The Guardian
The Guardian Insurance & Annuity Company, Inc.
A Stock Company Incorporated in the State of Delaware
Customer Service Office:
PO Box 26280
Lehigh VAlley, PA 18002-6280
Executive Office:
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
The Guardian Insurance & Annuity Company, Inc. (the Company) will pay
the benefits provided by this Contract in accordance with its provisions.
This Contract is issued by the Company at its Customer Service Office.
/s/ Xxxxxx Xxxx /s/ Xxxxxx X. Xxxxxxx
--------------- ---------------------
Secretary President
Flexible Deposits may be made under this Contract. Benefits depend,
among other things, on the number and value of Units and the annuity
payout option elected.
THE VALUES PROVIDED BY THIS CONTRACT THAT ARE
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE
ACCOUNT ARE VARIABLE, MAY INCREASE OR DECREASE
AND ARE NOT GUARANTEED. SEE SECTION 4, "INVESTMENT
VALUE" ON PAGE 9 FOR AN EXPLANATION OF THE VARIABLE
VALUES PROVIDED UNDER THIS CONTRACT.
WITHDRAWALS FROM THE FIXED RATE INVESTMENT OPTION
MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT. SEE
SECTION 10.6, "MARKET VALUE ADJUSTMENT" ON PAGE 20
FOR AN EXPLANATION.
Flexible Deposit Group Variable and Fixed Annuity Contract
Providing Fixed Annuity Options
Non-participating - No dividends payable
Unallocated
TABLE OF CONTENTS
Page
CONTRACT DATA PAGE 4
1. DEFINITIONS 5
2. FIXED RATE INVESTMENT OPTION 7
2.1 General 7
2.2 Declaration of Interest Rates 7
2.3 Interest Credited 7
3. VARIABLE INVESTMENT OPTIONS 8
3.1 General 8
3.2 The Separate Account 8
3.3 Variable Investment Options 8
4. INVESTMENT VALUE 9
4.1 Calculation of Investment Value 9
4.2 Unit Calculation 9
4.3 Unit Value for a Variable Investment
Option 9
4.4 Net Investment Factor 10
4.5 Unit Value for the Fixed Rate
Investment Option 10
5. DEPOSITS 11
6. EXCHANGES 12
7. BENEFIT WITHDRAWALS 13
7.1 General 13
7.2 Payment of Benefit Withdrawals 13
8. OTHER WITHDRAWALS 14
8.1 General 14
8.2 Other Withdrawals from the Variable
Investment Options 14
8.3 Other Withdrawals from the Fixed
Rate Investment Option 14
8.3.1 Lump Sum Payment Method 15
8.3.2 Installment Payment Method 15
9. ANNUITY BENEFIT 16
9.1 General 16
9.2 Annuity Payout Options 16
9.3 Annuity Payments 17
9.4 Change of Beneficiary 17
9.5 Contingent Beneficiary 17
9.6 General Provisions of Annuity
Payout Options 18
10. CHARGES AND ADJUSTMENTS 19
10.1 Asset Charge 19
10.2 Contract Charge 19
10.3 Contingent Deferred Charge 19
10.4 Service Charge 19
10.5 Expense Adjustment 19
10.6 Market Value Adjustment 20
10.7 Plan Expense 20
10.8 Annuity and Other Taxes 20
11. GENERAL PROVISIONS 21
11.1 The Contract 21
11.2 Termination of the Contract 21
11.3 Rights Reserved by the Company 22
11.4 Age 22
11.5 Proof of Age and Survival 23
11.6 Information Provided by the
Contractowner 23
11.7 Elections Under the Contract 23
11.8 Assignment 23
11.9 Facility of Payment 24
11.10 Payments 24
11.11 Nonparticipating 24
11.12 Ownership of Assets 24
11.13 Deferment 24
11.14 Reports to the Contractowner 24
CONTRACT DATA PAGE
CONTRACTOWNER: Access Pharmaceuticals, Inc. 401(K) Savings Plan
CONTRACT NUMBER: 602250 CONTRACT DATE: December 01, 1998
Fixed Rate Investment Options (see Section 2) None
Maximum Exchange Factor: N/A Maximum Allocation: N/A
Variable Investment Options (see Section 3)
See Addendum
Asset Charge * (see Section 10.1) Contingent Deferred Charge
Daily Asset Charge: 000040016 (1.45% annually) (see Section 10.3)
Asset Charge Schedule
Contract Year %
------------- -----
Contract Investment Value Daily Asset Charge 1 2.50%
------------------------- ------------------
$0 - $250,000 0.000040016 2 2.25%
$250,001 - $500,000 0.000037238 3 1.75%
$500,001 - $750,000 0.000033075 4 1.50%
$750,001 - $1,000,000 0.000030304 5 1.25%
$1,000,001 - $1,500,000 0.000028919 6 0.75%
$1,500,001 - $2,000,000 0.000027535 7 & Later 0.00%
$2,000,001 - $3,000,000 0.000026151
$3,000,001 - $4,500,000 0.000024769
$4,500,001 - $6,000,000 0.000023387
$6,000,001 - $7,500,000 0.000022006
$7,500,001 - $10,000,000 0.000020625
$10,000,001 - $15,000,000 0.000019245
$15,000,001 + 0.000017866
* Prior to the first Contract Anniversary, and every six month
anniversary thereafter, the Daily Asset Charge will be reviewed and, if
necessary, adjusted, based on the Contract's average Daily Investment
Value for the next-to-last full calendar month preceding such anniversary
date, in accordance with the Asset Charge Schedule shown above. Any
change to the Daily Asset Charge will be effective at the beginning of
the second Contract Year and every six months thereafter, if applicable.
Notification will be sent to the Contractowner after any change is
determined.
Contract Charge: $850, due on the second Contract Anniversary and
each Contract Anniversary thereafter, or upon the effective date of
Contract termination, where this Contract's Investment Value on such
date is less than $85,000, to be charged as described in Section 10.2.
