) $120 (a) $161 (a) $205 (a) $326
(b) $123 (b) $171 (b) $222 (b) $358
(c) $ 30 (c) $ 91 (c) $155 (c) $326
(d) $ 33 (d) $101 (d) $172 (d) $358
Focus TechNet (a) $122 (a) $167 (a) $214 (a) $345
(b) $125 (b) $177 (b) $231 (b) $376
(c) $ 32 (c) $ 97 (c) $164 (c) $345
(d) $ 35 (d) $107 (d) $181 (d) $376
- ----------------------------------------------------------------------------------------
</Table>
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13
<Table>
<Caption>
- ----------------------------------------------------------------------------------------
SEASONS STRATEGY 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------------------------------------------------------------------------
Growth (a) $117 (a) $152 (a) $189 (a) $296
(b) $120 (b) $162 (b) $207 (b) $330
(c) $ 27 (c) $ 82 (c) $139 (c) $296
(d) $ 30 (d) $ 92 (d) $157 (d) $330
Moderate Growth (a) $116 (a) $151 (a) $188 (a) $294
(b) $120 (b) $161 (b) $206 (b) $328
(c) $ 26 (c) $ 81 (c) $138 (c) $294
(d) $ 30 (d) $ 91 (d) $156 (d) $328
Balanced Growth (a) $117 (a) $152 (a) $189 (a) $296
(b) $120 (b) $162 (b) $207 (b) $330
(c) $ 27 (c) $ 82 (c) $139 (c) $296
(d) $ 30 (d) $ 92 (d) $157 (d) $330
Conservative Growth (a) $117 (a) $152 (a) $190 (a) $298
(b) $120 (b) $163 (b) $208 (b) $332
(c) $ 27 (c) $ 82 (c) $140 (c) $298
(d) $ 30 (d) $ 93 (d) $158 (d) $332
- ----------------------------------------------------------------------------------------
</Table>
EXPLANATION OF FEE TABLES AND EXAMPLES
1. The purpose of the Fee Tables is to show you the various expenses you will
incur directly and indirectly by investing in the contract. The example
reflects owner transaction expenses, separate account expenses including
optional benefit fees in some examples and investment portfolio expenses by
SELECT PORTFOLIO, FOCUSED PORTFOLIO and SEASONS STRATEGY. We converted the
contract administration charge to a percentage (0.09%) using an assumed
contract size of $40,000. The actual impact of the administration charge may
differ from this percentage and may be waived for contract values over
$50,000.
2. The Examples assume that no transfer fees were imposed. Premium taxes are not
reflected but may be applicable.
3. For certain underlying investment portfolios in which the SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and SEASONS STRATEGIES invest, the adviser voluntarily
agreed to waive fees or reimburse expenses, if necessary, to keep annual
operating expenses at or below the following percentages of each of the
following Portfolios' average net assets: Multi-Managed Income/Equity
Portfolio 1.29%, Multi-Managed Income Portfolio 1.21%, Asset Allocation:
Diversified Growth Portfolio 1.36%, Large Cap Growth Portfolio 1.25%, Large
Cap Composite Portfolio 1.25%, Large Cap Value Portfolio 1.25%, Mid Cap
Growth Portfolio 1.30%, Mid Cap Value Portfolio 1.30%, Small Cap Portfolio
1.30%, International Equity Portfolio 1.45%, Diversified Fixed Income
Portfolio 1.15%, Focus Growth 1.45%, Focus Value 1.45% and Cash Management
Portfolio 1.00%. The adviser also may voluntarily waive or reimburse
additional amounts to increase the investment return to a Portfolio's
investors. The adviser may terminate all such waivers and/or reimbursements
at any time. Further, any waivers or reimbursements made by the adviser with
respect to a Portfolio are subject to recoupment from that Portfolio within
the following two years, provided that the Portfolio is able to effect such
payment to the adviser and remain in compliance with the foregoing expense
limitations.
4. Examples reflecting participation in the Seasons Rewards program reflect
surrender charge Schedule B. The total expenses at the end of each period do
not take into account any Upfront Deferred Payment Enhancement which may be
added to your contract if you elect the Seasons Rewards Program. If you elect
the Seasons Rewards Program, your expenses may differ from the information
shown here.
5. THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The historical accumulation unit values for the SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and SEASONS STRATEGIES are contained in Appendix A--Condensed
Financial Information.
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THE SEASONS SELECT(II) VARIABLE ANNUITY
- --------------------------------------------------------------------------------
An annuity is a contract between you and an insurance company. You are the owner
of the contract. The contract provides three main benefits:
- Tax Deferral: You do not pay taxes on your earnings from the annuity
until you withdraw them.
- Death Benefit: If you die during the Accumulation Phase, the insurance
company pays a death benefit to your Beneficiary.
- Guaranteed Income: If elected, you receive a stream of income for your
lifetime, or another available period you select.
Tax-qualified retirement plans (e.g., IRAs, 401(k) or 403(b) plans) defer
payment of taxes on earnings until withdrawn. If you are considering funding a
tax-qualified retirement plan with an annuity, you should know that an annuity
does not provide any additional tax deferral treatment of earnings beyond the
treatment provided by the tax-qualified retirement plan itself. However,
annuities do provide other features and benefits which may be valuable to you.
You should fully discuss this decision with your financial advisor.
This annuity was developed to help you contribute to your retirement savings.
This annuity works in two stages, the Accumulation Phase and the Income Phase.
Your contract is in the Accumulation Phase during the period when you make
payments into the contract. The Income Phase begins when you request us to start
making payments to you out of the money accumulated in your contract.
The Contract is called a "variable" annuity because it allows you to invest in
variable investment portfolios which we call SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and SEASONS STRATEGIES. The SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and
SEASONS STRATEGIES, are similar to mutual funds, in that they have specific
investment objectives and their performance varies. You can gain or lose money
if you invest in these SELECT PORTFOLIOS, FOCUSED PORTFOLIOS or SEASONS
STRATEGIES. The amount of money you accumulate in your contract depends on the
performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or SEASONS
STRATEGY(IES) in which you invest.
The Contract also offers several fixed account options for varying time periods.
Fixed account options earn interest at a rate set and guaranteed by Anchor
National. If you allocate money to the fixed account options, the amount of
money that accumulates in your Contract depends on the total interest credited
to the particular fixed account option(s) in which you are invested.
For more information on SELECT PORTFOLIOS, FOCUSED PORTFOLIOS, SEASONS
STRATEGIES and fixed account options available under this contract, SEE
INVESTMENT OPTIONS PAGE 16.
Anchor National issues the Seasons Select(II) Variable Annuity. When you
purchase a Seasons Select(II) Variable Annuity, a contract exists between you
and Anchor National. The Company is a stock life insurance company organized
under the laws of the state of Arizona. Its principal place of business is 1
SunAmerica Center, Los Angeles, California 90067. The Company conducts life
insurance and annuity business in the District of Columbia and all states except
New York. Anchor National is an indirect, wholly owned subsidiary of American
International Group, Inc., a Delaware corporation. Seasons Select(II) may not
currently be available in all states. Please check with your financial advisor
regarding availability in your state.
This annuity is designed for investors whose personal circumstances allow for a
long-term investment time horizon, to assist in contributing to retirement
savings. As a function of the federal tax code you may be assessed a 10% federal
tax penalty on any withdrawal made prior to your reaching age 59 1/2.
Additionally, this contract provides that you will be charged a withdrawal
charge on each Purchase Payment withdrawn if that Purchase Payment has not been
invested in this contract for at least 7 years, or 9 years if you elect to
participate in the Seasons Rewards Program. Because of these potential
penalties, you should fully discuss all of the benefits and risks of this
contract with your financial adviser prior to purchase.
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PURCHASING A SEASONS SELECT(II) VARIABLE ANNUITY
- --------------------------------------------------------------------------------
An initial Purchase Payment is the money you give us to buy a contract. Any
additional money you give us to invest in the contract after purchase is a
subsequent Purchase Payment.
This chart shows the minimum initial and subsequent Purchase Payments permitted
under your contract. These amounts depend upon whether a contract is Qualified
or Non-qualified for tax purposes.
<Table>
<Caption>
MINIMUM MINIMUM SUBSEQUENT
MINIMUM INITIAL SUBSEQUENT PURCHASE PAYMENT--
PURCHASE PAYMENT PURCHASE PAYMENT AUTOMATIC PAYMENT PLAN
---------------- ---------------- ----------------------
Qualified $2,000 $500 $50
Non-qualified $5,000 $500 $50
</Table>
Prior Company approval is required to accept Purchase Payments greater than
$1,500,000. The Company reserves the right to refuse any Purchase Payment
including one which would cause the total Purchase Payments to exceed $1,500,000
at the time of the Purchase Payment. Also, the optional Automatic Payment Plan
allows you to make subsequent payments as small as $50.
In general, we will not issue a Qualified contract to anyone who is age 70 1/2
or older, unless they certify to us that the minimum distribution required by
the federal tax code is being made. In addition, we may not issue a contract to
anyone age 91 or older. Seasons Estate Advantage and Seasons Rewards Program is
not available to you if you are age 81 or older at the time of contract issue.
We allow spouses to jointly own this contract. However the age of the older
spouse is used to determine the availability of any age driven benefits. The
addition of a joint owner after the contract has been issued is contingent upon
prior review and approval by the Company.
ALLOCATION OF PURCHASE PAYMENTS
We invest your Purchase Payments in the fixed accounts, SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES) according to your
instructions. If we receive a Purchase Payment without allocation instructions,
we will invest the money according to your last allocation instructions.
Purchase Payments are applied to your contract based upon the value of the
variable investment option next determined after receipt of your money. SEE
INVESTMENT OPTIONS PAGE 16.
In order to issue your contract, we must receive your completed application,
Purchase Payment allocation instructions and any other required paper work at
our Annuity Service Center. We allocate your initial Purchase Payment within two
days of receiving it. If we do not have complete information necessary to issue
your contract, we will contact you. If we do not have the information necessary
to issue your contract within 5 business days we will:
- Send your money back to you; or
- Ask your permission to keep your money until we get the information
necessary to issue the contract.
SEASONS REWARDS PROGRAM
If you elect to participate in the Seasons Rewards Program at contract issue, we
contribute an Upfront Payment Enhancement and, if applicable, a Deferred Payment
Enhancement to your contract in conjunction with each Purchase Payment you
invest during the life of your contract. If you elect to participate in this
program, all Purchase Payments are subject to a nine year withdrawal charge
schedule. SEE WITHDRAWAL CHARGES ON PAGE 30. If you make an early withdrawal of
Purchase Payments, we may recoup a portion of any bonuses applicable to any
payment withdrawn. SEE EXPENSES, PAGE 29. The Seasons Rewards Program is not
available to you if you are age 81 or older at the time of contract issue.
Additionally, it may not be approved for sale in your state or through the
broker-dealer with which your financial advisor is affiliated. Amounts we
contribute to your contract under this program are considered earnings and are
allocated to your contract as described below.
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Purchase Payments may not be invested in the 6-month or the 1-year Dollar Cost
Averaging fixed accounts if you participate in the Seasons Rewards Program.
However, you may use the 1-year fixed account option as a Dollar Cost Averaging
source account.
There may be scenarios in which due to negative market conditions and your
inability to remain invested over the long-term, a contract with the Seasons
Rewards Program may not perform as well as the contract without the feature.
ENHANCEMENT LEVELS
The Upfront Payment Enhancement Rate, Deferred Payment Enhancement Rate and
Deferred Payment Enhancement Date may be determined based on stated Enhancement
Levels. Each Enhancement Level is a range of dollar amounts which may correspond
to different enhancement rates and dates. Enhancement Levels may change from
time to time, at our sole discretion. The Enhancement Level applicable to your
initial Purchase Payment is determined by the amount of that initial Purchase
Payment. With respect to any subsequent Purchase Payments we determine your
Enhancement Level by adding to your contract value on the date we receive each
subsequent Purchase Payment the amount of that subsequent Purchase Payment.
UPFRONT PAYMENT ENHANCEMENT
An Upfront Payment Enhancement is an amount we add to your contract on the day
we receive a Purchase Payment. We calculate an Upfront Payment Enhancement
amount as a percentage (the "Upfront Payment Enhancement Rate") of each Purchase
Payment. We periodically review and establish the Upfront Payment Enhancement
Rate, which may increase or decrease at any time, but will never be less than
2%. The applicable Upfront Payment Enhancement Rate is that which is in effect
for any applicable Enhancement Level, when we receive each Purchase Payment
under your contract. The Upfront Payment Enhancement amounts are allocated among
the fixed and variable investment options according to the current allocation
instructions in effect when we receive each Purchase Payment.
DEFERRED PAYMENT ENHANCEMENT
A Deferred Payment Enhancement is an amount we may add to your contract on a
future date (the "Deferred Payment Enhancement Date"). We calculate the Deferred
Payment Enhancement amount, if any, as a percentage of each Purchase Payment
(the "Deferred Payment Enhancement Rate"). We periodically review and establish
the Deferred Payment Enhancement Rates and Deferred Payment Enhancement Dates.
The Deferred Payment Enhancement Rate being offered may increase, decrease or be
eliminated by us, at any time. The Deferred Payment Enhancement Date, if
applicable, may change at any time. The applicable Deferred Payment Enhancement
Date and Deferred Payment Enhancement Rate are those which may be in effect for
any applicable Enhancement Level, when we receive each Purchase Payment under
your contract. Any applicable Deferred Payment Enhancement, when credited, is
allocated to the Cash Management portfolio.
If you withdraw any portion of a Purchase Payment, to which a Deferred Payment
Enhancement applies, prior to the Deferred Payment Enhancement Date, we reduce
the amount of the corresponding Deferred Payment Enhancement in the same
proportion that your withdrawal (and any fees and charges associated with such
withdrawals) reduces that Purchase Payment. For purposes of the Deferred Payment
Enhancement, withdrawals are assumed to be taken from earnings first, then from
Purchase Payments, on a first-in-first-out basis.
APPENDIX B shows how we calculate any applicable Deferred Payment Enhancement
amount.
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CURRENT ENHANCEMENT LEVELS
The Enhancement Levels and Upfront Payment Enhancement Rate are as follows:
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------
UPFRONT PAYMENT DEFERRED PAYMENT DEFERRED PAYMENT
ENHANCEMENT LEVEL ENHANCEMENT RATE ENHANCEMENT RATE ENHANCEMENT DATE
- -------------------------------------------------------------------------------------------------------------
Under $500,000 4% 0% N/A
- -------------------------------------------------------------------------------------------------------------
$500,000 - more 5% 0% N/A
- -------------------------------------------------------------------------------------------------------------
</Table>
Future Upfront Enhancement Rates may change at any time, but will never be less
than 2%. We are currently not offering a Deferred Payment Enhancement Rate.
Future Deferred Payment Enhancement Rates may increase or stay the same; there
is no minimum Deferred Payment Enhancement Rate. The Date on which you may
receive any applicable future Deferred Payment Enhancement may change; it may be
less than nine years or greater than nine years.
90 DAY WINDOW
Contracts issued with the Seasons Rewards feature may be eligible for a
"Look-Back Adjustment." As of the 90th day after your contract was issued, we
will total your Purchase Payments made over those 90 days, without considering
any investment gain or loss in contract value on those Purchase Payments. If
your total Purchase Payments bring you to an Enhancement Level which, as of the
date we issued your contract, would have provided for a higher Upfront and/or
any applicable Deferred Payment Enhancement Rate on each Purchase Payment, you
will get the benefit of the Enhancement Rate(s) that were applicable to that
higher Enhancement Level at the time your contract was issued. We will add any
applicable Upfront Look Back Adjustment to your contract on the 90th day
following the date of contract issue. We will send you a confirmation indicating
any applicable Upfront and/or Deferred Look Back Adjustment, on or about the
90th day following the date of contract issuance. We will allocate any
applicable Upfront Look Back Adjustment according to your then-current
allocation instructions on file for subsequent Purchase Payments at the time we
make the contribution. If applicable, any Deferred Look Back Adjustment will be
allocated to the Cash Management portfolio.
