REGISTRATION NO. 333-180899
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
POST-EFFECTIVE AMENDMENT NO. 1
TO THE
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AXA EQUITABLE LIFE INSURANCE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEW YORK
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
13-5570651
(I.R.S. EMPLOYER IDENTIFICATION NO.)
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DODIE KENT
VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL
AXA EQUITABLE LIFE INSURANCE COMPANY
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
(212) 554-1234
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
CHRISTOPHER E. PALMER, ESQ.
GOODWIN PROCTER LLP
901 NEW YORK AVENUE, N.W.
WASHINGTON, D.C. 20001
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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. [_]
If this Form is a registration statement pursuant to General Instruction I.D.
or a post-effective amendment thereto that shall become effective upon filing
with the commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [_]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. [_]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [X] (do not check if a smaller reporting company) Smaller reporting company [_]
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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AXA Equitable Life Insurance Company
SUPPLEMENT DATED SEPTEMBER 17, 2012 TO THE CURRENT PROSPECTUS FOR STRUCTURED
CAPITAL STRATEGIES/SM/
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This Supplement modifies certain information in the above-referenced
prospectus, supplements to prospectus and statement of additional information
(together the "Prospectus") offered by AXA Equitable Life Insurance Company
("AXA Equitable"). You should read this Supplement in conjunction with your
Prospectus and retain it for future reference. This Supplement incorporates the
Prospectus by reference. Unless otherwise indicated, all other information
included in your Prospectus remains unchanged. The terms we use in this
Supplement have the same meaning as in your Prospectus. We will send you
another copy of any prospectus or supplement without charge upon request.
Please contact the customer service center referenced in your Prospectus.
The purpose of this Supplement is to provide you with information regarding the
addition of one new index to the Structured Investment Option and to announce
the availability of the Gold Index and Oil Index under NQ contracts.
Accordingly, please note the following updates to the Prospectus effective on
or about September 17, 2012:
1. THE FOLLOWING INDEX IS ADDED TO THE COVER PAGE OF THE PROSPECTUS:
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INDICES
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.. NASDAQ-100 Price Return Index
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2. THE FOLLOWING IS ADDED UNDER THE SECTION "SEGMENT TYPES" UNDER "STRUCTURED
INVESTMENT OPTION" IN "CONTRACT FEATURES AND BENEFITS":
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INDEX SEGMENT DURATION SEGMENT BUFFER
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NASDAQ-100 Price Return Index 1 year -10%
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3. *THE FOLLOWING IS ADDED UNDER THE SECTION "SECURITIES INDICES" UNDER
"STRUCTURED INVESTMENT OPTION" IN "CONTRACT FEATURES AND BENEFITS":
NASDAQ-100 PRICE RETURN INDEX. The NASDAQ-100 Price Return Index (the
"NASDAQ-100 Index") includes securities of 100 of the largest domestic
and international non-financial securities listed on The NASDAQ Stock
Market based on market capitalization. The Index reflects companies
across major industry groups including computer hardware and software,
telecommunications, retail/wholesale trade and biotechnology. It does not
contain securities of financial companies including investment companies.
The NASDAQ-100 Price Return Index does not include dividends declared by
any of the companies included in this Index.
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* THE NASDAQ-100 PRICE RETURN INDEX IS NOT AVAILABLE IN THE STATE OF OREGON.
4. THE GOLD INDEX AND OIL INDEX ARE AVAILABLE UNDER NQ CONTRACTS.
Structured Capital Strategies/SM/ is issued by and is a service mark of AXA
Equitable Life Insurance Company (AXA Equitable).
Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC.
1290 Avenue of the Americas, New York, NY 10104.
COPYRIGHT 2012 AXA EQUITABLE LIFE INSURANCE COMPANY. ALL RIGHTS RESERVED.
AXA EQUITABLE LIFE INSURANCE COMPANY
1290 AVENUE OF THE AMERICAS, NEW YORK, NY 10104
(212) 554-1234
IM-06-12 (9/12) 149997 (9/12)
SCS SUP IF (SAR) #355166
Structured Capital Strategies/SM/
A variable and index-linked deferred annuity contract
PROSPECTUS DATED MAY 1, 2012,
AS AMENDED SEPTEMBER 17, 2012
Please read and keep this Prospectus for future reference. It contains
important information that you should know before purchasing or taking any
other action under your contract. This Prospectus supersedes all prior
prospectuses and supplements. You should read the prospectuses for each Trust
which contain important information about the portfolios.
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WHAT IS STRUCTURED CAPITAL STRATEGIES/SM/?
Structured Capital Strategies/SM/ is a variable and index-linked deferred
annuity contract issued by AXA EQUITABLE LIFE INSURANCE COMPANY. The series
consists of Structured Capital Strategies/SM/ Series B ("Series B"), Structured
Capital Strategies/SM/ Series C ("Series C") and Structured Capital
Strategies/SM/ Series ADV ("Series ADV"). The contracts provide for the
accumulation of retirement savings. The contract also offers a number of payout
options. You invest to accumulate value on a tax-deferred basis in one or more
of our variable investment options and/or in one or more of the Segments
comprising the Structured Investment Option. See "Definition of key terms"
later in this Prospectus for a more detailed explanation of terms associated
with the Structured Investment Option.
This Prospectus is a disclosure document and describes all of the contract's
material features, benefits, rights and obligations, as well as other
information. The description of the contract's material provisions in this
Prospectus is current as of the date of this Prospectus. If certain material
provisions under the contract are changed after the date of this Prospectus in
accordance with the contract, those changes will be described in a supplement
to this Prospectus. You should carefully read this Prospectus in conjunction
with any applicable supplements. The contract should also be read carefully.
The contract may not currently be available in all states. In addition, certain
features described in this Prospectus may vary in your state. Not all indices
are available in all states. For a state-by-state description of all material
variations to this contract, see "Appendix II" later in this Prospectus. We can
refuse to accept any application or contribution from you at any time,
including after you purchase the contract.
WE RESERVE THE RIGHT TO DISCONTINUE THE ACCEPTANCE OF, AND/OR PLACE ADDITIONAL
LIMITATIONS ON, CONTRIBUTIONS INTO CERTAIN INVESTMENT OPTIONS, INCLUDING ANY OR
ALL OF THE SEGMENTS COMPRISING THE STRUCTURED INVESTMENT OPTION. IF WE EXERCISE
THIS RIGHT, YOUR ABILITY TO INVEST IN YOUR CONTRACT, INCREASE YOUR CONTRACT
VALUE AND, CONSEQUENTLY, INCREASE YOUR DEATH BENEFIT WILL BE LIMITED.
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PLEASE REFER TO PAGE 13 OF THIS PROSPECTUS FOR A DISCUSSION OF RISK FACTORS.
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Our variable investment options are subaccounts offered through Separate
Account No. 49. Each variable investment option, in turn, invests in a
corresponding securities portfolio ("portfolio") of the EQ Advisors Trust (the
"Trust"). Your investment results in a variable investment option will depend
on the investment performance of the related portfolio. Below is a complete
list of the variable investment options:
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VARIABLE INVESTMENT OPTIONS
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EQ/Core Bond Index EQ/Equity 500 Index EQ/Money Market
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We also offer our Structured Investment Option, which permits you to invest in
one or more segments, each of which provides performance tied to the
performance of a securities or commodities index for a set period (1 year, 3
years or 5 years). The Structured Investment Option does not involve an
investment in any underlying portfolio. Instead, it is an obligation of AXA
Equitable Life Insurance Company. Unlike an index fund, the Structured
Investment Option provides a return at maturity designed to provide a
combination of protection against certain decreases in the index and a
limitation on participation in certain increases in the index. The extent of
the downside protection at maturity varies by segment, ranging from the first
10%, 20% or 30% of loss. THERE IS A RISK OF A SUBSTANTIAL LOSS OF YOUR
PRINCIPAL BECAUSE YOU AGREE TO ABSORB ALL LOSSES TO THE EXTENT THEY EXCEED THE
PROTECTION PROVIDED BY THE STRUCTURED INVESTMENT OPTION AT MATURITY. IF YOU
WOULD LIKE A GUARANTEE OF PRINCIPAL, WE OFFER OTHER PRODUCTS THAT PROVIDE SUCH
GUARANTEES.
The total amount earned on an investment in a segment of the Structured
Investment Option is only applied at maturity. If you take a withdrawal from a
segment on any date prior to maturity, we calculate the interim value of the
segment as described in "Appendix III -- Segment Interim Value." This amount
may be less than the amount invested and may be less than the amount you would
receive had you held the investment until maturity. The Segment Interim Value
will generally be negatively affected by increases in the expected volatility
of index prices, interest rate increases, and by poor market performance. All
other factors being equal, the Segment Interim Value would be lower the earlier
a withdrawal or surrender is made during a Segment. Also, participation in
upside performance for early withdrawals is pro-rated based on the period those
amounts were invested in a Segment. This means you participate to a lesser
extent in upside performance the earlier you take a withdrawal.
We currently offer the Structured Investment Option using the following indices:
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INDICES
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S&P 500 Price Return Index NYMEX West Texas Intermediate
London Gold Market Fixing Ltd PM Fix Crude Oil Generic Front-Month
Price/USD (the "Gold Index") Futures (the "Oil Index")
Russell 2000(R) Price Return Index MSCI EAFE Price Return Index
NASDAQ-100 Price Return Index
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THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
SCS 12.0
#349623
TYPES OF CONTRACTS. We offer the contracts for use as:
.. A nonqualified annuity ("NQ") for after-tax contributions only.
.. An individual retirement annuity ("IRA"), either traditional IRA or Roth
IRA.
A minimum contribution of $25,000 is required to purchase a contract.
You can purchase this contract in one of three ways: (i) as a Series B
contract, which has withdrawal charges, (ii) as a Series C contract, which has
no withdrawal charges, or (iii) as a Series ADV contract, if you are a
participant in an account established under a fee-based program sponsored by a
registered investment adviser that we accept, which has no withdrawal charges.
The principal underwriters of the contract are AXA Advisors, LLC and AXA
Distributors, LLC. The offering of the contract is intended to be continuous.
Registration statements relating to this offering have been filed with the
Securities and Exchange Commission ("SEC"). The statement of additional
information ("SAI") dated May 1, 2012, supplemented August 30, 2012, is a part
of the registration statement filed on Form N-4. The SAI is available free of
charge. You may request one by writing to our processing office at P.O. Box
1547, Secaucus, NJ 07096-1547 or calling 1-800-789-7771. The SAI is
incorporated by this reference into this Prospectus. This Prospectus and the
SAI can also be obtained from the SEC's website at www.sec.gov. The table of
contents for the SAI appears at the back of this Prospectus.
Contents of this Prospectus
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Who is AXA Equitable? 5
Definitions of key terms 6
Structured Capital Strategies/SM/ at a glance -- key features 8
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FEE TABLE 11
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Examples 12
Condensed financial information 12
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1. RISK FACTORS 13
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2. HOW TO REACH US 15
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3. CONTRACT FEATURES AND BENEFITS 17
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How you can purchase and contribute to your contract 17
Owner and annuitant requirements 20
How you can make your contributions 20
Allocating your contributions 21
What are your investment options under the contract? 21
Portfolios of the Trust 22
Structured Investment Option 23
Your right to cancel within a certain number of days 28
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4. DETERMINING YOUR CONTRACT'S VALUE 30
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Your account value and cash value 30
Your contract's value in the variable investment options and
Segment Type Holding Accounts 30
Your contract's value in the Structured Investment Option 30
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5. TRANSFERRING YOUR MONEY AMONG INVESTMENT
OPTIONS 32
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Transferring your account value 32
Disruptive transfer activity 32
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"We," "our" and "us" refer to AXA Equitable.
When we address the reader of this Prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
Prospectus is discussing at that point. This is usually the contract owner.
When we use the word "contract" it also includes certificates that are issued
under group contracts in some states.
CONTENTS OF THIS PROSPECTUS 3
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6. ACCESSING YOUR MONEY 34
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Withdrawing your account value 34
How withdrawals are taken from your account value 35
Surrendering your contract to receive its cash value 35
Withdrawals treated as surrenders 35
When to expect payments 35
Your annuity payout options 35
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7. CHARGES AND EXPENSES 38
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Charges that AXA Equitable deducts 38
Charges under the contracts 38
Charges that the Trust deducts 40
Group or sponsored arrangements 40
Other distribution arrangements 40
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8. PAYMENT OF DEATH BENEFIT 41
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Your beneficiary and payment of benefit 41
Beneficiary continuation option 42
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9. TAX INFORMATION 45
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Overview 45
Buying a contract to fund a retirement arrangement 45
Transfers among investment options 45
Taxation of nonqualified annuities 45
Individual retirement arrangements ("IRAs") 47
Roth individual retirement annuities ("Roth IRAs") 52
Federal and state income tax withholding and information
reporting 55
Impact of taxes to AXA Equitable 55
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10. MORE INFORMATION 56
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About Separate Account No. 49 56
About Separate Account No. 68 56
About the Trust 56
About the general account 57
About other methods of payment 57
Dates and prices at which contract events occur 57
About your voting rights 58
Statutory compliance 58
About legal proceedings 58
Financial statements 58
Transfers of ownership, collateral assignments, loans, and
borrowing 59
About Custodial IRAs 59
Distribution of the contracts 59
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11.INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE 62
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APPENDICES
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I -- Condensed financial information I-1
II -- State contract availability and/or variations of
certain features and benefits II-1
III -- Segment Interim Value III-1
IV -- Index Publishers IV-1
V -- Segment Maturity Date and Segment Start Date
examples V-1
VI -- Purchase considerations for defined benefit and
defined contribution plans VI-1
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STATEMENT OF ADDITIONAL INFORMATION
Table of contents
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4 CONTENTS OF THIS PROSPECTUS
Who is AXA Equitable?
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We are AXA Equitable Life Insurance Company ("AXA Equitable") a New York stock
life insurance corporation. We have been doing business since 1859. AXA
Equitable is an indirect, wholly-owned subsidiary of AXA Financial, Inc. (the
"parent"), a holding company, which is itself an indirect, wholly-owned
subsidiary of AXA SA ("AXA"). AXA is a French holding company for an
international group of insurance and related financial services companies. As
the ultimate sole shareholder of AXA Equitable, and under its other
arrangements with AXA Equitable and AXA Equitable's parent, AXA exercises
significant influence over the operations and capital structure of AXA
Equitable and its parent. AXA holds its interest in AXA Equitable through a
number of other intermediate holding companies, including Oudinot
Participations, AXA America Holdings, Inc. and AXA Equitable Financial
Services, LLC. AXA Equitable is obligated to pay all amounts that are promised
to be paid under the contracts. No company other than AXA Equitable, however,
has any legal responsibility to pay amounts that AXA Equitable owes under the
contracts.
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$508 billion in assets as of December 31, 2011. For more than 150 years AXA
Equitable has been among the largest insurance companies in the United States.
We are licensed to sell life insurance and annuities in all fifty states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our home office
is located at 1290 Avenue of the Americas, New York, NY 10104.
WHO IS AXA EQUITABLE? 5
Definitions of key terms
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ACCOUNT VALUE -- Your "account value" is the total of: (i) the values you have
in the variable investment options, (ii) the values you have in the Segment
Type Holding Accounts and (iii) your Segment Interim Values.
ANNUITANT -- The "annuitant" is the person who is the measuring life for
determining the contract's maturity date. The annuitant is not necessarily the
contract owner. Where the owner of a contract is non-natural, the annuitant is
the measuring life for determining contract benefits.
BUSINESS DAY -- Our "business day" is generally any day the New York Stock
Exchange ("NYSE") is open for regular trading and generally ends at 4:00 p.m.
Eastern Time (or as of an earlier close of regular trading). If the Securities
and Exchange Commission determines the existence of emergency conditions on any
day, and consequently, the NYSE does not open, then that day is not a business
day.
CASH VALUE -- At any time before annuity payments begin, your contract's cash
value is equal to the account value less any applicable withdrawal charges.
CONTRACT DATE -- The "contract date" is the effective date of a contract. This
usually is the business day we receive the properly completed and signed
application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract.
CONTRACT DATE ANNIVERSARY -- The end of each 12 month period is your "contract
date anniversary." For example, if your contract date is May 1, your contract
date anniversary is April 30.
CONTRACT YEAR -- The 12 month period beginning on your contract date and each
12 month period after that date is a "contract year."
INDEX -- An Index is used to determine the Segment Rate of Return for a
Segment. We currently offer Segment Types based on two types of Indices:
Indices based on the performance of securities ("Securities Indices") and
Indices based on the performance of commodities ("Commodities Indices"). In the
future, we may offer Segment Types based on other types of Indices.
INDEX PERFORMANCE RATE -- For a Segment, the percentage change in the value of
the related Index from the Segment Start Date to the Segment Maturity Date. The
Index Performance Rate may be positive or negative.
IRA -- Individual retirement annuity contract, either traditional IRA or Roth
IRA (may also refer to an individual retirement account or an individual
retirement arrangement).
IRS -- Internal Revenue Service
NQ CONTRACT -- Nonqualified contract.
OWNER -- The "owner" is the person who is the named owner in the contract and,
if an individual, is the measuring life for determining contract benefits.
PERFORMANCE CAP RATE -- The highest Segment Rate of Return that can be credited
on a Segment Maturity Date. The Performance Cap Rate is not an annual rate of
return.
PERFORMANCE CAP THRESHOLD -- A minimum rate you may specify as a participation
requirement that the Performance Cap Rate for a new Segment must equal or
exceed in order for amounts to be transferred from a Segment Type Holding
Account into a new Segment.
SAI -- Statement of Additional Information.
SEC -- Securities and Exchange Commission.
SEGMENT -- An investment option we establish with a specific Index, Segment
Duration, Segment Buffer, Segment Maturity Date and Performance Cap Rate.
SEGMENT BUFFER -- The portion of any negative Index Performance Rate that we
absorb on a Segment Maturity Date for a particular Segment. Any percentage
decline in a Segment's Index Performance Rate in excess of the Segment Buffer
reduces your Segment Maturity Value. We currently offer Segment Buffers of
-10%, -20% and -30%.
SEGMENT BUSINESS DAY -- A business day that all Indices underlying available
Segments are scheduled to be open and to publish prices. A scheduled holiday
for any one Index disqualifies that day from being scheduled as a Segment
Business Day for all Segments. We use Segment Business Days in this manner so
that, based on published holiday schedules, we mature all Segments on the same
day and start all new Segments on a subsequent day. This design, among other
things, facilitates the roll over of maturing Segment Investments into new
Segments. It is possible that due to emergency conditions, an Index cannot
provide a price on a day that was scheduled to be a Segment Business Day. These
unforeseen events can have two results. (1) If the NYSE experiences an
emergency close and cannot publish a price, we cannot mature or start any
Segments for any Index. (2) If any Index other than the NYSE experiences an
emergency close and cannot publish a price, we will mature or start Segments
for all unaffected Indices.
SEGMENT DURATION -- The period from the Segment Start Date to the Segment
Maturity Date. We currently offer Segment Durations of 1 year, 3 years or 5
years.
SEGMENT INTERIM VALUE -- The value of your investment in a Segment prior to the
Segment Maturity Date.
SEGMENT INVESTMENT -- The amount transferred to a Segment on its Segment Start
Date, as adjusted for any withdrawals from that Segment.
SEGMENT MATURITY DATE -- The Segment Business Day on which a Segment ends. This
is generally the first Segment Business Day occurring after the 13th of the
same month as the Segment Start Date in the calendar year in which the Segment
Duration ends.
SEGMENT MATURITY DATE REQUIREMENT -- You will not be invested in a Segment if
the Segment Maturity Date is later than your contract maturity date.
6 DEFINITIONS OF KEY TERMS
SEGMENT MATURITY VALUE -- The value of your investment in a Segment on the
Segment Maturity Date.
SEGMENT PARTICIPATION REQUIREMENTS -- The requirements that must be met before
we transfer amounts from a Segment Type Holding Account to a new Segment on a
Segment Start Date.
SEGMENT RATE OF RETURN -- If the Index Performance Rate is positive, then the
Segment Rate of Return is a rate equal to the Index Performance Rate, but not
more than the Performance Cap Rate. If the Index Performance Rate is negative,
but declines by a percentage less than or equal to the Segment Buffer, then the
Segment Rate of Return is 0%. If the Index Performance Rate is negative, and
declines by more than the Segment Buffer, then the Segment Rate of Return is
negative, but will not reflect the first -10%, -20% or -30% of downside
performance, depending on the Segment Buffer applicable to that Segment.
SEGMENT RETURN AMOUNT -- Equals the Segment Investment multiplied by the
Segment Rate of Return.
SEGMENT START DATE -- The Segment Business Day on which a new Segment is
established. This is generally the second Segment Business Day occurring after
the 13th of each month.
SEGMENT TYPE -- All Segments having the same Index, Segment Duration, and
Segment Buffer. Each Segment Type has a corresponding Segment Type Holding
Account. We currently offer 16 Segment Types.
SEGMENT TYPE HOLDING ACCOUNT -- An account that holds all contributions and
transfers allocated to a Segment Type pending investment in a Segment. There is
a Segment Type Holding Account for each Segment Type. The Segment Type Holding
Accounts are part of the EQ/Money Market variable investment option.
STRUCTURED INVESTMENT OPTION -- An investment option that permits you to invest
in various Segments, each tied to the performance of an Index, and participate
in the performance of that Index.
DEFINITIONS OF KEY TERMS 7
Structured Capital Strategies/SM/ at a glance -- key features
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THREE CONTRACT SERIES This Prospectus describes three contract series of
Structured Capital Strategies/SM/ -- Series B, Series C and
Series ADV. Series B contracts are subject to a withdrawal
charge schedule, while the Series C and Series ADV
contracts are not subject to a withdrawal charge schedule.
Series ADV contracts can only be purchased through an
account established under a fee-based program offered by a
registered investment adviser. The fees and expenses of
your fee-based program are separate from and in addition to
the fees and expenses of the contract and generally provide
for various advisory and other services. We do not create
or approve these fee-based programs, which are the sole
responsibility of the registered investment adviser that
maintains them.
Each series provides for the accumulation of retirement
savings and income, and provides for the payment of account
value to your beneficiary upon death, and offers various
payout options.
Each series has a different charge structure. For details,
please see the "Fee table" and "Charges and expenses"
sections later in this Prospectus.
Throughout the Prospectus, any differences in the series
are identified. Also see "Definition of key terms" ear-
lier in this Prospectus for a more detailed explanation of
terms associated with the Structured Investment Option.
You should work with your financial professional to decide
which series of the contract may be appropriate for you
based on a thorough analysis of your particular insurance
needs, financial objectives, investment goals, time
horizons and risk tolerance.
Before you purchase a Series C contract, you should be
aware that you will pay higher Separate account annual
expenses than if you purchase a Series B or Series ADV
contract. If you plan to hold your Series C contract for an
extended period of time or invest in segment durations of 5
years, you may be better off in a Series B or Series ADV
contract. You should consider this possibility before
purchasing the contract.
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VARIABLE INVESTMENT OPTIONS Structured Capital Strategies/SM/ variable investment
options invest in portfolios sub-advised by professional
investment advisers. The contract currently offers three
variable investment options. Depending upon the performance
of the variable investment options, you could lose money by
investing in one or more variable investment options.
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STRUCTURED INVESTMENT See "Definition of key terms" on the prior page and
OPTION "Contract features and benefits" later in this Prospectus
for more detailed explanations of terms associated with the
Structured Investment Option.
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. 16 Segment Types with Segment Durations of 1, 3 and 5
years.
. Investments in Segments are not investments in
underlying mutual funds; Segments are not "index
funds." Each Segment Type offers an opportunity to
invest in a Segment that is tied to the performance of
a Securities or Commodities Index. You participate in
the performance of that Index by investing in the
Segment. You do not participate in the investment
results of any assets we hold in relation to the
Segments. We hold assets in a "non-unitized" separate
account we have established under the New York
Insurance Law to support our obligations under the
Structured Investment Option. We calculate the results
of an investment in a Segment pursuant to one or more
formulas described later in this Prospectus. Depending
upon the performance of the Indices, you could lose
money by investing in one or more Segments.
. An "Index" is used to determine the Segment Rate of
Return for a Segment. We currently offer Segment Types
based on two types of Indices: Indices based on the
performance of securities ("Securities Indices") and
Indices based on the performance of commodities
("Commodities Indices"). In the future, we may offer
Segment Types based on other types of Indices. The
Indices are as follows:
-- S&P 500 Price Return Index;
-- Russell 2000(R) Price Return Index;
-- MSCI EAFE Price Return Index;
-- NASDAQ-100 Price Return Index;
-- London Gold Market Fixing Ltd PM Fix Price /USD (the
"Gold Index"); and
-----------------------------------------------------------------------------------------
8 STRUCTURED CAPITAL STRATEGIES/SM/ AT A GLANCE -- KEY FEATURES
-----------------------------------------------------------------------------------
STRUCTURED INVESTMENT -- NYMEX West Texas Intermediate Crude Oil Generic
OPTION (CONTINUED) Front-Month Futures (the "Oil Index").
. The Segment Return Amount (which equals the Segment
Investment multiplied by the Segment Rate of Return)
will only be applied on the Segment Maturity Date.
. The Segment Rate of Return could be positive, zero, or
negative. THERE IS A RISK OF A SUBSTANTIAL LOSS OF YOUR
PRINCIPAL BECAUSE YOU AGREE TO ABSORB ALL LOSSES TO THE
EXTENT THEY EXCEED THE APPLICABLE SEGMENT BUFFER.
. On any date prior to maturity, we calculate the Segment
Interim Value for each Segment as described in
"Appendix III -- Segment Interim Value". This amount
may be less than the amount invested and may be less
than the amount you would receive had you held the
investment until maturity. The Segment Interim Value
will generally be negatively affected by increases in
the expected volatility of index prices, interest rate
increases, and by poor market performance. All other
factors being equal, the Segment Interim Value would be
lower the earlier a withdrawal or surrender is made
during a Segment. Also, participation in upside
performance for early withdrawals is pro-rated based on
the period those amounts were invested in a Segment.
This means you participate to a lesser extent in upside
performance the earlier you take a withdrawal.
. BOTH THE PERFORMANCE CAP RATE AND THE SEGMENT BUFFER
ARE RATES OF RETURN FROM THE SEGMENT START DATE TO THE
SEGMENT MATURITY DATE, NOT ANNUAL RATES OF RETURN, EVEN
IF THE SEGMENT DURATION IS LONGER THAN ONE YEAR.
THEREFORE YOUR PERFORMANCE CAP THRESHOLD IS ALSO NOT AN
ANNUAL RATE, AS IT IS BASED ON THE SEGMENT DURATION.
. THE HIGHEST LEVEL OF PROTECTION AT MATURITY IS THE -30%
SEGMENT BUFFER AND LOWEST LEVEL OF PROTECTION IS THE
-10% SEGMENT BUFFER.
. THIS PRODUCT GENERALLY OFFERS GREATER UPSIDE POTENTIAL,
BUT LESS DOWNSIDE PROTECTION, AT MATURITY THAN FIXED
INDEXED ANNUITIES, WHICH PROVIDE A GUARANTEED MINIMUM
RETURN.
-----------------------------------------------------------------------------------
TAX CONSIDERATIONS . On earnings inside the contract No tax until you make withdrawals from your contract or receive an-
nuity payments.
. On transfers inside the No tax on transfers among investment options, including on a Segment
contract Maturity Date.
---------------------------------------------------------------------------------------------------------
If you are purchasing an annuity contract as an Individual
Retirement Annuity (IRA), you should be aware that such
annuities do not provide tax deferral benefits beyond those
already provided by the Internal Revenue Code for
individual retirement arrangements. Before purchasing this
contract, you should consider whether its features and
benefits beyond tax deferral meet your needs and goals. You
may also want to consider the relative features, benefits
and costs of this contract with any other investment that
you may use in connection with your individual retirement
arrangement. You should also be aware that income received
under the contract is taxable as ordinary income and not as
capital gain. For more information, see "Tax information"
later in this Prospectus.
----------------------------------------------------------------------------------
CONTRIBUTION AMOUNTS . NQ
$25,000(initial) (minimum)
$500(additional) (minimum)
. Traditional or Roth IRA
$25,000(initial) (minimum)
$50(subsequent) (minimum)
. Maximum contribution limitations apply to all contracts.
------------------------------------------------------------
In general, contributions are limited to $1.5 million under
all Structured Capital Strategies/SM/ contracts with the
same owner or annuitant and $2.5 million under all AXA
Equitable annuity accumulation contracts with the same
owner or annuitant. Upon advance notice to you, we may
exercise certain rights we have under the contract
regarding contributions, including our rights to (i) change
minimum and maximum contribution requirements and
limitations, and (ii) discontinue acceptance of
contributions including contributions in general, or to
particular investment options. In addition, we may, at any
time, exercise our right to limit or terminate transfers
into any variable investment option. For more information,
see "How you can purchase and contribute to your contract"
in "Contract features and benefits" later in this
Prospectus.
----------------------------------------------------------------------------------
STRUCTURED CAPITAL STRATEGIES/SM/ AT A GLANCE -- KEY FEATURES 9
---------------------------------------------------------------------------------------
ACCESS TO YOUR MONEY . Partial withdrawals
. Contract surrender
. You may be subject to tax on any income you receive
and, unless you are 59 1/2 or another exception
applies, an additional 10% federal income tax penalty.
For Series B, you may also incur a withdrawal charge
for certain withdrawals or if you surrender your
contract.
---------------------------------------------------------------------------------------
PAYOUT OPTIONS . Fixed annuity payout options
. Other payout options through other contracts
---------------------------------------------------------------------------------------
FEES AND CHARGES Please see "Fee table" later in this section for complete
details.
---------------------------------------------------------------------------------------
OWNER AND ANNUITANT ISSUE 0-85
AGES
---------------------------------------------------------------------------------------
YOUR RIGHT TO CANCEL To exercise your cancellation right you must notify us,
with a signed letter of instruction electing this right, to
our processing office within 10 days after you receive your
contract. If state law requires, this "free look" period
may be longer. See "Your right to cancel within a certain
number of days" in "Contract features and benefits" later
in this Prospectus for more information.
---------------------------------------------------------------------------------------
THE TABLE ABOVE SUMMARIZES ONLY CERTAIN CURRENT KEY FEATURES OF THE CONTRACT.
THE TABLE ALSO SUMMARIZES CERTAIN CURRENT LIMITATIONS, RESTRICTIONS AND
EXCEPTIONS TO THOSE FEATURES THAT WE HAVE THE RIGHT TO IMPOSE UNDER THE
CONTRACT AND THAT ARE SUBJECT TO CHANGE IN THE FUTURE. IN SOME CASES, OTHER
LIMITATIONS, RESTRICTIONS AND EXCEPTIONS MAY APPLY. THE CONTRACT MAY NOT
CURRENTLY BE AVAILABLE IN ALL STATES. ALL SEGMENT TYPES MAY NOT BE AVAILABLE IN
ALL STATES. FOR A STATE-BY-STATE DESCRIPTION OF ALL MATERIAL VARIATIONS TO THIS
CONTRACT, SEE "APPENDIX II" LATER IN THIS PROSPECTUS.
For more detailed information, we urge you to read the contents of this
Prospectus, as well as your contract. This Prospectus is a disclosure document
and describes all of the contract's material features, benefits, rights and
obligations, as well as other information. The Prospectus should be read
carefully before investing. Please feel free to speak with your financial
professional, or call us, if you have any questions.
OTHER CONTRACTS
We offer a variety of fixed and variable annuity contracts. They may offer
features, including investment options, and have fees and charges, that are
different from those in the contracts offered by this Prospectus. Not every
contract we issue is offered through every selling broker-dealer. Some selling
broker-dealers may not offer and/or limit the offering of certain features or
options, as well as limit the availability of the contracts, based on issue age
or other criteria established by the selling broker-dealer. Upon request, your
financial professional can show you information regarding other AXA Equitable
annuity contracts that he or she distributes. You can also contact us to find
out more about the availability of any of the AXA Equitable annuity contracts.
You should work with your financial professional to decide whether this
contract is appropriate for you based on a thorough analysis of your particular
insurance needs, financial objectives, investment goals, time horizons and risk
tolerance.
10 STRUCTURED CAPITAL STRATEGIES/SM/ AT A GLANCE -- KEY FEATURES
Fee table
--------------------------------------------------------------------------------
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the contract. Each of the charges and expenses
is more fully described in "Charges and expenses" later in this Prospectus.
The first table describes fees and expenses that you will pay at the time that
you surrender the contract, make certain withdrawals, purchase a Variable
Immediate Annuity payout option, request special services or make certain
transfers and exchanges. Charges designed to approximate certain taxes that may
be imposed on us, such as premium taxes in your state, may also apply./(1)/
---------------------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE AT THE TIME YOU REQUEST
CERTAIN TRANSACTIONS
---------------------------------------------------------------------------------------------------
Maximum withdrawal charge as a percentage of contributions SERIES B/(2)/ SERIES C SERIES ADV
withdrawn (deducted if you surrender your contract or make 5.00% N/A N/A
certain withdrawals or apply your cash value to certain
payout options).
---------------------------------------------------------------------------------------------------
Charge for each additional transfer in excess of 12
transfers per contract year:/(3)/ Maximum Charge: $35 Current Charge: $0
---------------------------------------------------------------------------------------------------
SPECIAL SERVICES CHARGES
.. Wire transfer charge Current and Maximum Charge: $90
.. Express mail charge Current and Maximum Charge: $35
.. Duplicate contract charge Current and Maximum Charge: $35
----------------------------------------------------------------
The following tables describe the fees and expenses that you will pay periodically
during the time that you own the contract, not including underlying Trust portfolio fees
and expenses.
-----------------------------------------------------------------------------------------
CHARGES WE DEDUCT FROM YOUR VARIABLE INVESTMENT OPTIONS (INCLUDING THE SEGMENT TYPE
HOLDING ACCOUNTS) EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
-----------------------------------------------------------------------------------------
SEPARATE ACCOUNT ANNUAL EXPENSES: SERIES B SERIES C SERIES ADV
Contract fee/(4)/ 1.25% 1.65% 0.65%
---------------------------------------------------------------------------------------------------------
ADJUSTMENTS FOR EARLY SURRENDER OR WITHDRAWAL FROM A SEGMENT
---------------------------------------------------------------------------------------------------------
WHEN CALCULATION IS MADE MAXIMUM AMOUNT THAT MAY BE LOST/(5)/
---------------------------------------------------------------------------------------------------------
-10% BUFFER -20% BUFFER -30% BUFFER
---------------------------------------------------------------------------------------------------------
Segment Interim Value is applied on surrender or withdrawal 90% of Segment 80% of Segment 70% of Segment
from a Segment prior to its Segment Maturity Date Investment Investment Investment
---------------------------------------------------------------------------------------------------------
You also bear your proportionate share of all fees and expenses paid by a
"portfolio" that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses charged by any
of the portfolios that you will pay periodically during the time that you own
the contract. These fees and expenses are reflected in the portfolio's net
asset value each day. Therefore, they reduce the investment return of the
portfolio and the related variable investment option. Actual fees and expenses
are likely to fluctuate from year to year. More detail concerning each
portfolio's fees and expenses is contained in the Trust Prospectus for the
portfolio.
---------------------------------------------------------------------------------------------------
PORTFOLIO OPERATING EXPENSES EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
---------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2011 (expenses that are deducted from Lowest Highest
portfolio assets including management fees, 12b-1 fees, service fees, and/or other
expenses)/(6)/ 0.62% 0.72%
---------------------------------------------------------------------------------------------------
(1)The current tax charge that might be imposed varies by jurisdiction and
currently ranges from 0% to 3.5%.
(2)Deducted upon a withdrawal of amounts in excess of the 10% free withdrawal
amount. Important exceptions and limitations may eliminate or reduce this
charge.
The withdrawal charge percentage we use is determined by the contract year
in which you make the withdrawal, surrender your contract to receive its
cash value, or surrender your contract to apply your cash value to a
non-life contingent annuity payment option. For each contribution, we
consider the contract year in which we receive that contribution to be
"contract year 1").
Contract Year
-------------
1........ 5.00%
2........ 5.00%
3........ 5.00%
4........ 4.00%
5........ 3.00%
6+....... 0.00%
FEE TABLE 11
(3)Currently, we do not charge for transfers among variable investment options
under the contract. However, we reserve the right to charge for transfers in
excess of 12 transfers per contract year. We will charge no more than $35
for each variable transfer at the time each transfer is processed. See
"Transfer charge" in "Charges and expenses" later in this Prospectus. We
will not count transfers from Segment Type Holding Accounts into Segments on
a Segment Start Date, or the allocation of Segment Maturity Value on a
Segment Maturity Date in calculating the number of transfers subject to this
charge.
(4)On a non-guaranteed basis, we may waive any portion of the contract fee as
it applies to the EQ/Money Market variable investment option to the extent
that the fee exceeds the income distributed by the underlying EQ/Money
Market Portfolio. This waiver is limited to the contract fee, and it is not
a fee waiver or performance guarantee for the underlying EQ/Money Market
Portfolio. See "Contract fee" in "Charges and expenses" later in this
Prospectus.
(5)The actual amount of the Interim Value Calculation is determined by a
formula that depends on, among other things, the Segment Buffer and how the
Index has performed since the Segment Start Date, as discussed in detail
under "Appendix III" later in this Prospectus. The maximum loss would occur
if there is a total distribution for a Segment with a 10%, 20% or 30% buffer
at a time when the Index price has declined to zero. If you surrender or
cancel your contract, die or make a withdrawal from a Segment before the
Segment Maturity Date, the Segment Buffer will not necessarily apply to the
extent it would on the Segment Maturity Date, and any upside performance
will be limited to a percentage lower than the Performance Cap Rate.
(6)"Total Annual Portfolio Operating Expenses" are based, in part, on estimated
amounts for options added during the fiscal year 2011, if applicable, and
for the underlying portfolios. In addition, the "Lowest" represents the
total annual operating expenses of the EQ/Equity 500 Index Portfolio. The
"Highest" represents the total annual operating expenses of the EQ/Core Bond
Index Portfolio.
EXAMPLES
These examples are intended to help you compare the cost of investing in the
contract with the cost of investing in other variable annuity contracts. These
costs include contract owner transaction expenses, separate account annual
expenses, and underlying Trust fees and expenses (including underlying
portfolio fees and expenses). For a complete description of portfolio charges
and expenses, please see the prospectuses for the Trust.
The examples below show the expenses that a hypothetical contract owner would
pay in the situations illustrated under a Series B contract, a Series C
contract and under a Series ADV contract.
The Structured Investment Option is not covered by the fee table and examples.
However, the withdrawal charge, if any, and the charge if you elect a Variable
Immediate Annuity payout option do apply to the Structured Investment Option.
These examples should not be considered a representation of past or future
expenses for any variable investment option. Actual expenses may be greater or
less than those shown. Similarly, the annual rate of return assumed in the
examples is not an estimate or guarantee of future investment performance.
The examples assume that you invest $10,000 in the contract for the time
periods indicated and that your investment has a 5% return each year. The
examples also assume (i) the total annual expenses of the portfolios set forth
in the previous tables; and (ii) there is no waiver of any withdrawal charge.
Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:
------------------------------------------------------------------------------------------------
SERIES B
------------------------------------------------------------------------------------------------
IF YOU ANNUITIZE AT THE END OF THE
APPLICABLE TIME PERIOD, AND SELECT A NON-
IF YOU SURRENDER YOUR CONTRACT AT THE LIFE CONTINGENT PERIOD CERTAIN ANNUITY
END OF THE APPLICABLE TIME PERIOD OPTION WITH LESS THAN FIVE YEARS
------------------------------------------------------------------------------------------------
PORTFOLIO
NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------------------------------
EQ
ADVISORS TRUST:
------------------------------------------------------------------------------------------------
EQ/Core
Bond
Index $707 $1,139 $1,397 $2,364 N/A $1,139 $1,397 $2,364
------------------------------------------------------------------------------------------------
EQ/Equity
500
Index $696 $1,107 $1,343 $2,255 N/A $1,107 $1,343 $2,255
------------------------------------------------------------------------------------------------
EQ/Money
Market $706 $1,136 $1,391 $2,353 N/A $1,136 $1,391 $2,353
------------------------------------------------------------------------------------------------
------------------------------------------------------
SERIES B
------------------------------------------------------
IF YOU DO NOT SURRENDER YOUR
CONTRACT AT THE END OF THE APPLICABLE
TIME PERIOD
------------------------------------------------------
PORTFOLIO
NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------
EQ
ADVISORS TRUST:
------------------------------------------------------
EQ/Core
Bond
Index $207 $639 $1,097 $2,364
------------------------------------------------------
EQ/Equity
500
Index $196 $607 $1,043 $2,255
------------------------------------------------------
EQ/Money
Market $206 $636 $1,091 $2,353
------------------------------------------------------
SERIES C
--------------------------------------------------------------------------------------------
IF YOU SURRENDER OR DO NOT
IF YOU ANNUITIZE AT THE END OF THE SURRENDER YOUR CONTRACT AT THE END OF
APPLICABLE TIME PERIOD THE APPLICABLE TIME PERIOD
--------------------------------------------------------------------------------------------
PORTFOLIO NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------------------------------------------------------------------------------------------
EQ ADVISORS TRUST
--------------------------------------------------------------------------------------------
EQ/CoreBond Index N/A $765 $1,308 $2,789 $249 $765 $1,303 $2,789
--------------------------------------------------------------------------------------------
EQ/Equity500 Index N/A $734 $1,256 $2,685 $238 $734 $1,256 $2,685
--------------------------------------------------------------------------------------------
EQ/MoneyMarket N/A $762 $1,303 $2,779 $248 $762 $1,303 $2,779
--------------------------------------------------------------------------------------------
SERIES
ADV
---------------------------------------------------------------------------------------
IF YOU SURRENDER OR DO NOT
IF YOU ANNUITIZE AT THE END OF THE SURRENDER YOUR CONTRACT AT THE END OF
APPLICABLE TIME PERIOD THE APPLICABLE TIME PERIOD
---------------------------------------------------------------------------------------
PORTFOLIO
NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------------------------------------------------------------------------------------
EQ
ADVISORS
TRUST:
---------------------------------------------------------------------------------------
EQ/Core
Bond
Index N/A $447 $772 $1,692 $144 $447 $772 $1,692
---------------------------------------------------------------------------------------
EQ/Equity
500
Index N/A $415 $717 $1,576 $133 $415 $717 $1,576
---------------------------------------------------------------------------------------
EQ/Money
Market N/A $444 $767 $1,681 $143 $444 $767 $1,681
---------------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
Please see Appendix I at the end of this Prospectus for the unit values and the
number of units outstanding as of the end of the periods shown for each of the
variable investment options available as of December 31, 2011.
