<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1996
REGISTRATION NOS. 33-75292/811-3240
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
---------------------
<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. / /
Post Effective Amendment No. 5 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 45 /X/
</TABLE>
---------------------
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
(EXACT NAME OF REGISTRANT)
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(713) 526-5251
(DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE)
---------------------
DAVID H. DEN BOER, ESQ.
VARIABLE ANNUITY LIFE INSURANCE COMPANY
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------------
It is proposed that this filing will become effective:
__ immediately upon filing pursuant to paragraph (b) of Rule 485
__ on (date) pursuant to paragraph (b) of Rule 485
X 60 days after filing pursuant to paragraph (a)(1) of Rule 485
__ on (date) pursuant to paragraph (a)(1) of Rule 485
PURSUANT TO RULE 24F-2(a)(1) UNDER THE INVESTMENT COMPANY ACT OF 1940, THE
REGISTRANT HAS REGISTERED AN INDEFINITE AMOUNT OF SECURITIES. THE REGISTRANT
FILED RULE 241-2 NOTICES ON FEBRUARY 21, 1996 FOR ITS MOST RECENT FISCAL YEAR
ENDING DECEMBER 31, 1995.
SEQUENTIAL NUMBER SYSTEM: PAGE OF PAGES
EXHIBIT INDEX ON SEQUENTIAL PAGE NUMBER
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE> 2
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
PORTFOLIO DIRECTOR CONTRACT SERIES
FORM N-4
UNDER
THE SECURITIES ACT OF 1933 AND
THE INVESTMENT COMPANY ACT OF 1940
---------------------
CROSS REFERENCE SHEET
(PURSUANT TO RULE 481(a))
<TABLE>
<CAPTION>
ITEM NO. PROSPECTUS CAPTION
- - -------- ------------------
<S> <S> <C>
PART A
1. Cover Page....................................... Cover Page
Profile..........................................
2. Definitions...................................... About the Prospectus
3. Synopsis......................................... About Portfolio Director, About VALIC,
About VALIC Separate Account A
4. Condensed Financial Information.................. Selected Purchase Unit Data
5. General Description of Registrant, Depositor and
Portfolio Companies.............................. About VALIC, About VALIC Separate
Account A, Variable Account Options
6. Deductions and Expenses.......................... Fees and Charges, Surrender of Account
Value
7. General Description of Variable Annuity
Contracts........................................ Transfers Between Investment Options
Purchase Period, Payout Period,
Surrender of Account Value, Other
Contract Features
8. Annuity Period................................... Payout Period
9. Death Benefit.................................... Death Benefits
10. Purchase and Contract Value...................... Fees and Charges, Purchase Period
11. Redemptions...................................... Surrender of Account Value
12. Taxes............................................ Federal Tax Matters
13. Legal Proceedings................................ Not Applicable
14. Table of Contents of the Statement of Additional
Information...................................... Contents of Statement of Additional
Information
<CAPTION>
STATEMENT OF ADDITIONAL
ITEM NO. INFORMATION CAPTION
- - -------- -----------------------
<S> <C> <C>
PART B
15. Cover Page....................................... Cover Page
16. Table of Contents................................ Table of Contents
17. General Information and History.................. General Information
18. Services......................................... Experts; Distribution of Variable
Annuity Contracts
19. Purchase of Securities Being Offered............. Calculation of Surrender Charge;
Purchase Unit Value; Exchange Privilege
20. Underwriters..................................... Distribution of Variable Annuity
Contracts
21. Calculation of Performance Data.................. Performance Calculations
22. Payout Payments.................................. Payout Payments
23. Financial Statements............................. Financial Statements
</TABLE>
PART C
Information required to be set forth in Part C is set forth under the
appropriate item, so numbered, in Part C of the Registration Statement.
<PAGE> 3
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
UNITS OF INTEREST UNDER GROUP AND INDIVIDUAL
VARIABLE ANNUITY CONTRACTS
(PORTFOLIO DIRECTOR CONTRACT SERIES)
SEPARATE ACCOUNT A. May 1, 1996
PROSPECTUS
Portfolio Director Contract Series consists of group and individual variable
annuity contracts ("Portfolio Director") that are offered by The Variable
Annuity Life Insurance Company. Portfolio Director may be available to you when
you participate in a retirement program that qualifies for deferral of federal
income taxes. Non-qualified contracts are also available. Portfolio Director is
composed of the following contract forms: UIT-194, UITG-194, UITN-194,
UIT-IRA-194 and UIT-SEP-194. Different variations of Portfolio Director are
sometimes referred to as "Series." Portfolio Director currently has Series 1
through 10.
Portfolio Director permits you to invest in and receive retirement benefits from
Fixed Account Options and/or Variable Account Options. Each of these investment
options is explained more fully in this prospectus. Here is a list of these
investment options:
Two Fixed Account Options: o Fixed Account Plus
o Short-Term Fixed Account
Sixteen Variable Account Options
(through a variety of mutual funds):
o American General Series Portfolio Company:
Stock Index Fund Government Securities Fund
MidCap Index Fund International Government Bond Fund
Small Cap Index Fund Social Awareness Fund
International Equities Fund Science & Technology Fund
Growth Fund Money Market Fund
Growth & Income Fund Timed Opportunity Fund
Capital Conservation Fund
o Dreyfus Variable Investment Fund:
Dreyfus Small Cap Fund
o Templeton Variable Products Series Fund:
Templeton International Fund Templeton Asset Allocation Fund
- - --------------------------------------------------------------------------------
This prospectus provides you with information you should know before investing
in Portfolio Director. This prospectus is accompanied by the three current
prospectuses for the mutual fund options listed above. Please read and retain
each of these prospectuses for future reference.
A Statement of Additional Information, dated May 1, 1996, has been filed with
the Securities and Exchange Commission. This Statement of Additional Information
contains additional information about Portfolio Director and is part of this
prospectus. For a free copy, complete and return the form contained in the back
of this prospectus or call 1-800-44-VALIC.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFER CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO
WHOM SUCH OFFER WOULD BE UNLAWFUL THEREIN.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES. ALSO, IT HAS NOT PASSED ON WHETHER THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.
1
<PAGE> 4
[THIS PAGE INTENTIONALLY LEFT BLANK]
2
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About the Prospectus.................. 4
Profile of Portfolio Director
Contract............................ 5
Fee Table............................. 7
Selected Purchase Unit Data........... 10
About Portfolio Director.............. 12
About VALIC........................... 12
About VALIC Separate Account A........ 12
Variable Account Options.............. 14
Summary of Funds................. 14
Purchase Period....................... 32
Purchase Payments................ 32
Purchase Units................... 32
Calculation of Purchase Unit
Value.......................... 32
Choosing Investment Options...... 33
Fixed Account Options....... 33
Variable Account Options.... 33
Stopping Purchase Payments....... 34
Transfers Between Investment
Options............................. 35
During the Purchase Period....... 35
During the Payout Period......... 35
Communicating Transfer or
Reallocation Instructions...... 35
Effective Date of Transfer....... 36
Fees and Charges...................... 37
Account Maintenance Fee.......... 37
Surrender Charges................ 37
Amount of Surrender
Charges................... 37
10% Free Withdrawal......... 37
Exceptions to Surrender
Charges................... 38
Premium Tax Charge............... 38
Separate Account Charges......... 38
Fund Annual Expense Charge....... 39
Other Tax Charges................ 39
Reduction or Waiver of Account
Maintenance Fee or Surrender
Charges........................ 39
Payout Period......................... 40
Fixed Payout..................... 40
Variable Payout.................. 40
Combination Fixed and Variable
Payout......................... 40
<CAPTION>
Page
----
<S> <C>
Payout Date...................... 40
Payout Options................... 41
Enhancements to Payout Options... 41
Payout Information............... 41
Surrender of Account Value............ 43
When Surrenders are Allowed...... 43
Amount That May Be Surrendered... 43
Surrender Restrictions........... 43
Partial Surrenders............... 43
Systematic Withdrawals........... 43
Surrenders Required By Federal
Tax Law........................ 44
Exchange Privilege.................... 45
Restrictions on Exchange
Privilege...................... 45
Taxes and Conversion Costs....... 45
Surrender Charges................ 45
Exchange Offers.................. 45
Comparison of Contracts.......... 46
Features of Portfolio Director... 46
Agents' and Managers' Retirement
Plan Exchange Offer............ 46
Death Benefits........................ 48
Beneficiary Information.......... 48
Special Information for
Individual Non-Tax Qualified
Contracts...................... 48
During the Purchase Period....... 48
Interest Guaranteed Death
Benefit................... 48
Standard Death Benefit...... 49
During the Payout Period......... 49
How to Review Investment Performance
of Separate Account Divisions....... 50
Types of Investment Performance
Information Advertised......... 50
Yield Performance Information.... 51
Other Contract Features............... 52
Voting Rights......................... 52
Federal Tax Matters................... 54
Type of Plans.................... 54
Tax Consequences in General...... 54
Effect of Tax-Deferred
Accumulations.................. 55
</TABLE>
f
3
<PAGE> 6
ABOUT THE PROSPECTUS
Unless otherwise specified in this prospectus, the words we, our, Company,
and VALIC mean The Variable Annuity Life Insurance Company. The words you and
your, unless otherwise specified in this prospectus, mean the participant,
contract owner, annuitant or beneficiary.
PARTICIPANT -- the individual, (in most cases you are the Participant) for
whom Purchase Payments are made.
We will use a number of other specific terms in this prospectus. We will,
when that term is used in the prospectus, provide you with a definition of that
term. The terms used in this prospectus for which we will provide you a
definition are:
Account Value
Annuitant
Assumed Investment Rate
Beneficiary
Contract Owner
Division
Fixed Account Options
Home Office
Mutual Fund or Fund
Participant
Participant Year
Payout Period
Payout Unit
Purchase Payments
Purchase Period
Purchase Unit
VALIC Separate Account A
Variable Account Options
This prospectus is being given to you to help you make decisions for selecting
various investment options and benefits to plan and save for your retirement. It
is intended to provide you with information about VALIC, Portfolio Director, and
saving for your retirement.
The purpose of Variable Account Options and Variable Payout Options is to
provide you investment returns which are greater than the effects of inflation.
We cannot, however, guarantee that this purpose will be achieved.
This prospectus describes a contract in which units of interest in VALIC's
Separate Account A are offered. Portfolio Director will allow you to accumulate
retirement dollars in Fixed Account Options and/or Variable Account Options.
This prospectus describes only the variable aspects of Portfolio Director except
where the Fixed Account Options are specifically mentioned.
For specific information about the Variable Account Options, you should
refer to the three mutual fund prospectuses you have been given with this
document. You should keep these prospectuses to help answer any questions you
may have in the future.
Following this introduction is a summary of the major features and options
of Portfolio Director. This summary is called the "Profile of Portfolio Director
Contract." It is intended to provide you with a brief overview of those sections
discussed in more detail in this prospectus.
4
<PAGE> 7
PROFILE OF PORTFOLIO DIRECTOR CONTRACT
Portfolio Director is VALIC's combination fixed and variable annuity that
offers you a wide choice of investment options and flexibility. A summary of
Portfolio Director's major features is presented below. For a more detailed
discussion of the Portfolio Director Contract, please read the entire prospectus
carefully.
FIXED AND VARIABLE OPTIONS
Portfolio Director offers you a choice from among 16 Variable Account
Options and two Fixed Account Options. You may invest in up to seven of these
investment options at any one time.
<TABLE>
- - ----------------------------------------------------------------------------------------------------------------------------
FIXED ACCOUNT
OPTIONS
- - ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED Fixed Guaranteed high current -- --
OPTIONS Account interest income
------------------------------------------------------------------------------------------------------
Plus
Short-Term Guaranteed current -- --
Fixed Account interest income
- - ----------------------------------------------------------------------------------------------------------------------------
VARIABLE INVESTMENT INVESTMENT
OPTIONS STRATEGY ADVISER SUBADVISER
- - ----------------------------------------------------------------------------------------------------------------------------
INDEX Stock Index Fund Growth through investments tracking VALIC Bankers Trust
EQUITY the S&P 500(R) Index
FUNDS ------------------------------------------------------------------------------------------------------
MidCap Growth through investments tracking VALIC Bankers Trust
Index Fund the S&P MidCap 400(R) Index
------------------------------------------------------------------------------------------------------
Small Cap Growth through investments tracking VALIC Bankers Trust
Index Fund the Russell 2000(R) Index
------------------------------------------------------------------------------------------------------
International Growth through investments tracking VALIC N/A
Equities Fund the EAFE Index
- - ----------------------------------------------------------------------------------------------------------------------------
ACTIVELY Templeton Growth through investments outside Templeton N/A
MANAGED International Fund the U.S.
EQUITY Dreyfus Small Growth through investments Dreyfus N/A
FUNDS Cap Fund in smaller companies
------------------------------------------------------------------------------------------------------
Growth Fund Growth through investments VALIC T. Rowe Price
in service sector companies
------------------------------------------------------------------------------------------------------
Growth & Growth and income VALIC Value Line
Income through investments in stocks or
Fund securities convertible into stocks
- - ----------------------------------------------------------------------------------------------------------------------------
INCOME Capital Income and possible growth VALIC N/A
FUNDS Conservation through investments in high quality
Fund debt securities
------------------------------------------------------------------------------------------------------
Government Income and possible growth VALIC N/A
Securities through investments in intermediate
Fund & long-term government debt
securities
------------------------------------------------------------------------------------------------------
International Income and possible growth through VALIC N/A
Government investments in high quality foreign
Bond Fund government debt securities
- - ----------------------------------------------------------------------------------------------------------------------------
SPECIALTY Social Growth through investments in VALIC N/A
FUNDS Awareness stocks of companies meeting social
Fund criteria of the Fund
------------------------------------------------------------------------------------------------------
Science & Growth through investments in VALIC T. Rowe Price
Technology stocks of companies which
Fund benefit from development of science
and technology
- - ----------------------------------------------------------------------------------------------------------------------------
MONEY Money Market Income through investments in VALIC N/A
MARKET Fund short-term money market
FUND securities
- - ----------------------------------------------------------------------------------------------------------------------------
ASSET Timed Opportunity Maximum return through investments VALIC N/A
ALLOCATION Fund in a mix of stocks, bonds and money
FUND Market securities
------------------------------------------------------------------------------------------------------
Templeton Flexible policy of investing in Templeton N/A
Asset stocks and debt obligations of
Allocation companies and governments
Fund of any nation
- - ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
A detailed description of the investment policy of each Fund can be found
in the section of the prospectus entitled "Variable Account Options," and also
in the current prospectus for each Fund mentioned.
INTEREST GUARANTEED DEATH BENEFIT
Portfolio Director offers a death benefit with an interest guarantee when
death occurs prior to your reaching age 70.
To learn more about the interest guaranteed death benefit, refer to the
section in the prospectus entitled "Death Benefits."
This contract provision is not available in some states.
LOANS
Portfolio Director offers a tax-free loan provision for tax-qualified
contracts that gives you access to your money in either of the Fixed Account
Options, subject to a minimum loan amount of $1,000. The availability of loans
is subject to government regulations, as well as your employer's plan
provisions.
Keep in mind that tax laws place restrictions on withdrawals (i.e. loans
which are not repaid) if made prior to age 59 1/2.
TRANSFERS
There is no charge to transfer the money in your account among Portfolio
Director's investment options. You may transfer your Account Values between
Variable Account Options at any time during the Purchase Period.
Your Account Value in the Short-Term Fixed Account must remain there for at
least 90 days before they can be transferred to other investment options. In
Fixed Account Plus, up to 20% of your Account Value may be transferred during
each contract year to other investment options.
Once you begin receiving payments from your account (called the Payout
Period), you may still transfer funds among Variable Account Options once each
contract year.
Transfers can be made by calling VALIC's toll-free transfer service at
1-800-621-7792. For more information on account transfers, see the "Transfers
Between Investment Options" section in the prospectus.
FEES AND CHARGES
ACCOUNT MAINTENANCE FEE:
If any of your account is invested in Variable Account Options, a quarterly
account maintenance fee of $3.75 is charged to your account. If you invest only
in Fixed Account Options during a calendar quarter no account maintenance fee is
assessed.
SURRENDER CHARGE:
Under some circumstances a surrender charge is made to your account. These
situations are discussed in detail in the section of the prospectus entitled
"Fees and Charges -- Surrender Charges." When this happens the surrender charge
is computed in two ways and you are charged whichever amount is less. The first
amount is simply 5% of whatever amount you have withdrawn. The second amount is
5% of the contributions you made to your account during the last 60 months.
Withdrawals are always subject to your plan provisions and federal tax
restrictions, which generally include a tax penalty on withdrawals made prior to
age 59 1/2.
SEPARATE ACCOUNT CHARGES:
Depending on the Variable Account Option you choose, you may incur a
mortality and expense risk fee, computed at an annualized rate of 1% or 1.25% on
the average daily net asset value of VALIC Separate Account A.
PREMIUM TAX CHARGE:
Premium taxes ranging from zero to 3% are currently imposed by certain
states and municipalities on Purchase Payments made under the contract.
FUND ANNUAL EXPENSE CHARGE:
A daily charge based on a percentage of each Fund's average daily net asset
balance is payable by each Fund to its investment adviser.
Since some of these fees may not apply to your contract, consult your VALIC
Retirement Plan Specialist to see how these provisions apply to you. More
information on fees may be found in the prospectus under the headings "Fees and
Charges" and "Fee Table."
PAYOUT OPTIONS
When you withdraw your money, you can select from several payout options: a
lifetime annuity (which guarantees payment for as long as you live), periodic
withdrawals and systematic withdrawals. More information on payout options can
be found in the "Payout Period" section of the prospectus.
FEDERAL TAX INFORMATION
Although deferred annuity contracts such as Portfolio Director can be
purchased with after-tax dollars, they are primarily used in connection with
retirement programs which receive favorable tax treatment under federal law. For
a more detailed discussion of these income tax provisions, see the "Federal Tax
Matters" section of the prospectus and of the Statement of Additional
Information.
PURCHASE REQUIREMENTS
Purchase Payments may be made at any time and in any amount, subject to
plan limitations.
For more information on Purchase Payments, refer to the "Purchase Period"
section of the prospectus.
6
<PAGE> 9
FEE TABLE
CONTRACT OWNER/PARTICIPANT EXPENSES(1):
<TABLE>
<S> <C>
Account Maintenance Fee ($3.75 per quarter, annualized)........................................... $15
Maximum Surrender Charge(2)..................................................................... 5.00%
</TABLE>
SEPARATE ACCOUNT EXPENSES
(as a percentage of Separate Account net assets):
<TABLE>
<CAPTION>
AGSPC FUNDS* OTHER FUNDS*
------------ ------------
<S> <C> <C>
Mortality and Expense Risk Fee..................................................... 1.00% 1.25%
</TABLE>
* -- see list of Funds under "Fund Annual Expenses" below.
FUND ANNUAL EXPENSES(3)
(as a percentage of Fund net assets):
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
AGSPC Funds:
Stock Index.................................................................. 0.29 0.09 0.38
MidCap Index................................................................. 0.35 0.09 0.44
Small Cap Index.............................................................. 0.35 0.09 0.44
International Equities....................................................... 0.35 0.10 0.45
Growth....................................................................... 0.80 0.11 0.91
Growth & Income.............................................................. 0.75 0.11 0.86
Capital Conservation......................................................... 0.50 0.08 0.58
Government Securities........................................................ 0.50 0.08 0.58
International Government Bond................................................ 0.50 0.09 0.59
Social Awareness............................................................. 0.50 0.08 0.58
Science & Technology......................................................... 0.90 0.10 1.00
Money Market................................................................. 0.50 0.07 0.57
Timed Opportunity............................................................ 0.50 0.08 0.58
Other Funds:
Dreyfus Small Cap............................................................ 0.75 0.08 0.83
Templeton International...................................................... 0.49 0.22 0.71
Templeton Asset Allocation................................................... 0.48 0.18 0.66
</TABLE>
Example #1--Assuming surrender at the end of the period shown:
Total Expenses: You would pay the following expenses on a $1,000 investment
under a typical Portfolio Director Contract invested in a single Separate
Account Division as listed below, assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Stock Index Division.................................................... $ 61 $ 96 $ 130 $ 176
MidCap Index Division................................................... 62 98 133 182
Small Cap Index Division................................................ 62 98 133 182
International Equities Division......................................... 62 98 134 183
Templeton International Division........................................ 67 113 160 238
Dreyfus Small Cap Division.............................................. 68 117 166 250
Growth Division......................................................... 67 112 158 233
Growth & Income Division................................................ 66 110 155 227
Capital Conservation Division........................................... 63 102 141 198
Government Securities Division.......................................... 63 102 141 198
International Government Bond Division.................................. 64 103 141 199
Social Awareness Division............................................... 63 102 141 198
Science & Technology Division........................................... 67 114 162 242
Money Market Division................................................... 63 102 140 196
Timed Opportunity Division.............................................. 63 102 141 198
Templeton Asset Allocation Division..................................... 67 112 158 233
</TABLE>
See footnotes on Page 8.
7
<PAGE> 10
Example #2 -- Assuming no surrender at the end of the period shown:
Total Expenses. You would pay the following expenses on a $1,000 investment
under a typical Portfolio Director Contract without a surrender charge imposed,
invested in a single Separate Account Division as listed below, assuming a 5%
annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Stock Index Division.................................. $ 15 $ 46 $ 80 $ 176
MidCap Index Division................................. 16 48 83 182
Small Cap Index Division.............................. 16 48 83 182
International Equities Division....................... 16 49 84 183
Templeton International Division...................... 21 64 110 238
Dreyfus Small Cap Division............................ 22 68 116 250
Growth Division....................................... 20 63 108 233
Growth & Income Division.............................. 20 61 105 227
Capital Conservation Division......................... 17 53 91 198
Government Securities Division........................ 17 53 91 198
International Government Bond Division................ 17 53 91 199
Social Awareness Division............................. 17 53 91 198
Science & Technology Division......................... 21 65 112 242
Money Market Division................................. 17 52 90 196
Timed Opportunity Division............................ 17 53 91 198
Templeton Asset Allocation Division................... 20 63 108 233
</TABLE>
Example #3 -- Assuming no account maintenance fee and no surrender at the end of
the period shown:
Total Expenses. You would pay the following expenses on a $1,000 investment
under a typical Portfolio Director Contract without a surrender charge or
account maintenance fee imposed, invested in a single Separate Account Division
as listed below, assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Stock Index Division.................................. $ 14 $ 44 $ 76 $ 166
MidCap Index Division................................. 15 46 79 173
Small Cap Index Division.............................. 15 46 79 173
International Equities Division....................... 15 46 79 174
Templeton International Division...................... 20 62 106 229
Dreyfus Small Cap Division............................ 21 65 112 242
Growth Division....................................... 19 60 103 224
Growth & Income Division.............................. 19 59 101 218
Capital Conservation Division......................... 16 50 86 188
Government Securities Division........................ 16 50 86 188
International Government Bond Division................ 16 50 87 189
Social Awareness Division............................. 16 50 86 188
Science & Technology Division......................... 20 63 108 233
Money Market Division................................. 16 50 86 187
Timed Opportunity Division............................ 16 50 86 188
Templeton Asset Allocation Division................... 19 60 103 224
</TABLE>
- - ------------
(1) Premium taxes are not shown here, but may be charged by some states. See:
"Premium Tax Charge" in this prospectus.
(2) Reductions in the surrender charge and the account maintenance fee are
available if certain conditions are met. See "Reduction or Waiver of Account
Maintenance Fee or Surrender Charges" and "Exceptions to Surrender Charges"
in this prospectus.
(3) MANAGEMENT FEES: The annual management fees for the Stock Index Fund, MidCap
Index Fund, Small Cap Index Fund and International Equities Fund are based
on each Fund's average daily net asset value at the following rates: .35% of
the first $500 million and .25% on the excess over $500 million. The annual
management fees for Growth Fund, Growth & Income Fund, Science & Technology
Fund, Social Awareness Fund, Timed Opportunity Fund, Capital Conservation
Fund, Government Securities Fund, International Government Bond Fund, Money
Market Fund, and Dreyfus Small Cap Fund are flat rates as shown regardless
of the amount of Fund assets. The annual
8
<PAGE> 11
management fees for Templeton Asset Allocation Fund and Templeton
International Fund are based on each Fund's average daily net asset value at
the following rates: .50% of the first $200 million, .45% from $200 million
up to $1.3 billion, and .40% on the excess over $1.3 billion. OTHER
EXPENSES includes custody, accounting, reports to shareholders, audit, legal
and other miscellaneous expenses.
Note: These examples should not be considered representations of past or future
expenses for VALIC Separate Account A or for any Fund. Actual expenses may be
greater or less than those shown above. Similarly, the 5% annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance. The purpose of the Fee Table above is to help Contract Owners and
Participants understand the various expenses of VALIC Separate Account A and the
Funds which are, in effect, passed on to the Contract Owners and Participants.
This Fee Table, shows all charges and expenses which may be deducted from the
assets of VALIC Separate Account A and from the Funds in which VALIC Separate
Account A invests. For a further description of these charges and expenses, see
"Fees and Charges" in this prospectus and "Investment Adviser" in the Series
Company Prospectus and "Management of the Fund" in the Dreyfus Small Cap Fund
Prospectus and "Management of the Trust" in the Templeton Variable Products
Series Fund Prospectus. Any and all limitations on total charges and expenses
are reflected in this Fee Table.
9
<PAGE> 12
SELECTED PURCHASE UNIT DATA
<TABLE>
<CAPTION>
INTER-
STOCK MIDCAP SMALL CAP NATIONAL TEMPLETON
INDEX INDEX INDEX EQUITIES INTERNATIONAL
DIVISION 10(2) DIVISION 4(1) DIVISION 14 DIVISION 11 DIVISION 20
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
December 31, 1995
Purchase Units in Force............. 455,255,243 172,613,690 98,335,995 172,564,018 219,124,926
Purchase Unit Value................. $2.343900 $2.782677 $1.544896 $1.156454 $1.142586
December 31, 1994
Purchase Units in Force............. 416,234,288 171,442,018 100,383,839 187,749,916 71,716,511
Purchase Unit Value................. $1.724134 $2.153183 $1.222329 $1.054460 $0.999282
July 11, 1994
Purchase Unit Value(3).............. -- -- -- -- $1.000000
April 29, 1994
Purchase Unit Value(3).............. -- -- -- -- --
December 31, 1993
Purchase Units in Force............. 369,550,060 134,621,879 56,159,647 117,215,227 --
Purchase Unit Value................. $1.729327 $2.259378 $1.277199 $0.986387 --
December 31, 1992
Purchase Units in Force............. 283,808,045 81,007,871 9,723,477 52,524,165
Purchase Unit Value................. $1.589718 $2.021271 $1.112790 $0.767135 --
May 1, 1992
Purchase Unit Value(3).............. -- -- $1.000000 -- --
December 31, 1991
Purchase Units in Force............. 90,526,907 49,106,844 -- 27,011,169 --
Purchase Unit Value................. $1.505641 $1.858030 -- $0.895250 --
October 1, 1991
Purchase Unit Value(3).............. -- -- -- -- --
December 31, 1990
Purchase Units in Force............. 46,016,297 42,958,640 -- 13,776,769
Purchase Unit Value................. $1.179000 $1.538017 -- $0.813423
December 31, 1989
Purchase Units in Force............. 22,325,990 40,618,028 -- 2,247,450
Purchase Unit Value................. $1.238782 $1.712671 -- $1.028405 --
October 2, 1989
Purchase Unit Value(3).............. -- -- -- $1.000000 --
December 31, 1988
Purchase Units in Force............. 9,213,178 38,747,706 -- -- --
Purchase Unit Value................. $0.968670 $1.450217 -- -- --
December 31, 1987
Purchase Units in Force............. 4,326,102 35,297,367 -- -- --
Purchase Unit Value................. $0.856238 $1.282662 -- -- --
April 20, 1987
Purchase Unit Value(3).............. $1.000000 -- -- -- --
December 31, 1986
Purchase Units in Force............. -- 28,360,188 -- -- --
Purchase Unit Value................. -- $1.351553 -- -- --
January 16, 1986
Purchase Unit Value(3).............. -- -- -- -- --
December 31, 1985
Purchase Units in Force............. -- 21,817,139 -- -- --
Purchase Unit Value................. -- $1.319494 -- -- --
<CAPTION>
DREYFUS GROWTH
SMALL CAP FUND
DIVISION 18 DIVISION 15
------------ ------------
<S> <C> <C>
December 31, 1995
Purchase Units in Force............. 267,735,219 164,417,848
Purchase Unit Value................. $1.332904 $1.466652
December 31, 1994
Purchase Units in Force............. 85,169,871 32,633,370
Purchase Unit Value................. $1.043156 $1.001834
July 11, 1994
Purchase Unit Value(3).............. $1.000000 --
April 29, 1994
Purchase Unit Value(3).............. -- $1.000000
December 31, 1993
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
December 31, 1992
Purchase Units in Force.............
Purchase Unit Value................. -- --
May 1, 1992
Purchase Unit Value(3).............. -- --
December 31, 1991
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
October 1, 1991
Purchase Unit Value(3).............. -- --
December 31, 1990
Purchase Units in Force.............
Purchase Unit Value.................
December 31, 1989
Purchase Units in Force.............
Purchase Unit Value................. -- --
October 2, 1989
Purchase Unit Value(3).............. -- --
December 31, 1988
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
December 31, 1987
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
April 20, 1987
Purchase Unit Value(3).............. -- --
December 31, 1986
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
January 16, 1986
Purchase Unit Value(3).............. -- --
December 31, 1985
Purchase Units in Force............. -- --
Purchase Unit Value................. -- --
</TABLE>
- - ------------
(1) Effective October 1, 1991, the Fund underlying this Division changed its
name from the Capital Accumulation Fund to the MidCap Index Fund and amended
its investment objective, investment program and investment restrictions
accordingly. Historical purchase unit values prior to October 1, 1991
reflect investment experience before these changes.
(2) Effective with the merger of Quality Growth Fund into Stock Index Fund on
May 1, 1992, Quality Growth Division 9 was merged into Stock Index Division
10. The merger of Divisions was accomplished by an exchange of units of
Quality Growth Division 9 for units of Stock Index Division 10 of equivalent
value as calculated at the close of business on April 30, 1992.
(3) Purchase Unit Value At Date Of Inception.
10
<PAGE> 13
<TABLE>
<CAPTION>
INTERNATIONAL SOCIAL SCIENCE
GROWTH & CAPITAL GOVERNMENT GOVERNMENT AWARE- & TECH- MONEY TIMED
INCOME CONSERVATION SECURITIES BOND NESS NOLOGY MARKET OPPORTUNITY
DIVISION 16 DIVISION 7 DIVISION 8 DIVISION 13 DIVISION 12 DIVISION 17 DIVISION 6 DIVISION 5
- - ------------ ----------- ----------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
51,779,089 29,573,808 39,847,053 73,369,250 32,750,120 187,862,232 51,907,757 75,851,431
$1.296577 $1.812011 $1.799475 $1.530780 $1.835102 $1.997175 $1.545802 $2.411022
12,386,602 26,859,219 26,667,073 25,691,713 29,015,764 42,726,137 75,765,781 89,377,860
$0.993168 $1.515278 $1.547150 $1.301357 $1.333899 $1.247713 $1.479129 $1.951533
-- -- -- -- -- -- -- --
$1.000000 -- -- -- -- $1.000000 -- --
-- 24,628,606 26,563,166 18,155,381 26,230,566 -- 24,799,810 93,899,802
-- $1.630069 $1.636228 $1.258340 $1.366979 -- $1.439327 $1.997266
-- 14,922,749 16,609,444 6,245,713 16,956,437 -- 23,414,474 80,637,090
-- $1.470167 $1.491537 $1.112826 $1.279516 -- $1.415690 $1.846025
-- -- -- -- -- -- -- --
-- 11,069,044 11,694,890 953,038 8,447,711 -- 25,545,494 76,624,765
-- $1.366905 $1.405236 $1.090499 $1.250634 -- $1.384882 $1.878219
-- -- -- $1.000000 -- -- -- --
-- 9,321,049 8,460,327 -- 2,947,418 -- 25,246,481 72,284,139
-- $1.178361 $1.237104 -- $0.987666 -- $1.325393 $1.563444
-- 7,502,717 5,556,464 -- 212,636 -- 15,949,534 68,361,149
-- $1.193583 $1.179231 -- $1.010003 -- $1.240599 $1.618165
-- -- -- -- $1.000000 -- -- --
-- 3,996,455 3,408,919 -- -- -- 9,429,191 65,817,325
-- $1.078919 $1.062082 -- -- -- $1.149516 $1.397280
-- 2,343,021 2,074,588 -- -- -- 4,121,853 59,631,901
-- $1.018629 $1.011978 -- -- -- $1.087299 $1.286227
-- -- -- -- -- -- -- --
-- 1,153,481 1,163,907 -- -- -- 914,106 41,290,244
-- $1.047718 $1.046062 -- -- -- $1.040484 $1.198662
-- $1.000000 $1.000000 -- -- -- $1.000000 --
-- -- -- -- -- -- -- 30,770,485
-- -- -- -- -- -- -- $1.100420
<CAPTION>
TEMPLETON
ASSET
ALLOCATION
DIVISION 19
-----------
<S> <C>
78,494,505
$1.205181
32,807,602
$0.995860
$1.000000
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
</TABLE>
Financial statements of VALIC Separate Account A are included in the
Statement of Additional Information, which is available upon request. Purchase
units shown are for a Purchase Unit outstanding throughout the year under a
representative Contract of the type invested in each column shown. The unit
value of each Division of VALIC Separate Account A will not be the same on any
given day as the net asset value per share of the underlying Fund of the Series
Company and the other mutual fund portfolios described in this prospectus in
which that Division invests. This is because each unit value consists of the
underlying share's net asset value minus the charges to VALIC Separate Account
A. In addition, dividends declared by the underlying Fund are reinvested by the
Division in additional shares. These distributions have the effect of reducing
the value of each share of the Fund and increasing the number of Fund shares
outstanding. However, the total cash value in VALIC Separate Account A does not
change as a result of such distributions.
11
<PAGE> 14
ABOUT PORTFOLIO DIRECTOR
Portfolio Director was developed to help you save money for your
retirement. It offers you a combination of fixed and variable investment options
that you can invest in to help you reach your retirement savings goals. Your
contributions to Portfolio Director can come from different sources, like
payroll deductions or money transfers. Your retirement savings process with
Portfolio Director will involve two stages: the Purchase Period; and the Payout
Period. The first is when you make contributions into Portfolio Director called
"Purchase Payments." The second, is when you receive your retirement payouts.
For more information, see "Purchase Period" and the "Payout Period" in this
prospectus.
You may choose, depending upon your retirement savings goals, your personal
risk tolerances and your retirement plan, to invest in the Fixed Account Options
and/or the Variable Account Options described in this prospectus. When you
decide to retire, or otherwise withdraw your money, you can select from a wide
array of payout options including both fixed and variable payments. In addition,
this prospectus will describe for you all fees and charges that may apply to
your participation in Portfolio Director.
All inquiries regarding Portfolio Director may be directed to your VALIC
Regional Office at the addresses shown in the back of this prospectus.
ABOUT VALIC
We are a life insurance company organized in 1955 and located in the State
of Texas. Our main business is issuing and offering fixed and variable
retirement annuity contracts, like Portfolio Director. Our principal offices are
located at 2929 Allen Parkway, Houston, Texas 77019. We have Regional Offices
throughout the United States. The addresses for these offices are given in the
back of this prospectus.
VALIC is a member of the American General Corporation group of companies.
Members of the American General Corporation group of companies operate in each
of the 50 states and Canada and collectively provide financial services with
activities heavily weighted toward insurance. For more information about VALIC,
see the Statement of Additional Information.
ABOUT VALIC SEPARATE ACCOUNT A
When you direct money to Portfolio Director's Variable Account Options, you
will be sending that money through VALIC's Separate Account A. You do not invest
directly in the mutual funds made available in Portfolio Director. VALIC's
Separate Account A invests in the mutual funds on behalf of your account.
VALIC Separate Account A is made up of what we call "Divisions." Sixteen
Divisions are available and represent the Variable Account Options in Portfolio
Director. Each of these Divisions invests in a different mutual fund made
available through Portfolio Director. For example, Division Ten represents and
invests in the Stock Index Fund. The earnings (or losses) of each Division are
credited to (or charged against) the assets of that Division, and do not affect
the performance of the other Divisions of VALIC Separate Account A.
VALIC established Separate Account A in 1979 under Texas insurance law to
allow you to be able to invest in a number of Variable Account Options available
in Portfolio Director. VALIC Separate Account A is registered with the SEC as a
unit investment trust under the Investment Company Act of 1940. Units of
interest in VALIC Separate Account A are registered as securities under the
Securities Act of 1933.
VALIC Separate Account A is administered and accounted for as part of
VALIC's business operations. However, the income, capital gains or capital
losses, whether or not realized of each Division of VALIC Separate Account A are
credited to or charged against the assets held in that Division without regard
to the income, capital gains or capital losses of any other Division or arising
out of any other business the Company may conduct. In accordance with the terms
of Portfolio Director VALIC Separate Account A may not be charged with the
liabilities of any other VALIC operation. As stated in Portfolio Director, the
Texas Insurance Code requires that the assets of VALIC Separate Account A
attributable to Portfolio Director be held exclusively for the benefit of the
contract owner, participants, annuitants, and beneficiaries of Portfolio
Director.
MUTUAL FUND OR FUND -- the investment portfolio(s) of a registered open-end
management investment company, which serves as the
12
<PAGE> 15
underlying investment vehicle for each Division represented in VALIC Separate
Account A.
When we discuss performance information in this prospectus, we mean the
performance of a VALIC Separate Account A Division.
UNITS OF INTERESTS
Your investment in a Division of VALIC Separate Account A is represented by
units of interest issued by VALIC Separate Account A. On a daily basis, the
units of interest issued by VALIC Separate Account A are revalued to reflect
that day's performance of the underlying mutual fund minus any applicable fees
and charges to VALIC Separate Account A.
13
<PAGE> 16
VARIABLE ACCOUNT OPTIONS
Portfolio Director enables you to participate in Divisions that represent
sixteen Variable Account Options. These Divisions comprise all of the Variable
Account Options that are made available to you through VALIC Separate Account A.
See "About VALIC Separate Account A" in this prospectus.
VARIABLE ACCOUNT OPTIONS -- investment options that correspond to Separate
Account Divisions offered by Portfolio Director. Investment returns on Variable
Account Options may be positive or negative depending on the investment
performance of the underlying mutual fund.
Each individual Division represents and invests, through VALIC's Separate
Account A, in specific mutual funds. These mutual funds serve as the investment
vehicles for Portfolio Director and include:
-- AMERICAN GENERAL SERIES PORTFOLIO COMPANY -- offers 13 funds, for which
VALIC serves as investment adviser.
-- TEMPLETON VARIABLE PRODUCTS SERIES -- offers 2 funds, for which
Templeton Investment Counsel, Inc. serves as investment adviser.
-- DREYFUS VARIABLE INVESTMENT FUND -- offers 1 fund, for which The Dreyfus
Corporation serves as investment adviser.
Each of these Funds is registered as a diversified open-end, management
investment company and is regulated under the Investment Company Act of 1940.
For complete information about each of these Funds, including charges and
expenses, you should refer to the prospectus for that Fund. Additional copies
are available from VALIC or you may contact your VALIC Regional Office at the
addresses shown in the back of this prospectus.
Shares of the Dreyfus Small Cap Fund, the Templeton Asset Allocation Fund,
and the Templeton International Fund are also sold to separate accounts of other
insurance companies that may or may not be affiliated with us. This is known as
"shared funding." These funds may also be sold to separate accounts that act as
the underlying investments for both variable annuity contracts and variable life
insurance policies. This is known as "mixed funding." There are certain risks
associated with mixed and shared funding. These risks are discussed in each
Fund's prospectus.
SUMMARY OF FUNDS
A brief summary of the investment objectives of each mutual fund is shown
below. In addition to the investment objectives, the change in an Account Value
of an assumed $10,000 investment in each of the Divisions is shown in both table
and graph form. The Account Values shown are since the inception of the Division
or the last 10 fiscal years, whichever is greater. The change in Account Values
shown for the Dreyfus and Templeton Funds have been calculated on a pro forma
basis using the inception dates of the Funds in which the corresponding
Divisions invest.
For more information about how these returns were calculated including a
statement of the charges reflected, see "How to Review Investment Performance of
Separate Account Divisions" in this prospectus. Any charges under Portfolio
Director excluded from the calculation of these returns will further reduce your
return.
14
<PAGE> 17
STOCK INDEX FUND (DIVISION 10)
INVESTMENT OBJECTIVE
Seeks long-term capital growth through investment in common stocks that, as
a group, are expected to provide investment results closely corresponding to the
performance of the Standard & Poor's 500 Stock Index(R)*.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
APRIL 20, 1987 $ VALUE STIPULATED PAYMENT MADE APRIL 20, 1987
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
04/20/87...................... $ 10,000
12/31/87...................... 8,562
12/31/88...................... 9,687
12/31/89...................... 12,388
12/31/90...................... 11,790 [GRAPH]
12/31/91...................... 15,056
12/31/92...................... 15,897
12/31/93...................... 17,293
12/31/94...................... 17,241
12/31/95...................... 23,439
</TABLE>
- - ---------------
* "Standard & Poor's(R)", "S&P(R)","S&P 500(R)" and "S&P MidCap 400(R)" are
trademarks of Standard and Poor's ("S&P"). Neither the MidCap Index Fund nor
the Stock Index Fund is sponsored, endorsed, sold or promoted by S&P and S&P
makes no representation regarding the advisability of investing in these
Funds.
15
<PAGE> 18
MIDCAP INDEX FUND (DIVISION 4)
INVESTMENT OBJECTIVE
Seeks to provide growth of capital through investments primarily in a
diversified portfolio of common stocks that, as a group, are expected to provide
investment results closely corresponding to the performance of the Standard &
Poor's MidCap 400(R) Index*.
The performance information for the MidCap Index Division is shown in two
separate sets of tables and graphs for the ten year period beginning January 1,
1986 and for the period beginning October 1, 1991. The latter period shows the
performance of the MidCap Index Division since the change in investment
objectives, investment program and investment restrictions of the underlying
Fund. Selected Purchase Unit data for the last ten years for the MidCap Index
Division appears on page 10 of this prospectus.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
OCTOBER 1, 1991 $ VALUE STIPULATED PAYMENT MADE OCTOBER 1, 1991
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
10/01/91...................... $ 10,000
12/31/91...................... 11,163
12/31/92...................... 12,143 [GRAPH]
12/31/93...................... 13,574
12/31/94...................... 12,936
12/31/95...................... 16,718
</TABLE>
16
<PAGE> 19
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
JANUARY 1, 1986 $ VALUE STIPULATED PAYMENT MADE JANUARY 1, 1986
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
01/01/86...................... $ 10,000
12/31/86...................... 10,243
12/31/87...................... 9,721
12/31/88...................... 10,991
12/31/89...................... 12,980
12/31/90...................... 11,656 [GRAPH]
12/31/91...................... 14,081
12/31/92...................... 15,319
12/31/93...................... 17,123
12/31/94...................... 16,318
12/31/95...................... 21,089
</TABLE>
17
<PAGE> 20
SMALL CAP INDEX FUND (DIVISION 14)
INVESTMENT OBJECTIVE
Seeks to provide growth of capital through investment primarily in a
diversified portfolio of common stocks that, as a group, are expected to provide
investment results closely corresponding to the performance of the Russell
2000(R) Index.**
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
MAY 1, 1992 $ VALUE STIPULATED PAYMENT MADE MAY 1, 1992
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
05/01/92...................... $ 10,000
12/31/92...................... 11,128
12/31/93...................... 12,772 [GRAPH]
12/31/94...................... 12,223
12/31/95...................... 15,449
</TABLE>
** The Russell 2000 Index is a trademark/service mark of the Frank Russell
Company. RussellTM is a trademark of the Frank Russell Company.
18
<PAGE> 21
INTERNATIONAL EQUITIES FUND (DIVISION 11)
INVESTMENT OBJECTIVE
Seeks to provide long-term growth of capital through investments primarily
in a diversified portfolio of equity and equity related securities of foreign
issuers that, as a group, are expected to provide investment results closely
corresponding to the performance of the EAFE Index.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
OCTOBER 2, 1989 $ VALUE STIPULATED PAYMENT MADE OCTOBER 2, 1989
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
10/02/89...................... $ 10,000
12/31/89...................... 10,284
12/31/90...................... 8,134
12/31/91...................... 8,952 [GRAPH]
12/31/92...................... 7,671
12/31/93...................... 9,864
12/31/94...................... 10,545
12/31/95...................... 11,565
</TABLE>
19
<PAGE> 22
TEMPLETON INTERNATIONAL FUND (DIVISION 20)
INVESTMENT OBJECTIVE
Seeks to achieve long-term capital growth through a flexible policy of
investing in stocks and debt obligations of companies and governments, outside
the United States. Any income realized will be incidental. Although the Fund
generally invests in common stock, it may also invest in preferred stocks and
certain debt securities such as convertible bonds which are rated in any
category by S&P or Moody's or which are unrated by any agency.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
MAY 1, 1992 $ VALUE STIPULATED PAYMENT MADE MAY 1, 1992
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
05/01/92...................... $ 10,000
12/31/92...................... 9,311
12/31/93...................... 13,549 [GRAPH]
12/31/94...................... 13,077
12/31/95...................... 14,952
</TABLE>
20
<PAGE> 23
DREYFUS SMALL CAP FUND (DIVISION 18)
INVESTMENT OBJECTIVE
Seeks to maximize capital appreciation and invests principally in common
stocks. This Fund will be particularly alert to companies which The Dreyfus
Corporation considers to be emerging smaller-size companies which are believed
to be characterized by new or innovative products, services, or processes which
should enhance prospects for growth in future earnings.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
AUGUST 31, 1990 $ VALUE STIPULATED PAYMENT MADE AUGUST 31, 1990
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
08/31/90...................... $ 10,000
12/31/90...................... 10,168
12/31/91...................... 26,105
12/31/92...................... 44,181 [GRAPH]
12/31/93...................... 73,477
12/31/94...................... 78,125
12/31/95...................... 99,825
</TABLE>
21
<PAGE> 24
GROWTH FUND (DIVISION 15)
INVESTMENT OBJECTIVE
Seeks to provide long-term growth of capital through investment primarily
in common stocks of U.S. growth companies engaged in service-related activities.
<TABLE>
<CAPTION>
QUARTERLY VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
APRIL 29, 1994 $ VALUE STIPULATED PAYMENT MADE APRIL 29, 1994
- - ---------------------------- -------- ---------------------------------------------
<S> <C> <C>
04/29/94...................... $ 10,000
06/30/94...................... 9,527
09/30/94...................... 10,037
12/31/94...................... 10,018 [GRAPH]
03/31/95...................... 11,246
06/30/95...................... 12,241
09/30/95...................... 13,920
12/31/95...................... 14,667
</TABLE>
22
<PAGE> 25
GROWTH & INCOME FUND (DIVISION 16)
INVESTMENT OBJECTIVE
Seeks to provide long-term growth of capital and, secondarily, current
income through investment in common stocks and equity-related securities.
<TABLE>
<CAPTION>
QUARTERLY VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
APRIL 29, 1994 $ VALUE STIPULATED PAYMENT MADE APRIL 29, 1994
- - ----------------------------- ------- ---------------------------------------------
<S> <C> <C>
04/29/94...................... $ 10,000
06/30/94...................... 9,479
09/30/94...................... 10,033
12/31/94...................... 9,932 [GRAPH]
03/31/95...................... 10,762
06/30/95...................... 11,473
09/30/95...................... 12,621
12/31/95...................... 12,966
</TABLE>
23
<PAGE> 26
CAPITAL CONSERVATION FUND (DIVISION 7)
INVESTMENT OBJECTIVE
Seeks the highest possible total return consistent with preservation of
capital through current income and capital gains on investments in intermediate
and long-term debt instruments and other income producing securities.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
JANUARY 16, 1986 $ VALUE STIPULATED PAYMENT MADE JANUARY 16, 1986
- - ------------------------------------- ------- ---------------------------------------------
<S> <C> <C>
01/16/86...................... $ 10,000
12/31/86...................... 10,477
12/31/87...................... 10,186
12/31/88...................... 10,789
12/31/89...................... 11,936
12/31/90...................... 11,784 [GRAPH]
12/31/91...................... 13,669
12/31/92...................... 14,702
12/31/93...................... 16,301
12/31/94...................... 15,153
12/31/95...................... 18,120
</TABLE>
24
<PAGE> 27
GOVERNMENT SECURITIES FUND (DIVISION 8)
INVESTMENT OBJECTIVE
Seeks high current income and protection of capital through investments in
intermediate and long-term U.S. Government debt securities.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
JANUARY 16, 1986 $ VALUE STIPULATED PAYMENT MADE JANUARY 16, 1986
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
01/16/86...................... $ 10,000
12/31/86...................... 10,461
12/31/87...................... 10,120
12/31/88...................... 10,621
12/31/89...................... 11,792 [GRAPH]
12/31/90...................... 12,371
12/31/91...................... 14,052
12/31/92...................... 14,915
12/31/93...................... 16,362
12/31/94...................... 15,472
12/31/95...................... 17,995
</TABLE>
25
<PAGE> 28
INTERNATIONAL GOVERNMENT BOND FUND (DIVISION 13)
INVESTMENT OBJECTIVE
Seeks high current income through investments primarily in high quality
debt securities issued or guaranteed by foreign governments.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
OCTOBER 1, 1991 $ VALUE STIPULATED PAYMENT MADE OCTOBER 1, 1991
- - ------------------------------------- ------- ---------------------------------------------
<S> <C> <C>
10/01/91...................... $10,000
12/31/91...................... 10,905
12/31/92...................... 11,128 [GRAPH]
12/31/93...................... 12,583
12/31/94...................... 13,014
12/31/95...................... 15,308
</TABLE>
26
<PAGE> 29
SOCIAL AWARENESS FUND (DIVISION 12)
INVESTMENT OBJECTIVE
Seeks to obtain growth of capital through investment, primarily in common
stocks, in companies which meet the social criteria established for the Fund.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
OCTOBER 2, 1989 $ VALUE STIPULATED PAYMENT MADE OCTOBER 2, 1989
- - ------------------------- ------- ---------------------------------------------
<S> <C> <C>
10/02/89...................... $10,000
12/31/89...................... 10,100
12/31/90...................... 9,877
12/31/91...................... 12,506 [GRAPH]
12/31/92...................... 12,795
12/31/93...................... 13,670
12/31/94...................... 13,339
12/31/95...................... 18,351
</TABLE>
27
<PAGE> 30
SCIENCE & TECHNOLOGY FUND (DIVISION 17)
INVESTMENT OBJECTIVE
Seeks long-term growth of capital through investment primarily in the
common stocks and equity-related securities of companies that are expected to
benefit from the development, advancement and use of science and technology.
