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Exhibit 10.1
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The Northwestern
Mutual Life Insurance Company agrees to pay the benefits
provided in this
contract, subject to its terms and conditions.
Signed at Milwaukee, Wisconsin on the Issue Date.
/s/ Edward J. Zore
/s/ Robert J. Berdan
--------------------
--------------------
President and CEO
Secretary
FLEXIBLE PAYMENT VARIABLE ANNUITY - ACCOUNT A
Net Purchase Payments accumulated
in a Separate Account, assets of which are
invested in shares of one or more
mutual funds, or Guaranteed Interest Fund.
Contract benefits payable in one sum or as variable
or guaranteed monthly income.
Variable Payment Plan benefits described in Section 11.
Participating.
AMOUNTS ALLOCATED TO THE SEPARATE ACCOUNT
DIVISIONS AND VARIABLE PAYMENTS
PROVIDED BY THIS CONTRACT ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT BUT ARE
VARIABLE AND MAY INCREASE OR DECREASE TO
REFLECT THE INVESTMENT EXPERIENCE OF
THE SEPARATE ACCOUNT.
Right To Return Contract. Please read this
contract carefully. The Owner may
return the contract for any reason within
ten days after receiving it. Return of
the contract is effective on the date
written notice of the return is delivered,
mailed or sent by telegram to either The
Northwestern Mutual Life Insurance
Company, 720 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202 or the agent who
sold the contract. If returned, the
contract will be cancelled and the Company
will refund the sum of (a) the difference
between the Purchase Payments paid and
the amounts, if any, allocated to the
Separate Account plus (b) the value of the
Accumulation Units of the Separate Account
on the effective date of return.
RR.V.A.(0803)
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[LOGO] Northwestern Mutual(TM)
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CONTRACT NUMBER 00 000 000
PRIMARY ANNUITANT John J Doe
ISSUE DATE
July 31, 2003
RR.V.A.FR.(0803)
SEX NEUTRAL FRONT
<PAGE>
TABLE OF CONTENTS
CONTRACT INFORMATION, INVESTMENT
ACCOUNTS
CHARGES AND FEES
MINIMUM PURCHASE PAYMENTS, ACCUMULATION
VALUE, PAYMENT PLANS
SECTION 1. GENERAL TERMS AND
DEFINITIONS
SECTION 2. SEPARATE ACCOUNT
. Separate Account
. Accumulation Units
. Net Investment
Factor
. Substitution and
Change
SECTION 3. GUARANTEED INTEREST FUND
. Guaranteed Interest
Fund
. Accumulation Value
. Transfer
Restrictions
. Maximum Guaranteed
Interest Fund Accumulation Value
. Table of Guaranteed
Values
SECTION 4. PURCHASE PAYMENTS, TRANSFERS,
WITHDRAWALS
. Payment of Purchase
Payments
. Application of
Purchase Payments
. Selection of
Investment Account for Purchase Payments
. Transfer of
Accumulation Value
. Withdrawals and Full
Surrender
. Effective Date
SECTION 5. BENEFITS
. Maturity Benefit
. Death Benefit if
Annuitant is an Owner
. Death Benefit if
Annuitant is not an Owner
SECTION 6. BENEFICIARIES AND CONTINGENT
ANNUITANTS
. Naming and Changing of
Beneficiaries
. Succession in Interest
of Beneficiaries
. Trustee as
Beneficiary
. General
. Naming and Changing a
Contingent Annuitant
SECTION 7. CHARGES AND FEES
. Sales Load and Premium
Taxes
. Contract Fee
SECTION 8. OWNERSHIP
. The Owner
. Transfer of
Ownership
. Naming and Changing a
Successor Owner
. Collateral
Assignment
. Reports to Owners
. Transferability
Restrictions
RR.V.A.FR.(0803)
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SECTION 9. THE CONTRACT
. Guarantees
. Valuation of Separate
Account Assets
. Determination of
Separate Account Values
. Deferment of Benefit
Payments
. Dividends
. Incontestability
. Misstatements
. Entire Contract;
Changes
. Termination of
Contract
SECTION 10. PAYMENT OF CONTRACT
BENEFITS
. Payment of
Benefits
. Death Benefit
. Effective Date for
Payment Plan
. Payment Plan
Elections
SECTION 11. PAYMENT PLANS
. Description of Payment
Plans
. Allocation of
Benefits
. Annuity Units under
Variable Payment Plans
. Payments under
Variable Payment Plans
. Transfers Involving
Variable Payment Plans
. Withdrawal under
Payment Plans
. Naming and Changing of
Beneficiaries under Payment Plans
. Succession in Interest
of Beneficiaries under Payment Plans
. Payment Plan Rates
ADDITIONAL BENEFITS (if any)
APPLICATION
ENDORSEMENTS
to be made only by the Company at the Home Office
RR.V.A.FR.(0803)
<PAGE>
CONTRACT INFORMATION
CONTRACT NUMBER
00 000 000
PLAN
Flexible Payment Variable Annuity
ADDITIONAL BENEFITS Enhanced
Death Benefit
TAX REPORTING CATEGORY Pension Annuity
PRIMARY ANNUITANT
John J. Doe
AGE AND SEX
35 Male
OWNER
John J. Doe, the Annuitant
ISSUE DATE
July 31, 2003
CONTRACT ANNIVERSARY July 31, 2004
and each July 31
thereafter
MATURITY DATE
July 31, 2053
DIRECT BENEFICIARY Jane
K. Doe, Wife of the Annuitant
INVESTMENT ACCOUNTS
On the Issue Date, Purchase Payments and
contract values may be allocated among
the following Investment Accounts.