12 FEE TABLE
1. Risk factors
--------------------------------------------------------------------------------
This section discusses risks associated with some features of the contract. See
"Definition of key terms" earlier in this Prospectus and "Contract features and
benefits" later in this Prospectus for more detailed explanations of terms
associated with the Structured Investment Option.
.. There is a risk of a substantial loss of your principal because you agree
to absorb all losses from the portion of any negative Index Performance
Rate that exceeds the Segment Buffer for any Segment at maturity. The
highest level of protection is the -30% Segment Buffer and the lowest level
of protection is the -10% Segment Buffer at maturity.
.. Your Segment Rate of Return for any Segment is limited by its Performance
Cap Rate, which could cause your Segment Rate of Return to be lower than it
would otherwise be if you invested in a mutual fund or exchange-traded fund
designed to track the performance of the applicable Index.
.. The Performance Cap Rate is determined on the Segment Start Date. You will
not know the rate in advance. Prior to the Segment Start Date, you may
elect a Performance Cap Threshold. The threshold represents the minimum
Performance Cap Rate you find acceptable for a particular Segment. If we
declare a cap that is lower than the threshold you specify, you will not be
invested in that Segment and your contribution will remain in that Segment
Type Holding Account, until the next available Segment for which your
threshold is met or you provide us with alternative instructions. If you do
not specify a threshold, you risk the possibility that the Performance Cap
Rate established will have a lower cap than you would find acceptable.
Currently, we will not establish a Segment if the Performance Cap Rate
would be less than 2% for a 1-Year Segment, 6% for a 3-Year Segment or 10%
for a 5-Year Segment. The Performance Cap Rate is a rate of return from the
Segment Start Date to the Segment Maturity Date, NOT an annual rate of
return, even if the Segment Duration is longer than one year. We reserve
the right to reduce or remove our current minimum threshold for setting the
Performance Cap Rate. Please see "Appendix II" later in this Prospectus for
state variations.
.. The method we use in calculating your Segment Interim Value may result in
an amount lower than your Segment Investment, even if the corresponding
Index has experienced positive investment performance since the Segment
Start Date. Also, this amount may be less than the amount you would receive
had you held the investment until maturity.
-- If you take a withdrawal, including required minimum distributions, and
there is insufficient value in the variable investment options and the
Segment Type Holding Accounts, we will withdraw amounts from any active
Segments in your contract. Amounts withdrawn from active Segments will be
valued using the formula for calculating the Segment Interim Value.
-- If you die or cancel or surrender your contract before the Segment
Maturity Date, we will pay the Segment Interim Value.
-- Any calculation of the Segment Interim Value will generally be affected
by changes in both the volatility and level of the relevant Index, as
well as interest rates. The calculation of the Segment Interim Value is
linked to various factors, including the value of a basket of put and
call options on the relevant Index as described in "Appendix III" of this
Prospectus. The Segment Interim Value will generally be negatively
affected by increases in the expected volatility of index prices,
interest rate increases, and by poor market performance. All other
factors being equal, the Segment Interim Value would be lower the earlier
a withdrawal or surrender is made during a Segment. Also, participation
in upside performance for early withdrawals is pro-rated based on the
period those amounts were invested in a Segment. This means you
participate to a lesser extent in upside performance the earlier you take
a withdrawal.
.. You cannot transfer out of a Segment prior to its maturity to another
investment option. You can only make withdrawals out of a Segment or
surrender your contract. The amount you would receive would be calculated
using the formula for the Segment Interim Value.
.. We may not offer new Segments of any or all Segment Types, so a Segment may
not be available for you to transfer your Segment Maturity Value into after
the Segment Maturity Date.
.. We have the right to substitute an alternative index prior to Segment
Maturity if the publication of one or more Indices is discontinued or at
our sole discretion we determine that our use of such Indices should be
discontinued or if the calculation of one or more of the Indices is
substantially changed. If we substitute an index for an existing Segment,
we would not change the Segment Buffer or Performance Cap Rate. We would
attempt to choose a substitute index that has a similar investment
objective and risk profile to the replaced index.
.. If a Segment cannot be matured until after the scheduled Segment Start Date
for a particular month, we may create new Segments of Segment Types that
utilize unaffected Indices on the scheduled Segment Start Date. This may
occur if the Segment Maturity Date for a Segment is delayed more than once
because the value for the relevant underlying Index of the Segment is not
published on the designated Segment Maturity Date. If your instructions
include an allocation from a Segment whose Segment Maturity Date has been
delayed to a new Segment whose underlying Index is unaffected, we will not
be able to transfer that portion of your Segment Maturity Value from the
affected Segment to the unaffected Segment. We will use reasonable efforts
to allocate your Segment Maturity Value in accordance with your
instructions, which may include holding
RISK FACTORS 13
amounts in Segment Type Holding Accounts until the next Segment Start Date.
.. The amounts held in a Segment Type Holding Account may earn a return that
is less than the return you might have earned if those amounts were held in
another variable investment option.
.. Segment Types with greater protection tend to have lower Performance Cap
Rates than other Segment Types that use the same index and duration but
provide less protection.
.. The value of your variable investment options will fluctuate and you could
lose some or all of your account value.
.. The level of risk you bear and your potential investment perfor- mance will
differ depending on the investments you choose.
.. If your account value falls below the applicable minimum account size as a
result of a withdrawal, the contract will terminate.
.. For Series B contracts only, if you surrender your contract, any applicable
withdrawal charge is calculated as a percentage of contributions, not
account value. It is possible that the percentage of account value
withdrawn could exceed the applicable withdrawal charge percentage. For
example, assume you make a onetime contribution of $1,000 at contract
issue. If your account value is $800 in contract year 3 and you surrender
your contract, a withdrawal charge percentage of 5% is applied. The
withdrawal charge would be $50 (5% of the $1,000 contribution). This is a
6.25% reduction of your account value, which results in a cash value of
$750 paid to you.
.. No company other than AXA Equitable has any legal responsibil- ity to pay
amounts that AXA Equitable owes under the contract. An owner should look to
the financial strength of AXA Equitable for its claims-paying ability.
.. You do not have any rights in the securities underlying the index,
including, but not limited to, (i) interest payments, (ii) dividend
payments or (iii) voting rights.
.. Your Segment Maturity Value is dependent on the performance of the index on
the Segment Maturity Date.
.. Past performance of the index is not indication of future performance.
14 RISK FACTORS
2. How to reach us
--------------------------------------------------------------------------------
Please communicate with us at the mailing addresses listed below for the
purposes described. Certain methods of contacting us, such as by telephone or
electronically, may be unavailable or delayed. For example, our facsimile
service may not be available at all times and/or we may be unavailable due to
emergency closing. In addition, the level and type of service available may be
restricted based on criteria established by us. In order to avoid delays in
processing, please send your correspondence and check to the appropriate
location, as follows:
--------------------------------------------------------------------------------
FOR CORRESPONDENCE WITH CHECKS:
FOR CONTRIBUTIONS SENT BY REGULAR MAIL:
Retirement Service Solutions
P.O. Box 1577
Secaucus, NJ 07096-1577
FOR CONTRIBUTIONS SENT BY EXPRESS DELIVERY:
Retirement Service Solutions
500 Plaza Drive, 6th Floor
Secaucus, NJ 07094
--------------------------------------------------------------------------------
FOR CORRESPONDENCE WITHOUT CHECKS:
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY REGULAR MAIL:
Retirement Service Solutions
P.O. Box 1547
Secaucus, NJ 07096-1547
FOR ALL OTHER COMMUNICATIONS (E.G., REQUESTS FOR TRANSFERS, WITHDRAWALS, OR
REQUIRED NOTICES) SENT BY EXPRESS DELIVERY:
Retirement Service Solutions
500 Plaza Drive, 6th Floor
Secaucus, NJ 07094
Your correspondence will be picked up at the mailing address noted above and
delivered to our processing office. Your correspondence, however, is not
considered received by us until it is received at our processing office. Where
this Prospectus refers to the day when we receive a contribution, request,
election, notice, transfer or any other transaction request from you, we mean
the day on which that item (or the last thing necessary for us to process that
item) arrives in complete and proper form at our processing office or via the
appropriate telephone or fax number if the item is a type we accept by those
means. There are two main exceptions: if the item arrives (1) on a day that is
not a business day or (2) after the close of a business day, then, in each
case, we are deemed to have received that item on the next business day. Our
processing office is: 500 Plaza Drive, 6th Floor, Secaucus, New Jersey 07094.
--------------------------------------------------------------------------------
Our "business day" is generally any day the NYSE is open for regular trading
and generally ends at 4:00 p.m. Eastern Time (or as of an earlier close of
regular trading). If the Securities and Exchange Commission determines the
existence of emergency conditions on any day, and consequently, the NYSE does
not open, then that day is not a business day. For more information about our
business day and our pricing of transactions, please see "Dates and prices at
which contract events occur in "More Information" later in this Prospectus."
--------------------------------------------------------------------------------
REPORTS WE PROVIDE:
.. written confirmation of financial transactions and certain non-financial
transactions, including when money is transferred into a Segment from a
Segment Type Holding Account; when money is not transferred from a Segment
Type Holding Account into a Segment on a Segment Start Date for any reason;
when a Segment matures; when you change a Performance Cap Threshold; or
when you change your current instructions; and
.. at the close of each calendar quarter for which there is a financial
transaction and statement of your contract values at the close of each
calendar year.
See "Definition of key terms" earlier in this Prospectus for a more detailed
explanation of terms associated with the Structured Investment Option.
--------------------------------------------------------------------------------
TELEPHONE OPERATED PROGRAM SUPPORT ("TOPS") AND ONLINE ACCOUNT ACCESS SYSTEMS:
TOPS is designed to provide you with up-to-date information via touch-tone
telephone. Online Account Access is designed to provide this information
through the Internet. You can obtain information on:
.. your current account value;
.. your current allocation percentages;
.. your Performance Cap Threshold;
.. your instructions on file for allocating the Segment Maturity Value on the
Segment Maturity Date;
.. the number of units you have in the variable investment options and the
Segment Type Holding Accounts;
.. the daily unit values for the variable investment options and the Segment
Type Holding Accounts; and
.. performance information regarding the variable investment options (not
available through TOPS).
You can also:
.. elect or change your Performance Cap Threshold;
HOW TO REACH US 15
.. change your allocation percentages and/or transfer among the variable
investment options (not available for transfers to Segment Type Holding
Accounts); and
.. change your TOPS personal identification number ("PIN") (through TOPS only)
and your Online Account Access password (through Online Account Access
only).
With Online Account Access only you can:
.. elect to receive certain contract statements electronically;
.. change your address;
.. elect or change your Performance Cap Threshold; and
.. access "Frequently Asked Questions" and certain service forms.
TOPS and Online Account Access are normally available seven days a week, 24
hours a day. You may use TOPS by calling toll-free 1-888-909-7770. You may use
Online Account Access by visiting our website at www.axa-equitable.com and
clicking on Online Account Access. Of course, for reasons beyond our control,
these services may sometimes be unavailable.
We have established procedures to reasonably confirm that the instructions
communicated by telephone or the Internet are genuine. For example, we will
require certain personal identification information before we will act on
telephone or Internet instructions and we will provide written confirmation of
your transfers. If we do not employ reasonable procedures to confirm the
genuineness of telephone or Internet instructions, we may be liable for any
losses arising out of any act or omission that constitutes negligence, lack of
good faith, or willful misconduct. In light of our procedures, we will not be
liable for following telephone or Internet instructions we reasonably believe
to be genuine.
We reserve the right to limit access to these services if we determine that you
engaged in a disruptive transfer activity such as "market timing" (see
"Disruptive transfer activity" in "Transferring your money among investment
options" later in this Prospectus).
--------------------------------------------------------------------------------
CUSTOMER SERVICE REPRESENTATIVE:
You may also use our toll-free number (1-877-899-3743) to speak with one of our
customer service representatives. Our customer service representatives are
available on the following business days.
.. Monday through Thursday from 8:30 a.m. until 7:00 p.m., Eastern time.
.. Friday from 8:30 a.m. until 5:30 p.m., Eastern time.
WE REQUIRE THAT THE FOLLOWING TYPES OF COMMUNICATIONS BE ON SPECIFIC FORMS WE
PROVIDE FOR THAT PURPOSE:
(1)authorization for transfers, including transfers of your Segment Maturity
Value on a Segment Maturity Date, by your financial professional;
(2)conversion of a traditional IRA to a Roth IRA contract;
(3)tax withholding elections (see withdrawal request form);
(4)election of the beneficiary continuation option;
(5)IRA contribution recharacterizations;
(6)Section 1035 exchanges;
(7)direct transfers and specified direct rollovers;
(8)death claims;
(9)change in ownership (NQ only, if available under your contract);
(10)purchase by, or change of ownership to, a non-natural owner;
(11)requests to transfer, re-allocate, make subsequent contributions and change
your future allocations (except that certain transactions may be permitted
through TOPS and the Online Account Access systems);
(12)establishing and changing a Performance Cap Threshold;
(13)providing instructions for allocating the Segment Maturity Value on the
Segment Maturity Date; and
(14)requests for withdrawals.
WE ALSO HAVE SPECIFIC FORMS THAT WE RECOMMEND YOU USE FOR THE FOLLOWING TYPES
OF REQUESTS:
(1)beneficiary changes; and
(2)contract surrender;
To cancel or change any of the following, we recommend that you provide the
required written notification at least seven calendar days before the next
scheduled transaction:
(1)instructions on file for allocating the Segment Maturity Value on the
Segment Maturity Date; and
(2)instructions to withdraw your Segment Maturity Value on the Segment Maturity
Date.
TO CANCEL OR CHANGE ANY OF THE FOLLOWING, WE REQUIRE WRITTEN NOTIFICATION
GENERALLY AT LEAST SEVEN CALENDAR DAYS BEFORE THE NEXT SCHEDULED TRANSACTION:
(1)the date annuity payments are to begin.
-------------------
You must sign and date all these requests. Any written request that is not on
one of our forms must include your name and your contract number along with
adequate details about the notice you wish to give or the action you wish us to
take.
SIGNATURES:
The proper person to sign forms, notices and requests would normally be the
owner. If there are joint owners, both must sign.
16 HOW TO REACH US
3. Contract features and benefits
--------------------------------------------------------------------------------
HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We can refuse to accept any contribution from you at any time,
including after you purchase the contract. We require a minimum contribution
amount for each type of contract purchased. Maximum contribution limitations
also apply. The following table summarizes our current rules regarding
contributions to your contract, which rules are subject to change. For a
traditional IRA contract, your initial contribution must be a direct transfer
from another traditional IRA or a rollover from an eligible retirement plan
(including another traditional IRA). For a Roth IRA contract, your initial
contribution must be a direct transfer from another Roth IRA or a rollover from
an eligible retirement plan including traditional IRA or another Roth IRA. Both
the owner and annuitant named in the contract must meet the issue age
requirements shown in the table, and contributions are based on the age of the
older of the original owner and annuitant. Subsequent contributions may not be
permitted in your state. Please see Appendix II later in this Prospectus for
any applicable state variations.
--------------------------------------------------------------------------------
We reserve the right to change our current limitations on your contributions
and to discontinue acceptance of contributions.
--------------------------------------------------------------------------------
We currently do not accept any contribution if (i) the aggregate contributions
under one or more Structured Capital Strategies/SM/ contracts with the same
owner or annuitant would then total more than $1,500,000; or (ii) the aggregate
contributions under all AXA Equitable annuity accumulation contracts with the
same owner or annuitant would then total more than $2,500,000. We may waive
these and other contribution limitations based on certain criteria we
determine, including issue age, aggregate contributions, variable investment
option allocations and selling broker-dealer compensation. These and other
contribution limitations may not be applicable in your state. Please see
Appendix II later in this Prospectus for more information on state variations.
--------------------------------------------------------------------------------
The "owner" is the person who is the named owner in the contract and, if an
individual, is the measuring life for determining contract benefits. The
"annuitant" is the person who is the measuring life for determining the
contract's maturity date. The annuitant is not necessarily the contract owner.
Where the owner of a contract is non-natural, the annuitant is the measuring
life for determining contract benefits.
--------------------------------------------------------------------------------
Upon advance notice to you, we may exercise certain rights we have under the
contract regarding contributions, including our rights to:
.. Change our contribution requirements and limitations and our transfer
rules, including to:
-- increase or decrease our minimum contribution requirements and increase
or decrease our maximum contribution limitations;
-- discontinue the acceptance of subsequent contributions to the contract;
-- discontinue the acceptance of subsequent contributions and/or transfers
into one or more of the variable investment options; and
-- discontinue the acceptance of subsequent contributions and/or transfers
into one or more of the Segment Type Holding Accounts or the Segments.
.. Further limit the number of Segment Type Holding Accounts and Segments you
may invest in at any one time.
.. Limit or terminate new contributions or transfers to any variable
investment option, Segment Type Holding Account or Segment ("investment
options").
WE RESERVE THE RIGHT IN OUR SOLE DISCRETION TO DISCONTINUE THE ACCEPTANCE OF,
AND/OR PLACE ADDITIONAL LIMITATIONS ON CONTRIBUTIONS AND TRANSFERS INTO CERTAIN
INVESTMENT OPTIONS, INCLUDING ANY OR ALL OF THE SEGMENT TYPES. IF WE EXERCISE
THIS RIGHT, YOUR ABILITY TO INVEST IN YOUR CONTRACT, INCREASE YOUR CONTRACT
VALUE AND, CONSEQUENTLY, INCREASE YOUR DEATH BENEFIT WILL BE LIMITED.
CONTRACT FEATURES AND BENEFITS 17
SERIES B,
SERIES C &
SERIES ADV
-----------------------------------------------------------------------------------------------------------------------------
CONTRACT AVAILABLE FOR OWNER AND ADDITIONAL LIMITATIONS ON
TYPE ANNUITANT ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO YOUR CONTRACT/(1)/
-----------------------------------------------------------------------------------------------------------------------------
NQ 0 through 85 $25,000 (initial) After-tax money. You may make subse-
quent contributions to the
$500 (subsequent) Paid to us by check or contract until the later of
transfer of contract attained age 86 or, if later,
value in a tax deferred the first con- tract date
exchange under anniversary./(2)/
Section 1035 of the
Internal Revenue
Code.
-----------------------------------------------------------------------------------------------------------------------------
0 through 85 $25,000 (initial) Eligible rollover You may make rollover or
Traditional distributions from direct transfer contributions
IRA $50 (subsequent) 403(b) plans, qualified until the later of attained
plans and age 86 or the first contract
governmental date anniversary./(2)/
employer 457(b) plans.
Contributions made after
Rollovers from another age 70 1/2 must be net of
traditional individual required minimum
retirement distributions.
arrangement.
Although we accept regular
Direct custodian-to- IRA contributions (limited to
custodian transfers $5,000 per calendar year)
from another under traditional IRA con-
traditional individual tracts, we intend that the
retirement contract be used primarily
arrangement. for rollover and direct trans-
fer contributions.
Regular IRA con-
tributions. Subsequent catch-up con-
tributions of up to $1,000
Additional catch-up per calendar year where the
contributions. owner is at least age 50 but
under age 70 1/2 at any time
during the calendar year for
which the contribution is
made.
-----------------------------------------------------------------------------------------------------------------------------
(1)Subsequent contributions may not be permitted under certain conditions in
your state. Please see Appendix II later in this Prospectus for more
information on contribution limitations in your state. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into any investment option at any
time.
(2)The end of each 12-month period is your "contract date anniversary." For
example, if your contract date is May 1, your contract date anniversary is
April 30.
18 CONTRACT FEATURES AND BENEFITS
SERIES B,
SERIES C &
SERIES ADV
(CONTINUED)
---------------------------------------------------------------------------------------------------------------------------
CONTRACT AVAILABLE FOR OWNER AND ADDITIONAL LIMITATIONS ON
TYPE ANNUITANT ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO YOUR CONTRACT/(1)/
---------------------------------------------------------------------------------------------------------------------------
Roth IRA 0 through 85 $25,000 (initial) Rollovers from another You may make rollover
Roth IRA. or direct transfer
$50 (subsequent) contributions until the
Rollovers from a later of attained age 86
designated Roth or the first contract date
contribution account anniversary./(2)/
under specified
retirement plans. Conversion rollovers
after age 70 1/2 must be
Conversion rollovers net of required minimum
from a traditional IRA distributions for the
or other eligible traditional IRA or other
retirement plan. eligible retirement plan
that is the source of the
Direct custodian-to- conversion rollover.
custodian transfers
from another Roth Although we accept
individual retirement Roth IRA contributions
arrangement. (limited to $5,000 per
calendar year) under
Regular Roth IRA Roth IRA contracts, we
contributions. intend that the contract
be used primarily for
Additional catch-up rollover and direct
contributions. transfer contributions.
Subsequent catch-up
contributions of up to
$1,000 per calendar
year where the owner is
at least 50 at any time
during the calendar year
for which the
contribution is made.
---------------------------------------------------------------------------------------------------------------------------
(1)Subsequent contributions may not be permitted under certain conditions in
your state. Please see Appendix II later in this Prospectus for more
information on contribution limitations in your state. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into any investment option at any
time.
(2)The end of each 12-month period is your "contract date anniversary." For
example, if your contract date is May 1, your contract date anniversary is
April 30.
CONTRACT FEATURES AND BENEFITS 19
OWNER AND ANNUITANT REQUIREMENTS
Under NQ contracts, the annuitant can be different from the owner. Only natural
persons can be joint owners. This means that an entity such as a corporation
cannot be a joint owner. We reserve the right to prohibit availability of this
contract to any non-natural owner.
For NQ contracts (with a single owner, joint owners, or a non-natural owner) we
permit the naming of joint annuitants only when the contract is purchased
through an exchange that is intended not to be taxable under Section 1035 of
the Internal Revenue Code and only where the joint annuitants are spouses.
We also permit defined benefit and defined contribution plan trusts to use
pooled plan assets to purchase NQ contracts. See "Appendix VI: Purchase
considerations for defined benefit and defined contribution plans" later in
this Prospectus.
Under all IRA contracts, the owner and annuitant must be the same person. In
some cases, an IRA contract may be held in a custodial individual retirement
account for the benefit of the individual annuitant.
For the Spousal continuation feature to apply, the spouses must either be joint
owners, or, for Single owner contracts, the surviving spouse must be the sole
primary beneficiary. The determination of spousal status is made under
applicable state law. However, in the event of a conflict between federal and
state law, we follow federal rules. Certain same-sex spouses or civil union
partners may not be eligible for tax benefits under federal law and may be
required to take post-death distributions.
In general, we will not permit a contract to be owned by a minor unless it is
pursuant to the Uniform Gift to Minors Act or the Uniform Transfers to Minors
Act in your state.
In this Prospectus, when we use the terms OWNER and JOINT OWNER, we intend
these to be references to ANNUITANT and JOINT ANNUITANT, respectively, if the
contract has a non-natural owner. Unless otherwise stated, if the contract is
jointly owned or is issued to a non-natural owner, benefits are based on the
age of the older joint owner or older joint annuitant, as applicable.
PURCHASE CONSIDERATIONS FOR A CHARITABLE REMAINDER TRUST
If you are purchasing the contract to fund a charitable remainder trust and
allocate any account value to the Structured Investment Option, you should
strongly consider "split-funding": that is the trust holds investments in
addition to this Structured Capital Strategies/SM/ contract. Charitable
remainder trusts are required to make specific distributions. The charitable
remainder trust annual distribution requirement may be equal to a percentage of
the donated amount or a percentage of the current value of the donated amount.
If your Structured Capital Strategies/SM/ contract is the only source for such
distributions, you may need to take withdrawals from Segments before their
Segment Maturity Dates. See the discussion of the Structured Investment Option
later in this section.
--------------------------------------------------------------------------------
SEGMENT -- an investment option we establish with a specific Index, Segment
Duration, Segment Buffer, Segment Maturity Date and Performance Cap Rate.
SEGMENT MATURITY DATE -- the Segment Business Day on which a Segment ends. This
is generally the first Segment Business Day occurring after the 13th of the
same month as the Segment Start Date in the calendar year in which the Segment
Duration ends.
--------------------------------------------------------------------------------
HOW YOU CAN MAKE YOUR CONTRIBUTIONS
Except as noted below, contributions must be by check drawn on a U.S. bank, in
U.S. dollars, and made payable to AXA Equitable. We may also apply
contributions made for NQ contracts, pursuant to an intended Section 1035
tax-free exchange or for IRA contracts, pursuant to a direct transfer. For a
traditional IRA contract, your initial contribution must be a direct transfer
from another traditional IRA or a rollover from an eligible retirement plan
(including a traditional IRA). For a Roth IRA contract, your initial
contribution must be a direct transfer from another Roth IRA or a rollover from
an eligible retirement plan including a traditional IRA or another Roth IRA. We
do not accept starter checks or travelers' checks. All checks are subject to
our ability to collect the funds. We reserve the right to reject a payment if
it is received in an unacceptable form or not in accordance with our
administrative procedures.
For your convenience, we will accept initial and subsequent contributions by
wire transmittal from certain broker-dealers who have agreements with us for
this purpose, including circumstances under which such contributions are
considered received by us when your order is taken by such broker-dealers.
These methods of payment are discussed in detail in "More information" later in
this Prospectus.
--------------------------------------------------------------------------------
The "contract date" is the effective date of a contract. This usually is the
business day we receive the properly completed and signed application, along
with any other required documents, and your initial contribution. Your contract
date will be shown in your contract. The 12 month period beginning on your
contract date and each 12 month period after that date is a "contract year."
The end of each 12 month period is your "contract date anniversary." For
example, if your contract date is May 1, your contract date anniversary is
April 30.
--------------------------------------------------------------------------------
If your contract is sold by a financial professional of AXA Advisors, AXA
Advisors will direct us to hold your initial contribution, whether received via
check or wire, in a non-interest bearing "Special Bank Account for the
Exclusive Benefit of Customers" while AXA Advisors ensures your application is
complete and that suitability standards are met. AXA Advisors will either
complete this process or instruct us to return your contribution to you within
the time requirements set by applicable rules of the Financial Industry
Regulatory Authority ("FINRA"). Upon timely and successful completion of this
review, AXA Advisors will instruct us to transfer your contribution into our
non-interest bearing suspense account and transmit your application to us, so
that we can consider your application for processing. If the period for this
review extends through a Segment Start Date, your initial investment will not
be allocated to new Segments until the next Segment Start Date.
If your application is in good order when we receive it from AXA Advisors for
application processing purposes, your contribution will be applied within two
business days. If any information we require to issue your contract is missing
or unclear, we will hold your contribution while we try to obtain this
information. If we are unable to obtain all of the information we require
within five business days after we receive an incomplete application or form,
we will inform the financial professional submitting the application on your
behalf. We will then return the contribution to you, unless you or your
financial professional acting on your behalf, specifically direct us to keep
your contribution until we receive the required information. The contribution
will be applied as of the date we receive the missing information.
20 CONTRACT FEATURES AND BENEFITS
If your financial professional is with a selling broker-dealer other than AXA
Advisors, your initial contribution must generally be accompanied by a
completed application and any other form we need to process the payments. If
any information is missing or unclear, we will hold the contribution, whether
received via check or wire, in a non-interest bearing suspense account while we
try to obtain this information. If we are unable to obtain all of the
information we require within five business days after we receive an incomplete
application or form, we will inform the financial professional submitting the
application on your behalf. We will then return the contribution to you unless
you or your financial professional on your behalf, specifically direct us to
keep your contribution until we receive the required information. The
contribution will be applied as of the date we receive the missing information.
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to one or more of the investment options.
The total number of Segments and Segment Type Holding Accounts that may be
active in your contract at any time is 70. If a transfer from a Segment Type
Holding Account into a Segment will cause a contract to exceed this limit, such
transfers will be defaulted to the EQ/Money Market variable investment option.
If there are multiple Segments scheduled to be established on a Segment Start
Date, new Segments will be established in the order of those that would have
the largest initial Segment Investment first until the limit of 70 is reached.
Any remaining amount that is not transferred into a Segment will then be
defaulted to the EQ/Money Market variable investment option. Allocations must
be in whole percentages and you may change your allocation percentages at any
time. However, the total of your allocations must equal 100%. Once your
contributions are allocated to the investment options they become part of your
account value. We discuss account value in "Determining your contract's value"
later in this Prospectus.
--------------------------------------------------------------------------------
SEGMENT TYPE HOLDING ACCOUNT -- an account that holds all contributions and
transfers allocated to a Segment Type pending investment in a Segment. There is
a Segment Type Holding Account for each Segment Type. The Segment Type Holding
Accounts are part of the EQ/Money Market variable investment option.
SEGMENT START DATE -- the Segment Business Day on which a new Segment is
established. This is generally the second Segment Business Day occurring after
the 13th of each month.
SEGMENT INVESTMENT -- the amount transferred to a Segment on its Segment Start
Date, as adjusted for any withdrawals from that Segment.
--------------------------------------------------------------------------------
The contract is between you and AXA Equitable. The contract is not an
investment advisory account, and AXA Equitable is not providing any investment
advice or managing the allocations under your contract. In the absence of a
specific written arrangement to the contrary, you, as the owner of the
contract, have the sole authority to make investment allocations and other
decisions under the contract. Your AXA Advisors financial professional is
acting as a broker-dealer registered representative, and is not authorized to
act as an investment advisor or to manage the allocations under your contract.
If your financial professional is a registered representative with a
broker-dealer other than AXA Advisors, you should speak with him/her regarding
any different arrangements that may apply, particularly with regard to any
fee-based arrangement you may have in connection with your Series ADV contract.
WHAT ARE YOUR INVESTMENT OPTIONS UNDER THE CONTRACT?
Your investment options are the variable investment options and the Segments
comprising the Structured Investment Option. The term variable investment
options includes the Segment Type Holding Accounts unless otherwise noted. The
Segment Type Holding Accounts are part of the EQ/Money Market variable
investment option. The Structured Investment Option and the Segment Type
Holding Accounts are discussed later in this section under "Structured
Investment Option."
VARIABLE INVESTMENT OPTIONS
Your investment results in any one of the variable investment options will
depend on the investment performance of the underlying portfolios. You can lose
your principal when investing in the variable investment options. In periods of
poor market performance, the net return, after charges and expenses, may result
in negative yields, including for the EQ/Money Market variable investment
option. Listed below are the currently available portfolios, their investment
objectives, and their sub-advisers. We may, at any time, exercise our rights to
limit or terminate your contributions, allocations and transfers into any of
the variable investment options and to limit the number of variable investment
options you may elect.
CONTRACT FEATURES AND BENEFITS 21
PORTFOLIOS OF THE TRUST
We offer an affiliated Trust, which in turn offers one or more Portfolios. AXA
Equitable Funds Management Group, LLC, a wholly owned subsidiary of AXA
Equitable, serves as the investment manager of the Portfolios of EQ Advisors
Trust. For some Portfolios, AXA Equitable Funds Management Group, LLC has
entered into sub-advisory agreements with investment advisers (the
"sub-advisers") to carry out the day-to-day investment decisions for the
Portfolios. As such, AXA Equitable Funds Management Group, LLC oversees the
activities of the sub-advisers with respect to the Trust and is responsible for
retaining or discontinuing the services of those sub-advisers. The chart below
indicates the sub-adviser(s) for each Portfolio, if any. The chart below also
shows the currently available Portfolios and their investment objectives.
You should be aware that AXA Advisors, LLC and AXA Distributors, LLC (together,
the "Distributors") directly or indirectly receive 12b-1 fees from affiliated
Portfolios for providing certain distribution and/or shareholder support
services. These fees will not exceed 0.25% of the Portfolios' average daily net
assets. The Portfolios' sub-advisers and/or their affiliates may also
contribute to the cost of expenses for sales meetings or seminar sponsorships
that may relate to the contracts and/or the sub-advisers' respective
Portfolios. It may be more profitable for us to offer affiliated Portfolios
than to offer unaffiliated Portfolios.
As a contract owner, you may bear the costs of some or all of these fees and
payments through your indirect investment in the Portfolios. (See the
Portfolios' prospectuses for more information.) These fees and payments will
reduce the underlying Portfolios' investment returns. AXA Equitable may profit
from these fees and payments.
AXA Equitable considers the availability of these fees and payment arrangements
during the selection process for the underlying Portfolios. These fees and
payment arrangements may create an incentive for us to select Portfolios (and
classes of shares of Portfolios) that pay us higher amounts.
-------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST
(CLASS IB SHARES)
PORTFOLIO NAME OBJECTIVE SUB-ADVISER
-------------------------------------------------------------------------------------------------------
EQ/CORE BOND INDEX Seeks to achieve a total return before AXA Equitable Funds Management
expenses that approximates the total return Group, LLC
performance of the Barclays Intermediate SSgA Funds Management, Inc.
U.S. Government/Credit Index, including
reinvestment of dividends, at a risk level
consistent with that of the Barclays
Intermediate U.S. Government/Credit
Index.
-------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks to achieve a total return before AllianceBernstein L.P.
expenses that approximates the total return
performance of the S&P 500 Index,
including reinvestment of dividends, at a
risk level consistent with that of the S&P
500 Index.
-------------------------------------------------------------------------------------------------------
EQ/MONEY MARKET Seeks to obtain a high level of current The Dreyfus Corporation
income, preserve its assets and maintain
liquidity.
-------------------------------------------------------------------------------------------------------
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES
OF THE PORTFOLIOS CAREFULLY BEFORE INVESTING. THE PROSPECTUSES FOR THE TRUST
CONTAIN THIS AND OTHER IMPORTANT INFORMATION ABOUT THE PORTFOLIOS. THE
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING. IN ORDER TO OBTAIN
COPIES OF THE TRUST PROSPECTUSES THAT DO NOT ACCOMPANY THIS PROSPECTUS, YOU MAY
CALL ONE OF OUR CUSTOMER SERVICE REPRESENTATIVES AT 1-877-899-3743.
22 CONTRACT FEATURES AND BENEFITS
STRUCTURED INVESTMENT OPTION
The Structured Investment Option consists of 16 Segment Types, each of which
provides a rate of return tied to the performance of a specified Securities or
Commodities Index. Each month, you have the opportunity to invest in any of the
Segment Types described below, subject to the requirements, limitations and
procedures disclosed in this section. You participate in the performance of an
Index by investing in the corresponding Segment. Investments in Segments are
not investments in underlying mutual funds; Segments are not "index funds."
SEGMENT TYPES
We currently offer a total of 16 Segment Types. We intend to offer each Segment
Type each month, with a Segment Start Date which is generally the second
Segment Business Day occurring after the 13th of the month. We are not
obligated to offer any one particular Segment Type. Also, we are not obligated
to offer any Segment Types. Each investment in a Segment Type that starts on a
particular Segment Start Date is a Segment. A Segment Type refers to Segments
that have the same Index, Segment Duration, and Segment Buffer. Each Segment
Type has a corresponding Segment Type Holding Account. Please refer to the
"Definitions of key terms" section earlier in this Prospectus for a discussion
of these terms.
--------------------------------------------------------------------------------
SEGMENT BUSINESS DAY -- a business day that all Indices underlying available
Segments are scheduled to be open and to publish prices. A scheduled holiday
for any one Index disqualifies that day from being scheduled as a Segment
Business Day for all Segments. We use Segment Business Days in this manner so
that, based on published holiday schedules, we mature all Segments on the same
day and start all new Segments on a subsequent day. This design, among other
things, facilitates the roll over of maturing Segment Investments into new
Segments. It is possible that due to emergency conditions, an Index cannot
provide a price on a day that was scheduled to be a Segment Business Day. These
unforeseen events can have two results. (1) If the NYSE experiences an
emergency close and cannot publish a price, we cannot mature or start any
Segments for any Index. (2) If any Index other than the NYSE experiences an
emergency close and cannot publish a price, we will mature or start Segments
for all unaffected Indices.
SEGMENT DURATION -- the period from the Segment Start Date to the Segment
Maturity Date. We currently offer Segment Durations of 1 year, 3 years or 5
years.
SEGMENT BUFFER -- the portion of any negative Index Performance Rate that we
absorb on a Segment Maturity Date for a particular Segment. Any percentage
decline in a Segment's Index Performance Rate in excess of the Segment Buffer
reduces your Segment Maturity Value. We currently offer Segment Buffers of
-10%, -20% and -30%.
--------------------------------------------------------------------------------
The following chart lists the current Segment Types:
--------------------------------------------------------
INDEX SEGMENT DURATION SEGMENT BUFFER
--------------------------------------------------------
S&P 500 Price Return 5 year -10%; -20%; -30%
Index
--------------------------------------------------------
S&P 500 Price Return 3 year -10%; -20%
Index
--------------------------------------------------------
S&P 500 Price Return 1 year -10%
Index
--------------------------------------------------------
Russell 2000(R) Price 5 year -10%; -20%; -30%
Return Index
--------------------------------------------------------
Russell 2000(R) Price 3 year -10%; -20%
Return Index
--------------------------------------------------------
Russell 2000(R) Price 1 year -10%
Return Index
--------------------------------------------------------
MSCI EAFE Price 1 year -10%
Return Index
--------------------------------------------------------
NASDAQ-100 Price 1 year -10%
Return Index
--------------------------------------------------------
Gold Index 1 year -10%
--------------------------------------------------------
Oil Index 1 year -10%
--------------------------------------------------------
AT MATURITY, THE HIGHEST LEVEL OF PROTECTION IS THE -30% SEGMENT BUFFER AND
LOWEST LEVEL OF PROTECTION IS THE -10% SEGMENT BUFFER.
The Indices are described in more detail below, under the heading "Indices."
Each Segment has a Performance Cap Rate that we set on the Segment Start Date.
See "Performance Cap Rate" below. For example, a Segment could be S&P 500 Price
Return Index/3 year/-20%/September 2015 with a 30% Performance Cap Rate
declared on the Segment Start Date. This means that you will participate in the
perfor- mance of the S&P 500 Price Return Index for three years starting from
the September 2012 Segment Start Date. If the Index performs positively during
this period, your rate of return at maturity could be as much as 30% for that
Segment Duration. If the Index performs negatively during this period, at
maturity you will be protected from the first 20% of the Index's decline. If
the Index performance is between -20% and 0%, your Segment Return Amount at
maturity will equal your Segment Investment. PLEASE NOTE, SEGMENT TYPES WITH
GREATER PROTECTION TEND TO HAVE LOWER PERFORMANCE CAP RATES THAN OTHER SEGMENT
TYPES THAT USE THE SAME INDEX AND DURATION BUT PROVIDE LESS PROTECTION.
CONTRACT FEATURES AND BENEFITS 23
--------------------------------------------------------------------------------
PERFORMANCE CAP RATE -- the highest Segment Rate of Return that can be credited
on a Segment Maturity Date. The Performance Cap Rate is not an annual rate of
return.
INDEX PERFORMANCE RATE -- for a Segment, the percentage change in the value of
the related Index from the Segment Start Date to the Segment Maturity Date. The
Index Performance Rate may be positive or negative.
PERFORMANCE CAP THRESHOLD -- the minimum rate you may specify as a
participation requirement that the Performance Cap Rate for a new Segment must
equal or exceed in order for amounts to be transferred from a Segment Type
Holding Account into a new Segment.
--------------------------------------------------------------------------------
BOTH THE PERFORMANCE CAP RATE AND THE SEGMENT RATE OF RETURN ARE RATES OF
RETURN FROM THE SEGMENT START DATE TO THE SEGMENT MATURITY DATE, NOT ANNUAL
RATES OF RETURN, EVEN IF THE SEGMENT DURATION IS LONGER THAN ONE YEAR.