Deposits: credited within 3 Business Days, as described in Section 5.
Exchanges: executed within 3 Business Days, as described in Section 6.
Benefit Withdrawals: disbursed within 5 Business Days, as described in
Section 7.
Expense Adjustment: None
1. DEFINITIONS
Annuitant: A Participant who is entitled to receive annuity payments
under this Contract.
Annuity Commencement Date: The date on which monthly annuity
payments to an Annuitant begin. This date may be the first day of any
calendar month following a Participant's 50th birthday, but may not be
later than the Participant's 85th birthday.
Annuity Period: The period during which an Annuitant receives annuity
payments. The Annuity Period begins on the Annuity Commencement
date.
Business Day: A day on which the New York Stock Exchange, the
Company and any other financial institution required to process
transactions under this Contract are open for business. Each Business
Day ends at 3PM Eastern Time.
Calendar Year: Any period of twelve (12) consecutive months beginning
on January 1st and ending on December 31st.
Company: The Guardian Insurance & Annuity Company, Inc.
Competing Investment Option: Any type of investment marketed by a
financial institution which includes in its terms and conditions a
guarantee of principal and interest, any money market mutual fund, any
money market investment, any investment fund that consists primarily
of investments in short-term bonds and any other fund determined by the
Company to be a competing fund.
Contract Anniversary: The annual anniversary of this Contract measured
from the Contract Date.
Contract Data Page: Page 4 of this Contract, which sets forth certain
specific information with respect to this Contract.
Contract Date: The effective date of this Contract as shown on the
Contract Data Page.
Contract Year. Any period of twelve (12) consecutive months that begins
on the Contract Date or on any Contract Anniversary.
Contractowner. The owner of this contract as shown on the Contract
Data Page.
Deposit: A payment into this Contract, which is applied net of any
applicable annuity taxes, to purchase Units within this Contract.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder, and successor
provisions thereto.
Exchange: The movement, within this Contract, of all or a portion of the
Investment Value of an Investment Option to another Investment
Option(s). Each Exchange consists of the offsetting cancellation and
purchase of Units of equivalent Investment Value executed on the same
Valuation Date.
Fixed Rate Investment Option: An Investment Option to which Deposits
and Exchanges may be allocated. This Investment Option pays fixed
rates of interest for specified Interest Rate Periods. Interest rates may
fluctuate from one Interest Rate Period to another.
2. FIXED RATE INVESTMENT OPTION
2.1 General
Fund: A registered management investment company, a mutual fund or
a separate investment portfolio of a mutual fund in which a Variable
Investment Option invests. Each Fund is managed by an investment
adviser registered under the Investment Advisers Act of 1940.
Good Order. Notice from the Contractowner, or the Contractowner's
authorized agent, received at the Customer Service Office in a format
satisfactory to the Company, that includes all information required by the
Company to process a transaction under this Contract.
Interest Rates Period: The period, as shown on the Contract Data Page,
during which a specified effective annual interest rate for the Fixed Rate
Investment Option is applicable.
Internal Revenue Code: The Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder, and successor
provisions thereto.
Investment Option: Each Variable Investment Option and/or the Fixed
Rate Investment Option selected by the Contractowner under this
Contract.
Investment Value: The dollar value of Units credited to this Contract as
of any Valuation Date.
Maximum Allocation: As shown on the Contract Data Page and
discussed in Section 5 and 6.
Maximum Exchange Factor. As shown on the Contract Data Page and
discussed in Section 6.
Participant. An eligible employee, as determined by the Contractowner,
who participates in the Plan.
Plan: A pension or profit-sharing plan that qualifies under Section 401(a)
of the Internal Revenue Code. This Contract is issued in connection with
a Plan. Such Plan is not a part of this Contract.
Separate Account. The Guardian Separate Account L, which is a
separate investment account established by the Company under the laws
of the state of Delaware. The assets of the Separate Account are held
separate from the Company's other assets and are not part of the
Company's general account.
Unit: A measurement used to establish the value of the Contractowner's
interest under this Contract.
Valuation Date: A date on which the Unit values of the Investment
Options are determined. Unit values are determined on each day that the
New York Stock Exchange is open for business. Each Valuation Date
ends at the time the New York Stock Exchange
closes.
Variable Investment Option: An Investment Option, which invests in
shares of a Fund, to which Deposits and Exchanges may be allocated
and for which Units are separately maintained.
Withdrawal: Cancellation from this Contract of all or a portion of the
Units credited to Investment Options under this Contract. Withdrawals
include, but are not limited to, Benefit Withdrawals, as described in
Section 7, and Other Withdrawals, as described in Section 8.
Withdrawal Date: The Business Day on which Units are cancelled in
order to execute a Withdrawal.
2. FIXED RATE INVESTMENT OPTION
2.1 General
The Contractowner may elect the Fixed Rate Investment Option as an
Investment Option for this Contract. The Company will credit interest
on Deposits, as described in Section 5, and Exchanges, as described
in Section 6, allocated to the Fixed Rate Investment Option, as
described below. Other Withdrawals from the Fixed Rate Investment
Option, as described in Section 8, may be subject to a Market Value
Adjustment, as described in Section 10.6.
2.2 Declaration of Interest Rates
Effective with the Contract Date, the Company establishes an initial
Interest Rate Period and the subsequent Interest Rate Period, declares
an effective annual interest rate for the initial Interest Rate Period and
sets forth a minimum effective annual interest rate for the subsequent
Interest Rate Period. Effective annual interest rates and Interest Rate
Periods are shown on the Contract Data Page.
Prior to the end of the initial Interest Rate Period, the Company will
declare an effective annual interest rate for the subsequent Interest
Rate Period. The interest rate for such period will not be less than the
minimum interest rate shown on the Contract Data Page.