Available Separate Account Divisions are
subject to change. See Section 2.1.
Divisions of Separate Account
A:
Select Bond
Division
Franklin
Templeton International Equity Division
Money Market
Division
Balanced
Division
Index 500 Stock
Division
Aggressive
Growth Stock Division
High Yield Bond
Division
Growth Stock
Division
Large Cap Core
Stock Division
Index 400 Stock
Division
Small Cap Growth
Stock Division
Russell
Multi-Style Equity Division
Russell
Aggressive Equity Division
Russell Non-US
Division
Russell Real
Estate Securities Division
Russell Core
Bond Division
Asset Allocation
Division
International
Growth Stock Division
T. Rowe Price
Small Cap Value Division
Capital Guardian
Domestic Equity Division
AllianceBernstein Mid Cap Value Division
Janus Capital
Appreciation Division
T. Rowe Price
Equity Income Division
Fidelity VIP Mid
Cap Division
Guaranteed Accounts:
Guaranteed
Interest Fund
RR.V.A.FR.(0803)
Page 3
(GTY.1.5)
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CONTRACT NUMBER
00 000 000
CHARGES AND FEES
DEDUCTION FROM PURCHASE PAYMENTS:
SALES LOAD (See
Section 7.1]
Total Purchase
Payments
Amount Deducted
Paid Under the
Contract
From Purchase Payment
First
$100,000
4.5%
Next
$400,000
2.0%
Balance over $500,000
1.0%
PREMIUM TAX (See
Section 7.1):
For the first Contract Year, Premium Taxes are not deducted
from
Purchase Payments. After the first Contract Year, the Company
may
deduct Premium Taxes from Purchase Payments received or benefits
paid.
ANNUAL MORTALITY AND EXPENSE RISK CHARGE
(See Section 2.3):
0.50% at Issue;
0.75% Maximum
ANNUAL CONTRACT FEE (See Section 7.2):
$30 charged on
the contract anniversary. The contract fee will be waived if
the Accumulation Value
of the contract equals or exceeds $25,000 on the
contract
anniversary.
ENHANCED DEATH BENEFIT CHARGE:
0.10% of the
Enhanced Death Benefit on each contract anniversary.
TRANSFER FEE (See Sections 4.4 and
11.5):
$25 beginning
with the thirteenth transfer in any Contract Year.
MINIMUM PURCHASE PAYMENTS, ACCUMULATION VALUE, PAYMENT PLANS
MINIMUM PURCHASE PAYMENT (See Section 4.1):
$25
MINIMUM ACCUMULATION VALUE (See Sections
5.2 and 9.9): $2,000
MINIMUM PAYMENT UNDER PAYMENT PLAN (See
Sections 9.9 and 10.1): $50
Monthly Income.
GUARANTEED INTEREST FUND
GUARANTEED ANNUAL EFFECTIVE INTEREST RATE
(See Section 3.2): 1.5%
MAXIMUM GUARANTEED INTEREST FUND
ACCUMULATION VALUE (See Section 3.4): $100,000
RR.V.A.FR.(0803)
Page 4
(GTY.1.5)
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CONTRACT NUMBER
00 000 000
GUARANTEED INTEREST FUND - TABLE OF GUARANTEED VALUES
The table shows minimum guaranteed values
and assumes a $10,000 Purchase Payment
made at the time of issue followed by
subsequent $100 Purchase Payments made
annually thereafter on each contract
anniversary. The values are based on the
assumption that 100% of all Net Purchase
Payments are allocated to, and remain
in, the Guaranteed Interest Fund.