We will not allocate any applicable Deferred Payment Enhancement to your
contract if any of the following circumstances occurs prior to the Deferred
Payment Enhancement Date:
- You surrender your contract;
- A death benefit it paid on your contract;
- You switch to the Income Phase of your contract; or
- You fully withdraw the corresponding Purchase Payment.
APPENDIX B provides an example of the 90 Day Window Provision.
WE RESERVE THE RIGHT TO MODIFY, SUSPEND OR TERMINATE THE SEASONS REWARDS PROGRAM
(IN ITS ENTIRETY OR ANY COMPONENT) AT ANY TIME.
Check with your representative for information on the Upfront Payment
Enhancement Rate, Deferred Payment Enhancement Rate and Deferred Payment
Enhancement Date.
ACCUMULATION UNITS
The value of the variable portion of your contract will go up or down depending
upon the investment performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S)
or SEASONS STRATEGY(IES) you select. In order to keep track of the value of your
contract, we use a unit of measure called an Accumulation Unit which works like
a share of a mutual fund. During the Income Phase, we call them Annuity Units.
An Accumulation Unit value is determined each day that the New York Stock
Exchange ("NYSE") is open. We base the number of units you receive on the unit
value of the variable investment option as of the date we receive your money, if
we receive it before 1:00 p.m. Pacific Standard Time (PST) and on the next day's
unit value if we
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receive your money after 1:00 p.m. PST. We calculate an Accumulation Unit for
each SEASONS STRATEGY, SELECT PORTFOLIO or FOCUSED PORTFOLIO after the NYSE
closes each day. We do this by:
1. determining the total value of money invested in a particular SEASONS
STRATEGY, SELECT PORTFOLIO or FOCUSED PORTFOLIO;
2. subtracting from that amount any asset-based charges and any other
charges such as taxes we have deducted; and
3. dividing this amount by the number of outstanding Accumulation Units.
EXAMPLE (CONTRACTS WITHOUT SEASONS REWARDS):
We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
the money to the Focus Growth Portfolio. We determine that the value of an
Accumulation Unit for the Focus Growth Portfolio is $11.10 when the NYSE
closes on Wednesday. We then divide $25,000 by $11.10 and credit your
contract on Wednesday night with 2,252.2523 Accumulation Units for the Focus
Growth Portfolio.
EXAMPLE (CONTRACTS WITH SEASONS REWARDS):
We receive a $25,000 Purchase Payment from you on Wednesday. You allocate
the money to the Focus Growth Portfolio. If the Upfront Payment Enhancement
is 2.00% of your Purchase Payment, we would add an Upfront Payment
Enhancement of $500 to your contract. We determine that the value of an
Accumulation Unit for the Focus Growth Portfolio is $11.10 when the NYSE
closes on Wednesday. We then divide $25,500 by $11.10 and credit your
contract on Wednesday with 2,297.2973 Accumulation Units for the Focus
Growth Portfolio.
FREE LOOK
You may cancel your contract within ten days after receiving it (or longer if
required by state law). We call this a "free look." To cancel, you must mail the
contract along with your free look request to our Annuity Service Center at P.O.
Box 54299, Los Angeles, California 90054-0299.
We will refund to you the value of your contract on the day we receive your
request MINUS any applicable Free Look Payment Enhancement Deduction, if you had
elected the Seasons Rewards program. The Free Look Payment Enhancement Deduction
is equal of the lesser of (1) the value of any Payment Enhancement(s) on the day
we receive your free look request; or (2) the Payment Enhancement amount(s), if
any, which we allocated to your contract. Thus, you receive any gain and we bear
any loss on any Payment Enhancement(s) if you decide to cancel your contract
during the free look period.
Certain states require us to return your Purchase Payments upon a free look
request. Additionally, all contracts issued as an IRA require the full return of
Purchase Payments upon a free look. With respect to those contracts, we reserve
the right to put your money in the Cash Management investment option during the
free look period and will allocate your money according to your instructions at
the end of the applicable free look period. Currently, we do not put your money
in the Cash Management investment option during the free look period unless you
allocate your money to it. If your contract was issued in a state requiring
return of Purchase Payments or as an IRA and you cancel your contract during the
free look period, we return the greater of (1) your Purchase Payments; or (2)
the value of your contract MINUS the Free Look Payment Enhancement Deduction, if
applicable. At the end of the free look period, we allocate your money according
to your instructions.
INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
The contract offers variable investment options which we call SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and SEASONS STRATEGIES, and fixed investment options. We
designed the contract to meet your varying investment needs over time. You can
achieve this by using the SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and/or SEASONS
STRATEGIES alone or in concert with the fixed investment options. The SELECT
PORTFOLIOS, FOCUSED PORTFOLIOS and SEASONS STRATEGIES operate similar to a
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mutual fund but are only available through the purchase of certain variable
annuities. A mixture of your investment in the SELECT PORTFOLIOS, FOCUSED
PORTFOLIOS and/or SEASONS STRATEGIES and fixed account options may lower the
risk associated with investing only in a variable investment option.
VARIABLE INVESTMENT OPTIONS
Each of the variable investment options of the contract invests in underlying
portfolios of Seasons Series Trust. SAAMCo, an affiliate of Anchor National,
manages Seasons Series Trust. SAAMCo has engaged sub-advisers to provide
investment advice for certain of the underlying investment portfolios.
YOU SHOULD READ THE PROSPECTUS FOR THE SEASONS SERIES TRUST CAREFULLY BEFORE
INVESTING. THE TRUST PROSPECTUS WHICH IS ATTACHED HERETO CONTAINS DETAILED
INFORMATION ABOUT THE UNDERLYING INVESTMENT PORTFOLIOS INCLUDING INVESTMENT
OBJECTIVE AND RISK FACTORS.
THE PORTFOLIOS
The contract offers nine SELECT PORTFOLIOS, each with a distinct investment
objective, utilizing a disciplined investing style to achieve its objective.
Each SELECT PORTFOLIO invests in an underlying investment portfolio of the
Seasons Series Trust. Except for the Cash Management portfolio, each underlying
portfolio is multi-managed by a team of three money managers, one component of
the underlying portfolios is an unmanaged component that tracks a particular
target index or subset of an index. The other two components are actively
managed. The unmanaged component of each underlying portfolio is intended to
balance some of the risks associated with an actively traded portfolio.
The contract also currently offers four FOCUSED PORTFOLIOS. Each multi-managed
FOCUSED PORTFOLIO offers you at least two different professional managers, one
of which may be SAAMCo, and each of which advises a separate portion of the
FOCUSED PORTFOLIO. Each manager actively selects a limited number of stocks that
represent their best stock selections. This approach to investing results in a
more concentrated portfolio, which will be less diversified than the SELECT
PORTFOLIOS, and may be subject to greater market risks.
Each underlying PORTFOLIO and the respective managers are:
<Table>
SELECT PORTFOLIOS FOCUSED PORTFOLIOS
LARGE CAP GROWTH MID CAP GROWTH INTERNATIONAL EQUITY FOCUS GROWTH
Deutsche Deutsche Deutsche Fred Alger
Goldman Sachs T. Rowe Price Goldman Sachs Int'l Jennison
Janus Wellington Lord Abbett Marsico
LARGE CAP COMPOSITE MID CAP VALUE DIVERSIFIED FIXED INCOME FOCUS GROWTH & INCOME
Deutsche Deutsche Deutsche Harris Associates L.P.
SAAMCo Goldman Sachs SAAMCo Marsico
T. Rowe Price Lord Abbett Wellington SAAMCo
LARGE CAP VALUE SMALL CAP CASH MANAGEMENT FOCUS VALUE
Deutsche Deutsche SAAMCo American Century
T. Rowe Price Lord Abbett Third Avenue
Wellington SAAMCo Thornberg
FOCUS TECHNET
Dresdner
SAAMCo
Van Wagoner
</Table>
PORTFOLIO OPERATION
Each PORTFOLIO is designed to meet a distinct investment objective facilitated
by the management philosophy of three different money managers (except for the
Cash Management portfolio). Generally, the Purchase Payments received for
allocation to each PORTFOLIO will be allocated equally among the three managers
for that
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PORTFOLIO. Each quarter SAAMCo will evaluate the asset allocation between the
three managers of each PORTFOLIO. If SAAMCo determines that the assets have
become significantly unequal in allocation among the managers, then the incoming
cash flows may be redirected in an attempt to stabilize the allocations.
Generally, existing PORTFOLIO assets will not be rebalanced. However, we reserve
the right to do so in the event that it is deemed necessary and not adverse to
the interests of contract owners invested in the PORTFOLIO.
THE SEASONS STRATEGIES
The contract offers four multi-manager variable investment SEASONS STRATEGIES,
each with a different investment objective. We designed the SEASONS STRATEGIES
utilizing an asset allocation approach to meet your investment needs over time,
considering factors such as your age, goals and risk tolerance. However, each
SEASONS STRATEGY is designed to achieve different levels of growth over time.
Each SEASONS STRATEGY invests in three underlying investment portfolios of the
Seasons Series Trust. The allocation of money among these investment portfolios
varies depending on the objective of the SEASONS STRATEGY.
The underlying investment portfolios of Seasons Series Trust in which the
SEASONS STRATEGIES invest include the Asset Allocation: Diversified Growth
Portfolio, the Stock Portfolio and the Multi-Managed Growth, Multi-Managed
Moderate Growth, Multi-Managed Income/Equity and Multi-Managed Income Portfolios
(the "Multi-Managed Portfolios").
The Asset Allocation: Diversified Growth Portfolio is managed by Putnam. The
Stock Portfolio is managed by T. Rowe Price. All of the Multi-Managed Portfolios
include the same three basic investment components: a growth component managed
by Janus, a balanced component managed by SAAMCo and a fixed income component
managed by Wellington, LLP. The Growth SEASONS STRATEGY and the Moderate Growth
SEASONS STRATEGY also have an aggressive growth component which SAAMCo manages.
The percentage that any one of these components represents in each Multi-Managed
Portfolio varies in accordance with the investment objective.
Each SEASONS STRATEGY uses an investment approach based on asset allocation.
This approach is achieved by each SEASONS STRATEGY investing in distinct
percentages in three specific underlying funds of the Seasons Series Trust. In
turn, the underlying funds invest in a combination of domestic and international
stocks, bonds and cash. Based on the percentage allocation to each specific
underlying fund and each underlying fund's investment approach, each SEASONS
STRATEGY initially has a neutral asset allocation mix of stocks, bonds and cash.
SEASONS STRATEGY REBALANCING
Each SEASONS STRATEGY is designed to meet its investment objective by allocating
a portion of your money to three different investment portfolios. At the
beginning of each quarter a rebalancing occurs among the underlying funds to
realign each SEASONS STRATEGY with its distinct percentage investment in the
three underlying funds. This rebalancing is designed to help maintain the
neutral asset allocation mix for each SEASONS STRATEGY. The pie charts on the
following pages demonstrate:
- the neutral asset allocation mix for each SEASONS STRATEGY; and
- the percentage allocation in which each SEASONS STRATEGY invests.
On the first business day of each quarter (or as close to such date as is
administratively practicable) your money will be allocated among the various
investment portfolios according to the percentages set forth on the prior pages.
Additionally, within each Multi-Managed Portfolio, your money will be rebalanced
among the various components. We also reserve the right to rebalance any SEASONS
STRATEGY more frequently if rebalancing is, deemed necessary and not adverse to
the interests of contract owners invested in such SEASONS STRATEGY. Rebalancing
a SEASONS STRATEGY may involve shifting a portion of assets out of underlying
investment portfolios with higher returns into underlying investment portfolios
with relatively lower returns.
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<Table>
GROWTH BALANCED GROWTH
GOAL: Long-term growth of capital, allocating its GOAL: Focuses on conservation of principal by investing in a
assets primarily to stocks. This SEASONS STRATEGY may be more balanced weighting of stocks and bonds, with a
best suited for those with longer periods to invest. secondary objective of seeking a high total return. This
SEASONS STRATEGY may be best suited for those approaching
[GROWTH CHART] retirement and with less tolerance for investment risk.
[BALANCED GROWTH CHART]
UNDERLYING INVESTMENT UNDERLYING INVESTMENT
PORTFOLIOS & MANAGERS PORTFOLIOS & MANAGERS
MULTI-MANAGED GROWTH PORTFOLIO 50% MULTI-MANAGED INCOME/EQUITY PORTFOLIO 55%
Managed by: Managed by:
Janus Capital Corporation Janus Capital Corporation
SunAmerica Asset Management Corp. SunAmerica Asset Management Corp.
Wellington Management Company, LLP Wellington Management Company, LLP
STOCK PORTFOLIO 25% STOCK PORTFOLIO 20%
Managed by T. Rowe Price Associates, Inc. Managed by T. Rowe Price Associates, Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO 25% ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO 25%
Managed by Putnam Investment Management, Inc. Managed by Putnam Investment Management, Inc.
</Table>
<Table>
MODERATE GROWTH CONSERVATIVE GROWTH
GOAL: Growth of capital through investments in GOAL: Capital preservation while maintaining some potential
equities, with a secondary objective of conservation of for growth over the long term. This SEASONS STRATEGY may be
principal by allocating more of its assets to bonds than best suited for those with lower investment risk tolerance.
the Growth SEASONS STRATEGY. This SEASONS STRATEGY may be [CONSERVATIVE GROWTH CHART]
best suited for those nearing retirement years but still UNDERLYING INVESTMENT
earning income. PORTFOLIOS & MANAGERS
[MODERATE GROWTH CHART]
UNDERLYING INVESTMENT MULTI-MANAGED INCOME PORTFOLIO 60%
PORTFOLIOS & MANAGERS Managed by:
MULTI-MANAGED MODERATE GROWTH PORTFOLIO 55% Janus Capital Corporation
Managed by: SunAmerica Asset Management Corp.
Janus Capital Corporation Wellington Management Company, LLP
SunAmerica Asset Management Corp. STOCK PORTFOLIO 15%
Wellington Management Company, LLP Managed by T. Rowe Price Associates, Inc.
STOCK PORTFOLIO 20% ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO 25%
Managed by T. Rowe Price Associates, Inc. Managed by Putnam Investment Management, Inc.
ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO 25%
Managed by Putnam Investment Management, Inc.
</Table>
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FIXED INVESTMENT OPTIONS
The contract also offers seven fixed investment options (five fixed investment
options if you enroll in the Seasons Rewards Program). Anchor National will
guarantee the interest rate earned on money you allocate to any of these fixed
investment options. We currently offer fixed investment options for periods of
one, three, five, seven and ten years, which we call guarantee periods. In
Maryland and Washington only the one year fixed account option is available.
Additionally, if you do not elect to enroll in the Seasons Rewards Program, you
have the option of allocating your money to the 6-month and/or 1-year DCA fixed
account. We guarantee the interest rate for money allocated to the 6-month DCA
fixed account and/or the 1-year DCA fixed account (the "DCA fixed accounts")
which are available only in conjunction with the Dollar Cost Averaging Program.
Please see the section on the Dollar Cost Averaging Program on page 22 for
additional information about, including limitations on, the availability and
operation of the DCA fixed accounts. The DCA fixed accounts are only available
for new Purchase Payments.
All of these fixed account options pay interest at rates set and guaranteed by
Anchor National. Interest rates may differ from time to time and are set at our
sole discretion. We will never credit less than a 3% annual effective rate to
any of the fixed account options. The interest rate offered for new Purchase
Payments may differ from that offered for subsequent Purchase Payments and money
already in the fixed account options. In addition, different guarantee periods
offer different interest rates. Rates for specified payments are declared at the
beginning of the guarantee period and do not change during the specified period.
There are three scenarios in which you may put money into the fixed account
options. In each scenario your money may be credited a different rate of
interest as follows:
- INITIAL RATE: Rate credited to new Purchase Payments allocated to the
fixed account when you purchase your contract.
- CURRENT RATE: Rate credited to subsequent Purchase Payments allocated to
the fixed account.
- RENEWAL RATE: Rate credited to money remaining in a fixed account after
expiration of a guarantee period and money transferred from a fixed
account or one of the SEASONS STRATEGIES, SELECT PORTFOLIOS or FOCUSED
PORTFOLIOS into a fixed account.