<TABLE>
<CAPTION>
QUARTERLY VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
APRIL 29, 1994 $ VALUE STIPULATED PAYMENT MADE APRIL 29, 1994
- - ---------------------------- -------- ---------------------------------------------
<S> <C> <C>
04/29/94...................... $ 10,000
06/30/94...................... 9,457
09/30/94...................... 11,316
12/31/94...................... 12,477 [GRAPH]
03/31/95...................... 13,753
06/30/95...................... 16,805
09/30/95...................... 19,444
12/31/95...................... 19,972
</TABLE>
28
<PAGE> 31
MONEY MARKET FUND (DIVISION 6)
INVESTMENT OBJECTIVE
Seeks liquidity, protection of capital and current income through
investments in short-term money market instruments.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
JANUARY 16, 1986 $ VALUE STIPULATED PAYMENT MADE JANUARY 16, 1986
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
01/16/86...................... $ 10,000
12/31/86...................... 10,405
12/31/87...................... 10,873
12/31/88...................... 11,495
12/31/89...................... 12,406
12/31/90...................... 13,254 [GRAPH]
12/31/91...................... 13,849
12/31/92...................... 14,157
12/31/93...................... 14,393
12/31/94...................... 14,791
12/31/95...................... 15,458
</TABLE>
29
<PAGE> 32
TIMED OPPORTUNITY FUND (DIVISION 5)
INVESTMENT OBJECTIVE
Seeks maximum aggregate rate of return over the long-term through
controlled investment risk by adjusting its investment mix among stocks,
long-term debt securities and short-term money market securities.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
JANUARY 1, 1986 $ VALUE STIPULATED PAYMENT MADE JANUARY 1, 1986
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
01/01/86...................... $ 10,000
12/31/86...................... 10,893
12/31/87...................... 11,689
12/31/88...................... 12,698
12/31/89...................... 14,705
12/31/90...................... 14,208 [GRAPH]
12/31/91...................... 17,068
12/31/92...................... 16,776
12/31/93...................... 18,150
12/31/94...................... 17,734
12/31/95...................... 21,910
</TABLE>
30
<PAGE> 33
TEMPLETON ASSET ALLOCATION FUND (DIVISION 19)
INVESTMENT OBJECTIVE
Seeks a high level of total return through a flexible policy of investing
in the following market segments: stocks of companies in any nation, debt
securities of companies and governments of any nation, and money market
instruments. Changes in the asset mix will be adjusted in an attempt to
capitalize on total return potential produced by changing economic conditions
throughout the world.
<TABLE>
<CAPTION>
ANNUAL VALUE OF A $10,000
STIPULATED PAYMENT MADE VALUE AT MONTHLY INTERVALS OF A $10,000
AUGUST 24, 1988 $ VALUE STIPULATED PAYMENT MADE AUGUST 24, 1988
- - ------------------------- -------- ---------------------------------------------
<S> <C> <C>
08/24/88...................... $ 10,000
12/31/88...................... 10,237
12/31/89...................... 11,450
12/31/90...................... 10,405
12/31/91...................... 13,124 [GRAPH]
12/31/92...................... 14,009
12/31/93...................... 17,453
12/31/94...................... 16,714
12/31/95...................... 20,227
</TABLE>
31
<PAGE> 34
PURCHASE PERIOD
The Purchase Period begins when your first Purchase Payment is made and
continues until you begin your Payout Period. The Purchase Period can also end
when a Portfolio Director account is surrendered before the Payout Period. The
amount, number, and frequency of your Purchase Payments is determined by the
retirement plan for which Portfolio Director was purchased.
PURCHASE PAYMENTS
You may establish an account only through a VALIC representative. Initial
Purchase Payments must be received by VALIC either with, or before, a completed
application. Your employer is usually responsible for remitting Purchase
Payments to us. The employer is responsible for furnishing instructions to us (a
premium flow report) as to the amount being applied to your account. Purchase
Payments can also be made by you for IRAs and certain non-qualified contracts
("individual contracts.")
PURCHASE PAYMENTS -- an amount of money you pay to VALIC to receive the
benefits of an annuity Contract offered by Portfolio Director.
Minimum initial and subsequent Purchase Payments are as follows:
<TABLE>
<CAPTION>
INITIAL SUBSEQUENT
CONTRACT TYPE PAYMENT PAYMENT
- - --------------------- ------- ----------
<S> <C> <C>
Periodic Payment $ 30 $ 30
Single Payment $1,000 -0-
</TABLE>
Periodic Payment minimums apply to each Fixed Account Option or Variable Account
Option selected. The Single Payment minimum applies to each of your accounts.
Purchase Payments are received in VALIC's Home Office. When an initial
Purchase Payment accompanies an application, within 2 business days we will:
o Accept the Application -- and issue a contract. We will also establish
your account and apply your Purchase Payment by crediting the amount to
the Fixed Account Option or Variable Account Option selected;
o Reject the Application -- and return the Purchase Payment; or
o Request Additional Information -- to correct or complete the application.
o Initial Purchase Payments will be returned if we do not receive a correct
and complete application within 5 business days unless the Contract Owner
agrees otherwise.
PURCHASE UNITS
A Purchase Unit is a unit of interest owned by you in your Variable Account
Option. Purchase Units apply only to the Variable Account Options selected for
your account. Purchase Unit values are calculated at the close of regular
trading of the New York Stock Exchange (the "Exchange"), currently 4:00 p.m. New
York time (see Calculation of Purchase Unit Value below for more information.)
Purchase Units will be credited the same business day if Purchase Payments are
received by our Home Office before the close of the Exchange. If not, they will
be calculated and credited the next business day. Purchase Unit values will vary
depending on the net investment results of each of the Variable Account Options.
This means the value of your Variable Account Option will fluctuate.
CALCULATION OF PURCHASE UNIT VALUE
The Purchase Unit value for a Division is calculated as shown below:
Step 1: Calculate the gross investment rate:
<TABLE>
<S> <C> <C> <C> <C>
Gross The Division's The value of the
Investment investment in- Division for the
Rate come and capital immediately pre-
gains and losses ceding day on
(whether real- which the values
= (EQUALS) ized or unreal- (DIVIDED BY) are calculated.
ized) on that
day from the
assets attributable
to the Division.
</TABLE>
We calculate the gross investment rate as of 4:00 p.m. New York time on each
business day when the New York Stock Exchange is open (except the Friday
following Thanksgiving, the Friday following Christmas if Christmas falls on a
Thursday and the Monday before Christmas if Christmas falls on a Tuesday.)
32
<PAGE> 35
Step 2: Calculate net investment rate for any day as follows:
<TABLE>
<S> <C> <C> <C> <C>
Net Investment Gross Invest- Separate Ac-
Rate ment Rate count charges
= (EQUALS) (calculated in - (MINUS) and any income
Step 1) tax charges.
</TABLE>
Step 3: Determine Purchase Unit Value for that day.
<TABLE>
<S> <C> <C> <C> <C>
Purchase Unit Purchase Unit Net Investment
Value for that Value for imme- X (MULTIPLIED Rate (as calcu-
day. = (EQUALS) diate preceding BY) lated in Step 2)
day. plus 1.00.
</TABLE>
For more information as to how Purchase Unit Values are calculated, see the
Statement of Additional Information.
CHOOSING INVESTMENT OPTIONS
There are 18 investment options offered in Portfolio Director. This
includes 2 Fixed Account Options and 16 Variable Account Options. Unless
provided otherwise, you may select and combine up to 7 of the 18 options. The
Funds that underlie the Variable Account Options are registered as investment
companies under and are subject to regulation of the Investment Company Act of
1940 (the Act). The Fixed Account Options are not subject to regulation under
the Act and are not required to be registered under the Securities Act of 1933.
As a result, the SEC has not reviewed data in this prospectus that relates to
the Fixed Account Options. However, federal securities law does require such
data to be accurate and complete.
FIXED ACCOUNT OPTIONS
Each of the Fixed Account Options are part of the Company's general assets.
You may allocate all or a portion of your Purchase Payment to the Fixed Account
Options listed in "Profile of Portfolio Director Contract" appearing in this
prospectus. Purchase Payments you allocate to these Fixed Account Options are
guaranteed to earn at least a minimum rate of interest. Interest is paid on each
of the Fixed Account Options at declared rates, which may be different for each
option. We bear the entire investment risk for the Fixed Account Option. All
Purchase Payments and interest earned on such amounts in your Fixed Account will
be paid regardless of the investment results experienced by the Company's
general assets.
Here is how you may calculate the value of your Fixed Account Option during
the Purchase Period:
<TABLE>
<C> <S> <C> <C>
All Purchase Payments made to the
Fixed Account Options
+ (plus)
Amounts transferred from Variable
Account Options to the Fixed
Account Options
+ (plus)
All interest earned
- (minus) = (equals) Value of Your Fixed Account
Options
Amounts transferred or withdrawn
from Fixed Account Options
(including applicable fees and
charges)
</TABLE>
VARIABLE ACCOUNT OPTIONS
You may allocate all or a portion of your Purchase Payments to the Variable
Account Options listed in this prospectus. A complete discussion of each of the
Variable Account Options may be found in the "Variable Account Options" section
in this prospectus. Based upon a Variable Account Option's Purchase Unit Value
your account will be credited with the applicable number of Purchase Units. The
Purchase Unit Value of each Variable Account Option will change daily depending
upon the investment performance of the underlying fund (which may be positive or
negative) and the deduction of VALIC Separate Account A charges. See the "Fees
and Charges" section in this prospectus. Because Purchase Unit Values change
daily, the number of Purchase Units your account will be credited with for
subsequent Purchase Payments will vary. Each Variable Account Option bears its
own investment risk. Therefore, the value of your account may be worth more or
less at retirement or withdrawal.
Here is how to calculate the value of each Variable Account Option in your
account during the Purchase Period:
<TABLE>
<S> <C> <C> <C> <C>
Value of Your Total Number of Current Daily
Variable = (EQUALS) Purchase Units X (MULTIPLIED BY) Purchase Unit
Account Option Value
</TABLE>
For information on how Purchase Unit Values are calculated, see the "Statement
of Additional Information".
33
<PAGE> 36
STOPPING PURCHASE PAYMENTS
Purchase Payments may be stopped at any time. Purchase Payments may be
resumed at any time before your Portfolio Director account has been surrendered.
While no Purchase Payments are being made, the number of Purchase Units
outstanding will remain the same. (This is assuming no transfers or withdrawals
are made.) The value of the Purchase Units will continue to vary. Your Account
Value will continue to be subject to charges.
PURCHASE UNIT -- a measuring unit used to calculate your Account Value
during the Purchase Period. The value of a Purchase Unit will vary with the
investment experience of the Separate Account Division you have selected.
If your Account Value falls below $300, and you do not make any Purchase
Payments for two years from the date we established your account, we may close
the account and pay the Account Value (less any surrender charge) to you.
34
<PAGE> 37
TRANSFERS BETWEEN INVESTMENT
OPTIONS
You may transfer all or part of your Account Value between the various
Fixed Account and Variable Account Options in Portfolio Director without a
charge. Transfer instructions may be made either in writing or by telephone as
discussed below. Transfers may be made during the Purchase Period or during the
Payout Period. We reserve the right to limit transfers as discussed below. Your
employer's plan may also limit your rights to transfer.
ACCOUNT VALUE -- the total sum of your Fixed Account and/or Variable
Account Options that have not yet been applied to your Payout Payments.
DURING THE PURCHASE PERIOD
During the Purchase Period, transfers may be made between Portfolio
Director's Fixed Account Options and Variable Account Options.
PURCHASE PERIOD -- the time between your first Purchase Payment and your
Payout Period (or surrender).
We currently permit transfers between Variable Account Options or from
Variable Account Options to Fixed Account Options, at any time. We may, however,
limit the number of transfers you can make.
Transfers are also permitted from the Fixed Account Options subject to the
following limitations:
<TABLE>
<CAPTION>
FIXED OTHER
ACCOUNT OPTION VALUE FREQUENCY RESTRICTIONS
- - ------------------ -------------- ------------ ------------------
<S> <C> <C> <C>
Fixed Account
Plus: Up to 20% per At any time None (1)
contract year
100% At any time If Account Value
is less than or
equal to $500
Short-Term Fixed
Account: Up to 100% At any time 90-day Holding
Period If transfer
was previously
made into Short-
Term Fixed
Account.(2)
</TABLE>
- - ---------------
(1) Your employer may further limit or expand the restrictions. We may charge
for those modified restrictions if specified in your employer's retirement
plan.
(2) VALIC may change this holding period at any time in the future, but it will
never be more than 180 days.
DURING THE PAYOUT PERIOD
During the Payout Period, transfers may be made between Portfolio
Director's investment options subject to the following limitations:
PAYOUT PERIOD -- the time that starts when you begin to withdraw your money
in a steady stream of payments.
<TABLE>
<CAPTION>
% OF ACCOUNT
--------------------------------- OTHER
ACCOUNT OPTION VALUE FREQUENCY RESTRICTIONS
- - ----------------------- ------------ -------------------- ------------
<S> <C> <C> <C>
Variable: Up to 100% Once every 365 days None
Combination Fixed
and Variable Payout: Up to 100% Once every 365 days None
of money in
variable
option
payout
Fixed: Not -- --
permitted
</TABLE>
COMMUNICATING TRANSFER OR REALLOCATION INSTRUCTIONS
A written instruction to transfer or reallocate all or part of your Account
Value between the various investment options in Portfolio Director, should be
sent to VALIC's Home Office.
HOME OFFICE -- Our principal office at 2929 Allen Parkway, Houston, Texas
77019.
Instructions for transfers or reallocations may be made by calling
1-800-621-7792. Telephone transfers will be allowed unless we have been notified
not to accept such telephone instructions. In this event, we must receive
written instructions, in order to permit future telephone transfers to be made.
Before a transfer will be made by telephone, you must give us the requested
identifying information concerning your account(s).
Unless we have been instructed not to accept requests for telephone
transfers, anyone may effect a telephone transfer if they furnish the requested
information. You will bear any loss resulting from such instructions, whether
the caller was specifically authorized by you or not.
No one that we employ or that represents VALIC may give telephone
instructions on your behalf without VALIC's prior written permission. (This does
not apply to a contract with the
35
<PAGE> 38
immediate family of an employee or representative of VALIC).
We will send you a confirmation of the completed transfer within 5 days
from the date of your instruction. When you receive your confirmation, it is
your duty to verify the information shown, and advise us of any errors within
one business day.
You will bear the risk of loss arising from instructions received by
telephone. We are not responsible for the authenticity of such instructions. Any
telephone instructions which we reasonably believe to be genuine will be your
responsibility. This includes losses from errors in communication. Telephone
transfer instruction may not be made during the Payout Period. We reserve the
right to stop telephone transfers at any time.
EFFECTIVE DATE OF TRANSFER
The effective date of a transfer will be:
1. The date of receipt, if received in our Home Office before the close of
regular trading of the New York Stock Exchange on a day values are
calculated; (Normally, this will be 4:00 P.M. New York time); otherwise
2. The next date values are calculated.
36
<PAGE> 39
FEES AND CHARGES
By investing in Portfolio Director, you may be subject to six basic types
of fees and charges:
-- Account Maintenance Fee
-- Surrender Charges
-- Premium Tax Charge
-- Separate Account Charges
-- Fund Annual Expense Charge
-- Other Tax Charges
These fees and charges are explained below. For additional information about
these fees and charges, see the Fee Table in this prospectus.
ACCOUNT MAINTENANCE FEE
An account maintenance fee of $3.75 will be deducted on the last day of
each calendar quarter if any of your money is invested in the Variable Account
Options. We will sell Purchase Units from your Account to pay the account
maintenance fee. If you invest only in Fixed Account Options during a calendar
quarter, this fee will not apply. If all your money in a Variable Account Option
is withdrawn, or transferred to a Fixed Account Option, the fee will be deducted
at that time. The fee will be assessed equally among the Variable Account
Options that make up your Account Value.
The account maintenance fee is to reimburse the Company for our
administrative expenses for providing Variable Account Options. This includes
the expense for establishing and maintaining the record keeping for the Variable
Account Options. We do not expect that the amount of fees we receive will be
greater than our expenses.
The amount of the account maintenance fee may be reduced or waived if
Portfolio Director is issued to certain types of plans which are expected to
result in lower costs to VALIC. To learn more about how we determine if account
maintenance fees may be reduced or waived, see the "Reduction or Waiver of
Account Maintenance Fee or Surrender Charges" section in this prospectus. If you
have two or more accounts established under the same group contract, we may
agree to deduct an account maintenance fee from only one account.
SURRENDER CHARGES
When you withdraw money from your
account, you may be subject to a surrender charge. For information about your
right to surrender, see "Surrender of Account Value" in this prospectus.
It is assumed that the most recent Purchase Payments are withdrawn first.
No surrender charge will be applied unless an amount is actually withdrawn. We
consider all Purchase Payments to be withdrawn before earnings are withdrawn.
Amounts transferred from other contracts
issued by the Company may or may not be subject to a surrender charge. After
exchange, it is assumed that any new Purchase Payments are withdrawn before the
exchanged amount. For more information, see "Exchange Privilege" in the
Statement of Additional Information.
AMOUNT OF SURRENDER CHARGES
A surrender charge may not be greater than:
1. Five percent (5%) of the amount of all Purchase Payments received during
the past 60 months; or
2. Five percent (5%) of the amount withdrawn.
10% FREE WITHDRAWAL
In any Participant Year, up to 10% of the Account Value may be withdrawn
without a surrender charge. The surrender charge will apply to any amount
withdrawn that exceeds this 10% limit. The percentage withdrawn will be
determined by dividing the amount withdrawn by the Account Value just prior to
the withdrawal. If more than one withdrawal is made during a Participant Year,
each percentage will be added to determine at what point the 10% limit has been
reached.
These 10% withdrawals without charge do not reduce Purchase Payments for
the purpose of computing the surrender charge. If a surrender charge is applied
to all or part of a Purchase Payment, no surrender charge will be applied to
such Purchase Payment (or portion thereof) again.
Participant Year -- the first twelve month period and then each yearly
anniversary of that period following the issue date of the contract or
certificate.
37
<PAGE> 40
EXCEPTIONS TO SURRENDER CHARGES
No surrender charge will be applied:
1. To money applied to provide a Payout Option;
2. To death benefits;
3. If no Purchase Payments have been received during the 60 months prior to
the date of surrender;
4. If your account has been in effect for 15 years or longer;
5. If your account has been in effect for 5 years or longer, and you have
attained age 59 1/2;
6. To "No Charge Systematic Withdrawals";
7. Under certain contracts, to withdrawals under the No Charge Minimum
Distribution provisions;
8. If you have become totally and permanently disabled, defined as follows:
You are unable, due to mental or physical impairment, to perform the
material and substantial duties of any occupation for which you are
suited by means of education, training or experience; the impairment
must have been in existence for more than 180 days; the impairment must
be expected to result in death or be long-standing and indefinite and
proof of disability must be evidenced by a certified copy of a Social
Security Administration determination or a doctor's verification; and
9. If you are at least 55 years old, are no longer employed by the employer
that established the plan, and your account under the plan was
established at least 5 years prior to the date of surrender.
The surrender charges may be reduced or waived if Portfolio Director is issued
to certain types of plans which are expected to result in lower costs to VALIC.
To learn more about how we determine if surrender charges may be reduced or
waived, see the "Reduction or Waiver of Account Maintenance Fee or Surrender
Charges" section in this prospectus.
PREMIUM TAX CHARGE
Taxes on Purchase Payments are imposed by some states, cities, and towns.
The rate will range from zero to 3%.
If the law of a state, city, or town requires premium taxes to be paid when
Purchase Payments are made, we will, of course, comply. Otherwise, such tax will
be deducted from the Payout Value when annuity payments are to begin.
If we deduct an amount for premium taxes, but later find the tax was not
due, we will:
1. Adjust the amount deducted in error to reflect investment experience
from the date of the deduction to the date we determined the tax was not
due; and
2. Apply the excess amount, as adjusted, to increase the number of Pay-in
or Payout Units.
SEPARATE ACCOUNT CHARGES
There will be a mortality and expense risk charge applied to VALIC Separate
Account A. This is a daily charge at an annualized rate of 1% to 1.25% on the
average daily net asset value of VALIC Separate Account A. The exact rate
depends on the Variable Account Option selected. This charge is guaranteed and
cannot be increased by the Company. The mortality and expense risk charge is to
compensate the Company for assuming mortality and expense risks under Portfolio
Director. The mortality risk that the Company assumes is the obligation to
provide payments during the Payout Period for your life no matter how long that
might be. In addition, the Company assumes the obligation to pay during the
Purchase Period an interest guaranteed death benefit. For more information about
the interest guaranteed death benefit see the "Death Benefit" section of this
prospectus. The expense risk is our obligation to cover the cost of issuing and
administering Portfolio Director, no matter how large the cost may be.
The Company may make a profit on the mortality and expense risk charge. For
more information about the mortality and expense risk charge, see the Fee Table
in this prospectus.
38
<PAGE> 41
FUND ANNUAL EXPENSE CHARGE
Investment management charges based on a percentage of each Fund's average
daily net assets are payable by each Fund. Depending on the Variable Account
Option selected, the charges will be paid by each Fund to the Company, or to
Dreyfus or to Templeton. These charges and other Fund charges and expenses are
fully described in the prospectuses for the Funds. These charges indirectly cost
you because they lower your return.
OTHER TAX CHARGES
We reserve the right to charge for certain taxes (other than premium taxes)
that we may have to pay. This could include federal income taxes. Currently, no
such charges are being made.
REDUCTION OR WAIVER OF ACCOUNT MAINTENANCE FEE OR SURRENDER CHARGES
We may, as described below, determine that the account maintenance fee or
the amount of surrender charges for Portfolio Director may be reduced or waived.
We may reduce or waive these fees and charges if we determine that your
retirement program will allow us to reduce or eliminate administrative or sales
expenses that we usually incur for retirement programs. There are a number of
factors we will review in determining whether your retirement program will allow
us to reduce or eliminate these administrative or sales expenses. In no event
will the reduction or waiver of fees and charges be permitted where the
reduction or waiver will unfairly discriminate against any person.
To determine whether we can reduce or waive account maintenance fees, we
review the following factors:
1. The type of retirement program
-- Certain types of retirement programs because of their stability can
result in lower administrative costs.
2. The nature of your retirement program.
-- Certain types of retirement programs, due to the types of employees
who participate, experience fewer account surrenders thus reducing
administrative costs.
3. The frequency of Purchase Payments for your retirement program
-- Purchase Payments received no more than once a year can reduce
administrative costs.
4. The administrative tasks performed by your employer for your retirement
program.
-- The employer sponsoring your retirement program can, through their
method of remitting Purchase Payments, reduce administrative costs.
5. Other factors of which we are not presently aware which could reduce
administrative costs.
To determine whether we can reduce or waive surrender charges, we review
the following factors:
1. The size of your retirement program.
-- A retirement program which involves a larger group of employees may
allow us to reduce sales expenses.
2. The total amount of Purchase Payments to be received for your retirement
program.
-- Larger Purchase Payments can reduce sales expenses.
3. The nature of your retirement program.
-- Certain types of retirement programs, due to the type of employees
who participate, experience fewer account surrenders thus reducing
sales expense.
4. The type of your retirement program.
-- Certain types of retirement programs because of their stability can
result in lower sales expenses.
5. The use of mass enrollment or related administrative tasks performed by
your employer for your retirement program.
6. Other factors of which we are not presently aware which could reduce
sales expenses.
39
<PAGE> 42
PAYOUT PERIOD
The Payout Period (Annuity Period) begins when you decide to retire or
otherwise withdraw your money in a steady stream of payments. If your employer's
plan permits, you may apply any portion of your Account Value to one of the
types of Payout Options listed below. You may choose to have your payout option
on either a fixed, a variable, or a combination payout basis. When you choose to
have your Payout Option on a variable basis, you may keep the same Variable
Account Options in which your Purchase Payments were made, or transfer to
different ones.
FIXED PAYOUT
Under Fixed Payout, you will receive payments from the Company. These
payments are fixed and guaranteed by the Company. The amount of these payments
will depend on:
o Type and duration of Payout Option chosen;
o Your age or your age and the age of your survivor (1);
o Your sex or your sex and the sex of your survivor (1) (IRA's and certain
nonqualified contracts);
o The portion of your Account Value being applied; and
o The payout rate being applied and the frequency of the payments.
(1) This applies only to joint and survivor payouts.
If the benefit would be greater, the amount of your payments will be based on
the current payout rate the Company uses for immediate annuity contracts.
VARIABLE PAYOUT
With a Variable Payout, you may select up to 7 Variable Account Options.
Your payments will vary accordingly. This is due to the varying investment
results that will be experienced by each of the Variable Account Options you
selected. The Payout Unit Value is calculated just like the Purchase Unit Value
for each Variable Account Option except that the Payout Unit Value includes a
factor for the Assumed Investment Rate you select. For additional information on
how Payout Payments and Payout Unit Values are calculated, see the Statement of
Additional Information.
In determining your first Payout Payment, an Assumed Investment Rate of
3 1/2% is used (unless you select a higher rate). If the net investment
experience of the Variable Account Option exceeds your Assumed Investment Rate,
your next payment will be greater than your first payment. If the investment
experience of the Variable Account Option is lower than your Assumed Investment
Rate, your next payment will be less than your payment.
PAYOUT UNIT -- a measuring unit used to calculate Payout Payments from your
Variable Account Option. Payout Unit values will vary with the investment
experience of the VALIC Separate Account A Division you have selected.
ASSUMED INVESTMENT RATE -- the rate used to determine your first monthly
Payout Payment per thousand dollars of Account Value in your Variable Account
Option(s).
COMBINATION FIXED AND VARIABLE PAYOUT
With a Combination Fixed and Variable Payout, you may choose:
o Up to 6 Variable Account Options (payments will vary); with a
o Fixed Payout (payment is fixed and guaranteed).
PAYOUT DATE
The Payout Date is the date elected on which your payout (annuity) payments
will start. The date elected must be the first of any month provided 30 days
advance notice has been given to VALIC. Your account will be valued ten days
prior to the end of the month preceding the Payout Date. A request to start
payments must be sent to our Home Office on a form approved by VALIC. Generally,
for qualified contracts, the Payout Date may begin when you attain age 59 1/2 or
separate from service, but must begin no later than April 1 following the
calendar year you reach age 70 1/2. For nonqualified contracts, the Payout Date
may begin at any time prior to your 85th birthday. For additional information on
the minimum distribution rules that apply to payments under 403(b), 401, 403(a)
and 457 plans or
40
<PAGE> 43
simplified employee plans ("SEPs"), see "Federal Tax Matters" in this prospectus
and in the Statement of Additional Information.
PAYOUT OPTIONS
You may specify the manner in which your Payout Payments are made. You may
select one of the following options:
o Life Only -- payments are made only to you during your lifetime. Under
this option there is no provision for a death benefit for the
beneficiary. For example, it would be possible under this option for the
Annuitant to receive only one payout payment if he died prior to the date
of the second payment, two if he died before the third payment.
o Life with Guaranteed Period -- payments are made to you during your
lifetime; but if you die before the guaranteed period has expired, your
beneficiary will receive payments for the rest of your guaranteed period.
o Life with Cash or Unit Refund -- payments are made to you during your
lifetime. Upon your death, your beneficiary will receive a lump sum
payment equal to the remaining Annuity Value.
o Joint and Survivor Life -- payments are made to you during the joint
lifetime of you and your beneficiary. Upon the death of one, payments
continue during the lifetime of the survivor. This option is designed
primarily for couples who require maximum possible variable payouts
during their joint lives and are not concerned with providing for
beneficiaries at death of the last survivor. For example, it would be
possible under this option for the Joint Annuitants to receive only one
payment if both Annuitants died prior to the date of the second payment,
or for the Joint Annuitants to receive only one payment and the surviving
Annuitant to receive only one payment if one Annuitant died prior to the
date of the second payment and the surviving Annuitant dies prior to the
date of the third payment.
o Payment for a Designated Period -- payments are made to you for a select
number of years between five and thirty. Upon your death, payments will
continue to your beneficiary until the designated period is completed.
ENHANCEMENTS TO PAYOUT OPTIONS
You may be able to select enhancements to the Payout Options described
above. These enhancements include partial annuitization, flexible payments of
varying amounts and inflation protection payments. Additionally, certain options
may be available with a one to twenty year guaranteed period. Additionally,
certain options may be available with a one to twenty year guaranteed period.
The Joint and Survivor Life Option may be available with a one to twenty year
guaranteed period option. Not all of the enhancements are available under each
option.
PAYOUT INFORMATION
Once your Payout Payments have begun, the option you have chosen may not be
stopped or changed. Any one of the Variable Account Options may result in your
receiving unequal payments during your life expectancy. If payments begin before
age 59 1/2, you may suffer unfavorable tax consequences if you do not meet an
exception to federal tax law. See "Federal Tax Matters" in this prospectus.
Your Payment Option should be selected at least 30 days before your Payout
Date. If such selection is not made:
-- payments will be made under the Life with Guaranteed Period Option, and
-- the payments will be guaranteed for a 10 year period, and
-- the payments will be based on the allocation used for your Purchase
Payments
-- Fixed Account Option will be used to distribute payments to you on
a Fixed Payout basis
-- Variable Account Options will be used to distribute payments to you
on a Variable Payout basis.
Your first Payout Payment must total at least $25.
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Most Payout Payments are made monthly. If the amount of your payment is
less than $25, we reserve the right to reduce the number of payments made each
year so each of your payments are at least $25.
For more information about Payout Options or enhancements of those Payout
Options available under the Contract, see the "Statement of Additional
Information".
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<PAGE> 45
SURRENDER OF ACCOUNT VALUE
WHEN SURRENDERS ARE ALLOWED. You may withdraw all or part of your Account
Value at any time before the Payout Period begins if:
1. allowed under federal and state law; and
2. allowed under your employer's plan.
For an explanation of charges that may apply if you surrender your Account
Value, see "Fees and Charges" in this prospectus.
AMOUNT THAT MAY BE SURRENDERED. The amount that may be surrendered at any
time will be:
Your Account Value (1) -- (minus) Applicable Surrender Charge = (equals)
Allowed Surrender Value
1: Equals the Account Value next computed after your properly completed
request for surrender is received in our Home Office.
There is no guarantee that the Surrender Value in a Variable Account Option will
ever equal or exceed the total amount of your Purchase Payments received by us.
We will mail to you the Surrender Value within 7 calendar days after we
receive your properly completed surrender request at our Home Office. However,
we may be required to suspend or postpone payments if redemption of an
underlying Fund's share has been suspended or postponed. See "Offering, Purchase
and Redemption of Fund Shares" in the Series Company Statement of Additional
Information. See your current Fund's prospectuses for a discussion of the
reasons why the redemption of shares may be postponed.
We may receive a surrender for a Purchase Payment which has not cleared the
banking system. We may delay payment of that portion of your Surrender Value
until the check clears. The rest of the Surrender Value will be processed as
usual.
SURRENDER RESTRICTIONS
Under the Texas State Optional Retirement Program, and in many Section
403(b) contracts, no surrender or partial surrender will be allowed except for
termination of employment, retirement or death.
Under the Florida State Optional Retirement Program, no surrender or
partial surrender of Purchase Payments made by the employer will be allowed
except for termination of employment, retirement or death. Benefit payments
based on payments from the employer may not be paid in a lump sum or for a
period certain, but must be paid under a life contingency option, except for:
1. death benefits; and
2. certain small amounts approved by the State of Florida.
PARTIAL SURRENDERS
You may request a partial surrender of your Account Value at any time. A
partial surrender plus any surrender charge will reduce your Account Value. The
reduction in your Account Value will be allocated proportionally through all of
your investment options unless specific investment options have been specified
on your request.
The reduction in the number of Purchase Units credited to your Variable
Account Option Account Value will equal:
<TABLE>
<S> <C> <C>
The amount Your Purchase
surrendered Units next
from the computed after
Variable the written
Account Option (DIVIDED BY) request for
+ (PLUS) surrender is
Any Surrender received at our
Charge Home Office.
</TABLE>
The Surrender Value will be reduced by a full quarterly account maintenance fee
charged in the case of a full surrender during a quarter.
SYSTEMATIC WITHDRAWALS. You may elect to withdraw all or part of your
Account Value under a systematic withdrawal method described in your annuity
contract offered by Portfolio Director. There will be no surrender charge for
withdrawals using this method, which provides for:
1. Payments to be made to you
2. Payment over a stated period of time (but not less than five years);
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<PAGE> 46
3. Payment of a stated yearly dollar amount or percentage (the amount or
percentage may not exceed 20% of your Account Value at the time election
is made);
We may require a minimum withdrawal amount under this method. The portion of
your account that has not been withdrawn will continue to receive the investment
return of the Variable Account Options which you selected. A systematic
withdrawal election may not be changed but can be revoked at no charge. Once
revoked, a systematic withdrawal may not be elected again. No more than one
systematic withdrawal election may be in effect at any one time. We reserve the
right to discontinue any or all systematic withdrawals or to change its terms,
at any time.
SURRENDERS REQUIRED BY FEDERAL TAX LAW. There will be no surrender charge
on a minimum distribution required by federal tax law (known as No Charge
Minimum Distribution), if the withdrawal:
1. Is made payable to you; and
2. Does not exceed the amount required under federal tax law as determined
by the values in this Contract and VALIC.
This contract feature will not be available in any year that an amount has been
withdrawn under the no charge systematic withdrawal method. See "Federal Tax
Matters" in this prospectus and in the Statement of Additional Information for
more information about required distributions imposed by tax law.
For an explanation of possible adverse tax consequences of a surrender, see
"Federal Tax Matters" in this prospectus.
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<PAGE> 47
EXCHANGE PRIVILEGE
We issue other fixed and/or variable annuity contracts in addition to
Portfolio Director (other contracts). These other contracts are listed below. We
will allow you, under certain conditions, to exchange from one of these other
contracts to Portfolio Director. This exchange privilege will be available only
to other contracts for which we have not yet started making payments under a
Payout Option. If you elect to exercise one of these exchange offers, you should
contact any of your Regional Offices at the address shown in the back of this
prospectus.
RESTRICTIONS ON EXCHANGE PRIVILEGE
We will impose certain general restrictions and rules on these exchange
privileges.
1. Partial exchanges are not permitted.
2. Exchanges from Portfolio Director to other contract forms are not
permitted.
3. This exchange privilege is only available for those other contracts
listed below.
Additionally, if you have your money in a fixed account of one of the below
listed other contracts, you must exchange directly into the Fixed Account
Options of Portfolio Director. You will be subject to all of the rules that
apply to the Fixed Account Options in Portfolio Director. For example, you will
be subject to the rules concerning transfers among investment options as stated
in the Transfers Between Investment Options section in this prospectus. We may,
at our option, waive any transfer restrictions for a stated period of time. If
we waive these transfer restrictions, you will be allowed to exchange to any
investment option available in Portfolio Director.
WE RESERVE THE RIGHT TO TERMINATE, MODIFY OR SUSPEND THESE EXCHANGE
PRIVILEGES AT ANY TIME.
TAXES AND CONVERSION COSTS
We will impose no fee or charge for these exchanges. Please read the
"Federal Tax Matters" section in this prospectus for information about the
federal income tax treatment of Portfolio Director.
SURRENDER CHARGES
We will generally not impose nor waive existing surrender charges as a
result of your electing to exchange from one of the other contracts.
For purpose of determining surrender charges, we often consider time in the
contract. For SPQ 181 and SPQ 181-1 Contracts, the contract date for determining
surrender charges under Portfolio Director will be the SPQ181 and SPQ181-1
contract date plus one year. For example, if you have an SPQ181 contract with a
contract date of January 1, 1993, upon exchange into Portfolio Director, the
contract date for surrender charges purposes becomes January 1, 1994.
For any other contract, the contract date for determining surrender charges
under Portfolio Director will be the same date as the other contract, but no
earlier than January 1, 1982. (The effect of this is to potentially shorten the
charge period for Purchase Payments subsequently made to Portfolio Director.)
If there is no surrender charge on assets within another contract, we will
not impose charges on those assets as a result of an exchange. If surrender
charges are to be based on Purchase Payments within a contract, we will consider
purchase payments in the other contract to have been transferred to Portfolio
Director for purposes of calculating the surrender charge. The effective dates
of these Purchase Payments will also be retained for charge purposes.
EXCHANGE OFFERS
The following other contracts may be exchanged.
-- V-Plan Contracts (IFA-582 and GFA-582 Contracts)
-- Compounder Contracts (C-1-75 and IFA-78 Contracts)
-- Independence Plus Contracts (UIT-585 and UITG-585 Contracts)
-- Impact Contracts (UIT-981 Contracts)
-- SA-1 or SA-2 (GUP-64, GUP-74 and GTS-VA Contracts)
-- FSPA-75, FSPA-73-3, FSPA-779 Con-
tracts
-- SPQ181, SPQ181-1 Contracts
-- CTA 978 Contract
-- TFA-379 Contract
-- SDA-578, SDA-773-T Contract
-- IRA-579 Contracts
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Portfolio Director will have the same Account Value (called Accumulation Value
in the other contracts) as the other contracts.
COMPARISON OF CONTRACTS
You should carefully compare the features, charges and restrictions of the
other contracts to those of Portfolio Director. A more detailed comparison of
the features, charges, and restriction between each above listed other contract
and Portfolio Director is provided in the Statement of Additional Information.
For the V-Plan and Compounder Contract you should refer to the terms of the
contract or certificate. For the other contracts please refer to its most
recently dated prospectus for a complete description of the contract terms and
conditions. Those prospectuses are incorporated herein by reference. If you want
an additional copy of any of these prospectuses or Statement of Additional
Information, please contact us at the address shown in the introduction of the
prospectus.
FEATURES OF PORTFOLIO DIRECTOR
In deciding whether you want to exercise this exchange privilege, you
should consider the following features of Portfolio Director.
1. Portfolio Director has more investment options to select from.
2. The Portfolio Director surrender charge is calculated assuming the most
recent Purchase Payments are removed first. This policy may cause
exchanged funds to be accessible only after charges are imposed.
3. Portfolio Director has an Interest Guaranteed Death Benefit.
4. Portfolio Director's Fund fees and charges are different than the other
contracts and in some cases may be higher.
5. Portfolio Director's guaranteed annuity rates and guaranteed interest
rates may be less favorable than the other contracts.
AGENTS' AND MANAGERS' RETIREMENT PLAN
EXCHANGE OFFER
General. All eligible agents and managers of the Company are allowed to
participate in the Company's Agents' and Managers' Retirement Plan ("Plan"). We
grant to participants in the Plan the right to effect a voluntary exchange of
their units of interest under the SA-1 Contracts or Independence Plus Contracts
for the equivalent units of interest in Portfolio Director.
Agents and managers of VALIC who enter into the voluntary exchange will not
incur under Portfolio Director any surrender charges or account maintenance
fees. Other individuals who may exchange to Portfolio Director from SA-1 or
Independence Plus Contracts may have surrender charges and account maintenance
fees imposed under Portfolio Director. All other provisions with regard to
exchange offers referenced in the section entitled "Exchange Offers" will apply
to the Agents' and Managers' Retirement Plan Exchange Offer.
Pursuant to this voluntary exchange offer, participants in the Plan will
have three options to choose from. As to the funding vehicle for their purchase
payment plan, the participant may choose to:
-- Remain in the SA-1 Contract or Independence Plus Contract.
-- Leave current assets in the SA-1 Contract and direct future Purchase
Payments to the Portfolio Director; or
-- Transfer all current assets and future Purchase Payments to the
Portfolio Director.
If the participant chooses to remain in either the SA-1 Contract or
Independence Plus Contract, future Purchase Payments and current assets will be
controlled by the provisions of the SA-1 Contract or Independence Plus Contract,
respectively. If the participant chooses to leave current assets in the SA-1
Contract or the Independence Plus Contract and direct future Purchase Payments
to Portfolio Director, the current assets will be controlled by the provisions
of the SA-1 Contract or the Independence Plus Contract, respectively. The future
Purchase Payments will be controlled by the terms of Portfolio Director subject
to the exception that surrender charges and account maintenance fees will not be
imposed under Portfolio Director. If the participant chooses to transfer all
current assets and future Purchase Payments to Portfolio Director, such
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<PAGE> 49
current assets and future Purchase Payments will be controlled by the provisions
of Portfolio Director subject to the exception that surrender charges and
account maintenance fees will not be imposed under Portfolio Director.
Once a participant transfers assets and future Purchase Payments to
Portfolio Director the participant will not be permitted to exchange back to the
SA-1 Contract or Independence Plus Contract. If a participant chooses to
transfer future Purchase Payments but not current assets to Portfolio Director,
the participant will be allowed at a later date to transfer the current assets
to Portfolio Director. For a complete analysis of the differences between the
SA-1 contract or the Independence Plus Contract and Portfolio Director, you
should refer to the Statement of Additional Information and the form of the
contract or certificate for its terms and conditions.
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DEATH BENEFITS
Portfolio Director will pay death benefits during either the Purchase Period or
the Payout Period. How these death benefits will be paid are discussed below.
The death benefit provisions in Portfolio Director may vary from state to state.
BENEFICIARY INFORMATION
The Beneficiary may receive death benefits:
o In a lump sum; or
o In the form of an annuity under any of the Payout Options stated in the
Payout Period section of this prospectus subject to the restrictions of that
Payout Option.
Payment of any death benefits must be within the time limits set by federal tax
law.
Beneficiary -- the person designated to receive Payout Payments upon the
death of an Annuitant.
Annuitant -- the individual, (in most cases this person is you) to whom
Payout Payments will be paid.
Beneficiaries Other Than Spouses.
If the Beneficiary is not the spouse of the Annuitant, death benefits must
be paid.
1. In full within 5 years after the Annuitant's death; or
2. By payments beginning within 1 year after the Annuitant's death under:
a. A life annuity;
b. A life annuity with payments certain; or
c. An annuity for a designated period.
If the Annuitant dies before the Annuity Date, the Beneficiary as named by you
may receive the payout.
Payments certain or payments for a designated period cannot be for a
greater period of time than the Beneficiary's life expectancy. After choosing a
payment option, a Beneficiary may exercise many of the investment options and
other rights that the Participant or Contract Owner had under Portfolio
Director.
Contract Owner -- either your employer or organization in the case of a
group contract or the Annuitant in the case of an individual contract. If the
contract is an individual non-qualified type, this is generally the Annuitant
but a Contingent Contract Owner may also be provided for.
SPECIAL INFORMATION FOR INDIVIDUAL NON-TAX QUALIFIED CONTRACTS
It is possible that the Contract Owner and the Annuitant under a Non-Tax
Qualified Contract are not the same person. If this is the case, and the
Contract Owner dies, there will be no death benefit payable since the death
benefit is only due in the event of the Annuitant's death. However, the Contract
will be transferred to the Contingent Owner, if any, or to the Contract Owner's
estate. Such transfers will be considered a taxable event by the IRS.
DURING THE PURCHASE PERIOD
Two types of benefits are available if death occurs during the Purchase
Period. Interest Guaranteed Death Benefit and Standard Death Benefit.
INTEREST GUARANTEED DEATH BENEFIT
The interest guaranteed death benefit is payable when death occurs prior to
your reaching the age of 70. This contract provision is not available in some
states.
The amount payable under the interest guaranteed death benefit will be at
least equal to the sum of your Account Value in the Fixed Account Option(s) and
the Variable Account Option(s) on the date VALIC receives proof of death.
Here is how to calculate the death benefit:
Fixed Account Options -- a particular subaccount into which your Purchase
Payments and Account Value may be allocated to fixed investment options.
Currently, the Fixed Account Options in Portfolio Director are Fixed Account
Plus and Short-Term Fixed Account. Each option of this type is guaranteed to
earn at least a minimum rate of interest.
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<PAGE> 51
Step 1: Determine your Fixed Account Option Value by taking the greater of:
<TABLE>
<S> <C> <C>
Value of Fixed Account 100% of Purchase
Option On Date Proof of OR Payments Placed in Fixed
Death Is Received by Account Option
VALIC -- (MINUS)
Amount of all Prior
Withdrawals, Charges and
any portion of Account
Value applied under a
Payout Option
</TABLE>
Variable Account Options -- Investment Options that correspond to VALIC
Separate Account A Divisions offered by Portfolio Director. Investment returns
on Variable Account Options may be positive or negative depending on the
investment performance of the underlying mutual fund.
Step 2: Determine your Variable Account Option Value by taking the greater
of:
<TABLE>
<S> <C> <C>
Value of Variable 100% of Purchase
Account Option On Date OR Payments Placed in
Proof of Death Is Variable Account
Received by VALIC Options
-- (MINUS)
Prior Withdrawals (out
of) or Transfers (out
of) the Variable Account
Option
+ (PLUS)
An annual interest
rate of 3%
</TABLE>
Step 3: Add step 1 + 2 = Death Benefit
For purposes of this calculation amounts transferred into the Variable Account
Option will be treated as Purchase Payments.
STANDARD DEATH BENEFIT
The standard death benefit is payable if death occurs on or after age 70.
The Standard Death Benefit will be the greater of:
<TABLE>
<S> <C> <C>
Your Account Value on 100% of Purchase
the Date Proof of OR Payments (to Fixed
Death is Received by and/or Variable Account
VALIC Options)
-- (MINUS)
Amount of all Prior
Withdrawals, Charges and
any portion of Account
Value applied under a
Payout Option
</TABLE>
DURING THE PAYOUT PERIOD
If death occurs during the Payout Period, your Beneficiary may receive a
death benefit depending on the Payout Option selected. The amount of death
benefits will also depend on the Payout Option that you selected. The Payout
Options available in Portfolio Director are described in the "Payout Period"
section of this prospectus.
-- If the Life Only Option or Joint and Survivor Life Option were chosen,
there will be no death benefit.
-- If the Life With Guaranteed Period Option, Joint and Survivor Life with
Guaranteed Periods Option, Life with Cash or Unit Refund Option or
Payment for a Designated Period Option were chosen, and the entire
amount guaranteed has not been paid, the Beneficiary may choose one of
the following within 60 days after death benefits are payable:
1. Receive the present value of any remaining payments in a lump sum; or
2. Receive the remaining payments under the same terms of the guaranteed
period option chosen by the deceased Participant; or
3. Receive the present value of any remaining payments applied under the
Payment for a Designated Period Option for a period equal to or
shorter than the period remaining. Spouse beneficiaries may be
entitled to more favorable treatment under federal tax law.
Under federal tax laws if the Life with Guaranteed Periods Option is chosen on a
variable basis, it may be treated in the same manner as a surrender of your
Portfolio Director account. If your account is surrendered the full amount your
Beneficiary receives will normally be treated as income for that year. This
amount generally will also be taxed at rates used for ordinary income.
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<PAGE> 52
HOW TO REVIEW INVESTMENT PERFORMANCE OF SEPARATE ACCOUNT DIVISIONS
We will advertise information about the investment performance of VALIC
Separate Account A Divisions. Our advertising of past investment performance
results does not mean that future performance will be the same. The performance
information will not predict what your actual investment experience will be in
that Division or show past performance under an actual contract. We may also
show how the Divisions rank on the basis of data compiled by independent ranking
services.
Divisions -- Subaccounts of VALIC Separate Account A which represent the
Variable Account Options in Portfolio Director. Each Division invests in a
different mutual fund, each having its own investment objective and strategy.
Some of the Divisions (and underlying Funds) offered in this prospectus
were previously available through other annuity contracts before Portfolio
Director was first available to you. We may therefore, advertise investment
performance since the inception of the underlying Funds. However, in doing so,
we will use the charges and fees imposed by Portfolio Director in calculating
the Division's investment performance for earlier time frames.
Purchase Payments -- an amount of money you pay to VALIC to receive the
benefits of an annuity Contract offered by Portfolio Director.
TYPES OF INVESTMENT PERFORMANCE
INFORMATION ADVERTISED
We may advertise the Division's Total Return Performance information and
Yield Performance information.
TOTAL RETURN PERFORMANCE INFORMATION
Total Return Performance Information is based on the overall dollar or
percentage change in value of an assumed investment in a Division over a given
period of time.
There are seven ways Total Return Performance Information may be
advertised:
-- Standard Average Annual Total Return
-- Nonstandard Average Annual Total Return
-- Cumulative Total Return
-- Annual Change in Purchase Unit Value
-- Cumulative Change in Purchase Unit Value
-- Total Return Based on Different Investment Amounts
-- An Assumed Account Value of $10,000
Each of these is described below.
For more information on how Total Return Performance Information is
calculated and tables showing historical performance information, see the
Statement of Additional Information.
STANDARD AVERAGE ANNUAL TOTAL RETURN
Standard Average Annual Total Return shows the average percentage change in
the value of an investment in the Division from the beginning to the end of a
given historical period. The results shown are after all charges and fees have
been applied against the Division. This will include account maintenance fees
and surrender charges that would have been deducted if you surrendered Portfolio
Director at the end of each period shown. Premium taxes are not deducted. This
information is calculated for each Division based on how an initial assumed
payment of $1,000 performed at the end of 1, 3, 5 and 10 year periods.
The return for periods of more than one year are annualized to obtain the
average annual percentage increase (or decrease) during the period.
Annualization assumes that the application of a single rate of return each year
during the period will produce the ending value, taking into account the effect
of compounding.
NONSTANDARD AVERAGE ANNUAL TOTAL RETURN
Nonstandard Average Annual Total Return is calculated in the same manner as
the Standard Average Annual Total Return. However, Nonstandard Average Annual
Total Return shows only the historic investment results of the Division. Account
maintenance fees, surrender charges and premium taxes are not deducted.
CUMULATIVE TOTAL RETURN
Cumulative Total Return assumes the investment in Portfolio Director will
stay in the Division beyond the time that a surrender charge would apply. It may
be calculated for 1, 3, 5 and 10 year
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<PAGE> 53
periods. It is based on an assumed initial investment of $10,000. The Cumulative
Return will be calculated without deduction of account maintenance fees,
surrender charges or premium taxes.
ANNUAL CHANGE IN PURCHASE UNIT VALUE
Annual Change in Purchase Unit Value is a percentage change during a one
year period. This is calculated as follows:
1. The Purchase Unit Value at the start of the year is subtracted from the
Purchase Unit Value at the end of the year;
2. The difference is divided by the Purchase Unit Value at the start of the
year.
Account maintenance fees, surrender charges and premium taxes are not
deducted. The effect of these charges, if deducted, would reduce the Division's
Annual Change in Purchase Unit Value.