THEREFORE THE INDEX PERFORMANCE RATE AND THE PERFORMANCE CAP THRESHOLD ARE ALSO
NOT ANNUAL RATES. The performance of the Index, the Performance Cap Rate and
the Segment Buffer are all measured from the Segment Start Date to the Segment
Maturity Date, and the Performance Cap Rate and Segment Buffer apply if you
hold the Segment until the Segment Maturity Date. If you surrender or cancel
your contract, die or make a withdrawal from a Segment before the Segment
Maturity Date, the Segment Buffer will not necessarily apply to the extent it
would on the Segment Maturity Date, and any upside performance will be limited
to a percentage lower than the Performance Cap Rate. Please see "Your
contract's value in the Structured Investment Option" in "Determining your
contract's value" later in this Prospectus. A partial withdrawal from a Segment
does not affect the Performance Cap Rate and Segment Buffer that apply to any
remaining amounts that are held in the Segment through the Segment Maturity
Date.
We reserve the right to offer any or all Segment Types less frequently than
monthly or to stop offering any or all of them or to suspend offering any or
all of them temporarily. Please see "Suspension, termination and changes to
Segment Types" later in this section. All Segment Types may not be available in
all states. We may also add Segment Types in the future.
The total number of Segments and Segment Type Holding Accounts that may be
active on a contract at any time is 70.
INDICES
The performance of a Segment of each Segment Type is based on the performance
of an Index. We offer Segment Types based on two types of Indices: Indices
based on the performance of securities ("Securities Indices") and Indices based
on the performance of commodities ("Commodities Indices").
SECURITIES INDICES. The following Securities Indices are currently available:
S&P 500 Price Return Index. The S&P 500 Price Return Index was established by
Standard & Poor's. The S&P 500 Price Return Index includes 500 leading
companies in leading industries of the U.S. economy, capturing 75% coverage of
U.S. equities. The S&P 500 Price Return Index does not include dividends
declared by any of the companies included in this Index.
Russell 2000(R) Price Return Index. The Russell 2000(R) Price Return Index was
established by Russell Investments. The Russell 2000(R) Price Return Index
measures the performance of the small-cap segment of the U.S. equity universe.
The Russell 2000(R) Price Return Index is a subset of the Russell 3000(R) Index
representing approximately 10% of the total market capitalization of that
index. It includes approximately 2,000 of the smallest securities based on a
combination of their market cap and current index membership. The Russell
2000(R) Price Return Index does not include dividends declared by any of the
companies included in this Index.
MSCI EAFE Price Return Index. The MSCI EAFE Price Return Index was established
by MSCI. The MSCI EAFE Price Return Index is a free float-adjusted market
capitalization index that is designed to measure the equity market performance
of developed markets, excluding the US and Canada. As of the date of this
Prospectus the MSCI EAFE Index consisted of the following 22 developed market
country indices: Australia, Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the
United Kingdom. The MSCI EAFE Price Return Index does not include dividends
declared by any of the companies included in this Index.
NASDAQ-100 Price Return Index. The NASDAQ-100 Price Return Index (the
"NASDAQ-100 Index") includes securities of 100 of the largest domestic and
international non-financial securities listed on The NASDAQ Stock Market based
on market capitalization. The Index reflects companies across major industry
groups including computer hardware and software, telecommunications,
retail/wholesale trade and biotechnology. It does not contain securities of
financial companies including investment companies. The NASDAQ-100 Price Return
Index does not include dividends declared by any of the companies included in
this Index.
COMMODITIES INDICES. The following Commodities Indices are currently available:
Gold Index. The Gold Index is the "London Gold Market Fixing Ltd PM Fix Price
/USD" as published by the London Gold/Market Fixing LTD at 3 p.m. London Time.
For historical performance information go to www.lbma.org.uk to see the current
London gold price. We use the USD PM price. Go to 'Statistics / Historical
Statistics / Gold Fixings' for daily price data back to 1968.
Oil Index . The Oil Index is the "NYMEX West Texas Intermediate Crude Oil
Generic Front-Month Futures" contract price. We use the closing price on the
NYMEX designated market of the New York Mercantile Exchange. For historical
performance information go to http://
www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude-cash-settled.html
to see the current Oil price. Go to 'Charts' for historic price information.
Please see Appendix IV later in this Prospectus for important information
regarding the publishers of the Indices.
SEGMENT TYPE HOLDING ACCOUNTS
Any contribution or transfer designated for a Segment Type will be allocated to
the corresponding Segment Type Holding Account until the Segment Start Date.
The Segment Type Holding Accounts are part of the EQ/Money Market variable
investment option. The Segment Type Holding Accounts have the same rate of
return as the EQ/Money Market variable investment option. You must transfer or
contribute to the Segment Type Holding Account for the corresponding Segment
24 CONTRACT FEATURES AND BENEFITS
Type if you want to invest in a Segment; you cannot transfer or contribute
directly to a Segment.
You can transfer amounts from a Segment Type Holding Account into any of the
variable investment options, or another Segment Type Holding Account at any
time up to the close of business on the last business day before the Segment
Start Date.
SEGMENT START DATE
Each Segment will have a Segment Start Date, which is generally the second
Segment Business Day occurring after the 13th of the month. However, the
Segment Start Date may sometimes be a later date under certain circumstances.
Please see "Setting the Segment Maturity Date and Segment Start Date" below.
PERFORMANCE CAP RATE
The Performance Cap Rate is the maximum Segment Rate of Return that each
Segment will be credited with on the Segment Maturity Date. We will declare a
Performance Cap Rate for each Segment on the Segment Start Date.
--------------------------------------------------------------------------------
SEGMENT RATE OF RETURN -- if the Index Performance Rate is positive, then the
Segment Rate of Return is a rate equal to the Index Performance Rate, but not
more than the Performance Cap Rate. If the Index Performance Rate is negative,
but declines by a percentage less than or equal to the Segment Buffer, then the
Segment Rate of Return is 0%. If the Index Performance Rate is negative, and
declines by more than the Segment Buffer, then the Segment Rate of Return is
negative, but will not reflect the first -10%, -20% or -30% of downside
performance, depending on the Segment Buffer applicable to that Segment.
--------------------------------------------------------------------------------
Please note that this means that you will not know the Performance Cap Rate for
a new Segment until after your account value has been transferred from the
corresponding Segment Type Holding Account into the Segment. You may not
transfer out of a Segment before the Segment Maturity Date. Please see
"Transfers" below. For this reason, we permit you to specify a Performance Cap
Threshold, which we describe below under "Segment Participation Requirements."
For more information regarding transfer restrictions, please see "Transferring
your account value" later in this Prospectus.
PLEASE NOTE THAT THE PERFORMANCE CAP RATE AND SEGMENT RATE OF RETURN ARE RATES
OF RETURN FROM THE SEGMENT START DATE TO THE SEGMENT MATURITY DATE, NOT ANNUAL
RATES, EVEN IF THE SEGMENT DURATION IS LONGER THAN ONE YEAR. THE PERFORMANCE
CAP RATE IS SET AT OUR SOLE DISCRETION.
SEGMENT PARTICIPATION REQUIREMENTS
All amounts in a Segment Type Holding Account as of the close of business on
the business day preceding the Segment Start Date, plus any earnings on those
amounts, will be transferred into the Segment on the Segment Start Date,
provided that all participation requirements are met.
Amounts transferred into a Segment Type Holding Account on a Segment Start Date
will not be included in any new Segment created that day. These amounts will
remain in the Segment Type Holding Account until they are transferred out or
the next Segment Start Date on which the participation requirements are met for
the amounts to be transferred into a new Segment.
If you change your Performance Cap Threshold on a Segment Start Date, that
Performance Cap Threshold will not affect the participation requirements for
any Segment created that day. For example if you have a Performance Cap
Threshold on file of 12%, but change it to 15% on a Segment Start Date, any
amounts in that Segment Type Holding Account will be transferred into a new
Segment of that Segment Type that we create that day with a Participation Cap
Rate of 13%, if the other participation requirements are met.
The following participation requirements must be met on a Segment Start Date in
order for any amount designated for a Segment Type to be transferred from a
Segment Type Holding Account into the designated new Segment: (1) Segment is
available; (2) Segment Maturity Date Requirement is met; and (3) Performance
Cap Threshold is met. If these requirements are met, your account value in the
Segment Type Holding Account will be transferred into a new Segment. This
amount is your initial Segment Investment.
(1) SEGMENT IS AVAILABLE. We may suspend or terminate any Segment Type, at our
sole discretion, at any time. If we terminate a Segment Type, no new Segments
of that Segment Type will be created, and the amount that would have been
transferred to the Segment will be transferred to the EQ/Money Market variable
investment option instead. If we suspend a Segment Type, no new Segments of
that Segment Type will be created until the suspension ends, and the amount
that would have been transferred to the Segment will remain in the Segment Type
Holding Account.
(2) SEGMENT MATURITY DATE REQUIREMENT IS MET. The Segment Maturity Date must
occur on or before the contract maturity date. If the Segment Maturity Date is
after the contract maturity date, your account value in the Segment Type
Holding Account will be transferred to the EQ/Money Market variable investment
option.
(3) PERFORMANCE CAP THRESHOLD IS MET. When you allocate a contribution or
transfer to a Segment Type, you may specify a Performance Cap Threshold in a
whole percentage rate. Your value in the Segment Type Holding Account will not
be transferred into the corresponding Segment unless the Performance Cap Rate
we declare on the Segment Start Date is equal to or higher than your
Performance Cap Threshold, and the other participation requirements are met.
For example, you may specify a Performance Cap Threshold of 10%. If we set a
Performance Cap Rate of 10% or higher for the next available Segment of that
Segment Type, then we will transfer the applicable account value to the new
Segment, provided all other requirements and conditions are met. However, if we
set the Performance Cap Rate at 9.9% for that Segment, the applicable account
value would not be transferred to the new Segment.
If you have allocated amounts to multiple Segment Types in a particular month,
you may specify a different Performance Cap Threshold for each Segment Type.
If you specify a Performance Cap Threshold, it will remain in effect until the
later of 90 days after we receive your election and the date amounts in the
Segment Type Holding Account are transferred into a Segment. If you specify a
Performance Cap Threshold on the required form in connection with your
application, the 90 days will be measured from your contract date.
CONTRACT FEATURES AND BENEFITS 25
If you do not specify a Performance Cap Threshold, then we will transfer your
account value from the Segment Type Holding Account into a Segment, regardless
of how low the Performance Cap Rate may be if the other participation
requirements are met.
Once your account value has been swept from a Segment Type Holding Account into
a Segment, transfers into or out of that Segment before its Segment Maturity
Date are not permitted.
We permit you, but do not require you, to specify a Performance Cap Threshold
so that you have additional flexibility in managing your contract. The
Performance Cap Threshold is an option for owners who want to invest in a
particular Segment Type only if we set a Performance Cap Rate at a certain
level or higher.
The threshold represents the minimum Performance Cap Rate you find acceptable
for a particular Segment. If we declare a cap that is lower than the threshold
you specify, you will not be invested in that Segment and your contribution
will remain in that Segment Type Holding Account, until the next available
Segment for which your threshold is met or you provide us with alternative
instructions. We do not require that you select a Performance Cap Threshold
because some owners may wish to invest in a Segment regardless of the
particular Performance Cap Rate. If you do not specify a threshold, you risk
the possibility that the Performance Cap Rate established will have a lower cap
on returns than you would otherwise find acceptable. You may wish to discuss
with your financial professional whether to specify a Performance Cap Threshold
and, if so, at what percentage.
SEGMENT MATURITY DATE
Your Segment Maturity Date is generally the first Segment Business Day
occurring after the 13th day of the same month as the Segment Start Date in the
calendar year in which the Segment Duration ends. However, the Segment Maturity
Date in a particular month may be a later date under certain circumstances.
Please see "Setting the Segment Maturity Date and Segment Start Date" below.
You will receive advance notice of maturing Segments in which you are currently
invested in your quarterly statement. You may also elect to receive a second
advance notice of maturing Segments in which you are currently invested. The
additional notice service is available by mail or electronically and is
provided at least 30 days before a Segment Maturity Date. There is no charge
for this service. We reserve the right to discontinue this service at any time.
Please speak with your financial professional or call us for additional
information about electing this service.
You may tell us how to allocate the Segment Maturity Value among the investment
options. You may tell us either to follow your allocation instructions on file
for new contributions, to withdraw all or part of your Segment Maturity Value,
or to transfer your Segment Maturity Value to the next available Segment of the
same Segment Type, provided the participation requirements are met.
--------------------------------------------------------------------------------
SEGMENT MATURITY VALUE -- the value of your investment in a Segment on the
Segment Maturity Date.
--------------------------------------------------------------------------------
As stated above, you may elect to have maturing Segments invested according to
your allocations on file, and those instructions may include allocations to a
Segment Type, or you may elect to transfer your Segment Maturity Value to the
next available Segment of the same Segment Type in which you are currently
invested. If you take either of these steps, then the designated portion of
your Segment Maturity Value will be transferred to the corresponding Segment
Type Holding Account, as of the close of business on the Segment Maturity Date.
Assuming that all participation requirements are met, the designated amounts
will be treated like any other amounts in a Segment Type Holding Account. On
the next Segment Start Date, the designated amounts in the Segment Type Holding
Account will be transferred into the corresponding Segment. Typically, this
means the designated amounts would be held in a Segment Type Holding Account
for one business day.
If you have not provided us with maturity instructions, the Segment Maturity
Value will be transferred to the Segment Type Holding Account for the same
Segment Type as the maturing Segment. Your Segment Maturity Value would then be
transferred from that Segment Type Holding Account into the next Segment of
that Segment Type on the Segment Start Date per your maturity instructions we
have on file. If the next Segment to be created in the Segment Type would not
meet the Segment Maturity Date Requirement or that Segment Type has been
terminated, we will instead transfer your Segment Maturity Value to the
EQ/Money Market variable investment option. Alternatively, if you designate a
Performance Cap Threshold that is not met on the next Segment Start Date or if
the Segment Type has been suspended, your Segment Maturity Value will remain in
the Segment Type Holding Account. If you are impacted by these delays, you may
transfer your Segment Maturity Value into another Segment Type Holding Account
or any other variable investment option at any time before the next month's
Segment Start Date.
SEGMENT MATURITY VALUE
On the Segment Maturity Date, we calculate your Segment Maturity Value using
your Segment Investment and the Segment Rate of Return. The Segment Rate of
Return is equal to the Index Performance Rate, subject to the Performance Cap
Rate and Segment Buffer, as follows:
----------------------------------------------------------------
YOUR SEGMENT RATE OF RETURN
IF THE INDEX PERFORMANCE RATE: WILL BE:
----------------------------------------------------------------
goes up by more than the positive, equal to the
Performance Cap Rate Performance Cap Rate
----------------------------------------------------------------
goes up by less than the positive, equal to the Index
Performance Cap Rate Performance Rate
----------------------------------------------------------------
stays flat or goes down by a equal to 0%
percentage equal to or less than
the Segment Buffer
----------------------------------------------------------------
goes down by a percentage negative, to the extent of the
greater than the Segment Buffer percentage exceeding the
Segment Buffer
----------------------------------------------------------------
Your Segment Maturity Value is calculated as follows:
We multiply your Segment Investment by your Segment Rate of Return to get your
Segment Return Amount. Your Segment Maturity Value is equal to your Segment
Investment plus or minus your Segment Return Amount. Your Segment Return Amount
may be negative, in which case your Segment Maturity Value will be less than
your Segment Investment. All of these values are based on the value of the
relevant Index on the Segment Start Date and the Segment Maturity Date. Any
26 CONTRACT FEATURES AND BENEFITS
fluctuations in the value of the Index between those dates is ignored in
calculating the Segment Maturity Value.
For example, assume that you invest $1,000 in an S&P 500 Price Return Index,
3-year Segment with a -20% Segment Buffer, we set the Performance Cap Rate for
that Segment at 17%, and you make no withdrawal from the Segment. If the S&P
500 Price Return Index is 20% higher on the Segment Maturity Date than on the
Segment Start Date, you will receive a 17% Segment Rate of Return, and your
Segment Maturity Value would be $1,170. We reach that amount as follows:
.. The Index Performance Rate (20%) is greater than the Performance Cap Rate
(17%), so the Segment Rate of Return (17%) is equal to the Performance Cap
Rate.
.. The Segment Return Amount ($170) is equal to the product of the Segment
Investment ($1,000) multiplied by the Segment Rate of Return (17%).
.. The Segment Maturity Value ($1,170) is equal to the Segment Investment
($1,000) plus the Segment Return Amount ($170).
If the S&P Price Return Index is only 15% higher on the Segment Maturity Date
than on the Segment Start Date, then you will receive a 15% Segment Rate of
Return, and your Segment Maturity Value would be $1,150. We reach that amount
as follows:
.. The Index Performance Rate (15%) is less than the Performance Cap Rate
(17%), so the Segment Rate of Return (15%) is equal to the Index
Performance Rate.
.. The Segment Return Amount ($150) is equal to the product of the Segment
Investment ($1,000) multiplied by the Segment Rate of Return (15%).
.. The Segment Maturity Value ($1,150) is equal to the Segment Investment
($1,000) plus the Segment Return Amount ($150).
If the S&P Price Return Index is -10% lower on the Segment Maturity Date than
on the Segment Start Date, then you will receive a 0% Segment Rate of Return,
and your Segment Maturity Value would be $1,000. We reach that amount as
follows:
.. The Index Performance Rate is -10% and the Segment Buffer absorbs the first
-20% of negative performance, so the Segment Rate of Return is 0%.
.. The Segment Return Amount ($0) is equal to the product of the Segment
Investment ($1,000) multiplied by the Segment Rate of Return (0%).
.. The Segment Maturity Value ($1,000) is equal to the Segment Investment
($1,000) plus the Segment Return Amount ($0).
If the S&P Price Return Index is -30% lower on the Segment Maturity Date than
on the Segment Start Date, then you will receive a -10% Segment Rate of Return,
and your Segment Maturity Value would be $900. We reach that amount as follows:
.. The Index Performance Rate is -30% and the Segment Buffer absorbs the first
-20% of negative performance, so the Segment Rate of Return is -10%.
.. The Segment Return Amount (-$100) is equal to the product of the Segment
Investment ($1,000) multiplied by the Segment Rate of Return (-10%).
.. The Segment Maturity Value ($900) is equal to the Segment Investment
($1,000) plus the Segment Return Amount (-$100).
SETTING THE SEGMENT MATURITY DATE AND SEGMENT START DATE
There will be a Segment Maturity Date and Segment Start Date each month that
the contract is outstanding. The Segment Maturity Date for Segments maturing in
a given month and the Segment Start Date for new Segments starting in that same
month will always be scheduled to occur on the first two consecutive business
days that are also Segment business days occurring after the 13th of a month.
Please see Appendix V later in this prospectus for a demonstration of the
effects that weekends and scheduled holidays can have on the Segment Maturity
Date and the Segment Start Date.
EFFECT OF AN EMERGENCY CLOSE. Segments are scheduled to mature and start on
Segment Business Days. The Segment Maturity Date for Segments maturing in a
given month and the Segment Start Date for new Segments starting in that same
month will always occur on the first two consecutive business days that are
also Segment Business Days occurring after the 13th of the month. It is
possible that an Index could experience an emergency close on a Segment
Business Date, thereby affecting the Index's ability to publish a price and our
ability to mature or start Segments based on the affected Index. Emergency
closes can have two consequences.
1. If the New York Stock Exchange ("NYSE") experiences an emergency close and
cannot publish any prices, we will delay the maturity or start of all
Segments for all Indices.
2. If any Index other than the NYSE experiences an emergency close, we will
delay the maturity and start of the Segments using the affected Index and
mature or start Segments for all unaffected Indices.
The emergency closure of an INDEX OTHER THAN THE NYSE can have a different
effect if it occurs on a Segment Maturity Date rather than a Segment Start Date.
.. If an emergency close occurs on a scheduled Segment Maturity Date, then the
Segment Maturity Date for that Segment will be delayed until the next
Segment Business Day. The next Segment Business Day would be the Segment
Start Date. If the emergency close only lasted that one day, the Segment
Start Date and the Segment Maturity Date for the affected Segment would
occur on the same day.
-- For example, assume Monday the 14th is the scheduled Segment Maturity
Date in a given month. If the NYMEX does not open due to an emergency
condition, there would be no reference price that day for the Oil Index.
If the NYSE opened on the 14th, the S&P 500 Price Return Index and
Russell 2000(R) Price Return Index would be published. In this case, the
Segment Maturity Date for any Segments based on the S&P 500 Price Return
Index or Russell 2000 Price Return Index would be Monday the 14th. Any
Segment based on the Oil Index that was scheduled to mature on the 14th
of that month could not mature, because we would not have a price with
which to calculate the Segment Maturity Value. This would mean the
Segment Maturity Date for Segments that utilize the S&P 500 Price Return
Index or Russell 2000(R) Price Return Index would be Monday the 14th, and
if the
CONTRACT FEATURES AND BENEFITS 27
NYMEX opens on the Tuesday the 15th the Segment Maturity Date for
Segments that utilize the Oil Index would be Tuesday the 15th. However,
the Segment Start Date for all new Segments created that month (including
both those that utilize the S&P 500 Price Return Index or Russell 2000(R)
Price Return Index and those that utilize the Oil Index) would be Tuesday
the 15th.
.. If an emergency close occurs on an Index other than the NYSE on a scheduled
Segment Start Date, then we would not create Segments that utilize the
affected Index. However, on that day we would create Segments that utilize
unaffected Indices. Consequently, Segment Maturity Values designated for
Segment Types that utilize an affected Index would not be allocated to
Segments that month and would remain in the corresponding Segment Type
Holding Account.
-- For example, assume that the only the Oil Index could not mature on the
14th or the 15th . This would mean that the Segment Maturity Date for
Segments that utilize the S&P 500 Price Return Index or the Russell
2000(R) Price Return Index would be Monday the 14th and the Segment Start
Date for those indices would be Tuesday the 15th. However, Segments that
utilize the Oil Index would be matured at the next available price after
the 15th and, consequently, could not participate in Segments established
for that month. The resulting Segment Maturity Values would remain in the
corresponding Segment Type Holding Account until the following month or
until further instruction was provided from the contract owner.
If the conditions that cause an emergency close persist, we will use reasonable
efforts to calculate the Segment Maturity Value of any affected Segments. If
the affected Index cannot be priced within eight days, we will contact a
calculating agency, normally a bank we have a contractual relationship with,
which will determine a price to reflect a reasonable estimate of the Index
level.
SUSPENSION, TERMINATION AND CHANGES TO SEGMENT TYPES AND INDICES
We may decide at any time until the close of business on each Segment Start
Date whether to offer any or all of the Segment Types described in this
Prospectus on a Segment Start Date for a particular Segment. We may suspend a
Segment Type for a month or a period of several months, or we may terminate a
Segment Type entirely.
If a Segment Type is suspended, your account value will remain in the Segment
Type Holding Account until a Segment of that Segment Type is offered or you
transfer out of the Segment Type Holding Account.
If a Segment Type is terminated, your account value in the corresponding
Segment Type Holding Account will be defaulted into the EQ/Money Market
variable investment option on the date that would have been the Segment Start
Date.
We have the right to substitute an alternative index prior to Segment Maturity
if the publication of one or more Indices is discontinued or at our sole
discretion we determine that our use of such Indices should be discontinued or
if the calculation of one or more of the Indices is substantially changed. In
addition, we reserve the right to use any or all reasonable methods to end any
outstanding Segments that use such Indices. We also have the right to add
additional Indices under the contract at any time. We would provide notice
about the use of additional or alternative Indices, as soon as practicable, in
a supplement to this Prospectus. If an alternative index is used, its
performance could impact the Index Performance Rate, Segment Rate of Return,
Segment Maturity Value and Segment Interim Value. An alternative index would
not change the Segment Buffer or Performance Cap Rate for an existing Segment.
If a similar index cannot be found, we will end the affected Segments
prematurely by applying the Performance Cap Rate and Segment Buffer that were
established on the applicable Segment Start Date to the actual gains or losses
on the original Index as of the date of termination. We would attempt to choose
a substitute index that has a similar investment objective and risk profile to
the replaced index. For example, if the Russell 2000(R) Index were not
available, we might use the NASDAQ or the S&P 400 Price Return Index.
We reserve the right to offer any or all Segment Types less frequently than
monthly or to stop offering any or all of them or to suspend offering any or
all of them temporarily. If we stop offering or suspend certain Segment Types,
each existing Segment of those Segment Types will remain invested until its
respective Segment Maturity Date.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may exercise
your cancellation right under the contract to receive a refund. To exercise
this cancellation right, you must notify us with a signed letter of instruction
electing this right, to our processing office within 10 days after you receive
your contract. If state law requires, this "free look" period may be longer.
Other state variations may apply. Please contact your financial professional
and/or see Appendix II to find out what applies in your state.
Generally, your refund will equal your account value under the contract on the
day we receive written notification of your decision to cancel the contract and
will reflect any investment gain or loss in the investment options (less the
daily charges we deduct) through the date we receive your contract. This
includes the Segment Interim Value for amounts allocated to existing Segments.
Some states, however, require that we refund the full amount of your
contribution (not reflecting investment gain or loss). For any IRA contract
returned to us within seven days after you receive it, we are required to
refund the full amount of your contribution.
--------------------------------------------------------------------------------
SEGMENT INTERIM VALUE -- the value of your investment in a Segment prior to the
Segment Maturity Date.
--------------------------------------------------------------------------------
We may require that you wait six months before you may apply for a contract
with us again if:
.. you cancel your contract during the free look period; or
.. you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus for possible consequences
of cancelling your contract.
If you fully convert an existing traditional IRA contract to a Roth IRA
contract, you may cancel your Roth IRA contract and return to a traditional IRA
contract. Our processing office, or your financial professional, can provide
you with the cancellation instructions.
28 CONTRACT FEATURES AND BENEFITS
In addition to the cancellation right described above, you have the right to
surrender your contract, rather than cancel it. Please see "Surrendering your
contract to receive its cash value" in "Accessing your money" later in this
Prospectus. Surrendering your contract may yield results different than
canceling your contract, including a greater potential for taxable income. In
some cases, your cash value upon surrender may be greater than your
contributions to the contract. Please see "Tax information," later in this
Prospectus.
CONTRACT CANCELLATION PROVISION FOR LACK OF SEGMENT
In addition to your right to cancel within a certain number of days, as
described in the previous section, you may also cancel your contract under
certain other conditions.
If you allocate all or a portion of your initial investment to Segment Type
Holding Accounts on your application, and no Segments are created in any of the
corresponding Segment Types on the first Segment Start Date following your
contract's issue date, you may cancel your contract, without paying any
applicable withdrawal charges. You may exercise this cancellation right by
mailing the contract, with a signed letter of instruction electing this right,
to our processing office by the first day of the month following the first
Segment Start Date after your contract date. If you transfer any amounts into
or out of any Segment Type Holding Accounts prior to the first Segment Start
Date under your contract, you will give up this right.
If your state's law requires that we refund the full amount of your
contribution upon cancellation, and you are within the time period specified by
your state's law to exercise your right to cancel, then you will receive the
full amount of your contribution. If that time has expired before we receive
your contract, or if your state's law does not require that we return the full
amount of your contribution, we will refund your account value, as described in
the previous section.
PARTIAL WITHDRAWAL PROVISION FOR LACK OF SEGMENT
We reserve the right, in our sole discretion, to terminate or suspend Segment
Types. It is possible that when you designate your entire initial investment to
more than one Segment Type Holding Account, or to one or more variable
investment options and one or more Segment Type Holding Accounts on your
application, no Segments are created in some or all of the corresponding
Segment Types on the first Segment Start Date following your contract date
because we have exercised our right to terminate or suspend those Segment
Types. If the Segment Type has been suspended, you may request that we return
to you the amount of your initial contribution to any Segment Type Holding
Account from which no Segment was created. The amount we return to you will not
be greater than your account value in the corresponding Segment Type Holding
Accounts on the date your request is received at our processing office. If the
Segment Type has been terminated and the account value in the Segment Type
Holding Account has been transferred to the EQ/Money Market variable investment
option, then the amount we return to you may not be greater than the amount
transferred from the Segment Type Holding Account to the EQ/Money Market
variable investment option. Under these circumstances, we will not assess any
otherwise applicable withdrawal charge on amounts returned to you. You will
have until the first day of the month following the first Segment Start Date to
exercise this right. Exercising this right will not cancel the rest of your
contract.
You may also exercise this right if you make (i) a subsequent contribution,
(ii) a contribution or transfer pursuant to an intended Section 1035 tax-free
exchange, or (iii) a IRA direct transfer, after your contract's issue date. In
these cases, we will measure your ability to exercise this right using the
Segment Start Date after we receive funds at our processing office, rather than
your contract date.
We reserve the right to change or cancel this provision at any time.
CONTRACT FEATURES AND BENEFITS 29
4. Determining your contract's value
--------------------------------------------------------------------------------
YOUR ACCOUNT VALUE AND CASH VALUE
Your "account value" is the total of: (i) the values you have in the variable
investment options, (ii) the values you have in the Segment Type Holding
Accounts and (iii) your Segment Interim Values.
Your Series B contract also has a "cash value." At any time before annuity
payments begin, your contract's cash value is equal to the account value less
any applicable withdrawal charges. Please see "Surrender of your contract to
receive its cash value" in "Accessing your money" later in this Prospectus.
For Series C and Series ADV contracts, at any time before annuity payments
begin, your contract's cash value is equal to its account value.
If you have a Series C or Series ADV contract, disregard any references to
"withdrawal charges" or "free withdrawal amount" in this section; these terms
only apply to Series B contracts, not Series C or Series ADV contracts.
YOUR CONTRACT'S VALUE IN THE VARIABLE INVESTMENT OPTIONS AND SEGMENT TYPE
HOLDING ACCOUNTS
Each variable investment option and Segment Type Holding Account invests in
shares of a corresponding portfolio. Your value in each variable investment
option and Segment Type Holding Account is measured by "units." The value of
your units will increase or decrease as though you had invested it in the
corresponding portfolio's shares directly. Your value, however, will be reduced
by the amount of the fees and charges that we deduct under the contract.
--------------------------------------------------------------------------------
Units measure your value in each variable investment option.
--------------------------------------------------------------------------------
The unit value for each variable investment option and Segment Type Holding
Account depends on the investment performance of that option minus daily
charges for the Contract fee. Each Segment Type Holding Account is part of the
EQ/Money Market variable investment option. On any day, your value in any
variable investment option or Segment Type Holding Account equals the number of
units credited to that option, adjusted for any units purchased for or deducted
from your contract under that option, multiplied by that day's value for one
unit. The number of your contract units in any variable investment option or
Segment Type Holding Account does not change unless it is:
(i)increased to reflect additional contributions;
(ii)decreased to reflect a withdrawal (including applicable withdrawal
charges); or
(iii)increased to reflect a transfer into, or decreased to reflect a transfer
out of, a variable investment option and Segment Type Holding Account.
A description of how unit values are calculated is found in the SAI.
YOUR CONTRACT'S VALUE IN THE STRUCTURED INVESTMENT OPTION
Your value in each Segment on the Segment Maturity Date is calculated as
described under "Segment Rate of Return" in "Contract Features and Benefits"
earlier in this Prospectus.
In setting the Performance Cap Rate that we use in calculating the Segment
Maturity Value, we assume that you are going to hold a Segment until the
Segment Maturity Date. However, you have the right under the contract to access
amounts in the Segments before the Segment Maturity Date under certain
circumstances. Therefore, we calculate a Segment Interim Value on each business
day, which is also a Segment Business Day, between the Segment Start Date and
the Segment Maturity Date. The method we use to calculate the Segment Interim
Value is different than the method we use to calculate the value of the Segment
on the Segment Maturity Date. Prior to the Segment Maturity Date, we use the
Segment Interim Value to calculate (1) your account value; (2) the amount your
beneficiary would receive as a death benefit; (3), the amount you would receive
if you make a withdrawal from a Segment; (4) the amount you would receive if
you surrender your contract; or (5) the amount you would receive if you cancel
your contract and return it to us for a refund within your state's "free look"
period (unless your state requires that we refund the full amount of your
contribution upon cancellation).
The Segment Interim Value is calculated based on a formula that provides a
treatment for an early distribution that is designed to be consistent with how
distributions at the end of a Segment are treated. Appendix III later in this
Prospectus sets forth in detail the specific calculation formula as well as
numerous hypothetical examples. The formula is calculated by adding the fair
value of three components. These components provide us with a market value
estimate of the risk of loss and the possibility of gain at the end of a
Segment. As detailed in Appendix III, these components are used to calculate
the Segment Interim Value. The three components are:
(1)Fair value of fixed instruments is calculated as the present value of the
Segment Investment (using a risk-free swap interest rate for the remaining
duration of the Segment). We use this component because we are forgoing the
opportunity to earn interest on the Segment Investment by having to make an
early distribution.
PLUS
(2)Fair value of derivatives is calculated by using the Black Scholes model, as
described in Appendix III, to value three hypothetical options (one put and
two call options) on the index underlying the Segment. The put option is
used to estimate the potential losses at Segment Maturity. The call options
are used to estimate the potential gains at Segment Maturity. The value of
these options also reflects the limits on positive performance (i.e., the
Performance Cap Rate) and some protection against negative performance
(i.e., the Segment Buffer).
30 DETERMINING YOUR CONTRACT'S VALUE
PLUS
(3)Cap calculation factor is a positive adjustment of the percentage of the
estimated expenses corresponding to the portion of the Segment Duration that
has not elapsed. This component reflects the fact that an early withdrawal
from a Segment means that we no longer have to incur expected expenses
associated with administering the Segment for the full period.
We then compare the sum of the three components above with a limitation based
on the Performance Cap Rate. In particular, the Segment Interim Value is never
greater than the Segment Investment multiplied by the portion of the
Performance Cap Rate corresponding to the portion of the Segment Duration that
has elapsed. This limitation is imposed to discourage owners from withdrawing
from a Segment before the Segment Maturity Date where there may have been
significant increases in the relevant Index early in the Segment Duration. For
more information, please see Appendix III.
EVEN IF THE CORRESPONDING INDEX HAS EXPERIENCED POSITIVE INVESTMENT PERFORMANCE
SINCE THE SEGMENT START DATE, BECAUSE OF THE FACTORS WE TAKE INTO ACCOUNT IN
THE CALCULATION ABOVE, YOUR SEGMENT INTERIM VALUE MAY BE LOWER THAN YOUR
SEGMENT INVESTMENT.
DETERMINING YOUR CONTRACT'S VALUE 31
5. Transferring your money among investment options
--------------------------------------------------------------------------------
TRANSFERRING YOUR ACCOUNT VALUE
At any time before the date annuity payments are to begin, you can transfer
some or all of your account value among the investment options, subject to the
following current limitations:
.. you may not transfer out of a Segment before its Segment Maturity Date.
.. you may not transfer out of a Segment Type Holding Account on a Segment
Start Date.
.. a contribution or transfer into a Segment Type Holding Account on a Segment
Start Date will not be transferred into the Segment that is created on that
Segment Start Date. Your money will be transferred into a Segment on the
following month's Segment Start Date, provided you meet the participation
requirements.
.. you may not contribute or transfer money into a Segment Type Holding
Account and designate a Segment Start Date. The account value in the
Segment Type Holding Account will be transferred on the first Segment Start
date on which you meet the participation requirements.
.. you may not contribute or transfer into a Segment Type Holding Account if
the Segment Maturity Date of the Segment that will be created on the
Segment Start Date would be after the maturity date of your contract.
.. you may not contribute to a Segment Type Holding Account or transfer to a
Segment Type Holding Account or a Segment if the total number of Segments
and Segment Type Holding Accounts that would be active in your contract
after such contribution or transfer would be greater than 70. If a transfer
from a Segment Type Holding Account into a Segment will cause a contract to
exceed this limit, such transfers will be defaulted to the EQ/Money Market
variable investment option. If there are multiple Segments scheduled to be
established on a Segment Start Date, new Segments will be established in
the order of those that would have the largest initial Segment Investment
first until the limit of 70 is reached. Any remaining amount that is not
transferred into a Segment will then be defaulted to the EQ/Money Market
variable investment option.
.. transfers from a Segment Type Holding Account to a Segment will not occur
if you do not meet the participation requirements. See "Segment
Participation Requirements" in "Contract features and benefits" earlier in
this Prospectus.
Upon advance notice to you, via a client communication mailing, we may change
or establish additional restrictions on transfers among the investment options,
including limitations on the number, frequency, or dollar amount of transfers.
In addition, we may, at any time, exercise our right to limit or terminate
transfers into any of the variable investment options and to limit the number
of variable investment options which you may elect. We currently do not impose
any transfer restrictions among the variable investment options. A transfer
request does not change your allocation instructions on file. Our current
transfer restrictions are set forth in the "Disruptive transfer activity"
section below.
You may request a transfer in writing using the specified form, or by telephone
using TOPS or on line using Online Account Access. You must send in all signed
written requests directly to our processing office. Transfer requests should
specify:
(1)the contract number,
(2)the dollar amounts or percentage to be transferred, and
(3)the investment options to and from which you are transferring.
We will confirm all transfers in writing.
Please see "Allocating your contributions" in "Contract features and benefits"
for more information about your role in managing your allocations.
We may charge a transfer charge for any transfers among the variable investment
options in excess of 12 transfers in a contract year. For more information, see
"Transfer charge" in "Charges and expenses" later in this Prospectus.
DISRUPTIVE TRANSFER ACTIVITY
You should note that the contract is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy. The contract is not designed to accommodate programmed
transfers, frequent transfers or transfers that are large in relation to the
total assets of the underlying portfolio.
Frequent transfers, including market timing and other program trading or
short-term trading strategies, may be disruptive to the underlying portfolios
in which the variable investment options invest. Disruptive transfer activity
may adversely affect performance and the interests of long-term investors by
requiring a portfolio to maintain larger amounts of cash or to liquidate
portfolio holdings at a disadvantageous time or price. For example, when market
timing occurs, a portfolio may have to sell its holdings to have the cash
necessary to redeem the market timer's investment. This can happen when it is
not advantageous to sell any securities, so the portfolio's performance may be
hurt. When large dollar amounts are involved, market timing can also make it
difficult to use long-term investment strategies because a portfolio cannot
predict how much cash it will have to invest. In addition, disruptive transfers
or purchases and redemptions of portfolio investments may impede efficient
portfolio management and impose increased transaction costs, such as brokerage
costs, by requiring the portfolio manager to effect more frequent purchases and
sales of portfolio securities. Similarly, a portfolio may bear increased
administrative costs as a result of the asset level and investment volatility
that accompanies patterns of excessive or short-term trading. Portfolios that
invest a significant portion of their assets in foreign securities or the
securities of small- and mid-capitalization companies tend to be subject to the
risks associated with market timing and short-term trading strategies to a
greater extent than portfolios that do not. Securities trading in overseas
markets
32 TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS
present time zone arbitrage opportunities when events affecting portfolio
securities values occur after the close of the overseas market but prior to the
close of the U.S. markets. Securities of small- and mid-capitalization
companies present arbitrage opportunities because the market for such
securities may be less liquid than the market for securities of larger
companies, which could result in pricing inefficiencies. Please see the
prospectuses for the underlying portfolios for more information on how
portfolio shares are priced.
We currently use the procedures described below to discourage disruptive
transfer activity. You should understand, however, that these procedures are
subject to the following limitations: (1) they primarily rely on the policies
and procedures implemented by the underlying portfolios; (2) they do not
eliminate the possibility that disruptive transfer activity, including market
timing, will occur or that portfolio performance will be affected by such
activity; and (3) the design of market timing procedures involves inherently
subjective judgments, which we seek to make in a fair and reasonable manner
consistent with the interests of all contract owners.
We offer investment options with underlying portfolios that are part of the EQ
Advisors Trust (the "trust"). The trust has adopted policies and procedures
regarding disruptive transfer activity. The trust discourages frequent
purchases and redemptions of portfolio shares and will not make special
arrangements to accommodate such transactions. The trust aggregates inflows and
outflows for each portfolio on a daily basis. On any day when a portfolio's net
inflows or outflows exceed an established monitoring threshold, the trust
obtains from us contract owner trading activity. The trust currently considers
transfers into and out of (or vice versa) the same variable investment option
within a five business day period as potentially disruptive transfer activity.
In most cases, the trust reserves the right to reject a transfer that it
believes, in its sole discretion, is disruptive (or potentially disruptive) to
the management of one of its portfolios. Please see the prospectuses for the
trust for more information.
When a contract owner is identified in connection with potentially disruptive
transfer activity for the first time, a letter is sent to the contract owner
explaining that there is a policy against disruptive transfer activity and that
if such activity continues certain transfer privileges may be eliminated. If
and when the contract owner is identified a second time as engaged in
potentially disruptive transfer activity under the contract, we currently
prohibit the use of voice, fax and automated transaction services. We currently
apply such action for the remaining life of each affected contract. We or a
trust may change the definition of potentially disruptive transfer activity,
the monitoring procedures and thresholds, any notification procedures, and the
procedures to restrict this activity. Any new or revised policies and
procedures will apply to all contract owners uniformly.We do not permit
exceptions to our policies restricting disruptive transfer activity.