Each of these rates may differ from one another. Although once declared the
applicable rate is guaranteed until your guarantee period expires.
The DCA fixed accounts also credit a fixed rate of interest. Interest is
credited to amounts allocated to the 6-month or 1-year DCA fixed account while
your investment is systematically transferred to the SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES). The rates applicable to the
DCA fixed accounts may differ from each other and/or the other fixed account
options but will never be less than an effective rate of 3%. SEE DOLLAR COST
AVERAGING ON PAGE 22 for more information.
When a guarantee period ends, you may leave your money in the same guarantee
period. You may also reallocate money to another fixed investment option (other
than the DCA fixed accounts) or to any of the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) or SEASONS STRATEGY(IES). If you want to reallocate your money, you
must contact us within 30 days after the end of the current guarantee period and
instruct us how to reallocate your money. If we do not hear from you, we will
keep your money in the same guarantee period where it will earn the renewal
interest rate applicable at that time.
MARKET VALUE ADJUSTMENT
NOTE: THE FOLLOWING DISCUSSION APPLIES TO THE 3, 5, 7 OR 10 YEAR FIXED
INVESTMENT OPTIONS ONLY. THESE OPTIONS ARE NOT AVAILABLE IN MARYLAND, OREGON AND
WASHINGTON AND MAY NOT BE AVAILABLE IN OTHER STATES. PLEASE CONTACT YOUR
FINANCIAL ADVISOR FOR MORE INFORMATION. THIS DISCUSSION DOES NOT APPLY TO
WITHDRAWALS TO PAY A DEATH BENEFIT OR CONTRACT FEES AND CHARGES.
If you take money out of the 3, 5, 7 or 10 year fixed investment options before
the end of the guarantee period, we make an adjustment to your contract (the
"market value adjustment" or "MVA"). This market value adjustment
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reflects any difference in the interest rate environment between the time you
place your money in the fixed investment option and the time when you withdraw
or transfer that money. This adjustment can increase or decrease your contract
value. You have 30 days after the end of each guarantee period to reallocate
your funds without incurring a market value adjustment.
We will not assess a market value adjustment against withdrawals made (1) to pay
a death benefit; (2) to pay contract fees and charges; or (3) to begin the
Income Phase of your contract on the latest Annuity Date.
We calculate the market value adjustment by doing a comparison between current
rates and the rate being credited to you in the fixed investment option. For the
current rate we use a rate being offered by us for a guarantee period that is
equal to the time remaining in the guarantee period from which you seek
withdrawal or transfer. If we are not currently offering a guarantee period for
that period of time, we determine an applicable rate by using a formula to
arrive at a number between the interest rates currently offered for the two
closest periods available.
Generally, if interest rates drop between the time you put your money into the
fixed investment options and the time you take it out, we credit a positive
adjustment to your contract. On the other hand, if interest rates increase
during the same period, we post a negative adjustment to your contract.
Where the market value adjustment is negative, we first deduct the adjustment
from any money remaining in the fixed investment option. If there is not enough
money in the fixed investment option to meet the negative deduction, we deduct
the remainder from your withdrawal or transfer amount. Where the market value
adjustments is positive, we add the adjustment to your withdrawal amount or
transfer amount. For withdrawals under the systematic withdrawal program that
result in a negative market value adjustment, the MVA amount will be deducted
from your withdrawal.
The 1-year fixed investment option and the DCA fixed accounts do not impose a
market value adjustment. These fixed investment options are not registered under
the Securities Act of 1933 and are not subject to the provisions of the
Investment Company Act of 1940.
Please see APPENDIX C for more information on how we calculate the market value
adjustment.
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer money among the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S), SEASONS STRATEGY(IES) and the fixed
investment options by written request or by telephone. Additionally, you may
access your account and request transfers through our website,
www.sunamerica.com. Funds already in your contract cannot be transferred into
the DCA fixed accounts. You may make transfers among the investment options
without incurring a transfer charge. Transfers out of a 3, 5, 7 or 10 year fixed
investment option may be subject to a market value adjustment.
The minimum amount you can transfer is $100, or a lesser amount if you transfer
the entire balance from a SELECT PORTFOLIO, FOCUSED PORTFOLIO, SEASONS STRATEGY
or a fixed investment option. Any money remaining in a SELECT PORTFOLIO, FOCUSED
PORTFOLIO, SEASONS STRATEGY or fixed investment option after making a transfer
must equal at least $100. Your request for transfer must clearly state which
investment option(s) are involved and the amount you want to transfer. Please
see the section on Dollar Cost Averaging on page 22 for specific rules regarding
the DCA fixed accounts.
We will accept transfers by telephone and/or the internet unless you specify
otherwise on your contract application. When receiving telephone and/or the
internet account transfers, we follow appropriate procedures to provide
reasonable assurance that the transactions executed are genuine. Thus, we are
not responsible for any claim, loss or expense from any error resulting from
instructions received over the telephone or the internet. If we fail to follow
our procedures we may be liable for any losses due to unauthorized or fraudulent
transactions.
For information regarding transfers during the Income Phase, SEE INCOME OPTIONS
ON PAGE 32.
We may limit the number of transfers in any contract year or refuse any transfer
request for you or others invested in the contract if we believe that excessive
trading or a specific transfer request or group transfer requests may have a
detrimental effect on unit values or the share prices of the underlying
portfolios.
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Where permitted by law, we may accept your authorization for a third party to
make transfers for you subject to our rules. We reserve the right to suspend or
cancel such acceptance at any time and will notify you accordingly.
Additionally, we may restrict the investment options available for transfers
during any period in which such third party acts for you. We notify such third
party beforehand regarding any restrictions. However, we will not enforce these
restrictions if we are satisfied that such third party has been appointed by a
court of competent jurisdiction to act on your behalf; or such third party is a
trustee/fiduciary appointed, by you or for you, to act on your behalf for all
your financial affairs.
We may provide administrative or other support services to independent third
parties you authorize to make transfers on your behalf. We do not currently
charge you extra for providing these support services. This includes, but is not
limited to, transfers between investment options in accordance with market
timing strategies. Such independent third parties may or may not be appointed
with us for the sale of annuities. However, WE DO NOT ENGAGE ANY THIRD PARTIES
TO OFFER INVESTMENT ALLOCATION SERVICES OF ANY TYPE. WE TAKE NO RESPONSIBILITY
FOR THE INVESTMENT ALLOCATION AND TRANSFERS TRANSACTED ON YOUR BEHALF BY SUCH
THIRD PARTIES OR FOR ANY INVESTMENT ALLOCATION RECOMMENDATIONS MADE BY SUCH
PARTIES.
We reserve the right to modify, suspend or terminate the transfer privileges at
any time.
DOLLAR COST AVERAGING
The Dollar Cost Averaging ("DCA") program allows you to invest gradually in the
variable investment options. Under the program you systematically transfer a set
dollar amount or percentage from any SELECT PORTFOLIO, FOCUSED PORTFOLIO and/or
SEASONS STRATEGY or the 1-year fixed account option (source accounts) to any
other SELECT PORTFOLIO, FOCUSED PORTFOLIO or SEASONS STRATEGY. Transfers may be
monthly or quarterly. You may change the frequency at any time by notifying us
in writing.
We also offer the 6-month and a 1-year DCA fixed accounts exclusively to
facilitate this program. If you elect to participate in the Seasons Rewards
Program, the 6-month and 1-year DCA fixed accounts are not available under your
contract. The DCA fixed accounts only accept new Purchase Payments. You can not
transfer money already in your contract into these options. If you allocate a
Purchase Payment into a DCA fixed account, we transfer all your money allocated
to that account into the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or SEASONS
STRATEGY(IES) you select over the selected 6-month or 1-year period. You cannot
change the option or the frequency of transfers once selected. The minimum
transfer amount if you use the 6-month or 1-year DCA fixed accounts to provide
dollar cost averaging is $100.
If allocated to the 6-month DCA fixed account, we transfer your money over a
maximum of 6 monthly transfers. We base the actual number of transfers on the
total amount allocated to the account. For example, if you allocate $500 to the
6-month DCA fixed account, we transfer your money over a period of five months,
so that each payment complies with the $100 per transfer minimum.
We determine the amount of the transfers from the 1-year DCA fixed account based
on:
- the total amount of money allocated to the account, and
- the frequency of transfers selected.
For example, let's say you allocate $1,000 to the 1-year DCA account. You select
monthly transfers. We completely transfer all of your money to the selected
investment options over a period of ten months. You may terminate your DCA
program at any time. If money remains in the DCA fixed account, we transfer the
remaining money to the 1-year fixed investment option, unless we receive
different instructions from you.
The DCA program is designed to lessen the impact of market fluctuations on your
investment. However, we cannot ensure that you will make a profit. When you
elect the DCA Program, you are continuously investing in securities regardless
of fluctuating price levels. You should consider your tolerance for investing
through periods of fluctuating price levels.
We reserve the right to modify, suspend or terminate this program at any time.
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EXAMPLE:
Assume that you want to gradually move $750 each quarter from the Cash
Management Portfolio to the Mid-Cap Value SELECT PORTFOLIO over six
quarters. You set up dollar cost averaging and purchase Accumulation Units
at the following values:
<Table>
<Caption>
QUARTER ACCUMULATION UNIT UNITS PURCHASED
- ------- ----------------- ---------------
1 $ 7.50 100
2 $ 5.00 150
3 $10.00 75
4 $ 7.50 100
5 $ 5.00 150
6 $ 7.50 100
</Table>
You paid an average price of only $6.67 per Accumulation Unit over six
quarters, while the average market price actually was $7.08. By investing an
equal amount of money each month, you automatically buy more Accumulation
Units when the market price is low and fewer Accumulation Units when the
market price is high. This example is for illustrative purposes only.
ASSET ALLOCATION REBALANCING PROGRAM
Earnings in your contract may cause the percentage of your investment in each
investment option to differ from your original allocations. The Automatic Asset
Rebalancing Program addresses this situation. At your election, we periodically
rebalance your investments in the SEASONS STRATEGIES, SELECT PORTFOLIOS and/or
FOCUSED PORTFOLIOS to return your allocations to their original percentages.
Asset rebalancing typically involves shifting a portion of your money out of an
investment option with a higher return into an investment option with a lower
return. At your request, rebalancing occurs on a quarterly, semi-annual or
annual basis. We reserve the right to modify, suspend or terminate this program
at any time.
PRINCIPAL ADVANTAGE PROGRAM
The Principal Advantage Program allows you to invest in one or more of the
SELECT PORTFOLIOS, FOCUSED PORTFOLIOS or SEASONS STRATEGIES without putting your
principal at direct risk. The program accomplishes this by allocating your
investment strategically between the fixed investment options (other than the
DCA fixed accounts) and the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or SEASONS
STRATEGY(IES) you select. You decide how much you want to invest and
approximately when you want a return of principal. We calculate how much of your
Purchase Payment needs to be allocated to the particular fixed investment option
to ensure that it grows to an amount equal to your total principal invested
under this program.
EXAMPLE:
Assume that you want to allocate a portion of your initial Purchase Payment
of $100,000 to the fixed investment option. You want the amount allocated to
the fixed investment option to grow to $100,000 in 7 years. If the 7-year
fixed investment option is offering a 5% interest rate, we will allocate
$71,069 to the 7-year fixed investment option to ensure that this amount
will grow to $100,000 at the end of the 7-year period. The remaining $28,931
may be allocated among the SELECT PORTFOLIOS, FOCUSED PORTFOLIOS or SEASONS
STRATEGIES, as determined by you, to provide opportunity for greater growth.
We reserve the right to modify, suspend or terminate this program at any time.
VOTING RIGHTS
Anchor National is the legal owner of the Seasons Series Trust shares. However,
when an underlying portfolio solicits proxies in conjunction with a vote of
shareholders, we must obtain your instructions on how to vote those shares. We
vote all of the shares we own in proportion to your instructions. This includes
any shares we own on
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our own behalf. Should we determine that we are no longer required to comply
with these rules, we will vote the shares in our own right.
SUBSTITUTION
If any of the underlying portfolios become unavailable for investment, we may be
required to substitute shares of another investment portfolio. We will seek
prior approval of the SEC and give you notice before substituting shares.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
You can access money in your contract in two ways:
- by making a partial or total withdrawal, and/or;
- by receiving income payments during the Income Phase. SEE INCOME OPTIONS
ON PAGE 32.
Generally, we deduct a withdrawal charge applicable to any partial or total
withdrawal and a market value adjustment if a withdrawal comes from the 3, 5, 7
or 10 year fixed investment options prior to the end of a guarantee period. If
you withdraw your entire contract value, we also deduct any applicable premium
taxes and a contract maintenance fee. SEE EXPENSES ON PAGE 29. We calculate
charges due on a total withdrawal on the day after we receive your request and
other required paper work. We return your contract value less any applicable
fees and charges.
The minimum partial withdrawal amount is $1,000. We require that the value left
in any SELECT PORTFOLIO, FOCUSED PORTFOLIO, SEASONS STRATEGY or fixed account be
at least $500 after the withdrawal. You must send a written withdrawal request.
Unless you provide us with different instructions, partial withdrawals will be
made in equal amounts from each SELECT PORTFOLIO, FOCUSED PORTFOLIO, SEASONS
STRATEGY and the fixed investment option in which your contract is invested.
Withdrawals from fixed investment options prior to the end of the guarantee
period may result in a market value adjustment.
We may be required to suspend or postpone the payment of a withdrawal for any
period of time when: (1) the NYSE is closed (other than a customary weekend and
holiday closings); (2) trading with the NYSE is restricted; (3) an emergency
exists such that disposal of or determination of the value of shares of the
Portfolios is not reasonably practicable; (4) the SEC, by order, so permits for
the protection of contract owners.
Additionally, we reserve the right to defer payments for a withdrawal from a
fixed investment option. Such deferrals are limited to no longer than six
months.
FREE WITHDRAWAL PROVISION
Your contract provides for a free withdrawal amount each year. A free withdrawal
amount is the portion of your account that we allow you to take out each year
without being charged a surrender penalty. However, upon a future full surrender
of your contract, any previous free withdrawals would be subject to a surrender
charge, if any is applicable at the time of the full surrender (except in the
state of Washington).
If you participate in the Seasons Rewards Program, you will not receive any
applicable Deferred Payment Enhancement if you fully withdraw a Purchase Payment
or your contract value prior to the corresponding Deferred Payment Enhancement
Date. SEE SEASONS REWARDS PROGRAM ON PAGE 13.
To determine your free withdrawal amount and the amount, if any, on which we
assess a withdrawal charge, we refer to two special terms. These are
penalty-free earnings and the Total Invested Amount.
The penalty-free earnings portion of your contract is your account value less
your Total Invested Amount. The Total Invested Amount is the total of all
Purchase Payments you have made into the contract less portions of some
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prior withdrawals you made. The portions of prior withdrawals that reduce your
Total Invested Amount are as follows:
1. Any prior withdrawals on which you previously paid a withdrawal charge,
plus the amount of the withdrawal charge.
2. Any prior free withdrawals in any year that were in excess of your
penalty-free earnings and were free because the Purchase Payment
withdrawn is no longer subject to surrender charges at the time of the
withdrawal.
When you make a withdrawal, we assume that it is taken from penalty-free
earnings first, then from the Total Invested Amount on a first-in, first-out
basis. This means that you can also access your Purchase Payments which are no
longer subject to a surrender charge before those Purchase Payments which are
still subject to the surrender charge.
During your first contract year your free withdrawal amount is the greater of:
1. Your penalty-free earnings, or;
2. If you are participating in the Systematic Withdrawal program, a total
of 10% of your Total Invested Amount less any prior withdrawals taken
during the contract year.
After the first contract year, you can take out the greater of the following
amounts each year:
1. Your penalty free earnings and any portion of your Total Invested Amount
no longer subject to surrender charges, or;
2. 10% of the portion of your Total Invested Amount that has been in your
contract for at least one year less any withdrawals taken during the
contract year.
Purchase Payments withdrawn, above and beyond the amount of your free withdrawal
amount, which have been invested for less than 7 years, or 9 years if you elect
to participate in the Seasons Rewards Program, will result in your paying a
withdrawal charge. The amount of the charge and how it applies are discussed
more fully below. You should consider, before purchasing this contract, the
effect this charge will have on your investment if you need to withdraw more
money than the free withdrawal amount. You should fully discuss this decision
with your financial advisor.