CUMULATIVE CHANGE IN PURCHASE UNIT VALUE
Cumulative Change in Purchase Unit Value is a percentage change from the
beginning to the ending of a period usually greater than one year. Otherwise, it
is calculated in the same way as the Annual Change in Purchase Unit Value.
TOTAL RETURN BASED ON DIFFERENT INVESTMENT AMOUNTS
We may show total return information based on different investment amounts.
For example, we may show $200 a month for 10 years, or $100 a month to age 65.
Fees may or may not be included. Each performance illustration will explain the
Portfolio Director charges and fees imposed on the Division.
AN ASSUMED ACCOUNT VALUE OF $10,000
We may show annual changes in the Purchase Unit Value based on an initial
investment of $10,000. This will not reflect any deduction for account
maintenance fees, surrender charges and premium taxes.
YIELD PERFORMANCE INFORMATION
We may advertise Yield Performance, at a given point in time. A Division's
yield is one way of showing the rate of income the Division is earning as a
percentage of the Division's Purchase Unit Value.
MONEY MARKET DIVISION
We may advertise the Money Market Division's Current Yield and Effective
Yield.
The Current Yield refers to the income produced by an investment in the
Money Market Division over a given 7-day period. The Current Yield does not take
into account surrender charges, account maintenance fees or premium taxes. The
income produced over a 7 day period is then "annualized." This means we are
assuming the amount of income produced during the 7-day period will continue to
be produced each week for an entire year. The annualized amount is shown as a
percentage of the investment. The 7-day Current Yield for the last 7 days ended
December 31, 1995 was 4.15%.
The Effective Yield is calculated in a manner similar to the Current Yield.
But, when the yield is annualized the income earned is assumed to be reinvested.
The compounding effect will cause the Effective Yield to be higher than the
Current Yield. The 7-day Effective Yield for the last 7 days ended December 31,
1995 was 4.24%.
DIVISIONS OTHER THAN THE MONEY MARKET DIVISION
We may advertise the standardized yield performance for each Division other
than the Money Market Division. The yield for each of these Divisions will be
determined as follows:
1. We will subtract the account maintenance fee from the average daily net
investment income per Purchase Unit;
2. We will divide the remainder by the Purchase Unit Value on the last day
of the period; and
3. We will annualize the result.
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<PAGE> 54
OTHER CONTRACT FEATURES
CHANGES THAT MAY NOT BE MADE
The following terms in Portfolio Director may not be changed once your
Account has been established:
1. The Contract Owner;
2. The Participant; and
3. The Annuitant.
CHANGE OF BENEFICIARY
The Beneficiary (if not irrevocable) may usually be changed at any time.
Under some retirement programs, the right to name or change a Beneficiary
is subject to approval by the spouse. Also, the right to name a Beneficiary
other than the spouse may be subject to certain tax laws and regulations.
If the Annuitant dies, and there is no Beneficiary, any death benefit will
be payable to the Annuitant's estate.
If a Beneficiary dies while receiving payments, and there is no
co-Beneficiary to continue to receive payments, any amount still due will be
paid to the Beneficiary's estate.
CONTINGENT OWNER
The Contract Owner may name a Contingent Owner under an individual non-tax
qualified Contract. During the Purchase Period, the Contingent Owner may be
changed. However, if the Contract Owner dies, benefits must be distributed as
required by the federal tax law.
CANCELLATION -- THE 20 DAY "FREE LOOK"
The Contract Owner may cancel an individual contract by returning it to the
Company within 20 days after delivery. (A longer period will be allowed if
required under state law.) A refund will be made to the Contract Owner within 7
days after receipt of the Contract within the required period. The amount of the
refund will be equal to all Purchase Payments received or the amount required
under state law, if larger.
WE RESERVE CERTAIN RIGHTS
We reserve the right to:
1. Amend the Contract to conform with substitutions of investments;
2. Amend the Contract to comply with tax or other laws;
3. Make changes (upon written notice) to group Contracts that would apply
only to new Participants after the effective date of the changes;
4. Operate VALIC Separate Account A as a management investment company
under the 1940 Act, in consideration of an investment management fee;
5. Deregister VALIC Separate Account A under the 1940 Act, if registration
is no longer required;
6. Stop accepting new Participants under a group Contract.
RELATIONSHIP TO EMPLOYER'S PLAN
If the Contract is being offered as a retirement plan through your
employer, you should always refer to the terms and conditions in your employer's
plan when reviewing the description of Portfolio Director in this prospectus.
Plan loans from the Fixed Account Options may be allowed by your employer's
plan. Refer to your plan for a description of charges and other information.
VOTING RIGHTS
As discussed in the "About VALIC Separate Account A" section of this
prospectus, VALIC Separate Account A holds on your behalf shares of the Funds
which comprise the Variable Account Options. From time to time the Funds are
required to hold a shareholder meeting to obtain approval from their
shareholders for certain matters. As a Participant, you may be entitled to give
voting instructions to us as to how VALIC Separate Account A should vote its
Fund shares on these matters. Those persons entitled to give voting instructions
will be determined before the shareholders meeting is held. For more information
about these shareholder meetings and when they may be held, see the Funds'
prospectuses.
52
<PAGE> 55
WHO MAY GIVE VOTING INSTRUCTIONS
In most cases during the Purchase Period, you will have the right to give
voting instructions for the shareholder meetings. This will be true even if your
employer is the Contract Owner. Contract Owners will instruct VALIC Separate
Account A in accordance with these instructions. You will receive proxy material
and a form on which voting instructions may be given before the shareholder
meeting is held.
You will not have the right to give voting instructions if Portfolio
Director was issued in connection with a nonqualified and unfunded deferred
compensation plan.
DETERMINATION OF FUND SHARES ATTRIBUTABLE TO YOUR ACCOUNT
DURING PURCHASE PERIOD
The number of Fund shares attributable to your account will be determined
on the basis of the Purchase Units credited to your account on the record date
set for the Fund shareholder meeting.
DURING PAYOUT PERIOD OR AFTER A DEATH
BENEFIT HAS BEEN PAID
The number of Fund shares attributable to your account will be based on the
liability for future variable annuity payments to your payees on the record date
set for the Fund shareholder meeting.
HOW FUND SHARES ARE VOTED
The Funds which comprise the Variable Account Options in Portfolio Director
may have a number of shareholders including VALIC Separate Account A, VALIC and
other affiliated insurance company separate accounts and retirement plans within
the American General group of companies.
VALIC Separate Account A -- a segregated asset account established by VALIC
under the Texas Insurance Code. The purpose of VALIC Separate Account A is to
receive and invest your Purchase Payments and Account Value in the Variable
Account Options you have selected.
VALIC Separate Account A will vote all of the shares of the Funds it holds
based on, and in the same proportion as, the instructions given by all the
Participants invested in that Fund entitled to give instructions at that
shareholder meeting. VALIC Separate Account A will vote the shares of the Funds
it holds for which it receives no voting instruction in the same proportion as
the shares for which voting instructions have been received.
VALIC will vote the shares of the Funds it holds based on, and in the same
proportion as, the voting instructions received from participants in VALIC
Separate Account A.
In the future, we may decide how to vote the shares of VALIC or VALIC
Separate Account A in a different manner if permitted at that time under federal
securities law.
53
<PAGE> 56
FEDERAL TAX MATTERS
Portfolio Director Contracts provide tax-deferred accumulation over time,
but are subject to federal income and excise taxes, mentioned briefly below. You
should refer to the Statement of Additional Information for further details.
Section references are to the Internal Revenue Code ("Code"). We do not attempt
to describe any potential estate or gift tax, or any applicable state, local or
foreign tax law other than possible premium taxes mentioned under "Premium Tax
Charge." Remember that future legislation could modify the rules discussed
below, and always consult your personal tax adviser regarding how the current
rules apply to your specific situation.
TYPE OF PLANS
Tax rules vary, depending on whether the Contract is offered under your
employer's tax-qualified retirement program or an IRA, or is instead a
nonqualified Contract. Portfolio Director is used under the following types of
retirement arrangements:
1. Section 403(b) annuities for employees of public schools and Section
501(c)(3) tax-exempt organizations;
2. Section 401(a) and 403(a) qualified plans of for-profit employers
(including self-employed individuals);
3. Section 408(b) individual retirement annuities;
4. Section 457 unfunded deferred compensation plans of governmental and
tax-exempt employers;
5. Section 408(k) simplified deferred compensation plans of private
employers.
6. Unfunded, non-qualified deferred compensation plans of private
employers.
Note that the specific terms of the governing employer plan may limit rights and
options otherwise available under a Contract.
In addition, Portfolio Director is also available through "Non-Qualified
Contracts." Separate Account investment must be "adequately diversified" in
order for the increase in the value of Non-Qualified Contracts to receive
tax-deferred treatment. Each Fund must, as of the end of each calendar quarter
or within 30 days thereafter, have no more than 55% of its assets invested in
any one investment, 70% in any two investments, 80% in any three investments and
90% in any four investments. A Fund's failure to meet these diversification
requirements could result in tax liability to Non-Qualified Contract Owners.
Since each Fund expects to satisfy diversification, and assure tax deferred
treatment to Non-Qualified Contract holders, investment opportunities of a Fund
may consequently be limited. This would affect all Contract Owners, including
owners of Contracts other than Non-Qualified Contracts for whom diversification
is not a requirement for tax-deferred treatment.
TAX CONSEQUENCES IN GENERAL
Purchase Payments, distributions, withdrawals, transfers and surrender of a
Contract can each have a tax effect, which varies with the governing retirement
arrangement. Please refer to the detailed explanation in the Statement of
Additional Information, the documents (if any) controlling the retirement
arrangement through which the contract is offered, and your personal tax
adviser.
Purchase Payments under Portfolio Director can be made as contributions by
employers, or as pre-tax or after-tax contributions by employees, depending on
the type of retirement program. After-tax employee contributions constitute
"investment in the Contract." All Contracts receive deferral of tax on the
inside build-up of earnings on invested Purchase Payments, until a distribution
occurs. See the Statement of Additional Information for special rules, including
those applicable to taxable, non-natural owners of Non-Qualified Contracts.
Distributions are taxed differently depending on the program through which
Portfolio Director is offered and the previous tax characterization of the
contributions to which the distribution relates. Generally, the amount by which
a distribution exceeds investment in the Contract is subject to income tax. For
annuity payments, investment in the contract is recovered ratably over the
expected payout period. Special recovery rules might apply in certain
situations.
Amounts subject to income tax may also incur excise tax, under the
circumstances de-
54
<PAGE> 57
scribed in the Statement of Additional Information. Generally, they would also
be subject to some form of federal income tax withholding unless rolled into
another tax-deferred vehicle. Required withholding will vary according to type
of program, type of payment and your tax status. In addition, amounts received
under all Contracts may be subject to state income tax withholding requirements.
EFFECT OF TAX-DEFERRED ACCUMULATIONS
The chart below compares the results from Premium Payments made to:
1) Portfolio Director Contract issued to a tax favored retirement program
purchased with pre-tax premium payments;
2) A non-qualified Contract purchased with after-tax Premium Payments and;
3) conventional savings vehicles such as savings accounts.
THE POWER OF TAX-DEFERRED GROWTH
[GRAPH]
This hypothetical chart compares the results of (1) contributing $100 per month
to a conventional, non-tax deferred plan, (2) contributing $100 to a
nonqualified, tax-deferred annuity, and (3) contributing $100 per month ($138.89
since contributions are made before tax) to a qualified tax-deferred plan. The
chart assumes a 28% tax rate and an 8% fixed rate of return. Variable annuity
options incur mortality and expense charges (1% - 1.25%) and may also incur
administrative fees ($3.75 per quarter) and surrender charges (5% of the lesser
of all contributions received during the last 60 months or the amount
withdrawn). These fees and charges are not reflected in the above illustration
and would reduce the results shown. Income taxes are payable upon withdrawal,
and an additional 10% tax penalty may apply to withdrawals before age 59 1/2.
This information is for illustrative purposes only and is not a guarantee of
future return.
Unlike savings accounts, Premium Payments made to tax-favored retirement
programs and Non-Qualified Contracts provide tax deferred treatment on earnings.
In addition, Premium Payments made to tax-favored retirement programs ordinarily
are not subject to income tax until withdrawn. As shown above, investing in a
tax-favored program increases the accumulation power of savings over time. The
more taxes saved and reinvested in the program, the more the accumulation power
effectively grows over the years.
To further illustrate the advantages of tax deferred savings using a 28%
Federal tax bracket, an annual fixed yield (BEFORE THE DEDUCTION OF ANY FEES OR
CHARGES) of 8% under a tax-favored retirement program in which tax savings were
reinvested has an equivalent annual fixed yield of 5.76% under a conventional
savings program. THE 8% YIELD ON THE TAX-FAVORED PROGRAM WILL BE REDUCED BY THE
IMPACT OF INCOME TAXES UPON WITHDRAWAL. The yield will vary depending upon the
timing of withdrawals. The previous chart represents (without factoring in fees
and charges) after-tax amounts that would be received.
By taking into account the current deferral of taxes, contributions to
tax-favored retirement programs increase the amount available for savings by
decreasing the relative current out-of-pocket cost (referring to the effect on
annual net take-home pay) of the investment. The chart below illustrates this
principle by comparing a pre-tax contribution to a tax-favored retirement plan
with an after-tax contribution to a conventional savings account:
PAYCHECK COMPARISON
<TABLE>
<CAPTION>
TAX-FAVORED CONVENTIONAL
RETIREMENT SAVINGS
PROGRAM ACCOUNT
----------- ------------
<S> <C> <C>
Annual amount available
for savings before
federal taxes........... $ 2,500 $ 2,500
Current federal income
tax due on Purchase
Payments................ 0 (700)
Net retirement plan
Purchase Payments....... $ 2,500 $ 1,800
</TABLE>
This chart assumes a 28% Federal income tax rate. The $700 which is paid toward
current Federal income taxes on $2,500 contributed to the conventional savings
account remains in the
55
<PAGE> 58
tax-favored program, subject to being taxed upon withdrawal. Stated otherwise,
to reach an annual retirement savings goal of $2,500, the contribution to a
tax-favored retirement program results in a current out-of-pocket expense of
$1,800 while the contribution to a conventional savings account requires the
full $2,500 out-of-pocket expense. The tax-favored retirement program
represented in this chart is a plan type, such as one under Section 403(b) of
the Code, which allows participants to exclude contributions within limits, from
gross income.
56
<PAGE> 59
REVOCATION OF TELEPHONE ASSET TRANSFER AUTHORITY
Participant/Contract Owner Name:
------------------------------------------------------------------------
Social Security Number:
------------------------------------------------------------------------
Birth Date:
I am the Participant under or Contract Owner of one or more variable
annuity contracts issued by The Variable Annuity Life Insurance Company
("VALIC"). I hereby instruct VALIC not to accept any telephone instructions to
transfer Account Values among investment options or change the allocation of
future Purchase Payments from me, anyone representing me or anyone representing
himself or herself to be me. I understand as a result of executing this form
that the transfer of Account Values or Payout Values among investment options or
changes in the allocation of future Purchase Payments may only be effected upon
the receipt by VALIC of my written instructions.
<TABLE>
<S> <C>
- - ---------------------------------------------------------------- ------------------------
Participant/Contract Owner Signature Date
Mail this form to any Regional Office (see the last page of your prospectus for addresses) or
to the Home Office at the following address: VALIC, Customer Service A3-01, 2929 Allen
Parkway, Houston, TX 77019.
</TABLE>
57
<PAGE> 60
Please tear off, complete and return the form below to one of our Regional
Offices at the address shown on the inside back cover of this Prospectus. A
Statement of Additional Information may also be ordered by calling
1-800-44-VALIC.
.................................................................................
PORTFOLIO DIRECTOR CONTRACTS
Please send me a free copy of the Statement of Additional Information for The
Variable Annuity Life Insurance Company Separate Account A (Portfolio Director
Contract Series).
(Please Print or Type)
================================================================================
Name: G.A. #
---------------------------------- -------------------------------
Address: Policy #
---------------------------------- -------------------------------
----------------------------------
Social Security Number:
----------------------------------
================================================================================
58
<PAGE> 61
CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information.................................................................... 4
Marketing Information................................................................ 4
Endorsements and Published Ratings................................................... 6
Types of Variable Annuity Contracts.................................................... 8
Federal Tax Matters.................................................................... 8
Tax Consequences of Purchase Payments................................................ 8
Tax Consequences of Distributions.................................................... 9
Special Tax Consequences -- Early Distribution....................................... 10
Special Tax Consequences -- Required Distributions................................... 10
Tax Free Rollovers, Transfers and Exchanges.......................................... 11
Exchange Privilege..................................................................... 12
Exchanges From Independence Plus Contracts........................................... 12
Exchanges From V-Plan Contracts...................................................... 13
Exchanges From SA-1 and SA-2 Contracts............................................... 14
Exchanges From Impact Contracts...................................................... 15
Exchanges From Compounder Contracts.................................................. 16
Information Which May Be Applicable To Any Exchange.................................. 17
Calculation of Surrender Charge........................................................ 18
Illustration of Surrender Charge on Total Surrender.................................. 18
Illustration of Surrender Charge on a 10% Partial Surrender Followed by a Full
Surrender......................................................................... 18
Purchase Unit Value.................................................................... 19
Illustration of Calculation of Purchase Unit Value................................... 19
Illustration of Purchase of Purchase Units........................................... 19
Performance Calculations............................................................... 19
Money Market Division Yields......................................................... 19
Calculation of Yield for Money Market Division Six................................... 19
Illustration of Calculation of Yield for Money Market Division Six................... 19
Calculation of Effective Yield for Money Market Division Six......................... 19
Illustration of Calculation of Effective Yield for Money Market Division Six......... 19
Standardized Yield for Divisions Seven, Eight and Thirteen............................. 20
Calculation of Standardized Yield for Divisions Seven, Eight and Thirteen............ 20
Illustration of Calculation of Standardized Yield for Divisions Seven, Eight and
Thirteen.......................................................................... 20
Calculation of Average Annual Total Return........................................... 21
Separate Account Division Performance Information...................................... 22
Average Annual Total Return, Cumulative Return and Annual and Cumulative Change in
Purchase Unit Value Tables........................................................ 22
Hypothetical $10,000 Account Value and Cumulative Return as Compared
to Benchmark Tables............................................................... 26
Performance Compared to Market Indices............................................... 29
Stock Index Division Ten Performance Compared to S&P 500 Index....................... 29
MidCap Index Division Four Performance Compared to Relevant Index.................... 30
Small Cap Index Division Fourteen Performance Compared to Russell 2000 Index......... 30
International Equities Division Eleven Performance Compared to EAFE Index............ 31
Templeton International Division Twenty Performance Compared to MSCI World Index..... 31
Dreyfus Small Cap Division Eighteen Performance Compared to Russell 2000............. 31
Growth Division Fifteen Performance Compared to S&P 500 Index........................ 32
Growth & Income Division Sixteen Performance Compared to S&P 500 Index............... 32
Capital Conservation Division Seven Performance Compared to Merrill Lynch
Corporate Master Index............................................................ 33
</TABLE>
59
<PAGE> 62
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Government Securities Division Eight Performance Compared to Lehman Brothers
U.S. Treasury Composite Index..................................................... 34
International Government Bond Division Thirteen Performance Compared to Salomon
Brothers
Non-U.S. Dollar World Government Bond Index....................................... 34
Social Awareness Division Twelve Performance Compared to S&P 500 Index............... 35
Science & Technology Division Seventeen Performance Compared to S&P 500 Index........ 35
Money Market Division Six Performance Compared to Certificate of Deposit Primary
Offering by New York City Banks, 30 Day Index..................................... 36
Timed Opportunity Division Five Performance Compared to S&P 500 Index, Merrill Lynch
Corporate and Government Master Index and Certificate of Deposit Primary Offering
by New York City Banks, 30 Day Index.............................................. 37
Templeton Asset Allocation Division Nineteen Performance Compared to MSCI World
Index,
Salomon Brothers Non-US Dollar World Government Bond Index, and Certificate of
Deposit Primary Offering by New York City Banks, 30 Day Index..................... 38
Payout Payments........................................................................ 38
Assumed Investment Rate.............................................................. 38
Amount of Payout Payments............................................................ 38
Payout Unit Value.................................................................... 39
Illustration of Calculation of Payout Unit Value..................................... 39
Illustration of Payout Payments...................................................... 40
Distribution of Variable Annuity Contracts............................................. 40
Experts................................................................................ 40
Comments on Financial Statements....................................................... 41
</TABLE>
60
<PAGE> 63
================================================================================
FOR ADDITIONAL INFORMATION ABOUT THE CONTRACTS
CONTACT YOUR NEAREST REGIONAL OFFICE:
4722 N. 24th 500 Normandale Lake Blvd.
Suite 150 Suite 750
Phoenix, AZ 85016 Bloomington, MN 55437
(602) 957-1690 (612) 893-1099
222 South Harbor Blvd. 410 Amherst Street
10th Floor Suite 250
Anaheim, CA 92805 Nashua, NH 03063
(714) 774-7844 (603) 883-3840
1900 O'Farrell St. 90 Woodbridge Ctr. Dr.
Suite 390 Suite 410
San Mateo, CA 94403 Woodbridge, NJ 07095
(415) 574-5433 (908) 750-5611
165 South Union Blvd. West University Tower
Suite 1050 3100 Tower Blvd.
Lakewood, CO 80228 Suite 1601, Box 50
(303) 988-3344 Durham, NC 27707
(919) 489-6529
10006 N. Dale Mabry Hwy.
Suite 113 Two Summit Park Drive
Tampa, FL 33618 Suite 410
(813) 961-1611 Independence, OH 44131
(216) 520-2028
100 Ashford Center North
Suite 100 1800 S.W. First Avenue
Atlanta, GA 30338 Suite 505
(770) 395-4700 Portland, OR 97201
(503) 223-6288
230 West Monroe
Suite 1550 1767 Sentry Pkwy. West 19
Chicago, IL 60606 Suite 300
(312) 368-1001 Blue Bell, PA 19422
(215) 646-8030
8555 North River Road
Suite 420 5400 LBJ Freeway
Indianapolis, IN 46240 Suite 1340
(317) 574-7145 Dallas, TX 75240
(214) 490-1515
7310 Ritchie Highway
Suite 800 800 Gessner
Glen Burnie, MD 21061 Suite 1280
(410) 768-2330 Houston, TX 77024
(713) 465-2253
1301 West Long Lake Road
Suite 340
Troy, MI 48098
(810) 641-0022
There are also more than thirty branch offices located throughout the country.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019 1-800-44-VALIC
TDD NUMBER 1-800-35-VALIC
FOR UNIT VALUE INFORMATION CALL: 1-(800) 847-5634
FOR ASSET TRANSFERS BY TELEPHONE CALL: 1-(800) 621-7792
================================================================================
<PAGE> 64
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
UNITS OF INTEREST UNDER GROUP AND
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
PORTFOLIO DIRECTOR CONTRACT SERIES
----------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
----------------------------------------------------------------
FORM N-4 PART B
MAY 1, 1996
This Statement of Additional Information is not a prospectus but contains
information in addition to that set forth in the prospectus for the Portfolio
Director Contract Series* dated May 1, 1996 ("Contracts") and should be read in
conjunction with the prospectus. The terms used in this Statement of Additional
Information have the same meaning as those set forth in the prospectus. A
prospectus may be obtained by calling or writing the Company, or The Variable
Annuity Marketing Company (the "Underwriter") at 2929 Allen Parkway, Houston,
Texas 77019; 1-(800)-44-VALIC. Prospectuses are also available from regional
sales offices of the Underwriter or from its registered sales representatives.
(*The Portfolio Director Contract Series is composed of Contract Forms UIT-194,
UITG-194, UITN-194, UIT-IRA-194, and UIT-SEP-194.)
1
<PAGE> 65
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information................................................................... 4
Marketing Information............................................................... 4
Endorsements and Published Ratings.................................................. 6
Types of Variable Annuity Contracts................................................... 8
Federal Tax Matters................................................................... 8
Tax Consequences of Purchase Payments............................................... 8
Tax Consequences of Distributions................................................... 9
Special Tax Consequences -- Early Distribution...................................... 10
Special Tax Consequences -- Required Distributions.................................. 10
Tax Free Rollovers, Transfers and Exchanges......................................... 11
Exchange Privilege.................................................................... 12
Exchanges From Independence Plus Contracts.......................................... 12
Exchange From V-Plan Contracts...................................................... 13
Exchanges From SA-1 and SA-2 Contracts.............................................. 14
Exchange From Impact Contracts...................................................... 15
Exchanges From Compounder Contracts................................................. 16
Information Which May Be Applicable To Any Exchange................................. 17
Calculation of Surrender Charge....................................................... 18
Illustration of Surrender Charge on Total Surrender................................. 18
Illustration of Surrender Charge on a 10% Partial Surrender Followed by a Full
Surrender........................................................................ 18
Purchase Unit Value................................................................... 19
Illustration of Calculation of Purchase Unit Value.................................. 19
Illustration of Purchase of Purchase Units.......................................... 19
Performance Calculations.............................................................. 19
Money Market Division Yields........................................................ 19
Calculation of Yield for Money Market Division Six.................................. 19
Illustration of Calculation of Yield for Money Market Division Six.................. 19
Calculation of Effective Yield for Money Market Division Six........................ 19
Illustration of Calculation of Effective Yield for Money Market Division Six........ 19
Standardized Yield for Divisions Seven, Eight and Thirteen............................ 20
Calculation of Standardized Yield for Divisions Seven,Eight and Thirteen............ 20
Illustration of Calculation of Standardized Yield for Divisions Seven, Eight and
Thirteen......................................................................... 20
Calculation of Average Annual Total Return.......................................... 21
Separate Account Division Performance Information..................................... 22
Average Annual Total Return, Cumulative Return and Annual and Cumulative Change in
Purchase Unit Value Tables....................................................... 22
Hypothetical $10,000 Account Value and Cumulative Return as Compared to
Benchmark Tables................................................................. 26
Performance Compared to Market Indices.............................................. 26
Stock Index Division Ten Performance Compared to S&P 500 Index...................... 29
MidCap Index Division Four Performance Compared to Relevant Index................... 29
Small Cap Index Division Fourteen Performance Compared to Russell 2000 Index........ 30
International Equities Division Eleven Performance Compared to EAFE Index........... 30
Templeton International Division Twenty Performance Compared to MSCI World Index.... 31
Dreyfus Small Cap Division Eighteen Performance Compared to Russell 2000............ 31
Growth Division Fifteen Performance Compared to S&P 500 Index....................... 32
Growth & Income Division Sixteen Performance Compared to S&P 500 Index.............. 32
Capital Conservation Division Seven Performance Compared to Merrill Lynch Corporate
Master Index..................................................................... 33
Government Securities Division Eight Performance Compared to Lehman Brothers U.S.
Treasury Composite Index......................................................... 34
</TABLE>
2
<PAGE> 66
<TABLE>
<S> <C>
International Government Bond Division Thirteen Performance Compared to Salomon
Brothers Non-U.S. Dollar World Government Bond Index............................. 34
Social Awareness Division Twelve Performance Compared to S&P 500 Index.............. 35
Science & Technology Division Seventeen Performance Compared to S&P 500 Index....... 35
Money Market Division Six Performance Compared to Certificate of Deposit Primary
Offering by New York City Banks, 30 Day Index.................................... 36
Timed Opportunity Division Five Performance Compared to S&P 500 Index, Merrill Lynch
Corporate and Government Master Index and Certificate of Deposit Primary Offering
by New York City Banks, 30 Day Index............................................. 37
Templeton Asset Allocation Division Nineteen Performance Compared to MSCI World
Index, Salomon Brothers Non-US Dollar World Government Bond Index, and
Certificate of Deposit Primary Offering by New York City Banks, 30 Day Index..... 38
Payout Payments....................................................................... 38
Assumed Investment Rate............................................................. 38
Amount of Payout Payments........................................................... 38
Payout Unit Value................................................................... 39
Illustration of Calculation of Payout Unit Value.................................... 39
Illustration of Payout Payments..................................................... 40
Distribution of Variable Annuity Contracts............................................ 40
Experts............................................................................... 40
Comments on Financial Statements...................................................... 41
</TABLE>
3
<PAGE> 67
GENERAL INFORMATION
MARKETING INFORMATION
The Company has targeted not-for-profit organizations as the central focus
of its marketing efforts for its Contracts. The Company has utilized as its
general marketing theme the concept that the Company is "America's Retirement
Plan Specialists." Specifically, the Company's marketing thrust is aimed at
individuals and groups associated with public and private schools, colleges and
universities, not-for-profit health care organizations, state and local
governments and other not-for-profit organizations.
This marketing concept has proven to be successful. In the aggregate,
premium deposits to the Company have grown from $37,000 in 1956 to more than
$2.5 billion as of December 31, 1995. The number of aggregate participant
accounts has increased from 155,000 accounts in 1980 to more than 1,390,700
accounts as of December 31, 1995. The number of employer groups which have
purchased Contracts has increased by 83 percent in the past five years to more
than 20,386 as of December 31, 1995. As of December 31, 1995, the Company was
ranked in the top 1 percent of all U.S. life insurance companies with regard to
asset size. As of December 31, 1995 the Company's assets totaled $25 billion.
The Company's growth can also be reviewed by examining each market segment
the Company targets.
As of December 31, 1995, the Company was marketing Contracts in more than
7,911 public and private, primary and secondary schools with nearly 401,064
participant accounts for employees in public and private schools nationwide.
From December 31, 1990 to December 31, 1995, the cash value of investments in
these Contracts has increased by 96 percent while the number of public and
private school groups in these Contracts increased 34 percent and the number of
participant accounts in these Contracts increased by 44 percent.
The Company has also increased its marketing efforts to colleges and
universities. From December 31, 1990 to December 31, 1995, the number of
colleges and universities which allow the Company to market Contracts to its
faculty and staff members has increased 72 percent and for the same period the
number of participant accounts has increased 48 percent. For the same time
period cash values for participants have increased 102 percent. As of December
31, 1995, more than 41 percent of United States colleges and universities allow
the Company to market Contracts to their faculty and staff members.
The Company has utilized as the central focus in its marketing to college
and university faculty and staff members the theme that the Company is the
"Alternative of Choice."
The Company has also had growth in the health care segment of the
not-for-profit organization market. From December 31, 1990 to December 31, 1995
Contract cash values have increased 199 percent. During the same period the
number of health care groups that have purchased these Contracts increased 78
percent and the number of participants who were in the Contracts increased 148
percent.
The Company has also experienced growth in contracts sold to state and
local governmental groups. From December 31, 1990 to December 31, 1995, Contract
cash values for participants in these groups have increased 98 percent. For the
same period the number of participant accounts for individuals in these groups
in these Contracts increased 75 percent and the number of employer groups has
increased 101 percent.
Additionally, several states have enacted, as an alternative to state
administered defined benefit retirement programs, Optional Retirement Plans
(ORPs). A state that sponsors an ORP will select the carriers which will be
allowed to participate in the ORP. The Company has been selected as one of the
carriers permitted to market Contracts to state employees who elect to
participate in the ORP in 24 of the last 27 states to sponsor ORPs with multiple
carriers, as of December 31, 1995. From December 31, 1990 to December 31, 1995,
in these ORPs the number of participant accounts increased 164 percent and cash
values increased 153 percent to more than $1.5 billion dollars. In addition,
during this time period annual ORP premiums doubled.
The Company may, from time to time, refer to a general investment strategy
known as indexing. Several of the Divisions employ this investment
4
<PAGE> 68
strategy. The Company may compare the performance of these Divisions to the S&P
500 Index, S&P MidCap 400 Index, Russell 2000 Index, Morgan Stanley Capital
International Europe, Australia, and Far East (EAFE) Index, or any other
appropriate market index. The indexes are not managed funds and have no
identifiable investment objectives.
The Company may, from time to time, refer, individually or collectively, to
its package of retirement plan services. Collectively, this package of services
may be referred to as easy Retirement Plan easy Retirement Plan includes: (1)
personal, face-to-face service from highly trained VALIC Retirement Plan
Specialists; (2) informative retirement-investment education programs, seminars
and materials; (3) specialized software programs for retirement planning and
developing asset allocation strategies; (4) a wide selection of innovative,
market-responsive investment options; (5) advanced and efficient administration
of your retirement account; (6) and a financially strong and stable Company with
which to do business.
From time to time the Company may refer to the diversifying process of
asset allocation based on the Modern Portfolio Theory developed by Nobel Prize
winning economist Harry Markowitz. The basic assumptions of Modern Portfolio
Theory are that the selection of individual investments has little impact on
portfolio performance, market timing strategies seldom work, markets are
efficient and selecting the suitable mix of asset classes is more important when
creating a long-term investment portfolio. Modern Portfolio Theory allows an
investor to determine an "efficient" or "optimized" portfolio that has
historically provided a higher return with the same risk or the same return with
lower risk.
When presenting the asset allocation process the Company may outline the
process of personal and investment risk analysis including determining
individual risk tolerances and a discussion of the different types of investment
risk. The Company may classify investors into five categories based on their
personal risk tolerance and will quote various industry experts on which types
of investments are best suited to each of the five risk categories. The industry
experts quoted may include Ibbotson Associates, CDA Investment Technologies,
Lipper Analytical Services, Laffer-Cantos, Inc., VARDS Report, Wilson Associates
and any other expert which has been deemed by the Company to be appropriate. The
Company may also provide a historical overview of the performance of a variety
of investment market indexes and different asset classes, such as stocks, bonds,
cash equivalents, etc. The Company may also discuss investment volatility
(standard deviation) including the range of returns for different asset classes
over different time horizons, and the correlation between the returns of
different asset classes. The Company may also discuss the basis of portfolio
optimization including the required inputs and the construction of efficient
portfolios using sophisticated computer-based techniques. Finally, the Company
may describe various investment strategies and methods of implementation such as
the use of index funds vs. actively managed funds, the use of dollar cost
averaging techniques, the tax status of contributions, and the periodic
rebalancing of diversified portfolios.
The Company, in its marketing efforts to each of the market segments, may
from time to time design sales literature and material specifically for that
market segment, e.g., the health care segment of the not-for-profit organization
market. This sales literature and material may also be specific to a certain
group. For example, sales literature and material may be designed for a specific
hospital. The sales literature and material would address specifically the
group's contract and retirement plan.
The Company, in its marketing efforts, may also refer to the following
investment advisers referenced in the Prospectus.
Templeton Investment Counsel Inc., is the investment adviser for the
Templeton Asset Allocation Fund (underlying Division Nineteen) and the Templeton
International Fund (underlying Division Twenty). For more than 50 years, the
Templeton organization has been a leading global investment management company
with offices in the U.S., Australia, Bahamas, Canada, Germany, Hong Kong,
Luxembourg, Russia, Scotland and Singapore. A member of the $132.6 billion
Franklin Templeton Group, Templeton has more than $52 billion of assets under
management in global and non-U.S. investment companies and private accounts. The
Franklin Templeton Group provides investment management and advisory services to
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a worldwide client base. Templeton Investment Counsel Inc., uses a disciplined,
long-term approach to value oriented global and international investing. It has
an extensive global network of investment research sources. Securities are
selected for a fund's portfolio on the basis of fundamental company-by-company
analysis.
The Company may, from time to time, refer to Value Line Inc., ("Value
Line"), investment subadviser to the Growth & Income Fund (underlying Division
16). For more than four decades, Value Line has provided investment counseling
services to mutual funds and private and institutional accounts with combined
assets in excess of $4.5 billion. Investment selection is based on the Value
Line Timeliness Ranking System, which has evolved after many years of research.
The System provides objective standards for determining whether the market is
under- or overvaluing a particular security. A Value Line subsidiary publishes
the Value Line Investment Survey, one of the best known investment advisory
services in the United States, which covers about 1700 stocks, organized into
90+ industries on a regular basis. The Expanded Edition of The Value Line
Investment Survey covers an additional 1,800 stocks.
The Company may, from time to time, refer to T. Rowe Price Associates, Inc.
(T. Rowe Price), as subadviser to the Science & Technology Fund (underlying
Division Seventeen) and the Growth Fund (underlying Division Fifteen). T. Rowe
Price, one of the nation's leading no-load mutual fund managers together with
its affiliates currently manages more than $70 billion. Its approach to managing
money is based on proprietary research and a strict investment discipline
developed over 50 years. Founded in 1937 by the late Thomas Rowe Price Jr., T.
Rowe Price is one of the pioneers of growth stock investing. Growth stock
investing focuses on well-managed companies that operate in fields where
earnings and dividends are expected to grow faster than both inflation and the
overall economy. T. Rowe Price has delivered strong performance for its clients
by investing in both large and small-growth companies which operate in the
service sector of the economy. This is based on the fundamental premise that
long-term growth in the service sector will outpace overall economic growth. T.
Rowe Price has also delivered strong performance for its clients by investing in
the common stocks of companies expected to benefit from the development,
advancement and use of science and technology. This includes industries such as
telecommunications, computers, software, medical devices, and biotechnology.
The Company may, from time to time, refer to The Dreyfus Corporation as
adviser for the Dreyfus Small Cap Fund (underlying Division Eighteen). The
Dreyfus Corporation has been helping Americans invest for their future with
quality mutual funds for more than four decades. As of the end of 1995, the firm
had over $82 billion in assets under management.
The Company may, from time to time, refer in advertisements or sales
materials to certain milestones which are intended to emphasize the Company's
growth and development in assets, groups and various market segments.
Additionally the Company may refer from time to time in advertisements or sales
materials to marketing strategies it utilizes to promote the Company's business
objectives. Further, the Company may refer from time to time in advertisements
or sales materials to certain value-added services it provides to its groups,
Contract Owners and Participants.
ENDORSEMENTS AND
PUBLISHED RATINGS
From time to time, in advertisements or in reports to Contract Owners, the
Company may refer to its endorsements. Endorsements are often in the form of a
list of organizations, individuals or other parties which recommend the Company
or the Contracts. The endorser's name will be used only with the endorser's
consent. It should be noted that the list of endorsements may change from time
to time.
Also from time to time, the rating of the Company as an insurance company
by A. M. Best may be referred to in advertisements or in reports to Contract
Owners. Each year the A. M. Best Company reviews the financial status of
thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect their current opinion of the relative financial strength and
operating performance of an insurance company in comparison to the norms of the
life/health insurance industry. Best's Ratings range from A++ to F. The
Company's rating is A++. An A++ rating means, in the opinion of A. M. Best,
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that the insurer has demonstrated the strongest ability to meet its respective
policyholder and other contractual obligations.
In addition, the claims-paying ability of the Company as measured by the
Standard and Poor's Ratings Group may be referred to in advertisements or in
reports to Contract Owners. A Standard and Poor's insurance claims-paying
ability rating is an assessment of an operating insurance company's financial
capacity to meet the obligations of its insurance policies in accordance with
their terms. Standard and Poor's ratings range from AAA to D. The Company's
claims-paying ability rating is AAA, which is defined as superior.
Further, from time to time the Company may refer to Moody's Investor's
Service's rating of the Company. Moody's Investor's Service's financial strength
ratings indicate an insurance company's ability to discharge senior policyholder
obligations and claims and are based on an analysis of the insurance company and
its relationship to its parent, subsidiaries and affiliates. Moody's Investor's
Service's ratings range from Aaa to C. The Company's rating is Aa2 which is
defined as excellent.
The Company may additionally refer to its Duff & Phelp's rating. A Duff &
Phelp's rating is an assessment of a Company's insurance claims paying ability.
Duff & Phelp's ratings range from AAA to CCC. Duff & Phelp's rates the claims
paying ability of the Company as AAA. An AAA rating reflects that the Company
has the highest claims paying ability.
Ratings relate to the claims paying ability of the Company's General
Account and not the investment characteristics of the Separate Account.
The Company may from time to time, refer to Lipper Analytical Services
Incorporated ("Lipper"), Morningstar, Inc. ("Morningstar") and CDA/Wiesenberger
Investment Companies (CDA/Wiesenberger) when discussing the performance of its
Divisions. Lipper, Morningstar and CDA/Wiesenberger are leading publishers of
statistical data about the investment company industry in the United States.
Additionally, the Company may compare the performance of the Divisions to
categories published by Lipper and Morningstar. The published categories which
may be utilized in comparison with the performance of the Divisions include the
Morningstar Growth and Income Mutual Fund Category, Morningstar Aggressive
Growth Mutual Fund Category, Morningstar Growth Mutual Fund Category,
Morningstar International Stock Mutual Fund Category, Lipper Growth and Income
Mutual Fund Category, Lipper Small Company Growth Mutual Fund Category, Lipper
Growth Mutual Fund Category and Lipper International Mutual Fund Category.
Additional Lipper or Morningstar categories may be utilized if they are deemed
by the Company relevant to the performance of the Company's Divisions.
The Company may, from time to time, refer to The Variable Annuity Research
& Data Services (VARDS) Report. The VARDS Report offers monthly analysis of the
variable annuity industry, including marketing and performance information.
The Company may, from time to time, refer to Bankers Trust Company's
Tactical Asset Allocation Model's historical performance and compare such
performance to that of the S&P 500 Index. Neither the Model nor the S&P 500
Index is a managed fund and neither have identifiable investment objectives.
Finally the Company will utilize as a comparative measure for the
performance of its Funds the Consumer Price Index ("CPI"). The CPI is a measure
of change in consumer prices, as determined in a monthly survey of the U.S.
Bureau of Labor Statistics. Housing costs, transportation, food, electricity,
changes in taxes and labor costs are among the CPI components. The CPI provides
a tool for determining the impact of inflation on an individual's purchasing
power.
TYPES OF VARIABLE ANNUITY
CONTRACTS
Three types of Contracts are offered in connection with the prospectus to
which this Statement of Additional Information relates:
(1) single payment immediate annuity Contracts;
(2) single payment deferred annuity Contracts; and
(3) flexible payment deferred annuity Contracts.
Under single payment Contracts, only one Purchase Payment is made by the
Contract
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Owner. Under flexible payment Contracts, Purchase Payments generally are made
until retirement age is reached. However, no Purchase Payments are required to
be made after the first payment. Purchase Payments are subject to any minimum
payment requirements under the Contract.
Under deferred annuity contracts, Purchase Payments are invested and
accumulate on a fixed or variable basis until the date the Contract Owner
selects to commence annuity payments.
Under immediate annuity Contracts, the first annuity payment is made on the
first day of the second month after the Purchase Payment is received. During the
period before the Annuity Date, the Purchase Payments are invested in the same
manner, and the other terms and conditions (including the options and rights of
Contract Owners, Annuitants and Beneficiaries) are the same under immediate
annuity Contracts as under deferred annuity Contracts.
The Contracts are non-participating and will not share in any of the
profits of the Company.
FEDERAL TAX MATTERS
This Section summarizes the major tax consequences of contributions,
payments, and withdrawals under Portfolio Director, during life and at death.
TAX CONSEQUENCES OF PURCHASE PAYMENTS
403(b) Annuities. Purchase Payments made by Section 501(c)(3) tax-exempt
organizations and public educational institutions toward Contracts for their
employees are excludable from the gross income of employees, to the extent
aggregate Purchase Payments do not exceed several competing tax limitations.
This gross income exclusion applies both to employer contributions and to your
voluntary salary reduction contributions.
Your voluntary salary reduction contributions are generally limited to the
lesser of $9,500 or 20% of salary, although additional, "catch-up" contributions
are permitted under certain circumstances. Combined employer and salary
reduction contributions are generally limited to approximately 20% of salary. In
addition, after 1988 employer contributions for highly compensated employees may
be further limited by applicable nondiscrimination rules.
401(a) and 403(a) Qualified Plans. Purchase Payments made by an employer
(or a self-employed individual) under a qualified pension, profit-sharing or
annuity plan are excluded from the gross income of the employee. Purchase
Payments made by an employee generally are made on an after-tax basis, unless
eligible for pre-tax treatment by reason of Sections 401(k) or 414(h).
408(b) Individual Retirement Annuities ("IRAs"). Tax-deductible
contributions for IRA Contracts are limited to the lesser of $2,000 or 100% of
compensation, and may be made only by individuals who:
(i) are not (and whose spouses are not) active participants in another
retirement plan;
(ii) are active participants in another retirement plan, but are unmarried and
have adjusted gross income of $25,000 or less; or
(iii) are active participants (or whose spouse is) in another retirement plan,
but are married and have adjusted gross income of $40,000 or less.
Active participants in other retirement plans whose adjusted gross income
exceeds the limits in (ii) or (iii) by less than $10,000 are entitled to make
deductible IRA contributions in proportionately reduced amounts. If an IRA is
established for a nonworking spouse who has no compensation, the annual
tax-deductible Purchase Payments for both spouses' Contracts cannot exceed the
lesser of $2,250 or 100% of the working spouse's earned income, and no more than
$2,000 may be contributed to either spouse's IRA for any year.
You may be eligible to make nondeductible IRA contributions in excess of:
(i) the lesser of $2,000 ($2,250 for you and your spouse's IRA) or 100% of
compensation, over
(ii) your applicable IRA deduction limit.
457 Plans. A unit of a state or local government may establish a deferred
compensation program for individuals who: (i) perform services for the
government unit, and (ii) belong to a select
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group of management or highly compensated employees and/or independent
contractors.
This type of program allows eligible individuals to defer the receipt of
compensation (and taxes thereon) otherwise presently payable to them. If the
program is an eligible deferred compensation plan (an "EDCP"), you may
contribute (and defer tax on) the lesser of $7,500 or 33 1/3% of your
"includible" compensation (compensation from the employer currently includible
in taxable income). Additional, catch-up deferrals are permitted in your final
three years before normal retirement age.
The employer uses deferred amounts to purchase the Contracts offered by
this prospectus. The Contract is owned by the employer and remains subject to
the claims of the employer's general creditors. The employee has no present
rights to vested interest in the Contract and is entitled to payment only in
accordance with the EDCP provisions.
SEP. Employer contributions under a SEP are made to a separate individual
retirement account established for each participating employee, and generally
must be made at a rate representing a uniform percent of participating
employees' compensation. Employer contributions are excludable from employees'
taxable income, and after 1993 cannot exceed the lesser of $22,500 or 15% of
your compensation.
Employees of certain small employers (other than tax-exempt organizations)
may contribute pretax, on a salary reduction basis, to the SEP. These salary
reduction contributions may not exceed $7,000, indexed for inflation in later
years.
Unfunded Deferred Compensation Plans. Private taxable employers may
establish unfunded, non-qualified deferred compensation plans for a select group
of management or highly compensated employees and/or for independent
contractors. Certain arrangements of nonprofit employers entered into prior to
August 16, 1986, and not subsequently modified, are also subject to the rules
discussed below.
An unfunded, deferred compensation plan is a bare contractual promise on
the part of the employer to defer current wages to some future time. The
Contract is owned by the employer and remains subject to the claims of the
employer's general creditors. Private taxable employers that are not natural
persons, however, are currently taxable on any increase in the Purchase Unit
Value attributable to Purchase Payments made after February 28, 1986 to such
Contracts. Participants have no present right or vested interest in the Contract
and are only entitled to payment in accordance with plan provisions.
Non-Qualified Contracts. Purchase Payments made under Non-Qualified
Contracts are neither excludible from the gross income of the Contract Owner nor
deductible for tax purposes. However, any increase in the Purchase Unit Value of
a Non-Qualified Contract resulting from the investment performance of VALIC
Separate Account A is not taxable to the Contract Owner until received by him.
Contract Owners that are not natural persons, however, are currently taxable on
any increase in the Purchase Unit Value attributable to Purchase Payments made
after February 28, 1986 to such Contracts.
TAX CONSEQUENCES OF DISTRIBUTIONS
403(b) Annuities. Voluntary salary reduction amounts accumulated after
December 31, 1988, and earnings on voluntary contributions before and after that
date, may not be distributed before one of the following:
(1) attainment of age 59 1/2;
(2) separation from service;
(3) death;
(4) disability, or
(5) hardship (hardship distributions are limited to salary reduction
contributions only, exclusive of earnings thereon).
Distributions are taxed as ordinary income to the recipient in accordance
with Section 72.
401(a) and 403(a) Qualified Plans. Distributions from Contracts purchased
under qualified plans are taxable as ordinary income, except to the extent
allocable to an employee's after-tax contributions (investment in the Contract).
If you or your Beneficiary receive a "lump sum distribution" (legally defined
term), the taxable portion may be subject to special 5-year or 10-year income
averaging treatment. Ten-year income averaging uses tax rates in effect for
1986, allows 20% capital gains treatment for the taxable portion of a lump sum
distribution attributable to
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years of service before 1974, and is available if you were 50 or older on
January 1, 1986.
408(b) IRAs and SEPs. Distributions are taxed as ordinary income to the
recipient.
457 Plans. Amounts received from an EDCP are includible in gross income for
the taxable year in which are paid or otherwise made available to the recipient.
Unfunded Deferred Compensation Plans. Amounts received are includible in
gross income for the taxable year in which are paid or otherwise made available
to the recipient.
Non-Qualified Contracts. Partial redemptions generally are taxed as
ordinary income to the extent of the accumulated income or gain under the
Contract if they are not received as an annuity under a Non-Qualified Contract
purchased after August 13, 1982 (or allocated to post-August 13, 1982 Purchase
Payments under a pre-existing Contract). Partial redemptions from a
Non-Qualified Contract purchased before August 14, 1982 are taxed only after the
Contract Owner has received all of his investment in the Contract. The amount
received in a complete redemption of a Non-Qualified Contract (regardless of the
date of purchase) will be taxed as ordinary income to the extent that it exceeds
the Contract Owners's investment in the Contract. Two or more Contracts
purchased from VALIC (or an affiliated company) by a Contract Owner within any
twelve-month period are treated as a single Contract for purposes of measuring
the income on a partial redemption or complete surrender.
When payments are received as an annuity, the Contract Owner's investment
in the Contract is treated as received ratably and excluded ratably from gross
income as a tax-free return of capital, over the expected payment period of the
annuity. Individuals who begin receiving annuity payments on or after January 1,
1987 can exclude from income only their unrecovered investment in the Contract.
Upon death prior to recovering tax-free their entire investment in the Contract,
such individuals generally are entitled to deduct the unrecovered amount on
their final tax return.
SPECIAL TAX CONSEQUENCES -- EARLY
DISTRIBUTION
403(b) Annuities, 401(a) and 403(a) Qualified Plans, 408(b) IRAs and
SEPs. Taxable distributions received before the recipient attains age 59 1/2
generally are subject to a 10% penalty tax in addition to regular income tax.
Distributions on account of the following generally are excepted from this
penalty tax:
(1) death;
(2) disability;
(3) separation from service after a participant reaches age 55;
(4) separation from service at any age if the distribution is in the form of
substantially equal periodic payments over the life (or life expectancy) of
the Participant (or the Participant and Beneficiary), and
(5) distributions which do not exceed the employee's tax deductible medical
expenses for the taxable year of receipt.