It is possible that a trust may impose a redemption fee designed to discourage
frequent or disruptive trading by contract owners. As of the date of this
prospectus, the trusts had not implemented such a fee. If a redemption fee is
implemented by a trust, that fee, like any other trust fee, will be borne by
the contract owner.
Contract owners should note that it is not always possible for us and the
underlying trusts to identify and prevent disruptive transfer activity. In
addition, because we do not monitor for all frequent trading at the separate
account level, contract owners may engage in frequent trading which may not be
detected, for example, due to low net inflows or outflows on the particular
day(s). Therefore, no assurance can be given that we or the trusts will
successfully impose restrictions on all potentially disruptive transfers.
Because there is no guarantee that disruptive trading will be stopped, some
contract owners may be treated differently than others, resulting in the risk
that some contract
owners may be able to engage in frequent transfer activity while others will
bear the effect of that frequent transfer activity. The potential effects of
frequent transfer activity are discussed above.
TRANSFERRING YOUR MONEY AMONG INVESTMENT OPTIONS 33
6. Accessing your money
--------------------------------------------------------------------------------
WITHDRAWING YOUR ACCOUNT VALUE
You have two ways to withdraw your account value before annuity payments begin.
The table below shows the methods available under each type of contract. More
information follows the table. For the tax consequences of taking withdrawals,
see "Tax information" later in this Prospectus.
If you have a Series C or Series ADV contract, disregard any references to
"withdrawal charges" or "free withdrawal amount" in this section; these terms
only apply to Series B contracts, not Series C or Series ADV contracts.
-------------------------------------
METHOD OF WITHDRAWAL
--------------------
LIFETIME
REQUIRED
MINIMUM
CONTRACT PARTIAL DISTRIBUTION
-------------------------------------
NQ Yes No
-------------------------------------
Traditional IRA Yes Yes
-------------------------------------
Roth IRA Yes No
-------------------------------------
We impose no withdrawal charge for withdrawals from Series C or Series ADV
contracts. However, withdrawals, including withdrawals made to pay all or part
of any fee that may be associated with a fee-based program, may be subject to
income tax and, unless the taxpayer is over age 59 1/2 or another exception
applies, an additional 10% federal income tax penalty, as described in "Tax
information" later in this Prospectus. In addition, the fee-based program
sponsor may apply a charge if you decide to no longer participate in the
program. You should consult with your program sponsor for more details about
your particular fee-based arrangement.
--------------------------------------------------------------------------------
All requests for withdrawals must be made on a specific form that we provide.
Please see "How to reach us" under "Who is AXA Equitable?" earlier in this
Prospectus for more information.
--------------------------------------------------------------------------------
PARTIAL WITHDRAWALS
(All contracts)
You may take partial withdrawals from your account value at any time before
annuity payments begin. The minimum amount you may withdraw at any time is
$300. If you request a withdrawal that leaves you with an account value of less
than $500, we reserve the right to terminate the contract and pay you the cash
value. See "Surrender of your contract to receive its cash value" below.
For Series B contracts, partial withdrawals in excess of the 10% free
withdrawal amount may be subject to a withdrawal charge (see "10% free
withdrawal amount" in "Charges and expenses" later in this Prospectus).
Partial withdrawals out of Segments are permitted, subject to certain
restrictions. See "How withdrawals are taken from your account value" later in
this section.
LIFETIME REQUIRED MINIMUM DISTRIBUTION WITHDRAWALS
(Traditional IRA contracts only -- See "Tax information" later in this
Prospectus.)
We offer our "automatic required minimum distribution (RMD) service" to help
you meet lifetime required minimum distributions under federal income tax
rules. This is not the exclusive way for you to meet these rules. After
consultation with your tax adviser, you may decide to compute required minimum
distributions (we refer to them as "RMDs") yourself and request partial
withdrawals. In such a case, a withdrawal charge could apply. Before electing
this account-based withdrawal option, you should consider whether annuitization
might be better in your situation. Please refer to "Required minimum
distributions" under "Individual Retirement Arrangements ("IRAs")" in "Tax
information" later in this Prospectus.
You may elect this service in the calendar year in which you reach age 70 1/2
or in any later year (other than the first calendar year that your contract is
in force). The minimum amount we will pay out is $250. Currently, RMD payments
will be made annually each December.
We do not impose a withdrawal charge on the RMD payment taken through our
automatic RMD service even if, when added to a partial withdrawal previously
taken in the same contract year, the RMD payments exceed the free withdrawal
amount.
This service does not generate an automatic RMD payment during the first
contract year. Therefore, if you are making a rollover or transfer contribution
to the contract after age 70 1/2, you must take an RMD before the rollover or
transfer. If you do not, any withdrawals that you take during the first
contract year to satisfy your RMD amount may be subject to withdrawal charges,
if applicable, if they exceed the free withdrawal amount.
The RMD amount is based on your entire interest in your traditional IRA
contract whether your investments are allocated to one or more variable
investment options and/or one or more Segments. We will withdraw your RMD
amount from the variable investment options first on a pro rata basis. If there
is insufficient account value in the variable investment options, then we will
withdraw the balance of the RMD amount from the Segment Type Holding Accounts
on a pro rata basis. If there is insufficient value in the variable investment
options and the Segment Type Holding Accounts, we will withdraw amounts from
the Segments on a pro rata basis.
As you approach age 70 1/2 you should consider the effect of allocations to any
Segment. You should consider whether you have a sufficient amount allocated to
the variable investment options under this contract and/or sufficient liquidity
under other traditional IRAs that you maintain in order to satisfy your RMD for
this contract without affecting amounts allocated to a Segment under this
contract.
We will send to traditional IRA owners a form outlining the minimum
distribution options available in the year you reach age 70 1/2 (if you have
not begun your annuity payments before that time).
34 ACCESSING YOUR MONEY
HOW WITHDRAWALS ARE TAKEN FROM YOUR ACCOUNT VALUE
WITHDRAWALS
Unless you specify otherwise, we will subtract your withdrawals on a pro rata
basis from your value in the variable investment options (excluding the Segment
Type Holding Accounts). If there is insufficient value or no value in the
variable investment options (excluding the Segment Type Holding Accounts), any
additional amount of the withdrawal required or the total amount of the
withdrawal will be taken on a pro rata basis from the Segment Type Holding
Accounts. If there is insufficient value in the Segment Type Holding Accounts,
we will deduct all or a portion of the withdrawal from the Segments on a pro
rata basis.
If you specify the investment options from which you want us to deduct your
withdrawal, the following restrictions apply: If the amount of your withdrawal
is equal to or less than your account value in the variable investment options
and Segment Type Holding Accounts, the entire withdrawal must come from the
account value in the variable investment options and Segment Type Holding
Accounts, and the withdrawal cannot be pro rata; you must specify the dollar
amount or percentage withdrawal for the variable investment options and Segment
Type Holding Accounts from which to take the withdrawal. In other words, you
cannot take a withdrawal from the Segments if there is any value remaining in
the variable investment options and Segment Type Holding Accounts.
After 100% of the value has been taken from the variable investment options and
Segment Type Holding Accounts, you can specify the dollar amount or percentage
of the withdrawal to be taken from any Segment.
If you have amounts in a Segment Type Holding Account and you make a withdrawal
on a Segment Start Date, that amount will not be transferred into the Segment
created on that date.
Withdrawals from a Segment prior to your Segment Maturity Date reduce the
Segment Investment on a pro rata basis by the same proportion that the Segment
Interim Value is reduced on the date of the withdrawal. We use the Segment
Investment to determine your Segment Maturity Value.
You can request, in advance of your Segment Maturity Date, a withdrawal of your
Segment Maturity Value on the Segment Maturity Date, which is not subject to
the restrictions described above regarding the need to withdraw amounts in
variable investment options and Segment Type Holding Accounts before
withdrawing amounts from Segments.
A withdrawal from a Series ADV NQ contract, including a withdrawal to pay the
fees of the fee-based program, may be a taxable event. For the tax consequences
of withdrawals, see "Tax information" later in this Prospectus.
SURRENDERING YOUR CONTRACT TO RECEIVE ITS CASH VALUE
You may surrender your contract to receive its cash value at any time while an
owner is living (or for contracts with non-natural owners, while the annuitant
is living) and before you begin to receive annuity payments. For a surrender to
be effective, we must receive your written request and your contract at our
processing office. We will determine your cash value on the date we receive the
required information.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus.
When a contract is surrendered in certain states, the free withdrawal amount is
not taken into account when calculating the amount of the withdrawal. See "10%
free withdrawal amount" under "Charges under the contract" in "Charges and
expenses" later in this Prospectus.
WITHDRAWALS TREATED AS SURRENDERS
If you withdraw more than 90% of a contract's current cash value, we will treat
it as a request to surrender the contract for its cash value. In addition, we
have the right to pay the cash value and terminate the contract if no
contributions are made during the last three completed contract years, and the
account value is less than $500, or if you make a withdrawal that would result
in a cash value of less than $500. See "Surrendering your contract to receive
its cash value" below. For the tax consequences of withdrawals, see "Tax
information" later in this Prospectus.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the investment options
within seven calendar days after the date of the transaction to which the
request relates. These transactions may include applying proceeds to a variable
annuity payout option, payment of a death benefit, payment of any amount you
withdraw (less any withdrawal charge) and, upon surrender or termination,
payment of the cash value. We may postpone such payments or applying proceeds
for any period during which:
(1)the New York Stock Exchange is closed or restricts trading,
(2)the SEC determines that an emergency exists as a result of which sales of
securities or determination of fair value of an investment option's assets
is not reasonably practicable, or
(3)the SEC, by order, permits us to defer payment to protect people remaining
in the variable investment options.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery or wire transfer service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
The following description assumes annuitization of your entire contract. For
partial annuitization, see "Partial annuitization" below.
Deferred annuity contracts such as Structured Capital Strategies/SM/ provide
for conversion to payout status at or before the contract's "maturity date."
This is called annuitization. When your contract is annuitized, your Structured
Capital Strategies/SM/ contract and all its benefits will terminate and you
will receive a supplemental payout annuity contract ("payout option") that
provides for periodic payments for life or for a specified period of time. In
general, the periodic payment amount is determined by the account value or cash
value of your Structured Capital Strategies/SM/ contract at the time of
annuitization, the annuity payout option that you select, and the annuity
purchase factor to which that value is applied, as described below. We have the
right to require you to provide any information we deem
ACCESSING YOUR MONEY 35
necessary to provide an annuity payout option. If an annuity payout is later
found to be based on incorrect information, it will be adjusted on the basis of
the correct information.
Your Structured Capital Strategies/SM/ contract guarantees that upon
annuitization, your account value will be applied to a guaranteed annuity
purchase factor for a life annuity payout option. We reserve the right, with
advance notice to you, to change your annuity purchase factor any time after
your fifth contract date anniversary and at not less than five year intervals
after the first change. Any change to the annuity purchase factor will only
apply to contributions made after the date of the change. (Please see your
contract and SAI for more information). In addition, you may apply your account
value or cash value, whichever is applicable, to any other annuity payout
option that we may offer at the time of annuitization. We may offer other
payout options not outlined here. Your financial professional can provide
details.
Structured Capital Strategies/SM/ currently offers you several choices of
annuity payout options. Some enable you to receive fixed annuity payments and
others enable you to receive variable annuity payments.
You can choose from among the annuity payout options listed below. Restrictions
may apply, depending on the type of contract you own and the annuitant's age at
contract issue. We reserve the right to add, remove or change these annuity
payout options at any time.
ANNUITY PAYOUT OPTIONS
---------------------------------------------------------------
Fixed annuity payout options Life annuity
Life annuity with period certain
Life annuity with refund certain
Period certain annuity
---------------------------------------------------------------
.. Life annuity: An annuity that guarantees payments for the rest of the
annuitant's life. Payments end with the last monthly payment before the
annuitant's death. Because there is no continuation of benefits following
the annuitant's death with this payout option, it provides the highest
monthly payment of any of the life annuity options, so long as the
annuitant is living.
.. Life annuity with period certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the end of a
selected period of time ("period certain"), payments continue to the
beneficiary for the balance of the period certain. The period certain
cannot extend beyond the annuitant's life expectancy or the joint life
expectancy of the annuitant and the joint annuitant. A life annuity with
period certain is the form of annuity under the contracts that you will
receive if you do not elect a different payout option. In this case the
period certain will be based on the annuitant's age and will not exceed 10
years or the annuitant's life expectancy.
.. Life annuity with refund certain: An annuity that guarantees payments for
the rest of the annuitant's life. If the annuitant dies before the amount
applied to purchase the annuity option has been recovered, payments to the
beneficiary will continue until that amount has been recovered. This payout
option is available only as a fixed annuity.
.. Period certain annuity: An annuity that guarantees payments for a specific
period of time, usually 5, 10, 15, or 20 years. This guarantee period may
not exceed the annuitant's life expectancy. This option does not guarantee
payments for the rest of the annuitant's life. It does not permit any
repayment of the unpaid principal, so you cannot elect to receive part of
the payments as a single sum payment with the rest paid in monthly annuity
payments. This payout option is available only as a fixed annuity.
The life annuity, life annuity with period certain, and life annuity with
refund certain payout options are available on a single life or joint and
survivor life basis. The joint and survivor life annuity guarantees payments
for the rest of the annuitant's life and, after the annuitant's death, payments
continue to the survivor.
With fixed annuities, we guarantee fixed annuity payments that will be based
either on the tables of guaranteed annuity purchase factors in your contract or
on our then current annuity purchase factors, whichever is more favorable for
you.
THE AMOUNT APPLIED TO PURCHASE AN ANNUITY PAYOUT OPTION
The amount applied to purchase an annuity payout option varies depending on the
payout option that you choose and the timing of your purchase as it relates to
any withdrawal charges that apply under your contract.
For the fixed annuity payout options, no withdrawal charge is imposed if you
select a life annuity, life annuity with period certain or life annuity with
refund certain.
The withdrawal charge applicable under your Structured Capital Strategies/SM/
Series B contract is imposed if you select a non-life contingent period certain
payout annuity. If the period certain is more than 5 years, then the withdrawal
charge deducted will not exceed 5% of your account value. Non-life contingent
period certain payouts are not available for variable payouts, so no withdrawal
charge is applicable to variable payouts.
PARTIAL ANNUITIZATION. Partial annuitization of nonqualified deferred annuity
contracts is permitted under certain circumstances. You may choose from the
annuity payout options described here, but if you choose a period certain
annuity payout, the certain period must be for 10 years or more. We require you
to elect partial annuitization on the form we specify. For purposes of this
contract we will effect any partial annuitization as a withdrawal applied to a
payout annuity. See "How withdrawals are taken from your account value" earlier
in this section and also the discussion of "Partial annuitization" in "Tax
information" for more information.
SELECTING AN ANNUITY PAYOUT OPTION
When you select a payout option, we will issue you a separate written agreement
confirming your right to receive annuity payments. We require you to return
your contract before annuity payments begin. Unless you choose a different
payout option, we will pay annuity payments under a life annuity with a maximum
period certain of 10 years. You choose whether these payments will be fixed or
variable. The contract owner and annuitant must meet the issue age and payment
requirements.
You can choose the date annuity payments are to begin, but generally it may not
be earlier than thirteen months from the Structured Capital Strategies/SM/
contract date. You can change the date your annuity payments are to begin any
time. The date may not be later than your contract's maturity date. Your
contract's maturity date is
36 ACCESSING YOUR MONEY
the date by which you must either take a lump sum withdrawal or select an
annuity payout option. The maturity date is generally the contract date
anniversary that follows the annuitant's 95th birthday.
We will send you a notice with your contract statement one year prior to your
maturity date. Once you have selected an annuity payout option and payments
have begun, no change can be made other than transfers among the variable
investment options if a variable immediate annuity is selected. If you do not
respond to the notice within 30 days following your maturity date, your
contract will be annuitized automatically.
We currently offer different payment frequencies on certain annuity payout
options. In general, the total annual payout will be lower for more frequent
payouts (such as monthly) because of the increased administrative expenses
associated with more frequent payouts. Also, in general, the longer the period
over which we expect to make payments, the lower will be your payment each year.
The amount of the annuity payments will depend on:
(1)the amount applied to purchase the annuity;
(2)the type of annuity chosen, and whether it is fixed or variable;
(3)in the case of a life annuity, the annuitant's age (or the annuitant's and
joint annuitant's ages); and
(4)in certain instances, the sex of the annuitant(s).
The amount applied to provide the annuity payments will be (1) the account
value for any life annuity form, or (2) the cash value for any annuity certain
(an annuity form that does not guarantee payments for a person's lifetime)
except that if the period certain is more than five years, the amount applied
will be no less than 95% of the account value.
If, at the time you elect a payout option, the amount to be applied is less
than $2,000 or the initial payment under the form elected is less than $20
monthly, we reserve the right to pay the account value in a single sum rather
than as payments under the payout option chosen.
Please see Appendix II later in this Prospectus for state variations.
ANNUITY MATURITY DATE
Your contract has a maturity date. The maturity date is based on the age of the
original annuitant at contract issue and cannot be changed other than in
conformance with applicable law, even if you name a new annuitant. The maturity
date is generally the contract date anniversary that follows the annuitant's
95th birthday (or older joint annuitant's, if your contract has joint
annuitants). The maturity date may not be less than thirteen months from your
contract date, unless otherwise stated in your contract. We will send a notice
with the contract statement one year prior to the maturity date. The notice
will include the date of maturity, describe the available annuity payout
options, state the availability of a lump sum payment option, and identify the
default payout option if you do not provide an election by the time of your
contract maturity date. The default payout option is a life annuity with a
maximum period certain of 10 years.
ACCESSING YOUR MONEY 37
7. Charges and expenses
--------------------------------------------------------------------------------
CHARGES THAT AXA EQUITABLE DEDUCTS
We deduct the following charge each day from the net assets of each variable
investment option and Segment Type Holding Account. This charge is reflected in
the unit values of each variable investment option:
.. A contract fee.
We deduct the following charges from your account value. When we deduct these
charges from your variable investment options, we reduce the number of units
credited to your contract:
.. for Series B contracts, at the time you make certain withdrawals or
surrender your contract, or your contract is terminated -- a withdrawal
charge.
.. at the time annuity payments are to begin -- charges designed to
approximate certain taxes that may be imposed on us, such as premium taxes
in your state. An annuity administrative fee may also apply.
.. at the time you request a transfer in excess of 12 transfers in a contract
year -- a transfer charge (currently, there is no transfer charge).
More information about these charges appears below. We will not increase these
charges for the life of your contract, except as noted. We may reduce certain
charges under group or sponsored arrangements. See "Group or sponsored
arrangements" below.
To help with your retirement planning, we may offer other annuities with
different charges, benefits and features. Please contact your financial
professional for more information.
CHARGES UNDER THE CONTRACTS
CONTRACT FEE
We deduct a daily charge from the net assets in each variable investment option
and Segment Type Holding Account to compensate us for administrative expenses,
sales expenses and certain expense risks we assume under the contracts. Below
is the daily charge shown as an annual rate of the net assets in each variable
investment option:
Series B: 1.25%
Series C: 1.65%
Series ADV: 0.65%
The expense risk we assume is the risk that our expenses in providing the
benefits and administering the contracts will be greater than we expect. To the
extent that the expense risk charges are not needed to cover the actual
expenses incurred, they may be considered an indirect reimbursement for certain
sales and promotional expenses relating to the contracts. This charge also
compensates us for administrative expenses and a portion of our sales expenses,
under the contract.
On a non-guaranteed basis, we may waive this fee under certain conditions. If
the return on the EQ/Money Market variable investment option on any day is
positive, but lower than the amount of this fee, then we will waive the
difference between the two, so that you do not receive a negative return. If
the return on the EQ/Money Market variable investment option on any day is
negative, we will waive this fee entirely for that day, although your account
value would be reduced by the negative performance of the EQ/Money Market
variable investment option itself. We reserve the right to change or cancel
this provision at any time.
FEE-BASED EXPENSES
(Applicable to Series ADV contracts only)
The fees and expenses of a fee-based program are separate from and in addition
to the fees and expenses of the annuity contract. Please consult with your
program sponsor for more details about your feebased program.
TRANSFER CHARGE
Currently, we do not charge for transfers among variable investment options
under the contract. However, we reserve the right to charge for any transfers
among variable investment options in excess of 12 per contract year. We will
provide you with advance notice if we decide to assess the transfer charge,
which will never exceed $35 per transfer. The transfer charge is designed to
compensate the company with respect to adminstering the transaction. The charge
is also designed to deter disruptive transfer activity. The transfer charge (if
applicable), will be assessed at the time that the transfer is processed. Each
time you request a transfer from one variable investment option to another, we
will assess the transfer charge (if applicable). Separate requests submitted on
the same day will each be treated as a separate transfer. Any transfer charge
will be deducted from the variable investment options from which the transfer
is made. We will not count transfers from Segment Type Holding Accounts into
Segments on a Segment Start Date, or the allocation of Segment Maturity Value
on a Segment Maturity Date in calculating the number of transfers subject to
this charge.
SPECIAL SERVICES CHARGES
We deduct a charge for providing the special services described below. These
charges compensate us for the expense of processing each special service. For
certain services, we will deduct from your account value any withdrawal charge
that applies and the charge for the special service. Please note that we may
discontinue some or all of these services without notice.
WIRE TRANSFER CHARGE. We charge $90 for outgoing wire transfers. Unless you
specify otherwise, this charge will be deducted from the amount you request.
EXPRESS MAIL CHARGE. We charge $35 for sending you a check by express mail
delivery. This charge will be deducted from the amount you request.
DUPLICATE CONTRACT CHARGE. We charge $35 for providing a copy of your contract.
The charge for this service can be paid (i) using a credit card acceptable to
AXA Equitable, (ii) by sending a check to our processing office, or (iii) by
any other means we make available to you.
38 CHARGES AND EXPENSES
WITHDRAWAL CHARGE
(Applicable to Series B contracts only)
A withdrawal charge may apply in three circumstances: (1) you make one or more
withdrawals during a contract year; (2) you surrender your contract to receive
its cash value; or (3) we terminate your contract. The amount of the charge
will depend on whether the 10% free withdrawal amount applies, and the
availability of one or more exceptions.
The withdrawal charge equals a percentage of the contributions withdrawn. The
percentage that applies depends on how long each contribution has been invested
in the contract. We determine the withdrawal charge separately for each
contribution according to the following table:
----------------------------------------------------------------
CONTRACT YEAR
----------------------------------------------------------------
1 2 3 4 5 6+
----------------------------------------------------------------
Percentage of contribution 5% 5% 5% 4% 3% 0%
----------------------------------------------------------------
For purposes of calculating the withdrawal charge, we treat the contract year
in which we receive a contribution as "contract year 1." Amounts withdrawn up
to the free withdrawal amount are not considered a withdrawal of any
contribution. We also treat contributions that have been invested the longest
as being withdrawn first. We treat contributions as withdrawn before earnings
for purposes of calculating the withdrawal charge. However, federal income tax
rules treat earnings under most NQ contracts as withdrawn first. See "Tax
information" later in this Prospectus.
In order to give you the exact dollar amount of the withdrawal you request, we
deduct the amount of the withdrawal and the amount of the withdrawal charge
from your account value. Any amount deducted to pay withdrawal charges is also
subject to that same withdrawal charge percentage.
We deduct the withdrawal amount and the withdrawal charge pro rata from the
variable investment options (excluding the Segment Type Holding Accounts). If
those amounts are insufficient, we will deduct all or a portion of the required
amounts pro rata from the Segment Type Holding Accounts. If the amounts in the
Segment Type Holding Accounts are still insufficient, we deduct all or a
portion of the required amounts from the Segments on a pro rata basis. If you
specify that your withdrawal be taken from specific investment options, the
amount of the withdrawal charge will first be taken from the investment options
you specify. If there is insufficient value in those options to pay the
withdrawal charge after your withdrawal is deducted, then the remainder of the
withdrawal charge is deducted as described above.
Withdrawals for a Segment or a Segment Type Holding Account are subject to the
same withdrawal charge calculations as a withdrawal from any other investment
option. Any withdrawal from a Segment will trigger the calculation of the
Segment Interim Value, which is in addition to any applicable withdrawal
charge. A withdrawal from a Segment Type Holding Account reduces the amount
that will be transferred to a Segment. For more information, see "Structured
Investment Option" in "Contract features and benefits," earlier in this
Prospectus.
The withdrawal charge does not apply in the circumstances described below.
10% FREE WITHDRAWAL AMOUNT. For Series B contracts, each contract year you can
withdraw up to 10% of your account value without paying a withdrawal charge. No
withdrawal charge applies to Series C and Series ADV contracts. The 10% free
withdrawal amount is determined using your account value at the beginning of
the contract year. When a contract is surrendered in certain states, the free
withdrawal amount is not taken into account when calculating the amount of the
withdrawal.
DEATH. The withdrawal charge does not apply if the owner dies and a death
benefit is payable to the beneficiary.
DISABILITY, TERMINAL ILLNESS, OR CONFINEMENT TO NURSING HOME. The withdrawal
charge also does not apply if:
(i)An owner (or older joint owner, if applicable) has qualified to receive
Social Security disability benefits as certified by the Social Security
Administration; or
(ii)We receive proof satisfactory to us (including certification by a licensed
physician) that an owner's (or older joint owner's, if applicable) life
expectancy is six months or less; or
(iii)An owner (or older joint owner, if applicable) has been confined to a
nursing home for more than 90 days (or such other period, as required in
your state) as verified by a licensed physician. A nursing home for this
purpose means one that is (a) approved by Medicare as a provider of
skilled nursing care service, or (b) licensed as a skilled nursing home by
the state or territory in which it is located (it must be within the
United States, Puerto Rico, or U.S. Virgin Islands) and meets all of the
following:
-- its main function is to provide skilled, intermediate, or custodial
nursing care;
-- it provides continuous room and board to three or more persons;
-- it is supervised by a registered nurse or licensed practical nurse;
-- it keeps daily medical records of each patient;
-- it controls and records all medications dispensed; and
-- its primary service is other than to provide housing for residents.
We reserve the right to impose a withdrawal charge, in accordance with your
contract and applicable state law, if the conditions described in (i), (ii) or
(iii) above existed at the time a contribution was remitted or if the condition
began within 12 months of the period following remittance. Some states may not
permit us to waive the withdrawal charge in the above circumstances, or may
limit the circumstances for which the withdrawal charge may be waived. Your
financial professional can provide more information or you may contact our
processing office.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain taxes that may be imposed on
us, such as premium taxes in your state. Generally, we deduct the charge from
the amount applied to provide an annuity pay out option. The current tax charge
that might be imposed varies by jurisdiction and ranges from 0% to 3.5%.
CHARGES AND EXPENSES 39
ADJUSTMENTS WITH RESPECT TO EARLY WITHDRAWALS FROM SEGMENTS
We calculate the Segment Interim Value when a withdrawal is taken, whether a
partial withdrawal or a full contract surrender, from a Segment prior to the
Segment Maturity Date. The Segment Interim Value is calculated based on a
formula that provides a treatment for an early distribution that is designed to
be consistent with how distributions at the end of a Segment are treated. For
more information on the calculation of the Segment Interim Value, please see
Appendix III.
CHARGES THAT THE TRUST DEDUCTS
The Trust deducts charges for the following types of fees and expenses:
.. Management fees.
.. 12b-1 fees.
.. Operating expenses, such as trustees' fees, independent auditors' fees,
legal counsel fees, administrative service fees, custodian fees, and
liability insurance.
.. Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of the Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. For more information about these charges,
please refer to the prospectuses for the Trusts.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce the withdrawal
charge or the contract fee, or change the minimum contribution requirements. We
also may change the minimum death benefit or offer variable investment options
that invest in shares of a Trust that are not subject to the 12b-1 fee. Group
arrangements include those in which a trustee or an employer, for example,
purchases contracts covering a group of individuals on a group basis. Group
arrangements are not available for traditional IRA and Roth IRA contracts.
Sponsored arrangements include those in which an employer allows us to sell
contracts to its employees or retirees on an individual basis.
Our costs for sales and administration generally vary with the size and
stability of the group or sponsoring organization, among other factors. We take
all these factors into account when reducing charges. To qualify for reduced
charges, a group or sponsored arrangement must meet certain requirements, such
as requirements for size and number of years in existence. Group or sponsored
arrangements that have been set up solely to buy contracts or that have been in
existence less than six months will not qualify for reduced charges.
We will make these and any similar reductions according to our rules in effect
when we approve a contract for issue. We may change these rules from time to
time. Any variation will reflect differences in costs or services and will not
be unfairly discriminatory.
Group or sponsored arrangements may be governed by federal income tax rules,
the Employee Retirement Income Security Act of 1974, or both. We make no
representations with regard to the impact of these and other applicable laws on
such programs. We recommend that employers, trustees, and others purchasing or
making contracts available for purchase under such programs seek the advice of
their own legal and benefits advisers.
OTHER DISTRIBUTION ARRANGEMENTS
We may reduce or eliminate charges when sales are made in a manner that results
in savings of sales and administrative expenses, such as sales through persons
who are compensated by clients for recommending investments and who receive no
commission or reduced commissions in connection with the sale of the contracts.
We will not permit a reduction or elimination of charges where it will be
unfairly discriminatory.
40 CHARGES AND EXPENSES
8. Payment of death benefit
--------------------------------------------------------------------------------
YOUR BENEFICIARY AND PAYMENT OF BENEFIT
If you have a Series C or Series ADV contract, disregard any references to
"withdrawal charges,""cash value" or "free withdrawal amount" in this section;
these terms only apply to Series B contracts, not Series C or Series ADV
contracts.
You designate your beneficiary when you apply for your contract. You may change
your beneficiary during your lifetime and while the contract is in force. The
change will be effective on the date the written request for the change is
received in our processing office. We are not responsible for any beneficiary
change request that we do not receive. We will send you a written confirmation
when we receive your request. Any part of a death benefit for which there is no
named or designated beneficiary living at your death will be payable in a
single sum to your surviving spouse, if any; if there is no surviving spouse,
then to the surviving children in equal shares; if there are no surviving
children, then to your estate. Under jointly owned contracts, the surviving
owner is considered the beneficiary, and will take the place of any other
beneficiary.
Subject to applicable laws and regulations, you may impose restrictions on the
timing and manner of the payment of the death benefit to your beneficiary. For
example, your beneficiary designation may specify the form of death benefit
payout (such as a life annuity), provided the payout you elect is one that we
offer both at the time of designation and when the death benefit is payable. In
general, the beneficiary will have no right to change the election. However,
you should be aware that (i) in accordance with current federal income tax
rules, we apply a predetermined death benefit annuity payout election only if
payment of the death benefit amount begins within one year following the date
of death, which payment may not occur if the beneficiary has failed to provide
all required information before the end of that period, (ii) we will not apply
the predetermined death benefit payout election if doing so would violate any
federal income tax rules or any other applicable law, and (iii) a beneficiary
or a successor owner who continues the contract under one of the continuation
options described below will have the right to change your annuity payout
election.
DEATH BENEFIT
The death benefit is equal to the account value as of the date we receive
satisfactory proof of the owner's death, any required instructions for the
method of payment, and all information and forms necessary to effect payment.
EFFECT OF THE OWNER'S DEATH
In general, if the owner dies while the contract is in force, the contract
terminates and the applicable death benefit is paid. If the contract is jointly
owned, the death benefit is payable upon the death of the older owner.
Once we have received notice of the Owner's death, we will not make any
transfers from Segment Type Holding Accounts to Segments. Amounts in the
Segment Type Holding Accounts will be defaulted into the EQ/Money Market
variable investment option. When Segments mature, the Segment Maturity Value
will be transferred to the EQ/Money Market variable investment option.
There are various circumstances, however, in which the contract can be
continued by a successor owner or under a Beneficiary continuation option
("BCO"). For contracts with spouses who are joint owners, the surviving spouse
will automatically be able to continue the contract under the "Spousal
continuation" feature, or under our Beneficiary continuation option, as
discussed below. For contracts with non-spousal joint owners, the joint owner
will be able to continue the contract as a successor owner subject to the
limitations discussed below under "Non-spousal joint owner contract
continuation." If you are the sole owner and your spouse is the sole primary
beneficiary, your surviving spouse can continue the contract as a successor
owner, under "Spousal continuation" or under our Beneficiary continuation
option, as discussed below.
If the surviving joint owner is not the surviving spouse, or, for single owner
contracts, if the beneficiary is not the surviving spouse, federal income tax
rules generally require payments of amounts under the contract to be made
within five years of an owner's death (the "5-year rule"). In certain cases, an
individual beneficiary or non-spousal surviving joint owner may opt to receive
payments over his/her life (or over a period not in excess of his/her life
expectancy) if payments commence within one year of the owner's death. Any such
election must be made in accordance with our rules at the time of death.
NON-SPOUSAL JOINT OWNER CONTRACT CONTINUATION
Upon the death of either owner, the surviving joint owner becomes the sole
owner.
Any death benefit (if the older owner dies first) or cash value (if the younger
owner dies first) must be fully paid to the surviving joint owner within five
years, unless one of the exceptions described here applies. The surviving owner
may instead elect to take an installment payout or annuity, provided payments
begin within one year of the deceased owner's death. If an annuity or
installment payout is elected, the contract terminates and a supplemental
contract is issued.
If the older owner dies first, the surviving owner can elect to (1) take a lump
sum payment; (2) take an installment payout or annuity within one year;
(3) continue the contract for up to five years; or (4) continue the contract
under the Beneficiary continuation option discussed below. If the contract
continues, withdrawal charges will no longer apply, and no additional
contributions will be permitted.
If the younger owner dies first, the surviving owner can elect to (1) take a
lump sum payment; (2) take an installment payout or annuity within one year;
(3) continue the contract for up to five years; or (4) continue the contract
under the Beneficiary continuation option discussed below. If the contract
continues, withdrawal charges (for Series B contracts) will continue to apply
and no additional contributions will be permitted. The death benefit becomes
payable to the beneficiary if the older owner dies within five years after the
death of the younger owner.
PAYMENT OF DEATH BENEFIT 41
SPOUSAL CONTINUATION
If you are the contract owner and your spouse is the sole primary beneficiary
or you jointly own the contract with your younger spouse, or if the contract
owner is a non-natural person and you and your younger spouse are joint
annuitants, your spouse may elect to continue the contract as successor owner
upon your death. Spousal beneficiaries (who are not also joint owners) must be
85 or younger as of the date of the deceased spouse's death in order to
continue the contract under Spousal continuation. The determination of spousal
status is made under applicable state law. However, in the event of a conflict
between federal and state law, we follow federal rules.
Upon your death, the younger spouse joint owner (for NQ contracts only) or the
spouse beneficiary (under a Single owner contract) may elect to receive the
death benefit, continue the contract under our Beneficiary continuation option
(as discussed below in this section) or continue the contract, as follows:
.. In general, withdrawal charges (for Series B contracts) will no longer
apply to contributions made before your death. Withdrawal charges will
apply if additional contributions are made.
.. If the deceased spouse was the annuitant, the surviving spouse becomes the
annuitant. If the deceased spouse was a joint annuitant, the contract will
become a single annuitant contract.
Where an NQ contract is owned by a Living Trust, as defined in the contract,
and at the time of the annuitant's death the annuitant's spouse is the sole
beneficiary of the Living Trust, the Trustee, as owner of the contract, may
request that the spouse be substituted as annuitant as of the date of the
annuitant's death. No further change of annuitant will be permitted.
Where an IRA contract is owned in a custodial individual retirement account,
and your spouse is the sole beneficiary of the account, the custodian may
request that the spouse be substituted as annuitant after your death.
For jointly owned NQ contracts, if the younger spouse dies first no death
benefit is paid, and the contract continues as follows:
.. If the deceased spouse was the annuitant, the surviving spouse becomes the
annuitant. If the deceased spouse was a joint annuitant, the contract will
become a single annuitant contract.
.. The withdrawal charge schedule (for Series B contracts) remains in effect.
The transfer restrictions on amounts in Segments prior to election of Spousal
continuation remain in place. Any amounts in Segments may not be transferred
out of the Segments until their Segment Maturity Dates. The Segment Maturity
Value may be reinvested in other investment options.
If you divorce, Spousal continuation does not apply.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract with the deceased contract owner's name on it and receive
distributions under the contract, instead of receiving the death benefit in a
single sum. We make this option available to beneficiaries under traditional
IRA, Roth IRA and NQ contracts, subject to state availability. Please speak
with your financial professional or see Appendix II later in this Prospectus
for further information.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian may reinvest the death benefit in an individual retirement
annuity contract, using the account beneficiary as the annuitant. Please speak
with your financial professional for further information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The beneficiary continuation option must be elected by September 30th of
the year following the calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your death
and determined on a term certain basis). These payments must begin no later
than December 31st of the calendar year after the year of your death. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 70 1/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed later in this Prospectus in
"Tax information" under "Individual retirement arrangements (IRAs)," the
beneficiary may choose the "5-year rule" option instead of annual payments over
life expectancy. The 5-year rule is always available to beneficiaries under
Roth IRA contracts. If the beneficiary chooses this option, the beneficiary may
take withdrawals as desired, but the entire account value must be fully
withdrawn by December 31st of the calendar year which contains the fifth
anniversary of your death.
Under the beneficiary continuation option for IRA and Roth IRA contracts:
.. The contract continues with your name on it for the benefit of your
beneficiary.
.. The beneficiary replaces the deceased owner as annuitant.
.. This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals
for this purpose.
.. If there is more than one beneficiary:
-- each beneficiary's share will be separately accounted for. It will be
distributed over the beneficiary's own life expectancy, if payments over
life expectancy are chosen; and
-- as of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature for the first beneficiary, all Segments will
be terminated and all Segment Interim Values will be transferred into the
EQ/Money Market variable investment option.
.. If there is one beneficiary, the transfer restrictions on amounts in
Segments prior to election of the beneficiary continuation option remain in
place. Any amounts in Segments may not be transferred out of the Segments
until their Segment Maturity
42 PAYMENT OF DEATH BENEFIT
Dates. The Segment Maturity Value may be reinvested in other investment
options. However, if the beneficiary has chosen the "5-year rule," amounts
may not be invested in Segments with Segment Maturity Dates later than
December 31st of the calendar year which contains the fifth anniversary of
your death.
.. A beneficiary who chooses to receive annual payments over his life
expectancy should consult his tax adviser about selecting Segments that
provide sufficient liquidity to satisfy the payout requirements under this
option.
.. The minimum amount that is required in order to elect the beneficiary
continuation option is $5,000 for each beneficiary.
.. The beneficiary may make transfers among the variable investment options
but no additional contributions will be permitted.
.. The beneficiary may choose at any time to withdraw all or a portion of the
account value and no withdrawal charges, if any, will apply.
.. Any partial withdrawal must be at least $300.
.. Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
.. Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based
on the remaining life expectancy of the deceased beneficiary or to receive
any remaining interest in the contract in a lump sum. The option elected
will be processed when we receive satisfactory proof of death, any required
instructions for the method of payment and any required information and
forms necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACTS ONLY. This feature may only be
elected when the NQ contract owner dies before the annuity maturity date,
whether or not the owner and the annuitant are the same person. For purposes of
this discussion, "beneficiary" refers to the successor owner or the surviving
joint owner who elects this feature. This feature must be elected within 9
months following the date of your death and before any other inconsistent
election is made. Beneficiaries who do not make a timely election will not be
eligible for this option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the beneficiary continuation option for NQ contracts:
.. This feature is only available if the beneficiary is an individual. It is
not available for any entity such as a trust, even if all of the
beneficiaries of the trust are individuals.
.. The beneficiary automatically replaces the existing annuitant.
.. The contract continues with your name on it for the benefit of your
beneficiary.
.. If there is more than one beneficiary:
-- each beneficiary's share will be separately accounted for. It will be
distributed over the respective beneficiary's own life expectancy, if
scheduled payments are chosen; and
-- as of the date we receive satisfactory proof of death, any required
instructions, information and forms necessary to effect the beneficiary
continuation option feature for the first beneficiary, all Segments will
be terminated and all Segment Interim Values will be transferred into the
EQ/Money Market variable investment option.
.. If there is one beneficiary, the transfer restrictions on amounts in
Segments prior to the election of the beneficiary continuation option
remain in place. Any amounts in Segments may not be transferred out of the
Segments until their Segment Maturity Dates. The Segment Maturity Value may
be reinvested in other investment options. However, if the beneficiary has
chosen the "5-year rule," amounts may not be invested in Segments with
Segment Maturity Dates later than the fifth anniversary of your death.
.. The minimum amount that is required in order to elect the ben- eficiary
continuation option is $5,000 for each beneficiary.
.. The beneficiary may make transfers among the investment options but no
additional contributions will be permitted.
.. If the beneficiary chooses the "5-year rule," withdrawals may be made at
any time. If the beneficiary instead chooses scheduled payments, the
beneficiary may also take withdrawals, in addition to scheduled payments,
at any time.