The withdrawal charge percentage applicable is determined by the age of the
Purchase Payment being withdrawn. For purposes of calculating the surrender
charge in the event of a full surrender, the charge is calculated based on the
remaining Total Invested Amount still subject to surrender charge.
For example, you make an initial Purchase Payment of $100,000. For purposes of
this example, we will assume a 0% growth rate over the life of the contract, no
election of the Seasons Rewards Program, Income Protector Program or Seasons
Estate Advantage and no subsequent Purchase Payments. In contract year 2 and
year 3, you take out your maximum free withdrawal of $10,000 for each year.
After those free withdrawals your contract value is $80,000. In contract year 5
you request a full surrender of your contract. We will apply the following
calculation, A - (B X C) = D, where:
A = Your contract value at the time of your request for surrender ($80,000)
B = The amount of your Total Invested Amount still subject to surrender charge
($100,000)
C = The withdrawal charge percentage applicable to the age of each Purchase
Payment at the time of full surrender (4%) [B X C = $4,000]
D = Your full surrender value ($76,000)
SYSTEMATIC WITHDRAWAL PROGRAM
If you elect, we use money in your contract to pay you monthly, quarterly,
semi-annual or annual payments during the Accumulation Phase. Electronic
transfer of these funds to your bank account is also available. The minimum
amount of each withdrawal is $250. There must be at least $500 remaining in your
contract at all times.
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Withdrawals may be taxable and a 10% IRS tax penalty may apply if you are under
age 59 1/2. Any withdrawals you make using this program count against your free
withdrawal amount as described above. Withdrawals in excess of that amount may
incur a withdrawal charge. There is no additional charge for participating in
this program.
The program is not available to everyone. Please check with our Annuity Service
Center, which can provide the necessary enrollment forms. We reserve the right
to modify, suspend or terminate this program at any time.
MINIMUM CONTRACT VALUE
Where permitted by state law, we may terminate your contract if both of the
following occur: (1) your contract is less than $500 as a result of withdrawals;
and (2) you have not made any Purchase Payments during the past three years. We
will provide you with sixty days written notice. At the end of the notice
period, we will distribute the contract's remaining value to you.
QUALIFIED CONTRACT OWNERS
Certain Qualified plans restrict and/or prohibit your ability to withdraw money
from your contract. SEE TAXES ON PAGE 36 for a more detailed explanation.
DEATH BENEFIT
- --------------------------------------------------------------------------------
If you should die during the Accumulation Phase, your Beneficiary will receive a
death benefit. The death benefit options are discussed in detail below.
The death benefit is not paid after you are in the Income Phase. If you die
during the Income Phase, your Beneficiary will receive any remaining guaranteed
income payments in accordance with the income option you choose. SEE INCOME
OPTIONS ON PAGE 32.
You select the Beneficiary to receive any amounts payable on death. You may
change the Beneficiary at any time, unless you previously made an irrevocable
Beneficiary designation. A new Beneficiary designation is not effective until we
record the change.
The death benefit will be calculated and paid out when we receive all required
paperwork and satisfactory proof of death. We consider satisfactory proof of
death one of the following: (1) a certified copy of a death certificate; (2) a
certified copy of a decree of court of competent jurisdiction as to the finding
of death; (3) a written statement by a medical doctor who attended the deceased
at the time of death; or (4) any other proof satisfactory to us. We may also
require additional documentation or proof in order for the death benefit to be
paid.
The death benefit must be paid within 5 years of the date of death. The
Beneficiary may, in the alternative, elect to have the death benefit payable in
the form of an income option. If the Beneficiary elects an income option, it
must be paid over the Beneficiary's lifetime or for a period not extending
beyond the Beneficiary's life expectancy. Income payments must begin within one
year of the owner's death. If the Beneficiary is the spouse of the owner, he or
she can elect to continue the contract, rather than receive a death benefit. SEE
SPOUSAL CONTINUATION ON PAGE 29. If the Beneficiary does not make a specific
election as to how they want the death benefit distributed within sixty days of
our receipt of adequate proof of death, it will be paid in a lump sum.
If the Annuitant dies before annuity payments begin, you can name a new
Annuitant. If no Annuitant is named within 30 days, you will become the
Annuitant. However, if the owner is a non-natural person (for example, a trust),
then the death of the Annuitant will be treated as the death of the owner, no
new Annuitant may be named and the death benefit will be paid.
This contract provides three death benefit options: the Standard Death Benefit
which is automatically included in your contract for no additional fee, and
Seasons Estate Advantage which offers a choice between two optional enhanced
death benefits, along with an Earnings Advantage feature, for an additional fee.
If you choose Seasons Estate Advantage, you must do so at the time of contract
application and the election cannot be terminated.
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The term "Net Purchase Payment" is used frequently in explaining the death
benefit options. We define Net Purchase Payments as Purchase Payments less an
adjustment for each withdrawal.
To calculate the adjustment amount for a withdrawal, you first determine the
percentage by which the contract value is reduced by the withdrawal, on the date
of the withdrawal. This percentage is calculated by dividing the amount of each
withdrawal (including fees and charges applicable to the withdrawal) by the
contract value immediately before taking that withdrawal. The percentage amount
is then multiplied by the amount of Net Purchase Payments immediately before the
withdrawal to get the adjustment amount. This amount is subtracted from the
amount of Net Purchase Payment(s) immediately before the withdrawal.
If you have not taken any withdrawals from your contract, Net Purchase Payments
equals total Purchase Payments into your contract.
If Seasons Rewards is elected, any payment enhancements are not considered
Purchase Payments.
STANDARD DEATH BENEFIT
The standard death benefit on your contract, if you are age 74 or younger at the
time of death, is the greater of:
1. Net Purchase Payments compounded at a 3% annual growth rate from the
date of issue until the date of death, plus any Purchase Payments
recorded after the date of death; and reduced for any withdrawals (and
fees and charges applicable to those withdrawals) recorded after the
date of death, in the same proportion that the withdrawal reduced the
contract value on the date of the withdrawal.
2. the contract value on the date we receive all required paperwork and
satisfactory proof of death.
If you are age 75 or older at the time of death, the death benefit is the
greater of:
1. Net Purchase Payments compounded at a 3% annual growth rate from date of
issue until the your 75th birthday, plus any Purchase Payments recorded
after the 75th birthday; and reduced for any withdrawals (and fees and
charges applicable to those withdrawals) recorded after the 75th
birthday, in the same proportion that the withdrawal reduced the
contract value on the date of the withdrawal.
2. the contract value at the time we receive all required paperwork and
satisfactory proof of death.
SEASONS ESTATE ADVANTAGE
The Seasons Estate Advantage is an optional feature that offers a choice between
two enhanced death benefits, each of which includes an Earnings Advantage
component. You must elect Seasons Estate Advantage at the time we issue your
contract and once elected it cannot be terminated by you. Seasons Estate
Advantage is not available if you are age 81 or older at the time of contract
issue.
If you elect Seasons Estate Advantage, we will pay your Beneficiary the sum of A
plus B, where:
A. is the amount payable under the selected enhanced death benefit (see
option 1 or 2 below); and
B. is the amount payable, if any, under the Earnings Advantage benefit.
A. Enhanced Death Benefit Options:
1. 5% Accumulation Option--the death benefit is the greater of:
a. the contract value on the date we receive all required paperwork and
satisfactory proof of death; or
b. Net Purchase Payments compounded to the earlier of the 80th birthday or
the date of death, at a 5% annual growth rate, plus any Purchase Payments
recorded after the 80th birthday or the date of death; and reduced for any
withdrawals (and fees and charges applicable to those withdrawals)
recorded after the 80th birthday or the date of death, in the same
proportion that the withdrawal reduced the contract value on the date of
the withdrawal, up to a maximum benefit of two times the Net Purchase
Payments made over the life of your contract.
If you die after the latest Annuity Date and you selected the 5%
Accumulation option, any death benefit payable under the contract will be
the Standard Death Benefit as described above. Therefore, your
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beneficiary will not receive any benefit from Seasons Estate Advantage.
The 5% Accumulation option is not available in the state of Washington.
2. Maximum Anniversary Value Option--the death benefit is the greater of:
a. Net Purchase Payments; or
b. the contract value on the date we receive all required paperwork and
satisfactory proof of death; or
c. the maximum anniversary value on any contract anniversary prior to your
81st birthday. The anniversary value equals the contract value on a
contract anniversary increased by any Purchase Payments recorded after
that anniversary; and reduced for any withdrawals (and fees and charges
applicable to those withdrawals) recorded after the anniversary, in the
same proportion that the withdrawal reduced the contract value on the date
of the withdrawal.
If you are age 90 or older at the time of death and you had selected the
Maximum Anniversary Value option, the death benefit will be equal to the
contract value on the date we receive all required paperwork and
satisfactory proof of death. Therefore, your beneficiary will not receive
any benefit from Season's Estate Advantage.
B. Earnings Advantage Benefit:
The Earnings Advantage benefit may increase the death benefit amount. If you
have earnings in your contract at the time of death, we will add a percentage of
those earnings (the "Earnings Advantage Percentage"), subject to a maximum
dollar amount (the "Maximum Earnings Advantage Percentage"), to the death
benefit payable.
The Contract Year of Death will determine the Earnings Advantage Percentage and
the Maximum Earnings Advantage amount, as set forth below:
<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------------
EARNINGS ADVANTAGE MAXIMUM
CONTRACT YEAR OF DEATH PERCENTAGE EARNINGS ADVANTAGE PERCENTAGE
- --------------------------------------------------------------------------------------------------------------------
Years 0-4 25% of earnings 25% of Net Purchase Payments
- --------------------------------------------------------------------------------------------------------------------
Years 5-9 40% of earnings 40% of Net Purchase Payments*
- --------------------------------------------------------------------------------------------------------------------
Years 10+ 50% of earnings 50% of Net Purchase Payments*
- --------------------------------------------------------------------------------------------------------------------
</Table>
* Purchase Payments must be invested for at least six months at the time of your
death to be included as part of Net Purchase Payments for the purposes of the
Maximum Earnings Advantage calculation.
What is the Contract Year of Death?
Contract Year of Death is the number of full 12 month periods beginning with the
date your contract is issued and ending on the date of death.
What is the Earnings Advantage Percentage Amount?
We determine the amount of the Earnings Advantage based upon a percentage of
earnings in your contract at the time of your death. For the purpose of this
calculation, earnings are defined as (1) minus (2) where
(1) equals the contract value on the date of death; and
(2) equals Net Purchase Payments.
What is the Maximum Earnings Advantage?
The Earnings Advantage amount is subject to a maximum. The maximum Earnings
Advantage amount is equal to a percentage of your Net Purchase Payments.
The Earnings Advantage feature is not available in the state of Washington.
If you elect the 5% Accumulation enhanced death benefit option or the Maximum
Anniversary enhanced death benefit, the Earnings Advantage benefit will only be
paid if your date of death is prior to your latest Annuity Date.
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We assess a fee for Seasons Estate Advantage. We deduct daily the annual charge
of 0.25% of the average daily ending value of the assets you have allocated to
the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/ or SEASONS STRATEGY(IES).
This fee will terminate, if the benefit is no longer available to you based on
your age, as discussed above. In the state of Washington only the Maximum
Anniversary Value component of the Seasons Estate Advantage death benefit is
available. Neither the 5% Accumulation nor the Earnings Advantage is available
in Washington. The fee charged for the Maximum Anniversary Value option in
Washington is .25% of the average daily ending value of the assets allocated to
the PORTFOLIO AND/OR SEASONS STRATEGIES.
WE RESERVE THE RIGHT TO MODIFY, SUSPEND OR TERMINATE THE SEASONS ESTATE
ADVANTAGE FEATURE (IN ITS ENTIRETY OR ANY COMPONENT) AT ANY TIME ON
PROSPECTIVELY ISSUED CONTRACTS.
SPOUSAL CONTINUATION
If you are the original owner of the contract and the Beneficiary is your
spouse, your Spouse may elect to continue the contract after your death. The
spouse becomes the new owner ("Continuing Spouse"). The contract and its elected
features, if any, remain the same. The Continuing Spouse is subject to the same
fees, charges and expenses applicable to the original owner of the contract. The
Continuing Spouse can only elect to continue the contract upon the death of the
original owner of the contract.
Upon continuation of the contract, we will contribute to the contract value an
amount by which the death benefit that would have been paid to the beneficiary
upon the death of the original owner exceeds the contract value ("Continuation
Contribution"), if any. We calculate the Continuation Contribution as of the
date of the original owner's death. We will add the Continuation Contribution as
of the date we receive both the Continuing Spouse's written request to continue
the contract and proof of death of the original owner in a form satisfactory to
us ("Continuation Date"). The age of the Continuing Spouse on the Continuation
Date and on the date of the Continuing Spouse's death will be used in
determining any future death benefits under the Contract. SEE APPENDIX D FOR
FURTHER EXPLANATION OF THE DEATH BENEFIT CALCULATION FOLLOWING A SPOUSAL
CONTINUATION. The Continuation Contribution is not considered a Purchase Payment
for any other calculation except as noted in Appendix D. To the extent the
Continuing Spouse invests in the Variable Portfolios or MVA fixed accounts, they
will be subject to investment risk as was the original owner.
Generally, the Continuing Spouse cannot change any contract provisions as the
new owner. However, on the Continuation Date, the Continuing Spouse may
terminate the original owner's election of Seasons Estate Advantage and the
available death benefit will be the Standard Death Benefit. We will terminate
Seasons Estate Advantage if the Continuing Spouse is age 81 or older on the
Continuation Date and the available death benefit will be the Standard Death
Benefit. If Seasons Estate Advantage is not terminated or discontinued and the
Continuing Spouse dies after the latest Annuity Date, the available death
benefit will be the Standard Death Benefit (if the 5% Accumulation option
applied) or contract value at the time we receive satisfactory proof of death
(if the Maximum Anniversary option applied.)
EXPENSES
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There are charges and expenses associated with your contract. These charges and
expenses reduce your investment return. We will not increase the contract
maintenance fee or withdrawal charges under your contract. However the
investment charges under your contract may increase or decrease. Some states may
require that we charge less than the amounts described below.
INSURANCE CHARGES
The amount of this charge is 1.40% annually of the value of your contract
invested in the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or SEASONS
STRATEGY(IES). We deduct the charge daily, on a pro-rata basis, from the value
of your contract allocated to the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S)
and/or SEASONS STRATEGY(IES). The insurance charge compensates us for the
mortality and expense risks and the costs of contract distribution assumed by
Anchor National. If these charges do not cover
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all of our expenses, we will pay the difference. Likewise, if these charges
exceed our expenses, we will keep the difference.
WITHDRAWAL CHARGES
During the Accumulation Phase you may make withdrawals from your contract.
However, a withdrawal charge may apply. We apply a withdrawal charge upon an
early withdrawal against each Purchase Payment you put into the contract. The
withdrawal charge equals a percentage of the Purchase Payment you take out of
the contract. The contract does provide a free withdrawal amount every year. SEE
ACCESS TO YOUR MONEY ON PAGE 24. The withdrawal charge percentage declines each
year a Purchase Payment is in the contract, as follows:
WITHDRAWAL CHARGE WITHOUT THE SEASONS REWARDS PROGRAM (SCHEDULE A)
<Table>
<Caption>
YEAR 1 2 3 4 5 6 7 8
- ----------------- --- --- --- --- --- --- --- ---
Withdrawal
Charge......... 7% 6% 6% 5% 4% 3% 2% 0%
</Table>
WITHDRAWAL CHARGE WITH THE SEASONS REWARDS PROGRAM (SCHEDULE B)
<Table>
<Caption>
YEAR 1 2 3 4 5 6 7 8 9 10
- ----------------- --- --- --- --- --- --- --- --- --- ---
Withdrawal
Charge......... 9% 8% 7% 6% 6% 5% 4% 3% 2% 0%
</Table>
After a Purchase Payment has been in the contract for seven complete years, or
nine complete years if you elect to participate in the Seasons Rewards Program,
the withdrawal charge no longer applies to that Purchase Payment. When
calculating the withdrawal charge, we treat withdrawals as coming first from the
Purchase Payments that have been in your contract the longest. However, for tax
purposes, your withdrawals are considered earnings first, then Purchase
Payments.