457 Plans. Distributions generally may be made under an EDCP prior to
separation from service only for unforeseeable emergencies, and are includible
in the recipient's gross income in the year paid.
Non-Qualified Contracts. A 10% penalty tax applies to the taxable portion
of a distribution received before age 59 1/2 under a Non-Qualified Contract,
unless the distribution is:
(1) to a Beneficiary on or after the Contract Owner's death;
(2) upon the Contract Owner's disability;
(3) part of a series of substantially equal annuity payments for the life or
life expectancy of the Contract Owner, or the lives or joint life expectancy
of the Contract Owner and Beneficiary;
(4) made under an immediate annuity contract, or
(5) allocable to Purchase Payments made before August 14, 1982.
SPECIAL TAX CONSEQUENCES -- REQUIRED DISTRIBUTIONS
403(b) Annuities. Generally, minimum required distributions must commence
no later than April 1 of the calendar year following the calendar
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year in which the Participant attains age 70 1/2; required distributions must be
made over a period that does not exceed the life or life expectancies of the
Participant (or lives or joint life expectancies of the Participant and
Beneficiary). The minimum amount payable can be determined several different
ways. Participants employed by governmental entities and certain church
organizations may delay the commencement of payments until April 1 of the
calendar year following retirement if still employed at age 70 1/2. A penalty
tax of 50% is imposed on the amount by which the minimum required distribution
in any year exceeds the amount actually distributed in that year.
Amounts accumulated under a Contract on December 31, 1986 may be paid in a
manner that meets the above rule or, alternatively:
(i) must begin to be paid when Participant attains age 75; and
(ii) the present value of payments expected to be made over the life of the
Participant, (under the option chosen) must exceed 50% of the present value
of all payments expected to be made (the "50% rule").
The 50% rule will not apply if a Participant's spouse is the joint
annuitant. Notwithstanding these pre-January 1, 1987 rules the entire contract
balance must meet the minimum distribution incidental benefit requirement of
Section 403(b)(10).
At the Participant's death before payout has begun, Contract amounts
generally either must be paid to the Beneficiary within 5 years, or must begin
within 1 year of death and be paid over the life or life expectancy of the
Beneficiary. If death occurs after commencement of (but before full) payout,
distributions generally must continue at least as rapidly as under the method
elected by the Participant and in effect at the time of death.
401(a) and 403(a) Qualified Plans. Minimum distribution requirements for
Qualified Plans, are generally the same as described for 403(b) Annuities,
except that:
(1) there is no exception for pre-1987 amounts; and
(2) there is no available postponement, past April 1 of the calendar year
following the calendar year in which age 70 1/2 is attained, if the
Participant remains employed.
408(b) IRAs and SEPs. Minimum distribution requirements are generally the
same as described above for 403(b) Annuities, except that:
(1) there is no exception for pre-1987 amounts; and
(2) there is no available postponement, past April 1 of the calendar year
following the calendar year in which age 70 1/2 is attained, if the
Participant remains employed.
457 Plans. Beginning January 1, 1989, the minimum distribution requirements
for EDCP's are generally the same as described above for 403(b) Annuities,
except that there is no exemption or postponement.
Non-Qualified Contracts. Non-Qualified Contracts do not require
commencement of distributions at any particular time and do not limit the
duration of annuity payments.
At the Participant's death before payout has begun, Contract amounts
generally either must be paid to the Beneficiary within 5 years, or must begin
within 1 year of death and be paid over the life or life expectancy of the
Beneficiary. If death occurs after commencement of (but before full) payout,
distributions generally must continue at least as rapidly as under the method
elected by the Participant at the time of death.
TAX-FREE ROLLOVERS, TRANSFERS AND
..EXCHANGES
403(b) Annuities. Tax free transfers between 403(b) annuity contracts
and/or 403(b)(7) custodial accounts, and tax-free rollovers from 403(b) programs
to IRAs or other 403(b) programs, are permitted under certain circumstances.
401(a) and 403(a) Qualified Plans. The taxable portion of certain
distributions may be transferred in a tax-free rollover to an individual
retirement account or annuity, or to another such plan.
408(b) IRAs. Funds may be transferred tax-free to an IRA Contract, from a
403(b) Annuity, or 401(a) or 403(a) Qualified Plan, under certain conditions.
These amounts may subsequently be rolled over on a tax-free basis to another
such plan or 403(b) Annuity Contract from this "conduit" IRA. In addition,
tax-free rol-
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lovers may be made from one IRA to another provided that no more than one such
rollover is made during any twelve-month period.
SEPs. Funds may be rolled over tax free from one SEP only to another SEP or
an IRA.
457 Plans. Tax-free transfer of EDCP amounts are permitted only to another
EDCP.
Unfunded Deferred Compensation Plans. Tax-free transfers or rollovers are
not allowed from these plans.
Non-Qualified Contracts. Certain of the Non-Qualified single payment
deferred annuity Contracts permit the Contract Owner to exchange the Contract
for a new deferred annuity contract prior to the commencement of annuity
payments. The exchange of one annuity contract for another is a tax-free
transaction under Section 1035, but is reportable to the IRS.
EXCHANGE PRIVILEGE
In the prospectus we described generally how under certain conditions we
will allow you to exchange from other fixed and/or variable contracts we issue
(other contracts) to Portfolio Director. These other contracts are listed in the
prospectus. A more detailed comparison of the features, charges and restrictions
between each of these listed other contracts and Portfolio Director is provided
below.
EXCHANGES FROM INDEPENDENCE PLUS
CONTRACTS
Sales/Surrender Charges. Under an Independence Plus Contract, no sales
charge is deducted at the time a Purchase Payment is made, but a surrender
charge may be imposed on partial or total surrenders. The surrender charge may
not exceed 5% of any Purchase Payments withdrawn within five years of the date
such Purchase Payments were made. The most recent Purchase Payments are deemed
to be withdrawn first. Up to 10% of the Account Value may be surrendered in a
Participant Year without any surrender charge being imposed. Portfolio Director
imposes a similar surrender charge upon total or partial surrenders. Both the
Portfolio Director and Independence Plus Contracts have other similar provisions
where surrender charges are not imposed. However, Portfolio Director provides at
least one additional provision, not included in Independence Plus Contracts,
under which no surrender charge will be imposed. An additional provision allows
election of a systematic withdrawal method without surrender charges. (See
"Surrender Charges" in the prospectus.) For purposes of satisfying the
fifteen-year and five-year holding requirements described in "Surrenders
Charges" in the prospectus, Portfolio Director will be deemed to have been
issued on the same date as the Independence Plus Contract or certificate
thereunder, but no earlier than January 1, 1982. Purchase Payments exchanged
into Portfolio Director and which were made within five years before the date of
exchange will be treated as Purchase Payments under Portfolio Director for
purposes of calculating surrender charges. Exchanged payments will be deemed to
have been made under Portfolio Director on the date they were made to
Independence Plus Contracts for purposes of calculating the surrender charge
under Portfolio Director.
Other Charges. Under the Independence Plus Contracts, a maintenance charge
of $20 is assessed for the first year and an annual charge of $15 is assessed
for the second and later years during the accumulation period. The charge is due
in quarterly installments. A daily fee is charged at the annual rate of 1% of
the daily net asset value allocable to the Variable Subaccounts to cover
administrative expenses (other than those covered by the annual charge) and
mortality risks assumed by the Company. For Portfolio Director, a quarterly
account maintenance charge of $3.75 is assessed for each calendar quarter during
the Purchase Period during which any Variable Account Option Account Value is
credited to a Participant's Account. The charge is to reimburse the Company for
some of the administrative expenses associated with the Variable Account
Options. No charge is assessed for any calendar quarter if the Account Value is
credited only to the Fixed Account Options throughout the quarter. Such charge
begins immediately if an exchange is made into any Variable Account Option
offered under Portfolio Director. The charge may also be reduced or waived by
the Company for Portfolio Director if the administrative expenses are expected
to be lower for that Contract. (See "Reduction or Waiver of Account Maintenance
Fee or Surrender Charges" in the prospectus) To cover expenses not covered by
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the account maintenance charge and to compensate the Company for assuming
mortality risks under Portfolio Director, an additional daily charge with an
annualized rate of 1.00% or 1.25%, depending upon the Variable Account Options
selected, if any, on the daily net asset value of VALIC Separate Account A is
attributable to Portfolio Director. (See "Separate Account Charges" in the
prospectus)
Investment Options. Under Independence Plus Contracts ten divisions of
VALIC Separate Account A are available variable investment alternatives, each
investing in shares of a different underlying fund of the Series Company
portfolio. The ten mutual funds are managed by the Company for advisory fees at
annual rates ranging from .29% to .50% of each respective portfolio's average
daily net assets. In addition, two fixed investment options are available. Under
Portfolio Director, sixteen divisions of VALIC Separate Account A are available,
thirteen of which invest in a different investment portfolio of the Series
Company and three divisions of which invest in other mutual fund portfolios.
These mutual fund portfolios are managed either by the Company, the Dreyfus
Corporation, or Templeton Investment Counsel Inc. for advisory fees at annual
rates ranging from .29% to .90% of each portfolio's or mutual fund's average
daily net assets. Two fixed investment options are also available.
Annuity Options. Annuity options under Independence Plus Contracts provide
for payments on a fixed or variable basis, or a combination of both. The
Independence Plus Contract permits annuity payments for a designated period
between 3 and 30 years on a fixed basis only. Portfolio Director permits annuity
payments for a designated period between of 5 and 30 years on a fixed basis
only. Independence Plus Contracts and Portfolio Director both provide for
"betterment of rates." Under this provision, annuity payments for fixed
annuities will be based on mortality tables then being used by the Company, if
more favorable to the Annuitant than those included in the Contract.
EXCHANGES FROM V-PLAN CONTRACTS
Sales/Surrender Charges. Under a V-Plan Contract, no sales charge is
deducted at the time a Purchase Payment is made, but a surrender charge may be
imposed on partial or total surrenders. The surrender charge is equal to 7% of
the Purchase Payments withdrawn within five years of the date such Purchase
Payments were made. The most recent Purchase Payments are deemed to be withdrawn
first. Up to 10% of the account value may be surrendered in a Participant Year
without any surrender charge being imposed. Portfolio Director also imposes a
surrender charge upon total or partial surrenders. However, the surrender charge
under Portfolio Director may not exceed 5% of any Purchase Payments withdrawn
within the most recent five years prior to the receipt of the surrender request
by the Company at its Home Office. V-Plan Contracts have other provisions where
surrender charges are not imposed. However, Portfolio Director provides at least
two additional provisions, not included in V-Plan Contracts, under which no
surrender charge will be imposed. Those Portfolio Director provisions include no
surrender charges on an election of the no charge systematic withdrawal method,
and where an employee-participant has maintained the account for a period of
five years and has attained the age 59 1/2. (See "Surrender Charges" in the
prospectus.) For purposes of satisfying the fifteen-year and five-year holding
requirements, Portfolio Director will be deemed to have been issued on the same
date as the V-Plan Contract or certificate thereunder, but no earlier than
January 1, 1982.
If there is a total or partial surrender, Purchase Payments exchanged into
Portfolio Director and which were made within five years before the date of
exchange will be treated as Purchase Payments under Portfolio Director for
purposes of calculating surrender charges. Exchanged payments will be deemed to
have been made under Portfolio Director on the date they were made to the V-Plan
Contract for purposes of calculating the surrender charge under Portfolio
Director.
Other Charges. There are no administrative and risk charges under V-Plan
Contracts. For Portfolio Director, a quarterly account maintenance charge of
$3.75 is assessed for each calendar quarter during the Purchase Period during
which any Variable Account Option Account Value is credited to a Participant's
Account. The charge is to reimburse the Company for some of the administrative
expenses associated with the Variable Account Options. No charge is assessed for
any calendar quarter if the Account Value is
13
<PAGE> 77
credited only to the Fixed Account Options throughout the quarter. Such charges
begin immediately if an exchange is made into any Variable Account Option
offered under Portfolio Director. The charge may also be reduced or waived by
the Company on Portfolio Director if the administrative expenses are expected to
be lower for that Contract. (See "Reduction or Waiver of Account Maintenance Fee
or Surrender Charges" in the prospectus.) To cover expenses not covered by the
account maintenance charge and to compensate the Company for assuming mortality
risks under Portfolio Director, an additional daily charge with an annualized
rate of 1.00% or 1.25%, depending upon the Variable Account Options selected, if
any, on the daily net asset value of the VALIC Separate Account A is
attributable to Portfolio Director. (See "Separate Account Charges" in the
prospectus.)
Investment Options. There are no variable investment alternatives provided
under V-Plan Contracts.
Annuity Options. Annuity options under V-Plan Contracts provide for
payments on a fixed basis only. The V-Plan Contract permits annuity payments for
a designated period of 1 to 15 years. Under a V-Plan Contract, the designated
period option may, subject to adverse tax consequences, be commuted at any time
for its remaining value. Portfolio Director permits Payout Payments for a
designated period of between 5 and 30 years on a fixed basis only. Under
Portfolio Director, Payout Payments may be made on a fixed or variable basis, or
a combination of both. Portfolio Director does not provide for commutation.
V-Plan Contracts and Portfolio Director both provide for "betterment of rates."
Under this provision, Payout Payments for fixed annuities will be based on
mortality tables then being used by the Company, if more favorable to the
Annuitant than those included in the Contract.
EXCHANGES FROM SA-1 AND SA-2 CONTRACTS (GUP-64, GUP-74, GTS XA CONTRACTS)
Sales/Surrender Charges. Under the SA-1 and SA-2 Contracts a sales and
administrative charge is deducted from each Purchase Payment. This charge ranges
from 5% of the first $5,000 of Purchase Payments to 3% of Purchase Payments in
excess of $15,000. If a SA-1 or SA-2 Contract is exchanged for Portfolio
Director the surrender charge under Portfolio Director will not apply to the
amount of Account Value applied to Portfolio Director ("Exchanged Amount").
Purchase Payments made to Portfolio Director, however, would be subject to
surrender charges. In the case of a partial surrender, all Purchase Payments to
Portfolio Director will be deemed to be withdrawn before any Exchanged Amount is
deemed to be withdrawn. No exchange pursuant to this offer will be allowed
within 120 days of a transfer of fixed accumulations under a SA-1 or SA-2
Contract to the variable portion of such Contract. Under Portfolio Director, no
sales charge is deducted at the time a Purchase Payment is made, but a surrender
charge may be imposed on partial or total surrenders. The surrender charge may
not exceed 5% of any Purchase Payments withdrawn within the most recent five
years prior to the receipt of the surrender request by the Company at its Home
Office. For purposes of this surrender charge, the most recent Purchase Payments
are deemed to be withdrawn first. (See "Surrender Charges" in the prospectus.)
Other Charges. A charge of a percentage of each Purchase Payment is made
for administrative expenses for SA-1 and SA-2 Contracts. The charge is generally
1.25% and is included in the above sales and administrative charge. An
additional daily charge (at an annual rate of 1% of total net assets
attributable to SA-1 Contracts and ranging from .21% to .85% of total net assets
attributable to SA-2 Contracts) is made for mortality and expense risks assumed
by the Company under the variable portion of the Contract. The total of these
expenses and other charges is limited to a maximum of the rate imposed on SA-1
and SA-2 Contracts on April 1, 1987. (See prospectus for SA-1 and SA-2 contracts
dated April 20, 1987.) For Portfolio Director, a quarterly account maintenance
charge of $3.75 is assessed for each calendar quarter during the Purchase Period
during which any Variable Account Option Account Value is credited to a
Participant's Account. The charge is to reimburse the Company for some of the
administrative expenses associated with the Variable Account Options. No charge
is assessed for any calendar quarter if the Account Value is credited only to
the Fixed Account Options throughout the quarter. Such charge begins immediately
if an exchange is made into any Variable Account Option offered under Portfolio
Director. The charge may
14
<PAGE> 78
also be reduced or waived by the Company on Portfolio Director if the
administrative expenses are expected to be lower for that Contract. (See
"Reduction or Waiver of Account Maintenance Fee or Surrender Charges" in the
prospectus.) To cover expenses not covered by the account maintenance charge and
to compensate the Company for assuming mortality risks under Portfolio Director,
an additional daily charge with an annualized rate of 1.00% or 1.25%, depending
upon the Variable Account Options selected, if any, on the average daily net
asset value of the Separate Account is attributable to Portfolio Director. (See
"Separate Account Charges" in the prospectus.)
Investment Options. Under SA-1 and SA-2 Contracts only one division of
VALIC Separate Account A is available as a variable investment alternative. This
division invests in a portfolio of the Series Company. This portfolio is managed
by the Company for advisory fees at an annual rate of .29% of the portfolio's
average daily net assets. (Under a "grandfathering" arrangement, the total
advisory fees and certain other charges imposed against these Contracts are
limited to a maximum of the rate charged on April 1, 1987. See the prospectus
for these Contracts dated April 20, 1987.) Under Portfolio Director, sixteen
divisions of VALIC Separate Account A are available, thirteen of which invest in
a different investment portfolio of the Series Company and three divisions of
which invest in other mutual fund portfolios. These mutual fund portfolios are
managed by either the Company, The Dreyfus Corporation, or Templeton Investment
Counsel Inc., for advisory fees at annual rates ranging from .29% to .90% of
each portfolio's or mutual fund's average daily net assets. Additionally, two
fixed investment options are available under Portfolio Director.
Annuity Options. Annuity options under the SA-1 and SA-2 Contracts provide
for payments on a fixed or variable basis, or a combination of both. The SA-1
Contract annuity payments under a designated period option are limited to 15
years on a fixed basis only. Under this Contract, the designated period option
may, subject to adverse tax consequences, be commuted at any time for its
remaining value. SA-2 Contracts do not provide a designated period option nor do
they provide for commutation. Portfolio Director permits Payout Payments for a
designated period of between 5 and 30 years on a fixed basis only. Portfolio
Director does not provide for commutation. The SA-1 and SA-2 Contracts make no
provision for transfers from a separate account to a fixed annuity during the
annuity period. This option, subject to certain conditions, is available under
Portfolio Director. The SA-1 Contracts provide an option for monthly variable
annuity payments to be made at a level payment basis during each year of the
annuity period. Portfolio Director does not provide this option. SA-1 and
Portfolio Director, but not SA-2 Contracts, both provide for "betterment of
rates." Under this provision, Payout Payments for fixed annuities will be based
on mortality tables then being used by the Company, if more favorable to the
Annuitant than those included in the Contract.
EXCHANGES FROM IMPACT CONTRACTS
Sales/Surrender Charges. Under an Impact Contract, no sales charge is
deducted at the time a Purchase Payment is made, but a surrender charge may be
imposed on partial or total surrenders. The surrender charge is equal to 5% of
the Purchase Payments withdrawn within three years of the date such Purchase
Payments were made. The most recent Purchase Payments are deemed to be withdrawn
first. Portfolio Director also imposes a surrender charge upon total or partial
surrenders which may not exceed 5% of any Purchase Payments withdrawn within the
most recent five years prior to the receipt of the surrender request by the
Company at its Home Office. Portfolio Director also has other provisions where
surrender charges are not imposed. (See "Exceptions to Surrender Charge" in the
prospectus.) For purposes of satisfying the fifteen-year and five-year holding
requirements, Portfolio Director will be deemed to have been issued on the same
date as the Impact Contract, or certificate thereunder, but no earlier than
January 1, 1982. Only Purchase Payments exchanged into a Portfolio Director
which were made within three years before the date of exchange will be treated
as Purchase Payments under Portfolio Director for purposes of calculating
surrender charges. Exchanged payments will be deemed to have been made under
Portfolio Director on the date they were made to Impact Contracts for purposes
of calculating the surrender charge under Portfolio Director.
Other Charges. Under Impact Contracts, a $30 annual charge is assessed once
a year to
15
<PAGE> 79
cover administrative expenses. The charge may, with prior regulatory approval if
required, be increased or decreased. In addition, a daily charge is made at an
annual rate of 1% of the net asset value allocable to the Impact Contracts to
cover administrative expenses (other than those covered by the annual charge)
and mortality risks assumed by the Company. For Portfolio Director, a quarterly
account maintenance charge of $3.75 is assessed for each calendar quarter during
the Purchase Period during which any Variable Account Option Account Value is
credited to a Participant's Account. The charge is to reimburse the Company for
some of the administrative expenses associated with the Variable Account
Options. No charge is assessed for any calendar quarter if the Account Value is
credited only to the Fixed Account Options throughout the quarter. Such charge
begins immediately if an exchange is made into any Variable Account Option
offered under Portfolio Director. The charge may also be reduced or waived by
the Company on Portfolio Director if the administrative expenses are expected to
be lower for that Contract. (See "Reduction or Waiver of Account Maintenance Fee
or Surrender Charges" in the prospectus.) To cover expenses not covered by the
account maintenance charge and to compensate the Company for assuming mortality
risks under Portfolio Director, an additional daily charge with an annualized
rate of 1.00% or 1.25%, depending upon the Variable Account Options selected, if
any, on the daily net asset value of the Separate Account is attributable to
Portfolio Director. (See "Separate Account Charges" in the prospectus.)
Investment Options. Under the Impact Contract five divisions of Separate
Account A are available as variable investment alternatives, each investing in
shares of a different underlying fund of the Series Company portfolio. The five
mutual funds are managed by the Company for advisory fees at annual rates
ranging from .29% to .50% of each respective portfolio's average daily net
assets. Under Portfolio Director, sixteen divisions of VALIC Separate Account A
are available, thirteen of which invest in a different investment portfolio of
the Series Company and three divisions of which invest in other mutual fund
portfolios. These mutual fund portfolios are managed by either the Company, The
Dreyfus Corporation, or Templeton Investment Counsel Inc., for advisory fees at
annual rates ranging from .29% to .90% of each portfolio's or mutual fund's
average daily net assets. In addition, two fixed investment options are
available under Portfolio Director.
Annuity Options. Annuity options under Impact Contracts provide for
payments on a fixed or variable basis, or a combination of both. The Impact
Contract permits annuity payments for a designated period of 1 to 15 years on a
fixed basis only. Under an Impact Contract, the designated period option may,
subject to adverse tax consequences, be commuted at any time for its remaining
value. Portfolio Director permits Payout Payments for a designated period of
between 5 and 30 years on a fixed basis only. Portfolio Director does not
provide for commutation. Impact Contracts and the Portfolio Director both
provide for "betterment of rates." Under this provision, Payout Payments for
fixed annuities will be based on mortality tables then being used by the
Company, if more favorable to the Annuitant than those included in the Contract.
EXCHANGES FROM COMPOUNDER CONTRACTS
Sales/Surrender Charges. Under a Compounder Contract a sales and
administrative charge is deducted from each Purchase Payment. This charge ranges
from 5% of the first $5,000 of Purchase Payments to 3% of Purchase Payments in
excess of $15,000. If a Compounder Contract is exchanged for Portfolio Director
the surrender charge under Portfolio Director will not apply to the amount of
Account Value applied to Portfolio Director. Purchase Payments made to Portfolio
Director, however, would be subject to the surrender charge under Portfolio
Director. In the case of a partial surrender, all Purchase Payments to Portfolio
Director will be deemed to be withdrawn before any Exchanged Amount is deemed to
be withdrawn. Under Portfolio Director, no sales charge is deducted at the time
a Purchase Payment is made, but a surrender charge may be imposed on partial or
total surrenders. The surrender charge may not exceed 5% of any Purchase
Payments withdrawn within the most recent five years prior to the receipt of the
surrender request by the Company at its Home Office. For purposes of this
surrender charge, the most recent Purchase Payments are deemed to be withdrawn
first. (See "Surrender Charges" in the prospectus.)
16
<PAGE> 80
Other Charges. A charge of a percentage of each Purchase Payment is made
for administrative expenses under a Compounder Contract. The charge is 1.25% and
is included in the above sales charge. For Portfolio Director, a quarterly
account maintenance charge of $3.75 is assessed for each calendar quarter during
the Purchase Period during which any Variable Account Option Account Value is
credited to a Participant's Account. The charge is to reimburse the Company for
some of the administrative expenses associated with the Variable Account
Options. No charge is assessed for any calendar quarter if the Account Value is
credited only to the Fixed Account Options throughout the quarter. Such charge
begins immediately if an exchange is made into any Variable Account Option
offered under Portfolio Director. The charge may also be reduced or waived by
the Company for Portfolio Director if the administrative expenses are expected
to be lower for that Contract. (See "Reduction or Waiver of Account Maintenance
Fee or Surrender Charges" in this prospectus.) To cover expenses not covered by
the account maintenance charge and to compensate the Company for assuming
mortality risks under Portfolio Director, an additional daily charge with an
annualized rate of 1.00% or 1.25%, depending upon the Variable Account Options
selected, if any, on the daily net asset value of the Separate Account is
attributable to Portfolio Director. (See "Separate Account Charges" in the
prospectus.)
Investment Options. There are no variable investment alternatives provided
under Compounder Contracts.
Annuity Options. Payout Payments under a Compounder Contract are on a fixed
basis only and the designated period option is limited to a period of 15 years.
However, under a Compounder Contract, the designated period option may, subject
to adverse tax consequences, be commuted at any time for its remaining value.
Portfolio Director allows Payout Payments be made on a fixed or variable basis,
or both. One option under the Portfolio Director provides for a designated
period of 5 and 30 years on a fixed basis only. Portfolio Director does not
provide for commutation. Unlike Portfolio Director, the Compounder Contracts
contain no "betterment of rates" provision.
INFORMATION WHICH MAY BE APPLICABLE TO
ANY EXCHANGE
Guaranteed Annuity Rates. Mortality rates have improved since annuity rates
were developed for the other contracts. Therefore, the annuity rates guaranteed
in Portfolio Director are less favorable to Contract Owners and Annuitants than
those guaranteed in the other contracts. However, the current annuity rates
being charged for fixed annuities under the "betterment of rates" provisions
discussed above are more favorable than those guaranteed under Portfolio
Director or the other contracts. Of course, no assurance can be given that this
will continue to be true at the time of annuitization for a given contract.
Guaranteed annuity rate tables are set forth in your Contract or in current
endorsements thereto. Those guaranteed for Portfolio Director are set forth
therein, and copies may be obtained from one of the Company's Regional Offices
listed on the inside back cover of this prospectus.
To satisfy a Federal tax law requirement, non-spouse beneficiaries under
Portfolio Director generally must receive the entire benefit payable upon the
death of the Annuitant over their life expectancy or within five years of the
Annuitant's death. This requirement may be inapplicable to certain other
contracts or certificates issued before January 19, 1985 if not exchanged.
17
<PAGE> 81
CALCULATION OF SURRENDER CHARGE
The surrender charge is discussed in the Prospectus under "Fees and Charges
- - -- Surrender Charge." Examples of calculation of the Surrender Charge upon total
and partial surrender are set forth below:
ILLUSTRATION OF SURRENDER CHARGE ON TOTAL SURRENDER
Example 1.
TRANSACTION HISTORY
<TABLE>
<CAPTION>
DATE TRANSACTION AMOUNT
---- ----------- ------
<S> <C> <C>
2/1/90......................... Purchase Payment $ 10,000
2/1/91......................... Purchase Payment 5,000
2/1/92......................... Purchase Payment 15,000
2/1/93......................... Purchase Payment 2,000
2/1/94......................... Purchase Payment 3,000
2/1/95......................... Purchase Payment 4,000
7/1/95......................... Total Purchase Payments (Assumes
Account Value is $50,000) 39,000
</TABLE>
Surrender Charge is lesser of (a) or (b):
<TABLE>
<S> <C> <C> <C>
a. Surrender Charge calculated on 60 months of Purchase Payments
1. Surrender Charge against Purchase Payment of 2/1/90.......................... $ 0
2. Surrender Charge against Purchase Payment of 2/1/91 (0.05 X $5,000).......... $ 250
3. Surrender Charge against Purchase Payment of 2/1/92 (0.05 X $15,000)......... $ 750
4. Surrender Charge against Purchase Payment of 2/1/93 (0.05 X $2,000).......... $ 100
5. Surrender Charge against Purchase Payment of 2/1/94 (0.05 X $3,000).......... $ 150
6. Surrender Charge against Purchase Payment of 2/1/95 (0.05 X $4,000).......... $ 200
Surrender Charge based on Purchase Payments (1 + 2 + 3 + 4 + 5 + 6).......... $ 1,450
b. Surrender Charge calculated on the excess over 10% of the Account Value at the time
of surrender:
Account Value at time of surrender $ 50,000
Less 10% not subject to Surrender Charge -5,000
---------
Subject to Surrender Charge 45,000
X .05
--------
Surrender Charge based on Account Value $ 2,250 ......................... $ 2,250
c. Surrender Charge is the lesser of a or b........................................... $ 1,450
</TABLE>
ILLUSTRATION OF SURRENDER CHARGE ON A 10% PARTIAL SURRENDER FOLLOWED BY A FULL
SURRENDER
Example 2.
TRANSACTION HISTORY (ASSUMES NO INTEREST EARNED)
<TABLE>
<CAPTION>
DATE TRANSACTION AMOUNT
---- ----------- ------
<S> <C> <C>
2/1/90......................... Purchase Payment $ 10,000
2/1/91......................... Purchase Payment 5,000
2/1/92......................... Purchase Payment 15,000
2/1/93......................... Purchase Payment 2,000
2/1/94......................... Purchase Payment 3,000
2/1/95......................... Purchase Payment 4,000
7/1/95......................... 10% Partial Surrender (Assumes 3,900
Account Value is $39,000)
8/1/95......................... Full Surrender 35,100
</TABLE>
a. Since this is the first partial surrender in this participant year,
calculate the excess over 10% of the value of the Purchase Units
10% of $39,000 = $3,900 [no charge on this 10% withdrawal]
b. The Account Value upon which Surrender Charge on the Full Surrender may
be calculated (levied) is $39,000 - $3,900 = $35,100
c. The Surrender Charge calculated on the Account Value withdrawn $35,100 X
.05 = $1,755
d. Since only $29,000 has been paid in Purchase Payments in the 60 months
prior to the Full Surrender, the charge can only be calculated on
$29,000. The $3,900 partial withdrawal does not reduce this amount.
Thus, the charge is $29,000 X (0.05) = $1,450.
18
<PAGE> 82
PURCHASE UNIT VALUE
The calculation of Purchase Unit value is discussed in the Prospectus under
"Purchase Period." The following illustrations show a calculation of a new Unit
value and the purchase of Purchase Units (using hypothetical examples):
ILLUSTRATION OF CALCULATION OF PURCHASE UNIT VALUE
Example 3.
<TABLE>
<S> <C>
1. Purchase Unit value, beginning of period............................... $ 1.800000
2. Value of Fund share, beginning of period............................... $ 21.200000
3. Change in value of Fund share.......................................... $ .500000
4. Gross investment return (3)/(2)........................................ .023585
5. Daily mortality and expense charge..................................... .000027
6. Net investment return (4)-(5).......................................... .023558
7. Net investment factor 1.000000+(6)..................................... 1.023558
8. Purchase Unit value, end of period (1)X(7)............................. $ 1.842404
</TABLE>
ILLUSTRATION OF PURCHASE OF PURCHASE UNITS (ASSUMING NO STATE PREMIUM TAX)
Example 4.
<TABLE>
<S> <C>
1. First Periodic Purchase Payment........................................ $ 100.00
2. Purchase Unit value on effective date of purchase (see Example 3)...... $ 1.800000
3. Number of Purchase Units purchased (1)/(2)............................. 55.556
4. Purchase Unit value for valuation date following purchase (see Example
3)..................................................................... $ 1.842404
5. Value of Purchase Units in account for valuation date following
purchase (3)X(4)....................................................... $ 102.36
</TABLE>
PERFORMANCE CALCULATIONS
MONEY MARKET DIVISION YIELDS
CALCULATION OF YIELD FOR MONEY MARKET DIVISION SIX
7-Day Current Yield: 4.15%
ILLUSTRATION OF CALCULATION OF YIELD FOR MONEY MARKET DIVISION SIX
Example 5.
The yield quotation above is based on the seven days ended December 31,
1995, the date of the most recent balance sheet included in the registration
statement ("base period"). It is computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one Purchase Unit at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from Contract Owner
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return and then
multiplying the base period return by 365/7.
CALCULATION OF EFFECTIVE YIELD FOR MONEY MARKET DIVISION SIX
7-Day Effective Yield: 4.24%
ILLUSTRATION OF CALCULATION OF EFFECTIVE YIELD FOR MONEY MARKET DIVISION SIX
Example 6.
The effective yield quotation above is based on the seven days ended
December 31, 1995, the date of the most recent balance sheet included in the
registration statement ("base period"). It is computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one Purchase Unit at the beginning of
19
<PAGE> 83
the period, subtracting a hypothetical charge reflecting deductions from
Contract Owner accounts, and dividing the difference by the value of the account
at the beginning of the base period to obtain the base period return and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) 365/7] -1
STANDARDIZED YIELD FOR DIVISIONS SEVEN, EIGHT AND THIRTEEN
CALCULATION OF STANDARDIZED YIELD FOR DIVISIONS SEVEN, EIGHT AND THIRTEEN
<TABLE>
<CAPTION>
DIV 7 DIV 8 DIV 13
------ ------ ------
<S> <C> <C> <C>
Standardized Yield........................................... 5.23% 5.00% 4.25%
</TABLE>
ILLUSTRATION OF CALCULATION OF STANDARDIZED YIELD FOR DIVISIONS SEVEN, EIGHT AND
THIRTEEN
Example 7.
The yield quotation based on a 30-day period ended December 31, 1995, the
date of the most recent balance sheet of the Registrant included in the
registration statement is computed by dividing the net investment income per
Purchase Unit earned during the period by the maximum offering price per Unit
on the last day of the period, according to the following formula:
YIELD = 2 [( a - b + 1)6 - 1]
cd
Where:
<TABLE>
<S> <C>
a = net investment income earned during the period by the Fund attributable
to shares owned by the Division
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of Purchase Units outstanding during the period
d = the maximum offering price per Purchase Unit on the last day of the
period
</TABLE>
Yield on each Division is earned from dividends declared and paid by the
Fund, which are automatically reinvested in Fund shares.
20
<PAGE> 84
CALCULATION OF AVERAGE ANNUAL TOTAL RETURN
Average Annual Total Return quotations for the 1, 3, 5, and 10 year periods
ended December 31, 1995, the date of the most recent balance sheet included in
this registration statement, are computed by finding the average annual
compounded rates of over the 1, 3, 5, and 10 year periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P (1+T)n = ERV
Where:
<TABLE>
<C> <S>
P = a hypothetical initial Purchase Payment of $1,000
T = average annual total return
n = number of years
ERV = redeemable value at the end of the 1, 3, 5 or 10 year periods of a
hypothetical $1,000 Purchase Payment made at the beginning of the 1,
3, 5, or 10 year periods (or fractional portion thereof)
</TABLE>
The Company may advertise standardized average annual total return which,
includes the surrender charge of up to 5% of Gross Purchase Payments received
during the most recent 60 months as well as non-standardized average annual
total returns which does not include a surrender charge or maintenance fee.
There is no sales charge for reinvested dividends. All recurring fees have
been deducted. For fees which vary with the account size, an account size equal
to that of the median account size has been assumed. Ending redeemable value has
been determined assuming a complete redemption at the end of the 1, 3, 5 or 10
year period and deduction of all nonrecurring charges at the end of each such
period.
21
<PAGE> 85
SEPARATE ACCOUNT DIVISION PERFORMANCE INFORMATION
AVERAGE ANNUAL TOTAL RETURN, CUMULATIVE RETURN AND ANNUAL AND CUMULATIVE CHANGE
IN PURCHASE UNIT VALUE TABLES.
In the prospectus we described a number of ways we may advertise
information about the investment performance of VALIC Separate Account A
Divisions. Certain performance information for each VALIC Separate A Account
Division is printed in the four tables below.
The information presented does not reflect the advantage under Portfolio
Director of deferring federal income tax on increases in Account Value due to
earnings attributable to Purchase Payments (see "Federal Tax Matters" in the
prospectus and in the Statement of Additional Information.) The information
presented also does not reflect the advantage under Qualified Contracts of
deferring federal income tax on Purchase Payments.
The performance results shown in the following tables are not an estimate
or guarantee of future investment performance, and do not represent the actual
experience of amounts invested by a particular Participant.
22
<PAGE> 86
TABLE I
AVERAGE ANNUAL TOTAL RETURN
WITH SURRENDER CHARGE AND ACCOUNT MAINTENANCE FEE IMPOSED
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE 10 5 3
DIVISION INCEPTION* YEARS YEARS YEARS 1 YEAR
- - -------- ---------- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C>
Stock Index Fund (Division 10)................. 10.13% -- 13.99% 12.36% 30.77%
MidCap Index Fund (Division 4)
Period from 10/13/82 to 12/31/95............. 7.90 7.60% 11.81 9.73 24.06
Period from 10/01/91 to 12/31/95............. 11.88 -- -- 9.73 24.06
Small Cap Index Fund (Division 14)............. 11.42 -- -- 10.05 21.22
International Equities Fund (Division 11)...... 2.22 -- 6.38 13.22 4.60
Templeton International Fund (Division 20)..... 10.40 -- -- 15.71 9.19
Dreyfus Small Cap Fund (Division 18)........... 53.65 -- 57.50 30.07 22.61
Growth Fund (Division 15)...................... 22.91 -- -- -- 41.20
Growth & Income Fund (Division 16)............. 13.88 -- -- -- 25.38
Capital Conservation Fund (Division 7)......... 6.01 -- 8.12 5.60 14.42
Government Securities Fund (Division 8)........ 5.93 -- 6.88 4.82 11.15
International Government Bond Fund (Division
13).......................................... 9.52 -- -- 9.70 12.47
Social Awareness Fund (Division 12)............ 10.05 -- 12.41 11.29 32.39
Science & Technology Fund (Division 17)........ 48.59 -- -- -- 54.85
Money Market Fund (Division 6)................. 4.33 -- 2.08 1.27 -0.33
Timed Opportunity Fund (Division 5)............ 7.25 8.01 8.18 7.75 18.38
Templeton Asset Allocation Fund (Division
19).......................................... 9.90 -- 13.46 11.55 15.86
</TABLE>
- - ------------
* The inception dates of the Divisions are as follows:
<TABLE>
<CAPTION>
DIVISION INCEPTION DATE
-------- --------------
<S> <C>
Stock Index Division....................... 04/20/87
MidCap Index Division...................... 10/13/82
Small Cap Index Division................... 05/01/92
International Equities Division............ 10/02/89
Templeton International Division........... 05/01/92
Dreyfus Small Cap Division................. 08/31/90
Growth Division............................ 04/29/94
Growth & Income Division................... 04/29/94
Capital Conservation Division.............. 01/16/86
Government Securities Division............. 01/16/86
International Government Bond Division..... 10/01/91
Social Awareness Division.................. 10/02/89
Science & Technology Division.............. 04/29/94
Money Market Division...................... 01/16/86
Timed Opportunity Division................. 09/06/83
Templeton Asset Allocation Division........ 08/24/88
</TABLE>
The MidCap Index Division was formerly the Capital Accumulation Division.
Effective October 1, 1991, the Fund underlying this Division changed its name
from the Capital Accumulation Fund to the MidCap Index Fund and amended its
investment objective, investment program and investment restrictions
accordingly. Historical data prior to October 1, 1991 reflect investment
experience prior to these changes. Selected purchase unit data for the last ten
years for this Division appears on page 10 of the prospectus. Performance
information for the Dreyfus Small Cap Division, Templeton Asset Allocation
Division, and Templeton International Division was calculated on a pro forma
basis, using the inception dates of the underlying Funds, and applying current
contract charges.
23
<PAGE> 87
TABLE II
AVERAGE ANNUAL TOTAL RETURN
WITH NO SURRENDER CHARGE OR ACCOUNT MAINTENANCE FEE IMPOSED
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE 10 5
DIVISION INCEPTION* YEARS YEARS 3 YEARS 1 YEAR
-------- ---------- ----- ----- ------- ------
<S> <C> <C> <C> <C> <C>
Stock Index Fund (Division 10)................ 10.28% -- 14.72% 13.82% 35.95%
MidCap Index Fund (Division 4)
Period from 10/13/82 to 12/31/95............ 8.04 7.75% 12.59 11.24 29.24
Period from 10/01/91 to 12/31/95............ 12.84 -- -- 11.24 29.24
Small Cap Index Fund (Division 14)............ 12.58 -- -- 11.56 26.39
International Equities Fund (Division 11)..... 2.35 -- 7.29 14.66 9.67
Templeton International Fund (Division 20).... 11.58 -- -- 17.10 14.34
Dreyfus Small Cap Fund (Division 18).......... 53.86 -- 57.87 31.22 27.78
Growth Fund (Division 15)..................... 25.66 -- -- -- 46.40
Growth & Income Fund (Division 16)............ 16.75 -- -- -- 30.55
Capital Conservation Fund (Division 7)........ 6.15 -- 8.98 7.22 19.58
Government Securities Fund (Division 8)....... 6.07 -- 7.78 6.46 16.31
International Government Bond Fund (Division
13)......................................... 10.52 -- -- 11.21 17.63
Social Awareness Fund (Division 12)........... 10.20 -- 13.18 12.77 37.57
Science & Technology Fund (Division 17)....... 51.07 -- -- -- 60.07
Money Market Fund (Division 6)................ 4.47 -- 3.12 2.97 4.51
Timed Opportunity Fund (Division 5)........... 7.40 8.15 9.04 9.31 23.55
Templeton Asset Allocation Fund (Division
19)......................................... 10.05 -- 14.21 13.03 21.02
</TABLE>
TABLE III
CUMULATIVE RETURN
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE 5
DIVISION INCEPTION* 10 YEARS YEARS 3 YEARS 1 YEAR
-------- ---------- -------- ----- ------- ------
<S> <C> <C> <C> <C> <C>
Stock Index Fund (Division 10).............. 134.39% -- 98.80% 47.44% 35.95%
MidCap Index Fund (Division 4)
Period from 10/13/82 through 12/31/95..... 178.27 110.89% 80.93 37.67 29.24
Period from 10/01/91 through 12/31/95..... 67.18 -- -- 37.67 29.24
Small Cap Index Fund (Division 14).......... 54.49 -- -- 38.83 26.39
International Equities Fund (Division 11)... 15.65 -- 42.17 50.75 9.67
Templeton International Fund (Division
20)....................................... 49.52 -- -- 60.58 14.34
Dreyfus Small Cap Fund (Division 18)........ 898.25 -- 881.77 125.94 27.78
Growth Fund (Division 15)................... 46.67 -- -- -- 46.40
Growth & Income Fund (Division 16).......... 29.66 -- -- -- 30.55
Capital Conservation Fund (Division 7)...... 81.20 -- 53.77 23.25 19.58
Government Securities Fund (Division 8)..... 79.95 -- 45.46 20.65 16.31
International Government Bond Fund (Division
13)....................................... 53.08 -- -- 37.56 17.63
Social Awareness Fund (Division 12)......... 83.51 -- 85.80 43.42 37.57
Science & Technology Fund (Division 17)..... 99.72 -- -- -- 60.07
Money Market Fund (Division 6).............. 54.58 -- 16.63 9.19 4.51
Timed Opportunity Fund (Division 5)......... 141.10 119.10 54.21 30.61 23.55
Templeton Asset Allocation Fund (Division
19)....................................... 102.27 -- 94.40 44.39 21.02
</TABLE>
- - ---------------
* See footnote to Table I for the inception date of each Division.
See "How to Review Investment Performance of Separate Account Divisions" in the
prospectus for information about how these returns were calculated.
24
<PAGE> 88
TABLE IV
ANNUAL AND CUMULATIVE CHANGE IN PURCHASE UNIT VALUE
<TABLE>
<CAPTION>
ANNUAL CHANGE IN PURCHASE UNIT VALUE FOR THE YEAR ENDED DECEMBER 31*
-------------------------------------------------------------------------------
DIVISION 1995 1994 1993 1992 1991 1990 1989
- - ------------------------------------------------ ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Index Fund (Division 10).................. 35.95% (0.30)% 8.78% 5.58% 27.70% (4.83)% 27.88%
MidCap Index Fund (Division 4).................. 29.94 (4.70) 11.78 8.79 20.81 (10.20) 18.10
Small Cap Index Fund (Division 14).............. 26.39 (4.30) 14.77 11.28 -- -- --
International Equities Fund (Division 11)....... 9.67 6.90 28.58 (14.31) 10.06 (20.90) 2.84
Templeton International Fund (Division 20)...... 14.34 (3.49) 45.51 (6.89) -- -- --
Dreyfus Small Cap Fund (Division 18)............ 27.78 6.33 66.31 69.24 156.75 1.68 --
Growth Fund (Division 15)....................... 46.40 0.18 -- -- -- -- --
Growth & Income Fund (Division 16).............. 30.55 (0.68) -- -- -- -- --
Capital Conservation Fund (Division 7).......... 19.58 (7.04) 10.88 7.55 16.00 (1.28) 10.63
Government Securities Fund (Division 8)......... 16.31 (5.44) 9.70 6.14 13.59 4.91 11.03
International Government Bond Fund (Division
13)............................................ 17.63 3.42 13.08 2.05 9.05 -- --
Social Awareness Fund (Division 12)............. 37.57 (2.42) 6.84 2.31 26.63 (2.21) 1.00
Science & Technology Fund (Division 17)......... 60.07 24.77 -- -- -- -- --
Money Market Fund (Division 6).................. 4.51 2.77 1.67 2.22 4.49 6.83 7.92
Timed Opportunity Fund (Division 5)............. 23.55 (2.29) 8.19 (1.71) 20.13 (3.38) 15.81
Templeton Asset Allocation Fund (Division 19)... 21.02 (4.24) 24.59 6.74 26.13 (9.13) 11.86
<CAPTION>
DIVISION 1988 1987 1986
- - ------------------------------------------------ ------- ------- -------
<S> <<C> <C> <C>
Stock Index Fund (Division 10).................. 13.13% (14.38)% --
MidCap Index Fund (Division 4).................. 13.06 (5.10) 2.43%
Small Cap Index Fund (Division 14).............. -- -- --
International Equities Fund (Division 11)....... -- -- --
Templeton International Fund (Division 20)...... -- -- --
Dreyfus Small Cap Fund (Division 18)............ -- -- --
Growth Fund (Division 15)....................... -- -- --
Growth & Income Fund (Division 16).............. -- -- --
Capital Conservation Fund (Division 7).......... 5.92 (2.78) 4.77
Government Securities Fund (Division 8)......... 4.95 (3.26) 4.61
International Government Bond Fund (Division
13)............................................ -- -- --
Social Awareness Fund (Division 12)............. -- -- --
Science & Technology Fund (Division 17)......... -- -- --
Money Market Fund (Division 6).................. 5.72 4.50 4.05
Timed Opportunity Fund (Division 5)............. 8.63 7.31 8.93
Templeton Asset Allocation Fund (Division 19)... 2.37 -- --
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE CHANGE IN PURCHASE UNIT VALUE FOR EACH PERIOD END SINCE 12/31/85*
-------------------------------------------------------------------------------
DIVISION 1995 1994 1993 1992 1991 1990 1989
- - ------------------------------------------------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Index Fund (Division 10)................... 134.39% 72.41% 72.93% 58.97% 50.56% 17.90% 23.88%
MidCap Index Fund (Division 4)................... 110.89 63.18 71.23 53.19 40.81 16.56 29.80
Small Cap Index Fund (Division 14)............... 54.49 22.23 27.72 11.28 -- -- --
International Equities Fund (Division 11)........ 15.65 5.45 (1.36) (23.29) (10.48) (18.66) 2.84
Templeton International Fund (Division 20)....... 49.52 30.77 35.49 (6.89) -- -- --
Dreyfus Small Cap Fund (Division 18)............. 898.25 681.25 634.77 341.81 161.05 1.68 --
Growth Fund (Division 15)........................ 46.67 0.18 -- -- -- -- --
Growth & Income Fund (Division 16)............... 29.66 (0.68) -- -- -- -- --
Capital Conservation Fund (Division 7)........... 81.20 51.53 63.01 47.02 36.69 17.84 19.36
Government Securities Fund (Division 8).......... 79.95 54.72 63.62 49.15 40.52 23.71 17.92
International Government Bond Fund (Division
13)............................................. 53.08 30.14 25.83 11.28 9.05 -- --
Social Awareness Fund (Division 12).............. 83.51 33.39 36.70 27.95 25.06 (1.23) 1.00
Science & Technology Fund (Division 17).......... 99.72 24.77 -- -- -- -- --
Money Market Fund (Division 6)................... 54.58 47.91 43.93 41.57 38.49 32.54 24.06
Timed Opportunity Fund (Division 5).............. 119.10 77.34 81.50 67.76 70.68 42.08 47.05
Templeton Asset Allocation Fund (Division 19).... 102.27 67.14 74.53 40.09 31.24 4.05 14.50
<CAPTION>
DIVISION 1988 1987 1986
- - ------------------------------------------------- ------- ------- -------
<S> <C<C> <C> <C>
Stock Index Fund (Division 10)................... (3.13)% (14.38)% --
MidCap Index Fund (Division 4)................... 9.91 (2.79) 2.43
Small Cap Index Fund (Division 14)............... -- -- --
International Equities Fund (Division 11)........ -- -- --
Templeton International Fund (Division 20)....... -- -- --
Dreyfus Small Cap Fund (Division 18)............. -- -- --
Growth Fund (Division 15)........................ -- -- --
Growth & Income Fund (Division 16)............... -- -- --
Capital Conservation Fund (Division 7)........... 7.89 1.86 4.77
Government Securities Fund (Division 8).......... 6.21 1.20 4.61
International Government Bond Fund (Division
13)............................................. -- -- --
Social Awareness Fund (Division 12).............. -- -- --
Science & Technology Fund (Division 17).......... -- -- --
Money Market Fund (Division 6)................... 14.95 8.73 4.05
Timed Opportunity Fund (Division 5).............. 26.98 16.89 8.93
Templeton Asset Allocation Fund (Division 19).... 2.37 -- --
</TABLE>
- - ------------
* For the year in which a Division was initiated, less than a full year's
performance has been reflected. Actual, not annualized, performance is
reflected. See footnote to Table I above for the inception date of each
Division. As noted above, effective October 1, 1991, the Fund underlying the
MidCap Index Division changed its name from the Capital Accumulation Fund to
the MidCap Index Fund and amended its investment objective, investment program
and investment restrictions accordingly. Historical data prior to October 1,
1991 reflect investment experience prior to these changes. Investment
experience for this Division subsequent to October 1, 1991 has been as
follows: for the period from October 1, 1991 through December 31, 1991, the
change in purchase unit value was 11.63%; for the period from October 1, 1991
through December 31, 1992, the cumulative change in purchase unit value was
21.43%; for the period from October 1, 1991 through December 31, 1993, the
cumulative change in purchase unit value was 35.74%; for the period from
October 1, 1991 through December 31, 1994, the cumulative change in purchase
unit value was 29.36% and for the period from October 1, 1991 through December
31, 1995 the cumulative change in purchase unit value was 67.18.