End of
Contract
Accumulation Cash
Year July 31
Value
Value
-------- ------- ------------ -------
1
2003
$
9,693 $ 9,693
2
2004
9,905
9,905
3
2005
10,120 10,120
4
2006
10,338 10,338
5
2007
10,560 10,560
6
2008
10,784 10,784
7
2009
11,013 11,013
8
2010
11,244 11,244
9
2011
11,480 11,480
10 2012
11,718 11,718
11 2013
11,960 11,960
12 2014
12,206 12,206
13 2015
12,456 12,456
14 2016
12,709 12,709
15 2017
12,966 12,966
16 2018
13,227 13,227
17 2019
13,492 13,492
18 2020
13,761
13,761
19 2021
14,034 14,034
20 2022
14,311 14,311
Age 60 2027
15,760 15,760
Age 65 2032
17,320 17,320
Age 70 2037
19,001 19,001
This table is based on the guaranteed
annual effective interest rate of 1.5%.
Higher declared rates of interest will
increase values. Values shown at the end
of contract years do not reflect any
Purchase Payments paid on that contract
anniversary. The actual guaranteed values
may differ from those shown above,
depending on the amount and frequency of
Purchase Payments.
Page 4A
(GTY.1.5)
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SECTION 1. GENERAL TERMS AND DEFINITIONS
ACCUMULATION UNIT. A unit of measure used
to determine the value of the interest
of this contract in the Separate Account
prior to the date on which amounts are
placed under a payment plan.
ACCUMULATION VALUE. The Accumulation Value
of a Separate Account Division is the
total value of all Accumulation Units in
that Division. The Accumulation Value
of the Guaranteed Interest Fund is the sum
of amounts applied to the fund, plus
credited interest, less amounts withdrawn
or transferred from the fund. The
Accumulation Value of the contract is the
sum of the Accumulation Values of all
Investment Accounts.
ANNUITANT. The Primary Annuitant and, upon
the death of the Primary Annuitant,
the Contingent Annuitant.
ANNUITY UNIT. A unit of measure used to
determine the amount of variable
payments under a variable payment plan and
the value of the interest of a
variable payment plan in the Separate
Account.
BENEFICIARIES. The term "Beneficiaries" as
used in this contract includes direct
beneficiaries, contingent beneficiaries and
further payees.
COMPANY. The Northwestern Mutual Life
Insurance Company.
CONTINGENT ANNUITANT. The person who
becomes the Annuitant upon the death of an
Annuitant.
CONTRACT FEE. An annual charge for
administration expenses made on each contract
anniversary prior to the Maturity Date.
CONTRACT YEAR. The first Contract Year is
the period of time ending on the first
contract anniversary. Subsequent Contract
Years are the annual periods between
contract anniversaries.
DIVISION. A component of the Separate
Account to which the Owner may allocate
Net Purchase Payments and contract
values.
GUARANTEED INTEREST FUND. The portion of
the contract that is credited with a
guaranteed interest rate and which is held
as part of the general assets of the
Company.
HOME OFFICE. The office of The Northwestern
Mutual Life Insurance Company
located at 720 East Wisconsin Avenue,
Milwaukee, WI 53202.
INVESTMENT ACCOUNT. The Guaranteed Interest
Fund and Separate Account Divisions
available for allocation of Net Purchase
Payments and contract values. The
available Investment Accounts are listed on
page 3.
ISSUE DATE. The date this contract is
issued and becomes effective.
MATURITY DATE. The date upon which contract
benefits will become payable. If the
contract is continued in force under the
Optional Maturity Date provision, the
Optional Maturity Date will become the
Maturity Date.
NET PURCHASE PAYMENT. A Purchase Payment
less all applicable deductions.
Deductions may include the Sales Load and a
Premium Tax.
OPTIONAL MATURITY DATE. The contract
anniversary nearest the Annuitant's 90th
birthday. Upon reaching the Maturity Date
shown on page 3, the Owner may elect
to continue the contract in force until
this Optional Maturity Date.
OWNER. The person possessing the ownership
rights stated in this contract.
RP.V.A.FR.(0803)
5
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PORTFOLIOS. Mutual funds or portfolios of
mutual funds in which the assets of
the Separate Account are invested.
PREMIUM TAX. A tax imposed by a
governmental entity when Purchase Payments are
received or benefits are paid.
PRIMARY ANNUITANT. The person upon whose
life this contract is initially issued.
PURCHASE PAYMENT. A payment made by or on
behalf of the Owner with respect to
this contract.
SALES LOAD. A deduction made from Purchase
Payments received.