The Seasons Rewards Program is designed to reward long term investing. We expect
that if you remain committed to this investment over the long term, we will
profit as a result of fees charged over the life of your contract. However,
neither the mortality and expense fees, distribution expenses, contract
administration fee nor investment management fees are higher on the Seasons
Rewards Program than the contract without election of the Seasons Rewards
Program.
Whenever possible, we deduct the withdrawal charge from the money remaining in
your contract from each of your investment options on a pro-rata basis. If you
withdraw all of your contract value, we deduct any applicable withdrawal charges
from the amount withdrawn. We will not assess a withdrawal charge for money
withdrawn to pay a death benefit. We do not currently assess a withdrawal charge
upon election to receive income payments from your contract. Withdrawals made
prior to age 59 1/2 may result in tax penalties. SEE TAXES ON PAGE 36.
INVESTMENT CHARGES
Investment Management Fees
Charges are deducted from the assets of the investment portfolios underlying the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or SEASONS STRATEGY(IES) for the
advisory and other expenses of the portfolios. SEE FEE TABLES ON PAGE 6.
Service Fees
Portfolio shares are all subject to fees imposed under a servicing plan adopted
by the Seasons Series Trust pursuant to Rule 12b-1 under the Investment Company
Act of 1940. The service fee of 0.15% (also known as a 12b-1 fee) is used
generally to pay financial intermediaries for services provided over the life of
the contract.
FOR MORE DETAILED INFORMATION ON THESE INVESTMENT CHARGES, REFER TO THE
PROSPECTUS FOR THE SEASONS SERIES TRUST, ATTACHED.
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Contract Maintenance Fee
During the Accumulation Phase, we subtract a contract maintenance fee from your
account once per year. This charge compensates us for the cost of contract
administration. If your contract value is $50,000 or more on your contract
anniversary date, we will waive the charge. This waiver is subject to change
without notice. We will deduct the $35 ($30 in North Dakota) contract
maintenance fee on a pro-rata basis from your account value on your contract
anniversary. In the states of Pennsylvania, Texas and Washington a contract
maintenance fee will be deducted pro-rata from the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) and/or SEASONS STRATEGY(IES) in which you are invested, only. If
you withdraw your entire contract value, we deduct the fee from that withdrawal.
TRANSFER FEE
You may make transfers between investment options, without incurring a transfer
charge. However, we reserve the right to charge a fee for such transfers in the
future.
SEASONS ESTATE ADVANTAGE FEE
Please see page 29 of this prospectus for additional information regarding the
Seasons Estate Advantage fee.
OPTIONAL INCOME PROTECTOR FEE
Please see page 35 of this prospectus for additional information regarding the
Income Protector fee.
PREMIUM TAX
Certain states charge the Company a tax on the premiums you pay into the
contract. We deduct from your contract these premium tax charges. Currently we
deduct the charge for premium taxes when you fully surrender or annuitize the
contract. In the future, we may assess this deduction at the time you put
Purchase Payment(s) into the contract or upon payment of a death benefit.
APPENDIX E provides more information about premium taxes.
INCOME TAXES
We do not currently deduct income taxes from your contract. We reserve the right
to do so in the future.
REDUCTION OR ELIMINATION OF CHARGES AND EXPENSES, AND ADDITIONAL AMOUNTS
CREDITED
Sometimes sales of the contracts to groups of similarly situated individuals may
lower our administrative and/or sales expenses. We reserve the right to reduce
or waive certain charges and expenses when this type of sale occurs. In
addition, we may also credit additional interest to policies sold to such
groups. We determine which groups are eligible for such treatment. Some of the
criteria we evaluate to make a determination are: size of the group; amount of
expected Purchase Payments; relationship existing between us and prospective
purchaser; nature of the purchase; length of time a group of contracts is
expected to remain active; purpose of the purchase and whether that purpose
increases the likelihood that our expenses will be reduced; and/or any other
factors that we believe indicate that administrative and/or sales expenses may
be reduced.
Anchor National may make such a determination regarding sales to its employees,
it affiliates' employees and employees of currently contracted broker-dealers;
its registered representatives and immediate family members of all of those
described.
We reserve the right to change or modify any such determination or the treatment
applied to a particular group, at any time.
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INCOME OPTIONS
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ANNUITY DATE
During the Income Phase, the money in your Contract is used to make regular
income payments to you. You may switch to the Income Phase any time after your
second contract anniversary. You select the month and year in which you want
income payments to begin. The first day of that month is the Annuity Date. You
may change your Annuity Date, so long as you do so at least seven days before
the income payments are scheduled to begin. Once you begin receiving income
payments, you cannot change your Income Option. Except as discussed under Option
5, once you begin receiving income payments, you cannot otherwise access your
money through a withdrawal or surrender. Other pay out options may be available.
Contact Our Annuity Service Center for more information.
If you participate in the Seasons Rewards Program and switch to the Income Phase
prior to a Deferred Payment Enhancement Date, if applicable, we will not
allocate any corresponding Deferred Payment Enhancement to your contract. SEE
SEASONS REWARDS PROGRAM ON PAGE 13.
Income payments must begin on or before your 95th birthday or on your tenth
contract anniversary, whichever occurs later. If you do not choose an Annuity
Date, your income payments will automatically begin on this date (latest Annuity
Date.) Certain states may require your income payments to start earlier.
If the Annuity Date is past your 85th birthday, your contract could lose its
status as an annuity under Federal tax laws. This may cause you to incur adverse
tax consequences. In addition, certain Qualified contracts require you to take
minimum distributions after you reach age 70 1/2. SEE TAXES ON PAGE 36.
INCOME OPTIONS
Currently, this Contract offers five Income Options. Other income options may be
available. Please contact the Annuity Service Center for more information. If
you elect to receive income payments but do not select an option, your income
payments will be made in accordance with Option 4 for a period of 10 years. For
income payments selected for joint lives, we pay according to Option 3.
We base our calculation of income payments on the life of the Annuitant and the
annuity rates set forth in your contract. As the contract owner, you may change
the Annuitant at any time prior to the Annuity Date. You must notify us if the
Annuitant dies before the Annuity Date and then designate a new Annuitant.
OPTION 1 - LIFE INCOME ANNUITY
This option provides income payments for the life of the Annuitant. Income
payments stop when the Annuitant dies.
OPTION 2 - JOINT AND SURVIVOR LIFE ANNUITY
This option provides income payments for the life of the Annuitant and for the
life of another designated person. Upon the death of either person, we will
continue to make income payments during the lifetime of the survivor. Income
payments stop whenever the survivor dies.
OPTION 3 - JOINT AND 100% SURVIVOR LIFE ANNUITY WITH 10 YEAR PERIOD CERTAIN
This option is similar to Option 2 above, with an additional guarantee of
payments for at least 10 years. If the Annuitant and the Survivor die before all
of the payments have been made, the remaining payments are made to the
Beneficiary under your Contract.
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OPTION 4 - LIFE ANNUITY WITH 10 OR 20 YEAR PERIOD CERTAIN
This option is similar to Option 1 above. In addition, this option provides a
guarantee that income payments will be made for at least 10 or 20 years. You
select the number of years. If the Annuitant dies before all guaranteed income
payments are made, the remaining income payments go to the Beneficiary under
your Contract.
OPTION 5 - INCOME FOR A SPECIFIED PERIOD
This option provides income payments for a guaranteed period ranging from 5 to
30 years. If the Annuitant dies before all the guaranteed income payments are
made, the remaining income payments are made to the Beneficiary under your
contract. Additionally, if variable income payments are elected under this
option, you (or the Beneficiary under the contract if the Annuitant dies prior
to all guaranteed payments being made) may redeem the contract value (in full or
in part) after the Annuity Date. The amount available upon such redemption would
be the discounted present value of any remaining guaranteed payments. The value
of an Annuity Unit, regardless of the option chosen, takes into account the
mortality and expense risk charge. Since Option 5 does not contain an element of
mortality risk, no benefit is derived from this charge.
We make income payments on a monthly, quarterly, semi-annual or annual basis.
You instruct us to send you a check or to have the payments direct deposited
into your bank account. If state law allows, we distribute annuities with a
contract value of $5,000 or less in a lump sum. Also, if the selected income
option results in annuity payments of less than $50 per payment, we may decrease
the frequency of the payments, state law allowing. See the INCOME PROTECTOR
section below for information regarding taking income under that feature.
ALLOCATION OF ANNUITY PAYMENTS
You can choose income payments that are fixed, variable or both. If payments are
fixed, Anchor National guarantees the amounts of each payment. If the payments
are variable, the amounts are not guaranteed. They will go up and/or down based
upon the performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) or SEASONS
STRATEGY(IES) in which you invest.
FIXED OR VARIABLE INCOME PAYMENTS
If at the date when income payments begin you are invested in the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES) only, your
income payments will be variable. If your money is only in fixed accounts at
that time, your income payments will be fixed in amount. If you are invested in
both fixed and variable options at the time you begin the Income Phase, a
portion of your income payments will be fixed and a portion will be variable.
INCOME PAYMENTS
Your income payments will vary if you are invested in the SELECT PORTFOLIO(S),
FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES) after the Annuity date
depending on four factors:
- for life options, your age when payments begin,
- the value of your contract in the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) and/or SEASONS STRATEGY(IES) on the Annuity Date,
- the 3.5% assumed investment rate for variable income payments used in the
annuity table for the contract, and;
- the performance of the SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or
SEASONS STRATEGY(IES) in which you are invested during the time you
receive income payments.
If you are invested in both the fixed account options and the SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES) after the
Annuity Date, the allocation of funds between the fixed accounts and SELECT
PORTFOLIO(S), FOCUSED PORTFOLIO(S) and/or SEASONS STRATEGY(IES) also impacts the
amount of your annuity payments.
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TRANSFERS DURING THE INCOME PHASE
During the Income Phase, one (1) transfer per month is permitted between the
SELECT PORTFOLIO(S), FOCUSED PORTFOLIO(S) and SEASONS STRATEGY(IES). No other
transfers are allowed during the Income Phase.
DEFERMENT OF PAYMENTS
We may defer making fixed payments for up to six months, or less if required by
law. Interest is credited to you during the deferral period.
Please read the Statement of Additional Information, available upon request, for
a more detailed discussion of the income options.
INCOME PROTECTOR
You may elect to enroll in the Income Protector Program. The Income Protector
Program can provide a future "safety net" which offers you the ability to
receive a guaranteed fixed minimum retirement income when you choose to begin
receiving income payments. With the Income Protector you can know the level of
minimum income that will be available to you upon annuitization, regardless of
fluctuating market conditions. In order to utilize the program, you must follow
the provisions discussed below.
You are not required to use the Income Protector to receive income payments. The
general provisions of your contract provide other income options. However, we
will not refund fees paid for the Income Protector if you begin taking income
payments under the general provisions of your contract. In addition, if
applicable, surrender charges will be assessed upon your beginning the Income
Phase, if you annuitize under the Income Protector Program. YOU MAY NEVER NEED
TO RELY UPON INCOME PROTECTOR IF YOUR CONTRACT PERFORMS WITHIN A HISTORICALLY
ANTICIPATED RANGE. HOWEVER, PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
Certain federal tax code restrictions on the income options available to
qualified retirement investors may have an impact on your ability to benefit
from this feature. Qualified investors should read NOTE TO QUALIFIED CONTRACT
HOLDERS, below.
HOW DO WE DETERMINE THE AMOUNT OF YOUR MINIMUM GUARANTEED INCOME?
We base the amount of minimum retirement income available to you if you take
income payments using the Income Protector upon a calculation we call the Income
Benefit Base. At the time your enrollment in the Income Protector program
becomes effective, your Initial Income Benefit Base is equal to your contract
value. Your participation becomes effective on either the date of issue of the
contract (if the feature is elected at the time of application) or on the
contract anniversary following your enrollment in the program.
The Income Benefit Base is only a calculation. It does not represent a contract
value, nor does it guarantee performance of the SELECT PORTFOLIO(S), FOCUSED
PORTFOLIO(S) or SEASONS STRATEGY(IES) in which you invest.
Your Income Benefit Base increases if you make subsequent Purchase Payments and
decreases if you withdraw money from your contract. The exact Income Benefit
Base calculation is equal to (a) plus (b) minus (c) where:
(a) is equal to, for the first year of calculation, your contract value on
the date your participation became effective, and for each subsequent
year of calculation, the Income Benefit Base of your prior contract
anniversary, and;
(b) is equal to the sum of all subsequent Purchase Payments made into the
contract since the prior contract anniversary, and;
(c) is equal to all withdrawals and applicable fees, charges since the last
contract anniversary in an amount proportionate to the amount by which
such withdrawals decreased your contract value.
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ENROLLING IN THE PROGRAM
If you decide that you want the protection offered by the Income Protector
program, you must elect the Program by completing the Income Protector Election
Form. You can not terminate your enrollment once elected.
ELECTING TO RECEIVE INCOME
In order to exercise your rights under the Income Protector feature, you may not
begin the Income Phase for at least nine years following the date your
enrollment in the program became effective. Further, you may begin taking income
payments using the Income Protector feature only within 30 days after the ninth
or later contract anniversary following the effective date of your enrollment in
the Income Protector program.
The contract anniversary prior to your election to begin receiving income
payments is your Income Benefit Date. We calculate your Income Benefit Base as
of that date to use in determining your guaranteed minimum fixed retirement
income. To determine the minimum guaranteed retirement income available to you,
we apply your final Income Benefit Base to the annuity rates stated in your
Income Protector endorsement for the income option you select. You then choose
if you would like to receive the income annually, semi-annually, quarterly or
monthly for the time guaranteed under your selected income option. Your final
Income Benefit Base is equal to (a) minus (b) where:
(a) is your Income Benefit Base as of your Income Benefit Date, and;
(b) is any partial withdrawals of contract value and any charges applicable
to those withdrawals (including any negative MVA) and any withdrawal
charges otherwise applicable, calculated as if you fully surrender your
contract as of the Income Benefit Date, and any applicable premium
taxes.
The income options available when using the Income Protector feature to receive
your retirement income are:
- Life Annuity with 10 years guaranteed, or
- Joint and 100% Survivor Life Annuity with 20 years guaranteed
At the time you elect to begin receiving income payments, we will calculate your
income payments using both your Income Benefit Base and your contract value. We
will use the same income option for each calculation; however, the annuity
factors used to calculate your income under the Income Protector feature will be
different. You will receive whichever provides a greater stream of income. If
you elect to receive income payments using the Income Protector feature your
income payments will be fixed in amount.
NOTE TO QUALIFIED CONTRACT HOLDERS
Qualified contracts generally require that you select an income option that does
not exceed your life expectancy. That restriction, if it applies to you, may
limit the benefit of the Income Protector program. To utilize the Income
Protector feature, you must take income payments under one of the two income
options described above. If those income options exceed your life expectancy,
you may be prohibited from receiving your guaranteed fixed income under the
program. If you own a Qualified contract to which this restriction applies and
you elect the Income Protector program, you may pay for this minimum guarantee
and not be able to realize the benefit.
Generally, for Qualified contracts:
- for the Life Annuity with 10 years guaranteed, you must annuitize before
age 79, and;
- for the Joint and 100% Survivor Annuity with 20 years guaranteed, both
annuitants must be 70 or younger or one of the annuitants must be 65 or
younger upon annuitization. Other age combinations may be available.
You may wish to consult your tax advisor for information concerning your
particular circumstances.
FEES ASSOCIATED WITH THE INCOME PROTECTOR PROGRAM
If you elect to participate in the Income Protector program we deduct a fee
equal to 0.10% of your Income Benefit Base from your contract value on each
contract anniversary beginning with the contract anniversary following the
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anniversary on which your enrollment in the program becomes effective. We will
deduct this charge from your contract value on every contract anniversary up to
and including your Income Benefit Date. Additionally, if you fully surrender
your contract prior to your contract anniversary, we will deduct the fee at the
time of surrender based on your Income Benefit Base as of the surrender date.