Prior to the end of each subsequent Interest Rate Period, the Company
will establish the next subsequent Interest Rate Period and will declare
the effective annual interest rate applicable to such period. Interest
rates declared by the Company are subject to the Company's
discretion and are based on the investment experience of the assets
held in the Company's general account for this Contract and all
financial activity of this Contract.
The Company will provide prior notice to the Contractowner of the
applicable interest rates and Interest Rate Periods.
2.3 Interest Credited
Interest is credited to amounts allocated to the Fixed Rate Investment
Option at a rate which, when compounded daily, equals the applicable
effective annual interest rate.
The effective annual interest rate credited on the portion of the
Investment Value which is allocated to the Fixed Rate Investment
Option may fluctuate from Interest Rate Period to Interest Rate
Period, but will not fall below the minimum guaranteed effective
annual rate of 3.0%.
3. VARIABLE INVESTMENT OPTIONS
3.1 General
Each Variable Investment Option invests in shares of a Fund. The
Contractowner may allocated Deposits, as described in Section 5, and
request Exchanges, as described in Section 6, into the Variable
Investment Options shown on the Contract Data Page.
3.2 The Separate Account
The Separate Account is a separate investment account established by the
Company under the laws of the state of Delaware. It is subject to the
laws of the jurisdiction in which this Contract is delivered. The Separate
Account is used to provide values and benefits on a variable basis only.
The Company owns the assets in the Separate Account. The assets in the
Separate Account are kept separate from:
* the Company's general account; and
* the Company's other separate accounts.
Assets equal to the reserves and other liabilities of the Separate Account
will not be charged with liabilities that arise from any other business the
Company may conduct. The Company may transfer assets in excess of
the reserves and liabilities of the Separate Account to the Company's
general account. Xxxxxx and realized and unrealized gains and losses
from assets in each Variable Investment Option of the Separate Account
are credited to or charged against such Variable Investment Option
without regard to income and realized and unrealized gains and losses in
the Separate Account's other Variable Investment Options or the
Company's other investment accounts.
3.3 Variable Investment Options
The Separate Account consists of Variable Investment Options. Each
Variable Investment Option of the Separate Account invests in shares of
a Fund.
The Company reserves the right to take certain actions deemed to be in
the best interests of the Contractowner and appropriate to carry out the
purpose of this Contract, only when permitted by applicable law. Details
of any such actions will be filed with any regulatory authority where
required and will be subject to any required approvals. Examples of the
actions the Company may choose to take are:
* transferring any assets from a Variable Investment Option:
* into another Variable Investment Option; or
* into one or more separate accounts; or
* into the Company's general account;
* adding, combining or removing Variable Investment Options in the
Separate Account;
* substituting, for shares of a Fund attributable to the Investment Value
held in any Variable Investment Option, the shares of another class of
shares issued by the Fund into which such Variable Investment Option
invests or the shares of another investment company or any other
investment permitted by law.
The Company will notify the Contractowner if any of these actions result
in a material change in the underlying investments of a Variable
Investment Option to which any part of the Investment Value may be
allocated. With six (6) months of such notice, the Contractowner may
effect an Exchange of any Investment Value allocated to the affected
Variable Investment Option to another Variable Investment Option
available under this Contract without being subject to any charges or
limitations otherwise imposed by this Contract.
4. INVESTMENT VALUE
4.1 Calculation of Investment Value
The dollar value of all the Units credited to this Contract, as of any
Valuation Date, is the Investment Value. The Investment Value for a
particular Investment Option is determined by multiplying (a) by (b),
where:
(a) is the number of Units credited to this Contract for that particular
Investment Option; and
(b) is the applicable Unit value for this Contract for the current
Valuation Date, as described in Sections 4.3 and 4.5.
4.2 Unit Calculation
The number of Units purchased in each specified Investment Option as
the result of a Deposit or an Exchange is determined by dividing (a) by
(b), where;
(a) is the dollar amount deposited or exchanged to the specified
Investment Option;
(b) is the Unit value, as defined in Sections 4.3 and 4.5, of the specified
Investment Option as of the Valuation Date on which the Deposit is
credited or the Exchange is executed.
The number of Units cancelled in each specified Investment Option as
the result of a Withdrawal, Exchange or applicable charges, as described
in Section 10, is determined by dividing (a) by (b), where:
(a) is the dollar amount withdrawn from the specified Investment Option;
(b) is the Unit value, as defined in Section 4.3 and 4.5, of the specified
Investment Option as of the Valuation Date on which the Withdrawal,
Exchange or applicable charge is executed.
4.3 Unit Value for a Variable Investment Option
The Unit Value of each Variable Investment Option of the Separate
Account was established at $10.00 as of the date operations began for
that Variable Investment Option. The Unit value for this Contract for
any Valuation Date thereafter is determined by multiplying (a) by (b),
where:
(a) is the Unit value for this Contract for the immediately preceding
Valuation Date; and
(b) is the Net Investment Factor, as described Section 4.4.
The Unit value of each Variable Investment Option will depend on the
investment experience of the Variable Investment Option. This value
may increase or decrease and may vary from on Valuation Date to the
next.
4.4 Net Investment Factor
The Net Investment Factor is used to calculate the Unit value of a
Variable Investment Option for a Valuation Date. The Net Investment
Factor is determined by dividing the sum of (a) and (b) by (c), and
subtracting (d) from the result, where:
(a) is the net asset value of a share of a Fund held in the applicable
Variable Investment Option, determined as of the end of the then
current Valuation Date;
(b) is the per share amount of any dividend and other distributions made
by the Fund since the immediately preceding Valuation Date;
(c) is the net asset value of the particular Fund share, determined as of
the end of the immediately preceding Valuation Date; and
(d) the applicable Daily Asset Charge for this Contract, as described in
Section 10.1, for the number of calendar days since the last
Valuation Date.
The Net Investment Factor may be less than 1.00 since it is related to
the variable investment experience of the Variable Investment Option.