SEPARATE ACCOUNT. NML Variable Annuity
Account A. The Separate Account consists
of assets set aside by the Company, the
investment performance of which is kept
separate from that of the general assets
and all other separate account assets
of the Company.
SUCCESSOR OWNER. The person designated to
become the Owner upon the death of the
Owner, provided the Owner was not the
Annuitant at the time of the Owner's
death.
TRANSFER FEE. A deduction that is made from
the amount transferred between
Investment Accounts.
VALUATION DATE. Any day on which the assets
of the Separate Account are valued.
Assets are valued as of the close of
trading on the New York Stock Exchange for
each day the Exchange is open.
SECTION 2. SEPARATE
ACCOUNT
2.1 SEPARATE ACCOUNT
The Separate
Account (NML Variable Annuity Account A) has been established
by the Company. The Separate Account
consists of assets set aside by the
Company, the investment performance of
which is kept separate from that of the
general assets and all other separate
account assets of the Company. The assets
of the Separate Account will not be charged
with liabilities arising out of any
other business the Company may conduct.
Interests in the Separate Account are
represented by Accumulation Units and
Annuity Units, described in Sections 2.2
and 11.3, respectively.
The Separate
Account is comprised of the Divisions listed on page 3. The
assets allocated to these Divisions are
invested in shares of the corresponding
Portfolios. Shares of the Portfolios are
purchased for the Separate Account at
their net asset value.
The Company
reserves the right to eliminate or add additional Divisions and
Portfolios.
2.2 ACCUMULATION UNITS
The interest of
this contract in the Separate Account, prior to the date on
which amounts become payable under a
payment plan, is represented by
Accumulation Units. The dollar value of
Accumulation Units for each Division
will increase or decrease to reflect the
investment experience of the Division.
The value of an Accumulation Unit on any
Valuation Date is the product of:
. the value on the
immediately preceding Valuation Date; and
. the Net Investment
Factor for the period from the immediately
preceding Valuation Date up to and including the current
Valuation
Date (the current period).
RP.V.A.FR.(0803)
6
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2.3 NET INVESTMENT FACTOR
For each
Division of the Separate Account the Net Investment Factor for
the
current period is one plus the net
investment rate for that Division. The net
investment rate for the current period is
equal to the gross investment rate for
the Division reduced on each Valuation Date
by a Mortality and Expense Risk
Charge. The charge for these risks on the
Issue Date is shown on page 4. The
Company may increase or decrease the charge
after the Issue Date, but the
Company may not increase the charges to
exceed the maximum charges shown on page
4.
The gross investment rate for the current
period for each Division is equal to
a. divided by b. where:
a. is:
. the
investment income of the Division for the current period;
plus
. capital
gains for the period, whether realized or unrealized, on
the assets of the Division; less
. capital
losses for the period, whether realized or unrealized, on
the assets of the Division; less
.
deduction for any tax liability paid or reserved for by the
Company resulting from the maintenance or operation of the
Division; and less
. any
reasonable expenses paid or reserved for by the Company which
result from a substitution of other securities for shares of
the
Portfolio(s) as set forth in Section 2.4; and
b. is the value of the assets
in the Division on the immediately
preceding Valuation Date.
The gross
investment rate may be positive or negative. The deduction for
any tax liability may be charged
proportionately against those contracts to
which the liability is attributable by a
reduction in the gross investment rate
for those contracts.
2.4 SUBSTITUTION AND CHANGE
Pursuant to the
authority of the Board of Trustees of the Company:
. the assets of the
Division may be invested in securities other than
shares of the Portfolio(s) as a substitute for those shares
already
purchased or as the securities to be purchased in the future;
and
. the provisions of the
contracts may be modified to comply with any
other applicable federal or state laws.
In the event of
a substitution or change, the Company may make appropriate
endorsement on this and other contracts
having an interest in the Separate
Account and take other actions as may be
necessary to effect the substitution or
change. Any such substitution or change
will be subject to any required approval
of the Commissioner of Insurance for the
state of Wisconsin, and filing with the
state in which this contract is issued.
RP.V.A.FR.(0803)
7
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SECTION 3. GUARANTEED INTEREST FUND
3.1 GUARANTEED INTEREST FUND
Net Purchase
Payments (see Section 4.2) and amounts transferred from other
Investment Accounts under this contract
(see Section 4.4) may be applied to the
Guaranteed Interest Fund. Contract benefits
placed under a variable payment plan
may not be applied to the Guaranteed
Interest Fund. Amounts applied to the
Guaranteed Interest Fund become part of the
general assets of the Company.