Once elected, the Income Protector Program and its corresponding charges may not
be terminated until full surrender or annuitization of the contract occurs.
For an example of the operation of the Income Protector feature, please SEE
EXHIBIT E.
The Income Protector program may not be available in all states. Check with your
financial advisor for availability in your state.
We reserve the right to modify, suspend or terminate the program at any time.
TAXES
- --------------------------------------------------------------------------------
NOTE: WE PREPARED THE FOLLOWING INFORMATION ON TAXES AS A GENERAL DISCUSSION OF
THE SUBJECT. IT IS NOT TAX ADVICE. WE CAUTION YOU TO SEEK COMPETENT TAX ADVICE
ABOUT YOUR OWN CIRCUMSTANCES. WE DO NOT GUARANTEE THE TAX STATUS OF YOUR
ANNUITY. TAX LAWS CONSTANTLY CHANGE, THEREFORE WE CANNOT GUARANTEE THAT THE
INFORMATION CONTAINED HEREIN IS COMPLETE AND/OR ACCURATE.
ANNUITY CONTRACTS IN GENERAL
The Internal Revenue Code ("IRC") provides for special rules regarding the tax
treatment of annuity contracts. Generally, taxes on the earnings in your annuity
contract are deferred until you take the money out. Qualified retirement
investments automatically provide tax deferral regardless of whether the
underlying contract is an annuity. Different rules apply depending on how you
take the money out and whether your contract is Qualified or Non-qualified.
If you do not purchase your contract under a pension plan, a specially sponsored
employer program or an individual retirement account, your contract is referred
to as a Non-qualified contract. A Non-qualified contract receives different tax
treatment than a Qualified contract. In general, your cost basis in a
Non-qualified contract is equal to the Purchase Payments you put into the
contract. You have already been taxed on the cost basis in your contract.
If you purchase your contract under a pension plan, a specially sponsored
employer program or as an individual retirement account, your contract is
referred to as a Qualified contract. Examples of Qualified plans are: Individual
Retirement Accounts ("IRAs"), Roth IRAs, Tax-Sheltered Annuities (referred to as
403(b) contracts), H.R. 10 Plans (referred to as Keogh Plans) and pension and
profit sharing plans, including 401(k) plans. Typically you have not paid any
tax on the Purchase Payments used to buy your contract and therefore, you have
no cost basis in your contract.
TAX TREATMENT OF DISTRIBUTIONS--NON-QUALIFIED CONTRACTS
If you make a withdrawal from a Non-qualified contract, the federal tax code
treats such a withdrawal as first coming from the earnings and then as coming
from your Purchase Payments. For annuity payments, any portion of each payment
that is considered a return of your Purchase Payment will not be taxed.
Withdrawn earnings are treated as income to you and are taxable. The federal tax
code provides for a 10% penalty tax on any earnings that are withdrawn other
than in conjunction with the following circumstances: (1) after reaching age
59 1/2; (2) when paid to your Beneficiary after you die; (3) after you become
disabled (as defined in the federal tax code); (4) in a series of substantially
equal installments made for your life or for the joint lives of you and you
Beneficiary; (5) under an immediate annuity; or (6) which come from Purchase
Payments made prior to August 14, 1982.
TAX TREATMENT OF DISTRIBUTIONS--QUALIFIED CONTRACTS
Generally, you have not paid any taxes on the Purchase Payments used to buy a
Qualified contract. Any amount of money you take out as a withdrawal or as
income payments is taxable income. The federal tax code further provides for a
10% penalty tax on any withdrawal or income payment paid to you other than in
conjunction with
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the following circumstances: (1) after reaching age 59 1/2; (2) when paid to
your Beneficiary after you die; (3) after you become disabled (as defined in the
federal tax code); (4) in a series of substantially equal installments made for
your life or for the joint lives of you and your Beneficiary; (5) to the extent
such withdrawals do not exceed limitations set by the federal tax code for
amounts paid during the taxable year for medical care; (6) to fund higher
education expenses (as defined in federal tax code); (7) to fund certain
first-time home purchase expenses; and, except in the case of an IRA; (8) when
you separate from service after attaining age 55; and (9) when paid to an
alternate payee pursuant to a qualified domestic relations order.
The federal tax code limits the withdrawal of Purchase Payments from certain
Tax-Sheltered Annuities. Withdrawals can only be made when an owner: (1) reaches
age 59 1/2; (2) leaves his or her job; (3) dies; (4) becomes disabled (as
defined in the federal tax code); or (5) in the case of hardship. In the case of
hardship, the owner can only withdraw Purchase Payments. These restrictions do
not apply to amounts transferred to another TSA contract under 403(b) or to a
custodial account under section 403(b)(7).
TAX TREATMENT OF DEATH BENEFITS
Any death benefits paid under the contract are taxable to the Beneficiary. The
rules governing the taxation of payments from an annuity contract, as discussed
above, generally apply whether the death benefits are paid as lump sum or
annuity payments. Estate taxes may also apply.
Certain enhanced death benefits may be purchased under your contract. Although
these types of benefits are used as investment protection and should not give
rise to any adverse tax effects, the IRS could take the position that some or
all of the charges for these death benefits should be treated as a partial
withdrawal from the contract. In such case, the amount of the partial withdrawal
may be includable in taxable income and subject to the 10% penalty if the owner
is under 59 1/2.
If you own a Qualified contract and purchase these enhanced death benefits, the
IRS may consider these benefits "incidental death benefits." The IRC imposes
limits on the amount of the incidental death benefits allowable for Qualified
contracts. If the death benefit(s) selected by you are considered to exceed
these limits, the benefit(s) could result in taxable income to the owner of the
Qualified contract. Furthermore, the IRC provides that the assets of an IRA
(including a Roth IRA) may not be invested in life insurance, but may provide,
in the case of death during the Accumulation Phase, for a death benefit payment
equal to the greater of Purchase Payments or contract value. This Contract
offers death benefits, which may exceed the greater of Purchase Payments or
contract value. If the IRS determines that these benefits are providing life
insurance, the contract may not qualify as an IRA (including Roth IRAs). You
should consult your tax adviser regarding these features and benefits prior to
purchasing a contract.
TAX TREATMENT OF NON-QUALIFIED CONTRACTS OWNED BY A TRUST OR CORPORATION
A Trust or Corporation ("Non-Natural Owner") that is considering purchasing this
annuity contract should consult a tax advisor. Generally, the IRC does not treat
a Non-Qualified contract owned by a Non-Natural owner as an annuity contract for
Federal income tax purposes. The Non-Natural Owner pays tax currently on the
contract's value in excess of the owner's cost basis. SEE THE STATEMENT OF
ADDITIONAL INFORMATION FOR A MORE DETAILED DISCUSSION OF THE POTENTIAL ADVERSE
TAX CONSEQUENCES ASSOCIATED WITH NON-NATURAL OWNERSHIP OF A NON-QUALIFIED
ANNUITY CONTRACT.
TAX TREATMENT OF GIFTS, PLEDGES AND/OR ASSIGNMENTS OF A NON-QUALIFIED ANNUITY
CONTRACT
If you gift your Non-Qualified contract to a person other than your spouse (or
former spouse incident to divorce) you will pay federal tax on the contract's
cash value to the extent it exceeds your cost basis. The recipient's cost basis
will be increased by the amount on which you will pay federal taxes. Also, the
IRC treats any assignment or pledge (or agreement to assign or pledge) of any
portion of a Non-Qualified contract as a withdrawal. PLEASE SEE THE STATEMENT OF
ADDITIONAL INFORMATION FOR A MORE DETAILED DISCUSSION REGARDING POTENTIAL TAX
CONSEQUENCES OF GIFTING, ASSIGNING OR PLEDGING A NON-QUALIFIED ANNUITY CONTRACT.
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MINIMUM DISTRIBUTIONS
Generally, the IRS requires that you begin taking annual distributions from
Qualified contracts by April 1, of the calendar year following the later of (1)
the calendar year in which you attain age 70 1/2 or (2) for Qualified contracts
other than IRAs the calendar year in which you retire. Minimum distributions are
not required in a Roth IRA, during your lifetime. Failure to satisfy the minimum
distribution requirements may result in a tax penalty. You should contact your
tax advisor for more information.
We currently waive surrender charges and MVA on withdrawals taken to meet
minimum distribution requirements. Current operational practice is to provide a
free withdrawal of the greater of the contract's maximum penalty free amount or
the required minimum distribution amount for a particular contract (but not
both).
You may elect to have the required minimum distribution amount on your contract
calculated and withdrawn each year under the automatic withdrawal option. You
may select either monthly, quarterly, semi-annual or annual withdrawals for this
purpose. This service is provided as a courtesy and we do not guarantee the
accuracy of our calculations. Accordingly, we recommend you consult your tax
advisor concerning your required minimum distribution. You may terminate your
election for automated minimum distribution at any time by sending a written
request to our Annuity Service Center. We reserve the right to change, modify or
discontinue the service at any time.
DIVERSIFICATION
The federal tax code imposes certain diversification requirements on the
underlying investments for a variable annuity. We believe that the underlying
Portfolios' management monitors the variable Portfolios so as to comply with
these requirements. To be treated as a variable annuity for tax purposes, the
underlying investments must meet these requirements.
The diversification regulations do not provide guidance as to the circumstances
under which you, because of the degree of control you exercise over the
underlying investments, and not Anchor National, would be considered the owner
of the shares of the Portfolios. It is unknown to what extent owners are
permitted to select investments, to make transfers among Portfolios or the
number and type of Portfolios owners may select from. If any guidance is
provided which is considered a new position, then the guidance would generally
be applied prospectively. However, if such guidance is considered not to be a
new position, it may be applied retroactively. This would mean you, as the owner
of the contract, could be treated as the owner of the underlying variable
investment Portfolios. Due to the uncertainty in this area, we reserve the right
to modify the contract in an attempt to maintain favorable tax treatment.
PERFORMANCE
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From time to time we will advertise the performance of the SELECT PORTFOLIOS,
FOCUSED PORTFOLIOS and/or SEASONS STRATEGIES. Any such performance results are
based on historical earnings and are not intended to indicate future
performance.
We advertise the Cash Management Portfolio's yield and effective yield. In
addition, the other SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and SEASONS STRATEGIES
advertise total return, gross yield and yield-to-maturity. These figures
represent past performance of the SELECT PORTFOLIOS, FOCUSED PORTFOLIOS and
SEASONS STRATEGIES. These performance numbers do not indicate future results.
We may show performance of each SELECT PORTFOLIO, FOCUSED PORTFOLIO and/or
SEASONS STRATEGY in comparison to various appropriate indices and the
performance of other similar variable annuity products with similar objectives
as reported by such independent reporting services as Morningstar, Inc., Lipper
Analytical Services, Inc. and the Variable Annuity Research Data Service
("VARDS").
Please see the Statement of Additional Information, available upon request, for
more information regarding the methods used to calculate performance data.
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Anchor National may also advertise the rating and other information assigned to
it by independent industry ratings organizations. Some of those organizations
are A.M. Best Company ("A.M. Best"), Moody's Investor's Service ("Moody's"),
Standard & Poor's Insurance Rating Services ("S&P"), and Fitch IBCA, Duff &
Phelps. A.M. Best's and Moody's ratings reflect their current opinion of our
financial strength and performance in comparison to others in the life and
health insurance industry. S&P's and Fitch IBCA, Duff & Phelps' ratings measure
the ability of an insurance company to meet its obligations under insurance
policies it issues. These two ratings do not measure the insurer's ability to
meet non-policy obligations. Ratings in general do not relate to the performance
of the variable Portfolios.
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OTHER INFORMATION
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ANCHOR NATIONAL
Anchor National is a stock life insurance company originally organized under the
laws of the state of California in April, 1965. On January 1, 1996, Anchor
National redomesticated under the laws of the state of Arizona.
Anchor National and its affiliates, SunAmerica Life Insurance Company, First
SunAmerica Life Insurance Company, SunAmerica Asset Management Corporation and
the SunAmerica Financial Network, Inc. (comprising six wholly owned
broker-dealers), specialize in retirement savings and investment products and
services. Business focuses include fixed and variable annuities, mutual funds
and broker-dealer services.
THE SEPARATE ACCOUNT
Anchor National originally established a separate account, Variable Annuity
Account Five (the "Separate Account"), under Arizona law on July 8, 1996. The
Separate Account is registered with the SEC as a unit investment trust under the
Investment Company Act of 1940, as amended.
Anchor National owns the assets in the Separate Account. However, the assets in
the Separate Account are not chargeable with liabilities arising out of any
other business conducted by Anchor National. Income gains and losses (realized
and unrealized) resulting from assets in the Separate Account are credited to or
charged against the Separate Account without regard to other income, gains or
losses of Anchor National. Assets in the Separate Account are not guaranteed by
Anchor National.
CUSTODIAN
State Street Bank and Trust Company, 255 Franklin Street, Boston, Massachusetts
02110, serves as the custodian of the assets of the Separate Account. Anchor
National pays State Street Bank for services provided, based on a schedule of
fees.
THE GENERAL ACCOUNT
Money allocated to the fixed account options goes into Anchor National's general
account. The general account consists of all of Anchor National's assets other
than assets attributable to a separate account. All of the assets in the general
account are chargeable with the claims of any Anchor National contract holders
as well as all of its creditors. The general account funds are invested as
permitted under state insurance laws.
DISTRIBUTION OF THE CONTRACT
Registered representatives of broker-dealers sell the contract. We pay
commissions to these representatives for the sale of the contracts. We do not
expect the total commissions to exceed 7.5% of your Purchase Payments. Contracts
sold with the Seasons Rewards Program may result in our paying a lower
commission. We may also pay a bonus to representatives for contracts which stay
active for a particular period of time, in addition to standard commissions. We
do not deduct commissions paid to registered representatives directly from your
Purchase Payments.
From time to time, we may pay or allow additional promotional incentives in the
form of cash or other compensation. We reserve the right to offer these
additional incentives only to certain broker-dealers that sell or are expected
to sell, certain minimum amounts of the contract, or other contracts offered by
us. Promotional incentives may change at any time.
SunAmerica Capital Services, Inc., 733 Third Avenue, 4th Floor, New York, New
York 10017 distributes the contracts. SunAmerica Capital Services is an
affiliate of Anchor National, and is a registered as a broker-dealer under the
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc.
No underwriting fees are paid in connection with the distribution of the
contracts.
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ADMINISTRATION
We are responsible for the administrative servicing of your contract. During the
Accumulation Phase, you will receive confirmation of transactions within your
contract. Transactions made pursuant to contractual or systematic agreements,
such as deduction of the annual maintenance fee and dollar cost averaging, may
be confirmed quarterly. Purchase payments received through the Automatic Payment
Plan or a salary reduction arrangement, may also be confirmed quarterly. For all
other transactions, we send confirmations immediately.
During the Accumulation and Income Phases, you will receive a statement of your
transactions over the past quarter and a summary of your account values. Please
contact our Annuity Service Center at 1-800-445-SUN2, if you have any comment,
question or service request.
We send out transaction confirmations and quarterly statements. It is your
responsibility to review these documents carefully and notify us of any
inaccuracies immediately. We investigate all inquiries. To the extent that we
believe we made an error, we retroactively adjust your contract, provided you
notify us within 30 days of receiving the transaction confirmation or quarterly
statement. Any other adjustments we deem warranted are made as of the time we
receive notice of the error.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Separate Account. Anchor
National and its subsidiaries engage in various kinds of routine litigation. In
management's opinion, these matters are not of material importance to their
respective total assets nor are they material with respect to the Separate
Account.