See "How to Review Investment Performance of Separate Account Divisions" in the
prospectus for information about how these returns were calculated.
25
<PAGE> 89
HYPOTHETICAL $10,000 ACCOUNT VALUE AND
CUMULATIVE RETURN AS COMPARED TO BENCHMARKS TABLES.
The following tables show the Hypothetical $10,000 Account Value and
Cumulative Return of each Division as compared to the benchmarks shown. Because
the Funds underlying Divisions Fifteen, Sixteen and Seventeen began operations
on April 29, 1994, performance information for those Divisions is based on
performance of comparable funds managed by the subadvisers for the Funds. The
performance information presented for all other Divisions represents actual Fund
performance.
These performance calculations for the Divisions, and the methods used for
calculating them, are explained in the prospectus. (See "How To Review
Investment Performance of Separate Account Divisions" and "Variable Account
Options" in the prospectus.)
These tables compare hypothetical investment performance and percentage
changes in Purchase Unit values with the results of several benchmarks,
representing unmanaged market indices. The performance information has been
adjusted to reflect mortality and expense risk charges. Surrender charges,
maintenance charges and premium taxes are not deducted. The effect of these
charges is to reduce total return to a Contract Owner. The comparisons should be
considered in light of the investment policies and objectives of the Funds.
Rates of return for the Divisions include reinvestment of investment income,
including capital gains, interest and dividends. The rates of return on the
market indices also have been adjusted to reflect reinvestment of interest and
dividends.
Price returns for the market indices are calculated by subtracting the
price level at the beginning of the year from the price level at the end of the
year and dividing the difference by the price level at the beginning of the
year. To calculate dollar values for the indices' Hypothetical $10,000 Account
Value presentation, price index values were substituted for Unit values in the
calculation described in the prospectus, and where applicable, dividend yields
were then added to determine the total returns applied in the dollar value
calculations. Similarly, to calculate Cumulative Return for the indices, the
Cumulative Return calculation described in the prospectus for Unit values of the
Divisions is used, substituting the Hypothetical $10,000 Account Value at the
end of each year for the Purchase Unit Value. No sales load, administrative
charges, or any other expenses have been deducted from the index calculations.
Additionally, the performance of a Division may from time to time be
compared with other Indexes which have been deemed by the Company relevant to
the Division.
These benchmarks do not reflect any charges for investment advisory fees,
brokerage commissions or other fees and expenses of the type charged at either
the Separate Account or Fund level. Therefore, the comparisons with these
benchmarks are of limited use.
THE PERFORMANCE RESULTS SHOWN IN THIS SECTION ARE NOT AN ESTIMATE OR
GUARANTEE OF FUTURE INVESTMENT PERFORMANCE, AND DO NOT REPRESENT THE ACTUAL
EXPERIENCE OF AMOUNTS INVESTED BY A PARTICULAR PARTICIPANT.
PERFORMANCE COMPARED TO MARKET INDICES
The performance of Stock Index Division Ten, Social Awareness Division
Twelve, the Growth Division Fifteen, the Growth & Income Division Sixteen, and
the Science & Technology Division Seventeen may be compared to the record of the
Standard & Poor's(R) Corporation ("S&P(R)")* Composite Stock Price Index ("S&P
500 Index"). The S&P 500(R) Index is a well known measure of the price
performance of 500 leading larger domestic stocks which represents approximately
80% of the market capitalization of the United States equity market. The index
is an unmanaged weighted index of 500 industrial, transportation, utility and
financial companies.
The performance of MidCap Index Division Four may be compared to the record
of the S&P MidCap 400 Index. The S&P MidCap 400 Index
- - ---------------
* "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)" and "S&P MidCap 400(R) Index"
are trademarks of Standard and Poor's Corporation. Neither the MidCap Index
Fund nor the Stock Index Fund is sponsored, endorsed, sold or promoted by S&P
and S&P makes no representation regarding the advisability of investing in
these Funds.
26
<PAGE> 90
was developed in 1991 by S&P to track the stock market performance of
medium-capitalization domestic stocks. The S&P MidCap 400 Index is market
weighted and consists of 400 stocks of domestic companies having a median market
capitalization of approximately $600 million. Stocks included in the S&P MidCap
400 Index are chosen on the basis of their market size, liquidity and industry
group representation. No stocks included in the S&P 500 Index are included in
the S&P MidCap 400 Index.
The performance of Money Market Division Six may be compared to the
Certificate of Deposit Primary Offering by New York City Banks, 30 Day Index.
The index is a money market index which reflects the average rate paid by New
York Banks on certificates of deposit of more than $100,000. The Index for 30
days is published daily.
The performance of Capital Conservation Division Seven may be compared to
the Merrill Lynch Corporate Master Index. The Merrill Lynch Corporate Master
Index consists of an index of approximately 4000 corporate bond holdings of
which assets are rated BBB3 to AAA. The average years to maturity of these
corporate bond holdings are approximately 12 years.
Performance of Government Securities Division Eight may be compared to the
Lehman Brothers U.S. Treasury Composite Index. The Lehman Brothers U.S. Treasury
Composite Index consists of an index of approximately 170 government securities
issues with all such issues having a maturity of greater than one year.
The performance of International Equities Division Eleven may be compared
to the Morgan Stanley Capital International Europe, Australia and Far East Index
("EAFE Index"). The EAFE Index, which commenced in 1969, is an unmanaged stock
index consisting of more than 1,000 companies from Europe, Australia and the Far
East. The index is capitalization weighted. It is a well known measure for
international stock performance. Total returns (with income reinvested) for the
EAFE Index are published using two methods. The first method includes gross
income (income earned without subtracting foreign income taxes which may be
withheld from foreign investors). The second method includes net income (income
earned after subtracting estimated foreign taxes). The Division currently
compares its performance with the index using the second method.
The performance of the International Government Bond Fund Division Thirteen
may be compared to the Salomon Brothers Non-US Dollar World Government Bond
Index ("Salomon Index"). Total returns with income reinvested for the Salomon
index are published using two methods. The first method includes gross income
(income earned without subtracting foreign income taxes which may be withheld
from foreign investors). The second method includes net income (income earned
after subtracting estimated foreign taxes). The Division currently compares its
performance with the index using the second method. The Salomon Index is an
unmanaged aggregate index composed of 650 issues from thirteen foreign
countries. These countries include Austria, Australia, Belgium, Canada, Denmark,
France, Germany, Italy, Japan, the Netherlands, Spain, Sweden and the United
Kingdom.
The performance of the Small Cap Index Division Fourteen and the Dreyfus
Small Cap Division Eighteen may be compared with the Russell 2000(R) Index
("Russell 2000").** The Russell 2000 was developed in 1984 by the Frank Russell
Company to track the stock market performance of small capitalization domestic
stocks. The Russell 2000 is market weighted and consists of approximately 2000
stocks. Stocks included in the Russell 2000 are chosen by the Frank Russell
Company on the basis of their market size.
The performance of Timed Opportunity Division Five may be compared to a
benchmark comprised of a weighted average of three market sectors corresponding
to the three market sectors in which the Division, through the Timed Opportunity
Fund, will invest as follows: 55% in equity securities, 35% in intermediate or
long-term debt securities and 10% in money market or short-term debt securities,
regardless of the Division's actual asset allocation. The performance of the
equity securities sector of the Division may be
- - ---------------
** The Russell 2000(R) Index is a trademark/service mark of the Frank Russell
Company. Russell TM is a trademark of the Frank Russell Company.
27
<PAGE> 91
compared to the S&P 500 Index. The performance of the intermediate or long-term
debt securities sector may be compared to the Merrill Lynch Corporate and
Government Master Index. The Merrill Lynch Corporate and Government Master Index
consists of an index of approximately 6,700 corporate and government bond
holdings. The average maturity of these corporate bond holdings is approximately
10 years. The performance of the money market or short-term debt securities
sector may be compared to the Certificate of Deposit Primary Offering by New
York City Banks, 30 Day Index.
The performance of the Templeton Asset Allocation Division Nineteen may be
compared to a benchmark comprised of a weighted average of three market sectors
corresponding to the sectors in which the Division, through the Templeton Asset
Allocation Fund, will invest as follows: 55% in equity securities, 35% in
intermediate or long-term debt securities and 10% in money market or short-term
debt securities, regardless of the Division's actual asset allocation. The
performance of the equity securities sector of the Division may be compared to
the Morgan Stanley Capital International World Index ("MSCI World Index"). The
performance of the intermediate or long-term debt securities sector may be
compared to the Salomon Brothers World Government Bond Index ("Salomon World
Index"). The performance of the money market or short-term debt securities
sector may be compared to the Certificate of Deposit Primary Offering by New
York City Banks, 30 Day Index. Total returns (with income reinvested) for the
MSCI World Index and the Salomon World Index are published using two methods.
The first method includes gross income (income earned without subtracting
foreign income taxes which may be withheld from foreign investors). The second
method includes net income (income earned after subtracting estimated foreign
taxes). The Division currently compares its performance with these indexes using
the second method. The MSCI World Index is an unmanaged capitalization weighted
index consisting of more than 1,500 issues from 22 countries as well as certain
South African gold mining issues. The countries include Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy,
Japan, Malaysia, The Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland, the United Kingdom, and the United States. The Salomon World Index
is an unmanaged aggregate index composed of approximately 820 issues from
fourteen countries. The countries include Australia, Austria, Belgium, Canada,
Denmark, France, Germany, Italy, Japan, The Netherlands, Spain, Sweden, the
United Kingdom and the United States.
The performance of the Templeton International Division Twenty may be
compared to the Morgan Stanley Capital International World Index ("MSCI World
Index"). Total returns (with income reinvested) for the MSCI World Index is
published using two methods. The first method includes gross income (income
earned without subtracting foreign income taxes which may be withheld from
foreign investors). The second method includes net income (income earned after
subtracting estimated foreign taxes). The Division currently compares its
performance with the index using the second method. The MSCI World Index is an
unmanaged capitalization weighted index consisting of more than 1,500 issues
from 22 countries as well as certain South African gold mining issues. The
countries include Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, The Netherlands, New
Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and
the United States.
28
<PAGE> 92
See "How to Review Investment Performance of Separate Account Divisions" in the
prospectus for information about how these returns were calculated.
Stock Index Division Ten Performance Compared to S&P 500 Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE APRIL 20, 1987
<TABLE>
<CAPTION>
STOCK INDEX S&P 500
DIVISION TEN INDEX
----------------------------------------------------------------- --------
<S> <C> <C>
04/20/87............................................... $ 10,000 $ 10,000
12/31/87............................................... 8,562 8,722
12/31/88............................................... 9,687 10,171
12/31/89............................................... 12,388 13,394
12/31/90............................................... 11,790 12,978
12/31/91............................................... 15,056 16,932
12/31/92............................................... 15,897 18,222
12/31/93............................................... 17,293 20,059
12/31/94............................................... 17,241 20,323
12/31/95............................................... 23,439 27,960
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Stock Index Division Ten................. 134.39% 98.80% 47.44% 35.95%
Benchmark Comparison
S&P 500 Index............................ 179.60% 115.45% 53.44% 37.58%
</TABLE>
- - ---------------
* This Division was initiated on April 20, 1987.
MidCap Index Division Four* Performance Compared to S&P 500 Index and S&P MidCap
400 Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 13, 1982
<TABLE>
<CAPTION>
S&P
S&P MIDCAP
MIDCAP INDEX 500 400
DIVISION FOUR INDEX INDEX
-------------------------------------------------- -------- --------
<S> <C> <C> <C>
10/13/82................................ $ 10,000 $ 10,000 $ 10,000
12/31/82................................ 10,096 11,352 11,564
12/31/83................................ 11,608 13,913 14,583
12/31/84................................ 11,721 14,786 14,755
12/31/85................................ 13,195 19,477 20,004
12/31/86................................ 13,516 23,113 23,247
12/31/87................................ 12,827 24,326 22,774
12/31/88................................ 14,502 28,367 27,527
12/31/89................................ 17,127 37,355 37,310
12/31/90................................ 15,380 36,195 35,401
12/31/91................................ 18,580 47,223 53,136
12/31/92................................ 20,213 50,820 59,466
12/31/93................................ 22,594 55,943 67,762
12/31/94................................ 21,532 56,681 65,332
12/31/95................................ 27,827 77,981 85,547
</TABLE>
29
<PAGE> 93
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 10 YEARS 5 YEARS 3 YEARS 1 YEAR
---------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Investment Division
Division Four............... 178.27% 110.89% 80.93% 37.67% 29.24%
Benchmark Comparison
S&P 500 Index............... 679.81% 300.37% 115.45% 53.44% 37.58%
S&P MidCap 400 Index........ 755.47% 327.64% 141.65% 43.86% 30.94%
</TABLE>
- - ---------------
Effective October 1, 1991, the Capital Accumulation Fund changed its name to
the MidCap Index Fund and revised its investment objective, investment program
and investment restrictions accordingly, pursuant to contract owner vote.
Selected purchase unit data for the last ten years for this Division appears
in the prospectus. Figures appearing above for the S&P MidCap 400 Index for
years prior to 1991 are based on estimates provided by Standard & Poor's for
illustrative purposes.
* This Division was initiated on October 13, 1982.
Small Cap Index Division Fourteen Performance Compared to Russell 2000 Index(R)
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE MAY 1, 1992
<TABLE>
<CAPTION>
RUSSELL
SMALL CAP INDEX 2000
DIVISION FOURTEEN INDEX
----------------------------------------------------------------- --------
<S> <C> <C>
05/01/92............................................... $ 10,000 $ 10,000
12/31/92............................................... 11,128 11,416
12/31/93............................................... 12,772 13,571
12/31/94............................................... 12,223 13,324
12/31/95............................................... 15,449 17,114
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 3 YEARS 1 YEAR
------- ------- -------
<S> <C> <C> <C>
Investment Division
Small Cap Index Division Fourteen...................... 54.49% 38.83% 26.39%
Benchmark Comparison
Russell 2000........................................... 71.14% 49.92% 28.45%
</TABLE>
- - ---------------
* This Division was initiated May 1, 1992.
International Equities Division Eleven Performance Compared to EAFE Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 2, 1989
<TABLE>
<CAPTION>
INTERNATIONAL EQUITIES EAFE
DIVISION ELEVEN INDEX
----------------------------------------------------------------- --------
<S> <C> <C>
10/02/89............................................... $ 10,000 $ 10,000
12/31/89............................................... 10,284 10,467
12/31/90............................................... 8,134 8,013
12/31/91............................................... 8,952 8,984
12/31/92............................................... 7,671 7,891
12/31/93............................................... 9,864 10,460
12/31/94............................................... 10,545 11,274
12/31/95............................................... 11,565 12,537
</TABLE>
30
<PAGE> 94
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
International Equities Division Eleven... 15.65% 42.17% 50.75% 9.67%
Benchmark Comparison
EAFE Index............................... 25.37% 56.46% 58.88% 11.21%
</TABLE>
- - ---------------
* This Division was initiated on October 2, 1989.
Templeton International Division Twenty Performance Compared to MSCI World Index
HYPOTHETICAL $10,000 ACCOUNT VALUE*
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE MAY 1, 1992
<TABLE>
<CAPTION>
MSCI
TEMPLETON INTERNATIONAL WORLD
DIVISION TWENTY INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
05/01/92................................................. $ 10,000 $ 10,000
12/31/92................................................. 9,311 10,182
12/31/93................................................. 13,549 12,474
12/31/94................................................. 13,077 13,107
12/31/95................................................. 14,952 15,823
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX*
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 3 YEARS 1 YEAR*
---------- ------- -------
<S> <C> <C> <C>
Investment Division
Templeton International Division Twenty.............. 49.52% 60.58% 14.34%
Benchmark Comparison
MSCI World Index..................................... 58.23% 55.39% 20.72%
</TABLE>
- - ---------------
* The hypothetical account illustration and cumulative returns were calculated
on a pro forma basis. Therefore, the inception date used for the Templeton
International Fund Division 20 was May 1, 1992, the inception of the
underlying fund. Current contract charges have been assessed in determining
pro forma hypothetical account values and cumulative returns.
Dreyfus Small Cap Division Eighteen Performance Compared to Russell 2000
HYPOTHETICAL $10,000 ACCOUNT VALUE*
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE AUGUST 31, 1990
<TABLE>
<CAPTION>
DREYFUS SMALL CAP RUSSELL
DIVISION EIGHTEEN INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
08/31/90................................................. $ 10,000 $ 10,000
12/31/90................................................. 10,168 9,577
12/31/91................................................. 26,105 13,996
12/31/92................................................. 44,181 16,572
12/31/93................................................. 73,477 19,701
12/31/94................................................. 78,125 19,341
12/31/95................................................. 99,825 24,844
</TABLE>
31
<PAGE> 95
CUMULATIVE RETURN COMPARED TO MARKET INDEX*
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Dreyfus Small Cap Division Eighteen..... 898.25% 881.77% 125.94% 27.78%
Benchmark Comparison
Russell 2000............................ 115.21% 159.41% 49.92% 28.45%
</TABLE>
- - ---------------
* The hypothetical account illustration and cumulative returns were calculated
on a pro forma basis. Therefore, the inception date used for the Dreyfus Small
Cap Fund Division 18 was August 31, 1990, the inception of the underlying
fund. Current contract charges have been assessed in determining pro forma
hypothetical account values and cumulative returns.
Growth Division Fifteen Performance Compared to S&P 500 Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
QUARTERLY VALUE OF A $10,000 STIPULATED PAYMENT MADE APRIL 29, 1994
<TABLE>
<CAPTION>
GROWTH S&P 500
DIVISION FIFTEEN INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
04/29/94................................................. $ 10,000 $ 10,000
06/30/94................................................. 9,527 10,042
09/30/94................................................. 10,037 10,533
12/31/94................................................. 10,018 10,532
03/31/95................................................. 11,246 11,557
06/30/95................................................. 12,241 12,660
09/30/95................................................. 13,920 13,666
12/31/95................................................. 14,667 14,489
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Growth Division Fifteen.................. 46.67% -- -- 46.40%
Benchmark Comparison
S&P 500 Index............................ 44.89% -- -- 37.58%
</TABLE>
- - ---------------
* The Fund underlying this Division was initiated on April 29, 1994.
Growth & Income Division Sixteen Compared to S&P 500 Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
QUARTERLY VALUE OF A $10,000 STIPULATED PAYMENT MADE APRIL 29, 1994
<TABLE>
<CAPTION>
GROWTH & INCOME S&P 500
DIVISION SIXTEEN INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
04/29/94................................................. $ 10,000 $ 10,000
06/30/94................................................. 9,479 10,042
09/30/94................................................. 10,033 10,533
12/31/94................................................. 9,932 10,532
03/31/95................................................. 10,762 11,557
06/30/95................................................. 11,473 12,660
09/30/95................................................. 12,621 13,666
12/31/95................................................. 12,966 14,489
</TABLE>
32
<PAGE> 96
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Growth & Income Division Sixteen......... 29.66% -- -- 30.55%
Benchmark Comparison
S&P 500 Index............................ 44.89% -- -- 37.58%
</TABLE>
- - ---------------
* The Fund underlying this Division was initiated on April 29, 1994.
Capital Conservation Division Seven Performance Compared to Merrill Lynch
Corporate Master Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE JANUARY 16, 1986
<TABLE>
<CAPTION>
MERRILL
LYNCH
CAPITAL CONSERVATION CORPORATE MASTER
DIVISION SEVEN INDEX
-------------------------------------------------------------------- ----------------
<S> <C> <C>
01/16/86................................................. $ 10,000 $ 10,000
12/31/86................................................. 10,477 11,609
12/31/87................................................. 10,186 11,823
12/31/88................................................. 10,789 12,976
12/31/89................................................. 11,936 14,808
12/31/90................................................. 11,784 15,899
12/31/91................................................. 13,669 18,799
12/31/92................................................. 14,702 20,514
12/31/93................................................. 16,301 23,064
12/31/94................................................. 15,153 22,288
12/31/95................................................. 18,120 27,097
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Capital Conservation Division Seven..... 81.20% 53.77% 23.25% 19.58%
Benchmark Comparison
Merrill Lynch Corporate Master Index.... 170.97% 70.43% 32.09% 21.58%
</TABLE>
- - ---------------
* This Division was initiated on January 16, 1986.
33
<PAGE> 97
Government Securities Division Eight Performance Compared to Lehman Brothers
U.S. Treasury
Composite Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE JANUARY 16, 1986
<TABLE>
<CAPTION>
U.S.
GOVERNMENT SECURITIES TREASURY
DIVISION EIGHT COMPOSITE INDEX
-------------------------------------------------------------------- ---------------
<S> <C> <C>
01/16/86................................................. $ 10,000 $ 10,000
12/31/86................................................. 10,461 11,630
12/31/87................................................. 10,120 11,862
12/31/88................................................. 10,621 12,694
12/31/89................................................. 11,792 14,516
12/31/90................................................. 12,371 15,765
12/31/91................................................. 14,052 18,187
12/31/92................................................. 14,915 19,502
12/31/93................................................. 16,362 21,597
12/31/94................................................. 15,472 20,857
12/31/95................................................. 17,995 24,684
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Government Securities Division Eight.... 79.95% 45.46% 20.65% 16.31%
Benchmark Comparison
U.S. Treasury Composite Index........... 146.84% 56.57% 26.57% 18.35%
</TABLE>
- - ---------------
* This Division was initiated on January 16, 1986.
International Government Bond Division Thirteen Performance Compared to Salomon
Brothers
Non-U.S. Dollar World Government Bond Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 1, 1991
<TABLE>
<CAPTION>
SALOMON
BROS.
NON-U.S.
DOLLAR
WORLD
GOVERNMENT
INTERNATIONAL GOVERNMENT BOND BOND
DIVISION THIRTEEN INDEX
-------------------------------------------------------------------- ---------
<S> <C> <C>
10/01/91................................................. $ 10,000 $ 10,000
12/31/91................................................. 10,905 11,042
12/31/92................................................. 11,128 11,540
12/31/93................................................. 12,583 13,246
12/31/94................................................. 13,014 13,999
12/31/95................................................. 15,308 16,692
</TABLE>
34
<PAGE> 98
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 3 YEARS 1 YEAR
---------- ------- ------
<S> <C> <C> <C>
Investment Division
International Government Bond Division Thirteen...... 53.08% 37.56% 17.63%
Benchmark Comparison
Salomon Bros. Non-U.S. Dollar World Government Bond
Index.............................................. 66.92% 44.64% 19.23%
</TABLE>
- - ---------------
* This Division was initiated on October 1, 1991.
Social Awareness Division Twelve Performance Compared to S&P 500 Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE OCTOBER 2, 1989
<TABLE>
<CAPTION>
SOCIAL AWARENESS S&P 500
DIVISION TWELVE INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
10/02/89................................................. $ 10,000 $ 10,000
12/31/89................................................. 10,100 10,214
12/31/90................................................. 9,877 9,897
12/31/91................................................. 12,506 12,912
12/31/92................................................. 12,795 13,896
12/31/93................................................. 13,670 15,297
12/31/94................................................. 13,339 15,499
12/31/95................................................. 18,351 21,323
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Social Awareness Division Twelve....... 83.51% 85.80% 43.42% 37.57%
Benchmark Comparison
S&P 500 Index.......................... 113.23% 115.45% 53.44% 37.58%
</TABLE>
- - ---------------
* This Division was initiated on October 2, 1989.
Science & Technology Division Seventeen Compared to S&P 500 Index.
HYPOTHETICAL $10,000 ACCOUNT VALUE
QUARTERLY VALUE OF A $10,000 STIPULATED PAYMENT MADE APRIL 29, 1994
<TABLE>
<CAPTION>
SCIENCE & TECHNOLOGY S&P 500
DIVISION SEVENTEEN INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
04/29/94................................................. $ 10,000 $ 10,000
06/30/94................................................. 9,457 10,042
09/30/94................................................. 11,316 10,533
12/31/94................................................. 12,477 10,532
03/31/95................................................. 13,753 11,557
06/30/95................................................. 16,805 12,660
09/30/95................................................. 19,444 13,666
12/31/95................................................. 19,972 14,489
</TABLE>
35
<PAGE> 99
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Science & Technology Division
Seventeen.............................. 99.72% -- -- 60.07%
Benchmark Comparison
S&P 500 Index............................ 44.89% -- -- 37.58%
</TABLE>
- - ---------------
* The Fund underlying this Division was initiated on April 29, 1994.
Money Market Division Six Performance Compared to Certificate of Deposit Primary
Offering by
New York City Banks, 30 Day Index (Primary CD Index)
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE JANUARY 16, 1986
<TABLE>
<CAPTION>
MONEY MARKET PRIMARY
DIVISION SIX CD INDEX
-------------------------------------------------------------------- --------
<S> <C> <C>
01/16/86................................................. $ 10,000 $ 10,000
12/31/86................................................. 10,405 10,591
12/31/87................................................. 10,873 11,253
12/31/88................................................. 11,495 12,083
12/31/89................................................. 12,406 13,130
12/31/90................................................. 13,254 14,181
12/31/91................................................. 13,849 14,955
12/31/92................................................. 14,157 15,427
12/31/93................................................. 14,393 15,826
12/31/94................................................. 14,791 16,390
12/31/95................................................. 15,458 17,200
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- ------
<S> <C> <C> <C> <C>
Investment Division
Money Market Division Six................... 54.58% 16.63% 9.19% 4.51%
Benchmark Comparison
Primary CD Index............................ 72.00% 21.29% 11.50% 4.94%
</TABLE>
- - ---------------
* This Division was initiated on January 16, 1986.
36
<PAGE> 100
Timed Opportunity Division Five Performance Compared to S&P 500 Index, Merrill
Lynch Corporate and Government Master Index and Certificate of Deposit Primary
Offering by New York City Banks, 30 Day Index
HYPOTHETICAL $10,000 ACCOUNT VALUE
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE SEPTEMBER 6, 1983
<TABLE>
<CAPTION>
TIMED OPPORTUNITY S&P 500 BLENDED
DIVISION FIVE INDEX INDEX*
--------------------------------------------------------------- -------- --------
<S> <C> <C> <C>
09/06/83............................................ $ 10,000 $ 10,000 $ 10,000
12/31/83............................................ 9,857 10,156 10,252
12/31/84............................................ 9,853 10,793 11,269
12/31/85............................................ 11,004 14,217 14,177
12/31/86............................................ 11,987 16,871 16,536
12/31/87............................................ 12,862 17,757 17,472
12/31/88............................................ 13,973 20,706 19,669
12/31/89............................................ 16,182 27,267 24,213
12/31/90............................................ 15,634 26,420 24,748
12/31/91............................................ 18,782 34,470 30,404
12/31/92............................................ 18,460 37,095 32,608
12/31/93............................................ 19,973 40,834 35,770
12/31/94............................................ 19,515 41,373 35,769
12/31/95............................................ 24,110 56,921 45,566
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION** 10 YEARS 5 YEARS 3 YEARS 1 YEAR
----------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Investment Division
Timed Opportunity Division Five... 141.10% 119.10% 54.21% 30.61% 23.55%
Benchmark Comparison
S&P 500 Index..................... 469.21% 300.37% 115.45% 53.44% 37.58%
Blended Index*.................... 355.66% 221.41% 84.12% 39.74% 27.39%
</TABLE>
- - ---------------
* The Blended Index reflects an allocation of investments in the following
Indexes: 55% of investments included in the S&P 500 Index, 35% of investments
included in the Merrill Lynch Corporate and Government Master Index, and 10%
of investments included in the Certificate of Deposit Primary Offering by New
York City Banks, 30 Day Index.
** This Division was initiated on September 6, 1983.
37
<PAGE> 101
Templeton Asset Allocation Division Nineteen Performance Compared to MSCI World
Index, Salomon Brothers World Government Bond Index and Certificate of Deposit
Primary Offering by New York City Banks, 30 Day Index
HYPOTHETICAL $10,000 ACCOUNT VALUE*
ANNUAL VALUE OF A $10,000 STIPULATED PAYMENT MADE AUGUST 24, 1988
<TABLE>
<CAPTION>
MSCI
TEMPLETON ASSET ALLOCATION WORLD BLENDED
DIVISION NINETEEN INDEX INDEX**
---------------------------------------------------------- -------- --------
<S> <C> <C> <C>
08/24/88....................................... $ 10,000 $ 10,000 $ 10,000
12/31/88....................................... 10,237 11,432 11,074
12/31/89....................................... 11,450 13,330 12,346
12/31/90....................................... 10,405 11,062 11,737
12/31/91....................................... 13,124 13,084 13,649
12/31/92....................................... 14,009 12,401 13,553
12/31/93....................................... 17,453 15,191 15,883
12/31/94....................................... 16,714 15,962 16,522
12/31/95....................................... 20,227 19,270 19,578
</TABLE>
CUMULATIVE RETURN COMPARED TO MARKET INDEX*
(PERIOD ENDED DECEMBER 31, 1995)
<TABLE>
<CAPTION>
SINCE
INCEPTION* 5 YEARS 3 YEARS 1 YEAR
---------- ------- ------- -------
<S> <C> <C> <C> <C>
Investment Division
Templeton Asset Allocation Division
Nineteen............................. 102.27% 94.40% 44.39% 21.02%
Benchmark Comparison**
MSCI World Index....................... 92.70% 74.20% 55.39% 20.72%
Blended Index.......................... 95.78% 66.80% 44.45% 18.49%
</TABLE>
- - ---------------
* The hypothetical account illustration and cumulative returns were calculated
on a pro forma basis. Therefore, the inception date used for the Templeton
Asset Allocation Fund Division 19 was August 24, 1988, the inception of the
underlying fund. Current contract charges have been assessed in determining
pro forma hypothetical account values and cumulative returns.
** The Blended Index reflects an allocation of investments in the following
Indexes: 55% of investments included in the MSCI World Index, 35% of
investments included in the Salomon Brothers World Government Bond Index and
10% of investments included in the Certificate of Deposit Primary Offering by
New York City Bank, 30 Day index.
PAYOUT PAYMENTS
ASSUMED INVESTMENT RATE
The discussion concerning the amount of payout payments which follows this
section is based on an Assumed Investment Rate of 3 1/2% per annum. However, the
Company will permit each Annuitant choosing a variable payout option to select
an Assumed Investment Rate permitted by state law or regulations other than the
3 1/2% rate described in this prospectus as follows: 3%, 4 1/2%, 5% or 6% per
annum. (Note: an Assumed Investment Rate higher than 5% may not be selected
under individual Contracts.) The foregoing Assumed Investment Rates are used
merely in order to determine the first monthly payment per thousand dollars of
value. It should not be inferred that such rates will bear any relationship to
the actual net investment experience of VALIC Separate Account A.
AMOUNT OF PAYOUT PAYMENTS
The amount of the first variable annuity payment to the Annuitant will
depend on the amount of the Account Value applied to effect the variable annuity
as of the tenth day immediately preceding
38
<PAGE> 102
the date payout payments commence, the amount of any premium tax owed, the
annuity option selected, and the age of the Annuitant.
The Contracts contain tables indicating the dollar amount of the first
payout payment under each payout option for each $1,000 of Account Value (after
the deduction for any premium tax) at various ages. These tables are based upon
the 1983 Table A (promulgated by the Society of Actuaries) and an Assumed
Investment Rate of 3%, 3 1/2%, 4% and 5% per annum (3 1/2% in the group
Contract).
The portion of the first monthly variable payout payment derived from a
Division of VALIC Separate Account A is divided by the Payout Unit value for
that Division (calculated ten days prior to the date of the first monthly
payment) to determine the number of Payout Units in each Division represented by
the payment. The number of such units will remain fixed during the Payout
Period, assuming the Annuitant makes no transfers of Payout Units to provide
Payout Units under another Division or to provide a fixed annuity.
In any subsequent month, the dollar amount of the variable payout payment
derived from each Division is determined by multiplying the number of Payout
Units in that Division by the value of such Payout Unit on the tenth day
preceding the due date of such payment. The Payout Unit value will increase or
decrease in proportion to the net investment return of the Division or Divisions
underlying the variable payout since the date of the previous payout payment,
less an adjustment to neutralize the 3 1/2% or other Assumed Investment Rate
referred to above.
Therefore, the dollar amount of variable payout payments after the first
will vary with the amount by which the net investment return is greater or less
than 3 1/2% per annum. For example, if a Division has a cumulative net
investment return of 5% over a one year period, the first payout payment in the
next year will be approximately 1 1/2 percentage points greater than the payment
on the same date in the preceding year, and subsequent payments will continue to
vary with the investment experience of the Division. If such net investment
return is 1% over a one year period, the first payout payment in the next year
will be approximately 2 1/2 percentage points less than the payment on the same
date in the preceding year, and subsequent payments will continue to vary with
the investment experience of the applicable Division.
Each deferred Contract provides that, when fixed payout payments are to be
made under one of the first four payout options, the monthly payment to the
Annuitant will not be less than the monthly payment produced by the then current
settlement option rates, which will not be less than the rates used for a
currently issued single payment immediate annuity contract. The purpose of this
provision is to assure the Annuitant that, at retirement, if the fixed payout
purchase rates then required by the Company for new single payment immediate
annuity contracts are significantly more favorable than the annuity rates
guaranteed by a Contract, the Annuitant will be given the benefit of the new
annuity rates.
PAYOUT UNIT VALUE
The value of a Payout Unit is calculated at the same time that the value of
an Purchase Unit is calculated and is based on the same values for Fund shares
and other assets and liabilities. (See "Purchase Period" in the prospectus.) The
calculation of Payout Unit value is discussed in the prospectus under "Payout
Period."
The following illustrations show, by use of hypothetical examples, the
method of determining the Payout Unit value and the amount of variable annuity
payments.
ILLUSTRATION OF CALCULATION OF PAYOUT UNIT VALUE
Example 8.
<TABLE>
<S> <C>
1. Payout Unit value, beginning of period.............................. $ .980000
2. Net investment factor for Period (see Example 3).................... 1.023558
3. Daily adjustment for 3 1/2% Assumed Investment Rate................. .999906
4. (2)X(3)............................................................. 1.023462
5. Payout Unit value, end of period (1)X(4)............................ $ 1.002993
</TABLE>
39
<PAGE> 103
ILLUSTRATION OF PAYOUT PAYMENTS
Example 9. Annuitant age 65, Life Annuity with 120 Payments Certain
<TABLE>
<S> <C>
1. Number of Purchase Units at Payout Date........................ 10,000.00
2. Purchase Unit value (see Example 3)............................ $ 1.800000
3. Account Value of Contract (1)X(2).............................. $ 18,000.00
4. First monthly Payout Payment per $1,000 of Account Value....... $ 5.63
5. First monthly Payout Payment (3)X(4)/1,000..................... $ 101.34
6. Payout Unit value (see Example 10)............................. $ .980000
7. Number of Payout Units (5)/(6)................................. 103.408
8. Assume Payout Unit value for second month equal to............. $ .997000
9. Second monthly Payout Payment (7)X(8).......................... $ 103.10
10. Assume Payout Unit value for third month equal to.............. $ .953000
11. Third monthly Payout Payment (7)X(10).......................... $ 98.55
</TABLE>
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The Company has qualified or intends to qualify the Contracts for sale in
all fifty states and the District of Columbia and will commence offering the
Contracts promptly upon qualification in each such jurisdiction.
The Contracts are sold in a continuous offering by licensed insurance
agents who are registered representatives of broker-dealers which are members of
the National Association of Securities Dealers, Inc. (the "NASD"). The principal
underwriter for VALIC Separate Account A is the Underwriter as defined above, a
wholly-owned subsidiary of the Company. The Underwriter's address is 2929 Allen
Parkway, Houston, Texas 77019. The Underwriter is a Texas corporation organized
in 1970 and is a member of the NASD.
The licensed agents who sell the Contracts will be compensated for such
sales by commissions ranging up to 5% of each Purchase Payment. Managers who
supervise the agents will receive overriding commissions ranging up to 1% of
Purchase Payments. (These various commissions are paid by the Company and do not
result in any charge to Contract Owners or to VALIC Separate Account A in
addition to the charges described under "Fees and Charges" in the prospectus.)
Pursuant to its underwriting agreement with the Underwriter and VALIC
Separate Account A, the Company reimburses the Underwriter for reasonable sales
expenses, including overhead expenses. Sales commissions for year 1995 were
$44,476,000.
EXPERTS
The consolidated financial statements of the Company at December 31, 1995
and 1994, and for each of the three years in the period ended December 31, 1995,
and the financial statements of the Company's Separate Account A at December 31,
1995 and for each of the two years in the period then ended, appearing in this
Statement of Additional Information have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing elsewhere
herein. The financial statements audited by Ernst & Young LLP have been included
in reliance upon such reports given upon the authority of such firm as experts
in accounting and auditing.
40
<PAGE> 104
COMMENTS ON FINANCIAL STATEMENTS
The financial statements of The Variable Annuity Life Insurance Company
should be considered only as bearing upon the ability of the Company to meet its
obligations under the Contracts, which include death benefits, and its
assumption of the mortality and expense risks.
Divisions Four, Five, Six, Seven, Eight, Ten, Eleven, Twelve, Thirteen,
Fourteen, Fifteen, Sixteen, Seventeen, Eighteen, Nineteen, and Twenty are the
only Divisions available under the Contracts described in the Prospectus. The
Separate Account financial statements contained herein reflect the composition
of the Separate Account as of December 31, 1995, and for the fiscal year then
ended.
41
<PAGE> 105
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
CONTRACT FORM
PORTFOLIO DIRECTOR
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Filed with Part A:
Selected Purchase Unit Data for each Fund for the last ten years or
since inception
Filed with Part B:
(i) Audited Financial Statements (To Be Filed By Amendment)
The Variable Annuity Life Insurance Company
Report of Independent Auditors
Consolidated Balance Sheet
Consolidated Statement of Income
Consolidated Statement of Changes in Stockholder Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
(ii) Audited Financial Statements (To Be Filed By Amendment)
The Variable Annuity Life Insurance Company Separate Account A --
Report of Independent Auditors
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Division Financial Statements
Notes to Financial Statements
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions, are inapplicable, or the related
information is included in the financial statements and therefore such
schedules have been omitted.
(b) Exhibits
<TABLE>
<S> <C>
1. -- Resolutions adopted by The Variable Annuity Life Insurance Company
Board of Directors at its Annual Meeting of April 18, 1979 establishing
The Variable Annuity Life Insurance Company Separate Account A.
2. -- Not Applicable.
</TABLE>
C-1
<PAGE> 106
<TABLE>
<S> <C>
3. -- Underwriting Agreement between The Variable Annuity Life Insurance
Company, The Variable Annuity Life Insurance Company Separate Account A
and The Variable Annuity Marketing Company.
4(a). -- Specimen Individual Annuity Contract. (Form UIT-194).
4(b)(i). -- Specimen Group Annuity Contract. (Form UITG-194).
4(b)(ii). -- Specimen Individual Non-Qualified Annuity Contract. (Form UITN-194).
4(b)(iii). -- Specimen Certificate of Participation under Group Annuity Contract.
(Form UITG-194P).
4(b)(iv). -- Specimen Individual Retirement Account Annuity Contract. (Form
UIT-IRA-194).
4(b)(v). -- Specimen Simplified Employee Pension Contract (Form UIT-SEP-194).
5(a). -- Specimen Application for Annuity Contract.
5(b). -- Specimen Group Master Application.
6(a). -- Copy of Amended and Restated Articles of Incorporation of The
Variable Annuity Life Insurance Company.
6(b). -- Copy of Amendment Number One to Amended and Restated Articles of
Incorporation of The Variable Annuity Life Insurance Company (as
amended through April 28, 1989) effective March 28, 1990.
7. -- Not Applicable.
8(a). -- Participation Agreement between The Variable Annuity Life Insurance
Company and Templeton Variable Products Series Fund.
8(b). -- Participation Agreement between The Variable Annuity Life Insurance
Company and Dreyfus Variable Investment Fund.
9. -- Written Consent and Opinion of Cynthia A. Toles, Senior Associate
General Counsel and Secretary.
10. -- Consent of Independent Auditors [To Be Filed by Amendment]
11. -- Not Applicable.
12. -- Not Applicable.
13. -- Calculation of standard and nonstandard performance information.
14. -- Financial Data Schedule. (Exhibit 27 for purposes of electronic
filing).
15. -- Confidential Personal Data Form which discloses Section 403(b)(11)
withdrawal restrictions as set forth in a no-action letter issued by the
SEC on November 28, 1988, and which requires the signed
acknowledgement of participants who purchase Section 403(b) annuities
with regard to these withdrawal restrictions.
16(a). -- Copies of manually signed powers of attorney for The Variable Annuity
Life Insurance Company Directors Robert M. Devlin, Peter V. Tuters,
Stephen D. Bickel, Joe C. Osborne, and Sam Magee.
16(b). -- Copy of manually signed power of attorney for The Variable Annuity
Life Insurance Company Director Harold S. Hook.
16(c). -- Copy of manually signed power of attorney for The Variable Annuity
Life Insurance Company Director Austin P. Young.
</TABLE>
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<PAGE> 107
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
The directors and principal officers of the Company are set forth below,
together with their current principal occupations including any position with
American General Corporation ("AGC"), the indirect parent of The Variable
Annuity Life Insurance Company ("VALIC"), the depositor of the Registrant, and
The Variable Annuity Marketing Company ("VAMCO"), the principal underwriter of
the Contracts issued through the Registrant. The business address of each
officer and director is 2929 Allen Parkway, Houston, Texas 77019.
<TABLE>
<CAPTION>
NAMES AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES HELD WITH DEPOSITOR
- - --------------------------------- ----------------------------------------------------------
<S> <C>
Harold S. Hook................... Senior Chairman of the Board of Directors, VALIC.
Chairman of the Board and Chief Executive Officer,
American General Corporation.
Robert M. Devlin................. Senior Chairman of the Board of Directors, VALIC.
President, American General Corporation.
Peter V. Tuters.................. Director; Vice President and Chief Investment Officer,
VALIC.
Senior Vice President and Chief Investment Officer,
American General Corporation.
Stephen D. Bickel................ Chairman and Chief Executive Officer, VALIC.
Chairman of the Board of Directors, VAMCO.
Thomas L. West, Jr............... Director, President, VALIC.
Austin P. Young.................. Director, VALIC. Senior Vice President and Chief Financial
Officer, American General Corporation.
Sam E. Magee..................... Director; Senior Vice President -- Operations, VALIC.
Joe C. Osborne................... Director; Senior Vice President -- Marketing, VALIC.
Director and President, VAMCO.
Brent C. Nelson.................. Director, Senior Vice President and Controller, Finance,
VALIC.
J. David Crank................... Vice President -- Group Plan Administration, VALIC.
Norman Jaskol.................... Vice President and Managing Director -- Investments,
VALIC.
Ronald E. Kopke.................. Vice President -- Sales Operations, VALIC.
Senior Vice President -- VAMCO.
William A. Wilson................ Vice President and General Counsel, VALIC.
Cynthia A. Toles................. Secretary, VALIC.
Director, Secretary and Assistant Treasurer, VAMCO.
James D. Bonsall................. Treasurer, VALIC.
Jane E. Bates.................... Chief Compliance Officer, VALIC.
Treasurer, VAMCO.
D. Lynne Walters................. Tax Officer, VALIC.
Tax Officer, VAMCO.
Vice President -- Taxes, American General Corporation.
</TABLE>
ITEM 26. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
No person is controlled by the Registrant. The Registrant is a segregated
asset account of the Company ("Depositor") established in accordance with the
Texas Insurance Code. The Registrant supports benefits payable under Variable
Annuity Contracts investing in American General Series Portfolio Company (the
"Series Company"), the Templeton Asset Allocation Fund and Templeton
International Fund (each a separate series of Templeton Variable Products Series
Fund), and Small Cap Portfolio of the Dreyfus Variable Investment Fund. The
Registrant votes Series Company shares and
C-3
<PAGE> 108
shares held in Templeton Variable Products Series Fund and Dreyfus Variable
Investment Fund only as directed by the contract owner. (See "Voting Rights" in
the Prospectus for these Contracts.)
The Depositor is indirectly wholly-owned by AGC (formerly American General
Insurance Company.) Therefore, the Depositor and various companies affiliated
with the Depositor may be deemed to be under common control with the Registrant.
These companies, together with their state of incorporation and the identity of
the owners of their common stock, are set forth in Exhibit 21, "Subsidiaries of
American General Corporation," of the Form 10-K of AGC filed for the year ended
December 31, 1995 (File No. 1-7981), which is incorporated herein by reference.
ITEM 27. NUMBER OF CONTRACT OWNERS
As of December 31, 1995 a date within 90 days prior to the date of filing,
there were 141,479 individual Contract Owners, 2,716 group Contract Owners of
the qualified Contracts, offered by the Portfolio Director prospectus of the
Registrant, and 5,665 individual Contract Owners and 7 group Contract Owners of
the non-qualified Contracts offered by the Portfolio Director prospectus. The
Registrant issues different contracts through other Registration Statements.
ITEM 28. INDEMNIFICATION
Set forth below is a summary of the general effect of applicable provisions
of the Depositor's Bylaws regarding indemnification of, and advancement of legal
expenses to, the Depositor's officers, directors and employees (collectively,
"Indemnitees").
The Depositor shall indemnify any Indemnitee who was or is a named
defendant or respondent or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative (including any action by or in the
right of the Depositor), or any appeal of such action, suit or proceeding and
any inquiry or investigation that could lead to such an action, suit or
proceeding, by reason of the fact that the Indemnitee is or was a director, or
officer or employee of the Depositor, or is or was serving at the request of the
Depositor as a director, officer, partner, venturer, proprietor, trustee,
employee, or similar functionary of another foreign or domestic corporation or
nonprofit corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, against judgments, penalties
(including excise and similar taxes), fines, amounts paid in settlement, and
reasonable expenses (including court costs and attorneys' fees) actually
incurred by him in connection with such action, suit or proceeding, if
Indemnitee acted in good faith and in a manner he reasonably believed, (i) in
the case of conduct in his official capacity as a director of the Depositor, to
be in the best interests of the Depositor and (ii) in all other cases, to be not
opposed to the best interests of the Depositor; and, with respect to any
criminal action or proceeding, if Indemnitee had no reasonable cause to believe
his conduct was unlawful; provided, however that in the case of any threatened,
pending or completed action, suit or proceeding by or in the right of the
Depositor, the indemnity shall be limited to reasonable expenses (including
court costs and attorneys' fees) actually incurred in connection with such
action, suit or proceeding; and no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the Depositor or liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted from an action
taken in the person's official capacity as a director or officer. The
termination of any action, suit or proceeding by judgment, order, settlement, or
conviction, or on a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the Indemnitee did not act in good faith and
in a manner which Indemnitee reasonably believed to be in the best interests of
the Depositor; and, with respect to any criminal action or proceeding, shall not
create a presumption that the person had reasonable cause to believe that his
conduct was unlawful.
Where an Indemnitee of the Depositor or other person entitled to indemnity
hereunder has been wholly successful, on the merits or otherwise, in defense of
any such action, suit or proceeding, Indemnitee shall be indemnified against
reasonable expenses (including court costs and attorneys' fees) actually
incurred by him in connection therewith.
C-4
<PAGE> 109
Any indemnification (unless otherwise ordered by a court of competent
jurisdiction) shall be made by the Depositor only as authorized in a specific
case upon a determination that the applicable standard of conduct has been met.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who at the time of the vote have not
been named as defendants or respondents in such action, suit or proceeding, or
(ii) if such a quorum cannot be obtained, by a majority vote of a committee of
the Board of Directors, designated to act in the matter by a majority vote of
all directors, consisting solely of two or more directors who at the time of the
vote are not named defendants or respondents in such action, suit or proceeding,
or (iii) by special legal counsel selected by the Board of Directors (or a
committee thereof) by vote in the manner set forth in subparagraphs (i) and (ii)
immediately above or if such a quorum cannot be obtained and such a committee
cannot be established, by a majority vote of all directors, or (iv) by the
shareholders in a vote that excludes the shares held by any Indemnitee who is
named as a defendant or respondent in such action, suit or proceeding.
Reasonable expenses incurred by an Indemnitee of the Depositor or other
person entitled to indemnity hereunder, who was, is or is threatened to be made
a named defendant or respondent in any such action, suit or proceeding described
above may be paid by the Depositor in advance of the final disposition thereof
upon (i) receipt of a written affirmation by the Indemnitee of his good faith
belief that he has met the standard of conduct necessary for indemnification
under this article and a written undertaking by or on behalf of the Indemnitee
to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Depositor as authorized under this article and
(ii) a determination that the facts then known to those making the determination
would not preclude indemnification under this article.
Notwithstanding any other provision of this article, the Depositor may pay
or reimburse expenses incurred by any Indemnitee of the Depositor or any other
person entitled to indemnity hereunder in connection with his appearance as a
witness or other participation in any action, suit or a proceeding described
above at a time when he is not named defendant or respondent in such action,
suit or proceeding.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant, as provided above or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification by the Depositor is against public policy, as expressed in the
Act, and therefore may be unenforceable. In the event (a) that a claim for such
indemnification (except insofar as it provides for the payment by the Depositor
of expenses incurred or paid by a director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted against the
Depositor by such director, officer or controlling person; and (b) the
Securities and Exchange Commission is still of the same opinion that the
Depositor or Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit such cause to a court of
appropriate jurisdiction, the question of whether such indemnification by the
Depositor is against public policy as expressed in the Act will be governed by
the final adjudication of such issue.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) VAMCO acts as exclusive distributor and principal underwriter of the
Registrant and as principal underwriter for the Series Company, a registered
investment company.
VAMCO also acts as underwriter for the Templeton Asset Allocation Fund and
Templeton International Fund of Templeton Variable Products Series Fund and the
Small Cap Portfolio of Dreyfus Variable Investment Fund, each an investment
company.