4.5 Unit Value for the Fixed Rate Investment Option
The Unit value of the Fixed Rate Investment Option was established at
$10.00 as of the date operations began for that option. Thereafter, the
Unit value increases daily at the rate of interest as described in Section 2.
5. DEPOSITS
While this Contract is in force, the Contractowner may remit Deposits
to the Company at its Customer Service Office, subject to the following:
* Deposits must be accompanied by allocation instructions in Good
Order.
* Deposits, less any applicable annuity taxes, will be applied to
purchase Units of Investment Options in accordance with the
Contractowner's allocation instructions, as described in Section 4.2,
within the number of Business Days stated on the Contract Data Page
following the receipt of such Deposits and the allocation instructions in
Good Order.
* The sum of all Deposits and Exchanges into the Fixed Rate
Investment Option in any Contract Year may not exceed the Maximum
Allocation, as shown on the Contract Data Page, without the written
consent of the Company.
* The Company reserves the right to limit the number of Investment
Options to which Deposits may be allocated under this Contract.
* Deposits will not be accepted after the Contractowner notifies the
Company that the Plan has been or will be terminated. Deposits will not
be accepted after either the Contractowner or the Company notifies the
other party of a Contract termination, in accordance with Section 11.2.
* Deposits into the Fixed Rate Investment Option will not be permitted
after termination of the Fixed Rate Investment Option as an Investment
Option, as described in Section 8.3.
6. EXCHANGES
While this Contract is in force, the Contractowner may request
Exchanges from a Variable Investment Option to another Variable
Investment Option or to the Fixed Rate Investment Option or from the
Fixed Rate Investment Option to a Variable Investment Option, subject
to the following:
* Requests for Exchanges must be received by the Company at its
Customer Service Office in Good Order.
* Exchanges will be executed, as described in Section 4.2, within the
number of Business Days stated on the Contract Data Page following the
receipt of the request in Good Order.
* The sum of all Deposits and Exchanges into the Fixed Rate
Investment Option in any Contract Year may not exceed the Maximum
Allocation, as shown on the Contract Data Page, without the written
consent of the Company.
* Exchanges from the Fixed Rate Investment Option to the Variable
Investment Options on any Business Day are limited to (a) minus (b)
where:
a)Is the amount determined by multiplying the Maximum Exchange
Factor, as shown on the Contract Data Page, by the Investment Value
allocated to the Fixed Rate Investment Option on the Valuation Date that
the Exchange is executed; and
is the sum of all Exchanges from the Fixed Rate Investment Option
during the immediately preceding twelve (12) month period prior to such
Valuation Date.
b)Exchanges from the Fixed Rate Investment Option to any Competing
Investment Option will not be permitted under this Contract.
* The Company reserves the right to limit the frequency of Exchanges
under this Contract. The Contractowner will be permitted, at a
minimum, to execute Exchanges at least once every thirty (30) days.
* Exchanges will not be permitted after the Contractowner notifies the
Company that the Plan has been or will be terminated. Exchanges will
not be permitted after either the Contractowner or the Company notifies
the other party of a Contract termination, in accordance with Section
11.2.
* Exchanges into the Fixed Rate Investment Option will not be
permitted after termination of the Fixed Rate Investment Option as an
Investment Option, as described in Section 8.3.
7. BENEFIT WITHDRAWALS
7.1 General
Xxxxxxxxxxx requested for the following reasons will be considered
Benefit Withdrawals for the purposes of this Contract:
Termination of Participant employment for reasons other than an
employer's bankruptcy, merger or acquisition by a successor company,
or any other employer-initiated event that results in a reduction in the
number of Participants with Plan assets invested under this Contract by
more than 15% of the number of such Participants at the inception of
this Contract;
* participant retirement, as defined in the Plan;
* participant death;
* participant financial hardship, as defined in the Plan;
* return of excess contributions pursuant to Sections 401(k)(8) or
401(m)(6) of the Internal Revenue Code;
* minimum distribution pursuant to Section 401(a)(9) of the Internal
Revenue Code;
* participant loan, as defined in the Plan;
* participant withdrawal of after-tax contributions, as permitted by the
Plan;
* qualified domestic relations order, as defined in Section 414(p) of the
Internal Revenue Code;
* purchase of an annuity benefit on behalf of a Participant in
accordance with Section 9 of this Contract
Xxxxxxxxxxx requested for any other reason will be considered Other
Withdrawals, as described in Section 8, for the purposes of this
Contract.
7.2 Payment of Benefit Withdrawals
The Contractowner may request the payment of Benefit Withdrawals,
subject to the following:
* requests for payment of Benefit Withdrawals must be received by the
Company at its Customer Service Office in Good Order and must
include certification from the Contractowner that the withdrawal for such
payment qualifies as a Benefit Withdrawal pursuant to Section 7.1. The
Company reserves the right to verify that such withdrawal qualifies as
a Benefit Withdrawal and the Contractowner shall promptly provide such
verification.
* if the Plan offers one or more Competing Investment Options outside
this Contract, and the Contractowner requests that a portion of any
Benefit Withdrawal payment be made from the Fixed Rate Investment
Option, the Contractowner must withdraw money on a pro-rate basis
from the Fixed Rate Investment Option of this Contract and from any
other Competing Investment Options.
* If the Contractowner requests a Benefit Withdrawal for the purpose of
a Participant loan on behalf of a Participant who has any Investment
Value in the Fixed Rate Investment Option, the Contractowner may
withdraw no more than a pro-rata portion from the Fixed Rate
Investment Option. Such pro-rata portion will be calculated by
multiplying the withdrawal amount requested by the ratio of the
Participant's Investment Value in the Fixed Rate Investment Option to
the Participant's total Investment Value under this Contract.
* payment of a Benefit Withdrawal will result in the cancellation of
Units from the investment Options specified in the request as of the
Withdrawal Date, as described in Section 4.2.