INDEPENDENT ACCOUNTANTS
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The consolidated financial statements of Anchor National Life Insurance Company
at December 31, 2000 and 1999, for the years ended December 31, 2000 and 1999,
for the three months ended December 31, 1998 and for the year ended September
30, 1998, and the financial statements of Variable Annuity Account Five (Portion
Relating to the Seasons Select(II) Variable Annuity at April 30, 2001, and for
the period from October 16, 2000 (inception) to April 30, 2001, are also
presented in this Statement of Additional Information, and are incorporated by
reference in this prospectus and have been so included in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
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TABLE OF CONTENTS OF
STATEMENT OF ADDITIONAL INFORMATION
<Table>
Separate Account............................................ 3
General Account............................................. 4
Performance Data............................................ 4
Income Payments............................................. 9
Annuity Unit Values......................................... 10
Taxes....................................................... 13
Distribution of Contracts................................... 18
Financial Statements........................................ 18
</Table>
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APPENDIX A - CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<Table>
<Caption>
FISCAL 3/31/00 4/30/00
INCEPTION TO YEAR TO TO
SEASONS STRATEGIES 3/31/99 3/31/00 4/30/00 4/30/2001
- -------------------------------------------- ------------ --------- --------- ---------------
- ----------------------------------------------------------------------------------------------------
Growth (Inception Date: 4/15/97)
Beginning AUV............................. 15.05 15.89 21.30 (a) 20.24
(b) 20.24
End AUV................................... 15.89 21.30 20.24 (a) 17.04
(b) 17.02
Ending Number of AUs...................... 31,169 1,653,495 1,871,300 (a) 398,040
(b) 1,431,268
- ----------------------------------------------------------------------------------------------------
Moderate Growth (Inception Date: 4/15/97)
Beginning AUV............................. 14.25 15.09 19.48 (a) 18.62
(b) 18.62
End AUV................................... 15.09 19.48 18.62 (a) 16.29
(b) 16.27
Ending Number of AUs...................... 93,136 1,559,019 1,760,865 (a) 483,256
(b) 1,692,012
- ----------------------------------------------------------------------------------------------------
Balanced Growth (Inception Date: 4/15/97)
Beginning AUV............................. 13.80 14.05 16.68 (a) 16.11
(b) 16.11
End AUV................................... 14.05 16.68 16.11 (a) 14.97
(b) 14.96
Ending Number of AUs...................... 85,553 991,695 1,061,795 (a) 375,068
(b) 1,049,088
- ----------------------------------------------------------------------------------------------------
Conservative Growth (Inception Date:
4/15/97)
Beginning AUV............................. 13.03 13.21 14.89 (a) 14.50
(b) 14.50
End AUV................................... 13.21 14.89 14.50 (a) 14.13
(b) 14.10
Ending Number of AUs...................... 33,892 623,175 629,067 (a) 181,135
(b) 795,377
- ----------------------------------------------------------------------------------------------------
</Table>
(a) Without election of optional Estate Advantage feature.
(b) With election of optional Estate Advantage feature, which became
available for sale on October 16, 2000.
AUV-Accumulation Unit Value
AU-Accumulation Units
A-1
46
<Table>
<Caption>
FISCAL 3/31/00 4/30/00
INCEPTION TO YEAR TO TO
SELECT PORTFOLIOS 3/31/99 3/31/00 4/30/00 4/30/2001
- -------------------------------------------- ------------ --------- --------- ---------------
- ----------------------------------------------------------------------------------------------------
Large Cap Growth (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.68 14.94 (a) 13.99
(b) 13.99
End AUV................................... 10.68 14.94 13.99 (a) 10.12
(b) 10.11
Ending Number of AUs...................... 85,647 1,058,317 1,158,071 (a) 138,746
(b) 1,108,465
- ----------------------------------------------------------------------------------------------------
Large Cap Composite (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.41 12.88 (a) 12.30
(b) 12.30
End AUV................................... 10.41 12.88 12.30 (a) 10.42
(b) 10.40
Ending Number of AUs...................... 33,347 316,855 361,941 (a) 30,196
(b) 397,804
- ----------------------------------------------------------------------------------------------------
Large Cap Value (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.32 10.75 (a) 10.79
(b) 10.79
End AUV................................... 10.32 10.75 10.79 (a) 12.35
(b) 12.34
Ending Number of AUs...................... 34,004 531,732 571,490 (a) 110,091
(b) 899,551
- ----------------------------------------------------------------------------------------------------
Mid Cap Growth (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.62 18.41 (a) 16.85
(b) 16.85
End AUV................................... 10.62 18.41 16.85 (a) 13.69
(b) 13.67
Ending Number of AUs...................... 27,096 529,844 612,249 (a) 80,629
(b) 678,174
- ----------------------------------------------------------------------------------------------------
</Table>
(a) Without election of optional Estate Advantage feature.
(b) With election of optional Estate Advantage feature, which became
available for sale on October 16, 2000.
AUV-Accumulation Unit Value
AU-Accumulation Units
A-2
47
<Table>
<Caption>
FISCAL 3/31/00 4/30/00
INCEPTION TO YEAR TO TO
SELECT PORTFOLIOS 3/31/99 3/31/00 4/30/00 4/30/2001
- -------------------------------------------- ------------ --------- --------- ---------------
- ----------------------------------------------------------------------------------------------------
Mid Cap Value (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.10 10.93 (a) 11.14
(b) 11.14
End AUV................................... 10.10 10.93 11.14 (a) 14.20
(b) 14.18
Ending Number of AUs...................... 11,278 297,306 318,151 (a) 98,363
(b) 598,874
- ----------------------------------------------------------------------------------------------------
Small Cap (Inception Date: 3/1/99)
Beginning AUV............................. 10.00 10.35 15.00 (a) 13.56
(b) 13.56
End AUV................................... 10.35 15.00 13.56 (a) 11.20
(b) 11.19
Ending Number of AUs...................... 22,807 432,850 481,239 (a) 61,891
(b) 499,597
- ----------------------------------------------------------------------------------------------------
International Equity (Inception Date:
3/1/99)
Beginning AUV............................. 10.00 10.51 13.61 (a) 12.46
(b) 12.46
End AUV................................... 10.51 13.61 12.46 (a) 9.61
(b) 9.60
Ending Number of AUs...................... 23,961 314,634 384,946 (a) 87,318
(b) 532,261
- ----------------------------------------------------------------------------------------------------
Diversified Fixed Income (Inception Date:
3/10/99)
Beginning AUV............................. 10.00 10.02 10.00 (a) 9.96
(b) 9.96
End AUV................................... 10.02 10.00 9.96 (a) 10.57
(b) 10.56
Ending Number of AUs...................... 31,762 474,014 513,721 (a) 217,162
(b) 732,849
- ----------------------------------------------------------------------------------------------------
Cash Management (Inception Date: 3/26/99)
Beginning AUV............................. 10.00 10.00 10.32 (a) 10.35
(b) 10.35
End AUV................................... 10.00 10.32 10.35 (a) 10.77
(b) 10.76
Ending Number of AUs...................... 970 380,169 235,608 (a) 713,829
(b) 1,188,716
- ----------------------------------------------------------------------------------------------------
</Table>
(a) Without election of optional Estate Advantage feature.
(b) With election of optional Estate Advantage feature, which became
available for sale on October 16, 2000.
AUV-Accumulation Unit Value
AU-Accumulation Units
A-3
48
<Table>
<Caption>
FISCAL 3/31/00 4/30/00
INCEPTION TO YEAR TO TO
FOCUSED PORTFOLIOS 3/31/99 3/31/00 4/30/00 4/30/2001
- -------------------------------------------- ------------ --------- --------- ---------------
- ----------------------------------------------------------------------------------------------------
Focus Growth (7/7/00)
Beginning AUV............................. 0 0 0 (a) 10.00
(b) 10.00
End AUV................................... 0 0 0 (a) 7.64
(b) 7.63
Ending Number of AUs...................... 0 0 0 (a) 336,517
(b) 1,598,717
- ----------------------------------------------------------------------------------------------------
Focus Growth and Income (12/29/00)
Beginning AUV............................. 0 0 0 (a) 10.00
(b) 10.00
End AUV................................... 0 0 0 (a) 9.35
(b) 8.94
Ending Number of AUs...................... 0 0 0 (a) 22,928
(b) 197,045
- ----------------------------------------------------------------------------------------------------
Focus Value*
Beginning AUV............................. 0 0 0 (a) 0
(b) 0
End AUV................................... 0 0 0 (a) 0
(b) 0
Ending Number of AUs...................... 0 0 0 (a) 0
(b) 0
- ----------------------------------------------------------------------------------------------------
Focus TechNet (12/29/00)
Beginning AUV............................. 0 0 0 (a) 10.00
(b) 10.00
End AUV................................... 0 0 0 (a) 6.33
(b) 7.01
Ending Number of AUs...................... 0 0 0 (a) 55,512
(b) 233,849
- ----------------------------------------------------------------------------------------------------
</Table>
*This portfolio was not available for sale in this product until October
1, 2001.
(a) Without election of optional Estate Advantage feature.
(b) With election of optional Estate Advantage feature, which became
available for sale on October 16, 2000.
AUV-Accumulation Unit Value
AU-Accumulation Units
A-4
49
APPENDIX B - SEASONS REWARDS PROGRAM EXAMPLES
- --------------------------------------------------------------------------------
The following examples assume an initial $125,000 Purchase Payment is made and
that the Company is offering Upfront and Deferred Payment Enhancements in
accordance with this chart:
<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------
UPFRONT PAYMENT DEFERRED PAYMENT DEFERRED PAYMENT
ENHANCEMENT LEVEL ENHANCEMENT RATE ENHANCEMENT RATE ENHANCEMENT DATE
- --------------------------------------------------------------------------------------------------------
Under $100,000 2% 0% N/A
- --------------------------------------------------------------------------------------------------------
$100,000 - $499,999 2% 1% Nine years from the date we
receive each Purchase Payment.
- --------------------------------------------------------------------------------------------------------
$500,000 - more 2% 2% Nine years from the date we
receive each Purchase Payment.
- --------------------------------------------------------------------------------------------------------
</Table>
I. DEFERRED PAYMENT ENHANCEMENT
If you elect to participate in the Seasons Rewards Program at contract issue, we
contribute at least 2% of each Purchase Payment to your contract for each
Purchase Payment we receive, as an Upfront Payment Enhancement. Any applicable
Deferred Payment Enhancement is allocated to your contract on the corresponding
Deferred Payment Enhancement Date and, if declared by the Company, is a
percentage of your remaining Purchase Payment on the Deferred Payment
Enhancement Date. Deferred Purchase Payment Enhancements are reduced
proportionately by partial withdrawals of that Purchase Payment prior to the
Deferred Payment Enhancement Date. The Deferred Payment Enhancement Rate may
increase, decrease or be eliminated at any time.
EXAMPLE 1 - NO WITHDRAWALS ARE MADE
The Upfront Payment Enhancement allocated to your contract is $2,500 (2% of
$125,000).
On your 9th contract anniversary, the Deferred Payment Enhancement Date, your
Deferred Payment Enhancement of $1,250 (1% of your remaining Purchase Payment or
$125,000) will be allocated to your contract.
EXAMPLE 2 - WITHDRAWAL MADE PRIOR TO DEFERRED PAYMENT ENHANCEMENT DATE
As in Example 1, your Upfront Payment Enhancement is $2,500.
This example also assumes the following:
(1) Your contract value on your 5th contract anniversary is $190,000.
(2) You request a withdrawal of $75,000 on your 5th contract anniversary.
(3) No subsequent Purchase Payments have been made.
(4) No prior withdrawals have been taken.
(5) Funds are not allocated to any of the MVA Fixed Accounts.
On your 5th contract anniversary, your penalty-free earnings in the contract are
$65,000 ($190,000 contract value less your $125,000 investment in the contract).
Therefore, you are withdrawing $10,000 of your initial Purchase Payment. Your
contract value will also be reduced by a $500 withdrawal charge on the $10,000
Purchase Payment (5% of $10,000). Your gross withdrawal is $75,500 of which
$10,500 constitutes part of your Purchase Payment.
The withdrawal of $10,500 of your $125,000 Purchase Payment is a withdrawal of
8.4% of your Purchase Payment. Therefore, only 91.6% or $114,500 of your initial
Purchase Payment remains in your contract.
On your 9th contract anniversary, the Deferred Payment Enhancement Date,
assuming no other transactions occur affecting the Purchase Payment, we allocate
your Deferred Payment Enhancement of $1,145 (1% of your remaining Purchase
Payment, $114,500) to your contract.
B-1
50
II. 90 DAY WINDOW
Contracts issued with the Seasons Rewards feature may be eligible for a
"Look-Back Adjustment." As of the 90th day after your contract was issued, we
will total your Purchase Payments remaining in your contract at that time,
without considering any investment gain or loss in contract value on those
Purchase Payments. If your total Purchase Payments bring you to an Enhancement
Level which, as of the date we issued your contract, would have provided for a
higher Upfront and/or Deferred Payment Enhancement Rate on each Purchase
Payment, you will get the benefit of the Enhancement Rate(s) that were
applicable to that higher Enhancement Level at the time your contract was
issued.
This example assumes the following:
(1) No withdrawal in the first 90 days.
(2) Initial Purchase Payment of $50,000 on November 1, 2000.
(3) Subsequent Purchase Payment of $50,000 on January 15, 2001.
(4) Subsequent Purchase Payment of $25,000 on January 28, 2001.
ENHANCEMENT AT THE TIME PURCHASE PAYMENT RECEIVED
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
DEFERRED
PURCHASE UPFRONT DEFERRED PAYMENT
PAYMENT PAYMENT PAYMENT ENHANCEMENT
DATE OF PURCHASE PAYMENT AMOUNT ENHANCEMENT ENHANCEMENT DATE
- ---------------------------------------------------------------------------------------------------
November 1, 2000 $50,000 2% 0% N/A
- ---------------------------------------------------------------------------------------------------
January 15, 2001 $50,000 2% 1% January 15, 2010
- ---------------------------------------------------------------------------------------------------
January 28, 2001 $25,000 2% 1% January 28, 2010
- ---------------------------------------------------------------------------------------------------
</Table>
ENHANCEMENT ADJUSTMENTS ON THE 90TH DAY FOLLOWING CONTRACT ISSUE
The sum of all Purchase Payments made in the first 90 days of the contract
equals $125,000. According to the Enhancement Levels in effect at the time this
contract was issued, a $125,000 Purchase Payment would have received a 2%
Upfront Payment Enhancement and a 1% Deferred Payment Enhancement. Under the 90
Day Window provision all Purchase Payments made within those first 90 days would
receive the benefit of the parameters in place at the time the contract was
issued, as if all of the Purchase Payments were received on the date of issue.
Thus, the first two payment enhancements would be adjusted at the end of the 90
days as follows:
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------------
DEFERRED
PURCHASE UPFRONT DEFERRED PAYMENT
PAYMENT PAYMENT PAYMENT ENHANCEMENT
DATE OF PURCHASE PAYMENT AMOUNT ENHANCEMENT ENHANCEMENT DATE
- ---------------------------------------------------------------------------------------------------
November 1, 2000 $50,000 2% 1% November 1, 2009
- ---------------------------------------------------------------------------------------------------
January 15, 2001 $50,000 2% 1% January 15, 2010
- ---------------------------------------------------------------------------------------------------
January 28, 2001 $25,000 2% 1% January 28, 2010
- ---------------------------------------------------------------------------------------------------
</Table>
B-2
51
APPENDIX C - MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------
The market value adjustment reflects the impact that changing interest rates
have on the value of money invested at a fixed interest rate. The longer the
period of time remaining in the term you initially agreed to leave your money in
the fixed investment option, the greater the impact of changing interest rates.
The impact of the market value adjustment can be either positive or negative,
and is computed by multiplying the amount withdrawn, transferred or annuitized
by the following factor:
(N/12)
[(1+I/(1+J+L)] - 1
The market value adjustment formula
may differ in certain states
where:
I is the interest rate you are earning on the money invested in
the fixed investment option;
J is the interest rate then currently available for the period of
time equal to the number of years remaining in the term you initially agreed to
leave your money in the fixed investment option; and
L is equal to 0.005, except in Florida where it is equal to .0025.
N is the number of full months remaining in the term you initially
agreed to leave your money in the fixed investment option.
EXAMPLES OF THE MARKET VALUE ADJUSTMENT
The examples below assume the following:
(1) You made an initial Purchase Payment of $10,000 and allocated it to the
10-year fixed investment option at a rate of 5%;
(2) You make a partial withdrawal of $4,000 when 1 year (12 months) remain
in the 10-year term you initially agreed to leave your money in the fixed
investment option (N=12); and
(3) You have not made any other transfers, additional Purchase Payments, or
withdrawals.