C-5
<PAGE> 110
(b) The following information is furnished with respect to each officer and
director of VAMCO:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH VAMCO
----------------------------------------- -----------------------------------------
<S> <C>
Stephen D. Bickell(1).................... Chairman of the Board of Directors
Joe C. Osborne(1)........................ Director and President
Cynthia A. Toles(1)...................... Director, Secretary and Assistant
Treasurer
Ronald E. Kopke(1)....................... Senior Vice President
Jane E. Bates(1)......................... Treasurer
D. Lynne Walters(1)...................... Tax Officer
Todd M. Adams............................ Vice President
8500 Normandale Lake Blvd.
Suite 750
Bloomington, MN 55437
Robert F. Bendall........................ Vice President
Two Summit Park Drive
Suite 410
Independence, OH 44131
Edward K. Boero.......................... Vice President
222 South Harbor Blvd.
10th Floor
Anaheim, CA 92805
Steven P. Boero.......................... Vice President
1900 O'Farrell Street
Suite 390
San Mateo, CA 94403-1311
Joe H. Connell........................... Vice President
4722 N. 24th Street
Suite 150
Phoenix, AZ 85016
James J. Costello........................ Vice President
1767 Sentry Parkway West 19
Suite 300
Blue Bell, PA 19422
Paige T. Davis........................... Vice President
7310 Ritchie Highway
Suite 800
Glen Burnie, MD 21060
George E. Downing........................ Vice President
100 Ashwood Center North
Suite 100
Atlanta, GA 30338
Robert G. Fillmore....................... Vice President
90 Woodbridge Center Dr.
Suite 410
Woodbridge, NJ 07095
James K. Graham.......................... Vice President
1301 West Long Lake Road
Suite 340
Troy, MI 48098
Richard R. Gumpert....................... Vice President
5400 LBJ Freeway
Suite 1340
Dallas, TX 75240
Thomas N. Lange.......................... Vice President
10006 N. Dale Mabry Hwy.
Suite 113
Tampa, FL 33618
</TABLE>
C-6
<PAGE> 111
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH VAMCO
----------------------------------------- -----------------------------------------
<S> <C>
Alden D. Lewis........................... Vice President
1800 S.W. First Avenue
Suite 505
Portland, OR 97201
David R. Lyle............................ Vice President
University Tower
3100 Tower Road
Suite 1601, Box 50
Durham, NC 27707
Sharon J. Novickas....................... Vice President
230 West Monroe
Suite 1550
Chicago, IL 60606
Robert A. Obester........................ Vice President
800 Gessner
Suite 1280
Houston, TX 77024
F. William Scott......................... Vice President
410 Amherst Street
Suite 250
Nashua, NH 03063
William G. Tubbs......................... Vice President
8555 North River Road
Suite 420
Indianapolis, IN 46240
Donald R. Van Putten..................... Vice President
165 South Union Blvd. West
Suite 1050
Lakewood, CO 80228
</TABLE>
- - ---------------
(1) 2929 Allen Parkway, Houston, Texas 77019
(c) VAMCO is the principal underwriter for the Registrant. The licensed
agents who sell the forms of Contract covered by this registration statement are
compensated for such sales by commissions paid by Depositor. These commissions
do not result in any change to the Registrant or to Contract Owners,
Participants, Annuitants or Beneficiaries in addition to the charges described
in the prospectuses for the Contract.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books or other documents required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and the Rules promulgated thereunder will be
in the physical possession of:
The Variable Annuity Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
ITEM 31. MANAGEMENT SERVICES
There have been no management-related services provided to the Separate
Account for the last three fiscal years.
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<PAGE> 112
ITEM 32. UNDERTAKINGS
VALIC hereby commits itself, on behalf of the Contract Owners, to the
following undertakings:
1. To file a post-effective amendment to this registration statement
as frequently as necessary to ensure that the audited financial statements
in the registration statement are never more than 16 months old for so long
as payments under he variable annuity contracts may be accepted;
2. To include either (1) as part of any application to purchase a
contract offer by the prospectus, a space that an applicant can check to
request a Statement of Additional Information; or (2) a post card or
similar written communication affixed to or included in the prospectus that
the applicant can remove to send for a Statement of Additional Information:
3. To deliver any Statement of Additional Information and any
financial statements required to be made available under this form promptly
upon written or oral request.
ITEM 33. WITHDRAWAL RESTRICTIONS FOR 403(B) PLANS
The Tax Reform Act of 1986 added to the Internal Revenue Code a new Section
403(b)11) which applies to tax years beginning after December 31, 1988. This
paragraph provides that withdrawal restrictions apply to contributions made and
interest earned subsequent to December 31, 1988. Such restrictions require that
distributions not begin before age 59 1/2, separation from service, death,
disability, or hardship (only employee contributions without accrued interest
may be withdrawn in case of hardship). These withdrawal restrictions appear in
Section 403(b) Annuities for Employees of Certain Tax-Exempt Organizations or
Public Educational Institutions in the Prospectus for Contracts of this
Registration Statement.
The Company relies on a no-action letter issued by the Securities and
Exchange Commission on November 28, 1988 stating that no enforcement action
would be taken under sections 22(e), 27(c)(1), or 27(d) of the Investment
Company Act of 1940 if, in effect, the Company permits restrictions on cash
distributions from elective contributions to the extent necessary to comply with
Section 403(b)(11) of the Internal Revenue Code in accordance with the following
conditions:
(1) Include appropriate disclosure regarding the redemption
restrictions imposed by Section 403(b)(11) in each registration statement,
including the prospectus, used in connection with the offer of the
Contract;
(2) Include appropriate disclosure regarding the redemption
restrictions imposed by Section 403(b)(11) in any sales literature used in
connection with the offer of the Contract;
(3) Instruct sales representatives who solicit participants to
purchase the Contract specifically to being the redemption restrictions
imposed by Section 403(b)(11) to the attention of the potential
participants;
(4) Obtain from each plan participant who purchases a Section 403(b)
annuity Contract, prior to or at the time of such purchase, a signed
statement acknowledging the participant's understanding of (1) the
restrictions on redemption imposed by Section 403(b)(11), and (2) the
investment alternatives available under the employer's Section 403(b)
arrangement, to which the participant may elect to transfer his contract
value.
The Company has complied, and is complying, with the provisions of
paragraphs (1)-(4) above.
The Company relies on Rule 6c-7 of the Investment Company Act of 1940 (the
"Act") which states that a registered separate account, and any depositor of or
underwriter for such account, shall be exempt from the provisions of sections
22(e), 27(c)(1) and 27(d) of the Act with respect to this Contract
C-8
<PAGE> 113
participating in this account to the extent necessary to permit compliance with
the Texas Optional Retirement Program (Program) in accordance with the following
conditions:
(a) include appropriate disclosure regarding the restrictions on
redemption imposed by the Program in each registration statement, including
the prospectus, used in connection with the Program;
(b) include appropriate disclosure regarding the restrictions on
redemption imposed by the Program in any sales literature used in
connection with the offer of this Contract to Program participants;
(c) instruct salespeople who solicit Program participants to purchase
this Contract specifically to bring the restrictions on redemption imposed
by the Program to the attention of potential Program participants.
(d) obtain from each Program participant who purchases this Contract
in connection with the Program, prior to or at the time of such purchase, a
signed statement acknowledging the restrictions on redemption imposed by
the Program.
The Company has complied, and is complying, with the provisions of
paragraphs (a)-(d) above.
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<PAGE> 114
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Depositor, The Variable Annuity Life Insurance Company, has
duly caused this amendment to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the city of Houston, and State of Texas, on the 28th day of February, 1996.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
Attest: /s/ CYNTHIA A. TOLES By: /s/ STEPHEN D. BICKEL
------------------------------- --------------------------------
Cynthia A. Toles, Secretary Stephen D. Bickel
Chief Executive Officer and
Director
<PAGE> 115
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant, The Variable Annuity Life Insurance Company
Separate Account A, has duly caused this amendment to be signed on its behalf by
the undersigned thereunto duly authorized and its seal to be hereunto affixed
and attested, all in the city of Houston, and State of Texas, on the 28th day of
February, 1996.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By: The Variable Annuity Life
Insurance Company
Attest: /s/ CYNTHIA A. TOLES By: /s/ STEPHEN D. BICKEL
------------------------------- --------------------------------
Cynthia A. Toles, Secretary Stephen D. Bickel
Chairman and
Chief Executive Officer
<PAGE> 116
Pursuant to the requirements of the Securities Act of 1933, this amendment
has been signed below by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- ----
<S> <C> <C>
/s/ STEPHEN D. BICKEL Chairman and Chief Executive February 28, 1996
- - ---------------------- Officer
Stephen D. Bickel
/s/ THOMAS L. WEST, JR. President and Director February 28, 1996
- - -----------------------
Thomas L. West, Jr.
/s/ BRENT C. NELSON Director, Senior Vice February 28, 1996
- - ---------------------- President and Controller
Brent C. Nelson
/s/ BRENT C. NELSON Principal Accounting Officer February 28, 1996
- - ----------------------
Brent C. Nelson
** Senior Chairman of the Board , 1996
- - ---------------------- of Directors -----------
Harold S. Hook
* Senior Chairman of the Board , 1996
- - ---------------------- of Directors -----------
Robert M. Devlin
* Vice President, Chief , 1996
- - ---------------------- Investment Officer and Director -----------
Peter V. Tuters
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- ----
<S> <C> <C>
* Senior Vice President - , 1996
- - --------------------------- Marketing and Director -----------
Joe C. Osborne
* Senior Vice President - , 1996
- - --------------------------- Operations and Director -----------
Sam E. Magee
* Director , 1996
- - --------------------------- -----------
Austin P. Young
*By: /s/ CYNTHIA A. TOLES February 28, 1996
- - ---------------------------
Cynthia A. Toles
Attorney-in-Fact
**BY: /s/ STEPHEN D. BICKEL February 28, 1996
- - ---------------------------
Stephen D. Bickel
Attorney-in-Fact
</TABLE>
<PAGE> 118
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. PAGES*
- - ---------------- -----------
<S> <C> <C>
1. -- Resolutions adopted by The Variable Annuity Life Insurance
Company Board of Directors at its Annual Meeting of April 18, 1979
establishing The Variable Annuity Life Insurance Company Separate
Account A.
3. -- Underwriting Agreement between The Variable Annuity Life
Insurance Company, The Variable Annuity Life Insurance Company
Separate Account A and The Variable Annuity Marketing Company.
4(a). -- Specimen Individual Annuity Contract (Form UITN-194)
4(b)(i). -- Specimen Group Annuity Contract (Form UITG-194).
4(b)(ii). -- Specimen Individual Non-Qualified Annuity Contract (Form
UITN-194).
4(b)(iii). -- Specimen Certificate of Participation under Group Annuity
Contract (Form UITG-194P).
4(b)(iv). -- Specimen Individual Retirement Annuity Contract (Form
UIT-IRA-194)
4(b)(v). -- Specimen Simplified Employee Pension Contract (Form UIT-SEP-194)
5(a). -- Specimen Application for Annuity Contract.
5(b). -- Specimen Group Master Application.
6(a). -- Copy of Amended and Restated Articles of Incorporation of The
Variable Annuity Life Insurance Company.
6(b). -- Copy of Amendment Number One to Amended and Restated Articles of
Incorporation of The Variable Annuity Life Insurance Company (as
amended through April 28, 1989) effective March 28, 1990.
8(a). -- Participation Agreement between The Variable Annuity Life
Insurance Company and Templeton Variable Products Series Fund.
8(b). -- Participation Agreement between The Variable Annuity Life
Insurance Company and Dreyfus Variable Investment Fund.
9. -- Written Consent and Opinion of Cynthia A. Toles, Senior
Associate, General Counsel and Secretary.
13. -- Calculation of standard and nonstandard performance information.
14. -- Financial Data Schedule (Exhibit 27 for purposes of electronic
filing).
15. -- Confidential Personal Data Form which discloses Section
403(b)(ii) withdrawal restrictions as set forth in a no-action
letter issued by the SEC on November 28, 1988, and which requires
the signed acknowledgement of participants who purchase Section
403(b) annuities with regard to these withdrawal restrictions.
16(a). -- Copies of manually signed powers of attorney for The Variable
Annuity Life Insurance Company Directors Robert M. Devlin, Peter V.
Tuters, Stephen D. Bickel, Joe C. Osborne and Sam Magee.
16(b). -- Copy of manually signed power of attorney for The Variable
Annuity Life Insurance Company Director Harold S. Hook.
16(c). -- Copy of manually signed power of attorney of The Variable Annuity
Life Insurance Company Director Austin P. Young.
</TABLE>
- - ---------------
* Page numbers inserted in manually signed copy only
<PAGE> 1
EXHIBIT 1
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Houston, Texas
ANNUAL MEETING OF THE BOARD OF DIRECTORS
April 18, 1979
The Annual Meeting of the Board of Directors of The Variable Annuity Life
Insurance Company was convened at 10:12 a.m. on Wednesday, April 18, 1979 in
the 13th floor Conference Room, American General Tower, 2727 Allen Parkway,
Houston, Texas.
1. Attendance.
Present: Messrs. Hook, Plumb, Davidson,
Delaney, Moore, and Reed. (6)
Absent: Messrs. Flack and Miller. (2)
Also Present: Mr. Roy G. Harmison, Vice President
and Treasurer, VALIC; Mr. Leonard
M. Richards, Vice President -
Portfolio Manager, VALIC; Mr. David
D. Knoll, Vice President, General
Counsel and Secretary, VALIC; and
Stephen D. Bickel, Consulting Actuary.
2. Presiding Officer and Secretary. Mr. Hook presided; Mr. Knoll
acted as Secretary.
3. Approval of Minutes. The minutes of the February 7, 1979 regular
quarterly meeting of the Board of Directors,
copies of which had previously been circulated to members of the
Board, were reviewed and duly approved.
4. Committee Reports. Departing from the regular order of the agenda,
Mr. Hook asked for reports from the following
Committees:
(a) Executive Committee. Mr. Plumb reported that there were no
matters acted upon by the Executive
Committee since the last regular meeting of the Board.
(b) Separate Account Finance Committee. Mr. Richards was recognized
and reviewed the invest-
ment report for the VALIC Separate Accounts for the first
quarter of 1979, including investment results, comparative data,
and the relative ranking of the accounts in the Lipper Survey.
Mr. Richards also entertained questions from the members of
the Board with respect to sales of the variable annuity,
relative size of the Separate Accounts over the past several
years, and portfolio turnover data.
<PAGE> 2
(c) Corporate Finance Committee. Mr. Delaney was recognized and
commented on the investment results
in the General Account of the Company for the first quarter
of 1979. He reviewed the yield in the General Account portfolio,
increases in common stock ownership, and the additions to the
mortgage portfolio of the Company.
5. Election of Standing Committees. The Chairman noted that the next
order of business was the annual
organization of the standing Committees of the Board of Directors.
After discussion, and upon motion made and seconded, the following
resolutions electing certain directors to the following three Com-
mittees were duly approved:
(a) Executive Committee.
RESOLVED, That pursuant to Article VI of the Bylaws
of the Company, there is hereby elected an Executive
Committee which shall have the powers and duties described
in Article VI of the Bylaws, the membership of which shall
be composed of the following three (3) directors:
Marden Miller - Chairman
Andrew Delaney
John J. Plumb
; and
FURTHER RESOLVED, That the members of the Executive
Committee shall receive no compensation for their services
as members thereof.
(b) Corporate Finance Committee.
RESOLVED, That pursuant to Article VII of the Bylaws
of the Company, there is hereby elected a Corporate Finance
Committee which shall have the powers and duties described
in Article VII of the Bylaws, the membership of which shall
be composed of the following four (4) directors:
Andrew Delaney - Chairman
Marden Miller
John J. Plumb
James F. Moore
; and
FURTHER RESOLVED, That the Corporate Finance Committee
shall have the authority to appoint an Investment Subcommittee
with the powers and duties described in Article VII, Section
6 of the Bylaws; and
FURTHER RESOLVED, That the members of the Corporate
Finance Committee and Investment Subcommittee shall receive
no compensation for their services as members thereof.
<PAGE> 3
(c) Separate Account Finance Committee.
RESOLVED, That the following named Directors shall be
appointed as members of the Separate Account Finance Com-
mittee to serve until the next annual meeting of the Board
of Directors or until their successors have been elected
and shall qualify:
Marden Miller - Chairman
John J. Plumb
Philip G. Davidson
James F. Moore
; and
FURTHER RESOLVED, That the members of the Separate
Account Finance Committee shall receive no compensation
for their services as members thereof.
6. Note of Resignation. Mr. Hook noted that Mr. Richard H. Hanneman
had resigned as a Director of the Company effective
January 24, 1979 and from all offices held with the Company effective
March 31, 1979, and directed that copies of his termination agreement and
letters of resignation should be attached to, and made a part of the
minutes of this meeting.
7. Election of officers. The next item of business to come before the meeting
was the annual election of officers of the Company
for the ensuing year. The members of the Board reviewed the list of
officers to be elected, and upon motion made and seconded, the following
resolution was unanimously adopted:
RESOLVED, That the following named persons be,
and they hereby are, elected to the offices of the
Company specified after their respective names, each
to serve until the next annual meeting of the Board
of Directors, and until their successors have been
elected and shall qualify:
<TABLE>
<CAPTION>
Name Office
---- ------
<S> <C>
Harold S. Hook Chairman of the Board
Marden Miller Vice Chairman of the Board
John J. Plumb President
Andrew Delaney Senior Vice President
(Investments)
William H. Guarniere Vice President - Administration
Roy G. Harmison Vice President and Treasurer
David D. Knoll Vice President, General
Counsel and Secretary
Edward J. Murphy Vice President and Director
of Marketing Services
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Leonard M. Richards Vice President - Portfolio
Manager
David L. Booher Second Vice President -
Administration, and Assistant
Secretary
Daniel P. Fitzgerald Second Vice President
LeRoy J. Karlin Second Vice President -
Accounting Division, and
Assistant Secretary
Janet F. Lionberger Assistant Secretary
H. Charles Boswell Investment Officer
</TABLE>
8. Compensation of Members of the Board of Managers. Discussion
next focused on the
amount of compensation paid to the three "outside" members of the Separate
Account Boards of Managers. Then, upon motion made and seconded, the
following resolution was unanimously adopted:
RESOLVED, That each member of the Boards of
Managers of Separate Accounts One and Two shall be
compensated at the rate of $3,000.00 per year; and
FURTHER RESOLVED, That each member of the Boards
of Managers of Separate Accounts One and Two shall
be additionally compensated at the rate of $1,000.00
per year as members of the Brokerage Review Committee
of Separate Accounts One and Two; and
FURTHER RESOLVED, That the compensation provided
for in the preceding resolution shall not be paid
to any member of the Boards of Managers of Separate
Accounts One and Two who is also an employee of the
Company or American General Insurance Company or any
of its affiliated companies.
9. Agreement Concerning Filing of Consolidated Federal Income Tax
Returns. Mr. Bickel was recognized to describe the purpose of
the agreement relating to the filing of consolidated
income tax returns between VALIC and American General Life
Insurance Company. After discussion among the members of the
Board, Mr. Bickel was assigned the responsibility of following
up on the implementation of the agreements, and the following
resolution was moved, seconded, and unanimously adopted:
<PAGE> 5
WHEREAS, The Board of Directors of American General Life
Insurance Company, at its annual meeting held on March 6, 1979, did
deem it advisable and proper and in the best interests of the Company
to enter into an agreement concerning the filing of a consolidated
federal income tax return with its directly owned subsidiaries which
qualify for inclusion, and did then approve the document titled
"American General Life Insurance Company and Subsidiaries Agreement
Concerning Filing of Consolidated Federal Income Tax Returns," in the
form submitted to that meeting; and
WHEREAS, The Variable Annuity Life Insurance Company, as a
81%-owned direct subsidiary of American General Life Insurance Company,
qualifies for inclusion in the consolidated federal income tax return
of its parent company, and this Board does hereby deem it advisable and
proper and in the best interests of the Company that it be so included;
now, therefore, be it
RESOLVED, That this Board does hereby approve the document titled
"American General Life Insurance Company and Subsidiaries Agreement
Concerning Filing of Consolidated Federal Income Tax Returns," in the
form submitted to this meeting; and be it
FURTHER RESOLVED, That the appropriate officers of the Company
be, and they hereby are, authorized to execute such Agreement subject
to the prior approval thereof by the Insurance Department of the State
of Texas.
10. Creation of Separate Account A. Mr. Hook then noted that the shareholders
of the Company had approved Amendments to
the Articles of Incorporation of the Company at their meeting immediately
preceding that would authorize the Company to establish variable annuity
separate accounts taking the form of unit investment trusts. After
entertaining further discussion on the subject, he asked for and received
a motion and a second upon the following resolutions which were then
unanimously adopted:
RESOLVED, That the Company establish a separate variable annuity
account pursuant to the provisions of Article 3.72 of the Texas
Insurance Code to be called "The Variable Annuity Life Insurance
Company Separate Account A" (the "Separate Account"); and
FURTHER RESOLVED, That the purpose of such Separate Account
shall be to receive for deposit therein such portion of the purchase
payments for variable annuity contracts issued by the company as shall
be required so to be deposited by the terms of such variable annuity
contracts; and
<PAGE> 6
FURTHER RESOLVED, That, pursuant to Section 7 of Article 3.72,
Texas Insurance Code, the variable annuity contracts issued with
respect to such Separate Account shall provide that that portion of the
assets of the Separate Account equal to the reserves and other
contract liabilities with respect to such account shall not be
chargeable with liabilities arising out of any other business the
Company may conduct but shall be held and applied exclusively for the
benefit of the owners or beneficiaries of the variable annuity
contracts applicable thereto; and
FURTHER RESOLVED, That the Company and the Company's Separate
Account make application to the Securities and Exchange Commission (the
"Commission") for exemption from certain provisions of Section 22(d) of
the Investment Company Act of 1940 (the "Act") with respect to the
purchase price required to be paid for variable annuity contracts
issued with respect to such Separate Account and from certain
provisions of Sections 26 and 27 of the Act with respect to the
necessity of a custodian acting on behalf of such Separate Account and
for exemptions from such other provisions of the Act as may be deemed
necessary or appropriate; and
FURTHER RESOLVED, That the president or any vice president of the
Company be and the same is hereby authorized, directed, and
empowered to execute and file the above-mentioned application or
applications (and such amendments thereto as he may deem appropriate)
and to take such further action therewith as he may deem appropriate;
and
FURTHER RESOLVED, That the appropriate officer of the Company be
and the same are hereby authorized, directed, and empowered to cause
to be filed with the Commission with respect to the Separate Account
a Notification of Registration on Form N-8A under the Act and a
Registration Statement on Form N-8B-2 under the Act in order to
register the Separate Account as a unit investment trust under the
Act; and
FURTHER RESOLVED, That the appropriate officers of the Company are
hereby authorized, directed, and empowered to cause the Separate
Account to file with the Commission under the Securities Act of 1933 a
Registration Statement on Form S-6 with respect to variable annuity
contracts issued with respect to such Separate Account; and
<PAGE> 7
FURTHER RESOLVED, That the appropriate officers of the Company are
authorized, directed, and empowered to take any and all action which,
in the judgment of such officers, is necessary and appropriate in order
to render such variable annuity contracts eligible for offering and
sale under the securities laws of any jurisdiction in which the Company
is qualified to issue such contracts, including, but without limitation
of the foregoing, making application for and obtaining qualification or
registration under such laws, and in that connection executing and
filing such documents, including consents to service of process,
adopting such rules and regulations as may be necessary and
appropriate with respect to the management of the Separate Account, and
making all such agreements as may appear necessary, useful, or
appropriate; and
FURTHER RESOLVED, That the officers of the Company are hereby
authorized, directed, and empowered to take such further action
and execute such further documents as they may deem necessary to effect
the transactions contemplated by the foregoing resolutions.
11. Increase in Number of Directors. As an item of new business,
Mr. Hook announced that he would
recommend to the Board that Mr. Michael J. Poulos, President of
California-Western States Life Insurance Company and a Senior
Vice President of American General, be added to the VALIC Board
of Directors. Mr. Knoll indicated that pursuant to Article III,
Section 8 of the Bylaws of the Company, the size of the Board
for the ensuing year may be at least 7 and no more than 10,
the number to be determined by resolution of the Board. He
noted further that Article IV, Section 8 of the Bylaws provides
that any vacancy to be filled on the Board by reason of an
increase in its size must be filled by the shareholders at an
annual or special meeting called for that purpose. After further
discussion, and upon motion made and seconded, the following
resolutions were then unanimously adopted:
RESOLVED, That the number of directors constituting the Board of
Directors for the ensuing year is hereby increased to nine (9); and
FURTHER RESOLVED, That Mr. Michael J. Poulos is hereby nominated
to fill the vacancy created by the foregoing resolutions; and
FURTHER RESOLVED, That a special meeting of the shareholders of
the Company is hereby called to convene at the conclusion of this
meeting, for the purpose of acting upon the nomination of Mr. Poulos
for election to the Board of Directors of the Company.
<PAGE> 8
12. President's Report. The Chairman then recognized Mr. Plumb to
present his report. Mr. Plumb commented upon
Company results and its five year operating plan, competitive
conditions, and product sales.
13. Adjournment. There being no further business, the meeting was
adjourned at 11:23 a.m.
/s/ DAVID D. (ILLEGIBLE)
--------------------------------
Secretary
Approved:
/s/ MICHAEL J. POULOS
- - -------------------------------
Chairman
<PAGE> 1
EXHIBIT 3
UNDERWRITING AGREEMENT
This AGREEMENT is made this 13th day of November, 1981
by and between THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC"),
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY SEPARATE ACCOUNT A (the "ACCOUNT")
and THE VARIABLE ANNUITY MARKETING COMPANY ("VAMCO").
VALIC, the ACCOUNT and VAMCO RECOGNIZE THE FOLLOWING:
a. VALIC is a life insurance company organized under
Chapter 3 of the Texas Insurance Code.
b. The ACCOUNT is a separate account established by
VALIC under Section 7 of Article 3.72 of the Texas Insurance Code
to fund certain individual variable annuity contracts issued by
VALIC and the ACCOUNT. The variable annuity contracts give rise
to security interests in the ACCOUNT. Under the Texas Insurance
Code, the ACCOUNT's assets will not be chargeable with liabilities
arising out of any other business which VALIC may conduct, but will
be held and applied exclusively for the benefit of the owners,
participants and beneficiaries of the variable annuity contracts. The
Account is a registered unit investment trust under the Investment
Company Act of 1940.
c. VAMCO is a wholly-owned subsidiary of VALIC organized under the
laws of Texas. It was established for the purpose of marketing certain
variable annuity contracts issued by VALIC and the ACCOUNT. VAMCO is a
registered broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers ("NASD"). It has
facilities for marketing variable annuity contracts.
VALIC, the ACCOUNT and VAMCO, THEREFORE, AGREE AS FOLLOWS:
1. Principal Underwriting
VAMCO shall act as the principal underwriter for the
offer, sale and distribution, throughout the world, of the variable
annuity contracts of which VALIC and the ACCOUNT are the issuers
("Contracts') in each state and other jurisdiction in which
the Contracts may be lawfully sold.
<PAGE> 2
VAMCO shall report periodically to VALIC's Board of
Directors regarding the performance of services under this
Agreement.
2. Sale of Contracts
VAMCO shall use its best efforts to obtain applications
for the purchase of the Contracts under such terms as may be
provided in the Contracts and the then current prospectus relating to
the Contracts. VAMCO, however, shall not solicit applications at
any time when it has received notice from VALIC or the ACCOUNT
that issuance of the Contracts have, for any reason, been
temporarily or permanently suspended or discontinued.
VAMCO shall offer and sell the Contracts through in-
surance agents of VALIC who are duly and appropriately licensed
for the sale of the Contracts in each state or other jurisdiction.
It shall transmit completed applications for the Contracts to
VALIC for acceptance and rejection in accordance with VALIC's
underwriting rules. It shall cause initial purchase payments under
the Contracts to be made by check payable to VALIC and to be
transmitted promptly to VALIC.
3. Allocation of Sale Proceeds
VALIC shall pay into the ACCOUNT proceeds from the sale
of the Contracts, less any deductions determined in accordance
with the Contracts with the then current prospectus relating to the
Contracts. VALIC shall receive the amounts deducted in accordance
with the Contracts and then current prospectus.
4. Underwriter's Compensation
VALIC shall pay such amounts to VAMCO as shall be
required (a) to reimburse VAMCO for all reasonable expenses incurred
in connection with the sale of the Contracts, including a reasonably
allocable portion of VAMCO's overhead expenses and (b) to enable
VAMCO to meet the net capital requirements for broker-dealers
under the Securities Exchange Act of 1934 on a continuing basis.
5. Books and Records
VALIC, the ACCOUNT, and VAMCO shall maintain their books,
accounts and records as to all transactions hereunder so as to
clearly and accurately disclose the nature and details of the
transaction and support the reasonableness of the amounts to be paid by
VALIC to VAMCO.
<PAGE> 3
6. Scope of Underwriter's Duties
VAMCO, and any affiliated person of VAMCO, shall be free
to act as principal underwriter for other separate accounts or for
any other person, or to engage in any other business, so long as
the services rendered to the ACCOUNT are not impaired.
VAMCO shall not be liable to the ACCOUNT, or to any
contract owner in the ACCOUNT, for any act or omission in rendering
services under this Agreement, so long as there has been no willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties on the part of VAMCO.
Except as otherwise required by the Investment Company
Act of 1940, any of the contract owners of the ACCOUNT may be a
shareholder, director, officer or employee of, or be otherwise
interested in, VAMCO and any affiliated person of VAMCO. Similarly,
VAMCO and any affiliated person of VAMCO may have a security
interest in the ACCOUNT.
7. Continuance and Termination
This Agreement shall become effective upon execution. It
shall continue in force from year to year thereafter. This Agreement
shall terminate automatically upon assignment. This Agreement
may be terminated at any time by VALIC's Board of Directors or by a
vote of a majority of the ACCOUNT's outstanding variable annuity
contract votes, on not more than 60 days, nor less than 30 days,
written notice, or upon such shorter notice as may be mutually
agreed upon. This Agreement may be terminated by VALIC or VAMCO,
upon such notice, so long as the ACCOUNT has entered into another
underwriting agreement. Termination shall be without the payment
of any penalty.
8. Applicability of Federal Securities Laws
The parties hereto shall comply with, and this Agreement
shall be interpreted in accordance with, applicable federal
securities laws, including such exceptions as may be granted to VALIC,
the ACCOUNT, or VAMCO by the Securities and Exchange Commission or
such interpretive positions as may be taken by the Commission or
its staff.
<PAGE> 4
VALIC, the ACCOUNT, and VAMCO have each caused this
Agreement to be signed on its behalf by a duly authorized
officer on the date specified above.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
Attest /s/ ILLEGIBLE By /s/ JOHN D. HOGAN
-------------------- ------------------------
John D. Hogan
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY SEPARATE
ACCOUNT A
Attest /s/ ILLEGIBLE By /s/ ROBERT L. BALDWIN
-------------------- ------------------------
Robert L. Baldwin
THE VARIABLE ANNUITY
MARKETING COMPANY
Attest /s/ ILLEGIBLE By /s/ JOE D. HEUSI
-------------------- ------------------------
Joe D. Heusi
<PAGE> 1
EXHIBIT 4(a)
The Variable Annuity
Life Insurance Company
2929 Allen Parkway
[VALIC LOGO] Houston, Texas 77019
- - --------------------------------------------------------------------------------
[STAR] An American General Company
ANNUITANT:
DATE OF ISSUE: ANNUITY DATE:
CONTRACT NUMBER: DATE OF BIRTH:
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
SEE INDEX ON PAGE 2
o MAINTENANCE CHARGE -- There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each quarter and is assessed
only if any portion of the Accumulation Value was applied to one or more
Variable Investment Options during that quarter. See Section 2.05 for a
complete description.
o SEPARATE ACCOUNT CHARGE -- There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily
net asset value of the Separate Account, based upon the Variable
Investment Option to which assets are allocated. This charge only applies
to assets under Variable Investment Options. See Section 2.06 for a
complete description.
o CASH SURRENDER OR WITHDRAWAL CHARGE -- There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03 through 4.06 for a complete description and conditions under
which there is no charge.
The conditions and provisions on this and the following pages are the entire
legal Contract between VALIC and the Annuitant. No agent has the authority to
change this Contract or waive any of its provisions. Only the President or a
Vice President of VALIC may change this Contract. Any such changes must be in
writing. All conditions and provisions are subject to applicable state laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ CYNTHIA A. TOLES /s/ S. D. BRICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
NOTICE OF TWENTY DAY RIGHT TO EXAMINE CONTRACT
YOU MAY CANCEL THIS CONTRACT BY DELIVERING OR MAILING A WRITTEN NOTICE TO: THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, 2929 ALLEN PARKWAY, HOUSTON, TEXAS
77019, AND BY RETURNING THE CONTRACT BEFORE MIDNIGHT OF THE TWENTIETH (20) DAY
AFTER THE DATE YOU RECEIVE THE CONTRACT. NOTICE GIVEN BY MAIL AND RETURN OF THE
CONTRACT BY MAIL ARE EFFECTIVE ON BEING POSTMARKED, PROPERLY ADDRESSED AND
POSTAGE PREPAID. VALIC WILL RETURN ALL PAYMENTS ALLOCATED TO THE CONTRACT
WITHIN TEN DAYS AFTER IT RECEIVES NOTICE OF CANCELLATION AND THE RETURNED
POLICY.
INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
- NON-PARTICIPATING -
UIT-194 OR0IXST1
<PAGE> 2
INDEX
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS................................ 3
SECTION 2 CONTRACT AND PURCHASE PAYMENTS............. 3
2.01 Incontestability........................... 3
2.02 Minimum Contract Value..................... 3
2.03 Plan Provisions............................ 3
2.04 Purchase Payments.......................... 3
2.05 Maintenance Charge......................... 3
2.06 Separate Account Charge.................... 3
SECTION 3 INVESTMENT OPTIONS......................... 4
3.01 Fixed Interest Options..................... 4
3.02 Variable Investment Options................ 4
3.03 Accumulation Unit.......................... 4
3.04 Accumulation Unit Value.................... 4
3.05 Transfers During the Accumulation
Period..................................... 4
3.06 Transfers During the Annuity Period........ 5
SECTION 4 BENEFITS................................... 6
4.01 Cash Surrender............................. 6
4.02 Withdrawals................................ 6
4.03 Charge for Cash Surrender or
Withdrawal................................. 6
4.04 No Charge Systematic Withdrawals........... 6
4.05 No Charge Minimum Distributions............ 6
4.06 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted........ 7
4.07 Annuity Period............................. 7
4.08 Starting Annuity Income Benefits........... 7
4.09 Partial Annuitization...................... 7
4.10 Minimum Annuity Payments................... 7
4.11 Misstatement of Age........................ 7
4.12 Annuity Income (Payment) Options........... 7
4.13 Fixed or Variable Annuity Basis............ 8
4.14 Variable Annuity Payments.................. 8
4.15 Assumed Investment Rate (AIR).............. 8
4.16 Annuity Units and Annuity Unit Value....... 8
4.17 Betterment of Rates........................ 9
4.18 Annuity Rate Tables........................ 9-14
4.19 Beneficiaries.............................. 14
4.20 Death Payment Provisions................... 14
SECTION 5 CODE REQUIREMENTS AND
RETIREMENT PLAN PROVISIONS................. 16
5.01 Salary Reduction Purchase Payments......... 16
5.02 Minimum Distributions After Age 70 1/2..... 16
5.03 Minimum Death Benefit Distributions........ 16
5.04 Direct Rollovers........................... 17
5.05 Plan Provisions............................ 17
SECTION 6 GENERAL PROVISIONS......................... 18
6.01 Assignment................................. 18
6.02 Vesting.................................... 18
6.03 Written Notices to Us...................... 18
6.04 Change of Contract......................... 18
6.05 Reports.................................... 18
6.06 Voting Rights.............................. 18
6.07 Suspension of Payments..................... 18
6.08 Deferral of Cash Surrender or
Withdrawal................................. 18
6.09 Proof of Survival.......................... 18
6.10 Substitution of Investment Fund Shares..... 18
6.11 Minimum Benefit............................ 18
6.12 Separate Account........................... 18
</TABLE>
2
UIT-194 OR0IXST2
<PAGE> 3
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase Payment
and the Annuity Date.
ACCUMULATION VALUE - equals the sum of the values of Your Fixed Interest
Options and Variable Investment Options that have not been applied to provide
annuity payments.
ANNUITANT - the person for whose benefit Purchase Payments have been made.
Any reference to "You" or "Your" means Annuitant.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The
Variable Annuity Life Insurance Company.
CONTRACT YEAR - the twelve month period starting with the date of issue and
subsequently with each anniversary of that date.
EMPLOYER - the employer that has established the retirement program under
which this Contract is issued.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account.
HOME OFFICE - the principal office of VALIC.
PLAN - the employer-sponsored retirement plan or annuity purchase arrangement
for which this Contract is issued.
PURCHASE PAYMENT - an amount paid to VALIC in consideration for the benefits
of this Contract.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of Your Contract less any charges.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - This Contract is incontestable. This Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM CONTRACT VALUE - We can end the Contract and pay the Surrender
Value to You if, during the Accumulation Period, the total
Accumulation Value for this Contract falls below $300 and there are no
Purchase Payments for two Contract Years.
2.03 PLAN PROVISIONS - As further explained in Section 5, this Contract is
subject to the provisions of Your Employer's Plan.
2.04 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period and may include amounts that are rolled over
or directly transferred from another plan. We require no payment
beyond the first. We will not penalize You if any scheduled payments
are omitted or stopped.
If only one Purchase Payment is to be made, it must be at least
$1,000. Periodic payments must be at least $30 each. VALIC may waive
this minimum.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to Your directions.
2.05 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which any
Variable Investment Option Accumulation Value is credited to this
Contract. We will not deduct the charge for any calendar quarter if
the Accumulation Value for this Contract is credited only to the Fixed
Interest Options throughout the quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among Your Variable Investment Options. However,
if You surrender the Contract or transfer all Variable Accumulation
Values to a Fixed Interest Option, the full quarterly charge will be
deducted at the time of surrender or transfer.
The charge is $3.75 for each quarter. The maintenance charge may be
waived or reduced uniformly on all contracts issued under certain
plans or arrangements which are expected to result in administrative
cost savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
2.06 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option. The rate is fixed and may not be increased by Us.
3
UIT-194 OR0IXST3
<PAGE> 4
SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by You. We reserve the right to limit allocations among
Investment Options to seven at any one time. Each selection must be a whole
percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately to
amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Investment returns on Variable Investment
Options may be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to Your Contract due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited to Your Contract is determined by dividing
the dollar amount of the transaction by the Accumulation Unit Value
for that Variable Investment Option at the next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held for
such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, You may transfer amounts among Investment Options, except as
provided below.
(a) We reserve the right to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30 days
apart.
(c) Transfers from the Short Term Fixed Account. After a transfer
to the Short Term Fixed Account, You may not make any transfer
from the Short Term Fixed Account for 90 days. We may change
this transfer restriction at any time. However, the transfer
restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. You may transfer up to 20%
of the Accumulation Value allocated to Fixed Account Plus
during each Contract Year. If multiple transfers are made in a
Contract Year, the percentages of the Accumulation Value
transferred each time will be added together to determine the
20% transfer limit for that Contract Year. For each transfer,
the percentage transferred is the ratio of the amount
transferred to the portion of the Accumulation Value allocated
to Fixed Account Plus immediately prior to the transfer.
However, if following a 20% transfer, the remaining amount
allocated to Fixed Account Plus would be less than $500, You
may also transfer the remaining amount.
4
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<PAGE> 5
3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, You
may transfer Annuity Unit values among the Variable Investment
Options. You may also transfer Annuity Unit values from the Variable
Investment Options underlying a Variable Annuity to provide a Fixed
Annuity. Transfers must be at least 365 days apart. We will not permit
any transfer from a Fixed Annuity during the Annuity Period.
5
UIT-194 OR0IXST5
<PAGE> 6
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - Subject to the restrictions in Sections 5.01 and
5.05, You may surrender this Contract before the Annuity Date for a
cash payment equal to the Surrender Value as of the date We receive
the request at the Home Office. The Surrender Value is the
Accumulation Value less any charges, as described below. Upon
surrender for cash, all of Our obligations under this Contract will be
terminated.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable Investment
Options or withdrawn.
4.02 WITHDRAWALS - Subject to the restrictions in Sections 5.01 and 5.05,
You may withdraw a portion of Your Accumulation Value in cash at any
time before the Annuity Date. We may deduct a charge as described
below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1) the
amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat all withdrawals as
withdrawals of Purchase Payments before any earnings. We treat the
most recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Contract Year. Subject to the provisions of
Sections 4.04 and 4.05 in any Contract Year You may withdraw up
to 10% of the Accumulation Value without a charge. The surrender
charge will be applicable only to the amount withdrawn that
exceeds 10%. The percentage withdrawn will be calculated as the
ratio of the amount withdrawn to the Accumulation Value
immediately prior to the withdrawal. If multiple withdrawals are
made in a Contract Year, the percentages withdrawn for each
withdrawal will be added together to determine whether the 10%
limit has been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time. However,
no change in availability will result in any charge against amounts
withdrawn under a previously elected NCSW. A NCSW must meet the
following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to You.
(3) The NCSW is not available in any Contract Year You have in effect
any other systematic withdrawal (with or without charge) or a No
Charge Minimum Distribution (NCMD).
(4) Once You begin a NCSW You may not change the terms of the election.
However, You may revoke the election at any time. Once the election
is revoked You may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Contract Year the NCSW has been, or is in effect.
Distributions under the NCSW may not begin in a Contract Year in
which You have taken one or more Section 4.03 withdrawals without
charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The annual
dollar amount chosen must be the same for each year the NCSW is
in effect and cannot be greater than 20% of the Accumulation
Value at the time of the NCSW election.
(b) Specified Percentage - an annual specified percentage. The
annual specified percentage chosen cannot be greater than 20%
of the Accumulation Value.
(c) Specified Period - payments for a designated time period. We
will determine each payment by dividing the Accumulation Value
by the number of payments remaining in the elected period.
4.05 NO CHARGE MINIMUM DISTRIBUTIONS - We will waive applicable surrender
charges on No Charge Minimum Distributions (NCMD). A NCMD is a
withdrawal which meets the following conditions:
(1) You are at least age 70 1/2, and the NCMD is payable to You.
(2) The amount withdrawn does not exceed the amount required to be
distributed under the Code and regulations issued by the Secretary
of the Treasury for this Contract.
(3) The NCMD is not available in any Contract Year You have withdrawn
any amount under a No Charge Systematic Withdrawal (NCSW).
6
UIT-194 OR0IXST6
<PAGE> 7
4.06 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges under any of the following
conditions:
(a) You elect an Annuity Income Option; or
(b) Payment of any death benefit; or
(c) You have become totally and permanently disabled. This means that You
are unable, because of physical or mental impairment, to perform the
material and substantial duties of any occupation for which You are
suited by means of education, training or experience. The impairment
must have been in existence for more than 180 days to qualify for this
benefit.
Such impairment must be expected to result in death or be long-standing
and indefinite.
We require proof of disability. We will accept a certified Social
Security finding of disability or a doctor's verification; or
(d) The withdrawal and any earlier withdrawals during the same Contract
Year do not exceed 10% of the Accumulation Value (see Section 4.03); or
(e) On any amount You withdraw with respect to the NCSW described in
Section 4.04, or the NCMD described in Section 4.05; or
(f) You are at least 55 years old, Your Contract is at least five years
old, and You are separated from service from Your Employer; or
(g) No Purchase Payments have been made in the five years preceding the
date of the surrender or withdrawal; or
(h) You are at least 59 1/2 years old and Your Contract is at least seven
years old; or
(i) Your Contract is fifteen or more years old.
The surrender charge may be waived or reduced uniformly on all contracts
issued under certain plans or arrangements which are expected to result in
administrative cost savings. No reduction or waiver will be made that is
unfairly discriminatory to any person.
We may waive any withdrawal or surrender charge attributable to Purchase
Payments received during specific periods of time, and under conditions and
limitations set by Us. Any such waiver will be made by Resolution of the
Board of Directors. Notice of the right to surrender without charge will be
mailed to affected contractholders when such waiver is declared by the Board
of Directors.
4.0 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
Your Accumulation Value is applied under an Annuity Income Option. You
may change the Annuity Date shown on the first page of Your Contract
by giving Us at least 30 days notice. The selected Annuity Date may be
the first day of any calendar month, but if You choose a life income
option, the Annuity Date may not precede Your 50th birthday without
Our permission.
4.08 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, You must choose one of the Annuity Income Options in
Section 4.12 and provide acceptable proof of age for any person whose
age is taken into account under a life income option. If You fail to
select another Annuity Income Option, annuity payments will be made on
the basis of the Second Option with payments guaranteed for a ten-year
period, commencing on the Annuity Date.
4.09 PARTIAL ANNUITIZATION - You may choose to apply less than the full
Accumulation Value under an Annuity Income Option and may choose
different Annuity Dates and different Annuity Income Options for
different portions of the Accumulation Value. Therefore, the Contract
may, at times, be in both an Accumulation Period and an Annuity
Period. If You choose to do this, the provisions of the Contract
relating to the Accumulation Period and the Annuity Period will be
applied as though there were separate Contracts.
4.10 MINIMUM ANNUITY PAYMENTS - You may not choose any Annuity Income Option
if the resulting initial payment would be less than $25 under either a
Fixed or Variable Annuity. We reserve the right to convert monthly
payments to quarterly, semi-annual or annual payments so the initial
payment will be at least $25.
4.11 MISSTATEMENT OF AGE - If annuity payments depend upon an individual's
survival and the date of birth of any individual was misstated, We
will adjust the remaining payments. The amount remaining to be paid
will be the amount that should have been paid with the correct
information. We will credit or charge the amount of any underpayment
or overpayment against the next succeeding payment or payments, if any
remain. We reserve the right to collect any overpayment directly from
the payee.
4.12 ANNUITY INCOME (PAYMENT) OPTIONS - You may choose to receive payments
under any of the Annuity Income Options below or any other option
agreed to by VALIC. Any option chosen must comply with applicable
state and federal laws and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income payable
during Your life. All payments cease at Your death with no further amounts
payable.
7
UIT-194 OR0IXST7
<PAGE> 8
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An income payable during Your life. If, at Your death, We have made
payments for fewer than the number of years selected, We will continue
payments to the Beneficiary for the remainder of the guarantee period.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An income
payable during Your life. Payments cease at Your death. However, the
Beneficiary may receive an additional payment.
For payments on a Fixed Annuity basis, the additional payment, if any, will
be the Accumulation Value applied to this option less the total of all
prior payments.
For payments on a Variable Annuity basis, the additional payment, if any,
will be the current value of the number of Annuity Units credited at the
Annuity Date less the number of Annuity Units that have been paid. For this
purpose, the number of Annuity Units credited equals the Accumulation Value
applied to this option divided by the Annuity Unit Value at the date used
to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable during
the joint lives of You and a second person and thereafter during the life
of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable for a
selected number of years between five and thirty. This option is available
for Fixed Annuities only.
4.13 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen Variable
Investment Options.
You may elect to receive payments under any annuity option as a Fixed
Annuity, a Variable Annuity, or a combination Fixed and Variable
Annuity. If You make no election, amounts in Fixed Interest Options
will provide a Fixed Annuity and amounts in Variable Investment
Options will provide a Variable Annuity.
4.14 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable investment Option remains constant unless
You transfer a portion of the annuity benefit between the Variable
Investment Options or from a Variable Annuity to a Fixed Annuity.
However, the dollar amount payable is not fixed and may change from
month to month.
4.15 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, You must choose an Assumed Investment
Rate (AIR). The AIR is the assumed rate of return used to determine
the first annuity payment for a Variable Annuity Option. Rates of 3%,
3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if permitted by
state law and regulations. If no AIR is chosen, the AIR will be
3 1/2%. A higher AIR will result in a higher initial payment. Choice
of a lower AIR will result in a lower initial payment. Payments will
increase whenever the actual return exceeds the chosen AIR. Payments
will decrease whenever the actual return is less than the chosen AIR.
4.16 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed at
$1.00.
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option at the
immediately preceding computation date
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised to the
power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
8
UIT-194 OR0IXST8
<PAGE> 9
4.17 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments. If a commutation (cash out of remaining annuity
payments) is allowed, the rates previously used to calculate the
annuity payments will be used for the commutation request.
4.18 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to purchase a
first monthly payment of $1.00. Quarterly, semiannual, and annual payments
may also be selected.
The amount of each payment will depend upon the Annuitant's adjusted
age at the time the first payment is due. Adjusted age will be
determined in accordance with the following:
<TABLE>
<CAPTION>
Calendar Year Adjusted Age is
of Birth Actual Age Minus
- - ------------- ----------------
<S> <C>
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
</TABLE>
Actual age, as used above, means the Annuitant's age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.15) and to determine the minimum guarantees for Fixed Annuities.
Tables B, C, and D are to be used for Variable Annuities with 3 1/2%,
4 1/2% and 5% AIRs respectively.
