<PAGE> 1
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
CLASS A SHARES
AND
CLASS B SHARES
SUPPLEMENT DATED JULY 27, 1999
TO PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 2, 1998
(AS SUPPLEMENTED FOR PROSPECTUS THROUGH APRIL 20, 1999)
FOR THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION OF ALL FUNDS:
This Supplement incorporates certain information provided in a previous
supplement dated July 12, 1999.
Craig R. Rodby and John R. Graf have resigned as Trustees and Officers of the
Funds. Effective July 27, 1999, the size of the Board was reset at 12 (nine of
the Trustees are independent and three are employees of VALIC or its
affiliates). The following individuals were elected by the Board of Trustees to
serve as trustees of the Series Company:
<TABLE>
<S> <C>
Kent E. Barrett* Executive Vice President and Chief Financial Officer,
2929 Allen Parkway American General Retirement Services (February
Houston, Texas 77019 1999-Present); formerly, Executive Vice President and Chief
Date of Birth: 9/20/56 Financial Officer, American General Life & Accident Company.
Alice T. Kane* Executive Vice President American General Investment
125 Maiden Lane Management, L.P. (May 1998-Present); formerly, Executive
New York, New York Vice President, New York Life Insurance Company (1994-1998).
Date of Birth: 11/16/48
</TABLE>
- ---------------
* Interested persons of the Series Company as defined in the Investment Company
Act of 1940 specifically because of their capacity as officers, directors or
consultants of the Series Company, VALIC or one of its affiliates.
Effective July 27, 1999, Ms. Kane and Mr. Bartlett were elected President and
Executive Vice President of the Series Company, respectively.
FOR THE PROSPECTUS ONLY:
All Funds
Effective immediately, all inquiries regarding the prospectus should be
directed, in writing, to American General Fund Group Customer Service, P.O. Box
219502, Kansas City, Missouri 64121-6502, or by calling 1-877-999-2434.
Effective immediately, under "General Redemption Policies," on page 82 of the
prospectus, the amount of a redemption request which must be accompanied by a
signature guarantee has been lowered from an amount in excess of $50,000 to an
amount in excess of $25,000. As always, a signature guarantee will be required
for a redemption request of any amount, where the redemption proceeds are to be
sent somewhere other than the address of record on the Series Company's books or
if the current address of record has not been on the books for 60 days.
Under "Systematic Withdrawals," on page 81 of the prospectus, if you own Class B
Shares you may redeem up to 12% annually of your account value without incurring
a CDSC, which replaces the provision that you may only redeem up to 12% annually
of your initial account without incurring a CDSC. As always, the minimum amount
of a withdrawal under the Systematic Withdrawal program, is $50 and the minimum
account size is $5,000.
Effective May 1, 1999, the Funds' distributor was changed from VALIC Investment
Services Company (VISCO) to A.G. Distributors, Inc., an affiliate of VALIC.
Effective July 14, 1999, A.G. Distributors, Inc. changed its name to American
General Distributors, Inc. All references to VISCO in this prospectus should
instead refer to American General Distributors, Inc.
Fund shares are now sold to the public by broker/dealers separate from the
Distributor, although one is an affiliate. The Distributor remains the Series
Company's principal underwriter. The "Purchasing and Selling Fund Shares"
section of this Prospectus should now reflect that sales charges on Class A
shares are allocated between the Distributor and the selling broker/dealer.
Similarly, any reallowance of sales charge shown in the sales charge tables
should now reflect that it is reallowed to selling broker/dealers. The
Distributor may, in its discretion, reallow up to 100% of any sales
<PAGE> 2
charge on Class A shares. Also, on Class B shares, the 4.00% commission paid at
the time of purchase is now paid to the selling broker/dealer, as is the service
fee under the Distribution and Service Plan.
American General Stock Index Fund, American General Mid Cap Index Fund, American
General Small Cap Index Fund and American General Small Cap Value Fund
Effective June 4, 1999, Bankers Trust Corporation, the parent company to Bankers
Trust Company ("Bankers Trust"), the sub-adviser to each Fund, became a
wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global
banking institution that is engaged in a wide range of financial services,
including investment management, mutual funds, retail and commercial banking,
investment banking and insurance. Bankers Trust has informed the Funds that,
under this new arrangement, the services provided to the Funds will be
maintained at their current level. As a result of the foregoing transaction, on
April 20, 1999, the Board of Trustees approved a new investment sub-advisory
agreement with Bankers Trust. The new sub-advisory agreement is identical to the
current agreement with Bankers Trust except for the effective date.
Effective as of July 6, 1999, Kathy Condon has assumed portfolio management
responsibilities for each Fund. Ms. Condon is the Managing Director and Head of
Passive Investments of the sub-adviser. Ms. Condon has been with the sub-adviser
since 1970.