.. Any partial withdrawals must be at least $300.
.. Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract on the beneficiary's death.
.. Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking scheduled pay- ments based on the
remaining life expectancy of the deceased beneficiary (if scheduled
payments were chosen) or to receive any remaining interest in the contract
in a lump sum. We will pay any remaining interest in the contract in a lump
sum if your beneficiary elects the 5-year rule. The option elected will be
processed when we receive satisfactory proof of death, any required
instructions for the method of payment and any required information and
forms necessary to effect payment.
If the deceased is the owner or older joint owner:
.. No withdrawal charges will apply to any withdrawals by the beneficiary.
If the deceased is the younger non-spousal joint owner:
.. The contract's withdrawal charge schedule will continue to be applied to
any withdrawal or surrender other than scheduled payments; the contract's
free withdrawal amount will continue to apply to withdrawals but does not
apply to surrenders.
PAYMENT OF DEATH BENEFIT 43
.. We do not impose a withdrawal charge on scheduled payments except if, when
added to any withdrawals previously taken in the same contract year,
including for this purpose a contract surrender, the total amount of
withdrawals and scheduled payments exceed the free withdrawal amount. See
the "Withdrawal charges" in "Charges and expenses" earlier in this
Prospectus.
-------------------
A beneficiary should speak to his or her tax professional about which
continuation option is appropriate for him or her. Factors to consider include,
but are not limited to, the beneficiary's age, need for immediate income and a
desire to continue the contract.
44 PAYMENT OF DEATH BENEFIT
9. Tax information
--------------------------------------------------------------------------------
OVERVIEW
In this part of the Prospectus, we discuss the current federal income tax rules
that generally apply to Structured Capital Strategies/SM/ contracts owned by
United States individual taxpayers. The tax rules can differ, depending on the
type of contract, whether NQ, traditional IRA or Roth IRA. Therefore, we
discuss the tax aspects of each type of contract separately.
Federal income tax rules include the United States laws in the Internal Revenue
Code, and Treasury Department Regulations and IRS interpretations of the
Internal Revenue Code. These tax rules may change without notice. We cannot
predict whether, when, or how these rules could change. Any change could affect
contracts purchased before the change. Congress may also consider proposals in
the future to comprehensively reform or overhaul the United States tax and
retirement systems, which if enacted, could affect the tax benefits of a
contract. We cannot predict what, if any, legislation will actually be proposed
or enacted.
We cannot provide detailed information on all tax aspects of the contracts.
Moreover, the tax aspects that apply to a particular person's contract may vary
depending on the facts applicable to that person. We do not discuss state
income and other state taxes, federal income tax and withholding rules for
non-U.S. taxpayers, or federal gift and estate taxes. We also do not discuss
the Employee Retirement Income Security Act of 1974 (ERISA). Transfers of the
contract, rights or values under the contract, or payments under the contract,
for example, amounts due to beneficiaries, may be subject to federal or state
gift, estate or inheritance taxes. You should not rely only on this document,
but should consult your tax adviser before your purchase.
BUYING A CONTRACT TO FUND A RETIREMENT ARRANGEMENT
Generally, there are two types of funding vehicles that are available for
Individual Retirement Arrangements ("IRAs"): an individual retirement annuity
contract such as the ones offered in this Prospectus, or an individual
retirement custodial or trusteed account. You should be aware that the funding
vehicle for a tax-qualified arrangement does not provide any tax deferral
benefit beyond that already provided by the Code for all permissible funding
vehicles. Before choosing an annuity contract, therefore, you should consider
the annuity's features and benefits compared with the features and benefits of
other permissible funding vehicles and the relative costs of annuities and
other such arrangements. You should be aware that cost may vary depending on
the features and benefits made available and the charges and expenses of the
investment options you elect.
TRANSFERS AMONG INVESTMENT OPTIONS
If permitted under the terms of the contract, you can make transfers among
investment options inside the contract without triggering taxable income.
TAXATION OF NONQUALIFIED ANNUITIES
Before purchasing or making any subsequent contributions to an NQ contract,
taxpayers with incomes over $250,000 should consider the 3.8% Medicare tax on
investment income (including, for this purpose, income from NQ contracts) which
will be effective after December 31, 2012.
CONTRIBUTIONS
You may not deduct the amount of your contributions to a nonquali-fied annuity
contract.
CONTRACT EARNINGS
Generally, you are not taxed on contract earnings until you receive a
distribution from your contract, whether as a withdrawal or as an annuity
payment. However, earnings are taxable, even without a distribution:
.. if a contract fails investment diversification requirements as specified in
federal income tax rules (these rules are based on or are similar to those
specified for mutual funds under securities laws);
.. if you transfer a contract, for example, as a gift to someone other than
your spouse (or former spouse);
.. if you use a contract as security for a loan (in this case, the amount
pledged will be treated as a distribution); and
.. if the owner is other than an individual (such as a corporation,
partnership, trust, or other non-natural person). This provision does not
apply to a trust which is a mere agent or nominee for an individual, such
as a grantor trust.
Federal tax law requires that all nonqualified deferred annuity contracts that
AXA Equitable and its affiliates issue to you during the same calendar year be
linked together and treated as one contract for calculating the taxable amount
of any distribution from any of those contracts.
ANNUITY PAYMENTS
The following applies to an annuitization of the entire contract. In certain
cases, the contract can be partially annuitized. See "Partial annuitization"
below.
Annuitization under a Structured Capital Strategies/SM/ contract occurs when
your entire interest under the contract is or has been applied to one or more
payout options intended to amortize amounts over your life or over a period
certain generally limited by the period of your life expectancy. Annuity
payouts can also be determined on a joint life basis. After annuitization, no
further contributions to the contract may be made, the annuity payout amount
must be paid at least annually, and annuity payments cannot be stopped except
by death or surrender (if permitted under the terms of the contract).
Once annuity payments begin, a portion of each payment is taxable as ordinary
income. You get back the remaining portion without paying taxes on it. This is
your unrecovered investment in the contract.
TAX INFORMATION 45
Generally, your investment in the contract equals the contributions you made,
less any amounts you previously withdrew that were not taxable.
For fixed annuity payments, the tax-free portion of each payment is determined
by (1) dividing your investment in the contract by the total amount you are
expected to receive out of the contract, and (2) multiplying the result by the
amount of the payment. For variable annuity payments, your tax-free portion of
each payment is your investment in the contract divided by the number of
expected payments. If you have a loss on a variable annuity payout in a taxable
year, you may be able to adjust the tax-free amount in subsequent years.
Once you have received the amount of your investment in the contract, all
payments after that are fully taxable. If payments under a life annuity stop
because the annuitant dies, there is an income tax deduction for any
unrecovered investment in the contract.
Your rights to apply amounts under this Structured Capital Strategies/SM/
contract to an annuity payout option are described elsewhere in this
Prospectus. If you hold your contract to the maximum maturity age under the
contract we require that a choice be made between taking a lump sum settlement
of any remaining account value or applying any such account value to one or
more of the annuity payout options under the contract. If no affirmative choice
is made, we will apply any remaining account value or interest in the contract
to the default option under the contract at such age. While there is no
specific federal tax guidance as to whether or when an annuity contract is
required to mature, or as to the form of the payments to be made upon maturity,
we believe that this Structured Capital Strategies/SM/ contract constitutes an
annuity contract under current federal tax rules.
PARTIAL ANNUITIZATION
The consequences described above for annuitization of the entire contract apply
to the portion of the contract which is partially annuitized. A nonqualified
deferred annuity contract is treated as being partially annuitized if a portion
of the contract is applied to an annuity payout option on a life-contingent
basis or for a period certain of at least 10 years. In order to get annuity
payment tax treatment for the portion of the contract applied to the annuity
payout, payments must be made at least annually in substantially equal amounts,
the payments must be designed to amortize the amount applied over life or the
period certain, and the payments cannot be stopped, except by death or
surrender (if permitted under the terms of the contract). The investment in the
contract is split between the partially annuitized portion and the deferred
amount remaining based on the relative values of the amount applied to the
annuity payout and the deferred amount remaining at the time of the partial
annuitization. Also, the partial annuitization has its own annuity starting
date.
WITHDRAWALS MADE BEFORE ANNUITY PAYMENTS BEGIN
If you make withdrawals before annuity payments begin under your contract, they
are taxable to you as ordinary income if there are earnings in the contract.
Generally, earnings are your account value less your investment in the
contract. If you withdraw an amount which is more than the earnings in the
contract as of the date of the withdrawal, the balance of the distribution is
treated as a reduction of your investment in the contract and is not taxable.
If you have a Series ADV contract, withdrawals made by your investment advisor
are taxable to you.
1035 EXCHANGES
You may purchase a nonqualified deferred annuity through an exchange of another
contract. Normally, exchanges of contracts are taxable events. The exchange
will not be taxable under Section 1035 of the Internal Revenue Code if:
.. the contract that is the source of the funds you are using to purchase the
nonqualified deferred annuity contract is another nonqualified deferred
annuity contract or life insurance or endowment contract.
.. the owner and the annuitant are the same under the source contract and the
contract issued in exchange. If you are using a life insurance or endowment
contract the owner and the insured must be the same on both sides of the
exchange transaction.
In some cases you may make a tax-deferred 1035 exchange from a nonqualified
deferred annuity contract to a "qualified long-term care contract" meeting all
specified requirements under the Code or an annuity contract with a "qualified
long-term care contract" feature (sometimes referred to as a "combination
annuity" contract).
The tax basis, also referred to as your investment in the contract, of the
source contract carries over to the contract issued in exchange.
An owner may direct the proceeds of a partial withdrawal from one nonqualified
deferred annuity contract to purchase or contribute to another nonqualified
deferred annuity contract on a tax-deferred basis. If requirements are met, the
owner may also directly transfer amounts from a nonqualified deferred annuity
contract to a "qualified long-term care contract" or "combination annuity" in
such a partial 1035 exchange transaction. Special forms, agreement between the
carriers, and provision of cost basis information may be required to process
this type of an exchange.
Even if the contract owner and the insurance companies agree that a full or
partial 1035 exchange is intended, the IRS has the ultimate authority to review
the facts and determine that the transaction should be recharacterized as
taxable in whole or in part.
Section 1035 exchanges are generally not available after the death of the owner.
SURRENDERS
If you surrender or cancel the contract, the distribution is taxable as
ordinary income (not capital gain) to the extent it exceeds your investment in
the contract.
DEATH BENEFIT PAYMENTS MADE TO A BENEFICIARY AFTER YOUR DEATH
For the rules applicable to death benefits, see "Payment of death benefit"
earlier in this Prospectus. The tax treatment of a death benefit taken as a
single sum is generally the same as the tax treatment of a withdrawal from or
surrender of your contract. The tax treatment of a death benefit taken as
annuity payments is generally the same as the tax treatment of annuity payments
under your contract.
Under the Beneficiary continuation option, the tax treatment of a withdrawal
after the death of the owner taken as a single sum or
46 TAX INFORMATION
taken as withdrawals under the 5-year rule is generally the same as the tax
treatment of a withdrawal from or surrender of your contract.
EARLY DISTRIBUTION PENALTY TAX
If you take distributions before you are age 59 1/2, a penalty tax of 10% of
the taxable portion of your distribution applies in addition to the income tax.
Some of the available exceptions to the pre-age 59 1/2 penalty tax include
distributions made:
.. on or after your death; or
.. because you are disabled (special federal income tax definition); or
.. in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy) or over the joint lives of you and
your beneficiary (or your joint life expectancies) using an IRS-approved
distribution method.
We will report a life-contingent partial annuitization made to an owner under
age 59 1/2 as eligible for an exception to the early distribution penalty tax.
We may be required to treat a partial annuitization for a period certain of at
least 10 years as being subject to the penalty for an owner under age 59 1/2.
INVESTOR CONTROL ISSUES
Under certain circumstances, the IRS has stated that you could be treated as
the owner (for tax purposes) of the assets of Separate Account No. 49. If you
were treated as the owner, you would be taxed on income and gains attributable
to the shares of the underlying portfolios.
The circumstances that would lead to this tax treatment would be that, in the
opinion of the IRS, you could control the underlying investment of Separate
Account No. 49. Recently, the IRS has said that the owners of variable
annuities will not be treated as owning the separate account assets provided
the underlying portfolios are restricted to variable life and annuity assets.
The variable annuity owners must have the right only to choose among the
portfolios, and must have no right to direct the particular investment
decisions within the portfolios.
Also we do not believe that these rules apply to the assets of Separate Account
No. 68, because contract owners have no interest in the performance of those
assets.
Although we believe that, under current IRS guidance, you would not be treated
as the owner of the assets of Separate Account No. 49, there are some issues
that remain unclear. For example, the IRS has not issued any guidance as to
whether having a larger number of portfolios available, or an unlimited right
to transfer among them, could cause you to be treated as the owner. We do not
know whether the IRS will ever provide such guidance or whether such guidance,
if unfavorable, would apply retroactively to your contract. Furthermore, the
IRS could reverse its current guidance at any time. We reserve the right to
modify your contract as necessary to prevent you from being treated as the
owner of the assets of Separate Account No 49.
INDIVIDUAL RETIREMENT ARRANGEMENTS ("IRAS")
GENERAL
"IRA" stands for individual retirement arrangement. There are two basic types
of such arrangements, individual retirement accounts and individual retirement
annuities. In an individual retirement account, a trustee or custodian holds
the assets funding the account for the benefit of the IRA owner. The assets
typically include mutual funds and/or individual stocks and securities in a
custodial account, and bank certificates of deposit in a trusteed account. In
an individual retirement annuity, an insurance company issues an annuity
contract that serves as the IRA.
There are two basic types of IRAs, as follows:
.. traditional IRAs, typically funded on a pre-tax basis; and
.. Roth IRAs, funded on an after-tax basis.
Regardless of the type of IRA, your ownership interest in the IRA cannot be
forfeited. You or your beneficiaries who survive you are the only ones who can
receive the IRA's benefits or payments. All types of IRAs qualify for tax
deferral, regardless of the funding vehicle selected.
You can hold your IRA assets in as many different accounts and annuities as you
would like, as long as you meet the rules for setting up and making
contributions to IRAs. However, if you own multiple IRAs, you may be required
to combine IRA values or contributions for tax purposes. For further
information about individual retirement arrangements, you can read Internal
Revenue Service Publication 590 ("Individual Retirement Arrangements (IRAs)").
This publication is usually updated annually, and can be obtained by contacting
the IRS or from the IRS website (www.irs.gov).
AXA Equitable designs its IRA contracts to qualify as "individual retirement
annuities" under Section 408(b) of the Internal Revenue Code. We offer the
Structured Capital StrategiesSM contract in both traditional IRA and Roth IRA
versions.
This Prospectus contains the information that the IRS requires you to have
before you purchase an IRA. The first section covers some of the special tax
rules that apply to traditional IRAs. The next section covers
Roth IRAs. The disclosure generally assumes direct ownership of the individual
retirement annuity contracts. For contracts owned in a custodial individual
retirement account, the disclosure will apply only if you terminate your
account or transfer ownership of the contract to yourself.
We describe the amount and types of charges that may apply to your
contributions under "Charges and expenses" earlier in this Prospectus. We
describe the method of calculating payments under "Accessing your money"
earlier in this Prospectus. We do not guarantee or project growth in variable
income annuitization option payments (as opposed to payments from a fixed
income annuitization option).
We have not applied for opinion letters approving the respective forms of the
traditional IRA and Roth IRA contracts for use as a traditional and Roth IRA,
respectively. This IRS approval is a determination only as to the form of the
annuity. It does not represent a determination of the merits of the annuity as
an investment.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
You can cancel either version of the Structured Capital Strategies/SM/ IRA
contract (traditional IRA or Roth IRA) by following the directions under "Your
right to cancel within a certain number of days" in "Contract features and
benefits" earlier in this Prospectus. If you cancel a traditional IRA, or Roth
IRA contract, we may have to withhold tax, and we must report the transaction
to the IRS. A contract cancellation could have an unfavorable tax impact.
TAX INFORMATION 47
TRADITIONAL INDIVIDUAL RETIREMENT ANNUITIES (TRADITIONAL IRAS)
CONTRIBUTIONS TO TRADITIONAL IRAS. Individuals may make three different types
of contributions to purchase a traditional IRA or as subsequent contributions
to an existing IRA:
.. "regular" contributions out of earned income or compensation; or
.. tax-free "rollover" contributions; or
.. direct custodian-to-custodian transfers from other traditional IRAs
("direct transfers").
When you make a contribution to your IRA, we require you to tell us whether it
is a regular contribution, rollover contribution, or direct transfer
contribution, and to supply supporting documentation in some cases.
Because the minimum initial contribution AXA Equitable requires to purchase
this contract is larger than the maximum regular contribution you can make to
an IRA for a taxable year, this contract must be purchased through a rollover
or direct transfer contribution.
REGULAR CONTRIBUTIONS TO TRADITIONAL IRAS
LIMITS ON CONTRIBUTIONS. The "maximum regular contribution amount" for any
taxable year is the most that can be contributed to all of your IRAs
(traditional and Roth) as regular contributions for the particular taxable
year. The maximum regular contribution amount depends on age, earnings, and
year, among other things. Generally, $5,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs). When your earnings are below
$5,000, your earned income or compensation for the year is the most you can
contribute. This limit does not apply to rollover contributions or direct
custodian-to-custodian transfers into a traditional IRA. You cannot make
regular traditional IRA contributions for the taxable year in which you reach
age 70 1/2 or any taxable year after that.
If you are at least age 50 at any time during the taxable year for which you
are making a regular contribution to your IRA, you may be eligible to make
additional "catch up contributions" of up to $1,000 to your traditional IRA.
SPECIAL RULES FOR SPOUSES. If you are married and file a joint federal income
tax return, you and your spouse may combine your compensation to determine the
amount of regular contributions you are permitted to make to traditional IRAs
(and Roth IRAs discussed below). Even if one spouse has no compensation, or
compensation under $5,000, married individuals filing jointly can contribute up
to $10,000 per year to any combination of traditional IRAs and Roth IRAs. Any
contributions to Roth IRAs reduce the ability to contribute to traditional IRAs
and vice versa. The maximum amount may be less if earned income is less and the
other spouse has made IRA contributions. No more than a combined total of
$5,000 can be contributed annually to either spouse's traditional and Roth
IRAs. Each spouse owns his or her traditional IRAs and Roth IRAs even if the
other spouse funded the contributions. A working spouse age 70 1/2 or over can
contribute up to the lesser of $5,000 or 100% of "earned income" to a
traditional IRA for a nonworking spouse until the year in which the nonworking
spouse reaches age 70 1/2. Catch-up contributions may be made as described
above for spouses who are at least age 50 but under age 70 1/2 at any time
during the taxable year for which the contribution is being made.
DEDUCTIBILITY OF CONTRIBUTIONS. The amount of traditional IRA contributions
that you can deduct for a taxable year depends on whether you are covered by an
employer-sponsored-tax-favored retirement plan, as defined under special
federal income tax rules. Your Form W-2 will indicate whether or not you are
covered by such a retirement plan.
The federal tax rules governing contributions to IRAs made from current
compensation are complex and are subject to numerous technical requirements and
limitations which vary based on an individual's personal situation (including
his/her spouse). IRS Publication 590, "Individual Retirement Arrangements
(IRAs)" which is updated annually and is available at www.irs.gov, contains
pertinent explanations of the rules applicable to the current year. The amount
of permissible contributions to IRAs, the amount of IRA contributions which may
be deductible, and the individual's income limits for determining contributions
and deductions all may be adjusted annually for cost of living.
NONDEDUCTIBLE REGULAR CONTRIBUTIONS. If you are not eligible to deduct part or
all of the traditional IRA contribution, you may still make nondeductible
contributions on which earnings will accumulate on a tax-deferred basis. The
combined deductible and nondeductible contributions to your traditional IRA (or
the nonworking spouse's traditional IRA) may not, however, exceed the maximum
$5,000 per person limit for the applicable taxable year. The dollar limit is
$6,000 for people eligible to make age 50-70 1/2 "catch-up" contributions. You
must keep your own records of deductible and nondeductible contributions in
order to prevent double taxation on the distribution of previously taxed
amounts. See "Withdrawals, payments and transfers of funds out of traditional
IRAs" below.
If you are making nondeductible contributions in any taxable year, or you have
made nondeductible contributions to a traditional IRA in prior years and are
receiving distributions from any traditional IRA, you must file the required
information with the IRS. Moreover, if you are making nondeductible traditional
IRA contributions, you must retain all income tax returns and records
pertaining to such contributions until interests in all traditional IRAs are
fully distributed.
WHEN YOU CAN MAKE REGULAR CONTRIBUTIONS. If you file your tax returns on a
calendar year basis like most taxpayers, you have until the April 15 return
filing deadline (without extensions) of the following calendar year to make
your regular traditional IRA contributions for a tax year. Make sure you
designate the year for which you are making the contribution.
ROLLOVER AND DIRECT TRANSFER CONTRIBUTIONS TO TRADITIONAL IRAS
Rollover contributions may be made to a traditional IRA from these "eligible
retirement plans":
.. qualified plans;
.. governmental employer 457(b) plans;
.. 403(b) plans; and
.. other traditional IRAs.
Direct transfer contributions may only be made directly from one traditional
IRA to another.
Any amount contributed to a traditional IRA after you reach age 70 1/2 must be
net of your required minimum distribution for the year in which the rollover or
direct transfer contribution is made.
48 TAX INFORMATION
ROLLOVERS FROM "ELIGIBLE RETIREMENT PLANS" OTHER THAN TRADITIONAL IRAS
Your plan administrator will tell you whether or not your distribution is
eligible to be rolled over. Spousal beneficiaries and spousal alternate payees
under qualified domestic relations orders may roll over funds on the same basis
as the plan participant.
There are two ways to do rollovers:
.. Do it yourself:
You actually receive a distribution that can be rolled over and you roll it
over to a traditional IRA within 60 days after the date you receive the
funds. The distribution from your eligible retirement plan will be net of
20% mandatory federal income tax withholding. If you want, you can replace
the withheld funds yourself and roll over the full amount.
.. Direct rollover:
You tell the trustee or custodian of the eligible retirement plan to send
the distribution directly to your traditional IRA issuer. Direct rollovers
are not subject to mandatory federal income tax withholding.
All distributions from a qualified plan, 403(b) plan or governmental employer
457(b) plan are eligible rollover distributions, unless the distributions are:
.. "required minimum distributions" after age 70 1/2 or retirement from
service with the employer; or
.. substantially equal periodic payments made at least annually for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you
and your designated beneficiary; or
.. substantially equal periodic payments made for a specified period of 10
years or more; or
.. hardship withdrawals; or
.. corrective distributions that fit specified technical tax rules; or
.. loans that are treated as distributions; or
.. death benefit payments to a beneficiary who is not your surviving spouse; or
.. qualified domestic relations order distributions to a beneficiary who is
not your current spouse or former spouse.
You should discuss with your tax adviser whether you should consider rolling
over funds from one type of tax qualified retirement plan to another, because
the funds will generally be subject to the rules of the recipient plan. For
example, funds in a governmental employer 457(b) plan are not subject to the
additional 10% federal income tax penalty for premature distributions, but they
may become subject to this penalty if you roll the funds to a different type of
eligible retirement plan, such as a traditional IRA, and subsequently take a
premature distribution.
ROLLOVERS OF AFTER-TAX CONTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN
TRADITIONAL IRAS
Any non-Roth after-tax contributions you have made to a qualified plan or
403(b) plan (but not a governmental employer 457(b) plan) may be rolled over to
a traditional IRA (either in a direct rollover or a rollover you do yourself).
When the recipient plan is a traditional IRA, you are responsible for
recordkeeping and calculating the taxable amount of any distributions you take
from that traditional IRA. See "Taxation of payments" later in this Prospectus
under "Withdrawals, payments and transfers of funds out of traditional IRAs."
After-tax contributions in a traditional IRA cannot be rolled over from your
traditional IRA into, or back into, a qualified plan, 403(b) plan or
governmental employer 457(b) plan.
ROLLOVERS FROM TRADITIONAL IRAS TO TRADITIONAL IRAS
You may roll over amounts from one traditional IRA to one or more of your other
traditional IRAs if you complete the transaction within 60 days after you
receive the funds. You may make such a rollover only once in every 12-month
period for the same funds. Trustee-to-trustee or custodian-to-custodian direct
transfers are not rollover transactions. You can make these more frequently
than once in every 12-month period.
SPOUSAL ROLLOVERS AND DIVORCE-RELATED DIRECT TRANSFERS
The surviving spouse beneficiary of a deceased individual can roll over funds
from, or directly transfer funds from, the deceased spouse's traditional IRA to
one or more other traditional IRAs. Also, in some cases, traditional IRAs can
be transferred on a tax-free basis between spouses or former spouses as a
result of a court-ordered divorce or separation decree.
EXCESS CONTRIBUTIONS TO TRADITIONAL IRAS
Excess contributions to IRAs are subject to a 6% excise tax for the year in
which made and for each year after until withdrawn. The following are excess
contributions to IRAs:
.. regular contributions of more than the maximum regular contribution amount
for the applicable taxable year; or
.. regular contributions to a traditional IRA made after you reach age 70 1/2;
or
.. rollover contributions of amounts which are not eligible to be rolled over,
for example, minimum distributions required to be made after age 70 1/2.
You can avoid or limit the excise tax by withdrawing an excess contribution
(rollover or regular). See Publication 590 for further details.
RECHARACTERIZATIONS
Amounts that have been contributed as traditional IRA funds may subsequently be
treated as Roth IRA funds. Special federal income tax rules allow you to change
your mind again and have amounts that are subsequently treated as Roth IRA
funds, once again treated as traditional IRA funds. You do this by using the
forms we prescribe. This is referred to as having "recharacterized" your
contribution.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF TRADITIONAL IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a traditional IRA at any time. You do not need to wait
for a special event like retirement.
TAXATION OF PAYMENTS. Amounts distributed from traditional IRAs are not subject
to federal income tax until you or your beneficiary receive them. Taxable
payments or distributions include withdrawals from your contract, surrender of
your contract and annuity payments from your contract. Death benefits are also
taxable.
TAX INFORMATION 49
We report all payments from traditional IRA contracts on IRS Form 1099-R. You
are responsible for reporting these amounts correctly on your individual income
tax return and keeping supporting records. Except as discussed below, the total
amount of any distribution from a traditional IRA must be included in your
gross income as ordinary income.
If you have ever made nondeductible (after-tax) IRA contributions to any
traditional IRA (it does not have to be to this particular traditional IRA
contract), those contributions are recovered tax-free when you get
distributions from any traditional IRA. It is your responsibility to keep
permanent tax records of all of your nondeductible contributions to traditional
IRAs so that you can correctly report the taxable amount of any distribution on
your own tax return. At the end of any year in which you have received a
distribution from any traditional IRA, you calculate the ratio of your total
nondeductible traditional IRA contributions (less any amounts previously
withdrawn tax free) to the total account balances of all traditional IRAs you
own at the end of the year plus all traditional IRA distributions made during
the year. Multiply this by all distributions from the traditional IRA during
the year to determine the nontaxable portion of each distribution.
A distribution from a traditional IRA is not taxable if:
.. the amount received is a withdrawal of certain excess contributions, as
described in IRS Publication 590; or
.. the entire amount received is rolled over to another traditional IRA or
other eligible retirement plan which agrees to accept the funds. (See
"Rollovers from eligible retirement plans other than traditional IRAs"
under "Rollover and direct transfer contributions to traditional IRAs"
earlier in this section for more information.)
The following are eligible to receive rollovers of distributions from a
traditional IRA: a qualified plan, a 403(b) plan or a governmental employer 457
plan. After-tax contributions in a traditional IRA cannot be rolled from your
traditional IRA into, or back into, a qualified plan, 403(b) plan or
governmental employer 457 plan. Before you decide to roll over a distribution
from a traditional IRA to another eligible retirement plan, you should check
with the administrator of that plan about whether the plan accepts rollovers
and, if so, the types it accepts. You should also check with the administrator
of the receiving plan about any documents required to be completed before it
will accept a rollover.
Distributions from a traditional IRA are not eligible for favorable ten-year
averaging and long-term capital gain treatment available under limited
circumstances for certain distributions from qualified plans. If you might be
eligible for such tax treatment from your qualified plan, you may be able to
preserve such tax treatment even though an eligible rollover from a qualified
plan is temporarily rolled into a "conduit IRA"before being rolled back into a
qualified plan. See your tax adviser.
REQUIRED MINIMUM DISTRIBUTIONS
BACKGROUND ON REGULATIONS -- REQUIRED MINIMUM DISTRIBUTIONS
Distributions must be made from traditional IRAs according to rules contained
in the Code and Treasury Regulations. Certain provisions of the Treasury
Regulations require that the actuarial present value of additional annuity
contract benefits must be added to the dollar amount credited for purposes of
calculating certain types of required minimum distributions from individual
retirement annuity contracts. For this purpose additional annuity contract
benefits may include, but are not limited to, various guaranteed benefits. This
could increase the amount required to be distributed from the contracts if you
take annual withdrawals instead of annuitizing. Currently we believe that these
provisions would not apply to Structured Capital Strategies/SM/ contracts
because of the type of benefits provided under the contracts. However, if you
take annual withdrawals instead of annuitizing, please consult your tax adviser
concerning applicability of these complex rules to your situation.
LIFETIME REQUIRED MINIMUM DISTRIBUTIONS. You must start taking annual
distributions from your traditional IRAs for the year in which you turn age
70 1/2.
WHEN YOU HAVE TO TAKE THE FIRST LIFETIME REQUIRED MINIMUM DISTRIBUTION. The
first required minimum distribution is for the calendar year in which you turn
age 70 1/2. You have the choice to take this first required minimum
distribution during the calendar year you actually reach age 70 1/2, or to
delay taking it until the first three-month period in the next calendar year
(January 1 - April 1). Distributions must start no later than your "Required
Beginning Date," which is April 1st of the calendar year after the calendar
year in which you turn age 70 1/2. If you choose to delay taking the first
annual minimum distribution, then you will have to take two minimum
distributions in that year -- the delayed one for the first year and the one
actually for that year. Once minimum distributions begin, they must be made at
some time each year.
HOW YOU CAN CALCULATE REQUIRED MINIMUM DISTRIBUTIONS. There are two approaches
to taking required minimum distributions -- "account-based" or "annuity-based."
ACCOUNT-BASED METHOD. If you choose an account-based method, you divide the
value of your traditional IRA as of December 31st of the past calendar year by
a number corresponding to your age from an IRS table. This gives you the
required minimum distribution amount for that particular IRA for that year. If
your spouse is your sole beneficiary and more than 10 years younger than you,
the dividing number you use may be from another IRS table and may produce a
smaller lifetime required minimum distribution amount. Regardless of the table
used, the required minimum distribution amount will vary each year as the
account value, the actuarial present value of additional annuity contract
benefits, if applicable, and the divisor change. If you initially choose an
account-based method, you may later apply your traditional IRA funds to a life
annuity-based payout with any certain period not exceeding remaining life
expectancy, determined in accordance with IRS tables.
If you choose an account-based method, the RMD amount for your Structured
Capital Strategies/SM/ traditional IRA contract is calculated with respect to
your entire interest in the contract, including your allocations to one or more
variable investment options and one or more of the Segments in the Structured
Investment Option.
ANNUITY-BASED METHOD. If you choose an annuity-based method, you do not have to
do annual calculations. You apply the account value to an annuity payout for
your life or the joint lives of you and a designated beneficiary, or for a
period certain not extending beyond applicable life expectancies, determined in
accordance with IRS tables.
50 TAX INFORMATION
DO YOU HAVE TO PICK THE SAME METHOD TO CALCULATE YOUR REQUIRED MINIMUM
DISTRIBUTIONS FOR ALL OF YOUR TRADITIONAL IRAS AND OTHER RETIREMENT PLANS? No.
If you want, you can choose a different method for each of your traditional
IRAs and other retirement plans. For example, you can choose an annuity payout
from one IRA, a different annuity payout from a qualified plan, and an
account-based annual withdrawal from another IRA.
WILL WE PAY YOU THE ANNUAL AMOUNT EVERY YEAR FROM YOUR TRADITIONAL IRA BASED ON
THE METHOD YOU CHOOSE? We will only pay you automatically if you affirmatively
select an annuity payout option or an account-based withdrawal option such as
our "automatic required minimum distribution (RMD) service." Even if you do not
enroll in our service, we will calculate the amount of the required minimum
distribution withdrawal for you, if you so request in writing. However, in that
case you will be responsible for asking us to pay the required minimum
distribution withdrawal to you.
Also, if you are taking account-based withdrawals from all of your traditional
IRAs, the IRS will let you calculate the required minimum distribution for each
traditional IRA that you maintain, using the method that you picked for that
particular IRA. You can add these required minimum distribution amount
calculations together. As long as the total amount you take out every year
satisfies your overall traditional IRA required minimum distribution amount,
you may choose to take your annual required minimum distribution from any one
or more traditional IRAs that you own.
If you are at an age where you are required to take lifetime required minimum
distributions from traditional IRAs you should consider the effect of
allocations to the Structured Investment Option under a Structured Capital
Strategies/SM/ traditional IRA contract. You should consider whether you have a
sufficient amount allocated to the Variable Investment Options under this
contract and/or sufficient liquidity under other traditional IRAs that you
maintain in order to satisfy your RMD for this contract without affecting
amounts allocated to the Structured Investment Option under this contract.
WHAT IF YOU TAKE MORE THAN YOU NEED TO FOR ANY YEAR? The required minimum
distribution amount for your traditional IRAs is calculated on a year-by-year
basis. There are no carry-back or carry-forward provisions. Also, you cannot
apply required minimum distribution amounts you take from your qualified plans
to the amounts you have to take from your traditional IRAs and vice versa.
WHAT IF YOU TAKE LESS THAN YOU NEED TO FOR ANY YEAR? Your IRA could be
disqualified, and you could have to pay tax on the entire value. Even if your
IRA is not disqualified, you could have to pay a 50% penalty tax on the
shortfall (required amount for traditional IRAs less amount actually taken). It
is your responsibility to meet the required minimum distribution rules. We will
remind you when our records show that you are within the age group which must
take lifetime required minimum distributions. If you do not select a method
with us, we will assume you are taking your required minimum distribution from
another traditional IRA that you own.
WHAT ARE THE REQUIRED MINIMUM DISTRIBUTION PAYMENTS AFTER YOU DIE? These could
vary depending on whether you die before or after your Required Beginning Date
for lifetime required minimum distribution payments, and the status of your
beneficiary. The following assumes that you have not yet elected an
annuity-based payout at the time of your death. If you elect an annuity-based
payout, payments (if any) after your death must be made at least as rapidly as
when you were alive.
INDIVIDUAL BENEFICIARY. Regardless of whether your death occurs before or after
your Required Beginning Date, an individual death beneficiary calculates annual
post-death required minimum distribution payments based on the beneficiary's
life expectancy using the "term certain method." That is, he or she determines
his or her life expectancy using the IRS-provided life expectancy tables as of
the calendar year after the owner's death and reduces that number by one each
subsequent year.
If you die before your Required Beginning Date, the rules permit any individual
beneficiary, including a spousal beneficiary, to elect instead to apply the
"5-year rule." Under this rule, instead of annual payments having to be made
beginning with the first in the year following the owner's death, the entire
account must be distributed by the end of the calendar year which contains the
fifth anniversary of the owner's death. No distribution is required before that
fifth year.
SPOUSAL BENEFICIARY. If you die after your Required Beginning Date, and your
death beneficiary is your surviving spouse, your spouse has a number of
choices. Post-death distributions may be made over your spouse's single life
expectancy. Any amounts distributed after that surviving spouse's death are
made over the spouse's life expectancy calculated in the year of his/her death,
reduced by one for each subsequent year. In some circumstances, your surviving
spouse may elect to become the owner of the traditional IRA and halt
distributions until he or she reaches age 70 1/2, or roll over amounts from
your traditional IRA into his/her own traditional IRA or other eligible
retirement plan.
If you die before your Required Beginning Date, and the death beneficiary is
your surviving spouse, the rules permit the spouse to delay starting payments
over his/her life expectancy until the year in which you would have attained
age 70 1/2.
NON-INDIVIDUAL BENEFICIARY. If you die after your Required Beginning Date, and
your death beneficiary is a non-individual, such as the estate, the rules
permit the beneficiary to calculate post-death required minimum distribution
amounts based on the owner's life expectancy in the year of death. HOWEVER,
NOTE THAT WE NEED AN INDIVIDUAL ANNUITANT TO KEEP AN ANNUITY CONTRACT IN FORCE.
IF THE BENEFICIARY IS NOT AN INDIVIDUAL, WE MUST DISTRIBUTE AMOUNTS REMAINING
IN THE ANNUITY CONTRACT AFTER THE DEATH OF THE ANNUITANT.
If you die before your Required Beginning Date for lifetime required minimum
distribution payments, and the death beneficiary is a non-individual, such as
the estate, the rules continue to apply the 5-year rule discussed above under
"Individual beneficiary."PLEASE NOTE THAT WE NEED AN INDIVIDUAL ANNUITANT TO
KEEP AN ANNUITY CONTRACT IN FORCE. IF THE BENEFICIARY IS NOT AN INDIVIDUAL, WE
MUST DISTRIBUTE AMOUNTS REMAINING IN THE ANNUITY CONTRACT AFTER THE DEATH OF
THE ANNUITANT.
SPOUSAL CONTINUATION
If the contract is continued under Spousal continuation, the required minimum
distribution rules are applied as if your surviving spouse is the contract
owner.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
IRA death benefits are taxed the same as IRA distributions.
TAX INFORMATION 51
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
You cannot get loans from a traditional IRA. You cannot use a traditional IRA
as collateral for a loan or other obligation. If you borrow against your IRA or
use it as collateral, its tax-favored status will be lost as of the first day
of the tax year in which this prohibited event occurs. If this happens, you
must include the value of the traditional IRA in your federal gross income.
Also, the early distribution penalty tax of 10% may apply if you have not
reached age 59 1/2 before the first day of that tax year.
EARLY DISTRIBUTION PENALTY TAX
A penalty tax of 10% of the taxable portion of a distribution applies to
distributions from a traditional IRA made before you reach age 59 1/2. Some of
the available exceptions to the pre-age 59 1/2 penalty tax include
distributions:
.. made on or after your death; or
.. made because you are disabled (special federal income tax definition); or
.. used to pay for certain extraordinary medical expenses (special federal
income tax definition); or
.. used to pay medical insurance premiums for unemployed individuals (special
federal income tax definition); or
.. used to pay certain first-time home buyer expenses (special federal income
tax definition -- there is a $10,000 lifetime total limit for these
distributions from all your traditional and Roth IRAs); or
.. used to pay certain higher education expenses (special federal income tax
definition); or
.. in the form of substantially equal periodic payments made at least annually
over your life (or your life expectancy), or over the joint lives of you
and your beneficiary (or your joint life expectancies) using an
IRS-approved distribution method.
Please note that it is your responsibility to claim the penalty exception on
your own income tax return and document eligibility for the exception to the
IRS.
ROTH INDIVIDUAL RETIREMENT ANNUITIES ("ROTH IRAS")
This section of the Prospectus covers some of the special tax rules that apply
to Roth IRAs. If the rules are the same as those that apply to the traditional
IRA, we will refer you to the same topic under "traditional IRAs."
The Structured Capital Strategies/SM/ Roth IRA contracts are designed to
qualify as Roth individual retirement annuities under Sections 408A(b) and
408(b) of the Internal Revenue Code.
CONTRIBUTIONS TO ROTH IRAS
Individuals may make four different types of contributions to a Roth IRA:
.. regular after-tax contributions out of earnings; or
.. taxable rollover contributions from traditional IRAs or other eligible
retirement plans ("conversion" rollover contributions); or
.. tax-free rollover contributions from other Roth individual retirement
arrangements (or designated Roth accounts under defined contribution
plans); or
.. tax-free direct custodian-to-custodian transfers from other Roth IRAs
("direct transfers").
If you use the forms we require, we will also accept traditional IRA funds
which are subsequently recharacterized as Roth IRA funds following special
federal income tax rules.
Because the minimum initial contribution AXA Equitable requires to purchase
this contract is larger than the maximum regular contribution you can make to
an IRA for a taxable year, this contract must be purchased through a rollover
or direct transfer contribution.
REGULAR CONTRIBUTIONS TO ROTH IRAS
LIMITS ON REGULAR CONTRIBUTIONS. The "maximum regular contribution amount" for
any taxable year is the most that can be contributed to all of your IRAs
(traditional and Roth) as regular contributions for the particular taxable
year. The maximum regular contribution amount depends on age, earnings, and
year, among other things. Generally, $5,000 is the maximum amount that you may
contribute to all IRAs (including Roth IRAs). This limit does not apply to
rollover contributions or direct custodian-to-custodian transfers into a Roth
IRA. Any contributions to Roth IRAs reduce the ability to contribute to
traditional IRAs and vice versa. When your earnings are below $5,000, your
earned income or compensation for the year is the most you can contribute. If
you are married and file a joint income tax return, you and your spouse may
combine your compensation to determine the amount of regular contributions you
are permitted to make to Roth IRAs and traditional IRAs. See the discussion
above under "Special rules for spouses" earlier in this section under
traditional IRAs.