No withdrawal charges are reflected because your Purchase Payment has been in
the contract for nine full years. If a withdrawal charge applies, it is deducted
before the market value adjustment. The market value adjustment is assessed on
the amount withdrawn less any withdrawal charges.
POSITIVE ADJUSTMENT
Assume that on the date of withdrawal, the interest rate in effect for a new
Purchase Payments in the 1-year fixed investment option is 4%.
The market value adjustment factor is
(N/12)
= [(1+I/(1+J+0.005)] - 1
(12/12)
= [(1.05)/(1.04+0.005)] - 1
(1)
= (1.004785) - 1
= 1.004785 - 1
= +0.004785
The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:
$4,000 X (+0.004785) = +$19.14
$19.14 represents the market value adjustment that would be added to your
withdrawal.
NEGATIVE ADJUSTMENT
Assume that on the date of withdrawal, the interest rate in effect for new
Purchase Payments in the 1-year fixed investment option is 6%.
The market value adjustment factor is
(N/12)
= [(1+I)/(1+J+0.005)] - 1
(12/12)
= [(1.05)/(1.06+0.005)] - 1
= (0.985915)(1) - 1
= 0.985915 - 1
= -0.014085
The requested withdrawal amount is multiplied by the market value adjustment
factor to determine the market value adjustment:
$4,000 X (-0.014085) = -$56.34
$56.34 represents the market value adjustment that will be deducted from the
money remaining in the 10-year fixed investment option.
C-1
52
APPENDIX D - DEATH BENEFITS FOLLOWING SPOUSAL CONTINUATION
- --------------------------------------------------------------------------------
Capitalized terms used in the Appendix have the same meaning as they have in the
Death Benefit section starting on page 26 of the prospectus.
The term "Continuation Net Purchase Payment" is used frequently to describe the
death benefit options payable to the beneficiary of a Continuing Spouse. We
define Continuation Net Purchase Payment as Net Purchase Payments made as of the
Continuation Date. For the purposes of calculating Continuation Net Purchase
Payments, the amount that equals the contract value on the Continuation Date,
including the Continuation Contribution is considered a Purchase Payment. If the
Continuing Spouse makes no additional Purchase Payments or withdrawals,
Continuation Net Purchase Payments equal the contract value on the Continuation
Date, including the Continuation Contribution.
STANDARD DEATH BENEFIT PAYABLE UPON CONTINUING SPOUSE'S DEATH
If the Standard Death Benefit is applicable upon the Continuing Spouse's death
and the Continuing Spouse is age 74 or younger at the time of death, we will pay
the beneficiary the greater of:
1. Continuation Net Purchase Payments compounded at a 3% annual growth rate
until the date of death of the Continuing Spouse, plus any Purchase
Payments recorded after the date of death of the Continuing Spouse; and
reduced for any withdrawals (and fees and charges applicable to those
withdrawals) recorded after the date of death, in the same proportion
that the withdrawal reduced the contract value on the date of the
withdrawal.
2. The contract value on the date we receive all required paperwork and
satisfactory proof of death.
If the Continuing Spouse is age 75 or older at the time of death, the Standard
Death Benefit is the greater of:
1. Continuation Net Purchase Payments compounded at a 3% annual growth rate
from the date of issue until the Continuing Spouse's 75th birthday, plus
any Purchase Payments recorded after the Continuing Spouse's 75th
birthday; and reduced for any withdrawal (and fees and charges
applicable to those withdrawals) recorded after the 75th birthday, in
the same proportion that the withdrawal reduced the contract value on
the date of the withdrawal.
2. The contract value on the date we receive all required paperwork and
satisfactory proof of death.
SEASONS ESTATE ADVANTAGE DEATH BENEFIT PAYABLE UPON CONTINUING SPOUSE'S DEATH
If Seasons Estate Advantage is applicable upon the Continuing Spouse's death, we
will pay the Beneficiary the sum of A plus B, where:
A. equals the amount payable under the selected enhanced death benefit
(option 1 or 2 below, as selected by the original owner); and
B. equals the amount payable, if any, under the Earnings Advantage benefit.
A. Enhanced Death Benefit Options for Spousal Continuation:
1. 5% Accumulation Option--the death benefit is the greater of:
a. The contract value on the date we receive all required paperwork and
satisfactory proof of the Continuing Spouse's death; or
b. Net Purchase Payments made from the original contract issue date
including the Continuation Contribution, compounded to the earlier of
the Continuing Spouse's 80th birthday or the date of death at a 5%
annual growth rate, plus any Purchase Payments recorded after the
80th birthday or the date of death; and reduced for any withdrawals
(and fees and charges applicable to those withdrawals) recorded after
the 80th birthday or the date of death, in the same proportion that
the withdrawal reduced the contract value on the date of the
withdrawal, up to a maximum benefit of two times the Net Purchase
Payments.
D-1
53
If the Continuing Spouse dies after the latest Annuity Date and the 5%
Accumulation option applied, any death benefit payable under the contract will
be the Standard Death Benefit as described above. The Continuing Spouse's
beneficiary will not receive any benefit from Seasons Estate Advantage.
2. Maximum Anniversary Value Option--if the Continuing Spouse is younger
than age 90 at the time of death, the death benefit is the greater of:
a. Continuation Net Purchase Payments; or
b. The contract value on the date we receive all required paperwork and
satisfactory proof of the Continuing Spouse's death; or
c. The maximum anniversary value on any contract anniversary (of the
original issue date) occurring after the Continuation Date prior to
the Continuing Spouse's 81st birthday. The anniversary value equals
the value on the contract anniversary plus any Purchase Payments
recorded after that anniversary; and reduced for any withdrawals (and
fees and charges applicable to those withdrawals) recorded after that
anniversary, in the same proportion that the withdrawal reduced the
contract value on the date of the withdrawal.
If the Continuing Spouse is age 90 or older at the time of death and the Maximum
Anniversary Value option applied, the death benefit will be equal to the
contract value at the time we receive all required paperwork and satisfactory
proof of death. The Continuing Spouse's beneficiary will not receive any benefit
from Seasons Estate Advantage.
B. Earnings Advantage Benefit for Spousal Continuation:
The Earnings Advantage benefit may increase the death benefit amount. The
Earnings Advantage benefit is only available if the original owner elected
Seasons Estate Advantage and it has not been discontinued or terminated. If the
Continuing Spouse had earnings in the contract at the time of his/her death, we
will add a percentage of those earnings (the "Earnings Advantage Percentage"),
subject to a maximum dollar amount (the "Maximum Earnings Advantage
Percentage"), to the death benefit payable.
The Contract Year of Death (from Continuation Date forward) will determine the
Earnings Advantage Percentage and the Maximum Earnings Advantage amount, as set
forth below:
<Table>
<Caption>
- -------------------------------------------------------------------------------------------
EARNINGS ADVANTAGE
CONTRACT YEAR OF DEATH PERCENTAGE MAXIMUM EARNINGS ADVANTAGE PERCENTAGE
- -------------------------------------------------------------------------------------------
Years [0-4] [25%] of earnings [25%] of Continuation Net Purchase Payments
- -------------------------------------------------------------------------------------------
Years [5-9] [40%] of earnings [40%] of Continuation Net Purchase Payments*
- -------------------------------------------------------------------------------------------
Years [10+] [50%] of earnings [50%] of Continuation Net Purchase Payments*
- -------------------------------------------------------------------------------------------
</Table>
* PURCHASE PAYMENTS MUST BE INVESTED FOR AT LEAST SIX MONTHS AT THE TIME OF YOUR
DEATH TO BE INCLUDED AS PART OF CONTINUATION NET PURCHASE PAYMENTS FOR
PURPOSES OF THE MAXIMUM EARNINGS ADVANTAGE CALCULATION.
What is the Contract Year of Death?
Contract Year of Death is the number of full 12 month periods starting on the
Continuation Date and ending on the Continuing Spouse's date of death.
What is the Earnings Advantage Amount?
We determine the Earnings Advantage amount based upon a percentage of earnings
in the contract at the time of the Continuing Spouse's death. For the purpose of
this calculation, earnings are defined as (1) minus (2) where
(1) equals the contract value on the Continuing Spouse's date of death;
(2) equals the Continuation Net Purchase Payment(s).
D-2
54
What is the Maximum Earnings Advantage Amount?
The Earnings Advantage amount is subject to a maximum. The Maximum Earnings
Advantage amount is a percentage of the Continuation Net Purchase Payments.
The Earnings Advantage benefit will only be paid if the Continuing Spouse's date
of death is prior to reaching age 95.
WE RESERVE THE RIGHT TO MODIFY, SUSPEND OR TERMINATE THE SPOUSAL CONTINUATION
PROVISION (IN ITS ENTIRETY OR ANY COMPONENT) AT ANY TIME ON PROSPECTIVELY ISSUED
CONTRACTS.
D-3
55
APPENDIX E - HYPOTHETICAL EXAMPLE OF THE OPERATION OF THE INCOME PROTECTOR
PROGRAM:
- --------------------------------------------------------------------------------
This table assumes a $100,000 initial investment in a Non-qualified contract
with no further premiums, no withdrawals, and no premium taxes, no election of
Seasons Rewards or Seasons Estate Advantage and the election of the Income
Protector program at contract issue.
<Table>
- -----------------------------------------------------------------------------------------------------------------------------
ANNUAL INCOME IF YOU ANNUITIZE ON THE FOLLOWING CONTRACT ANNIVERSARIES:
IF AT ISSUE YOU ARE... 1-8 9 10 15 20
- -----------------------------------------------------------------------------------------------------------------------------
Male (M), Age 60* N/A 6,480 6,672 7,716 8,832
- -----------------------------------------------------------------------------------------------------------------------------
Female (F), Age 60* N/A 5,700 5,880 6,900 8,112
- -----------------------------------------------------------------------------------------------------------------------------
M and F, Age 60** N/A 4,920 5,028 5,544 5,928
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
* Life Annuity with 10 Year Period Certain
**Joint and 100% Survivor Annuity with 20 Year Period Certain
E-1
56
APPENDIX F - PREMIUM TAXES
- --------------------------------------------------------------------------------
Premium taxes vary according to the state and are subject to change without
notice. In many states, there is no tax at all. Listed below are the current
premium tax rates in those states that assess a premium tax. For current
information, you should consult your tax adviser.
<Table>
<Caption>
QUALIFIED NON-QUALIFIED
STATE CONTRACT CONTRACT
----- --------- -------------
California.................................................. 0.50% 2.35%
Maine....................................................... 0% 2.00%
Nevada...................................................... 0% 3.50%
South Dakota................................................ 0% 1.25%
West Virginia............................................... 1.00% 1.00%
Wyoming..................................................... 0% 1.00%
</Table>
F-1
57
Please forward a copy (without charge) of the Seasons Select(II) Variable
Annuity Statement of Additional Information to:
(Please print or type and fill in all information.)
------------------------------------------------------------------
Name
------------------------------------------------------------------
Address
------------------------------------------------------------------
City/State/Zip
------------------------------------------------------------------
Date: ____________ Signed:
Return to: Anchor National Life Insurance Company, Annuity Service Center, P.O.
Box 52499, Los Angeles, California 90054-0299
58
Part II
-------
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
SEC registration fee ....................................... $ 5,560
Printing and engraving ..................................... 50,000
Legal fees and expenses .................................... 10,000
Rating agency fees ......................................... 7,500
Miscellaneous .............................................. 10,000
---------
Total ................................................... $ 83,060
=========
Item 15. Indemnification of Directors and Officers.
Section 10-851 of the Arizona Corporations and Associations law permits the
indemnification of directors, officers, employees and agents of Arizona
corporations. Article Eight of the Company's Restated Articles of Incorporation,
as amended and restated (the "Articles") and Article Five of the Company's
By-Laws ("By-Laws") authorize the indemnification of directors and officers to
the full extent required or permitted by the Laws of the State of Arizona, now
or hereafter in force, whether such persons are serving the Company, or, at its
request, any other entity, which indemnification shall include the advance of
expenses under the procedures and to the full extent permitted by law. In
addition, the Company's officers and directors are covered by certain directors'
and officers' liability insurance policies maintained by the Company's parent.
Reference is made to section 10-851 of the Arizona Corporations and Associations
Law, Article Eight of the Articles, and Article Five of the By-Laws, which are
incorporated herein by reference.
Item 16. Exhibits and Financial Statements Schedules.
Seasons Select
Exhibit No. Description
- ----------- -----------
(1) Form of Underwriting Agreement ***
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession **
(3) (a) Articles of Incorporation ***
(b) By-Laws ****
(4) (a) Seasons Select II Individual Fixed and Variable Annuity Contract+++
(b) Individual Retirement Annuity Endorsement+++
(c) Purchase Payment Accumulation Optional Death Benefit Endorsement+++
(d) Maximum Anniversary Value Optional Death Benefit Endorsement+++
(e) Spousal Continuation Death Benefit Endorsement+++
(f) Optional Income Benefit Endorsement+++
(g) Death Benefit Endorsement+++
(h) Seasons Select II Deferred Annuity Application+++
(5) Opinion of Counsel re: Legality **
(including on Exhibit (23)(b))
(6) Opinion re Discount on Capital Shares **
(7) Opinion re Liquidation Preference **
(8) Opinion re Tax Matters **
(9) Voting Trust Agreement **
(10) Material Contracts **
(11) Statement re Computation of Per Share Earnings **
(12) Statement re Computation of Ratios **
(14) Material Foreign Patents **
(15) Letter re Unaudited Financial Information **
(16) Letter re Change in Certifying Accountant **
(23) (a) Consent of Independent Accountants *
(b) Consent of Attorney **
(24) Powers of Attorney ++++
(25) Statement of Eligibility of Trustee **
(26) Invitation for Competitive Bids **
(27) Financial Data Schedule +
II-1
59
(28) Information Reports Furnished to State Insurance Regulatory Authority **
(29) Other Exhibits **
* Herewith
** Not Applicable
*** Incorporated by Reference to Pre-Effective Amendment No. 1 of this
Registration Statement on Form S-1 filed on March 11, 1997.
**** Incorporated by Reference to Post Effective Amendment No. 11 of this
Registration Statement filed on Form S-3 on April 9, 2001.
+ Incorporated by Reference to Pre-Effective Amendment No. 2 to
Registration Statement No. 333-08877 on Form S-1, filed on February 1,
1999.
++ Incorporated by Reference to the Post-Effective Amendment No. 8 of this
Registration Statement filed on Form S-3 on July 19, 2000.
+++ Incorporated by Reference to Post-Effective Amendment No. 9 of this
Registration Statement filed in Form S-3 on September 25, 2000.
++++ Incorporated by Reference to Post Effective Amendment No. 10 of this
Registration Statement filed on Form S-3 on December 19, 2000.
II-2
60
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
61
SIGNATURES
Pursuant to the requirement of the Securities Act of 1933, the Registrant
Certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post Effective
Amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California on this 14th day of September, 2001.
By: ANCHOR NATIONAL LIFE INSURANCE COMPANY
By: /s/ JAY S. WINTROB
--------------------------------------
Jay S. Wintrob
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post
Effective Amendment to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
N. SCOTT GILLIS* Director & Senior Vice President
- ------------------- (Principal Financial Officer)
N. Scott Gillis
JAMES R. BELARDI* Director & Senior Vice President
- -------------------
James R. Belardi
JANA W. GREER* Director & Senior Vice President
- -------------------
Jana W. Greer
JAY S. WINTROB* Director, President and
- ------------------- Chief Executive Officer
Jay S. Wintrob (Principal Executive Officer)
MAURICE S. HEBERT*
- ------------------- Controller & Vice President
Maurice S. Hebert (Principal Accounting Officer)
MARC H. GAMSIN* Director & Senior Vice President
- -------------------
Marc H. Gamsin
*By: /s/ CHRISTINE A. NIXON Attorney-in-Fact September 14, 2001
----------------------
Christine A. Nixon
Dated: September 14, 2001
II-4
62
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
(23a) Consent of Independent Accountants