On July 27, 1999, the Board of Trustees of the Series Company approved the
termination of Bankers Trust as sub-adviser of each Fund. VALIC expects to
reassume direct management of each Fund's investment portfolio on September 1,
1999. As of that date, Paul Green, CFA will assume portfolio management
responsibility for each Fund. Mr. Green has been Vice President and Investment
Officer of VALIC since February 1999. Previously, Mr. Green was with BARRA,
Inc., a financial consulting firm, since July 1993.
American General Growth Lifestyle Fund
The asset allocation ranges included in the "Fact Sheet" should reflect a range
of 20% to 30% for large capitalization equity securities rather than the range
of 25% to 35%.
American General Moderate Growth Lifestyle Fund
The asset allocation ranges included in the "Fact Sheet" should reflect a range
of 25% to 35% for large capitalization equity securities rather than the range
of 25% to 30%.
VA 10856-B
<PAGE> 3
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
INSTITUTIONAL CLASS I
AND
INSTITUTIONAL CLASS II
SUPPLEMENT DATED JULY 27, 1999
TO PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 2, 1998
FOR THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION OF ALL FUNDS:
This Supplement incorporates certain information provided in a previous
supplement dated July 12, 1999.
Craig R. Rodby and John R. Graf have resigned as Trustees and Officers of the
Funds. Effective July 27, 1999, the size of the Board was reset at 12 (nine of
the Trustees are independent and three are employees of VALIC or its
affiliates). The following individuals were elected by the Board of Trustees to
serve as trustees of the Series Company:
<TABLE>
<S> <C>
Kent E. Barrett* Executive Vice President and Chief Financial Officer,
2929 Allen Parkway American General Retirement Services (February
Houston, Texas 77019 1999-Present); formerly, Executive Vice President and Chief
Date of Birth: 9/20/56 Financial Officer, American General Life & Accident Company.
Alice T. Kane* Executive Vice President, American General Investment
125 Maiden Lane Management, L.P. (May 1998-Present); formerly, Executive
New York, New York Vice President, New York Life Insurance Company (1994-1998).
Date of Birth: 1/16/48
</TABLE>
- ---------------
* Interested persons of the Series Company as defined in the Investment Company
Act of 1940 specifically because of their capacity as officers, directors or
consultants of the Series Company, VALIC or one of its affiliates.
Effective July 27, 1999, Ms. Kane and Mr. Barrett were elected President and
Executive Vice President of the Series Company, respectively.
FOR THE PROSPECTUS ONLY:
All Funds
Effective May 1, 1999, the Funds' distributor was changed from VALIC Investment
Services Company (VISCO) to A.G. Distributors, Inc., an affiliate of VALIC.
Effective July 14, 1999, A. G. Distributors, Inc. changed its name to American
General Distributors, Inc. All references to VISCO in this prospectus should
instead refer to American General Distributors, Inc.
On January 19, 1999, the Board of Trustees of the Series Company approved
certain changes to the Funds' investment restrictions with respect to illiquid
and restricted securities. Specifically, the section entitled "Illiquid and
Restricted Securities" under "Types of Investments" is re-titled and replaced in
its entirety with the following:
ILLIQUID SECURITIES
An illiquid security is one that may not be frequently traded or cannot be
disposed of promptly within seven days and in the usual course of business
without taking a materially reduced price. Illiquid securities include, but
are not limited to, time deposits and repurchase agreements not maturing
within seven days and restricted securities.
A restricted security is one that has not been registered with the SEC and,
therefore, cannot be sold in the public market. Securities eligible for
sale under Rule 144A and commercial paper offered pursuant to Section 4(2)
of the Securities Act of 1933, as amended, are not deemed by VALIC or the
Sub-adviser to be illiquid solely by reason of being restricted. Instead,
VALIC or the Sub-adviser will determine whether such securities are liquid
based on trading markets and pursuant to guidelines adopted by the Series
Company's Board of Trustees. If VALIC or the Sub-adviser concludes that a
security is not liquid, that investment will be included within the Fund's
limitation on illiquid securities.
All the Funds, except the Lifestyle Funds, may buy illiquid securities, but
are restricted as to how much money they may invest in them.
The related sidebar should only reference illiquid securities.
<PAGE> 4
In the "Fact Sheets" for the Large Cap Value Fund, Mid Cap Value Fund, Socially
Responsible Fund, and Money Market Fund, please disregard all references to
restricted securities under "Investment Strategy." The stated limit should refer
to illiquid securities only.
American General Small Cap Value Fund
Effective June 4, 1999, Bankers Trust Corporation, the parent company to Bankers
Trust Company ("Bankers Trust"), the sub-adviser to the Fund, became a
wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a major global
banking institution that is engaged in a wide range of financial services,
including investment management, mutual funds, retail and commercial banking,
investment banking and insurance. Bankers Trust has informed the Fund that,
under this new arrangement, the services provided to the Fund will be maintained
at their current level. As a result of the foregoing transaction, on April 20,
1999, the Board of Trustees approved a new investment sub-advisory agreement
with Bankers Trust. The new sub-advisory agreement is identical to the current
agreement with Bankers Trust except for the effective date.