If you or your spouse are at least age 50 at any time during the taxable year
for which you are making a regular contribution, you may be eligible to make
additional catch-up contributions of up to $1,000.
With a Roth IRA, you can make regular contributions when you reach
70 1/2, as long as you have sufficient earnings. The amount of permissible
contributions to Roth IRAs for any year depends on the individual's income
limits and marital status. For example, if you are married and filing
separately for any year your ability to make regular Roth IRA contributions is
greatly limited. The amount of permissible contributions and income limits may
be adjusted annually for cost of living. Please consult IRS Publication 590,
"Individual Retirement Arrangements (IRAs)" for the rules applicable to the
current year.
WHEN YOU CAN MAKE CONTRIBUTIONS. Same as traditional IRAs.
DEDUCTIBILITY OF CONTRIBUTIONS. Roth IRA contributions are not tax deductible.
ROLLOVER AND DIRECT TRANSFER CONTRIBUTIONS TO ROTH IRAS
WHAT IS THE DIFFERENCE BETWEEN ROLLOVER AND DIRECT TRANSFER TRANSACTIONS? The
difference between a rollover transaction and a direct transfer transaction is
the following: in a rollover transaction you actually take possession of the
funds rolled over, or are considered to have received them under tax law in the
case of a change from one type of plan to another. In a direct transfer
transaction, you never take possession of the funds, but direct the first Roth
IRA custodian, trustee, or issuer to transfer the first Roth IRA funds directly
to the recipient Roth IRA custodian, trustee or issuer. You can make direct
transfer transactions only between identical plan types (for example, Roth IRA
to Roth IRA). You can also make rollover
52 TAX INFORMATION
transactions between identical plan types. However, you can only make rollovers
between different plan types (for example, traditional IRA to Roth IRA).
You may make rollover contributions to a Roth IRA from these sources only:
.. another Roth IRA;
.. a traditional IRA, including a SEP-IRA or SIMPLE IRA (after a two-year
rollover limitation period for SIMPLE IRA funds), in a taxable conversion
rollover ("conversion rollover");
.. a "designated Roth contribution account" under a 401(k) plan, 403(b) plan
or governmental employer Section 457(b) plan (direct or 60-day); or
.. from non-Roth accounts under another eligible retirement plan as described
below under "Conversion rollover contributions to Roth IRAs."
You may make direct transfer contributions to a Roth IRA only from another Roth
IRA.
You may make both Roth IRA to Roth IRA rollover transactions and Roth IRA to
Roth IRA direct transfer transactions. This can be accomplished on a completely
tax-free basis. However, you may make Roth IRA to Roth IRA rollover
transactions only once in any 12-month period for the same funds.
Trustee-to-trustee or custodian-to-custodian direct transfers can be made more
frequently than once a year. Also, if you send us the rollover contribution to
apply it to a Roth IRA, you must do so within 60 days after you receive the
proceeds from the original IRA to get rollover treatment.
The surviving spouse beneficiary of a deceased individual can roll over or
directly transfer an inherited Roth IRA to one or more other Roth IRAs. In some
cases, Roth IRAs can be transferred on a tax-free basis between spouses or
former spouses as a result of a court-ordered divorce or separation decree.
CONVERSION ROLLOVER CONTRIBUTIONS TO ROTH IRAS
In a conversion rollover transaction, you withdraw (or are considered to have
withdrawn) all or a portion of funds from a traditional IRA you maintain and
convert it to a Roth IRA within 60 days after you receive (or are considered to
have received) the traditional IRA proceeds. Amounts can also be rolled over
from non-Roth accounts under another eligible retirement plan, including a Code
Section 401(a) qualified plan, a 403(b) plan, and a governmental employer
Section 457(b) plan.
Unlike a rollover from a traditional IRA to another traditional IRA, a
conversion rollover transaction from a traditional IRA or other eligible
retirement plan to a Roth IRA is not tax-free. Instead, the distribution from
the traditional IRA or other eligible retirement plan is generally fully
taxable. If you are converting all or part of a traditional IRA, and you have
ever made nondeductible regular contributions to any traditional IRA -- whether
or not it is the traditional IRA you are converting -- a pro rata portion of
the distribution is tax-free. Even if you are under age 59 1/2, the early
distribution penalty tax does not apply to conversion rollover contributions to
a Roth IRA.
You cannot make conversion contributions to a Roth IRA to the extent that the
funds in your traditional IRA or other eligible retirement plan are subject to
the lifetime annual required minimum distribution rules.
You cannot convert and reconvert an amount during the same taxable year, or if
later, during the 30-day period following a recharacterization. If you
reconvert during either of these periods, it will be a failed Roth IRA
conversion.
The IRS and Treasury have issued Proposed and Temporary Treasury Regulations
addressing the valuation of annuity contracts funding traditional IRAs in the
conversion to Roth IRAs. Although these Regulations are not clear, they could
require an individual's gross income on the conversion of a traditional IRA to
a Roth IRA to be measured using various actuarial methods and not as if the
annuity contract funding the traditional IRA had been surrendered at the time
of conversion. This could increase the amount of income reported in certain
circumstances.
RECHARACTERIZATIONS
You may be able to treat a contribution made to one type of IRA as having been
made to a different type of IRA. This is called recharacterizing the
contribution.
HOW TO RECHARACTERIZE. To recharacterize a contribution, you generally must
have the contribution transferred from the first IRA (the one to which it was
made) to the second IRA in a deemed trustee-to-trustee transfer. If the
transfer is made by the due date (including extensions) for your tax return for
the year during which the contribution was made, you can elect to treat the
contribution as having been originally made to the second IRA instead of to the
first IRA. It will be treated as having been made to the second IRA on the same
date that it was actually made to the first IRA. You must report the
recharacterization, and must treat the contribution as having been made to the
second IRA, instead of the first IRA, on your tax return for the year during
which the contribution was made.
The contribution will not be treated as having been made to the second IRA
unless the transfer includes any net income allocable to the contribution. You
can take into account any loss on the contribution while it was in the IRA when
calculating the amount that must be transferred. If there was a loss, the net
income you must transfer may be a negative amount.
No deduction is allowed for the contribution to the first IRA and any net
income transferred with the recharacterized contribution is treated as earned
in the second IRA. The contribution will not be treated as having been made to
the second IRA to the extent any deduction was allowed with respect to the
contribution to the first IRA.
For recharacterization purposes, a distribution from a traditional IRA that is
received in one tax year and rolled over into a Roth IRA in the next year, but
still within 60 days of the distribution from the traditional IRA, is treated
as a contribution to the Roth IRA in the year of the distribution from the
traditional IRA.
Roth IRA conversion contributions from a SEP-IRA or SIMPLE IRA can be
recharacterized to a SEP-IRA or SIMPLE IRA (including the original
SEP-IRA or SIMPLE IRA). You cannot recharacterize back to the original plan a
contribution directly rolled over from an eligible retirement plan which is not
a traditional IRA.
The recharacterization of a contribution is not treated as a rollover for
purposes of the 12-month limitation period described above. This rule applies
even if the contribution would have been treated as a rollover
TAX INFORMATION 53
contribution by the second IRA if it had been made directly to the second IRA
rather than as a result of a recharacterization of a contribution to the first
IRA.
To recharacterize a contribution you must use our forms.
WITHDRAWALS, PAYMENTS AND TRANSFERS OF FUNDS OUT OF ROTH IRAS
NO FEDERAL INCOME TAX LAW RESTRICTIONS ON WITHDRAWALS. You can withdraw any or
all of your funds from a Roth IRA at any time; you do not need to wait for a
special event like retirement.
DISTRIBUTIONS FROM ROTH IRAS
Distributions include withdrawals from your contract, surrender and termination
of your contract and annuity payments from your contract. Death benefits are
also distributions.
You must keep your own records of regular and conversion contributions to all
Roth IRAs to assure appropriate taxation. You may have to file information on
your contributions to and distributions from any Roth IRA on your tax return.
You may have to retain all income tax returns and records pertaining to such
contributions and distributions until your interests in all Roth IRAs are
distributed.
Like traditional IRAs, taxable distributions from a Roth IRA are not entitled
to the special favorable ten-year averaging and long-term capital gain
treatment available in limited cases to certain distributions from qualified
plans.
The following distributions from Roth IRAs are free of income tax:
.. rollovers from a Roth IRA to another Roth IRA;
.. direct transfers from a Roth IRA to another Roth IRA;
.. qualified distributions from a Roth IRA; and
.. return of excess contributions or amounts recharacterized to a traditional
IRA.
QUALIFIED DISTRIBUTIONS FROM ROTH IRAS
Qualified distributions from Roth IRAs made because of one of the following
four qualifying events or reasons are not includable in income:
.. you are age 59 1/2 or older; or
.. you die; or
.. you become disabled (special federal income tax definition); or
.. your distribution is a "qualified first-time homebuyer distribution"
(special federal income tax definition; $10,000 lifetime total limit for
these distributions from all of your traditional and Roth IRAs).
You also have to meet a five-year aging period. A qualified distribution is any
distribution made after the five-taxable year period beginning with the first
taxable year for which you made any contribution to any Roth IRA (whether or
not the one from which the distribution is being made).
NONQUALIFIED DISTRIBUTIONS FROM ROTH IRAS. Nonqualified distributions from Roth
IRAs are distributions that do not meet both the qualifying event and five-year
aging period tests described above. If you receive such a distribution, part of
it may be taxable. For purposes of determining the correct tax treatment of
distributions (other than the withdrawal of excess contributions and the
earnings on them), there is a set order in which contributions (including
conversion contributions) and earnings are considered to be distributed from
your Roth IRA. The order of distributions is as follows:
(1)Regular contributions
(2)Conversion contributions, on a first-in-first-out basis (generally, total
conversions from the earliest year first). These conversion contributions
are taken into account as follows:
(a)Taxable portion (the amount required to be included in gross income
because of conversion) first, and then the
(b)Nontaxable portion.
(3)Earnings on contributions.
Rollover contributions from other Roth IRAs are disregarded for this purpose.
To determine the taxable amounts distributed, distributions and contributions
are aggregated or grouped and added together as follows:
(1)All distributions made during the year from all Roth IRAs you maintain --
within any custodian or issuer -- are added together.
(2)All regular contributions made during and for the year (contributions made
after the close of the year, but before the due date of your return) are
added together. This total is added to the total undistributed regular
contributions made in prior years.
(3)All conversion contributions made during the year are added together.
Any recharacterized contributions that end up in a Roth IRA are added to the
appropriate contribution group for the year that the original contribution
would have been taken into account if it had been made directly to the Roth IRA.
Any recharacterized contribution that ends up in an IRA other than a Roth IRA
is disregarded for the purpose of grouping both contributions and
distributions. Any amount withdrawn to correct an excess contribution
(including the earnings withdrawn) is also disregarded for this purpose.
REQUIRED MINIMUM DISTRIBUTIONS
Lifetime minimum distribution requirements do not apply.
REQUIRED MINIMUM DISTRIBUTIONS AT DEATH
Same as traditional IRA under "What are the required minimum distribution
payments after you die?", assuming death before the Required Beginning Date.
PAYMENTS TO A BENEFICIARY AFTER YOUR DEATH
Distributions to a beneficiary generally receive the same tax treatment as if
the distribution had been made to you.
BORROWING AND LOANS ARE PROHIBITED TRANSACTIONS
Same as traditional IRA.
54 TAX INFORMATION
EXCESS CONTRIBUTIONS
Generally the same as traditional IRA, except that regular contributions made
after age 70 1/2 are not "excess contributions."
Excess rollover contributions to Roth IRAs are contributions not eligible to be
rolled over.
You can withdraw or recharacterize any contribution to a Roth IRA before the
due date (including extensions) for filing your federal income tax return for
the tax year. If you do this, you must also withdraw or recharacterize any
earnings attributable to the contribution.
EARLY DISTRIBUTION PENALTY TAX
Same as traditional IRA.
FEDERAL AND STATE INCOME TAX WITHHOLDING AND INFORMATION REPORTING
We must withhold federal income tax from distributions from annuity contracts
and specified tax-favored savings or retirement plans or arrangements. You may
be able to elect out of this income tax withholding in some cases. Generally,
we do not have to withhold if your distributions are not taxable. The rate of
withholding will depend on the type of distribution and, in certain cases, the
amount of your distribution. Any income tax withheld is a credit against your
income tax liability. If you do not have sufficient income tax withheld or do
not make sufficient estimated income tax payments, you may incur penalties
under the estimated income tax rules.
You must file your request not to withhold in writing before the payment or
distribution is made. Our processing office will provide forms for this
purpose. You cannot elect out of withholding unless you provide us with your
correct Taxpayer Identification Number and a United States residence address.
You cannot elect out of withholding if we are sending the payment out of the
United States.
You should note the following special situations:
.. we might have to withhold and/or report on amounts we pay under a free look
or cancellation.
.. we are required to withhold on the gross amount of a distribution from a
Roth IRA to the extent it is reasonable for us to believe that a
distribution is includable in your gross income. This may result in tax
being withheld even though the Roth IRA distribution is ultimately not
taxable.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. We do not discuss these rules here
in detail. However, we may require additional documentation in the case of
payments made to non-United States persons and United States persons living
abroad prior to processing any requested transaction.
Certain states have indicated that state income tax withholding will also apply
to payments from the contracts made to residents. Generally, an election out of
federal withholding will also be considered an election out of state
withholding. In some states, you may elect out of state withholding, even if
federal withholding applies. In some states, the income tax withholding is
completely independent of federal income tax withholding. If you need more
information concerning a particular state or any required forms, call our
processing office at the toll-free number.
FEDERAL INCOME TAX WITHHOLDING ON PERIODIC ANNUITY PAYMENTS
Federal tax rules require payers to withhold differently on "periodic" and
"non-periodic" payments. Payers are to withhold from periodic
annuity payments as if the payments were wages. The annuity contract owner is
to specify marital status and the number of withholding exemptions claimed on
an IRS Form W-4P or similar substitute election form. If the owner does not
claim a different number of withholding exemptions or marital status, the payer
is to withhold assuming that the owner is married and claiming three
withholding exemptions. If the owner does not provide the owner's correct
Taxpayer Identification Number a payer is to withhold from periodic annuity
payments as if the owner were single with no exemptions.
A contract owner's withholding election remains effective unless and until the
owner revokes it. The contract owner may revoke or change a withholding
election at any time.
FEDERAL INCOME TAX WITHHOLDING ON NON-PERIODIC ANNUITY PAYMENTS (WITHDRAWALS)
Non-periodic distributions include partial withdrawals, total surrenders and
death benefits. Payers generally withhold federal income tax at a flat 10% rate
from (i) the taxable amount in the case of nonqualified contracts, and (ii) the
payment amount in the case of traditional IRAs and Roth IRAs, where it is
reasonable to assume an amount is includable in gross income.
IMPACT OF TAXES TO AXA EQUITABLE
The contracts provide that we may charge Separate Account No. 49 for taxes. We
do not now, but may in the future set up reserves for such taxes.
We are entitled to certain tax benefits related to the investment of company
assets, including assets of the separate account. These tax benefits, which may
include the foreign tax credit and the corporate dividends received deduction,
are not passed back to you, since we are the owner of the assets from which tax
benefits may be derived.
TAX INFORMATION 55
10. More information
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ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. For example, we may withdraw amounts from Separate Account
No. 49 that represent our investments in Separate Account No. 49 or that
represent fees and charges under the contracts that we have earned. Also, we
may, at our sole discretion, invest Separate Account No. 49 assets in any
investment permitted by applicable law. The results of Separate Account
No. 49's operations are accounted for without regard to AXA Equitable's other
operations. The amount of some of our obligations under the contracts is based
on the assets in Separate Account No. 49. However, the obligations themselves
are obligations of AXA Equitable.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is registered and classified under that act as a "unit investment trust."
The SEC, however, does not manage or supervise AXA Equitable or Separate
Account No. 49. Although Separate Account No. 49 is registered, the SEC does
not monitor the activity of Separate Account No. 49 on a daily basis. AXA
Equitable is not required to register, and is not registered, as an investment
company under the Investment Company Act of 1940.
Each subaccount (variable investment option) within Separate Account No. 49
invests in shares issued by the corresponding Portfolio of its Trust.
We reserve the right subject to compliance with laws that apply:
(1)to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2)to combine any two or more variable investment options;
(3)to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment option
to another variable investment option;
(4)to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against an
underlying mutual fund would be assessed against Separate Account No. 49 or
a variable investment option directly);
(5)to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6)to restrict or eliminate any voting rights as to Separate Account No. 49;
(7)to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies;
(8)to limit or terminate contributions or transfers into any variable
investment option; and
(9)to limit the number of variable investment options you may select.
If the exercise of these rights results in a material change in the underlying
investment of Separate Account No. 49, you will be notified of such exercise,
as required by law.
ABOUT SEPARATE ACCOUNT NO. 68
We hold assets in a "non-unitized" separate account we have established under
the New York Insurance Law to support our obligations under the Structured
Investment Option. We own the assets of the separate account, as well as any
favorable investment performance on those assets. You do not participate in the
performance of the assets held in this separate account. We may, subject to
state law that applies, transfer all assets allocated to the separate account
to our general account. We guarantee all benefits relating to your value in the
Structured Investment Option, regardless of whether assets supporting the
Structured Investment Option are held in a separate account or our general
account.
Our current plans are to invest separate account assets in fixed-income
obligations, including corporate bonds, mortgage-backed and asset-backed
securities, and government and agency issues. We may also invest in interest
rate swaps. Although the above generally describes our plans for investing the
assets supporting our obligations under the Structured Investment Option, we
are not obligated to invest those assets according to any particular plan
except as we may be required to by state insurance laws.
ABOUT THE TRUST
The Trust is registered under the Investment Company Act of 1940. It is
classified as an "open-end management investment company," more commonly called
a mutual fund. The Trust issues different shares relating to each of its
portfolios.
The Trust does not impose sales charges or "loads" for buying and selling its
shares. All dividends and other distributions on the Trust's shares are
reinvested in full. The Board of Trustees or Board of Directors, as applicable,
of the Trust may establish additional portfolios or eliminate existing
portfolios at any time. More detailed information about the Trust, its
portfolio investment objectives, policies, restrictions, risks, expenses, its
Rule 12b-1 Plan, and other aspects of its operations, appears in the
prospectuses for the Trust, which generally accompany this Prospectus, or in
its SAIs, which are available upon request.
56 MORE INFORMATION
ABOUT THE GENERAL ACCOUNT
This contract is offered to customers through various financial institutions,
brokerage firms and their affiliate insurance agencies. No financial
institution, brokerage firm or insurance agency has any liability with respect
to a contract's account value or the Structured Investment Option with which
the contract was issued. AXA Equitable is solely responsible to the contract
owner for the contract's account value and the Structured Investment Option.
The general obligations and the Structured Investment Option under the contract
are supported by AXA Equitable's general account and are subject to AXA
Equitable's claims paying ability. An owner should look to the financial
strength of AXA Equitable for its claims-paying ability. Assets in the general
account are not segregated for the exclusive benefit of any particular contract
or obligation. General account assets are also available to the insurer's
general creditors and the conduct of its routine business activities, such as
the payment of salaries, rent and other ordinary business expenses. For more
information about AXA Equitable's financial strength, you may review its
financial statements and/or check its current rating with one or more of the
independent sources that rate insurance companies for their financial strength
and stability. Such ratings are subject to change and have no bearing on the
performance of the variable investment options. You may also speak with your
financial representative.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Interests in the
Structured Investment Option under the contracts in the general account are
issued by AXA Equitable and are registered under the Securities Act of 1933.
The general account is not required to register as an investment company under
the Investment Company Act of 1940 and it is not registered as an investment
company under the Investment Company Act of 1940. The contract is a "covered
security" under the federal securities laws.
We have been advised that the staff of the SEC has not reviewed the portions of
this Prospectus that relate to the general account . The disclosure with regard
to the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS AND ELECTRONIC TRANSACTIONS
We accept initial and subsequent contributions sent by wire to our processing
office by agreement with certain broker-dealers. Such transmittals must be
accompanied by information we require to allocate your contribution. Wire
orders not accompanied by complete information may be retained as described
under "How you can make your contributions" under "Contract features and
benefits" earlier in this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
provided through certain broker-dealers with which we have established
electronic facilities. In any such cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, the above procedures do not apply and no
transactions will be permitted until we receive the signed application and have
issued the contract. Where we issue a contract based on information provided
through electronic facilities, we require an Acknowledgement of Receipt Form.
We may also require additional information. Until we receive the
Acknowledgement of Receipt Form, (i.e. withdrawals and surrenders) financial
transactions will not be permitted unless you request them in writing, sign the
request and have it signature guaranteed. After your contract has been issued,
additional contributions may be transmitted by wire.
In general, the transaction date for electronic transmissions is the date on
which we receive at our regular processing office all required information and
the funds due for your contribution. We may also establish same-day electronic
processing facilities with a broker-dealer that has undertaken to pay
contribution amounts on behalf of its customers. In such cases, the transaction
date for properly processed orders is the business day on which the
broker-dealer inputs all required information into its electronic processing
system. You can contact us to find out more about such arrangements.
After your contract has been issued, subsequent contributions may be
transmitted by wire.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this Prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our "business day" is generally any day the NYSE is open for regular trading
and generally ends at 4:00 p.m. Eastern Time (or as of an earlier close of
regular trading). If the Securities and Exchange Commission determines the
existence of emergency conditions on any day, and consequently, the NYSE does
not open, then that day is not a business day. Contributions will be applied
and any other transaction requests will be processed when they are received
along with all the required information unless another date applies as
indicated below.
.. If your contribution, transfer or any other transaction request containing
all the required information reaches us on any of the following, we will
use the next business day:
-- on a non-business day;
-- after 4:00 p.m. Eastern Time on a business day; or
-- after an early close of regular trading on the NYSE on a business day.
.. If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
.. When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
.. If we have entered into an agreement with your broker-dealer for automated
processing of contributions and/or transfers upon
MORE INFORMATION 57
receipt of customer order, your contribution and/or transfer will be
considered received at the time your broker-dealer receives your
contribution and/or transfer and all information needed to process your
application, along with any required documents. Your broker-dealer will then
transmit your order to us in accordance with our processing procedures.
However, in such cases, your broker-dealer is considered a processing office
for the purpose of receiving the contribution and/or transfer. Such
arrangements may apply to initial contributions, subsequent contributions
and/or transfers, or both, and may be commenced or terminated at any time
without prior notice. If required by law, the "closing time" for such orders
will be earlier than 4:00 p.m., Eastern Time.
CONTRIBUTIONS, TRANSFERS, WITHDRAWALS AND SURRENDERS
.. Contributions allocated to the variable investment options or the Segment
Type Holding Accounts are invested at the unit value next determined after
the receipt of the contribution.
.. Transfers to or from the variable investment options or the Segment Type
Holding Accounts will be made at the unit value next determined after the
receipt of the transfer request.
.. Requests for withdrawals or surrenders from the variable investment options
or the Segment Type Holding Accounts will be made at the unit value next
determined on the business day that we receive the information that we
require.
ABOUT YOUR VOTING RIGHTS
As the owner of shares of the Trusts we have the right to vote on certain
matters involving the portfolios, such as:
.. the election of trustees;
.. the formal approval of independent auditors selected for each Trust; or
.. any other matters described in the Prospectus for the Trust or requiring a
shareholders' vote under the Investment Company Act of 1940.
We will give contract owners the opportunity to instruct us how to vote the
number of shares attributable to their contracts if a shareholder vote is
taken. If we do not receive instructions in time from all contract owners, we
will vote the shares of a portfolio for which no instructions have been
received in the same proportion as we vote shares of that portfolio for which
we have received instructions. We will also vote any shares that we are
entitled to vote directly because of amounts we have in a portfolio in the same
proportions that contract owners vote. One effect of proportional voting is
that a small number of contract owners may determine the outcome of a vote.
The Trust sells its shares to AXA Equitable separate accounts in connection
with AXA Equitable's variable annuity and/or life insurance products, and to
separate accounts of insurance companies, both affiliated and unaffiliated with
AXA Equitable. EQ Advisors Trust also sells its shares to the trustee of a
qualified plan for AXA Equitable. We currently do not foresee any disadvantages
to our contract owners arising out of these arrangements. However, the Board of
Trustees or Directors of the Trust intend to monitor events to identify any
material irreconcilable conflicts that may arise and to determine what action,
if any, should be taken in response. If we believe that a Board's response
insufficiently protects our contract owners, we will see to it that appropriate
action is taken to do so.
SEPARATE ACCOUNT NO. 49 VOTING RIGHTS
If actions relating to Separate Account No. 49 require contract owner approval,
contract owners will be entitled to one vote for each unit they have in the
variable investment options. Each contract owner who has elected a variable
annuity payout option may cast the number of votes equal to the dollar amount
of reserves we are holding for that annuity in a variable investment option
divided by the annuity unit value for that option. We will cast votes
attributable to any amounts we have in the variable investment options in the
same proportion as votes cast by contract owners.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this Prospectus are created under applicable
federal securities laws. To the extent that those laws or the
regulations published under those laws eliminate the necessity to submit
matters for approval by persons having voting rights in separate accounts of
insurance companies, we reserve the right to proceed in accordance with those
laws or regulations.
STATUTORY COMPLIANCE
We have the right to change your contract without the consent of any other
person in order to comply with any laws and regulations that apply, including
but not limited to changes in the Internal Revenue Code, in Treasury
Regulations or in published rulings of the Internal Revenue Service and in
Department of Labor regulations.
Any change in your contract must be in writing and made by an authorized
officer of AXA Equitable. We will provide notice of any contract change.
The benefits under your contract will not be less than the minimum benefits
required by any state law that applies.
ABOUT LEGAL PROCEEDINGS
AXA Equitable and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings would be considered material with respect
to a contract owner's interest in Separate Account No. 49, nor would any of
these proceedings be likely to have a material adverse effect upon Separate
Account No. 49, our ability to meet our obligations under the contracts, or the
distribution of the contracts.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of AXA Equitable, are in the SAI. The SAI is
part of the registration statement filed on Form N-4. The financial statements
of AXA Equitable have relevance to the contracts only to the extent that they
bear upon the ability of AXA Equitable to meet its obligations under the
contracts. The SAI is available free of charge. You may request one by writing
to our processing office or calling 1-800-789-7771.
58 MORE INFORMATION
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS, AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin, subject to our acceptance. We will continue to treat you as the
owner until we receive written notification of any change at our processing
office. In some cases, an assignment or change of ownership may have adverse
tax consequences. See "Tax information" earlier in this Prospectus.
You cannot assign or transfer ownership of a traditional IRA or Roth IRA
contract except by surrender to us.
You cannot assign your contract as collateral or security for a loan. Loans are
also not available under your contract. For limited transfers of ownership
after the owner's death see "Beneficiary continuation option" in "Payment of
death benefit" earlier in this Prospectus. You may direct the transfer of the
values under your traditional IRA or Roth IRA contract to another similar
arrangement under federal income tax rules. In the case of such a transfer,
which involves a surrender of your contract, we will impose a withdrawal charge
if one applies.
ABOUT CUSTODIAL IRAS
For certain custodial IRA accounts, after your contract has been issued, we may
accept transfer instructions by telephone, mail, facsimile or electronically
from a broker-dealer, provided that we or your broker-dealer have your written
authorization to do so on file. Accordingly, AXA Equitable will rely on the
stated identity of the person placing instructions as authorized to do so on
your behalf. AXA Equitable will not be liable for any claim, loss, liability or
expenses that may arise out of such instructions. AXA Equitable will continue
to rely on this authorization until it receives your written notification at
its processing office that you have withdrawn this authorization. AXA Equitable
may change or terminate telephone or electronic or overnight mail transfer
procedures at any time without prior written notice and restrict facsimile,
internet, telephone and other electronic transfer services because of
disruptive transfer activity.
DISTRIBUTION OF THE CONTRACTS
The contracts are distributed by both AXA Advisors, LLC ("AXA Advisors") and
AXA Distributors, LLC ("AXA Distributors") (together, the "Distributors"). The
Distributors serve as principal underwriters of Separate Account No. 49. The
offering of the contracts is intended to be continuous.
AXA Advisors is an affiliate of AXA Equitable, and AXA Distributors is an
indirect wholly owned subsidiary of AXA Equitable. The Distributors are under
the common control of AXA Financial, Inc. Their principal business address is
1290 Avenue of the Americas, New York, NY 10104. The Distributors are
registered with the SEC as broker-dealers and are members of the Financial
Industry Regulatory Authority, Inc. ("FINRA"). Both broker-dealers also act as
distributors for other AXA Equitable life and annuity products.
The contracts are sold by financial professionals of AXA Advisors and its
affiliates. The contracts are also sold by financial professionals of
unaffiliated broker-dealers that have entered into selling agreements with the
Distributors ("Selling broker-dealers").
AXA Equitable pays compensation to both Distributors based on contracts sold
(except for Series ADV contracts sold through AXA Distributors). AXA Equitable
may also make additional payments to the Distributors, and the Distributors
may, in turn, make additional payments to certain Selling broker-dealers. All
payments will be in compliance with all applicable FINRA rules and other laws
and regulations.
Although AXA Equitable takes into account all of its distribution and other
costs in establishing the level of fees and charges under its contracts, none
of the compensation paid to the Distributors or the Selling broker-dealers
discussed in this section of the Prospectus are imposed as separate fees or
charges under your contract. AXA Equitable, however, intends to recoup amounts
it pays for distribution and other services through the fees and charges of the
contract and payments it receives for providing administrative, distribution
and other services to the Portfolios. For information about the fees and
charges under the contract, see "Fee table" and "Charges and expenses" earlier
in this Prospectus.
AXA ADVISORS COMPENSATION. For Series ADV contracts sold through AXA Advisors,
AXA Advisors will retain 50% of the advisory fee and the financial
representative will get the other 50%.
For Series B and Series C contracts, AXA Equitable pays compensation to AXA
Advisors based on contributions made on the contracts sold through AXA Advisors
("contribution-based compensation"). The contribution-based compensation will
generally not exceed 8.5% of total contributions. AXA Advisors, in turn, may
pay a portion of the contribution-based compensation received from AXA
Equitable to the AXA Advisors financial professional and/or the Selling
broker-dealer making the sale. In some instances, a financial professional or a
Selling broker-dealer may elect to receive reduced contribution-based
compensation on a contract in combination with ongoing annual compensation of
up to 1.0% of the account value of the contract sold ("asset-based
compensation"). Total compensation paid to a financial professional or a
Selling broker-dealer electing to receive both contribution-based and
asset-based compensation could, over time, exceed the total compensation that
would otherwise be paid on the basis of contributions alone. The compensation
paid by AXA Advisors varies among financial professionals and among Selling
broker-dealers. AXA Advisors also pays a portion of the compensation it
receives to its managerial personnel. AXA Advisors also pays its financial
professionals and managerial personnel other types of compensation including
service fees, expense allowance payments and health and retirement benefits.
AXA Advisors also pays its financial professionals, managerial personnel and
Selling broker-dealers sales bonuses (based on selling certain products during
specified periods) and persistency bonuses. AXA Advisors may offer sales
incentive programs to financial professionals and Selling broker-dealers who
meet specified production levels for the sales of both AXA Equitable contracts
and contracts offered by other companies. These incentives provide non-cash
compensation such as stock options awards and/or stock appreciation rights,
expense-paid trips, expense-paid education seminars and merchandise.
When a contract is sold by a Selling broker-dealer, the Selling broker-dealer,
not AXA Advisors, determines the compensation paid to the Selling
broker-dealer's financial professional for the sale of the contract. Therefore,
you should contract your financial professional for
MORE INFORMATION 59
information about the compensation he or she receives and any related
incentives, as described immediately below.
DIFFERENTIAL COMPENSATION. In an effort to promote the sale of AXA Equitable
products, AXA Advisors may pay its financial professionals and managerial
personnel a greater percentage of contribution-based compensation and/or
asset-based compensation for the sale of an AXA Equitable contract than it pays
for the sale of a contract or other financial product issued by a company other
than AXA Equitable. This practice is known as providing "differential
compensation." Differential compensation may involve other forms of
compensation to AXA Advisors personnel. Certain components of the compensation
paid to managerial personnel are based on whether the sales involve AXA
Equitable contracts. Managers earn higher compensation (and credits toward
awards and bonuses) if the financial professionals they manage sell a higher
percentage of AXA Equitable contracts than products issued by other companies.
Other forms of compensation provided to its financial professionals include
health and retirement benefits, expense reimbursements, marketing allowances
and contribution-based payments, known as "overrides." For tax reasons, AXA
Advisors financial professionals qualify for health and retirement benefits
based solely on their sales of AXA Equitable contracts and products sponsored
by affiliates.
The fact that AXA Advisors financial professionals receive differential
compensation and additional payments may provide an incentive for those
financial professionals to recommend an AXA Equitable contract over a contract
or other financial product issued by a company not affiliated with AXA
Equitable. However, under applicable rules of FINRA, AXA Advisors financial
professionals may only recommend to you products that they reasonably believe
are suitable for you based on the facts that you have disclosed as to your
other security holdings, financial situation and needs. In making any
recommendation, financial professionals of AXA Advisors may nonetheless face
conflicts of interest because of the differences in compensation from one
product category to another, and because of differences in compensation among
products in the same category. For more information, contact your financial
professional.
AXA DISTRIBUTORS COMPENSATION. For Series ADV contracts sold through AXA
Distributors, AXA Distributors will not receive any compensation.
For Series B and Series C contracts, AXA Equitable pays contribution-based and
asset-based compensation (together "compensation") to AXA Distributors.
Contribution-based compensation is paid based on AXA Equitable contracts sold
through AXA Distributor's Selling broker-dealers. Asset-based compensation is
paid based on the aggregate account value of contracts sold through certain of
AXA Distributor's Selling broker-dealers. Contribution-compensation will
generally not exceed 7.0% of the total contributions made under the contracts.
AXA Distributors, in turn, pays the contribution-based compensation it receives
on the sale of a contract to the Selling broker-dealer making the sale. In some
instances, the Selling broker-dealer may elect to receive reduced
contribution-based compensation on the sale of the contract in combination with
annual asset-based compensation of up to 1.0% of the account value of the
contract sold. If a Selling broker-dealer elects to receive reduced
contribution-based compensation on a contract, the contribution-based
compensation which AXA Equitable pays to AXA Distributors will be reduced by
the same amount, and AXA Equitable will pay AXA Distributors asset-based
compensation on the contract equal to the asset-based compensation which AXA
Distributors pays to the Selling broker-dealer. Total compensation paid to a
Selling broker-dealer electing to receive both contribution-based and
asset-based compensation could over time exceed the total compensation that
would otherwise be paid on the basis of contributions alone. The
contribution-based and asset-based compensation paid by AXA Distributors varies
among Selling broker-dealers.
The Selling broker-dealer, not AXA Distributors, determines the compensation
paid to the Selling broker-dealer's financial professional for the sale of the
contract. Therefore, you should contact your financial professional for
information about the compensation he or she receives and any related
incentives, such as differential compensation paid for various products.
AXA Equitable also pays AXA Distributors compensation to cover its operating
expenses and marketing services under the terms of AXA Equitable's distribution
agreements with AXA Distributors.
ADDITIONAL PAYMENTS BY AXA DISTRIBUTORS TO SELLING BROKER-DEALERS. AXA
Distributors may pay, out of its assets, certain Selling broker-dealers and
other financial intermediaries additional compensation in recognition of
services provided or expenses incurred. AXA Distributors may also pay certain
Selling broker-dealers or other financial intermediaries additional
compensation for enhanced marketing opportunities and other services (commonly
referred to as "marketing allowances"). Services for which such payments are
made may include, but are not limited to, the preferred placement of AXA
Equitable products on a company and/or product list; sales personnel training;
product training; business reporting; technological support; due diligence and
related costs; advertising, marketing and related services; conference; and/or
other support services, including some that may benefit the contract owner.
Payments may be based on the aggregate account value attributable to contracts
sold through a Selling broker-dealer or such payments may be a fixed amount.
AXA Distributors may also make fixed payments to Selling broker-dealers, for
example in connection with the initiation of a new relationship or the
introduction of a new product.
Additionally, as an incentive for the financial professionals of Selling
broker-dealers to promote the sale of AXA Equitable products, AXA Distributors
may increase the sales compensation paid to the Selling broker-dealer for a
period of time (commonly referred to as "compensation enhancements").
These additional payments may serve as an incentive for Selling broker-dealers
to promote the sale of AXA Equitable contracts over contracts and other
products issued by other companies. Not all Selling broker-dealers receive
additional payments, and the payments vary among Selling broker-dealers. The
list below includes the names of Selling broker-dealers that we are aware (as
of December 31, 2011) received additional payments. These additional payments
ranged from $81 to $4,973,724. AXA Equitable and its affiliates may also
have other business relationships with Selling broker-dealers, which may
provide an incentive for the Selling broker-dealers to promote the sale of AXA
Equitable contracts over contracts and other products issued by other
companies. The list below includes any such Selling broker-dealer. For more
information, ask your financial professional.
60 MORE INFORMATION
1st Global Capital Corporation
Advantage Capital Corporation
A.G. Edwards
American Portfolios Financial Services
Ameriprise Financial Services, Inc.
Associated Securities Corp.
Bank of America
BBVA Compass Investment Solutions, Inc.
CCO Investment Services Corp.
Centaurus Financial, Inc.
Commonwealth Financial Network
CUSO Financial Services, L.P.
Essex National Securities Inc.
Financial Network Investment Corporation
First Allied Securities
First Citizens Investor Services, Inc.
First Tennessee Brokerage, Inc.
FSC Securities Corporation
Geneos Wealth Management, Inc.
H.D. Vest Investment Securities, Inc.
Investment Centers of America/First Dakota Inc.
IFC Holdings Inc. DBA Invest Financial Corporation
Investment Professionals, Inc.
Investors Capital Corporation
J.P. Turner & Company, LLC
James T. Borello & Co.
Janney Montgomery Scott, LLC
Key Investment Services, LLC
Lincoln Financial Advisors Corporation
Lincoln Financial Securities Corporation
LPL Financial Corporation
M&T Securities, Inc.
Merrill Lynch Life Agency Inc.
Morgan Keegan & Co., Inc.
Morgan Stanley Smith Barney - Morgan Stanley & Co., Incorporated
Multi-Financial Securities Corporation
National Planning Corporation
Next Financial Group, Inc.
NFP Securities, Inc.
Plan Member Financial Corporation
PNC Investments
Prime Capital Services
PrimeVest Financial Services, Inc.
Raymond James & Associates Inc
Raymond James Financial Services
RBC Capital Markets Corp.
Robert W Baird & Co.
Royal Alliance Associates Inc.
Sage Point Financial, Inc
Securities America, Inc.
SII Investments, Inc.
Sorrento Pacific Financial, LLC
Stifel, Nicolaus & Co.
Summit Brokerage Services, Inc
Termed/Mutual Service Corporation
Transamerica Financial Advisors, Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services, Inc.
UVEST Financial Services Group, Inc.
Waterstone Financial Group, Inc.
Wells Fargo Advisors Financial Network LLC
Wells Fargo Advisors
Wells Fargo Advisors, LLC
Wells Fargo Investments, LLC
MORE INFORMATION 61
11. Incorporation of certain documents by reference
--------------------------------------------------------------------------------
AXA Equitable's Annual Report on Form 10-K for the period ended December 31,
2011 (the "Annual Report") is considered to be part of this Prospectus because
it is incorporated by reference.
AXA Equitable files reports and other information with the SEC, as required by
law. You may read and copy this information at the SEC's public reference
facilities at Room 1580, 100 F Street, NE, Washing-ton, DC 20549, or by
accessing the SEC's website at www.sec.gov. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Under the Securities Act of 1933, AXA Equitable has filed with
the SEC a registration statement relating to the Structured Investment Option
(the "Registration Statement"). This Prospectus has been filed as part of the
Registration Statement and does not contain all of the information set forth in
the Registration Statement.
After the date of this Prospectus and before we terminate the offering of the
securities under the Registration Statement, all documents or reports we file
with the SEC under the Securities Exchange Act of 1934 ("Exchange Act"), will
be considered to become part of this Prospectus because they are incorporated
by reference.
Any statement contained in a document that is or becomes part of this
Prospectus, will be considered changed or replaced for purposes of this
Prospectus if a statement contained in this Prospectus changes or is replaced.
Any statement that is considered to be a part of this Prospectus because of its
incorporation will be considered changed or replaced for the purpose of this
Prospectus if a statement contained in any other subsequently filed document
that is considered to be part of this Prospectus changes or replaces that
statement. After that, only the statement that is changed or replaced will be
considered to be part of this Prospectus.
We file the Registration Statement and our Exchange Act documents and reports,
including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
electronically according to EDGAR under CIK No. 0000727920. The SEC maintains a
website that contains reports, proxy and information statements, and other
information regarding registrants that file electronically with the SEC. The
address of the site is www.sec.gov.