* payment will be made within the number of Business Days stated on
the Contract Data page following the receipt of the request in Good
Order.
* Benefit Withdrawal payments are not subject to the Contingent Deferred
Charge, as described in Section 10.3, or to the Market Value
Adjustment, as described in Section 10.6.
8. OTHER WITHDRAWALS
8.1 General
Withdrawals for reasons other than those listed in Section 7.1 will be
considered Other Withdrawals for the purposes of this Contract.
Examples of reasons for Other Withdrawals include, but are not limited
to, the following:
* termination of this Contract, as described in Section 11.2;
* transfer of the entire Investment Value allocated to the Fixed Rate
Investment Option, or a transfer of all or a portion of the Investment
Value allocated to one or more of the Variable Investment Options, to
any funding vehicle outside of this Contract;
plan merger,
* termination of Participant employment due to an employer's
bankruptcy, merger, or acquisition by a successor company, or any other
employer-initiated event that results in a reduction in the number of
Participants with Plan assets invested under this Contract by more than
15% of the number of such Participants at the inception of this Contract.
8.2 Other Withdrawals from the Variable Investment Options
The Contractowner may request an Other Withdrawal of all or a portion
of the Investment Value allocated to one or more Variable Investment
Options, subject to the following:
* requests for payment of Other Withdrawals must be received by the
Company at its Customer Service Office in Good Order and must
include a description of the purpose of the Other Withdrawal.
* payment of Other Withdrawals will result in the cancellation of Units
from the Variable Investment Options specified in the request as of the
Withdrawal Date, as described in Section 4.2.
* payment of Other Withdrawals from a Variable Investment Option
will be reduced by any applicable Contingent Deferred Charge and other
charges, as described in Section 10.
* with the exception of Contract termination, payment of Other
Withdrawals will be made within ten (10) Business Days following the
receipt of the request in Good Order. payment of an Other Withdrawal
that is due to a Contract termination will be made pursuant to Section
11.2.
8.3 Other Withdrawals from the Fixed Rate Investment Option
The Contractowner may request an Other Withdrawal of all or a portion
of the Investment Value allocated to the Fixed Rate Investment Option,
subject to the following:
* Requests for payment of Other Withdrawals must be received by the
Company at its Customer Service Office in Good Order and must
include a description of the purpose of the Other Withdrawal.
* A request for payment of the entire Investment Value allocated to the
Fixed Rate Investment Option will result in the termination of the Fixed
Rate Investment Option as an Investment Option for this Contract.
Effective upon receipt by the Company of any such request, the
Company will not accept Deposits into or permit Exchanges to or from
the Fixed Rate Investment Option. Any such request must specify
whether the method of payment is to be the Lump Sum Payment Method
or the Installment Payment Method, as described in Sections 8.3.1 and
8.3.2.
* Payment of a portion of the Investment Value allocated to the Fixed
Rate Investment Option will be disbursed pursuant to the Lump Sum
Payment Method, as described in Section 8.3.1. The Company will not
permit payment of a portion of the Investment Value for the purpose of
transferring such amounts to any funding vehicle outside this Contract.
* Payments disbursed pursuant to the Lump Sum Payment Method will
be subject to a Market Value Adjustment, as described in Section 10.6.
8.3.1 Lump Sum Payment Method
* Other Withdrawal of the entire Investment Value allocated to the
Fixed Rate Investment Option may be disbursed pursuant to the Lump
Sum Payment Method if so requested by the Contractowner. Other
Withdrawals of a portion of the Investment Value allocated to the Fixed
Rate Investment Option must be disbursed pursuant to the Lump Sum
Payment Method.
* Payment of an Other Withdrawal under this method will result in the
cancellation of Units of the Fixed Rate Investment Option, as described
in Section 4.2, on the Withdrawal Date.
* The amount of the lump sum payment will be reduced by any
applicable Contingent Deferred Charge, Market Value Adjustment and
other charges, as described in Section 10.
* The lump sum payment will be disbursed within sixty (60) days
following the receipt of the request in Good Order.
8.3.2 Installment Payment Method
* Other Withdrawals of the entire Investment Value allocated to the
Fixed Rate Investment Option may be disbursed pursuant to the
Installment Payment Method if so requested by the Contractowner.
* Pursuant to this method, all of the Units in the Fixed Rate Investment
Option will be cancelled, as described in Section 4.2, on the Withdrawal
Date. The dollar value of these Units becomes the initial installment
balance.
* The installment balance will be disbursed in six installment payments
over a five year installment payout period. The initial payment will be
made within sixty (60) days following the receipt of the request in Good
Order. Successive installment payments will be made on the annual
anniversary of the first installment payment for the remainder of the
installment payout period.
* The amount of each installment payment will be determined by
dividing the then current installment balance by the number of
installment payments then remaining before the current payment. The
installment balance will be reduced by any Benefit Withdrawals
disbursed during the installment payout period.
* Each installment payment will be reduced by any applicable
Contingent Deferred Charge and other charges, as described in Section
10. Installment payments are not subject to the Market Value
Adjustment, as described in Section 10.6.
* Interest will be credited daily to the installment balance during the
installment payout period at an effective annual interest rate determined
by the Company. The effective annual interest rate will be determined
in a manner consistent with the Company's general practice in setting
interest rates for this Contract, less 1.5%.
9. ANNUITY BENEFIT
9.1 General
The Contractowner may direct the Company to apply a portion of this
Contract's Investment Value to provide monthly annuity payments for a
Participant. Annuity payments for a Participant begin on the Annuity
Commencement Date for such Participant, as stated by the
Contractowner, in accordance with the terms of the Plan and subject to
the following:
* this Contract must be in force in that date;
* the Participant must be living and must be between the ages of 50
and 85 on that date;
* the Contractowner must submit a request, received by the Company
in Good Order at least thirty days prior to the desired Annuity
Commencement Date, indicating that the purchase of an annuity for the
Participant is to be made. The request must contain instructions to the
Company indicating:
* the portion of the Investment Value to be applied to purchase the
annuity for the Participant;
* the Investment Option(s) from which Units must be cancelled in
order to purchase the annuity;
* beneficiary designation, if applicable; and
* the annuity payout option elected as specified in Section 9.2.