Effective as of July 6, 1999, Kathy Condon has assumed portfolio management
responsibilities for the Fund. Ms. Condon is the Managing Director and Head of
Passive Investments of the sub-adviser. Ms. Condon has been with the sub-adviser
since 1970.
On July 27, 1999, the Board of Trustees of the Series Company approved the
termination of Bankers Trust as sub-adviser of the Fund. VALIC expects to
reassume direct management of the Fund's investment portfolio on September 1,
1999. As of that date, Paul Green, CFA will assume portfolio management
responsibility for the Fund. Mr. Green has been Vice President and Investment
Officer of VALIC since February 1999. Previously, Mr. Green was with BARRA,
Inc., a financial consulting firm, since July 1993.
American General Balanced Fund
R. Bryan Jacoboski is no longer a portfolio manager for the Fund. All of the
other portfolio managers for the Fund identified in this prospectus will
continue to manage the Fund.
American General Core Bond Fund
The "Fund Investments" guidelines included in the "Fact Sheet" should reflect
that short-term investments, such as commercial paper, bankers' acceptances,
bank certificates of deposit and other cash equivalents and cash may constitute
up to 35% of the Fund's total assets, rather than be included among investment
grade fixed-income and other securities that must constitute at least 65% of the
Fund's total assets.
American General Domestic Bond Fund
The "Fund Investments" guidelines included in the "Fact Sheet" should reflect
that short-term investments, such as commercial paper, bankers' acceptances,
bank certificates of deposit and other cash equivalents and cash may constitute
up to 35% of the Fund's total assets, rather than be included among investment
grade fixed-income and other securities that must constitute at least 65% of the
Fund's total assets.
American General Growth Lifestyle Fund
The asset allocation ranges included in the "Fact Sheet" should reflect a range
of 20% to 30% for large capitalization equity securities rather than the range
of 25% to 35%.
American General Moderate Growth Lifestyle Fund
The asset allocation ranges included in the "Fact Sheet" should reflect a range
of 25% to 35% for large capitalization equity securities rather than the range
of 25% to 30%.
VA 10856-I/IID
<PAGE> 5
AMERICAN GENERAL SERIES PORTFOLIO COMPANY 2
SUPPLEMENT DATED JULY 27, 1999
TO STATEMENT OF ADDITIONAL INFORMATION DATED
NOVEMBER 2, 1998 (AS SUPPLEMENTED THROUGH APRIL 20, 1999)
The Stock Index Fund, the Mid Cap Index Fund, the Small Cap Index Fund, the
Small Cap Value Fund, the American General International Growth Fund, the
American General Mid Cap Growth Fund, the American General Small Cap Growth
Fund, the American General Large Cap Value Fund, the American General Mid Cap
Value Fund, the American General Small Cap Value Fund, the Socially Responsible
Fund and the American General Balanced Fund are permitted to invest in Standard
and Poor's Depositary Receipts as described herein under "Investment Practices."
The Distributor may make payments to authorized dealers of record for
purchases of $1 million or more of Class A Shares, which are sold at net asset
value and are subject to a contingent deferred sales charge as follows: 1.00% on
sales of $1 million to $2 million, plus 0.80% on the next $1 million and 0.50%
on the excess over $3 million.
Craig R. Rodby and John R. Graf have resigned as Trustees and Officers of
the Funds. Effective July 27, 1999, the size of the Board was reset at 12 (nine
of the Trustees are independent and three are employees of VALIC or its
affiliates). The following individuals were elected by the Board of Trustees to
serve as trustees of the Series Company:
<TABLE>
<S> <C>
Kent E. Barrett* Executive Vice President and Chief Financial Officer,
2929 Allen Parkway American General Retirement Services (February
Houston, Texas 77019 1999-Present); formerly, Executive Vice President and Chief
Date of Birth: 9/20/56 Financial Officer, American General Life & Accident Company.
Alice T. Kane* Executive Vice President American General Investment
125 Maiden Lane Management, L.P. (May 1998-Present); formerly, Executive
New York, New York Vice President, New York Life Insurance Company (1994-1998).
Date of Birth: 11/16/48
</TABLE>
- ---------------
* Interested persons of the Series Company as defined in the Investment Company
Act of 1940 specifically because of their capacity as officers, directors or
consultants of the Series Company, VALIC or one of its affiliates.
Effective July 27, 1999, Ms. Kane and Mr. Barrett were elected President and
Executive Vice President of the Series Company, respectively.
VA 10856-1B