Upon written or oral request, we will provide, free of charge, to each person
to whom this Prospectus is delivered, a copy of any or all of the documents
considered to be part of this Prospectus because they are incorporated herein.
In accordance with SEC rules, we will provide copies of any exhibits
specifically incorporated by reference into the text of the Exchange Act
reports (but not any other exhibits). Requests for documents should be directed
to AXA Equitable Life Insurance Company, 1290 Avenue of the Americas, New York,
New York 10104. Attention: Corporate Secretary (telephone: (212) 554-1234). You
can access our website at www.axa-equitable.com.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of AXA Equitable at December 31, 2011 and
2010 and for each of the three years in the period ended December 31, 2011 are
incorporated by reference herein in reliance on the reports of
PricewaterhouseCoopers LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP provides independent audit services and certain
other non-audit services to AXA Equitable as permitted by the applicable SEC
independence rules, and as disclosed in AXA Equitable's Form 10-K.
PricewaterhouseCoopers LLP's address is 300 Madison Avenue, New York, New York
10017.
62 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Appendix I: Condensed financial information
--------------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 49 with the same daily asset charges of
1.25%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2011.
-------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
--------------------------------
2011 2010
-------------------------------------------------------------------------
EQ/CORE BOND INDEX
-------------------------------------------------------------------------
Unit value $ 10.16 $ 9.82
-------------------------------------------------------------------------
Number of units outstanding (000's) 62 13
-------------------------------------------------------------------------
EQ/EQUITY 500 INDEX
-------------------------------------------------------------------------
Unit value $ 11.05 $ 11.02
-------------------------------------------------------------------------
Number of units outstanding (000's) 66 5
-------------------------------------------------------------------------
EQ/MONEY MARKET
-------------------------------------------------------------------------
Unit value $ 1.00 $ 1.00
-------------------------------------------------------------------------
Number of units outstanding (000's) 43,482 24,335
-------------------------------------------------------------------------
The unit values and number of units outstanding shown below are for contracts
offered under Separate Account No. 49 with the same daily asset
charges of 0.65%.
UNIT VALUES AND NUMBER OF UNITS OUTSTANDING AT YEAR END FOR EACH VARIABLE
INVESTMENT OPTION, EXCEPT FOR THOSE OPTIONS BEING OFFERED FOR THE FIRST TIME
AFTER DECEMBER 31, 2011.
-------------------------------------------------------------------------
FOR THE YEAR ENDING DECEMBER 31,
--------------------------------
2011 2010
-------------------------------------------------------------------------
EQ/CORE BOND INDEX
-------------------------------------------------------------------------
Unit value $10.24 $ 9.84
-------------------------------------------------------------------------
Number of units outstanding (000's) -- --
-------------------------------------------------------------------------
EQ/EQUITY 500 INDEX
-------------------------------------------------------------------------
Unit value $11.13 $11.04
-------------------------------------------------------------------------
Number of units outstanding (000's) -- --
-------------------------------------------------------------------------
EQ/MONEY MARKET
-------------------------------------------------------------------------
Unit value $ 1.00 $ 1.00
-------------------------------------------------------------------------
Number of units outstanding (000's) 757 --
-------------------------------------------------------------------------
APPENDIX I: CONDENSED FINANCIAL INFORMATION I-1
Appendix II: State contract availability and/or variations of certain features
and benefits
--------------------------------------------------------------------------------
The following information is a summary of the states where the Structured
Capital Strategies/SM/ contracts or certain features and/or benefits are either
not available as of the date of this Prospectus or vary from the contract's
features and benefits as previously described in this Prospectus. Certain
features and/or benefits may have been approved in your state after your
contract was issued and cannot be added. Please contact your financial
professional for more information about availability in your state.
STATES WHERE CERTAIN STRUCTURED CAPITAL STRATEGIES/SM/ FEATURES AND/OR BENEFITS
ARE NOT AVAILABLE OR VARY:
-------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
-------------------------------------------------------------------------------
ALASKA Series B, Series C, and Series Not Available
ADV contracts
-------------------------------------------------------------------------------
CALIFORNIA See "Contract features and If you reside in California and
benefits" -- "Your right to you are age 60 or older at the
cancel within a certain number time the contract is issued, you
of days" may return your variable annuity
contract within 30 days from the
date that you receive it and
receive a refund as described
below.
If you allocate your entire
initial contribution to the
EQ/Money Market option, the
amount of your refund will be
equal to your contribution,
unless you make a transfer, in
which case the amount of your
refund will be equal to your
account value on the date we
receive your request to cancel
at our processing office. This
amount could be less than your
initial contribution. If you
allocate any portion of your
initial contribution to the
variable investment options
(other than the EQ/Money Market
option), your refund will be
equal to your account value on
the date we receive your request
to cancel at our processing
office.
"RETURN OF CONTRIBUTION" FREE
LOOK TREATMENT AVAILABLE THROUGH
CERTAIN SELLING BROKERS-DEALERS
Certain selling broker-dealers
offer an allocation method
designed to preserve your right
to a return of your contribu-
tions during the free look
period. At the time of
application, you will instruct
your financial professional as
to how your initial contribution
and any subsequent contributions
should be treated for the
purpose of maintaining your free
look right under the contract.
Please consult your financial
professional to learn more about
the availability of "return of
contribution" free look
treatment.
If you choose "return of
contribution" free look
treatment of your contract, we
will allocate your entire
contribution and any subsequent
contributions made during the 40
day period following the
Contract Date, to the EQ/Money
Market investment option. In the
event you choose to exercise
your free look right under the
contract, you will receive a
refund equal to your
contributions.
If you choose the "return of
contribution" free look
treatment and your contract is
still in effect on the 40th day
(or next business day) following
the Contract Date, we will
automatically reallocate your
account value to the investment
options chosen on your
application.
-------------------------------------------------------------------------------
II-1 APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS
------------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
------------------------------------------------------------------------------------
CALIFORNIA Any transfers made prior to the
(CONTINUED) expiration of the 30 day free look
will terminate your right to
"return of contribution" treatment
in the event you choose to
exercise your free look right
under the contract. Any transfer
made prior to the 40th day
following the Contract Date will
cancel the automatic reallocation
on the 40th day (or next business
day) following the Contract Date
described above. If you do not
want AXA Equitable to perform this
scheduled one-time reallocation,
you must call one of our customer
service representatives at 1 (800)
789-7771 before the 40th day
following the Contract Date to
cancel.
See "Charges and expenses" -- Item (iii) under this section is
"Disability, terminal illness, or deleted in its entirety.
confinement to a nursing home"
(For Series B contracts only)
See "More information" -- You can transfer ownership of an
"Transfers of ownership, NQ contract at any time before
collateral assignments, loans, and annuity payments begin. You may
borrowing" assign your contract, unless
otherwise restricted for tax
qualification purposes.
------------------------------------------------------------------------------------
CONNECTICUT See "Charges and expenses - Waiver (i) is deleted. As a
Disability, terminal illness, or result, the first sentence of the
confinement to a nursing home" last paragraph of this section is
(For Series B contracts only) deleted and replaced with the
following:
We reserve the right to impose a
withdrawal charge, in accordance
with your contract, if the
conditions described in (ii) or
(iii) above existed at the time a
contribution was remitted or if
the condition began within 12
months following remittance.
See "Charge for each additional The charge for transfers does not
transfer in excess of 12 transfers apply.
per contract year" in "Fee table"
and "Transfer charge" in "Charges
and expenses"
------------------------------------------------------------------------------------
FLORIDA See "How you can purchase and In the third paragraph of this
contribute to your contract" in section, item (i) now reads: "(i)
"Contract features and benefits" contributions under a Structured
Capital Strategies/SM/ contract
would then total more than
$1,500,000;" and item (ii)
regarding the $2,500,000
limitation on contributions is
deleted. The remainder of this
section is unchanged.
See "Your right to cancel within a If you reside in Florida and you
certain number of days" in are age 65 or older at the time
"Contract features and benefits" the contract is issued, you may
cancel your variable annuity
contract and return it to us
within 21 days from the date that
you receive it. You will receive
an unconditional refund equal to
the cash surrender value provided
in the annuity contract, plus any
fees or charges deducted from the
contributions or imposed under the
contract.
If you reside in Florida and you
are age 64 or younger at the time
the contract is issued, you may
cancel your variable annuity
contract and return it to us
within 14 days from the date that
you receive it. You will receive
an unconditional refund equal to
your contributions, including any
contract fees or charges.
See "Selecting an annuity payout The following sentence replaces
option" under "Your annuity payout the first sentence of the second
options" in "Accessing your money" paragraph in this section:
You can choose the date annuity
payments are to begin, but it may
not be earlier than twelve months
from the contract date.
------------------------------------------------------------------------------------
APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS II-2
----------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
----------------------------------------------------------------------------------
FLORIDA See "Withdrawal charge" in If you are age 65 or older at
(CONTINUED) "Charges and expenses" the time your contract is
issued, the applicable
withdrawal charge will not
exceed 10% of the amount
withdrawn. In addition, no
charge will apply after the end
of the 10th contract year or 10
years after a contribution is
made, whichever is later.
----------------------------------------------------------------------------------
IDAHO See "Your right to cancel within If you reside in the state of
a certain number of days" in Idaho, you may return your
"Contract features and benefits" contract within 20 days from the
date that you receive it and
receive a refund of your initial
contribution.
----------------------------------------------------------------------------------
ILLINOIS Series B, Series C and Series Not Available
ADV contracts
----------------------------------------------------------------------------------
IOWA The Gold Index and the Oil Index
are not available.
----------------------------------------------------------------------------------
MARYLAND Series C contracts Not Available
See "How you can purchase and In the third paragraph of this
contribute to your contract" in section, item (i) now reads:
"Contract features and benefits" "(i) contributions under a
Structured Capital
Strategies/SM/ contract would
then total more than
$1,500,000;" and item (ii)
regarding the $2,500,000
limitation on contributions is
deleted. The remainder of this
section is unchanged.
See "Your annuity payout The table of guaranteed annuity
options" in "Accessing your payments cannot be changed after
money" contract issue.
----------------------------------------------------------------------------------
MASSACHUSETTS See "Disability, terminal This section is deleted in its
illness or confinement to entirety.
nursing home" under "Withdrawal
charge" in "Charges and
expenses" (For Series B
contracts only)
----------------------------------------------------------------------------------
MINNESOTA Series C contracts Not Available
See "Your right to cancel within If you reside in the state of
a certain number of days" in Minnesota at the time the
"Contract features and benefits" contract is issued, you may
return your contract within 10
days from the date that you
receive a refund equal to the
sum of (a) the difference
between the contributions made
and the amounts allocated to any
investment option and (b) the
account value in any investment
option on the date your contract
is received by our processing
office or your financial
professional. Such amount will
be paid within 10 days after we
receive notice of cancellation
and the contract.
----------------------------------------------------------------------------------
NEW JERSEY See "Disability, terminal The waivers described in this
illness or confinement to section are deleted.
nursing home" under "Withdrawal
charge" in "Charges and
expenses" (For Series B
contracts only)
----------------------------------------------------------------------------------
NEW HAMPSHIRE See "Disability, terminal Waiver (iii) regarding the
illness, or confinement to a definition of a nursing home is
nursing home" under "Withdrawal deleted, and replaced with the
charge" in "Charges and following:
expenses" (For Series B
contracts only) You are confined to a nursing
home for more than 90 days (or
such other period, as required
in your state) as verified by a
licensed physician. A nursing
home for this purpose means one
that is (a) a provider of
skilled nursing care service, or
qualified to receive approval of
Medicare benefits, or (b)
operated pursuant to law as a
skilled nursing home by the
state or territory in which it
is located (it must be within
the United States, Puerto Rico,
U.S. Virgin Islands, or Guam)
and meets all of the following:
. its main function is to
provide skilled,
intermediate, or custodial
nursing care;
. it provides continuous room
and board;
. it is supervised by a
registered nurse or licensed
practical nurse;
----------------------------------------------------------------------------------
II-3 APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS
----------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
----------------------------------------------------------------------------------
NEW HAMPSHIRE . it keeps daily medical
records of each patient;
(CONTINUED) . it controls and records all
medications dispenses; and
. its primary service is other
than to provide housing for
residents.
----------------------------------------------------------------------------------
NEW YORK See "Your right to cancel within The second paragraph under "Your
a certain number of days" in right to cancel within a certain
"Contract features and benefits" number of days" is deleted in
and also see "Calculation its entirety and re-placed with
Formula" in "Appendix III: the following:
Segment Interim Value"
Your refund will equal your
account value under the
con-tract on the day we receive
written notification of your
decision to cancel the contract
and will reflect any invest-ment
gain or loss in the variable
investment options (less the
daily charges we deduct) through
the date we receive your
contract. This includes a
modified calculation of the
Segment Interim Value for
amounts allocated to existing
Segments. For any IRA contract
returned to us within seven days
after you receive it, we are
required to refund the full
amount of your contribution.
Only for the purpose of
calculating your refunded amount
if you exercise your right to
cancel within a certain number
of days, your Segment Interim
Value is equal to the sum of the
following components:
(1)Fair Value of Fixed
Instruments; plus
(2)Fair Value of Derivatives;
plus
(3)Cap Calculation Factor
(computed based on the
assumption that we have
not incurred any expense).
See "The amount applied to If a life contingent annuity
purchase an annuity payout payout option is elected, the
option" in "Accessing your money" amount applied to the annuity
benefit will be 100% of the
account value and any applicable
withdrawal charge will be waived.
If a non-life contingent annuity
payout option is elected, the
amount applied to the annuity
benefit is the greater of the
cash value or 95% of what the
account value would be if no
withdrawal charge applied.
See "Disability, terminal Item (i) is deleted and replaced
illness, or confinement to a with the following: An owner (or
nursing home" in "Charges and older joint owner, if
expenses" applicable) has qualified to
receive Social Security
disability benefits as certified
by the Social Security
Administration or meets the
definition of a total disability
as specified in the contract. To
qualify, a re-certification
statement from a physician will
be required every 12 months from
the date disability is
determined.
See "Transfers of ownership, You may assign all or a portion
collateral assignments, loans of your contract at any time,
and borrowing" in "More unless otherwise restricted for
information" tax qualification purposes.
----------------------------------------------------------------------------------
NORTH DAKOTA See "Your right to cancel within To exercise your cancellation
a certain number of days" in right, you must return the
"Contract features and benefits" certificate directly to our
processing office within 20 days
after you receive it.
----------------------------------------------------------------------------------
OREGON Series C contracts Not Available
See "Securities Indices" under The NASDAQ-100 Price Return
"Structured Investment Option" Index is not available in Oregon.
in "Contract features and
benefits"
See "How you can purchase and Additional contributions are not
contribute to your contract" in permitted after the fifth
"Contract features and benefits" contract year.
----------------------------------------------------------------------------------
APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS II-4
---------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
---------------------------------------------------------------------------------
OREGON See "Lifetime required minimum The following replaces the third
(CONTINUED) distribution withdrawals" under paragraph:
"Withdrawing your account value" We generally will not impose a
in "Accessing your money" withdrawal charge on minimum
distribution withdrawals even if
you are not enrolled in our
automatic RMD service, except
if, when added to a non-RMD lump
sum withdrawal previously taken
in the same contract year, the
minimum distribution withdrawals
exceed the free withdrawal
amount. In order to avoid a
withdrawal charge in connection
with minimum distribution
withdrawals outside of our
automatic RMD service, you must
notify us using our withdrawal
request form. Such minimum
distribution withdrawals must be
based solely on your contract's
account value.
For Series B Contracts:
See "Selecting an annuity payout You can choose the date annuity
option" under "Your annuity payments begin, but it may not
payout options" in "Accessing be earlier than the date all
your money" withdrawal charges under the
contract expire.
See "Disability, terminal Item (i) under this section is
illness, or confinement to deleted in its entirety.
nursing home" under "Withdrawal
charge" in "Charges and expenses"
See "Transfers of ownership, The contract may be freely
collateral assignments, loans assigned unless otherwise
and borrowing" in "More restricted for tax qualification
information" purposes.
---------------------------------------------------------------------------------
PENNSYLVANIA Contributions Your contract refers to
contributions as premiums.
See "Disability, terminal The Withdrawal Charge Waiver
illness or confinement to does not apply during the first
nursing home" in "Charges and 12 months of the contract with
expenses" (For Series B respect to the Social Security
contracts only) Disability Waiver, the Six Month
Life Expectancy Waiver, or if
the owner is confined to a
nursing home during such period.
Required disclosure for Any person who knowingly and
Pennsylvania customers with intent to defraud any
insurance company or other
person files an application for
insurance or statement of claim
containing any materially false
information or conceals for the
purpose of misleading,
information concerning any fact
material thereto commits a
fraudulent insurance act, which
is a crime and subjects such
person to criminal and civil
penalties.
---------------------------------------------------------------------------------
PUERTO RICO Beneficiary continuation option Not Available
(IRA)
IRA and Roth IRA Available for direct rollovers
from U.S. source 401(a) plans
and direct transfers from the
same type of U.S. source IRAs.
See footnote 1 in "Fee table" There is no premium tax charge
and "Charges for state premium imposed.
and other applicable taxes" in
"Charges and expenses"
See "Purchase considerations for We do not offer Structured
a charitable remainder trusts" Capital Strategies/SM/ contracts
under "Owner and annuitant to charitable remainder trusts
requirements" in "Contract in Puerto Rico.
features and benefits"
See "Taxation of nonqualified There are special rules for
annuities" in "Tax information" nonqualified contracts issued in
Puerto Rico.
---------------------------------------------------------------------------------
II-5 APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS
---------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
---------------------------------------------------------------------------------
PUERTO RICO Income from NQ contracts we
(CONTINUED) issue is U.S. source. A Puerto
Rico resident is subject to U.S.
taxation on such U.S. source
income. Only Puerto Rico source
income of Puerto Rico resi-
dents is excludable from U.S.
taxation. Income from NQ
contracts is also subject to
Puerto Rico tax. The calculation
of the taxable portion of
amounts distributed from a
contract may differ in the two
jurisdictions. Therefore, you
might have to file both U.S. and
Puerto Rico tax returns, showing
different amounts of income from
the contract for each tax
return. Puerto Rico generally
provides a credit against Puerto
Rico tax for U.S. tax paid.
Depending on your personal
situation and the timing of the
different tax liabilities, you
may not be able to take full
advantage of this credit.
---------------------------------------------------------------------------------
RHODE ISLAND See "Your right to cancel within If you reside in the state of
a certain number of days" in Rhode Island at the time the
"Contract features and benefits" contract is issued, you may
return your contract within 20
days from the date that you
receive it and receive a refund
of your contribution.
---------------------------------------------------------------------------------
TEXAS See "How you can purchase and The $2,500,000 limitation on the
contribute to your contract" in sum of all contributions under
"Contract features and benefits" all AXA Equitable annuity
accumulation contracts with the
same owner or annuitant does not
apply.
See "Disability, terminal There is no 12 month waiting
illness or confinement to period following a contribution
nursing home" in "Charges and for the Six Month Life
expenses" (For Series B Expectancy Waiver. The
contracts only) withdrawal charge can be waived
even if the condition begins
within 12 months of the
remittance of the contribution.
---------------------------------------------------------------------------------
WASHINGTON See "10% free withdrawal amount" The 10% free withdrawal amount
under "Withdrawal charge" in applies to full surrenders.
"Charges and expenses"
See "Disability, terminal The owner (or older joint owner,
illness, or confinement to if applicable) has qualified to
nursing home" in "Charges and receive Social Security
expenses" (For Series B disability benefits as certified
contracts only) by the Social Security
Administration or a statement
from an independent U.S.
licensed physician stating that
the owner (or older joint owner,
if applicable) meets the
definition of total disability
for at least 6 continuous months
prior to the notice of claim.
Such disability must be
re-certified every 12 months.
---------------------------------------------------------------------------------
APPENDIX II: STATE CONTRACT AVAILABILITY AND/OR
VARIATIONS OF CERTAIN FEATURES AND BENEFITS II-6
Appendix III: Segment Interim Value
--------------------------------------------------------------------------------
We calculate the Segment Interim Value for each Segment on each business day,
which is also a Segment Business Day, between the Segment Start Date and
Segment Maturity Date. The calculation is based on a formula designed to
measure the fair value of your Segment Investment on the particular interim
date based on the downside protection provided by the Segment Buffer, the limit
on participation in investment gain provided by the Performance Cap Rate, and
an adjustment for the effect of a withdrawal prior to the Segment Maturity
Date. The formula we use, in part, derives the fair value of hypothetical
investments in fixed instruments and derivatives (put and call options). These
values provide us with protection from the risk that we will have to pay out
account value related to a Segment prior to the Segment Maturity Date. The
hypothetical put option provides us with a market value of the potential loss
at Segment Maturity, and the hypothetical call options provide us with a market
value of the potential gain at Segment Maturity. This formula provides a
treatment for an early distribution that is designed to be consistent with how
distributions at the end of a Segment are treated. We may hold such investments
in relation to Segments but are not required to do so. You have no interest in
the performance of any of our investments relating to Segments. The formula
also includes an adjustment relating to the Cap Calculation Factor. This is a
positive adjustment of the percentage of the estimated expenses corresponding
to the portion of the Segment Duration that has not elapsed. Appendix III sets
forth the actual calculation formula, an overview of the purposes and impacts
of the calculation, and detailed descriptions of the specific inputs into the
calculation. You should note, even if a corresponding Index has experienced
positive growth, the calculation of your Segment Interim Value may result in an
amount lower than your Segment Investment because of other market conditions,
such as the volatility of index prices and interest rates. Finally, Appendix
III includes examples of calculations of Segment Interim Values under various
hypothetical situations.
CALCULATION FORMULA
Your Segment Interim Value is equal to the lesser of (A) or (B).
(A)equals the sum of the following three components:
(1)Fair Value of Fixed Instruments; plus
(2)Fair Value of Derivatives; plus
(3)Cap Calculation Factor.
(B)equals the Segment Investment multiplied by (1 + the Performance Cap Rate
limiting factor).
OVERVIEW OF THE PURPOSES AND IMPACTS OF THE CALCULATION
FAIR VALUE OF FIXED INSTRUMENTS. The Segment Interim Value formula includes an
element designed to compensate us for the fact that when we have to pay out
account value related to a Segment before the Segment Maturity Date, we forgo
the opportunity to earn interest on the Segment Investment from the date of
withdrawal or surrender until the Segment Maturity Date. We accomplish this
estimate by calculating the present value of the Segment Investment using a
risk-free swap interest rate widely used in derivative markets.
FAIR VALUE OF DERIVATIVES. We use put and call options that are designated for
each Segment to estimate the market value, at the time the Segment Interim
Value is calculated, of the risk of loss and the possibility of gain at the end
of the Segment. This calculation reflects the value of the downside protection
that would be provided at maturity by the Segment Buffer as well as the upper
limit that would be placed on gains at maturity due to the Performance Cap Rate.
At the time the Segment Interim Value is determined, the Fair Value of
Derivatives is calculated using the three different hypothetical options. These
options are designated for each Segment and are described in more detail later
in this Appendix.
At-the-Money Call Option (strike price equals the index value at Segment
inception). The potential for gain is estimated using the value of this
hypothetical option.
Out-of-the-Money Call Option (strike price equals the index increased by the
Performance Cap Rate established at Segment inception). The potential for gain
in excess of the Performance Cap Rate is estimated using the value of this
hypothetical option.
.. The net amount of the At-the-Money Call Option less the value of the
Out-of-the-Money Call Option is an estimate of the market value of the
possibility of gain at the end of the Segment as limited by the Performance
Cap Rate.
Out-of-the-Money Put Option (strike price equals the index decreased by the
Segment Buffer). The risk of loss is estimated using the value of this
hypothetical option.
III-1 APPENDIX III: SEGMENT INTERIM VALUE
.. IT IS IMPORTANT TO NOTE THAT THIS PUT OPTION VALUE WILL ALMOST ALWAYS
REDUCE THE PRINCIPAL YOU RECEIVE, EVEN WHERE THE INDEX IS HIGHER AT THE
TIME OF THE WITHDRAWAL THAN AT THE TIME OF THE ORIGINAL INVESTMENT. This is
because the risk that the Index could have been lower at the end of a
Segment is present to some extent whether or not the Index has increased at
the earlier point in time that the Segment Interim Value is calculated.
CAP CALCULATION FACTOR. In setting the Performance Cap Rate, we take into
account that we incur expenses in connection with a contract, including
insurance and administrative expenses. The Segment Interim Value formula
includes item (3) above, the Cap Calculation Factor, which is designed to
reflect the fact that we will not incur those expenses for the entire duration
of the Segment if you withdraw your investment prior to the Segment Maturity
Date. Therefore, the Cap Calculation Factor is always positive and declines
during the course of the Segment.
PERFORMANCE CAP RATE LIMITING FACTOR. The formula provides that the Segment
Interim Value is never greater than (B) above, which is the portion of the
Performance Cap Rate corresponding to the portion of the Segment Duration that
has elapsed. This limitation is imposed to discourage owners from withdrawing
from a Segment before the Segment Maturity Date where there may have been
significant increases in the relevant Index early in the Segment Duration.
Although the Performance Cap Rate limiting factor pro-rates the upside
potential on amounts withdrawn early, there is no similar adjustment to
pro-rate the downside protection. THIS MEANS, IF YOU SURRENDER OR CANCEL YOUR
CONTRACT, DIE OR MAKE A WITHDRAWAL FROM A SEGMENT BEFORE THE SEGMENT MATURITY
DATE, THE SEGMENT BUFFER WILL NOT NECESSARILY APPLY TO THE EXTENT IT WOULD ON
THE SEGMENT MATURITY DATE, AND ANY UPSIDE PERFORMANCE WILL BE LIMITED TO A
PERCENTAGE LOWER THAN THE PERFORMANCE CAP RATE.
DETAILED DESCRIPTIONS OF SPECIFIC INPUTS TO THE CALCULATION
(A)(1) FAIR VALUE OF FIXED INSTRUMENTS. The Fair Value of Fixed Instrument in a
Segment is based on the swap rate associated with the Segment's remaining time
to maturity. Swap rates are the risk-free interest rates widely used in
derivative markets. There is no standard quote for swap rates. However, because
of their high liquidity and popularity, swap rate quotes from different dealers
generally fall within a close range, the differences among which are not
meaningful. Swap rates can be obtained from inter-dealer systems or financial
data vendors who have feeds from swap dealers. For example, "Bloomberg
Composite" swap rates are the weighted average of swap rates provided by a
number of dealers to Bloomberg. Individual dealers and brokers also publish
swap rates of their own on Bloomberg or Reuters. We may, in the future, utilize
exchange traded swaps that become available. These exchange traded swaps would
have a standard quote associated with them. The Fair Value of Fixed Instruments
is defined as its present value, as expressed in the following formula:
(Segment Investment)/(1 + swap rate)/(time to maturity)/
The time to maturity is expressed as a fraction, in which the numerator is the
number of days remaining in the Segment Duration and the denominator is the
average number of days in each year of the Segment Duration for that Segment.
(A)(2) FAIR VALUE OF DERIVATIVES. We utilize a fair market value methodology
to determine the Fair Value of Derivatives.
For each Segment, we designate and value three hypothetical options, each of
which is tied to the performance of the Index underlying the Segment in which
you are invested: (1) the At-the-Money Call Option, (2) the Out-of-the-Money
Call Option and (3) the Out-of-the-Money Put Option. At Segment Maturity, the
Put Option is designed to value the loss below the buffer, while the call
options are designed to provide gains up to the Performance Cap Rate. These
options are described in more detail below.
In a put option on an index, the seller will pay the buyer, at the maturity of
the option, the difference between the strike price -- which was set at issue
-- and the underlying index closing price, in the event that the closing price
is below the strike price. In a call option on an index, the seller will pay
the buyer, at the maturity of the option, the difference between the underlying
index closing price and the strike price, in the event that the closing price
is above the strike price. Generally, a put option has an inverse relationship
with its underlying Index, while a call option has a direct relationship. In
addition to the inputs discussed above, the Fair Value of Derivatives is also
affected by the time remaining until the Segment Maturity Date. More
information about the three designated options is set forth below:
(1)At-the-Money Call Option: This is an option to buy a position in the
relevant Index equal to the Segment Investment on the scheduled Segment
Maturity Date, at the price of the Index on the Segment Start Date. At any
time during the Segment Duration, the fair value of the At-the-Money Call
Option represents the market value of the potential to receive an amount in
excess of the Segment Investment on the Segment Maturity Date equal to the
percentage growth in the Index between the Segment Start Date and the
Segment Maturity Date, multiplied by the Segment Investment.
(2)Out-of-the-Money Call Option: This is an option to buy a position in the
relevant Index equal to the Segment Investment on the scheduled Segment
Maturity Date, at the price of the Index on the Segment Start Date increased
by a percentage equal to the Performance Cap Rate. At any time during the
Segment Duration, the fair value of the Out-of-the-Money Call Option
represents the market value of the potential to receive an amount in excess
of the Segment Investment equal to the percentage growth in the Index
between the Segment Start Date and the Segment Maturity Date in excess of
the Performance Cap Rate, multiplied by the Segment Investment. The value of
this option is used to offset the value of the At-the-Money Call Option,
thus recognizing in the Interim Segment Value a ceiling on gains at Segment
Maturity imposed by the Performance Cap Rate.
(3)Out-of-the-Money Put Option: This is an option to sell a position in the
relevant Index equal to the Segment Investment on the scheduled Segment
Maturity Date, at the price of the Index on the Segment Start Date decreased
by a percentage equal to the Segment Buffer. At any
APPENDIX III: SEGMENT INTERIM VALUE III-2
time during the Segment Duration, the fair value of the Out-of-the-Money Put
Option represents the market value of the potential to receive an amount
equal to the excess of the negative return of the Index between the Segment
Start Date and the Segment Maturity Date beyond the Segment Buffer,
multiplied by the Segment Investment. The value of this option reduces the
Interim Segment Value, as it reflects losses that may be incurred in excess
of the Segment Buffer at Segment Maturity.
The Fair Value of Derivatives is equal to (1) minus (2) minus (3), as defined
above.
We determine the fair value of each of the three designated options using the
Black Scholes model for valuing a European option on the Index, assuming a
continuous dividend yield or net convenience value, with inputs that are
consistent with current market prices. Each option has a notional value on the
Segment Start Date equal to the Segment Investment on that date. The notional
value is the price of the underlying Index at the inception of the contract. In
the event that a number of options, or a fractional number of options was
purchased, the notional value would be the number of options multiplied by the
price of the Index at inception.
For Securities Indices, we use the following inputs to the Black Scholes model:
(1)Implied Volatility of the Index -- This input varies with (i) how much time
remains until the Segment Maturity Date of the Segment, which is determined
by using an expiration date for the designated option that corresponds to
that time remaining and (ii) the relationship between the strike price of
that option and the level of the Index at the time of the calculation.
This relationship is referred to as the "moneyness" of the option described
above, and is calculated as the ratio of current price to the strike price.
Direct market data for these inputs for any given early distribution are
generally not available, because options on the Index that actually trade in
the market have specific maturity dates and moneyness values that are
unlikely to correspond precisely to the Segment Maturity Date and moneyness
of the designated option that we use for purposes of the calculation.
Accordingly, we use the following method to estimate the implied volatility
of the Index. We use daily quotes of implied volatility from our pricing
agent bank using the same Black Scholes model described above and based on
the market prices for certain options. Specifically, implied volatility
quotes are obtained for options with the closest maturities above and below
the actual time remaining in the Segment at the time of the calculation and,
for each maturity, for those options having the closest moneyness value
above and below the actual moneyness of the designated option, given the
level of the Index at the time of the calculation. In calculating the
Segment Interim Value, we will derive a volatility input for your Segment's
time to maturity and strike price by linearly interpolating between the
implied volatility quotes that are based on the actual adjacent maturities
and moneyness values described above, as follows:
(a)We first determine the implied volatility of an option that has the same
moneyness as the designated option but with the closest available time to
maturity shorter than your Segment's remaining time to maturity. This
volatility is derived by linearly interpolating between the implied
volatilities of options having the times to maturity that are above and
below the moneyness value of the hypothetical option.
(b)We then determine the implied volatility of an option that has the same
moneyness as the designated option but with the closest available time to
maturity longer than your Segment's remaining time to maturity. This
volatility is derived by linearly interpolating between the implied
volatilities of options having the times to maturity that are above and
below the moneyness value of the designated option.
(c)The volatility input for your Segment's time to maturity will then be
determined by linearly interpolating between the volatilities derived in
steps (a) and (b).
(2)Swap Rate -- We use key derivative swap rates provided by our pricing agent
bank, which is a recognized financial reporting vendor. Swap rates are
obtained for maturities adjacent to the actual time remaining in the Segment
at the time of the early distribution. We use linear interpolation to derive
the exact remaining duration rate needed as the input.
(3)Index Dividend Yield -- On a daily basis, we use the projected annual
dividend yield across the entire Index provided by our pricing agent bank.
This value is a widely used assumption and is readily available from
recognized financial reporting vendors.
For Commodities Indices, we use the first two inputs listed above (Implied
Volatility of the Index and Swap Rate), but for the third input, instead of
using the Index Dividend Yield, we use the Net Convenience Value. This approach
is based on standard option pricing methodology, which recognizes that
commodities do not pay dividends. Instead, Net Convenience Value represents the
market's valuation of the yield of two offsetting factors: (1) the fact that
the option does not give the holder the benefit of the ability to use the
commodity itself (much like a security option does not give the holder the
right to receive dividends); and (2) the fact that the holder is not burdened
with the obligation to store the commodity.
(3)Net Convenience Value -- On a daily basis, we calculate the net convenience
value for the commodity underlying the Index. The net convenience value for
a commodity equals the spot price minus the present value of the futures
price (with the present value based on the Swap Rate). We use the spot
prices and futures prices provided by our pricing agent bank, which is a
recognized financial reporting vendor. The price differences among
recognized financial reporting vendors are not meaningful to the calculation
of the Segment Interim Value.
Generally, a put option has an inverse relationship with its underlying Index,
while a call option has a direct relationship. In addition to the inputs
discussed above, the Fair Value of Derivatives is also affected by the time to
the Segment Maturity Date.
(A)(3) CAP CALCULATION FACTOR. In setting the Performance Cap Rate, we take
into account that we incur expenses in connection with a contract, including
insurance and administrative expenses. In particular, if there were no such
expenses, the Performance Cap Rate might have been greater.
III-3 APPENDIX III: SEGMENT INTERIM VALUE
In setting the Performance Rate Cap, we currently estimate annual expenses at
approximately 1.80% of the Segment Investment for Series B contracts,
approximately 2.20% of the Segment Investment for Series C contracts and
approximately 1.25% of the Segment Investment for Series ADV contracts. This
calculation includes not only expenses, but an element of profit as well. We
may use a lower estimate, which would provide a higher Performance Cap Rate,
all other factors being equal. We reserve the right to use a higher estimate in
the future, but we would do so only after revising this Appendix to provide
notice of the higher estimate. If you withdraw your investment prior to the
Segment Maturity Date, we will not incur expenses for the entire duration of
the Segment. Therefore, if you withdraw your investment prior to the Segment
Maturity Date, we provide a positive adjustment as part of the calculation of
Segment Interim Value, which we call the Cap Calculation Factor. The Cap
Calculation Factor represents a return of estimated expenses for the portion of
the Segment Duration that has not elapsed. For example, if the estimated
expenses for a one year Segment are calculated by our pricing agent bank to be
$10, then at the end of 146 days (with 219 days remaining in the Segment), the
Cap Calculation Factor would be $6, because $10 x 219/365 (60%) = $6. The Cap
Calculation Factor is not used at the time we calculate your Segment Maturity
Value. Instead, for any Segment held to its Segment Maturity Date, the values
are provided by the contractual guarantees based on Index performance as
adjusted by the Performance Cap Rate and the Segment Buffer. A Segment is not a
variable investment option with an underlying portfolio, and therefore the
percentages we use in setting the performance caps do not reflect a daily
charge against assets held on your behalf in a separate account.
(B) PRO RATA SHARE OF PERFORMANCE CAP RATE. In setting the Performance Cap
Rate, we assume that you are going to hold the Segment for the entire Segment
Duration. If you hold a Segment until its Segment Maturity Date, the Segment
Return will be calculated subject to the Performance Cap Rate. Prior to the
Segment Maturity Date, your Segment Interim Value will be limited by the
portion of the Performance Cap Rate corresponding to the portion of the Segment
Duration that has elapsed. For example, if the Performance Cap Rate for a
one-year Segment is 10%, then at the end of 146 days, the Pro Rata Share of the
Performance Cap Rate would be 4%, because 10% x 146/365 = 4%; as a result, the
Interim Value at the end of the 146 days could not exceed 104% of the Segment
Investment.
APPENDIX III: SEGMENT INTERIM VALUE III-4
EXAMPLES
On the following pages are hypothetical examples of how the Segment Interim
Value would be calculated for three different Segments. On the first page,
Segments 1, 2 and 3 all have the same Index and Segment Start Date, but have
different Segment Durations. The Segments are each shown on the same date,
approximately 8 1/2 months after the Segment Start Date. On the second page,
Segments 2 and 3 are valued again, but this time on later dates, with
approximately 3 1/2 months remaining until their respective Segment Maturity
Dates. On the third page, Segments 1, 2 and 3 all have the same Index and
Segment Start Date, but have different Segment Durations. The Segments are each
shown making a partial withdrawal on the same date, approximately 8 1/2 months
after the Segment Start Date.
EXAMPLE OF SEGMENT INTERIM VALUE
----------------------------------------------------------------------------------
ITEM 1-YEAR SEGMENT 3-YEAR SEGMENT 5-YEAR SEGMENT
----------------------------------------------------------------------------------
Segment Duration (in months) 12 36 60
Valuation Date (Months since
Segment Start Date) 8.5 8.5 8.5
Segment Investment $1,000 $1,000 $1,000
Segment Buffer -10% -20% -30%
Performance Cap Rate 11% 19% 35%
Time to Maturity
(in months) 3.5 27.5 51.5
(in years) 0.288 2.290 4.290
----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS -40% (FOR EXAMPLE FROM 100.00 TO 60.00)
----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed
Instrument 999.24 971.31 905.58
Fair Value of Hypothetical
Derivatives (303.20) (224.50) (150.09)
Cap Calculation Factor 5.19 41.22 77.23
Sum of Above 701.23 788.03 832.72
Segment Investment Multiplied by
prorated Performance Cap Rate 1,078.27 1,044.98 1,049.67
Segment Interim Value 701.23 788.03 832.72
----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS -10% (FOR EXAMPLE FROM 100.00 TO 90.00)
----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed
Instrument 999.24 971.31 905.58
Fair Value of Hypothetical
Derivatives (37.47) (38.30) (3.60)
Cap Calculation Factor 5.19 41.22 77.23
Sum of Above 966.97 974.22 979.21
Segment Investment Multiplied by
prorated Performance Cap Rate 1,078.27 1,044.98 1,049.67
Segment Interim Value 966.97 974.22 979.21
----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS 0% (FOR EXAMPLE FROM 100.00 TO 100.00)
----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed
Instrument 999.24 971.31 905.58
Fair Value of Hypothetical
Derivatives 18.79 5.30 34.30
Cap Calculation Factor 5.19 41.22 77.23
Sum of Above 1,023.22 1,017.83 1,017.11
Segment Investment Multiplied by
prorated Performance Cap Rate 1,078.27 1,044.98 1,049.67
Segment Interim Value 1,023.22 1,017.83 1,017.11
III-5 APPENDIX III: SEGMENT INTERIM VALUE
ASSUMING THE CHANGE IN THE INDEX VALUE IS +10% (FOR EXAMPLE FROM 100.00 TO
110.00)
------------------------------------------------------------------------------
ITEM 1-YEAR SEGMENT 3-YEAR SEGMENT 5-YEAR SEGMENT
------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed
Instrument 999.24 971.31 905.58
Fair Value of Hypothetical
Derivatives 61.19 41.44 67.83
Cap Calculation Factor 5.19 41.22 77.23
Sum of Above 1,065.63 1,053.96 1,050.63
Segment Investment Multiplied by
prorated Performance Cap Rate 1,078.27 1,044.98 1,049.67
Segment Interim Value 1,065.63 1,044.98 1,049.67
ASSUMING THE CHANGE IN THE INDEX VALUE IS +40% (FOR EXAMPLE FROM 100.00 TO
140.00)
------------------------------------------------------------------------------
ITEM 1-YEAR SEGMENT 3-YEAR SEGMENT 5-YEAR SEGMENT
------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed
Instrument 999.24 971.31 905.58
Fair Value of Hypothetical
Derivatives 107.43 114.66 146.75
Cap Calculation Factor 5.19 41.22 77.23
Sum of Above 1,111.87 1,127.19 1,129.56
Segment Investment Multiplied by
prorated Performance Cap Rate 1,078.27 1,044.98 1,049.67
Segment Interim Value 1,078.27 1,044.98 1,049.67
The input values to the Black Scholes model that have been utilized to generate
the hypothetical examples above are as follows:
(1)Implied volatility of 23.4%, 23.6% and 26.1% is assumed for 1-year, 3-year
and 5-year segments, respectively.