The Company will then issue a certificate to the Contractowner for
delivery to the Participant when an annuity benefit is provided for such
Participant. Each such certificate will set forth the amount and terms of
the annuity payments and any other benefits to which the Participant may
be entitled under this Contract during the Annuity Period.
9.2 Annuity Payout Options
* Option 1 - Life Annuity without Guaranteed Period: The Company
will make monthly fixed annuity payments for the lifetime of the
Annuitant. The Company does not guarantee a minimum number of
annuity payments.
* Option 2 - Life Annuity with Ten (10) Year Guaranteed Period: The
Company will make monthly fixed annuity payments during the lifetime
of the Annuitant. Payments are guaranteed for a period of ten (10) years.
If the Annuitant dies sooner, payments will be made during the
remaining period to the beneficiary designated by the Annuitant. The
beneficiary may elect to be paid the present value of the then remaining
number of fixed annuity payments. If the beneficiary dies while
receiving such payments, the present value of the remaining number of
fixed annuity payments will be paid in one sum to the beneficiary's
estate. The present value of such annuity payments will be derived using
the interest rate which was used in computing the monthly payment.
If any designated beneficiary dies before the Annuitant, the interest of
that beneficiary will pass to the designated surviving beneficiary. If more
than one beneficiary survives the Annuitant, such interest will pass to the
surviving beneficiaries in proportion to their respective interest, unless
otherwise previously specified by the Annuitant. If no designated
beneficiary survives the Annuitant, and no other designation is provided,
the benefit provided under this annuity option will be paid in one sum
to the Annuitant's estate.
* Option 3 - Joint and Two-Thirds to Survivor Annuity. This option
requires the Annuitant to select a joint annuitant. The Company will
make monthly fixed annuity payments while the Annuitant and the joint
annuitant are living. When either the Annuitant or the joint annuitant
dies, the Company will continue to pay, for the lifetime of the survivor,
two-thirds of the amount of the payment in effect while both were living.
The Company does not guarantee a minimum number of annuity
payments under this option.
9.3 Annuity Payments
The Company begins making monthly annuity payments on the Annuity
Commencement Date. The Annuity Payout Option Table, shown on page
26, indicates the dollar amount of the guaranteed monthly annuity
payment which can be purchased with each $1,000 of the Investment
Value, less any applicable annuity taxes as described in Section 10.8,
applied by the Contractowner to purchase an annuity for the Participant.
All guaranteed monthly annuity payments are based on the age of the
Annuitant at the birthday nearest the Annuity Commencement Date and
the annuity payout option elected. The guaranteed monthly annuity
payment is determined by multiplying (a) by (b), where:
(a) is the amount shown for the Annuitant's age in the Annuity Payout
Option Table for the annuity payout option elected; and
(b) is the number of thousands of dollars of the Investment Value, less
any applicable annuity taxes, applied to purchase the annuity.
The Annuity Payout Option Table is based on:
* a blended 1983 Individual Annuity Mortality Table "a" projected
under Scale G factors; and
* an effective annual interest rate if 3%.
9.4 Change of Beneficiary
The Annuitant may change a beneficiary designated to receive benefits
under Option 2. Any change takes effect on the date the Company
receives the request in Good Order, whether or not the Annuitant is
living when the Company receives the signed request. However, the
change does not apply to any payments made or actions taken by the
Company before the request is received in Good Order.
9.5 Contingent Beneficiary
A numbered sequence may be used to name contingent beneficiaries for
Option 2. The primary beneficiary is the living person(s) designated by
the lowest number in the sequence.
9.6 General Provisions of Annuity Payout Options
* At least $3,500 must be applied under an annuity payout option for
any Annuitant. Proceeds of a lesser amount will be paid in one sum.
* If the monthly annuity payments are or become $100 or less, the
Company reserves the right to change the frequency of payments.
* The Company requires satisfactory proof of the age of the Annuitant,
and joint annuitant if applicable, on the date annuity payments begin.
* Unless the Company agrees otherwise, the annuity payout options
will be available only to a natural person entitled to receive proceeds.
* The Annuitant does not have the right to advance or assign payments
made under an annuity payout option.
* The Annuitant cannot make any change in the manner of payout,
except as provided in the election.
* To the extent permitted by law, the payments made under an annuity
payout option will not be subject to encumbrance, or to the claims of
creditors, or legal process.
10. CHARGES AND ADJUSTMENTS
10.1 Asset Charge
The Company assesses a Daily Asset Charge on the Investment Value of
each of the Variable Investment Options. The Daily Asset Charge,
shown on the Contract Data Page, is used to calculate the Net
Investment Factor, as described in Section 4.4.
The Company reserves the right to change the Asset Charge Schedule,
shown on the Contract Data Page, after the third Contract Year,
provided that the Company give the Contractowner at least sixty (60)
days advance written notice of any such change.
10.2 Contract Charge
The Contract Charge, if any, is shown on the Contract Data Page.
Assessment of the Contract Charge will result in the cancellation of
Units, as described in Section 4.2, on a pro-rata basis from the
Investment Value of all Investment Options under this Contract.
10.3 Contingent Deferred Charge
The Contingent Deferred Charge is equal to a percentage, shown on the
Contract Data Page, of the Investment Value withdrawn from this
Contract. The Contingent Deferred Charge may reduce the dollar amount
disbursed to the Contractowner pursuant to Other Withdrawals, as
described in Section 8.