9
UIT-194 OR0IXST9
<PAGE> 10
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2 and 3 - Single life Annuities
<TABLE>
<CAPTION>
Monthly Payment Guaranteed
---------------------------------------------------------------------------- -------------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $250.48 $250.83 $251.98 $254.04 $257.21 $259.24
51 246.41 246.79 248.04 250.27 253.72 255.69
52 242.26 242.68 244.03 246.45 250.21 252.09
53 238.03 238.49 239.95 242.58 246.69 248.43
54 233.73 234.23 235.81 238.67 243.15 244.71
55 229.35 229.88 231.60 234.72 239.60 240.94
56 224.89 225.46 227.32 230.73 236.05 237.12
57 220.34 220.96 222.98 226.71 232.52 233.24
58 215.71 216.38 218.59 222.65 229.01 229.31
59 210.99 211.72 214.14 218.58 225.54 225.33
60 206.19 206.99 209.63 214.50 222.12 221.29
61 201.30 202.18 205.08 210.42 218.75 217.19
62 196.35 197.31 200.50 206.34 215.47 213.04
63 191.32 192.39 195.88 202.30 212.28 208.83
64 186.24 187.41 191.25 198.29 209.20 204.54
65 181.11 182.40 186.61 194.34 206.25 200.18
66 175.92 177.34 181.97 190.46 203.44 195.73
67 170.70 172.26 177.35 186.66 200.79 191.41
68 165.43 167.15 172.75 182.97 198.31 186.93
69 160.13 162.01 168.18 179.39 196.00 182.35
70 154.78 156.86 163.66 175.95 193.89 178.01
71 149.41 151.71 159.21 172.66 191.97 173.43
72 144.01 146.56 154.85 169.54 190.26 169.01
73 138.61 141.44 150.59 166.61 188.73 164.46
74 133.21 136.35 146.45 163.88 187.41 159.83
75 127.84 131.33 142.46 161.36 186.26 155.48
</TABLE>
Option 4 - Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older -------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $280.54 $282.36 $284.24 $286.16 $288.12 $290.13 $292.17 $294.25 $296.35 $298.47 $300.61
51 276.91 278.78 280.70 282.67 284.69 286.75 288.85 290.98 293.13 295.31 297.51
52 273.19 275.10 277.07 279.10 281.17 283.28 285.43 287.62 289.83 292.07 294.33
53 269.37 271.34 273.36 275.43 277.55 279.72 281.93 284.17 286.45 288.74 291.06
54 265.46 267.47 269.54 271.67 273.85 276.07 278.33 280.64 282.97 285.33 287.71
55 261.45 263.51 265.64 267.81 270.05 272.33 274.65 277.01 279.40 281.83 284.27
56 257.34 259.46 261.63 263.86 266.15 268.49 270.87 273.29 275.75 278.23 280.74
57 253.13 255.30 257.53 259.82 262.16 264.56 267.00 269.48 272.00 274.55 277.12
58 248.82 251.04 253.32 255.67 258.07 260.53 263.03 265.58 268.16 270.77 273.40
59 244.40 246.67 249.01 251.42 253.88 256.40 258.97 261.57 264.22 266.90 269.60
60 239.88 242.21 244.60 247.07 249.59 252.17 254.80 257.48 260.19 262.93 265.70
61 235.26 237.64 240.09 242.61 245.20 247.84 250.54 253.28 256.06 258.87 261.71
62 230.54 232.97 235.47 238.06 240.70 243.41 246.17 248.98 251.83 254.71 257.62
63 225.71 228.19 230.76 233.40 236.11 238.88 241.71 244.58 247.50 250.46 253.44
64 220.79 223.32 225.94 228.64 231.41 234.25 237.14 240.09 243.08 246.10 249.16
65 215.78 218.35 221.02 223.78 226.61 229.51 232.47 235.49 238.55 241.65 244.78
66 210.67 213.30 216.02 218.82 221.71 224.68 227.71 230.79 233.93 237.10 240.31
67 205.48 208.15 210.92 213.78 216.72 219.75 222.84 226.00 229.21 232.45 235.74
68 200.20 202.91 205.73 208.64 211.64 214.73 217.88 221.11 224.38 227.71 231.06
69 194.83 197.59 200.45 203.41 206.47 209.61 212.83 216.12 219.46 222.86 226.30
70 189.39 192.19 195.09 198.10 201.21 204.41 207.68 211.03 214.45 217.92 221.43
71 183.87 186.70 189.66 192.71 195.87 199.12 202.45 205.86 209.34 212.88 216.47
72 178.28 181.15 184.14 187.24 190.45 193.75 197.14 200.61 204.15 207.76 211.41
73 172.63 175.53 178.56 181.70 184.96 188.31 191.75 195.28 198.88 202.55 206.27
74 166.94 169.86 172.92 176.10 179.40 182.80 186.29 189.87 193.53 197.26 201.05
75 161.21 164.15 167.23 170.44 173.78 177.22 180.77 184.40 188.11 191.90 195.75
</TABLE>
10
UIT-194 OR0IXSTA
<PAGE> 11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2 and 3 - Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
--------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $233.36 $233.71 $234.82 $236.75 $239.66 $240.70
51 229.87 230.25 231.45 233.54 236.72 237.65
52 226.30 226.72 228.01 230.29 233.74 234.54
53 222.65 223.10 224.51 226.98 230.75 231.36
54 218.93 219.41 220.93 223.62 227.73 228.12
55 215.11 215.64 217.28 220.22 224.70 224.82
56 211.21 211.78 213.57 216.77 221.66 221.45
57 207.23 207.84 209.79 213.28 218.62 218.02
58 203.15 203.81 205.94 209.76 215.60 214.53
59 198.98 199.70 202.03 206.21 212.60 210.96
60 194.73 195.51 198.06 202.64 209.63 207.33
61 190.38 191.24 194.04 199.05 206.70 203.63
62 185.95 186.90 189.97 195.47 203.84 199.85
63 181.45 182.50 185.86 191.89 201.06 195.99
64 176.88 178.03 181.73 188.35 198.37 192.18
65 172.25 173.52 177.57 184.84 195.78 188.25
66 167.56 168.95 173.41 181.39 193.31 184.24
67 162.81 164.34 169.24 178.00 190.97 180.31
68 158.01 159.70 165.09 174.70 188.78 176.25
69 153.16 155.01 160.95 171.49 186.75 172.11
70 148.26 150.30 156.85 168.40 184.88 168.10
71 143.31 145.57 152.79 165.44 183.18 163.94
72 138.33 140.83 148.81 162.62 181.65 159.70
73 133.32 136.10 144.91 159.98 180.30 155.66
74 128.31 131.39 141.11 157.51 179.12 151.45
75 123.30 126.73 137.44 155.22 178.10 147.15
</TABLE>
Option 4 - Joint and Survivor Life Annuity
<TABLE>
<Captio>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older -------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $259.51 $261.02 $262.56 $264.14 $265.75 $267.38 $269.05 $270.72 $272.42 $274.13 $275.84
51 256.50 258.05 259.64 261.26 262.92 264.61 266.32 268.06 269.80 271.57 273.33
52 253.39 254.99 256.63 258.30 260.01 261.75 263.52 265.30 267.11 268.92 270.75
53 250.19 251.84 253.53 255.25 257.01 258.80 260.62 262.47 264.33 266.20 268.08
54 246.90 248.59 250.33 252.11 253.92 255.77 257.64 259.54 261.46 263.39 265.33
55 243.51 245.25 247.04 248.87 250.74 252.64 254.57 256.53 258.51 260.50 252.50
56 240.02 241.82 243.66 245.54 247.47 249.42 251.41 253.43 255.46 257.52 259.58
57 236.43 238.28 240.17 242.11 244.09 246.11 248.16 250.23 252.33 254.44 256.57
58 232.74 234.64 236.59 238.58 240.62 242.70 244.81 246.94 249.10 251.28 253.47
59 228.94 230.89 232.90 234.95 237.05 239.19 241.36 243.56 245.78 248.03 250.28
60 225.03 227.04 229.10 231.22 233.38 235.58 237.81 240.08 242.37 244.68 247.00
61 221.02 223.08 225.20 227.38 229.60 231.87 234.17 236.50 238.85 241.23 243.62
62 216.90 219.02 221.20 223.43 225.72 228.05 230.42 232.82 235.24 237.69 240.15
63 212.68 214.85 217.09 219.38 221.73 224.13 226.56 226.03 231.53 234.05 236.58
64 208.35 210.58 212.87 215.23 217.64 220.10 222.61 225.15 227.71 230.31 232.91
65 203.92 206.20 208.55 210.97 213.44 215.97 218.55 221.16 223.80 226.46 229.15
66 199.40 201.73 204.13 206.60 209.14 211.74 214.38 217.06 219.78 222.52 225.28
67 194.78 197.16 199.61 202.14 204.74 207.40 210.11 212.87 215.66 218.48 221.31
68 190.06 192.49 195.00 197.58 200.24 202.96 205.74 208.57 211.43 214.33 217.24
69 185.25 187.72 190.28 192.92 195.64 198.42 201.27 204.16 207.10 210.07 213.07
70 180.35 182.87 185.48 188.17 190.95 193.79 196.70 199.66 202.67 205.72 208.79
71 175.35 177.92 180.58 183.33 186.16 189.06 192.03 195.06 198.14 201.26 204.41
72 170.28 172.89 175.60 178.40 181.28 184.24 187.27 190.37 193.51 196.70 199.93
73 165.14 167.78 170.53 173.38 176.32 179.34 182.43 185.58 188.80 192.06 195.36
74 159.93 162.60 165.39 168.29 171.28 174.35 177.50 180.72 183.99 187.32 190.69
75 154.67 157.37 160.19 163.13 166.16 169.29 172.49 175.77 179.11 182.51 185.95
</TABLE>
11
UIT-194 OR0IXSTB
<PAGE> 12
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
--------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $204.42 $204.75 $205.77 $207.48 $209.94 $209.57
51 201.83 202.19 203.30 205.15 207.83 207.29
52 199.16 199.55 200.75 202.77 205.68 204.94
53 196.41 196.84 198.14 200.33 203.51 202.52
54 193.58 194.05 195.45 197.84 201.30 200.04
55 190.67 191.17 192.70 195.30 199.07 197.48
56 187.67 188.21 189.87 192.70 196.83 194.84
57 184.58 185.17 186.97 190.07 194.57 192.18
58 181.40 182.04 184.00 187.39 192.31 189.42
59 178.12 178.82 180.97 184.67 190.06 186.59
60 174.75 175.51 177.87 181.92 187.82 183.68
61 171.28 172.12 174.70 179.14 185.60 180.76
62 167.73 168.64 171.48 176.35 183.42 177.73
63 164.09 165.09 168.21 173.55 181.29 174.63
64 160.36 161.48 164.90 170.76 179.22 171.46
65 156.57 157.79 161.55 167.99 177.22 168.31
66 152.70 154.05 158.18 165.24 175.31 165.04
67 148.76 150.24 154.78 162.54 173.49 161.70
68 144.75 146.38 151.38 159.88 171.78 158.28
69 140.67 142.46 147.97 157.30 170.19 154.96
70 136.53 138.50 144.57 154.80 168.72 151.48
71 132.31 134.50 141.20 152.39 167.38 147.92
72 128.04 130.46 137.87 150.10 166.17 144.48
73 123.73 126.41 134.59 147.93 165.10 140.90
74 119.38 122.37 131.39 145.90 164.16 137.25
75 115.01 118.33 128.27 144.02 163.35 133.53
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older -------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $224.40 $225.44 $226.49 $227.57 $228.65 $229.75 $230.86 $231.97 $233.08 $234.19 $235.30
51 222.31 223.38 224.48 225.60 226.73 227.87 229.02 230.17 231.33 232.49 233.65
52 220.13 221.25 222.39 223.55 224.72 225.91 227.11 228.31 229.52 230.72 231.93
53 217.87 219.03 220.22 221.42 222.64 223.88 225.12 226.37 227.63 228.88 230.14
54 215.52 216.73 217.96 219.21 220.48 221.76 223.06 224.36 225.66 226.97 228.27
55 213.08 214.34 215.61 216.91 218.23 219.56 220.91 222.26 223.62 224.98 226.33
56 210.55 211.85 213.18 214.53 215.90 217.28 218.68 220.08 221.49 222.91 224.32
57 207.92 209.27 210.65 212.05 213.47 214.91 216.36 217.82 219.29 220.76 222.22
58 205.19 206.59 208.03 209.48 210.96 212.45 213.96 215.48 217.00 218.52 220.05
59 202.36 203.82 205.30 206.81 208.35 209.90 211.46 213.04 214.62 216.20 217.79
60 199.43 200.94 202.48 204.05 205.64 207.25 208.87 210.51 212.15 213.80 215.44
61 196.39 197.95 199.55 201.18 202.83 204.50 206.19 207.89 209.59 211.30 213.01
62 193.24 194.86 196.51 198.20 199.91 201.65 203.40 205.16 206.94 208.71 210.48
63 189.98 191.66 193.37 195.12 196.90 198.70 200.51 202.34 204.18 206.03 207.87
64 186.62 188.35 190.13 191.93 193.77 195.64 197.53 199.42 201.33 203.24 205.16
65 183.16 184.94 186.77 188.64 190.55 192.48 194.43 196.40 198.38 200.36 202.35
66 179.59 181.42 183.31 185.24 187.21 189.21 191.23 193.27 195.32 197.38 199.44
67 175.91 177.80 179.75 181.74 183.77 185.83 187.93 190.04 192.16 194.30 196.43
68 172.13 174.07 176.07 178.12 180.22 182.35 184.51 186.70 188.90 191.11 193.32
69 168.24 170.24 172.30 174.41 176.56 178.76 180.99 183.25 185.52 187.81 190.10
70 164.24 166.30 168.41 170.58 172.80 175.06 177.36 179.69 182.04 184.41 186.78
71 160.14 162.25 164.42 166.65 168.94 171.26 173.63 176.03 178.46 180.90 183.35
72 155.95 158.10 160.33 162.62 164.97 167.36 169.80 172.27 174.77 177.28 179.82
73 151.66 153.86 156.15 158.49 160.90 163.36 165.86 168.40 170.97 173.57 176.18
74 147.29 149.54 151.87 154.27 156.74 159.26 161.83 164.44 167.08 169.75 172.44
75 142.84 145.13 147.50 149.96 152.48 155.07 157.70 160.38 163.10 165.84 168.60
</TABLE>
12
UIT-194 OR0IXSTC
<PAGE> 13
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
---------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $192.14 $192.47 $193.45 $195.06 $209.94 $196.46
51 189.89 190.25 191.32 193.06 195.52 194.47
52 187.57 187.96 189.12 191.01 193.69 192.45
53 185.18 185.60 186.85 188.91 191.83 190.34
54 182.70 183.16 184.51 186.76 189.94 188.17
55 180.14 180.64 182.11 184.55 188.03 185.92
56 177.50 178.04 179.63 182.30 186.09 183.60
57 174.77 175.35 177.09 180.00 184.14 181.21
58 171.95 172.58 174.47 177.65 182.18 178.81
59 169.03 169.71 171.79 175.27 180.22 176.29
60 166.02 166.77 169.04 172.85 178.27 173.70
61 162.91 163.73 166.22 170.40 176.34 171.03
62 159.72 160.62 163.35 167.93 174.43 168.35
63 156.43 157.42 160.43 165.45 172.56 165.57
64 153.06 154.16 157.45 162.97 170.74 162.71
65 149.62 150.82 154.44 160.50 168.98 159.78
66 146.09 147.42 151.40 158.04 167.30 156.86
67 142.49 143.95 148.32 155.62 165.69 153.83
68 138.82 140.42 145.24 153.24 164.18 150.73
69 135.07 136.83 142.14 150.92 162.77 147.55
70 131.25 133.19 139.04 148.66 161.46 144.44
71 127.35 129.50 135.96 146.49 160.27 141.20
72 123.39 125.77 132.90 144.42 159.20 137.89
73 119.38 122.02 129.89 142.45 158.24 134.51
74 115.32 118.25 126.94 140.61 157.41 131.31
75 111.23 114.50 124.08 138.90 156.68 127.92
</TABLE>
Option 4 - Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $209.69 $210.56 $211.44 $212.32 $213.22 $214.12 $215.03 $215.93 $216.84 $217.74 $218.64
51 207.94 208.84 209.76 210.69 211.62 212.56 213.51 214.46 215.41 216.35 217.29
52 206.11 207.05 208.01 208.98 209.96 210.94 211.93 212.92 213.91 214.90 215.88
53 204.21 205.19 206.18 207.19 208.21 209.24 210.28 211.31 212.35 213.38 214.40
54 202.21 203.24 204.28 205.33 206.40 207.47 208.55 209.63 210.71 211.79 212.86
55 200.14 201.21 202.29 203.39 204.50 205.62 206.75 207.88 209.01 210.13 211.25
56 197.97 199.09 200.22 201.37 202.53 203.69 204.87 206.05 207.22 208.40 209.57
57 195.72 196.88 198.06 199.26 200.46 201.68 202.91 204.14 205.37 206.60 207.82
58 193.37 194.58 195.81 197.05 198.32 199.59 200.86 202.15 203.43 204.71 205.99
59 190.92 192.18 193.46 194.76 196.07 197.40 198.73 200.07 201.41 202.75 204.08
60 188.36 189.68 191.01 192.37 193.74 195.12 196.51 197.91 199.30 200.70 202.09
61 185.71 187.08 188.47 189.88 191.31 192.75 194.20 195.65 197.11 198.56 200.01
62 182.95 184.37 185.82 187.29 188.78 190.28 191.79 193.31 194.83 196.34 197.85
63 180.09 181.56 183.07 184.60 186.15 187.71 189.28 190.87 192.45 194.03 195.61
64 177.12 178.65 180.21 181.80 183.41 185.04 186.68 188.33 189.98 191.62 193.27
65 174.04 175.63 177.25 178.90 180.57 182.26 183.97 185.69 187.40 189.12 190.83
66 170.86 172.50 174.18 175.89 177.62 179.38 181.16 182.94 184.73 186.52 188.30
67 167.57 169.27 171.00 172.77 174.57 176.40 178.24 180.10 181.96 183.82 185.68
68 164.18 165.93 167.72 169.55 171.41 173.30 175.21 177.14 179.08 181.01 182.95
69 160.67 162.48 164.33 166.22 168.14 170.10 172.08 174.08 176.09 178.10 180.11
70 157.06 158.92 160.83 162.78 164.77 166.79 168.84 170.91 173.00 175.09 177.18
71 153.34 155.25 157.22 159.23 161.29 163.38 165.50 167.64 169.80 171.96 174.13
72 149.51 151.48 153.51 155.58 157.70 159.86 162.05 164.26 166.49 168.74 170.98
73 145.59 147.61 149.69 151.83 154.01 156.24 158.49 160.78 163.08 165.40 167.73
74 141.58 143.65 145.78 147.97 150.22 152.51 154.84 157.19 159.57 161.97 164.37
75 137.49 139.59 141.77 144.02 146.33 148.68 151.08 153.51 155.96 158.43 160.91
</TABLE>
13
UIT-194 OR0IXSTD
<PAGE> 14
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
- - ---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 28 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.19 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity You
designate to receive any benefits payable upon Your death.
(b) Designation of Beneficiary. During Your lifetime, You have the right
to designate a Beneficiary and to change the designation. The change
may be made by sending a written request to Our Home Office. The
change will take effect when We have recorded the change. However,
after the change is recorded, the change will be deemed effective as
of the date of the written request for change. The change will be
subject to any payment made or action taken by Us before the request
is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the Beneficiary
designation:
(1) If any Beneficiary dies prior to the Annuitant, that
Beneficiary's interest will pass to any other Beneficiary
according to the surviving Beneficiary's respective interest.
(2) If no Beneficiary survives the Annuitant, death benefits
will be paid to the Annuitant's estate.
(3) If any Beneficiary dies after the Annuitant, that
Beneficiary's interest will pass to his or her Beneficiary or,
if none, to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether You or a
Beneficiary died first in a common disaster, We will assume that the
Beneficiary died first and make payments on that basis.
(e) Multiple Beneficiaries. You may designate two or more Beneficiaries
to receive separate percentage interests in the death benefits payable
under this Contract. Each such Beneficiary may separately exercise the
rights that a Beneficiary has under this Contract.
(f) Trust or Estate as Beneficiary. Payments to a Beneficiary that is
a trust or estate will be made only in a lump sum or in installments
over a period not to exceed five years.
4.20 DEATH PAYMENT PROVISIONS
(a) Death During Accumulation Period. If You die during the Accumulation
Period, a death benefit described in (1) or (2) below is payable.
(1) If You die on or after age 70, the death benefit is the
greater of (a) the Accumulation Value on the date We receive
proof of death, or (b) 100% of Purchase Payments reduced by
the amount of any prior withdrawals and further reduced by any
portion of the Accumulation Value that has been applied under
an Annuity Income Option.
(2) If You die before age 70, the death benefit is the sum of the
benefits under the Fixed Interest Options and the Variable
Investment Options, as follows:
The benefit under the Fixed Interest Options is the greater of:
(a) the Fixed Interest Option Values on the date We receive
proof of death; or
14
UIT-194 OR0IXSTE
<PAGE> 15
(b) 100% of Purchase Payments allocated to the Fixed Interest
Options, reduced by the amount of any prior withdrawals or
transfers from Fixed Interest Options and further reduced by
any portion of the Accumulation Value that has been applied
under an Annuity Income Option.
The benefit under the Variable Investment Options is the greater
of:
(a) the Variable Investment Option Values on the date We receive
proof of death, or
(b) 100% of Purchase Payments allocated to Variable Investment
Options reduced by the amount of any prior withdrawals or
transfers from the Variable Investment Options, plus
interest at an annual rate of 3%. For this purpose, all
amounts transferred into Variable Investment Options are
considered Purchase Payments allocated to Variable
Investment Options.
Subject to Section 5.03, the death benefit is payable at any time Your
Beneficiary selects and in any form You could have selected under this
Contract.
(b) Death During Annuity Period. If You die during the Annuity Period, the
amount of the death benefit, if any, will be based on the terms of the
Annuity Income Option. Unless You elected the Fourth Option, the
Beneficiary may elect to receive the death benefit in one of the following
forms:
(1) Continuing annuity payments under the terms of Your Annuity Income
Option with the right, for Variable Annuities only, to receive the
remaining payments in a lump sum at any time thereafter;
(2) A lump sum; or
(3) Annuity payments under another Annuity Income Option, based on the
available lump sum and subject to the limitations of Section 5.03.
The lump sum available under these alternatives is the present value of
remaining payments, discounted at the Assumed Investment Rate, and based
on the current Annuity Unit Value for (2) and (3), or the value next
determined after receipt of the request at VALIC's Home Office for (1).
(c) Investment Options and Other Rights. Until the death benefits have been
fully paid, Your Beneficiary will be entitled to exercise all the
Investment Options and other rights the Annuitant can exercise under this
Contract. Unpaid death benefits that have not been applied under an Annuity
Income Option will have an Accumulation Value determined in the same manner
as Your Accumulation Value.
(d) Proof of Death. Proof of death may be made by sending VALIC a certified
copy of the death certificate, a certified copy of a decree of a court of
competent jurisdiction as to death, a written statement by an attending
physician, or any other proof satisfactory to VALIC.
15
UIT-914 OR0IXSTF
<PAGE> 16
SECTION 5 - CODE REQUIREMENTS AND RETIREMENT PLAN PROVISIONS
5.01 SALARY REDUCTION PURCHASE PAYMENTS - If Your Purchase Payments are
made under a voluntary salary reduction agreement with Your Employer
as part of a Tax-Deferred Annuity arrangement under Section 403(b) of
the Code, i) there may not be a separate Plan document, in which case
the Contract is the Plan, and ii) in either case the following
restrictions apply:
(a) Limit on Purchase Payments. Your salary reduction Purchase
Payments may not exceed the limits of Section 402(g) of the Code.
We reserve the right to refund excess Purchase Payments.
(b) Withdrawal Restrictions. Your Accumulation Value attributable to
salary reduction Purchase Payments cannot be withdrawn or
otherwise distributed before You are 59 1/2 years old, unless You
(1) have separated from service with the Employer, (2) die, (3)
become Disabled (see Section 4.06(c)), or (4) have incurred a
hardship (hardship withdrawal not available for earnings on
salary reduction Purchase Payments). This limitation will be
applied in a manner consistent with the requirements of Section
403(b)(11) of the Code. Equivalent withdrawal restrictions apply
to any portion of Your Accumulation Value that is attributable to
Purchase Payments representing amounts directly transferred from
a custodial account under Section 403(b)(7) of the Code.
5.02 MINIMUM DISTRIBUTIONS AFTER AGE 70 1/2
(a) General Rules. Your benefits under the Contract must satisfy
minimum distribution rules of the applicable section of the Code
and regulations issued by the Secretary of the Treasury under the
applicable section. These minimum distribution rules generally
require that benefits begin after you are 70 1/2 years old and
that the minimum amount is paid each year. Payments may be made
in the form of annual withdrawals or under an Annuity Income
Option.
Code Sections which apply are: (i) Section 401(a)(9) for
contracts issued for a Plan intended to meet Sections 401(a)
and/or 403(a), (ii) Section 403(b)(10) for Section 403(b)
contracts, and (iii) Section 457(d) for deferred compensation
plans under Section 457.
(b) Minumum Annual Withdrawals. The minimum withdrawal is set each year
based on the Accumulation Value and the life expectancy of You and
Your Beneficiary. You may elect to have life expectancies computed for
each year's distribution, or to use the life expectancies computed at
the first distribution (reduced by one year for each annual
withdrawal) for all later distributions. If Your Beneficiary is not
Your spouse, the annual withdrawal must meet the minimum distribution
incidental benefit requirements.
(c) Annuity Income Option. If You elect payments under an Annuity Income
Option, the guaranteed or expected period of payments under the Annuity
Income Option may not exceed Your life expectancy and that of Your
Beneficiary at the Annuity Date, or a shorter period if Your
Beneficiary is not Your spouse.
(d) 403(b) Exception to General Rule. Any amount added to the Contract
which was initially within a Section 403(b) contract prior to January
1, 1987 and continually since then, may either be paid in a manner
which meets these rules or must (1) begin to be paid when You are age
75; and (2) the present value of payments expected to be made to You,
over life, under the option chosen must exceed 50% of the present value
of all payments expected to be made ("the 50% rule"). Notwithstanding,
Your entire Section 403(b) Contract balance must meet the minimum
distribution incidental benefit requirement of Section 403(b)(10).
5.03 MINIMUM DEATH BENEFIT DISTRIBUTIONS
(a) General Rules. The death benefit, if any, payable to Your Beneficiary
must also satisfy the rules of Section 401(a)(9)(B), Section 403(b)(10)
or Section 457(d), whichever may be applicable, and the regulations
issued under such sections by the Secretary of the Treasury. The
post-death rules of these sections limit the extent to which a
Beneficiary may delay payment of death benefits. Your Beneficiary may
satisfy these rules by receiving a lump sum, annual withdrawals, or
payments under an Annuity Income Option.
16
UIT-194 OR0IXSTG
<PAGE> 17
(b) Death Before Distributions Begin. If You die before payments under an
Annuity Income Option (or post-age 70 1/2 withdrawals) have begun, Your
Beneficiary must either receive the whole benefit by the end of the
fifth year following the year of Your death or receive the benefit in
installment payments over his or her life or life expectancy if
payments begin by the calendar year following the year of Your death.
Your spouse beneficiary may delay distributions until You would have
reached age 70 1/2.
(c) Death After Distributions Begin. If You die after payments under an
Annuity Income Option (or post-age 70 1/2 withdrawals) have begun, the
death benefit must be paid at least as fast as under the method You
selected.
5.04 DIRECT ROLLOVERS - If any benefit payable to You under this Contract
constitutes an "eligible rollover distribution" within the meaning of
Section 402 of the Code, You have the right to elect to have such
distribution paid directly to an "eligible retirement plan" on Your behalf
in a transaction designated under the Code as a "direct rollover." Before
any eligible rollover distribution is made to You, we will provide You with
a written explanation of Your right to make a direct rollover and the tax
consequences of making or not making a direct rollover. No surrender,
withdrawal, or other benefit distribution that constitutes an eligible
rollover distribution will be made to You under this Contract, unless the
Code's requirements applicable to eligible rollover distributions have been
satisfied. Except for eligible rollover distributions, We reserve the
right to make payments only to You or Your Beneficiary.
5.05 PLAN PROVISIONS - The Plan, including certain Plan provisions required
by the Employee Retirement Income Security Act of 1974 (ERISA) or other
applicable law, may limit Your rights under this Contract. The Plan
provisions may:
(a) Limit Your right to make Purchase Payments;
(b) Restrict the time when You may elect to receive payments under this
Contract;
(c) Require the consent of Your spouse before You may elect to receive
payments under this Contract;
(d) Require that all distributions be made in the form of a joint and
survivor annuity for You and Your spouse unless You both consent to a
different form of distribution;
(e) Require that Your spouse be designated as Beneficiary;
(f) Require that You remain employed with the Employer for a specified
period of time before Your rights under the Contract become fully
vested; or
(g) Otherwise restrict Your exercise of rights under the Contract or give
the Employer (or a Plan representative) the right to exercise certain
rights on Your behalf.
No such Plan provision shall limit Your rights under this Contract
unless the Employer has provided VALIC with written notification of
such provision. In no event may any Plan provision enlarge VALIC's
obligations under this Contract.
17
UIT-194 OR0IXSTH
<PAGE> 18
SECTION 6 - GENERAL PROVISIONS
6.01 ASSIGNMENT - This Contract cannot be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of
an obligation. The benefits, values, and rights under this Contract
are not subject to any creditor claims to the fullest extent permitted
by law. Your Contract and its rights cannot be transferred to anyone
other than Us, except under a domestic relations order properly issued
by a court of competent jurisdiction and that complies with ERISA, if
applicable. To the extent permitted by the Code and applicable law,
We will make a Cash Surrender or Withdrawal payable to a third party
upon Your request.
6.02 VESTING - Except as may be provided in the Employer's Plan, Your rights
under this Contract are fully vested and nonforfeitable. Separate
Account A holds all assets for Variable Investment Options for the
exclusive benefit of Annuitants, Beneficiaries, and other holders of
annuity contracts.
6.03. WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
6.04 CHANGE OF CONTRACT - You and VALIC, by an agreement in writing, may
change any or all terms of this Contract. VALIC may unilaterally
change the contract if it is deemed advisable to do so in order to
conform the Contract to applicable laws or regulations.
6.05 REPORTS - We will send You a Separate Account financial report twice
each year if You have values in any Variable Investment Option.
We will send to You, at least annually, a statement showing the dollar
value of all investment options, investment performance since the
prior statement, and as applicable, the number and value of any
Variable Accumulation Units credited to this Contract. All statements
will be mailed within two months of the date of the information.
6.06 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of this Contract's participation
in the Separate Account through one or more Variable Investment
Options, We will vote those shares as instructed. You, or the
Beneficiary if You have died, will have the voting instruction rights
prior to the Annuity Date. The annuity payee will have the voting
instruction rights on and after the Annuity Date.
6.07 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate Account for any period when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday
closings); (b) when trading on the Exchange is restricted; (c) when an
emergency prevents disposal of securities held in the Separate Account
or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
6.08 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
6.09 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that the Annuitant and any payee is alive on the date any benefit
payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
6.10 SUBSTITUTION OF INVESTMENT FUND SHARES - If shares of a particular
Investment Fund are not available or if, in the judgment of VALIC,
such shares are no longer appropriate for a Variable Investment
Option, shares of another Investment Fund may be substituted for the
Investment Fund shares already held under the Variable Investment
Option and for those to be purchased by future Purchase Payments or
transfers under this Contract. In the event any substitution occurs,
VALIC will notify You within five days.
6.11 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under this Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
6.12 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income, gains or losses.
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UIT-194 OR0IXSTI
<PAGE> 1
EXHIBIT 4(b)(i)
(LOGO) The Variable Annuity
VALIC Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
- - --------------------------------------------------------------------------------
* An American General Company
CONTRACT OWNER:
CONTRACT NUMBER: DATE OF ISSUE:
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
See Index on Page 2
o MAINTENANCE CHARGE - There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each Participant Account for
each quarter and is assessed only if any portion of the Accumulation Value
was applied to one or more Variable Investment Options during that quarter.
See Section 2.05 for a complete description.
o SEPARATE ACCOUNT CHARGE - There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily net
asset value of the Separate Account, based upon the Variable Investment
Option to which assets are allocated. This charge only applies to assets
under Variable Investment Options. See Section 2.06 for a complete
description.
o CASH SURRENDER OR WITHDRAWAL CHARGE - There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03 through 4.06 for a complete description and conditions under
which there is no charge.
The conditions and provisions on this and the following pages are the entire
legal Contract between VALIC and the Contract Owner. No agent has the authority
to change this Contract or waive any of its provisions. Only the President or
a Vice President of VALIC may change this Contract. Any such changes must be in
writing. All conditions and provisions are subject to applicable state laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/S/ CYNTHIA A. TOLEN /S/ S.D. BRICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
GROUP FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
INDIVIDUAL ALLOCATIONS
- NON-PARTICIPATING -
UITG-194 OR0GXST1
<PAGE> 2
INDEX
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . 3
SECTION 2 CONTRACT AND PURCHASE PAYMENTS . . . . . . . 3
2.01 Incontestability . . . . . . . . . . . . . . 3
2.02 Minimum Contract Value . . . . . . . . . . . 3
2.03 Plan Provisions. . . . . . . . . . . . . . . 3
2.04 Purchase Payments. . . . . . . . . . . . . . 3
2.05 Maintenance Charge . . . . . . . . . . . . . 3
2.06 Separate Account Charge. . . . . . . . . . . 3
SECTION 3 INVESTMENT OPTIONS . . . . . . . . . . . . . 4
3.01 Fixed Interest Options . . . . . . . . . . . 4
3.02 Variable Investment Options. . . . . . . . . 4
3.03 Accumulation Unit . . . . . . . . . . . . . 4
3.04 Accumulation Unit Value. . . . . . . . . . . 4
3.05 Transfers During the Accumulation Period . . 4
3.06 Transfers During the Annuity Period. . . . . 5
SECTION 4 BENEFITS . . . . . . . . . . . . . . . . . . 6
4.01 Cash Surrender . . . . . . . . . . . . . . . 6
4.02 Withdrawals. . . . . . . . . . . . . . . . . 6
4.03 Charges for Cash Surrender or Withdrawal . . 6
4.04 No Charge Systematic Withdrawals . . . . . . 6
4.05 No Charge Minimum Distributions. . . . . . . 6
4.06 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted. . . . . 7
4.07 Annuity Period . . . . . . . . . . . . . . . 7
4.08 Starting Annuity Income Benefits . . . . . . 7
4.09 Partial Annuitization . . . . . . . . . . . 7
4.10 Minimum Annuity Payments . . . . . . . . . . 7
4.11 Misstatement of Age . . . . . . . . . . . . 8
4.12 Annuity Income (Payment) Options . . . . . . 8
4.13 Fixed or Variable Annuity Basis. . . . . . . 8
4.14 Variable Annuity Payments. . . . . . . . . . 8
4.15 Assumed Investment Rate (AIR) . . . . . . . 8
4.16 Annuity Units and Annuity Unit Value . . . . 8
4.17 Betterment of Rates. . . . . . . . . . . . . 9
4.18 Annuity Rate Tables. . . . . . . . . . . . . 9-14
4.19 Beneficiaries. . . . . . . . . . . . . . . . 14
4.20 Death Payment Provisions . . . . . . . . . . 14
SECTION 5 CODE REQUIREMENTS AND RETIREMENT PLAN
PROVISIONS . . . . . . . . . . . . . . . . . 16
5.01 Salary Reduction Purchase Payments . . . . . 16
5.02 Minimum Distributions After Age 70 1/2 . . . 16
5.03 Minimum Death Benefit Distributions. . . . . 16
5.04 Direct Rollovers . . . . . . . . . . . . . . 17
5.05 Plan Provisions . . . . . . . . . . . . . . 17
5.06 Nonqualified Deferred Compensation Plans . . 17
SECTION 6 GENERAL PROVISIONS . . . . . . . . . . . . . 18
6.01 Participant Certificates . . . . . . . . . . 18
6.02 Assignment . . . . . . . . . . . . . . . . . 18
6.03 Vesting . . . . . . . . . . . . . . . . . . 18
6.04 Written Notices to Us . . . . . . . . . . . 18
6.05 Change of Contract . . . . . . . . . . . . . 18
6.06 Future Participants . . . . . . . . . . . . 18
6.07 Reports . . . . . . . . . . . . . . . . . . 18
6.08 Voting Rights . . . . . . . . . . . . . . . 18
6.09 Suspension of Payments . . . . . . . . . . . 18
6.10 Deferral of Cash Surrender or Withdrawal . . 18
6.11 Proof of Survival . . . . . . . . . . . . . 18
6.12 Substitution of Investment Fund Shares . . . 18
6.13 Minimum Benefit . . . . . . . . . . . . . . 18
6.14 Separate Account . . . . . . . . . . . . . . 19
</TABLE>
2
UITG-194 OR0GXST2
<PAGE> 3
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase
Payment and the Annuity Date for a Participant.
ACCUMULATION VALUE - equals the sum of the values of the Fixed Interest
Options and Variable Investment Options allocated to a Participant Account that
have not been applied to provide annuity payments.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CERTIFICATE YEAR - a twelve month period starting with the issue date of a
Participant's certificate and each anniversary of that date.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The Variable Annuity
Life Insurance Company.
CONTRACT OWNER - the employer or other entity that makes application for the
Contract.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account.
HOME OFFICE - the principal office of VALIC.
PARTICIPANT - a person for whom or with respect to whom Purchase Payments are
made under the Contract.
PARTICIPANT ACCOUNT - an individual account which is established for a
Participant to record the Accumulation Value for the Participant.
PLAN - the employer-sponsored retirement plan, annuity purchase arrangement,
or deferred compensation program for which this Contract is issued.
PURCHASE PAYMENT - an amount paid to VALIC for allocation to a Participant
Account.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of a Participant Account less any
applicable surrender charge.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - This Contract is incontestable. This Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM CONTRACT VALUE - We can distribute the Surrender Value if the
Accumulation Value for the Participant Account falls below $300 and
there are no Purchase Payments for two Certificate Years.
2.03 PLAN PROVISIONS - As further explained in Section 5, this Contract is
subject to the provisions of the Plan. To the extent provided by the
Plan, any rights that may be exercised by a Participant under this
Contract may instead be exercised by the Contract Owner or a Plan
representative.
2.04 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period and may include amounts that are rolled over
or directly transferred from another plan. We require no payment
beyond the first. There is no penalty if any scheduled payments are
omitted or stopped.
If only one Purchase Payment is to be allocated to a Participant's
Account, it must be at least $1,000. Periodic payments must be at
least $30 each. VALIC may waive this minimum.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to the
Participant's directions unless the Contract Owner has retained
that right under the Plan.
2.05 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which the
Accumulation Value includes any Variable Investment Option. We will
not deduct the charge for any calendar quarter if the Accumulation
Value is credited only to the Fixed Interest Options throughout the
quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among the Variable Investment Options for the
Participant's Account. However, if all Variable Accumulation Values
are withdrawn or transferred to a Fixed Interest Option, the full
quarterly charge will be deducted at the time of surrender or transfer.
The charge is $3.75 for each Participant Account for each quarter. The
maintenance charge may be waived or reduced uniformly on all
Participant Accounts for contracts issued under certain plans or
arrangements which are expected to result in administrative cost
savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
2.06 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option.
3
UITG-194 OR0GXST3
<PAGE> 4
SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by the Participant. We reserve the right to limit allocations
among Investment Options to seven at any one time. Each selection must be a
whole percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately
to amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Investment returns on Variable Investment
Options may be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to the Participant's Account due to
a Purchase Payment or a transfer from another Investment Option. The
number of Accumulation Units credited to the Participant's Account is
determined by dividing the dollar amount of the transaction by the
Accumulation Unit Value for that Variable Investment Option at the
next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, the Participant may transfer amounts among Investment Options,
except as provided below.
(a) We reserve the right to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30 days
apart.
(c) Transfers from the Short Term Fixed Account. After a transfer to
the Short Term Fixed Account, the Participant may not make any
transfer from the Short Term Fixed Account for 90 days. We may
change this transfer restriction at any time. However, the
transfer restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. The Participant may
transfer up to 20% of the Accumulation Value allocated to
Fixed Account Plus during each Certificate Year. If multiple
transfers are made in a Certificate Year, the percentages of
the Accumulation Value transferred each time will be added
together to determine the 20% transfer limit for that
Certificate Year. For each transfer, the percentage
transferred is the ratio of the amount transferred to the
portion of the Accumulation Value allocated to Fixed Account
Plus immediately prior to the transfer. However, if following
a 20% transfer, the remaining amount allocated to Fixed
Account Plus would be less than $500, the Participant may
transfer the remaining amount.
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UITG-194 OR0GXST4
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3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, the
Participant may transfer Annuity Unit values among the Variable
Investment Options. The Participant may also transfer Annuity Unit
values from the Variable Investment Options underlying a Variable
Annuity to provide a Fixed Annuity. Transfers must be at least 365
days apart. We will not permit any transfer from a Fixed Annuity
during the Annuity Period.
5
UITG-194 OR0GXST5
<PAGE> 6
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - Subject to the restrictions in Sections 5.01 and
5.05, the Participant may surrender the Participant Account before the
Annuity Date for a cash payment equal to the Surrender Value as of the
date We receive the request at the Home Office. The Surrender Value is
the Accumulation Value less any charges, as described below.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable Investment
Options or withdrawn.
4.02 WITHDRAWALS - Subject to the restrictions in Sections 5.01 and 5.05,
the Participant may withdraw a portion of the Accumulation Value in
cash at any time before the Annuity Date. We may deduct a charge as
described below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1) the
amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat withdrawals as withdrawals
of Purchase Payments before any earnings. We treat the most
recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Certificate Year. Subject to the provisions
of Sections 4.04 and 4.05, in any Certificate Year the
Participant may withdraw up to 10% of the Accumulation Value
without a charge. The surrender charge will be applicable only
to the amount withdrawn that exceeds 10%. The percentage
withdrawn will be calculated as the ratio of the amount
withdrawn to the Accumulation Value immediately prior to the
withdrawal. If multiple withdrawals are made in a Certificate
Year, the percentages withdrawn for each withdrawal
will be added together to determine whether the 10% limit has
been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time.
However, no change in availability will result in any charge against
amounts withdrawn under a previously elected NCSW. A NCSW must meet
the following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to the Participant.
(3) The NCSW is not available in any Certificate Year the Participant
has in effect any other systematic withdrawal (with or without
charge) or a No Charge Minimum Distribution (NCMD).
(4) Once the Participant begins a NCSW the terms of the election
may not be changed. However, the Participant may revoke the
election at any time. Once the election is revoked the
Participant may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Certificate Year the NCSW has been, or is in
effect. Distributions under the NCSW may not begin in a
Certificate Year in which the Participant has taken one or
more Section 4.03 withdrawals without charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The
annual dollar amount chosen must be the same for each
year the NCSW is in effect and cannot be greater than
20% of the Accumulation Value at the time of the NCSW
election.
(b) Specified Percentage - an annual specified percentage.
The annual specified percentage chosen cannot be greater
than 20% of the Accumulation Value.
(c) Specified Period - payments for a designated time
period. We will determine each payment by dividing the
Accumulation Value by the number of payments remaining
in the elected period.
4.05 NO CHARGE MINIMUM DISTRIBUTIONS - We will waive applicable surrender
charges on No Charge Minimum Distributions (NCMD). A NCMD is a
withdrawal which meets the following conditions:
(1) The Participant is at least age 70 1/2, and the NCMD is payable
to the Participant.
(2) The amount withdrawn does not exceed the amount required to be
distributed under the Code and regulations issued by the
Secretary of the Treasury for this Contract.
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UITG-194 OR0GXST6
<PAGE> 7
(3) The NCMD is not available in any Certificate Year the
Participant has withdrawn any amount under a No Charge Systematic
Withdrawal (NCSW).
4.06 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges from a participant Account under
any of the following conditions:
(a) The Participant elects an Annuity Income Option; or
(b) After the death of the Participant; or
(c) The Participant has become totally and permanently disabled.
This means that the Participant is unable, because of physical
or mental impairment, to perform the material and substantial
duties of any occupation for which the Participant is suited by
means of education, training or experience. The impairment must
have been in existence for more than 180 days to qualify for
this benefit.
Such impairment must be expected to result in death or be
long-standing and indefinite.
We require proof of disability. We will accept a certified
Social Security finding of disability or a doctor's
verification; or
(d) The withdrawal and any earlier withdrawals from the Participant
Account during the same Certificate Year do not exceed 10% of the
Accumulation Value (see Section 4.03); or
(e) On any amount the Participant withdraws with respect to the NCSW
described in Section 4.04, or the NCMD described in Section 4.05;
or
(f) The Participant is at least 55 years old, the Participant Account
was established at least five years before the date of the
surrender or withdrawal, and the Participant is separated from
service with the employer that maintains the Plan; or
(g) No Purchase Payments were made to the Participant Account in the
five years preceding the date of the surrender or withdrawal; or
(h) The Participant is at least 59 1/2 years old and the Participant
Account was established at least seven years before the date of
the surrender or withdrawal; or
(i) The Participant Account was established at least fifteen years
before the date of the surrender or withdrawal.
The surrender charge may be waived or reduced uniformly on all
Participant Accounts for contracts issued under certain plans or
arrangements which are expected to result in administrative cost
savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
We may waive any withdrawal or surrender charge attributable to
Purchase Payments received during specific periods of time, and under
conditions and limitations set by Us. Any such waiver will be made by
Resolution of the Board of Directors. Notice of the right to surrender
without charge will be mailed to the Contract Owner when such
waiver is declared by the Board of Directors.
4.07 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
the Participant's Accumulation Value is applied under an Annuity
Income Option. The Participant may change the Annuity Date shown on
the first page of the Participant Certificate by giving Us at least 30
days notice. The selected Annuity Date may be the first day of any
calendar month, but if the Participant chooses a life income option,
the Annuity Date may not precede the Participant's 50th birthday
without Our permission.
4.08 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, the Participant must choose one of the Annuity Income
Options in Section 4.12 and provide acceptable proof of age for any
person whose age is taken into account under a life income option. If
the Participant fails to select another Annuity Income Option, annuity
payments will be made on the basis of the Second Option with payments
guaranteed for a ten-year period, commencing on the Annuity Date.
4.09 PARTIAL ANNUITIZATION - The Participant may choose to apply less than
the full Accumulation Value under an Annuity Income Option and may
choose different Annuity Dates and different Annuity Income Options
for different portions of the Accumulation Value. Therefore, the
Contract may, at times, be in both an Accumulation Period and an
Annuity Period. If the Participant chooses to do this, the provisions
of the Contract relating to the Accumulation Period and the Annuity
Period will be applied as though there were separate Contracts.
4.10 MINIMUM ANNUITY PAYMENTS - The Participant may not choose any Annuity
Income Option if the resulting initial payment would be less than $25
under either a Fixed or Variable Annuity. We reserve the right to
convert monthly payments to quarterly, semi-annual or annual payments
so the initial payment will be at least $25.
7
UITG-194 OR0GXST7
<PAGE> 8
4.11 MISSTATEMENT OF AGE - If annuity payments depend upon an individual's
survival and the date of birth of any individual was misstated, We
will adjust the remaining payments. The amount remaining to be paid
will be the amount that should have been paid with the correct
information. We will credit or charge the amount of any underpayment
or overpayment against the next succeeding payment or payments, if any
remain. We reserve the right to collect any overpayment directly from
the payee.
4.12 ANNUITY INCOME (PAYMENT) OPTIONS - The Participant may choose to
receive payments under any of the Annuity Income Options below or any
other option agreed to by VALIC. Any option chosen must comply with
applicable state and federal laws and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income
payable during the Participant's life. All payments cease at the
Participant's death with no further amounts payable.
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An income payable during the Participant's life. If, at the
Participant's death, We have made payments for fewer than the number
of years selected, We will continue payments to the Beneficiary for
the remainder of the guarantee period.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An
income payable during the Participant's life. Payments cease at the
Participant's death. However, the Beneficiary may receive an
additional payment.
For payments on a Fixed Annuity basis, the additional payment, if any,
will be the Accumulation Value applied to this option less the total
of all prior payments.
For payments on a Variable Annuity basis, the additional payment, if
any, will be the current value of the number of Annuity Units credited
at the Annuity Date less the number of Annuity Units that have been
paid. For this purpose, the number of Annuity Units credited equals
the Accumulation Value applied to this option divided by the Annuity
Unit Value at the date used to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable
during the joint lives of the Participant and a second person and
thereafter during the life of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable
for a selected number of years between five and thirty. This option is
available for Fixed Annuities only.
4.13 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen Variable
Investment Options.
The Participant may elect to receive payments under any annuity option
as a Fixed Annuity, a Variable Annuity, or a combination Fixed and
Variable Annuity. If the Participant makes no election, amounts in
Fixed Interest Options will provide a Fixed Annuity and amounts in
Variable Investment Options will provide a Variable Annuity.
4.14 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable Investment Option remains constant unless
the Participant transfers a portion of the annuity benefit between the
Variable Investment Options or from a Variable Annuity to a Fixed
Annuity. However, the dollar amount payable is not fixed and may
change from month to month.
4.15 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, the Participant must choose an Assumed
Investment Rate (AIR). The AIR is the assumed rate of return used to
determine the first annuity payment for a Variable Annuity Option.
Rates of 3%, 3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if
permitted by state law and regulations. If no AIR is chosen, the AIR
will be 3 1/2%. A higher AIR will result in a higher initial payment.
Choice of a lower AIR will result in a lower initial payment. Payments
will increase whenever the actual return exceeds the chosen AIR.
Payments will decrease whenever the actual return is less than the
chosen AIR.
4.16 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed
at $1.00.
8
UITG-194 OR0GXST8
<PAGE> 9
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option at
the immediately preceding computation date
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised to
the power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
4.17 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments to the Participant. If a commutation (cash out of
remaining annuity payments) is allowed, the rates previously used to
calculate the annuity payments will be used for the commutation
request.
4.18 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to
purchase a first monthly payment of $1.00. Quarterly, semiannual, and
annual payments may also be selected.
The amount of each payment will depend upon the Annuitant's adjusted
age at the time the first payment is due. Adjusted age will be
determined in accordance with the following:
Calendar Year Adjusted Age is
of Birth Actual Age Minus
------------- ----------------
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
Actual age, as used above, means the Annuitant's age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.15) and to determine the minimum guarantees for Fixed
Annuities. Tables B, C, and D are to be used for Variable Annuities
with 3 1/2%, 4 1/2% and 5% AIRs respectively.