(2)Swap rate corresponding to remainder of segment term is 0.26% (1-year),
1.27% (3-year) and 2.31% (5-year) annually.
(3)Index dividend yield - 1.95% annually.
(4)Bid-Ask Spread is 10bps (1-year), 15bps (3-year) and 30bps (5-year).
EXAMPLE OF SEGMENT INTERIM VALUE
----------------------------------------------------------------------------------
ITEM 3-YEAR SEGMENT 5-YEAR SEGMENT
----------------------------------------------------------------------------------
Segment Duration (in months) 36 60
Valuation Date (Months since Segment Start
Date) 32.5 56.5
Segment Investment $1,000 $1,000
Segment Buffer -20% -30%
Performance Cap Rate 19% 35%
Time to Maturity
(in months) 3.5 3.5
(in years) 0.288 0.288
----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS -40% (FOR EXAMPLE FROM 100.00 TO 60.00)
----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed Instrument 999.25 999.25
Fair Value of Hypothetical Derivatives (203.82) (110.12)
Cap Calculation Factor 5.18 5.18
Sum of Above 800.61 894.31
Segment Investment Multiplied by prorated
Performance Cap Rate 1,171.76 1,329.86
Segment Interim Value 800.61 894.31
APPENDIX III: SEGMENT INTERIM VALUE III-6
ASSUMING THE CHANGE IN THE INDEX VALUE IS -10% (FOR EXAMPLE FROM 100.00 TO
90.00)
-----------------------------------------------------------------------------------
ITEM 3-YEAR SEGMENT 5-YEAR SEGMENT
-----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed Instrument 999.25 999.25
Fair Value of Hypothetical Derivatives 0.46 12.96
Cap Calculation Factor 5.18 5.18
Sum of Above 1,004.89 1,017.38
Segment Investment Multiplied by prorated
Performance Cap Rate 1,171.76 1,329.86
Segment Interim Value 1,004.89 1,017.38
-----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS +10% (FOR EXAMPLE FROM 100.00 TO 110.00)
-----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed Instrument 999.25 999.25
Fair Value of Hypothetical Derivatives 89.97 110.95
Cap Calculation Factor 5.18 5.18
Sum of Above 1,094.40 1,115.37
Segment Investment Multiplied by prorated
Performance Cap Rate 1,171.76 1,329.86
Segment Interim Value 1,094.40 1,115.37
-----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS +40% (FOR EXAMPLE FROM 100.00 TO 140.00)
-----------------------------------------------------------------------------------
Fair Value of Hypothetical Fixed Instrument 999.25 999.25
Fair Value of Hypothetical Derivatives 181.03 291.85
Cap Calculation Factor 5.18 5.18
Sum of Above 1,185.46 1,296.27
Segment Investment Multiplied by prorated
Performance Cap Rate 1,171.76 1,329.86
Segment Interim Value 1,171.76 1,296.27
EXAMPLE OF PARTIAL WITHDRAWAL
-----------------------------------------------------------------------------------
ITEM 1-YEAR SEGMENT 3-YEAR SEGMENT 5-YEAR SEGMENT
-----------------------------------------------------------------------------------
Segment Duration (in months) 12 36 60
Valuation Date (Months since
Segment Start Date) 8.5 8.5 8.5
Segment Investment $1,000 $1,000 $1,000
Segment Buffer -10% -20% -30%
Performance Cap Rate 11% 19% 35%
Time to Maturity
(in month) 3.5 27.5 51.5
(in year) 0.288 2.290 4.290
AMOUNT WITHDRAWN $100 $100 $100
-----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS -40% (FOR EXAMPLE FROM 100.00 TO 60.00)
-----------------------------------------------------------------------------------
Segment Interim Value 701.23 788.03 832.72
Percent Withdrawn 14.26% 12.69% 12.01%
New Segment Investment $857.39 $873.10 $879.91
New Segment Interim Value $601.23 $688.03 $732.72
-----------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS -10% (FOR EXAMPLE FROM 100.00 TO 90.00)
-----------------------------------------------------------------------------------
Segment Interim Value 966.97 974.22 979.21
Percent Withdrawn 10.34% 10.26% 10.21%
New Segment Investment $896.58 $897.35 $897.88
New Segment Interim Value $866.97 $874.22 $879.21
-----------------------------------------------------------------------------------
III-7 APPENDIX III: SEGMENT INTERIM VALUE
ASSUMING THE CHANGE IN THE INDEX VALUE IS +10% (FOR EXAMPLE FROM 100.00 TO
110.00)
------------------------------------------------------------------------------------
ITEM 1-YEAR SEGMENT 3-YEAR SEGMENT 5-YEAR SEGMENT
------------------------------------------------------------------------------------
Segment Interim Value 1,065.63 1,044.98 1,049.67
Percent Withdrawn 9.38% 9.57% 9.53%
New Segment Investment $906.16 $904.30 $904.73
New Segment Interim Value $965.63 $944.98 $949.67
------------------------------------------------------------------------------------
ASSUMING THE CHANGE IN THE INDEX VALUE IS +40% (FOR EXAMPLE FROM 100.00 TO 140.00)
------------------------------------------------------------------------------------
Segment Interim Value 1,078.27 1,044.98 1,049.67
Percent Withdrawn 9.27% 9.57% 9.53%
New Segment Investment $907.26 $904.30 $904.73
New Segment Interim Value $978.27 $944.98 $949.67
------------------------------------------------------------------------------------
Definitions:
(1)Amount withdrawal is net of applicable withdrawal charge
Percent Withdrawn is equal to Amount Withdrawn divided by Segment Interim Value
New Segment Investment is equal to the original Segment Investment ($1,000)
multiplied by [1 - Percent Withdrawn]
New Segment Interim Value is equal to the calculated Segment Interim Value
based on the new Segment Investment. It will also be equal to
the Segment Interim Value multiplied by [1 - Percent Withdrawn]
APPENDIX III: SEGMENT INTERIM VALUE III-8
Appendix IV: Index Publishers
--------------------------------------------------------------------------------
The Structured Investment Option of the Structured Capital Strategies/SM/
contract tracks certain Securities Indices that are published by third parties.
AXA Equitable uses these Securities Indices under license from the Indices'
respective publishers. The following information about the Indices is included
in this Prospectus in accordance with AXA Equitable's license agreements with
the publishers of the Indices:
Standard & Poor's requires that the following disclaimer be included in this
Prospectus:
The Structured Capital Strategies/SM/ contract is not sponsored, endorsed, sold
or promoted by Standard & Poor's ("S&P") or its third party licensors. Neither
S&P nor its third party licensors makes any representation or warranty, express
or implied, to the owners of the Structured Capital Strategies/SM/ contract or
any member of the public regarding the advisability of investing in securities
generally or in the Structured Capital Strategies/SM/ contract particularly or
the ability of the S&P 500 Price Return Index (the "Index") to track general
stock market performance. S&P's and its third party licensor's only
relationship to AXA Equitable is the licensing of certain trademarks and trade
names of S&P and the third party licensors and of the Index which is
determined, composed and calculated by S&P or its third party licensors without
regard to AXA Equitable or the Structured Capital Strategies/SM/ contract. S&P
and its third party licensors have no obligation to take the needs of AXA
Equitable or the owners of the Structured Capital Strategies/SM/ contract into
consideration in determining, composing or calculating the Index. Neither S&P
nor its third party licensors is responsible for and has not participated in
the determination of the prices and amount of the Structured Capital
Strategies/SM/ contract or the timing of the issuance or sale of the Structured
Capital Strategies/SM/ contract or in the determination or calculation of the
equation by which the Structured Capital Strategies/SM/ contract is to be
converted into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Structured Capital Strategies/SM/
contract.
NEITHER S&P, ITS AFFILIATES NOR THEIR THIRD PARTY LICENSORS GUARANTEE THE
ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INDEX OR ANY DATA
INCLUDED THEREIN OR ANY COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO, ORAL OR
WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT
THERETO. S&P, ITS AFFILIATES AND THEIR THIRD PARTY LICENSORS SHALL NOT BE
SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS OR DELAYS
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P, ITS AFFILIATES
OR THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY
OR OTHERWISE.
The name "S&P 500 Price Return Index" is a trademark of Standard & Poor's and
has been licensed for use by AXA Equitable.
Frank Russell Company requires that the following disclosure be included in
this Prospectus:
The Structured Capital Strategies/SM/ contract is not sponsored, endorsed, sold
or promoted by Frank Russell Company ("Russell"). Russell makes no
representation or warranty, express or implied, to the owners of the Structured
Capital Strategies/SM/ contract or any member of the public regarding the
advisability of investing in securities generally or in the Product(s)
particularly or the ability of the Russell 2000(R) Price Return Index to track
general stock market performance or a segment of the same. Russell's
publication of the Russell 2000(R) Price Return Index in no way suggests or
implies an opinion by Russell as to the advisability of investment in any or
all of the securities upon which the Russell 2000(R) Price Return Index is
based. Russell's only relationship to AXA Equitable is the licensing of certain
trademarks and trade names of Russell and of the Russell 2000(R) Price Return
Index which is determined, composed and calculated by Russell without regard to
AXA Equitable or the Structured Capital Strategies/SM/ contract. Russell is not
responsible for and has not reviewed the Structured Capital Strategies/SM/
contract nor any associated literature or publications and Russell makes no
representation or warranty express or implied as to their accuracy or
completeness, or otherwise. Russell reserves the right, at any time and without
notice, to alter, amend, terminate or in any way change the the Structured
Capital Strategies/SM/ contract. Russell has no obligation or liability in
connection with the administration, marketing or trading of the Structured
Capital Strategies/SM/ contract.
RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL
2000(R) PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN AND RUSSELL SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. RUSSELL MAKES
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY AXA EQUITABLE,
INVESTORS, OWNERS OF THE PRODUCT(S), OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE RUSSELL 2000(R) PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN. RUSSELL
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO
THE RUSSELL 2000(R) PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL RUSSELL HAVE ANY LIABILITY FOR
ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
IV-1 APPENDIX IV: INDEX PUBLISHERS
MSCI Inc. requires that the following disclosure be included in this Prospectus:
THIS PRODUCT IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY MSCI INC.
("MSCI"), ANY OF ITS AFFILIATES, ANY OF ITS INFORMATION PROVIDERS OR ANY OTHER
THIRD PARTY INVOLVED IN, OR RELATED TO, COMPILING, COMPUTING OR CREATING ANY
MSCI INDEX (COLLECTIVELY, THE "MSCI PARTIES"). THE MSCI INDEXES ARE THE
EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES ARE SERVICE MARK(S)
OF MSCI OR ITS AFFILIATES AND HAVE BEEN LICENSED FOR USE FOR CERTAIN PURPOSES
BY [LICENSEE]. NONE OF THE MSCI PARTIES MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, TO THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON
OR ENTITY REGARDING THE ADVISABILITY OF INVESTING IN PRODUCTS GENERALLY OR IN
THIS PRODUCT PARTICULARLY OR THE ABILITY OF ANY MSCI INDEX TO TRACK
CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS AFFILIATES ARE THE
LICENSORS OF CERTAIN TRADEMARKS, SERVICE MARKS AND TRADE NAMES AND OF THE MSCI
INDEXES WHICH ARE DETERMINED, COMPOSED AND CALCULATED BY MSCI WITHOUT REGARD TO
THIS PRODUCT OR THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR
ENTITY. NONE OF THE MSCI PARTIES HAS ANY OBLIGATION TO TAKE THE NEEDS OF THE
ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER PERSON OR ENTITY INTO
CONSIDERATION IN DETERMINING, COMPOSING OR CALCULATING THE MSCI INDEXES. NONE
OF THE MSCI PARTIES IS RESPONSIBLE FOR OR HAS PARTICIPATED IN THE DETERMINATION
OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THIS PRODUCT TO BE ISSUED OR IN
THE DETERMINATION OR CALCULATION OF THE EQUATION BY OR THE CONSIDERATION INTO
WHICH THIS PRODUCT IS REDEEMABLE. FURTHER, NONE OF THE MSCI PARTIES HAS ANY
OBLIGATION OR LIABILITY TO THE ISSUER OR OWNERS OF THIS PRODUCT OR ANY OTHER
PERSON OR ENTITY IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR OFFERING
OF THIS PRODUCT. ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR
USE IN THE CALCULATION OF THE MSCI INDEXES FROM SOURCES THAT MSCI CONSIDERS
RELIABLE, NONE OF THE MSCI PARTIES WARRANTS OR GUARANTEES THE ORIGINALITY,
ACCURACY AND/OR THE COMPLETENESS OF ANY MSCI INDEX OR ANY DATA INCLUDED
THEREIN. NONE OF THE MSCI PARTIES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY THE ISSUER OF THE PRODUCT, OWNERS OF THE PRODUCT, OR
ANY OTHER PERSON OR ENTITY, FROM THE USE OF ANY MSCI INDEX OR ANY DATA INCLUDED
THEREIN. NONE OF THE MSCI PARTIES SHALL HAVE ANY LIABILITY FOR ANY ERRORS,
OMISSIONS OR INTERRUPTIONS OF OR IN CONNECTION WITH ANY MSCI INDEX OR ANY DATA
INCLUDED THEREIN. FURTHER, NONE OF THE MSCI PARTIES MAKES ANY EXPRESS OR
IMPLIED WARRANTIES OF ANY KIND, AND THE MSCI PARTIES HEREBY EXPRESSLY DISCLAIM
ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH
RESPECT TO EACH MSCI INDEX AND ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL ANY OF THE MSCI PARTIES HAVE ANY LIABILITY
FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES
(INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
No purchaser, seller or holder of this product, or any other person or entity,
should use or refer to any MSCI trade name, trademark or service mark to
sponsor, endorse, market or promote this security without first contacting MSCI
to determine whether MSCI's permission is required. Under no circumstances may
any person or entity claim any affiliation with MSCI without the prior written
permission of MSCI.
The Structured Capital Strategies/SM/ contract is not sponsored, endorsed, sold
or promoted by The NASDAQ OMX Group, Inc. or its affiliates (NASDAQ OMX, with
its affiliates, are referred to as the "Corporations"). The Corporations have
not passed on the legality or suitability of, or the accuracy or adequacy of
descriptions and disclosures relating to, the Structured Capital Strategies/SM/
contract. The Corporations make no representation or warranty, express or
implied to the owners of the Structured Capital Strategies/SM/ contract or any
member of the public regarding the advisability of investing in securities
generally or in the Structured Capital Strategies/SM/ contract particularly, or
the ability of the NASDAQ-100 Price Return Index to track general stock market
performance. The Corporations' only relationship to AXA Equitable ("Licensee")
is in the licensing of the NASDAQ(R), OMX(R), NASDAQ OMX(R) and NASDAQ-100
Price Return Index(R) registered trademarks, and certain trade names of the
Corporations and the use of the NASDAQ-100 Price Return Index which is
determined, composed and calculated by NASDAQ OMX without regard to Licensee or
the Structured Capital Strategies/SM/ contract. NASDAQ OMX has no obligation to
take the needs of the Licensee or the owners of the Structured Capital
Strategies/SM/ contract into consideration in determining, composing or
calculating the NASDAQ-100 Price Return Index. The Corporations are not
responsible for and have not participated in the determination of the timing
of, prices at, or quantities of the Structured Capital Strategies/SM/ contract
to be issued or in the determination or calculation of the equation by which
the Structured Capital Strategies/SM/ contract is to be converted into cash.
The Corporations have no liability in connection with the administration,
marketing or trading of the Structured Capital Strategies/SM/ contract.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION
OF THE NASDAQ-100 PRICE RETURN INDEX OR ANY DATA INCLUDED THEREIN. THE
CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED
BY LICENSEE, OWNERS OF THE STRUCTURED CAPITAL STRATEGIES/SM/ CONTRACT, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 PRICE RETURN INDEX OR ANY
DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 PRICE RETURN INDEX OR
ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL,
INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
APPENDIX IV: INDEX PUBLISHERS IV-2
Appendix V: Segment Maturity Date and Segment Start Date examples
--------------------------------------------------------------------------------
The Segment Maturity Date for Segments maturing in a given month and the
Segment Start Date for new Segments starting in that same month will always be
scheduled to occur on the first two consecutive business days that are also
Segment Business Days occurring after the 13th of a month. However, as
described earlier in this Prospectus, the Segment Maturity Date and Segment
Start Date may sometimes occur on later dates.
Set forth below are representative examples of how the Segment Maturity Date
and Segment Start Date may be moved to a later date in a given month due to
weekends and holidays, which are not Segment Business Days.
The first table below assumes that the 14th and/or 15th of the month falls on a
weekend, and the following Monday and Tuesday are both Segment Business Days:
-----------------------------------------------------
THEN THE SEGMENT AND THE SEGMENT
IF THE 14TH IS A: MATURITY DATE IS: START DATE IS:
-----------------------------------------------------
Friday Friday the 14th Monday the 17th
-----------------------------------------------------
Saturday Monday the 16th Tuesday the 17th
-----------------------------------------------------
Sunday Monday the 15th Tuesday the 16th
-----------------------------------------------------
The second table below assumes that the 14th or 15th of the month falls on a
scheduled holiday and therefore, is not a Segment Business Day:
------------------------------------------------------------
IF A SCHEDULED HOLIDAY THEN THE SEGMENT AND THE SEGMENT
FALLS ON: MATURITY DATE IS: START DATE IS:
------------------------------------------------------------
Monday the 14th Tuesday the 15th Wednesday the 16th
------------------------------------------------------------
Friday the 15th Monday the 18th Tuesday the 19th
------------------------------------------------------------
V-1 APPENDIX V: SEGMENT MATURITY DATE AND SEGMENT START DATE EXAMPLES
Appendix VI: Purchase considerations for defined benefit and defined
contribution plans
--------------------------------------------------------------------------------
Defined benefit and defined contribution plans may invest pooled defined
benefit plan assets in Structured Capital Strategies/SM/ under these
circumstances.
POOLED DEFINED BENEFIT AND DEFINED CONTRIBUTION PLAN ASSETS
The plans may invest assets attributable to the benefits of multiple plan
participants in one Structured Capital Strategies/SM/ contract. There is no
requirement to apply for multiple Structured Capital Strategies/SM/ contracts.
Pooled defined benefit plan assets may be invested in Structured Capital
Strategies/SM/ contracts because the product has no optional benefits that need
to be divided among participants. (We also permit defined contribution plans
without participant-directed accounts to pool assets attributable to multiple
plan participants in one contract.)
Trustees who are considering the purchase of a Structured Capital
Strategies/SM/ contract should discuss with their tax and ERISA advisers
whether this is an appropriate investment vehicle for the employer's plan.
There are significant issues in the purchase of a Structured Capital
Strategies/SM/ contract for a qualified plan. The contract and this Prospectus
should be reviewed in full, and the following factors, among others, should be
noted. Trustees should consider whether the plan provisions permit the
investment of plan assets in the contract. Trustees should also consider that
the plan trust must be designated as the beneficiary and that payment of death
benefits from the contract must be in accordance with the requirements of the
federal income tax rules. Assuming continued plan qualification and operation,
earnings on qualified plan assets will accumulate on a tax-deferred basis even
if the plan is not funded by the Structured Capital Strategies/SM/ contract or
another annuity contract. Therefore, trusts should purchase a Structured
Capital Strategies/SM/ contract to fund a plan for the contract's features and
benefits and not for tax deferral, after considering the relative costs and
benefits of annuity contracts and other types of arrangements and funding
vehicles.
NON-QUALIFIED CONTRACT
Defined benefit plans (and defined contribution plans) must use Non-Qualified
contracts to invest in Structured Capital Strategies/SM/. There is no qualified
plan contract endorsement available with Structured Capital Strategies/SM/. The
Plan and Trust, if properly qualified, contain the requisite provisions of the
Internal Revenue Code to maintain their tax exempt status. A non-qualified
contract cannot be converted to an IRA.
SPLIT FUNDING REQUIREMENT
The maximum percentage of the value of the plan's total assets that should be
invested in a Structured Capital Strategies/SM/ contract at any time is 80%. At
least 20% of the plan's assets should be invested in one or more other funding
vehicles to provide liquidity for the plan because Segments in the Structured
Investment Option may not be mature at the time plan benefits become payable.
The plan's fiduciaries are responsible for ensuring that the plan has enough
liquidity to pay benefits when required and should discuss anticipated
liquidity needs with the plan's actuary. Amounts must be withdrawn from the
contract or the contract must be liquidated to pay benefits; benefits payable
under the plan cannot be satisfied through a transfer of ownership of the NQ
contract to any person or entity. Any withdrawal from the Structured Capital
Strategies/SM/ NQ contract to pay benefits, or to address plan overfunding,
excess or mistaken contributions, any required minimum distribution
requirement, or for any other plan or benefit purpose will be treated as a
normal withdrawal for purposes of withdrawal charges and all other contractual
provisions. The Structured Capital Strategies/SM/ contract is merely a funding
vehicle and is not "benefit sensitive" like some products offered to qualified
plan sponsors.
CONTRIBUTIONS
The Structured Capital Strategies/SM/ contract will only accept transfer
contributions from the other funding vehicles of the plan trust. No
contributions will be accepted directly from the employer sponsoring the plan.
Checks written on accounts held in the name of the employer sponsoring the plan
will not be accepted.
PAYMENTS
All payments under the contract will be made to the plan trust owner. Also,
there may be adverse tax consequences if the plan transfers ownership of the
contract to an employee after the employee separates from service.
FUNDING VEHICLE ONLY
AXA Equitable's only role is that of the issuer of the contract. AXA Equitable
is not the plan administrator. AXA Equitable will not perform or provide any
plan administrative recordkeeping or actuarial valuation services with respect
to plan assets invested in Structured Capital Strategies/SM/ contracts. The
plan's administrator will be solely responsible for performing or providing for
all such services.
APPENDIX VI: PURCHASE CONSIDERATIONS FOR DEFINED BENEFIT
AND DEFINED CONTRIBUTION PLANS VI-1
Statement of additional information
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
Who is AXA Equitable? 2
Unit Values 2
Custodian and independent registered public accounting firm 2
Distribution of the contracts 2
Financial statements 2
HOW TO OBTAIN A STRUCTURED CAPITAL STRATEGIES/SM/ STATEMENT OF ADDITIONAL
INFORMATION FOR SEPARATE ACCOUNT NO. 49
Send this request form to:
Retirement Service Solutions
P.O. Box 1547
Secaucus, NJ 07096-1547
----------------------------------------------------------------------------------
Please send me a Structured Capital Strategies/SM/ Statement of
Additional Information dated May 1, 2012, supplemented August 30, 2012.
----------------------------------------------------------------------------------
Name
----------------------------------------------------------------------------------
Address
----------------------------------------------------------------------------------
City State Zip
387790
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
ESTIMATED
ITEM OF EXPENSE EXPENSE
--------------- ---------
Registration fees $229,200
Federal taxes N/A
State taxes and fees (based on 50 state average) N/A
Trustees' fees N/A
Transfer agents' fees N/A
Printing and filing fees $ 50,000*
Legal fees N/A
Accounting fees N/A
Audit fees $ 20,000*
Engineering fees N/A
Directors and officers insurance premium paid by Registrant N/A
--------
* Estimated expense.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The by-laws of AXA Equitable Life Insurance Company ("AXA Equitable")
provide, in Article VII, as follows:
7.4 Indemnification of Directors, Officers and Employees. (a) To
the extent permitted by the law of the State of New York and
subject to all applicable requirements thereof:
(i) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the
Company;
(ii) any person made or threatened to be made a party to any
action or proceeding, whether civil or criminal, by
reason of the fact that he or she, or his or her
testator or intestate serves or served any other
organization in any capacity at the request of the
Company may be indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company.
(b) To the extent permitted by the law of the State of
New York, the Company may provide for further
indemnification or advancement of expenses by resolution
of shareholders of the Company or the Board of
Directors, by amendment of these By-Laws, or by
agreement. {Business Corporation Law ss.ss. 721-726;
Insurance Law ss.1216}
The directors and officers of AXA Equitable are insured under
policies issued by X. L. Insurance Company, Arch Insurance Company, Endurance
Insurance Company, U.S. Specialty Insurance, St. Paul Travelers, Chubb
Insurance Company, AXIS Insurance Company and Zurich Insurance Company. The
annual limit on such policies is $100 million, and the policies insure the
officers and directors against certain liabilities arising out of their conduct
in such capacities.
ITEM 16. EXHIBITS
Exhibits No.
(1) (a) Distribution Agreement dated as of January 1, 1998 among The
Equitable Life Assurance Society of the United States (now AXA
Equitable Life Insurance Company) for itself and as depositor
on behalf of certain Separate Accounts, and Equitable
Distributors, Inc. (now AXA Distributors, LLC), incorporated
herein by reference to the Registration Statement on Form N-4
(File No. 333-64749), filed on August 5, 2011.
(i) First Amendment dated January 1, 2001 to Distribution
Agreement dated January 1, 1998, incorporated herein by
reference to the Registration Statement on Form N-4
(File No. 333-64749), filed on August 5, 2011.
(ii) Second Amendment dated January 1, 2012 to Distribution
Agreement dated January 1, 1998, incorporated herein by
reference to Registration Statement on Form N-4 (File
No. 333-05593) filed on April 24, 2012.
(b) Distribution and Servicing Agreement dated as of May 1, 1994,
among Equico Securities (now AXA Advisors, LLC), The Equitable
Life Assurance Society of the United States, and Equitable
Variable Life Insurance Company, incorporated herein by
reference to Exhibit 3(c) to the Registration Statement on Form
N-4 (File No. 2-30070), refiled electronically July 10, 1998.
(i) Letter of Agreement dated April 20, 1998 for
Distribution Agreement, among The Equitable Life
Assurance Society of the United States and EQ Financial
Consultants, Inc. (now AXA Advisors, LLC), incorporated
herein by reference to Exhibit No. 3(c) to Registration
Statement (File No. 33-83750), filed on May 1, 1998.
(c) Distribution Agreement for services by The Equitable Life
Assurance Society of the United States to AXA Network, LLC and
its subsidiaries dated January 1, 2000 incorporated herein by
reference to Exhibit 3(d) to Registration Statement (File No.
33-83750) filed April 19, 2001.
(d) Transition Agreement for services by AXA Network, LLC and its
subsidiaries to The Equitable Life Assurance Society of the
United States dated January 1, 2000 incorporated herein by
reference to Exhibit 3(e) to Registration Statement (File No.
33-83750) filed April 19, 2001.
(e) Distribution Agreement, dated as of January 1, 1998 by and
between The Equitable Life Assurance Society of the United
States for itself and as depositor on behalf of the Equitable
Life separate accounts and Equitable Distributors, Inc.,
incorporated herein by reference to the Registration Statement
filed on Form N-4 (File No. 333-64749) filed on August 5, 2011.
(i) First Amendment dated as of January 1, 2001 to the
Distribution Agreement dated as of January 1, 1998
between The Equitable Life Assurance Society of the
United States for itself and as depositor on behalf of
the Equitable Life separate accounts and Equitable
Distributors, Inc., incorporated herein by reference to
the Registration Statement filed on Form N-4 (File No.
333-127445) filed on August 11, 2005.
(ii) Second Amendment dated as of January 1, 2012 to the
Distribution Agreement dated as of January 1, 1998
between AXA Equitable Life Insurance Company and AXA
Distributors LLC incorporated herein by reference to the
Registration Statement filed on Form N-4 (File No.
333-05593) filed on April 24, 2012.
(f) General Agent Sales Agreement dated January 1, 2000 between The
Equitable Life Assurance Society of the United States and AXA
Network, LLC and its subsidiaries, incorporated herein by
reference to Exhibit 3(h) to the Registration Statement on Form
N-4, (File No. 2-30070), filed April 19, 2004.
(i) First Amendment dated January 1, 2003 to General Agent
Sales Agreement dated January 1, 2000 between The
Equitable Life Assurance Society of the
II-2
United States and AXA Network, LLC and its subsidiaries,
incorporated herein by reference to the Registration
Statement on Form N-4, (File No. 333-05593), filed
April 24, 2012.
(ii) Second Amendment dated as of January 1, 2004 to General
Agent Sales Agreement dated January 1, 2000 between The
Equitable Life Assurance Society of the United States
and AXA Network, LLC and its subsidiaries, incorporated
herein by reference to the Registration Statement on
Form N-4, (File No. 333-05593), filed April 24, 2012.
(iii) Third Amendment dated as of July 19,2004 to General
Agent Sales Agreement dated as of January 1, 2000 by and
between The Equitable Life Assurance Society of the
United States and AXA Network, LLC and its subsidiaries
incorporated herein by reference to Registration
Statement on Form N-4 (File No. 333-127445), filed on
August 11, 2005.
(iv) Fourth Amendment dated as of November 1, 2004 to General
Agent Sales Agreement dated as of January 1, 2000 by and
between The Equitable Life Assurance Society of the
United States and AXA Network, LLC and its subsidiaries
incorporated herein by reference to Registration
Statement on Form N-4 (File No. 333-127445), filed on
August 11, 2005.
(v) Fifth Amendment dated as of November 1, 2006, to General
Agent Sales Agreement dated as of January 1, 2000 by and
between The Equitable Life Assurance Society of the
United States and AXA Network, LLC and its subsidiaries
incorporated herein by reference to Registration
Statement on Form N-4 (File No. 333-05593), filed on
April 24, 2012.
(vi) Sixth Amendment dated as of February 15, 2008, to
General Agent Sales Agreement dated as of January 1,
2000 by and between AXA Equitable Life Insurance Company
(formerly known as The Equitable Life Assurance Society
of the United States) and AXA Network, LLC and its
subsidiaries, incorporated herein by reference to
Registration Statement on Form N-4 (File No. 333-05593)
filed on April 24, 2012.
(vii) Seventh Amendment dated as of February 15, 2008, to
General Agent Sales Agreement dated as of January 1,
2000 by and between AXA Equitable Life Insurance Company
(formerly known as The Equitable Life Assurance Society
of the United States) and AXA Network, LLC and its
subsidiaries, incorporated herein by reference to
Registration Statement on Form N-4 (File No. 2-30070) to
Exhibit 3(r), filed on April 20, 2009.
(viii) Eighth Amendment dated as of November 1, 2008, to
General Agent Sales Agreement dated as of January 1,
2000 by and between AXA Equitable Life Insurance Company
(formerly known as The Equitable Life Assurance Society
of the United States) and AXA Network, LLC and its
subsidiaries, incorporated herein by reference to
Registration Statement on Form N-4 (File No. 2-30070) to
Exhibit 3(s), filed on April 20, 2009.
(ix) Ninth Amendment dated as of November 1, 2011 to General
Agent Sales Agreement dated as of January 1, 2000 by and
between AXA Life Insurance Company (formerly known as
The Equitable Life Assurance Society of the United
States) and AXA Network, LLC and its subsidiaries,
incorporated herein by reference to Registration
Statement on Form N-4 (File No. 333-05593) filed on
April 24, 2012.
(g) Form of Brokerage General Agent Sales Agreement with Schedule
and Amendment to Brokerage General Agent Sales Agreement among
[Brokerage General Agent] and AXA Distributors, LLC, AXA
Distributors Insurance Agency, LLC, AXA Distributors Insurance
Agency of Alabama, LLC, and AXA Distributors Insurance Agency
of Massachusetts, LLC, incorporated herein by reference to
Exhibit No. 3.(i) to Registration Statement (File No.
333-05593) on Form N-4, filed on April 20, 2005.
(h) Form of Wholesale Broker-Dealer Supervisory and Sales Agreement
among [Broker-Dealer] and AXA Distributors, LLC, incorporated
herein by reference to Exhibit No. 3.(j) to Registration
Statement (File No. 333-05593) on Form N-4, filed on April 20,
2005.
II-3
(i) Amended and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable Life Insurance Company ("AXA Equitable"),
AXA Distributors and AXA Advisors dated July 15, 2002 is
incorporated herein by reference to Post-Effective Amendment
No. 25 to the EQ Advisor's Trust Registration Statement on Form
N-1A (File No. 333-17217 and 811-07953), filed on February 7,
2003.
(i) Amendment No. 1, dated May 2, 2003, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 28 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on February 10, 2004.
(ii) Amendment No. 2, dated July 9, 2004, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 35 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on October 15, 2004.
(iii) Amendment No. 3, dated October 1, 2004, to the Amended
and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 35 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on October 15, 2004.
(iv) Amendment No. 4, dated May 1, 2005, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 37 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on April 7, 2005.
(v) Amendment No. 5, dated September 30, 2005, to the
Amended and Restated Participation Agreement among EQ
Advisors Trust, AXA Equitable, AXA Distributors and AXA
Advisors dated July 15, 2002 incorporated herein by
reference to Post-Effective Amendment No. 44 to the EQ
Advisor's Trust Registration Statement (File No.
333-17217) on Form N-1A filed on April 5, 2006.
(vi) Amendment No. 6, dated August 1, 2006, to the Amended
and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 51 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on February 2, 2007.
(vii) Amendment No. 7, dated May 1, 2007, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 53 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on April 27, 2007.
(viii) Amendment No. 8, dated January 1, 2008, to the Amended
and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 56 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on December 27, 2007.
(ix) Amendment No. 9, dated May 1, 2008, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 61 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on February 13, 2009.
(x) Amendment No. 10, dated January 1, 2009, to the Amended
and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 64 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on March 16, 2009.
(xi) Amendment No. 11, dated May 1, 2009, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 67 to the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on April 15, 2009.
(xii) Amendment No. 12, dated September 29, 2009, to the
Amended and Restated Participation Agreement among EQ
Advisors Trust, AXA Equitable, AXA Distributors and AXA
Advisors dated July 15, 2002 incorporated herein by
reference to Post-Effective Amendment No. 70 to the EQ
Advisor's Trust Registration Statement (File No.
333-17217) on Form N-1A filed on January 21, 2010.
II-4
(xiii) Amendment No. 13, dated August 16, 2010, to the Amended
and Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
Post-Effective Amendment No. 77 To the EQ Advisor's
Trust Registration Statement (File No. 333-17217) on
Form N-1A filed on February 3, 2011.
(xiv) Amendment No. 14, dated December 15, 2010, to the
Amended and Restated Participation Agreement among EQ
Advisors Trust, AXA Equitable, AXA Distributors and AXA
Advisors dated July 15, 2002 incorporated herein by
reference to Post-Effective Amendment No. 77 To the EQ
Advisor's Trust Registration Statement (File No.
333-17217) on Form N-1A filed on February 3, 2011.
(xv) Amendment No. 15, dated June 7, 2011, to the Amended and
Restated Participation Agreement among EQ Advisors
Trust, AXA Equitable, AXA Distributors and AXA Advisors
dated July 15, 2002 incorporated herein by reference to
and/or previously filed with Post-Effective Amendment
No. 84 to EQ Advisor's Trust Registration Statement
(File No. 333-17217) on Form N-1A filed on
August 17, 2011.
(2) Not applicable
(4) (a) Form of Endorsement Applicable to Traditional IRA
(2010IRA-I-PCS), incorporated herein by reference to Exhibit 4
(a) to the Registration Statement (File No. 333-165395) on Form
N-4 filed on September 13, 2010.
(b) Form of Endorsement Applicable to Non-Qualified Contracts
(2010NQ-I-PCS), incorporated herein by reference to Exhibit 4
(b) to the Registration Statement (File No. 333-165395) on Form
N-4 filed on September 13, 2010.
(c) Form of Endorsement Applicable to Roth IRA Contracts
(2010ROTH-I-PCS), incorporated herein by reference to Exhibit 4
(c) to the Registration Statement (File No. 333-165395) on Form
N-4 filed on September 13, 2010.
(d) Form of Flexible Premium Deferred Variable and Index Linked
Annuity Contract (2010PCSBASE-I-A), incorporated herein by
reference to Exhibit 4 (d) to the Registration Statement (File
No. 333-165395) on Form N-4 filed on September 13, 2010.
(e) Form of Data Page (Part A - Personal Data) (2010PCSDP),
incorporated herein by reference to Exhibit 4 (e) to the
Registration Statement (File No. 333-165395) on Form N-4 filed
on September 13, 2010 and refiled on August 30, 2012.
(f) Form of Data Page (Part C - Charges) (2010PCSDP-ADV),
incorporated herein by reference to Exhibit 4 (f) to the
Registration Statement (File No. 333-165395) on Form N-4 filed
on September 13, 2010.
(g) Form of Data Page (Part C - Charges) (2010PCSDP-B),
incorporated herein by reference to Exhibit 4 (g) to the
Registration Statement (File No. 333-165395) on Form N-4 filed
on September 13, 2010 and refiled on August 30, 2012.
(h) Form of Data Page (Part C - Charges) (2010PCSDP-C),
incorporated herein by reference to Exhibit 4 (g)(ii) to the
Registration Statement (File No. 333-165395) on Form N-4 filed
on August 30, 2012.
(5) Opinion of Dodie Kent, Esq., Vice President and Associate
General Counsel, filed herewith.
(8) Not applicable.
(12) Not applicable.
(15) Not applicable.
(23) Consent of PricewaterhouseCoopers LLP, filed herewith.
(24) Powers of Attorney, filed herewith.
(25) Not applicable.
(26) Not applicable.
II-5
ITEM 17. UNDERTAKINGS
(a) 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:
(i) to include any prospectus required by
section 10(a)(3) of the Securities Act
of 1933;
(ii) to reflect in the prospectus any facts
or events arising after the effective
date of the registration statement (or
the most recent post-effective
amendment thereof) which, individually
or in the aggregate represent a
fundamental change in the information
set forth in the registration
statement. Notwithstanding the
foregoing, any increase or decrease in
volume of securities offered (if the
total dollar value of securities
offered would not exceed that which was
registered) and any deviation from the
low or high end of the estimated
maximum offering range may be reflected
in the form of prospectus filed with
the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in
volume and price represent no more than
20% change in the maximum aggregate
offering price set forth in the
"Calculation of Registration Fee" table
in the effective registration statement;
(iii)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;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of this
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 the purpose of determining
liability under the Securities Act of 1933 to
any purchaser, each prospectus filed
II-6
pursuant to Rule 424(b) as part of a
registration statement relating to an
offering, other than registration statements
relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in
the registration statement as of the date it
is first used after effectiveness. Provided,
however, that no statement made in a
registration statement or prospectus that is
part of the registration statement or made in
a document incorporated or deemed
incorporated by reference into the
registration statement or prospectus that is
part of the registration statement will, as
to a purchaser with a time of contract of
sale prior to such first use, supersede or
modify any statement that was made in the
registration statement or prospectus that was
part of the registration statement or made in
any such document immediately prior to such
date of first use.
(5) That, for the purpose of determining
liability of the Registrant under the
Securities Act of 1933 to any purchaser in
the initial distribution of the securities:
The undersigned Registrant undertakes that in
a primary offering of securities of the
undersigned Registrant pursuant to this
registration statement, regardless of the
underwriting method used to sell the
securities to the purchaser, if the
securities are offered or sold to such
purchaser by means of any of the following
communications, the undersigned Registrant
will be a seller to the purchaser and will be
considered to offer or sell such securities
to such purchaser: (i) Any preliminary
prospectus or prospectus of the undersigned
Registrant relating to the offering required
to be filed pursuant to Rule 424; (ii) Any
free writing prospectus relating to the
offering prepared by or on behalf of the
undersigned Registrant or used or referred to
by the undersigned Registrant; (iii) The
portion of any other free writing prospectus
relating to the offering containing material
information about the undersigned Registrant
or its securities provided by or on behalf of
the undersigned Registrant; and (iv) Any
other communication that is an offer in the
offering made by the undersigned Registrant
to the purchaser.
(b) The undersigned registrant hereby undertakes 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 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-7
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
II-8
SIGNATURES
Pursuant to the requirements 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
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York, on
this 31st day of August, 2012.
AXA EQUITABLE LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Dodie Kent
-----------------------------------
Dodie Kent
Vice President and Associate General
Counsel
AXA Equitable Life Insurance Company
As required by the Securities Act of 1933, this amendment to the
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
*Mark Pearson Chairman of the Board,
Chief Executive Officer and
Director
PRINCIPAL FINANCIAL OFFICER:
*Anders Malmstrom Senior Executive Vice
President, and Chief
Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
*Andrea M. Nitzan Executive Vice President
(acting Principal Accounting
Officer)
*DIRECTORS:
Mark Pearson Danny L. Hale Ramon de Oliveira
Henri de Castries Anthony J. Hamilton Bertram L. Scott
Denis Duverne Peter S. Kraus Lorie A. Slutsky
Charlynn Goins Andrew J. McMahon Ezra Suleiman
Barbara Fallon-Walsh Richard C. Vaughan
*By: /s/ Dodie Kent
-------------------------
Dodie Kent
Attorney-in-Fact
August 31, 2012
EXHIBIT INDEX
EXHIBIT NO. TAG VALUE
5 Opinion and Consent of Dodie Kent EX-5
23 Consent of PricewaterhouseCoopers LLP EX-23
24 Powers of Attorney EX-24