10.4 Service Charge
If the Company performs services on behalf of the Contractowner in
addition to those which the Company is required to perform under the
terms of this Contract, charges for those services may be paid directly
by the Contractowner to the Company or may be deducted from the
Investment Value of this Contract, as specified by the Contractowner in
Good Order and agreed to by the Company. Charges for any such
services that remain outstanding more than ninety (90) days from the
date of invoice will be deducted on a pro-rata basis from the Investment
Value of all Investment Options under this Contract.
10.5 Expense Adjustment
The Expense Adjustment, if any, is shown on the Contract Data Page.
10.6 Market Value Adjustments
The Market Value Adjustment may reduce the dollar amount disbursed
to the Contractowner as an Other Withdrawal from the Fixed Rate
Investment Option pursuant to the Lump Sum Payment Method, as
described in Section 8.3.1. The Market Value Adjustment is equal to the
greater of zero or the product of (a) and (b), where:
(a) is 5 x ( (I - J) + .005),
where I is the interest rate which is applicable to the Fixed Rate
Investment Option for Contracts of the same class as this Contract that
are issued on the Withdrawal Date;
J is the interest rate then being credited to the Investment Value allocated
to the Fixed Rate Investment Option in this Contract on the Withdrawal
Date.
(b) is the amount of the Investment Value withdrawn from the Fixed
Rate Investment Option prior to the assessment of any applicable
Contingent Deferred Charge or other charges.
10.7 Plan Expense
Plan expenses may be paid from the Investment Value of this Contract,
pursuant to requests from the Contractowner received by the Company
at its Customer Service Office in Good Order, in a manner and dollar
amount agreed upon between Contractowner and the Company.
10.8 Annuity and Other Taxes
The Company will deduct from Deposits, or from the portion of the
Investment Value used to purchase an annuity for a Participant, any
applicable annuity taxes, as defined by the Company, levied by any state
or other government entity.
The Company reserves the right to deduct from the Investment Value of
the Variable Investment Options any applicable taxes imposed on the
investment earnings of the Variable Investment Options.
11. GENERAL PROVISIONS
11.1 The Contract
The entire Contract consists of this Contract, any attached endorsements,
and the attached copy of the application. The Company relies upon the
application in issuing this Contract. All statements in the application are
assumed to be true to the best knowledge and belief of the person(s)
making them. These statements are representations, not warranties. No
statement may be used to contest this Contract unless contained in the
application.
Only the President, a Vice President, or the Secretary of the Company
may make or modify this Contract, and then only in writing. No agent
is authorized to change this Contract or to waive any of the Company's
requirements; no agent may waive an answer to any question in the
application. The Company will not be bound by any promise or
statement made by any agent or other person except as stated above.
The Company is not a party to, nor bound by, the Plan or any other
document or agreement issued in connection with the Plan, other than
this Contract. The Company is not responsible for determining that the
Investment Value of this Contract is sufficient to provide the benefits
under this Plan. The provisions of this Contract govern with respect to
the Company's rights and obligations, and control over contrary
provisions of the Plan in that regard.
11.2 Termination of the Contract
The Company reserves the right to terminate this Contract upon the
occurrence of any of the following events:
* this Contract's Investment Value, at any time after the first Contract
Year, is less than $10,000;
* the Company determines that the Plan is no longer qualified under
Section 401(a) of the Internal Revenue Code, as now or hereafter
amended;
* the Plan is amended and the Company determines that the
amendment has an adverse effect on its obligations under this Contract;
* there has been a change in the administrative practices to which the
Plan adheres and the Company determines that the change has an adverse
effect on its obligations under this Contract;
* the Company determines that the Contractowner has failed to supply
the information necessary for the Company to carry out the terms of this
Contract, as described in Section 11.6; or
* the Plan is terminated.
The effective date of this Contract's termination due to the events
described above will not be later than sixty (60) days after written notice
of Contract termination is sent from the Company to the Contractowner.
The Contractowner may elect to terminate this Contract at any time by
providing the Company written notice in Good Order. The effective date
of such Contract termination will not be later than sixty (60) days after
receipt of such notice.
Effective on the date of receipt of notice of Contract termination, the
Company will prohibit Deposits, Exchanges, and Withdrawals, unless
otherwise agreed upon by both the Company and the Contractowner.
After the receipt of the notice of Contract termination and on or before
the effective date of Contract termination, the Company will:
* cancel all of the Units in the Variable Investment Options and
disburse the Investment Value in those Investment Options, reduced by
any applicable Contingent Deferred Charge and other charges as
described in Section 10; and
* cancel all of the Units in the Fixed Rate Investment Option and
disburse the Investment Value in the Fixed Rate Investment Option
pursuant to the method of payment requested by the Contractowner, as
described in Sections 8.3.1 and 8.3.2. If no method of payment is
requested, the Company will disburse the Investment Value pursuant to
the Lump Sum Payment Method as described in Section 8.3.1.
11.3 Rights Reserved by the Company
The Company reserves the right to take certain actions deemed to be in
the best interests of the Contractowner and appropriate to carry out the
purposes of this Contract, only when permitted by applicable law.
Examples of the actions the Company may choose to take are:
* operating the Separate Account in any form permitted by law;
* taking any action necessary to comply with or obtain and continue
any exemptions from the Investment Company Act of 1940;
* changing the way the Company deducts or collects charges under this
Contract, but without increasing the charges unless and to the extent
permitted by other provisions of this Contract;
* making any other necessary technical changes in this Contract in
order to conform with any action that the Company is permitted to take;
* adding to, eliminating, limiting, or suspending the Contractowner's
ability to allocate Deposits or Exchanges into any Investment Option.
The Company may at any time make any change in this Contract to the
extent that such change is required in order to make this Contract
conform with any law or any regulation issued by any governmental
authority to which the Company is subject.
The Company will provide written notice to the Contractowner of any
actions that result in a change to this Contract. To the extent practicable,
such notice shall be given prior to the effective date of any such
changes.