3.2 ACCUMULATION VALUE
The Accumulation
Value of the Guaranteed Interest Fund is the sum of the
amounts applied to it, plus credited
interest, less any amounts withdrawn or
transferred from the fund. Interest begins
to accrue on the effective date of
the Purchase Payment or transfer (see
Section 4.6).
Interest will be
credited at an annual effective interest rate of not less
than the guaranteed annual effective
interest rate stated on page 4. A higher
rate may be declared by the Company from
time to time for a period set by the
Company.
3.3 TRANSFER RESTRICTIONS
Transfers of
Accumulation Value from the Guaranteed Interest Fund will not
be allowed for a period of 365 days
following the most recent transfer of
Accumulation Value from the Guaranteed
Interest Fund.
The maximum
amount of the Accumulation Value that may be transferred from
the Guaranteed Interest Fund in one
transfer is limited to the greater of:
. 25% of the
Accumulation Value of the Guaranteed Interest Fund on the
last contract anniversary preceding the transfer; and
. the amount of the most
recent transfer from the Guaranteed Interest
Fund.
However, in no event will this maximum
transfer amount be less than $1,000 or
greater than $50,000.
Transfers of
Accumulation Value into the Guaranteed Interest Fund will not
be allowed for a period of 90 days
following the most recent transfer of
Accumulation Value from the Guaranteed
Interest Fund.
3.4 MAXIMUM GUARANTEED INTEREST FUND
ACCUMULATION VALUE
The Accumulation
Value of the Guaranteed Interest Fund may not exceed the
maximum Guaranteed Interest Fund
accumulation value shown on page 4 without
prior consent of the Company, except when
the maximum is exceeded because of
interest accruing to the Guaranteed
Interest Fund.
3.5 TABLE OF GUARANTEED VALUES
Accumulation and
cash values are shown on page 4A. The values are based on
the assumptions stated on page 4A and are
for the end of the contract years
shown. Values for contract years not shown
are calculated on the same basis as
those shown on page 4A. Guaranteed values
are at least as great as those
required by the state in which this
contract is delivered.
RP.V.A.FR.(0803)
8
<PAGE>
SECTION 4. PURCHASE PAYMENTS, TRANSFERS, WITHDRAWALS
4.1 PAYMENT OF PURCHASE PAYMENTS
All Purchase
Payments are payable at the Home Office or to an authorized
agent. A receipt signed by an officer of
the Company will be furnished on
request.
Purchase
Payments may be made at any time prior to the death of an Owner
and prior to the Maturity Date. Purchase
Payments may be made after the death of
an Owner only if the new Owner of the
contract is the surviving spouse of the
deceased Owner. The Owner may vary the
amount of Purchase Payments, but no
Purchase Payment may be less than the
Minimum Purchase Payment shown on page 4.
Total Purchase Payments may not exceed
$5,000,000 without the consent of the
Company.
The Company will
not accept any Purchase Payment under Section 4 unless it
is a contribution under a pension or profit
sharing plan which meets the
requirements of Section 401 of the Internal
Revenue Code of 1954, as amended, or
the requirements for deduction of the
employer's contribution under Section
404(a)(2) of such code.
4.2 APPLICATION OF PURCHASE
PAYMENTS
Each Purchase
Payment, net of the Sales Load and Premium Taxes, will be
applied to one or more Investment Accounts.
Net Purchase Payments applied to the
Guaranteed Interest Fund will accrue
interest from the effective date of the
Purchase Payment. Net Purchase Payments
applied to the Separate Account will
provide Accumulation Units in one or more
Divisions. Accumulation Units are
credited as of the effective date of the
Net Purchase Payment.
The number of
Accumulation Units will be determined by dividing the Net
Purchase Payment by the value of an
Accumulation Unit on the effective date.
This number of Accumulation Units will not
be changed by any subsequent change
in the dollar value of Accumulation
Units.
4.3 SELECTION OF INVESTMENT ACCOUNT
FOR PURCHASE PAYMENTS
The Owner may
change the allocation of Net Purchase Payments among the
Investment Accounts by written notice to
the Company. Net Purchase Payments
received at the Home Office on or after the
date on which notice is received
will be applied to the designated
Investment Accounts on the basis of the new
allocation.
4.4 TRANSFER OF ACCUMULATION VALUE
Before the
Maturity Date the Owner may, on request satisfactory to the
Company, transfer amounts from one
Investment Account to another, subject to the
transfer restrictions described in Section
3.3.
For transfers
among the Separate Account Divisions, the number of
Accumulation Units to be applied or
deducted will be adjusted