11.4 Age
If the age of an Annuitant or joint annuitant has been misstated, any
benefit payable under this Contract is that which the Investment Value
would have purchased at the correct age. Overpayments made by the
Company because of such misstatement, with interest at 6% a year,
compounded annually are to be charged against benefits falling due after
the adjustment. If underpayments are made by the Company because of
such misstatement, the Company is to pay the balance immediately, with
6% interest, compounded annually.
11.5 Proof of Age and Survival
The Company has the right to require satisfactory proof:
* of the age of the Annuitant or joint annuitant, and
* that an Annuitant, joint annuitant or beneficiary is living when a
payment is contingent upon the Annuitant's, joint annuitant's or
beneficiary's survival.
11.6 Information Provided by the Contractowner
The Contractowner must provide the Company with any information or
evidence that the Company may reasonably require in order to
administer this Contract. If the Contractowner cannot furnish any
required information, the Company may then request any person or
entity authorized by the Contractowner to furnish such information. The
Company is not liable for the fulfillment of any obligations dependent
upon the receipt of such information until the Company receives it in
Good Order. The Company reserves the right to audit the books and
records of the Plan to verify compliance with this Contract.
All communications to the Company, as required under this Contract,
must be in Good Order. The Contractowner must notify the Company
of the following events at least thirty (30) days prior to the effective date
of the event:
* any amendment or change to the Plan;
* any change in the administrative practices to which the Plan adheres;
* any change in the investments offered by the Plan;
* Plan termination;
* merger with another Plan for all or a class of Participants;
* merger, acquisition, consolidation or reorganization by any employer
that sponsors the Plan;
* any employer-initiated event that results in a reduction in the number
of Participants with Plan assets invested under this Contract by more
than 15% of the number of such Participants at the inception of this
Contract.
The Contractowner must notify the Company of the initiation of any
bankruptcy proceedings involving any employer that sponsors that Plan
within ten (10) days after the initiation of such event.
11.7 Elections Under the Contract
The Contractowner is responsible for providing the Company with
requests or instructions regarding elections to be made under this
Contract in Good Order. Elections include, but are not limited to
requests for Exchanges and Withdrawals and instructions for Deposit
allocations. The Company will be fully protected in dealing with the
Contractowner in all matters including accepting and applying Deposits
and making payments to, or on direction of, the Contractowner without
liability as to the application of such payments. The Contractowner may
only make requests for actions that are permitted under this Contract and
which comply with the terms of the Plan, the Internal Revenue Code and
ERISA. The Company does not assume any responsibility for such
compliance.
11.8 Assignment
This Contract and the benefits and rights provided under it may not be
transferred, sold, pledged as collateral or security for loans or assigned
to any person or entity except the Company.
11.9 Facility of Payment
If any payee under this Contract is a minor or is, in the Company's
judgment, otherwise legally incapable of personally receiving and giving
a valid receipt for any payment due the payee under this Contract, the
Company will make the payment to the legal guardian or conservator of
the payee, or to such other person(s) whom the Company has reason to
believe has assumed the custody and principal support of the payee. Such
payments completely discharge the Company's liability with respect to
the amount so paid.
11.10 Payments
All payments made by the Company to the Contractowner under this
Contract will be disbursed from the Company's Customer Service
Office. All payments made by the Contractowner to the Company under
this Contract will be payable at its Customer Service Office. All amounts
to be paid either to or by the Company will be paid in United States
dollars.
11.11 Nonparticipating
This Contract is not eligible for dividends and does not share in the
surplus earnings of the Company.
11.12 Ownership of Assets
The Company maintains ownership and control of its assets, including
all assets allocated to the Separate Account and the Fixed Rate
Investment Option.
11.13 Deferment
The Company ordinarily pays any Withdrawal within the number of days
described in Sections 7 and 8. However, when permitted by law, the
Company may defer payment of any-Withdrawal for up to six (6) months
after the request for such Withdrawal is received in Good Order. The
amount payable will be determined on the Withdrawal Date. Interest at
the rate of 3% will be paid on any amount deferred thirty (30) days or
more.
The Company may defer calculation or payment of any Withdrawal or
the Exchange of Units based on separate account performance if,
* the New York Stock Exchange is closed for trading or trading has
been suspended; or
* the Securities and Exchange Commission restricts trading or
determines that a state of emergency exists which may make such
calculation, payment, or Exchange reasonably impracticable.
11.14 Reports to the Contractowner
Within two months after the end of each Contract Year, or within any
other period agreed upon by the Company and the Contractowner, the
Company will provide a written report to the Contractowner. The report
will show the Investment Value of this Contract as of the end of the
previous Contract Year. The Company will also send appropriate
statements containing such information as may be required by applicable
laws, rules, and regulations.
ENDORSEMENT RIDER
Attached to and made part of Contract GVA 9000 TX
Investment Options Under This Contract
The following are available as investment options under this Contract:
1. Fixed Rate Investment Option
2. The Guardian Park Avenue Fund
3. The Guardian Investment Quality Bond Fund
4. The Guardian Asset Allocation Fund
5. The Guardian Cash Management Fund
6. The Guardian Xxxxxxx Xxxxxxx International Fund
7. The Guardian Xxxxxxx Xxxxxxx Emerging Markets Fund
8. The Guardian Park Avenue Small Cap Fund
9. Fidelity Advisor High Yield Bond Fund
10. Fidelity Advisor Equity Income Fund
11. Fidelity Advisor Growth Opportunities Fund
12. AIM Constellation Fund
13. AIM Value Fund
14. American Century: Value Fund
15. American Century: Twentieth Century Ultra Fund
16. American Century: Twentieth Century International Growth Fund
The Guardian Insurance & Annuity Company, Inc.
/s/ Xxxxxx Xxxx
---------------
Secretary
The Company's Customer Service Office
may be accessed by the Contractowner at
0-000-000-0000
during business hours:
to answer any inquiries concerning this Contract
or to provide assistance in resolving complaints.