9
UITG-194 OR0GXST9
<PAGE> 10
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $250.48 $250.83 $251.93 $254.04 $257.21 $259.24
51 246.41 246.79 248.04 250.27 253.72 255.69
52 242.26 242.68 244.03 246.45 250.21 252.09
53 238.03 238.49 239.95 242.58 246.69 248.43
54 233.73 234.23 235.81 238.67 243.15 244.71
55 229.35 229.88 231.60 234.72 239.60 240.94
56 224.89 225.46 227.32 230.73 236.05 237.12
57 220.34 220.96 222.98 226.71 232.52 233.24
58 215.71 216.38 218.59 222.65 229.01 229.31
59 210.99 211.72 214.14 218.58 225.54 225.33
60 206.19 206.99 209.63 214.50 222.12 221.29
61 201.30 202.18 205.08 210.42 218.75 217.19
62 196.35 197.31 200.50 206.34 215.47 213.04
63 191.32 192.39 195.88 202.30 212.28 208.83
64 186.24 187.41 191.25 198.29 209.20 204.54
65 181.11 182.40 186.61 194.34 206.25 200.18
66 175.92 177.34 181.97 190.46 203.44 195.73
67 170.70 172.26 177.35 186.66 200.79 191.41
68 165.43 167.15 172.75 182.97 198.31 186.93
69 160.13 162.01 168.18 179.39 196.00 182.35
70 154.78 156.86 163.66 175.95 193.89 178.01
71 149.41 151.71 159.21 172.66 191.97 173.43
72 144.01 146.56 154.85 169.54 190.26 169.01
73 138.61 141.44 150.59 166.61 188.73 164.46
74 133.21 136.35 146.45 163.88 187.41 159.83
75 127.84 131.33 142.46 161.36 186.26 155.48
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $280.54 $282.36 $284.24 $286.16 $288.12 $290.13 $292.17 $294.25 $296.35 $298.47 $300.61
51 276.91 278.78 280.70 282.67 284.69 286.75 288.85 290.98 293.13 295.31 297.51
52 273.19 275.10 277.07 279.10 281.17 283.28 285.43 287.62 289.83 292.07 294.33
53 269.37 271.34 273.36 275.43 277.55 279.72 281.93 284.17 286.45 288.74 291.06
54 265.46 267.47 269.54 271.67 273.85 276.07 278.33 280.64 282.97 285.33 287.71
55 261.45 263.51 265.64 267.81 270.05 272.33 274.65 277.01 279.40 281.83 284.27
56 257.34 259.46 261.63 263.86 266.15 268.49 270.87 273.29 275.75 278.23 280.74
57 253.13 255.30 257.53 259.82 262.16 264.56 267.00 269.48 272.00 274.55 277.12
58 248.82 251.04 253.32 255.67 258.07 260.53 263.03 265.58 268.16 270.77 273.40
59 244.40 246.67 249.01 251.42 253.88 256.40 258.97 261.57 264.22 266.90 269.60
60 239.88 242.21 244.60 247.07 249.59 252.17 254.80 257.48 260.19 262.93 265.70
61 235.26 237.64 240.09 242.61 245.20 247.84 250.54 253.28 256.06 258.87 261.71
62 230.54 232.97 235.47 238.06 240.70 243.41 246.17 248.98 251.83 254.71 257.62
63 225.71 228.19 230.76 233.40 236.11 238.88 241.71 244.58 247.50 250.46 253.44
64 220.79 223.32 225.94 228.64 231.41 234.25 237.14 240.09 243.08 246.10 249.16
65 215.78 218.35 221.02 223.78 226.61 229.51 232.47 235.49 238.55 241.65 244.78
66 210.67 213.30 216.02 218.82 221.71 224.68 227.71 230.79 233.93 237.10 240.31
67 205.48 208.15 210.92 213.78 216.72 219.75 222.84 226.00 229.21 232.45 235.74
68 200.20 202.91 205.73 208.64 211.64 214.73 217.88 221.11 224.38 227.71 231.06
69 194.83 197.59 200.45 203.41 206.47 209.61 212.83 216.12 219.46 222.86 226.30
70 189.39 192.19 195.09 198.10 201.21 204.41 207.68 211.03 214.45 217.92 221.43
71 183.87 186.70 189.66 192.71 195.87 199.12 202.45 205.86 209.34 212.88 216.47
72 178.28 181.15 184.14 187.24 190.45 193.75 197.14 200.61 204.15 207.76 211.41
73 172.63 175.53 178.56 181.70 184.96 188.31 191.75 195.28 198.88 202.55 206.27
74 166.94 169.86 172.92 176.10 179.40 182.80 186.29 189.87 193.53 197.26 201.05
75 161.21 164.15 167.23 170.44 173.78 177.22 180.77 184.40 188.11 191.90 195.75
</TABLE>
10
UITG-194 OR0GXSTA
<PAGE> 11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $233.36 $233.71 $234.82 $236.75 $239.66 $240.70
51 229.87 230.25 231.45 233.54 236.72 237.65
52 226.30 226.72 228.01 230.29 233.74 234.54
53 222.65 223.10 224.51 226.98 230.75 231.36
54 218.93 219.41 220.93 223.62 227.73 228.12
55 215.11 215.64 217.28 220.22 224.70 224.82
56 211.21 211.78 213.57 216.77 221.66 221.45
57 207.23 207.84 209.79 213.28 218.62 218.02
58 203.15 203.81 205.94 209.76 215.60 214.59
59 198.98 199.70 202.03 206.21 212.60 210.96
60 194.73 195.51 198.06 202.64 209.63 207.33
61 190.38 191.24 194.04 199.05 206.70 203.63
62 185.95 186.90 189.97 195.47 203.84 199.85
63 181.45 182.50 185.86 191.89 201.06 195.99
64 176.88 178.03 181.73 188.35 198.37 192.18
65 172.25 173.52 177.57 184.84 195.78 188.25
66 167.56 168.95 173.41 181.39 193.31 184.24
67 162.81 164.34 169.24 178.00 190.97 180.31
68 158.01 159.70 165.09 174.70 188.78 176.25
69 153.16 155.01 160.95 171.49 186.75 172.11
70 148.26 150.30 156.85 168.40 184.88 168.10
71 143.31 145.57 152.79 165.44 183.18 163.94
72 138.33 140.83 148.81 162.62 181.65 159.70
73 133.32 136.10 144.91 159.98 180.30 155.66
74 128.31 131.39 141.11 157.51 179.12 151.45
75 123.30 126.73 137.44 155.22 178.10 147.15
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $259.51 $261.02 $262.56 $264.14 $265.75 $267.38 $269.05 $270.72 $272.42 $274.13 $275.84
51 256.50 258.05 259.64 261.26 262.92 264.61 266.32 268.06 269.80 271.57 273.33
52 253.39 254.99 256.63 258.30 260.01 261.75 263.52 265.30 267.11 268.92 270.75
53 250.19 251.84 253.53 255.25 257.01 258.80 260.62 262.47 264.33 266.20 268.08
54 246.90 248.59 250.33 252.11 253.92 255.77 257.64 259.54 261.46 263.39 265.33
55 243.51 245.25 247.04 248.87 250.74 252.64 254.57 256.53 258.51 260.50 262.50
56 240.02 241.82 243.66 245.54 247.47 249.42 251.41 253.43 255.46 257.52 259.58
57 236.43 238.28 240.17 242.11 244.09 246.11 248.16 250.23 252.33 254.44 256.57
58 232.74 234.64 236.59 238.58 240.62 242.70 244.81 246.94 249.10 251.28 253.47
59 228.94 230.89 232.90 234.95 237.05 239.19 241.36 243.56 245.78 248.03 250.28
60 225.03 227.04 229.10 231.22 233.38 235.58 237.81 240.08 242.37 244.68 247.00
61 221.02 223.08 225.20 227.38 229.60 231.87 234.17 236.50 238.85 241.23 243.62
62 216.90 219.02 221.20 223.43 225.72 228.05 230.42 232.82 235.24 237.69 240.15
63 212.68 214.85 217.09 219.38 221.73 224.13 226.56 229.03 231.53 234.05 236.58
64 208.35 210.58 212.87 215.23 217.64 220.10 222.61 225.15 227.71 230.31 232.91
65 203.92 206.20 208.55 210.97 213.44 215.97 218.55 221.16 223.80 226.46 229.15
66 199.40 201.73 204.13 206.60 209.14 211.74 214.38 217.06 219.78 222.52 225.28
67 194.78 197.16 199.61 202.14 204.74 207.40 210.11 212.87 215.66 218.48 221.31
68 190.06 192.49 195.00 197.58 200.24 202.96 205.74 208.57 211.43 214.33 217.24
69 185.25 187.72 190.28 192.92 195.64 198.42 201.27 204.16 207.10 210.07 213.07
70 180.35 182.87 185.48 188.17 190.95 193.79 196.70 199.66 202.67 205.72 208.79
71 175.35 177.92 180.58 183.33 186.16 189.06 192.03 195.06 198.14 201.26 204.41
72 170.28 172.89 175.60 178.40 181.28 184.24 187.27 190.37 193.51 196.70 199.93
73 165.14 167.78 170.53 173.38 176.32 179.34 182.43 185.58 188.80 192.06 195.36
74 159.93 162.60 165.39 168.29 171.28 174.35 177.50 180.72 183.99 187.32 190.69
75 154.67 157.37 160.19 163.13 166.16 169.29 172.49 175.77 179.11 182.51 185.95
</TABLE>
11
UITG-194 OR0GXSTB
<PAGE> 12
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $204.42 $204.75 $205.77 $207.48 $209.94 $209.57
51 201.83 202.19 203.30 205.15 207.83 207.29
52 199.16 199.55 200.75 202.77 205.68 204.94
53 196.41 196.84 198.14 200.33 203.51 202.52
54 193.58 194.05 195.45 197.84 201.30 200.04
55 190.67 191.17 192.70 195.30 199.07 197.48
56 187.67 188.21 189.87 192.70 196.83 194.84
57 184.58 185.17 186.97 190.07 194.57 192.18
58 181.40 182.04 184.00 187.39 192.31 189.42
59 178.12 178.82 180.97 184.67 190.06 186.59
60 174.75 175.51 177.87 181.92 187.82 183.68
61 171.28 172.12 174.70 179.14 185.60 180.76
62 167.73 168.64 171.48 176.35 183.42 177.73
63 164.09 165.09 168.21 173.55 181.29 174.63
64 160.36 161.48 164.90 170.76 179.22 171.46
65 156.57 157.79 161.55 167.99 177.22 168.31
66 152.70 154.05 158.18 165.24 175.31 165.04
67 148.76 150.24 154.78 162.54 173.49 161.70
68 144.75 146.38 151.38 159.88 171.78 158.28
69 140.67 142.46 147.97 157.30 170.19 154.96
70 136.53 138.50 144.57 154.80 168.72 151.48
71 132.31 134.50 141.20 152.39 167.38 147.92
72 128.04 130.46 137.87 150.10 166.17 144.48
73 123.73 126.41 134.59 147.93 165.10 140.90
74 119.38 122.37 131.39 145.90 164.16 137.25
75 115.01 118.33 128.27 144.02 163.35 133.53
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $224.40 $225.44 $226.49 $227.57 $228.65 $229.75 $230.86 $231.97 $233.08 $234.19 $235.30
51 222.31 223.38 224.48 225.60 226.73 227.87 229.02 230.17 231.33 232.49 233.65
52 220.13 221.25 222.39 223.55 224.72 225.91 227.11 228.31 229.52 230.72 231.93
53 217.87 219.03 220.22 221.42 222.64 223.88 225.12 226.37 227.63 228.88 230.14
54 215.52 216.73 217.96 219.21 220.48 221.76 223.06 224.36 225.66 226.97 228.27
55 213.08 214.34 215.61 216.91 218.23 219.56 220.91 222.26 223.62 224.98 226.33
56 210.55 211.85 213.18 214.53 215.90 217.28 218.68 220.08 221.49 222.91 224.32
57 207.92 209.27 210.65 212.05 213.47 214.91 216.36 217.82 219.29 220.76 222.22
58 205.19 206.59 208.03 209.48 210.96 212.45 213.96 215.48 217.00 218.52 220.05
59 202.36 203.82 205.30 206.81 208.35 209.90 211.46 213.04 214.62 216.20 217.79
60 199.43 200.94 202.48 204.05 205.64 207.25 208.87 210.51 212.15 213.80 215.44
61 196.39 197.95 199.55 201.18 202.83 204.50 206.19 207.89 209.59 211.30 213.01
62 193.24 194.86 196.51 198.20 199.91 201.65 203.40 205.16 206.94 208.71 210.48
63 189.98 191.66 193.37 195.12 196.90 198.70 200.51 202.34 204.18 206.03 207.87
64 186.62 188.35 190.13 191.93 193.77 195.64 197.53 199.42 201.33 203.24 205.16
65 183.16 184.94 186.77 188.64 190.55 192.48 194.43 196.40 198.38 200.36 202.35
66 179.59 181.42 183.31 185.24 187.21 189.21 191.23 193.27 195.32 197.38 199.44
67 175.91 177.80 179.75 181.74 183.77 185.83 187.93 190.04 192.16 194.30 196.43
68 172.13 174.07 176.07 178.12 180.22 182.35 184.51 186.70 188.90 191.11 193.32
69 168.24 170.24 172.30 174.41 176.56 178.76 180.99 183.25 185.52 187.61 190.10
70 164.24 166.30 168.41 170.58 172.80 175.06 177.36 179.69 182.04 184.41 186.78
71 160.14 162.25 164.42 166.65 168.94 171.26 173.63 176.03 178.46 180.90 183.35
72 155.95 158.10 160.33 162.62 164.97 167.36 169.80 172.27 174.77 177.28 179.82
73 151.66 153.86 156.15 158.49 160.90 163.36 165.86 168.40 170.97 173.57 176.18
74 147.29 149.54 151.87 154.27 156.74 159.26 161.83 164.44 167.08 169.75 172.44
75 142.84 145.13 147.50 149.96 152.48 155.07 157.70 160.38 163.10 165.84 168.60
</TABLE>
12
UITG-194 OR0GXSTC
<PAGE> 13
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $192.14 $192.47 $193.45 $195.06 $209.94 $196.46
51 189.89 190.25 191.32 193.06 195.52 194.47
52 187.57 187.96 189.12 191.01 193.69 192.45
53 185.18 185.60 186.85 188.91 191.83 190.34
54 182.70 183.16 184.51 186.76 189.94 188.17
55 180.14 180.64 182.11 184.55 188.03 185.92
56 177.50 178.04 179.63 182.30 186.09 183.60
57 174.77 175.35 177.09 180.00 184.14 181.21
58 171.95 172.58 174.47 177.65 182.18 178.81
59 169.03 169.71 171.79 175.27 180.22 176.29
60 166.02 166.77 169.04 172.85 178.27 173.70
61 162.91 163.73 166.22 170.40 176.34 171.03
62 159.72 160.62 163.35 167.93 174.43 168.35
63 156.43 157.42 160.43 165.45 172.56 165.57
64 153.06 154.16 157.45 162.97 170.74 162.71
65 149.62 150.82 154.44 160.50 168.98 159.78
66 146.09 147.42 151.40 158.04 167.30 156.86
67 142.49 143.95 148.32 155.62 165.69 153.83
68 138.82 140.42 145.24 153.24 164.18 150.73
69 135.07 136.83 142.14 150.92 162.77 147.55
70 131.25 133.19 139.04 148.66 161.46 144.44
71 127.35 129.50 135.96 146.49 160.27 141.20
72 123.39 125.77 132.90 144.42 159.20 137.89
73 119.38 122.02 129.89 142.45 158.24 134.51
74 115.32 118.25 126.94 140.61 157.41 131.31
75 111.23 114.50 124.08 138.90 156.68 127.92
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $209.69 $210.56 $211.44 $212.32 $213.22 $214.12 $215.03 $215.93 $216.84 $217.74 $218.64
51 207.94 208.84 209.76 210.69 211.62 212.56 213.51 214.46 215.41 216.35 217.29
52 206.11 207.05 208.01 208.98 209.96 210.94 211.93 212.92 213.91 214.90 215.88
53 204.21 205.19 206.18 207.19 208.21 209.24 210.28 211.31 212.35 213.38 214.40
54 202.21 203.24 204.28 205.33 206.40 207.47 208.55 209.63 210.71 211.79 212.86
55 200.14 201.21 202.29 203.39 204.50 205.62 206.75 207.88 209.01 210.13 211.25
56 197.97 199.09 200.22 201.37 202.53 203.69 204.87 206.05 207.22 208.40 209.57
57 195.72 196.88 198.06 199.26 200.46 201.68 202.91 204.14 205.37 206.60 207.82
58 193.37 194.58 195.81 197.05 198.32 199.59 200.86 202.15 203.43 204.71 205.99
59 190.92 192.18 193.46 194.76 196.07 197.40 198.73 200.07 201.41 202.75 204.08
60 188.36 189.68 191.01 192.37 193.74 195.12 196.51 197.91 199.30 200.70 202.09
61 185.71 187.08 188.47 189.88 191.31 192.75 194.20 195.65 197.11 198.56 200.01
62 182.95 184.37 185.82 187.29 188.78 190.28 191.79 193.31 194.83 196.34 197.85
63 180.09 181.56 183.07 184.60 186.15 187.71 189.28 190.87 192.45 194.03 195.61
64 177.12 178.65 180.21 181.80 183.41 185.04 186.68 188.33 189.98 191.62 193.27
65 174.04 175.63 177.25 178.90 180.57 182.26 183.97 185.69 187.40 189.12 190.83
66 170.86 172.50 174.18 175.89 177.62 179.38 181.16 182.94 184.73 186.52 188.30
67 167.57 169.27 171.00 172.77 174.57 176.40 178.24 180.10 181.96 183.82 185.68
68 164.18 165.93 167.72 169.55 171.41 173.30 175.21 177.14 179.08 181.01 182.95
69 160.67 162.48 164.33 166.22 168.14 170.10 172.08 174.08 176.09 178.10 180.11
70 157.06 158.92 160.83 162.78 164.77 166.79 168.84 170.91 173.00 175.09 177.18
71 153.34 155.25 157.22 159.23 161.29 163.38 165.50 167.64 169.80 171.96 174.13
72 149.51 151.48 153.51 155.58 157.70 159.86 162.05 164.26 166.49 168.74 170.98
73 145.59 147.61 149.69 151.83 154.01 156.24 158.49 160.78 163.08 165.40 167.73
74 141.58 143.65 145.78 147.97 150.22 152.51 154.84 157.19 159.57 161.97 164.37
75 137.49 139.59 141.77 144.02 146.33 148.68 151.08 153.51 155.98 158.43 160.91
</TABLE>
13
UITG-194 OR0GSXTD
<PAGE> 14
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 28 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.19 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity
the Participant designates to receive any benefits payable upon
the Participant's death.
(b) Designation of Beneficiary. During the Participant's lifetime, he
or she has the right to designate a Beneficiary and to change the
designation. The change may be made by sending a written request
to Our Home Office. The change will take effect when We have
recorded the change. However, after the change is recorded, the
change will be deemed effective as of the date of the written
request for change. The change will be subject to any payment
made or action taken by Us before the request is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the
Beneficiary designation:
(1) If any Beneficiary dies prior to the Participant, that
Beneficiary's interest will pass to any other Beneficiary
according to the surviving Beneficiary's respective
interest.
(2) If no Beneficiary survives the Participant, death benefits
will be paid to the Participant's estate.
(3) If any Beneficiary dies after the Participant, that
Beneficiary's interest will pass to his or her Beneficiary
or, if none, to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether the
Participant or a Beneficiary died first in a common disaster, We
will assume that the Beneficiary died first and make payments on
that basis.
(e) Multiple Beneficiaries. The Participant may designate two or
more Beneficiaries to receive separate percentage interests in
the death benefits payable under this Contract. Each such
Beneficiary may separately exercise the rights that a
Beneficiary has under this Contract.
(f) Trust or Estate as Beneficiary. Payments to a beneficiary that
is a trust or estate will be made only in a lump sum or in
installments over a period not to exceed five years.
4.20 DEATH PAYMENT PROVISIONS
(a) Death During Accumulation Period. If the Participant dies
during the Accumulation Period, a death benefit described in
(1) or (2) below is payable.
(1) If the Participant dies on or after age 70, the death
benefit is the greater of (a) the Accumulation Value
of the Participant's Account on the date We receive
proof of death, or (b) 100% of Purchase Payments
reduced by the amount of any prior withdrawals and
further reduced by any portion of the Accumulation
Value that has been applied under an Annuity Income
Option.
(2) If the Participant dies before age 70, the death benefit
is the sum of the benefits under the Fixed Interest
Options and the Variable Investment Options, as
follows:
The benefit under the Fixed Interest Options is the
greater of:
14
UITG-194 OR0GXSTE
<PAGE> 15
(a) the Fixed Interest Option Values on the date We
receive proof of death; or
(b) 100% of Purchase Payments allocated to the Fixed
interest Options, reduced by the amount of any prior
withdrawals or transfers from Fixed Interest Options
and further reduced by any portion of the
Accumulation Value that has been applied under an
Annuity Income Option.
The benefit under the Variable Investment Options is the
greater of:
(a) the Variable Investment Option Values on the date
We receive proof of death, or
(b) 100% of Purchase Payments allocated to Variable
Investment Options reduced by the amount of any
prior withdrawals or transfers from the Variable
Investment Options, plus interest at an annual rate
of 3%. For this purpose, all amounts transferred
into Variable Investment Options are considered
Purchase Payments allocated to Variable Investment
Options.
Subject to Section 5.03, the death benefit is payable at any time the
Participant's Beneficiary selects and in any form the Participant could
have selected under this Contract.
(b) Death During Annuity Period. If the Participant dies during the
Annuity Period, the amount of the death benefit, if any, will be based
on the terms of the Annuity Income Option. Unless the Participant
elected the Fourth Option, the Beneficiary may elect to receive the
death benefit in one of the following forms:
(1) Continuing annuity payments under the terms of the Participant's
Annuity Income Option with the right, for Variable Annuities
only, to receive the remaining payments in a lump sum at any
time thereafter;
(2) A lump sum; or
(3) Annuity payments under another Annuity under another Annuity
Income Option, based on the available lump sum and subject to
the limitations of Section 5.03.
The lump sum available under these alternatives is the present value of
remaining payments, discounted at the Assumed Investment Rate, and
based on the current Annuity Unit Value for (2) and (3), or the value
next determined after receipt of the request at VALIC's Home Office
for (1).
(c) Investment Options and Other Rights. Until the death benefits have been
fully paid, the Participant's Beneficiary will be entitled to exercise
all the Investment Options and other rights the Participant can
exercise under this Contract. Unpaid death benefits that have not been
applied under an Annuity Income Option will have an Accumulation Value
determined in the same manner as the Participant's Accumulation Value.
(d) Proof of Death. Proof of death may be made by sending VALIC a certified
copy of the death certificate, a certified copy of a decree of a court
of competent jurisdiction as to death, a written statement by an
attending physician, or any other proof satisfactory to VALIC.
15
UITG-194 OR0GXSTF
<PAGE> 16
SECTION 5 - CODE REQUIREMENTS AND RETIREMENT PLAN PROVISIONS
5.01 SALARY REDUCTION PURCHASE PAYMENTS - If the Participant's Purchase
Payments are made under a voluntary salary reduction agreement as part
of a Tax-Deferred Annuity arrangement under Section 403(b) of the Code,
i) there may not be a separate Plan document, in which case the
Contract is the Plan, and ii) in either case the following
restrictions apply:
(a) Limit on Purchase Payments. A Participant's salary reduction
Purchase Payments may not exceed the limits of Section 402(g) of
the Code. We reserve the right to refund excess Purchase
Payments.
(b) Withdrawal Restrictions. The Participant's Accumulation Value
attributable to salary reduction Purchase Payments cannot be
withdrawn or otherwise distributed before the Participant is 59
1/2 years old, unless the Participant (1) has separated from
service with the employer maintaining the Plan, (2) dies, (3)
becomes disabled (see Section 4.06(c)), or (4) has incurred a
hardship (hardship withdrawals are not available for earnings on
salary reduction purchase payments). This limitation will be
applied in a manner consistent with the requirements of Section
403(b)(11) of the Code. Equivalent withdrawal restrictions apply
to any portion of the Accumulation Value that is attributable to
Purchase Payments representing amounts directly transferred from
a custodial account under Section 403(b)(7) of the Code.
5.02 MINIMUM DISTRIBUTIONS AFTER AGE 70 1/2
(a) General Rules. The Participant's benefits under the Contract must
satisfy minimum distribution rules of the applicable section of
the Code and regulations issued by the Secretary of the Treasury
under the applicable section. These minimum distribution rules
generally require that benefits begin after the Participant is 70
1/2 years old and that the minimum amount is paid each year.
Payments may be made in the form of annual withdrawals or under
an Annuity Income Option.
Code Sections which apply are: (i) Section 401(a)(9) for
contracts issued for a Plan intended to meet Sections 401(a)
and/or 403(a), (ii) Section 403(b)(10) for Section 403(b)
contracts, and (iii) Section 457(d) for deferred compensation
plans under Section 457.
(b) Minimum Annual Withdrawals. The minimum withdrawal is set each
year based on the Accumulation Value and the life expectancy of
the Participant and the Participant's Beneficiary. The
Participant may elect to have life expectancies computed for
each year's distribution, or to use the life expectancies
computed at the first distribution (reduced by one year for each
annual withdrawal) for all later distributions. If the
Participant's Beneficiary is not the Participant's spouse, the
annual withdrawal must meet the minimum distribution incidental
benefit requirements.
(c) Annuity Income Option. If the Participant elects payments under
an Annuity Income Option, the guaranteed or expected period of
payments under the Annuity Income Option may not exceed the
Participant's life expectancy and that of the Participant's
Beneficiary at the Annuity Date, or a shorter period if the
Participant's Beneficiary is not the Participant's spouse.
(d) 403(b) Exception to General Rule. Any amount added to the
Contract which was initially within a Section 403(b) contract
prior to January 1, 1987 and continually since then, may either
be paid in a manner which meets these rules or must (1) begin to
be paid when the Participant is age 75; and (2) the present value
of payments expected to be made to the Participant, over life,
under the option chosen must exceed 50% of the present value of
all payments expected to be made ("the 50% rule").
Notwithstanding, the Participant's entire Section 403(b) Contract
balance must meet the minimum distribution incidental benefit
requirement of Section 403(b)(10).
5.03 MINIMUM DEATH BENEFIT DISTRIBUTIONS
(a) General Rules. The death benefit, if any, payable to the
Participant's Beneficiary must also satisfy the rules of Section
401(a)(9)(B), Section 403(b)(10) or Section 457(d), whichever may
be applicable, and the regulations issued under such sections by
the Secretary of the Treasury. The post-death rules of these
sections limit the extent to which a Beneficiary may delay
payment of death benefits. The Participant's Beneficiary may
satisfy these rules by receiving a lump
16
UITG-194 OR0GXSTG
<PAGE> 17
sum, annual withdrawals, or payments under an Annuity Income
Option.
(b) Death Before Distributions Begin. If the Participant dies before
payments under an Annuity Income Option (or post-age 70 1/2
withdrawals) have begun, the Participant's Beneficiary must
either receive the whole benefit by the end of the fifth year
following the year of the Participant's death or receive the
benefit in installment payments over his or her life or life
expectancy if payments begin by the calendar year following the
year of the Participant's death. The Participant's spouse
beneficiary may delay distributions until the Participant
would have reached age 70 1/2.
(c) Death After Distributions Begin. If the Participant dies after
payments under an Annuity Income Option (or post-age 70 1/2 with-
drawals) have begun, the death benefit must be paid at least as
fast as under the method the Participant selected.
5.04 DIRECT ROLLOVERS - If any benefit payable under this Contract
constitutes an "eligible rollover distribution" within the meaning of
Section 402 of the Code, the Participant has the right to elect to have
such distribution paid directly to an "eligible retirement plan" in a
transaction designated under the Code as a "direct rollover." Before
any eligible rollover distribution is made to the Participant, we will
provide the Participant with a written explanation of the Participant's
right to make a direct rollover and the tax consequences of making or
not making a direct rollover. No surrender, withdrawal, or other
benefit distribution that constitutes an eligible rollover distribution
will be made to the Participant under this Contract, unless the Code's
requirements applicable to eligible rollover distributions have been
satisfied. Except for eligible rollover distributions, We reserve the
right to make payments only to the Participant or the Participant's
Beneficiary.
5.05 PLAN PROVISIONS - The Plan, including certain Plan provisions required
by the Employee Retirement Income Security Act of 1974 (ERISA) or
other applicable law, may limit the Participant's rights under this
Contract. The Plan provisions may:
(a) Limit the Participant's right to make Purchase Payments;
(b) Restrict the time when the Participant may elect to receive
payments under this Contract;
(c) Require the consent of the Participant's spouse before the
Participant may elect to receive payments under this Contract;
(d) Require that all distributions be made in the form of a joint
and survivor annuity for the Participant and the Participant's
spouse, unless both consent to a different form of distribution;
(e) Require that the Participant's spouse be designated as
Beneficiary;
(f) Require that the Participant remain employed with the Contract
Owner for a specified period of time before the Participant's
rights under the Contract become fully vested; or
(g) Otherwise restrict the Participant's exercise of rights under the
Contract or give the Contract Owner (or a Plan representative)
the right to exercise certain rights on the Participant's behalf.
No such Plan provision shall limit a Participant's rights under this
Contract, unless the Contract Owner has provided VALIC with written
notification of such provision. In no event shall any such Plan
provision enlarge VALIC's obligations under this Contract.
5.06 NONQUALIFIED DEFERRED COMPENSATION PLANS - If the Contract has been
issued for a nonqualified and unfunded deferred compensation plan, the
Contract Owner possesses all rights under the Contract. No Participant
or Beneficiary will have any enforceable right to make elections under
this Contract or to receive benefits from VALIC. The Contract Owner may
direct that all benefit payments be made to the Contract Owner, or
the Contract Owner may authorize VALIC to make benefit payments
directly to Participants and Beneficiaries as the Contract Owner's
payment agent under the Plan. The Contract Owner may also authorize
VALIC to follow Participant requests with regard to the allocation of
Purchase Payments among Investment Options, transfers among Investment
Options, and other elective rights provided by this Contract. If the
Contract Owner authorizes VALIC to act as payment agent under the Plan
or to follow Participant requests, the Contract Owner may revoke or
modify that authorization at any time without prior notice to
Participants.
17
UITG-194 OR0GXSTH
<PAGE> 18
SECTION 6 - GENERAL PROVISIONS
6.01 PARTICIPANT CERTIFICATES - We will issue certificates to each
Participant unless this Contract is issued with respect to a
nonqualified and unfunded deferred compensation plan. Each certificate
will set forth the benefits to which the Participant is entitled under
the Contract. Certificates are not a part of this Contract.
6.02 ASSIGNMENT - This Contract cannot be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of
an obligation. The benefits, values, and rights under this Contract
are not subject to any creditor claims to the fullest extent permitted
by law. This Contract and its rights cannot be transferred to anyone
other than Us, except as provided under the Plan or under a domestic
relations order properly issued by a court of competent jurisdiction
and that complies with ERISA, if applicable. To the extent permitted
by the Code and applicable law, We will make a Cash Surrender or
Withdrawal payable to a third party upon the Participant's request.
6.03 VESTING - Except as may be provided in the Plan, the Participant's
rights under this Contract are fully vested and nonforfeitable.
Separate Account A holds all assets for Variable Investment Options
for the exclusive benefit of Participants, Beneficiaries, and other
holders of annuity contracts.
6.04 WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
6.05 CHANGE OF CONTRACT - We may change this Contract to the extent it is
required or deemed advisable to do so in order to conform the Contract
to applicable law. In addition, upon at least 30 days written notice
to the Contract Owner, we may make other changes to this Contract that
will apply only to individuals who become Participants after the
effective date of such change. All changes We make will be subject to
any applicable regulatory requirements.
6.06 FUTURE PARTICIPANTS - We may at our discretion curtail or prohibit new
Participants under this Contract upon written notice to the Contract
Owner.
6.07 REPORTS - We will send the Participant a Separate Account financial
report twice each year if the Participant has values in any Variable
Investment Option.
We will send to the Participant, at least annually, a statement showing
the dollar value of all investment options, investment performance
since the prior statement, and as applicable, the number and value of
any Variable Accumulation Units credited to the Participant's Account.
All statements will be mailed within two months of the date of the
information.
6.08 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of this Contract's participation
in the Separate Account through one or more Variable Investment
Options, We will vote those shares as instructed. The Participant, or
the Beneficiary, if the Participant has died, will have the voting
instruction rights prior to the Annuity Date. The annuity payee will
have the voting instruction rights on and after the Annuity Date.
6.09 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate Account for any period when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday closings);
(b) when trading on the Exchange is restricted; (c) when an emergency
prevents disposal of securities held in the Separate Account or it is
not reasonably practicable to determine the value of the Separate
Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
6.10 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
6.11 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that the Participant and any payee is alive on the date any benefit
payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
6.12 SUBSTITUTION OF INVESTMENT FUND SHARES - If shares of a particular
Investment Fund are not available or if, in the judgment of VALIC,
such shares are no longer appropriate for a Variable Investment
Option, shares of another Investment Fund may be substituted for the
Investment Fund shares already held under the Variable Investment
Option and for those to be purchased by future Purchase Payments or
transfers under this Contract. In the event any substitution occurs,
VALIC will notify the Contract Owner within five days.
6.13 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under this Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
18
UITG-194 OR0GXSTI
<PAGE> 19
6.14 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income, gains or losses.
19
UITG-194 OR0GXSTJ
<PAGE> 1
EXHIBIT 4(b)(ii)
(LOGO) The Variable Annuity
VALIC Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
- - --------------------------------------------------------------------------------
* An American General Company
ANNUITANT:
OWNER:
DATE OF ISSUE: ANNUITY DATE:
CONTRACT NUMBER: DATE OF BIRTH:
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
See Index on Page 2
o MAINTENANCE CHARGE - There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each quarter and is assessed
only if any portion of the Accumulation Value was applied to one or more
Variable Investment Options during that quarter. See Section 2.04 for a
complete description.
o SEPARATE ACCOUNT CHARGE - There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily net
asset value of the Separate Account, based upon the Variable Investment
Option to which assets are allocated. This charge only applies to assets
under Variable Investment Options. See Section 2.05 for a complete
description.
o CASH SURRENDER OR WITHDRAWAL CHARGE - There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03, 4.04 and 4.05 for a complete description and conditions
under which there is no charge.
The conditions and provisions on this and the following pages are the entire
legal Contract between VALIC and the Owner. No agent has the authority to
change this Contract or waive any of its provisions. Only the President or a
Vice President of VALIC may change this Contract. Any such changes must be in
writing. All conditions and provisions are subject to applicable state laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ CYNTHIA A. TOLEN /s/ S.D. BICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
NOTICE OF TWENTY DAY RIGHT TO EXAMINE CONTRACT
YOU MAY CANCEL THIS CONTRACT BY DELIVERING OR MAILING A WRITTEN NOTICE TO: THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, 2929 ALLEN PARKWAY, HOUSTON, TEXAS
77019, AND BY RETURNING THE CONTRACT BEFORE MIDNIGHT OF THE TWENTIETH (20) DAY
AFTER THE DATE YOU RECEIVE THE CONTRACT. NOTICE GIVEN BY MAIL AND RETURN OF THE
CONTRACT BY MAIL ARE EFFECTIVE ON BEING POSTMARKED, PROPERLY ADDRESSED AND
POSTAGE PREPAID. VALIC WILL RETURN ALL PAYMENTS ALLOCATED TO THE CONTRACT
WITHIN TEN DAYS AFTER IT RECEIVES NOTICE OF CANCELLATION AND THE RETURNED
POLICY.
INDIVIDUAL FIXED AND VARIABLE NON-QUALIFIED DEFERRED ANNUITY CONTRACT
- NON-PARTICIPATING -
UITN-194 NR0IXST1
<PAGE> 2
INDEX
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . 3
SECTION 2 CONTRACT AND PURCHASE PAYMENTS . . . . . 3
2.01 Incontestability . . . . . . . . . . . . 3
2.02 Minimum Contract Value . . . . . . . . . 3
2.03 Purchase Payments . . . . . . . . . . . . 3
2.04 Maintenance Charge . . . . . . . . . . . 3
2.05 Separate Account Charge . . . . . . . . . 3
SECTION 3 INVESTMENT OPTIONS . . . . . . . . . . . 4
3.01 Fixed Interest Options . . . . . . . . . 4
3.02 Variable Investment Options . . . . . . . 4
3.03 Accumulation Unit . . . . . . . . . . . . 4
3.04 Accumulation Unit Value . . . . . . . . . 4
3.05 Transfers During the Accumulation Period. 4
3.06 Transfers During the Annuity Period . . . 5
SECTION 4 BENEFITS . . . . . . . . . . . . . . . . 6
4.01 Cash Surrender . . . . . . . . . . . . . 6
4.02 Withdrawals . . . . . . . . . . . . . . . 6
4.03 Charges for Cash Surrender or Withdrawal. 6
4.04 No Charge Systematic Withdrawals . . . . 6
4.05 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted . . . 6
4.06 Annuity Period . . . . . . . . . . . . . 7
4.07 Starting Annuity Income Benefits . . . . 7
4.08 Partial Annuitization . . . . . . . . . . 7
4.09 Minimum Annuity Payments . . . . . . . . 7
4.10 Misstatement of Age or Sex . . . . . . . 7
4.11 Annuity Income (Payment) Options . . . . 7
4.12 Fixed or Variable Annuity Basis . . . . . 8
4.13 Variable Annuity Payments . . . . . . . . 8
4.14 Assumed Investment Rate (AIR) . . . . . . 8
4.15 Annuity Units and Annuity Unit Value . . 8
4.16 Betterment of Rates . . . . . . . . . . . 8
4.17 Annuity Rate Tables . . . . . . . . . . . 8-17
4.18 Beneficiaries . . . . . . . . . . . . . . 17
4.19 Contingent Owner . . . . . . . . . . . . 17
4.20 Death Payment Provisions . . . . . . . . 17
SECTION 5 GENERAL PROVISIONS . . . . . . . . . . . 20
5.01 Different Owner and Annuitant . . . . . . 20
5.02 Assignment . . . . . . . . . . . . . . . 20
5.03 Written Notices to Us . . . . . . . . . . 20
5.04 Change of Contract . . . . . . . . . . . 20
5.05 Reports . . . . . . . . . . . . . . . . . 20
5.06 Voting Rights . . . . . . . . . . . . . . 20
5.07 Suspension of Payments . . . . . . . . . 20
5.08 Deferral of Cash Surrender or Withdrawal. 20
5.09 Proof of Survival . . . . . . . . . . . . 20
5.10 Substitution of Investment Fund Shares. . 20
5.11 Minimum Benefit . . . . . . . . . . . . 20
5.12 Separate Account . . . . . . . . . . . . 20
</TABLE>
2
UITN-194 NR0IXST2
<PAGE> 3
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase
Payment and the Annuity Date.
ACCUMULATION VALUE - equals the sum of the values of Your Fixed interest
Options and Variable Investment Options that have not been applied to provide
annuity payments.
ANNUITANT - the person on whose life VALIC will base payments during the
Annuity Period. See Section 5.01 which explains when the Annuitant and Owner
may be different persons.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The Variable
Annuity Life Insurance Company.
CONTRACT YEAR - the twelve month period starting with the date of issue and
subsequently with each anniversary of that date.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account.
HOME OFFICE - the principal office of VALIC.
OWNER - the person(s) or entity designated as Owner on page one. Any
reference to "You" or "Your" means Owner.
PURCHASE PAYMENT - an amount paid to VALIC in consideration for the benefits
of this Contract.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of Your Contract less any charges.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - This Contract is incontestable. This Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM CONTRACT VALUE - We can end the Contract and pay the Surrender
Value to You if, during the Accumulation Period, the total
Accumulation Value for this Contract falls below $300 and there are no
Purchase Payments for two Contract Years.
2.03 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period. We require no payment beyond the first. We
will not penalize You if any scheduled payments are omitted or
stopped.
If only one Purchase Payment is to be made, it must be at least
$1,000. Multiple payments must be at least $30 each. VALIC may waive
this minimum.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to Your
directions.
2.04 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which any
Variable Investment Option Accumulation Value is credited to this
Contract. We will not deduct the charge for any calendar quarter if
the Accumulation Value for this Contract is credited only to the Fixed
Interest Options throughout the quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among Your Variable Investment Options. However,
if You surrender the Contract or transfer all Variable Accumulation
Values to a Fixed Interest Option, the full quarterly charge will be
deducted at the time of surrender or transfer.
The charge is $3.75 for each quarter.
2.05 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option. The rate is fixed and may not be increased by Us.
3
UITN-194 NR0IXST3
<PAGE> 4
SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by You. We reserve the right to limit allocations among
Investment Options to seven at any one time. Each selection must be whole
percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately to
amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Separate Account A holds all Variable Investment
Option assets exclusively for the benefit of Owners, Annuitants and
Beneficiaries. Investment returns on Variable Investment Options may
be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying investment Fund.
Accumulation Units may be credited to Your Contract due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited to Your Contract is determined by dividing
the dollar amount of the transaction by the Accumulation Unit Value
for that Variable Investment Option at the next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, You may transfer amounts among Investment Options, except as
provided below.
(a) We reserve the fight to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30
days apart.
(c) Transfers from the Short Term Fixed Account. After a transfer
to the Short Term Fixed Account, You may not make any transfer
from the Short Term Fixed Account for 90 days. We may change this
transfer restriction at any time. However, the transfer
restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. You may transfer up to 20%
of the Accumulation Value allocated to Fixed Account Plus during
each Contract Year. If multiple transfers are made in a Contract
Year, the percentages of the Accumulation Value transferred each
time will be added together to determine the 20% transfer limit
for that Contract Year. For each transfer, the percentage
transferred is the ratio of the amount transferred to the portion
of the Accumulation Value allocated to the Fixed Account Plus
immediately prior to the transfer. However, if following a 20%
transfer, the remaining amount allocated to Fixed Account Plus
would be less than $500, You may also transfer the
remaining amount.
4
UITN-194 NR0IXST4
<PAGE> 5
3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, You
may transfer Annuity Unit values among the Variable Investment
Options. You may also transfer Annuity Unit values from the Variable
Investment Options underlying a Variable Annuity to provide a Fixed
Annuity. Transfers must be at least 365 days apart. We will not permit
any transfer from a Fixed Annuity during the Annuity Period.
5
UITN-194 NR0IXST5
<PAGE> 6
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - You may surrender this Contract at any time before
the Annuity Date for a cash payment equal to the Surrender Value as of
the date We receive the request at the Home Office. The Surrender
Value is the Accumulation Value less any charges, as described below.
Upon surrender for cash, all of Our obligations under this Contract
will be terminated.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable Investment
Options or withdrawn.
4.02 WITHDRAWALS - You may withdraw a portion of Your account balance in
cash at any time before the Annuity Date. We may deduct a charge as
described below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1) the
amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat all withdrawals as
withdrawals of Purchase Payments before any earnings. We treat
the most recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Contract Year. Subject to the provisions of
Section 4.04, in any Contract Year, You may withdraw up to 10% of
the Accumulation Value without a charge. The surrender charge
will be applicable only to the amount withdrawn that exceeds 10%.
The percentage withdrawn will be calculated as the ratio of the
amount withdrawn to the Accumulation Value immediately prior to
the withdrawal. If multiple withdrawals are made in a Contract
Year, the percentages withdrawn for each withdrawal will be added
together to determine whether the 10% limit has been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time.
However, no change in availability will result in any charge against
amounts withdrawn under a previously elected NCSW. A NCSW must meet
the following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to You.
(3) The NCSW is not available in any Contract Year You have in
effect any other systematic withdrawal (with or without charge).
(4) Once you begin a NCSW You may not change the terms of the
election. However, You may revoke the election at any time. Once
the election is revoked You may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Contract Year the NCSW has been, or is in
effect. Distributions under the NCSW may not begin in a Contract
Year in which You have taken one or more Section 4.03
withdrawals without charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The
annual dollar amount chosen must be the same for each year
the NCSW is in effect and cannot be greater than 20% of
the Accumulation Value at the time of the NCSW election.
(b) Specified Percentage - an annual specified percentage.
The annual specified percentage chosen cannot be greater
than 20% of the Accumulation Value.
(c) Specified Period - payments for a designated time
period. We will determine each payment by dividing the
Accumulation Value by the number of payments remaining
in the elected period.
4.05 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges under any of the following
conditions:
(a) You elect an Annuity Income Option; or
(b) Payment of any death benefit; or
(c) You have become totally and permanently disabled. This means
that You are unable, because of physical or mental impairment, to
perform the material and substantial duties of any occupation for
which You are suited by means of education, training or
experience. The impairment must have been in existence for
more than 180 days to qualify for this benefit.
Such impairment must be expected to result in death or be
long-standing and indefinite.
We require proof of disability. We will accept a certified
Social Security finding of disability or a doctor's
verification; or
6
UITN-194 NR0IXST6
<PAGE> 7
(d) The withdrawal and any earlier withdrawals during the same
Contract Year do not exceed 10% of the Accumulation Value (see
Section 4.03); or
(e) On any amount You withdraw with respect to the NCSW described
in Section 4.04; or
(f) No Purchase Payments have been made in the five years preceding
the date of the surrender or withdrawal; or
(g) You are at least 59 1/2 years old and Your Contract is at least
seven years old; or
(h) Your Contract is fifteen or more years old.
We may waive any withdrawal or surrender charge attributable to
Purchase Payments received during specific periods of time, and under
conditions and limitations set by Us. Any such waiver will be made by
Resolution of the Board of Directors. Notice of the right to surrender
without charge will be mailed to affected contractholders when such
waiver is declared by the Board of Directors.
4.06 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
Your Accumulation Value is applied under an Annuity Income Option. You
may change the Annuity Date shown on the first page of Your Contract
by giving Us at least 30 days notice. The Annuity Date may not exceed
the Annuitant's 85th birthday. The selected Annuity Date may be the
first day of any calendar month, but if You choose a life income
option, the Annuity Date may not precede the Annuitant's 50th birthday
without Our permission.
4.07 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, You must choose one of the Annuity Income Options in
Section 4.11 and provide acceptable proof of age for any person whose
age is taken into account under a life income option. If You fall to
select another Annuity Income Option, annuity payments will be made on
the basis of the Second Option with payments guaranteed for a ten-year
period, commencing on the Annuity Date.
4.08 PARTIAL ANNUITIZATION - You may choose to apply less than the full
Accumulation Value under an Annuity Income Option and may choose
different Annuity Dates and different Annuity Income Options for
different portions of the Accumulation Value. Therefore, the Contract
may, at times, be in both an Accumulation Period and an Annuity
Period. If You choose to do this, the provisions of the Contract
relating to the Accumulation Period and the Annuity Period will be
applied as though there were separate Contracts.
4.09 MINIMUM ANNUITY PAYMENTS - You may not choose any Annuity Income Option
if the resulting initial payment would be less than $25 under either a
Fixed or Variable Annuity. We reserve the right to convert monthly
payments to quarterly, semi-annual or annual payments so the initial
payment will be at least $25.
4.10 MISSTATEMENT OF AGE OR SEX - if annuity payments depend upon an
individual's survival and the date of birth or the sex of any
individual was misstated, We will adjust the remaining payments. The
amount remaining to be paid will be the amount that should have been
paid with the correct information. We will credit or charge the amount
of any underpayment or overpayment against the next succeeding payment
or payments, if any remain. We reserve the right to collect any
overpayment directly from the payee.
4.11 ANNUITY INCOME (PAYMENT) OPTIONS - You may choose to receive payments
under any of the Annuity Income Options below or any other option
agreed to by VALIC. Any option chosen must comply with applicable state
and federal laws and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income
payable during the Annuitant's life. All payments cease at the
Annuitant's death with no further amounts payable.
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An Income payable during the Annuitant's life. If, at the
Annuitant's death, We have made payments for fewer than the number of
years selected, We will continue payments to the Beneficiary for the
remainder of the guarantee period.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An
income payable during the Annuitant's life. Payments cease at the
Annuitant's death. However, the Beneficiary may receive an additional
payment.
For payments on a Fixed Annuity basis, the additional payment, if any,
will be the Accumulation Value applied to this option less the total
of all prior payments.
For payments on a Variable Annuity basis, the additional payment, if
any, will be the current value of the number of Annuity Units credited
at the Annuity Date less the number of Annuity Units that have been
paid. For this purpose, the number of Annuity Units credited equals
the Accumulation Value applied to this option divided by the Annuity
Unit Value at the date used to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable
during the joint lives of two Annuitants and thereafter during the
life of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable
for a selected number of years between five and thirty. This option is
available for Fixed Annuities only.
7
UITN-194 NR0IXST7
<PAGE> 8
4.12 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen Variable
Investment Options.
You may elect to receive payments under any annuity option as a Fixed
Annuity, a Variable Annuity, or a combination Fixed and Variable
Annuity. If You make no election, amounts in Fixed Interest Options
will provide a Fixed Annuity and amounts in Variable Investment
Options will provide a Variable Annuity.
4.13 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable Investment Option remains constant unless
You transfer a portion of the annuity benefit between the Variable
Investment Options or from a Variable Annuity to a Fixed Annuity.
However, the dollar amount payable is not fixed and may change from
month to month.
4.14 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, You must choose an Assumed Investment
Rate (AIR). The AIR is the assumed rate of return used to determine
the first annuity payment for a Variable Annuity Option. Rates of 3%,
3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if permitted by
state law and regulations. If no AIR is chosen, the AIR will be 3 1/2%.
A higher AIR will result in a higher initial payment. Choice of a
lower AIR will result in a lower initial payment. Payments will
increase whenever the actual return exceeds the chosen AIR. Payments
will decrease whenever the actual return is less than the chosen AIR.
4.15 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed at
$1.00.
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option
at the immediately preceding computation date
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised
to the power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
4.16 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments. If a commutation (cash out of remaining annuity
payments) is allowed, the rates previously used to calculate the
annuity payments will be used for the commutation request.
4.17 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to
purchase a first monthly payment of $1.00. Quarterly, semiannual, and
annual payments may also be selected.
The amount of each payment will depend upon the Annuitant's adjusted
age and Annuitant's sex at the time the first payment is due. Adjusted
age will be determined in accordance with the following:
Calendar Year Adjusted Age is
of Birth Actual Age Minus
------------- ----------------
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
Actual age, as used above, means the Annuitant's age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.14) and to determine the minimum guarantees for Fixed
Annuities. Tables B, C, and D are to be used for Variable Annuities
with 3 1/2%, 4 1/2% and 5% AIRs respectively.
8
UITN-194 NR0IXST8
<PAGE> 9
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2, and 3 - Single Life Annuities - Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
------------------------------------------------------------------------------------------------ ----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $234.40 $256.13 $235.00 $256.40 $236.87 $257.29 $240.08 $258.94 $244.85 $261.55 $246.89 $263.37
51 230.20 252.09 230.84 252.38 222.85 253.36 236.30 255.16 241.46 258.02 243.28 259.83
52 225.93 247.97 226.63 243.29 228.78 249.36 232.49 251.33 238.08 254.46 229.63 256.21
53 221.81 243.76 222.36 244.12 224.66 245.28 228.65 247.44 234.71 250.86 235.93 252.54
54 217.22 239.47 218.02 239.86 220.48 241.13 224.79 243.50 231.36 247.24 222.18 248.81
55 212.76 235.10 213.62 235.52 216.26 236.91 220.91 239.51 228.04 243.60 228.39 245.01
56 208.23 230.64 209.14 231.10 211.98 232.62 217.02 235.47 224.77 239.96 224.54 241.16
57 203.62 226.10 204.60 226.50 207.65 228.27 213.12 231.38 221.54 236.31 220.65 237.25
58 198.93 221.46 199.98 222.01 203.27 223.85 209.24 227.26 218.38 232.66 216.71 233.28
56 194.16 216.74 195.28 217.35 198.86 219.36 205.36 223.10 215.29 229.05 212.71 229.26
60 189.31 211.94 190.52 212.60 194.41 214.82 201.52 218.92 212.29 225.46 208.65 225.18
61 184.38 207.05 185.69 207.78 189.95 210.22 197.71 214.73 209.39 221.93 204.54 221.04
62 179.37 202.08 180.80 202.89 185.48 205.57 193.96 210.53 206.61 218.46 200.36 216.84
63 174.31 197.05 175.88 197.94 181.01 200.89 190.27 206.34 203.96 215.08 196.10 212.58
64 169.20 191.95 170.92 192.93 176.57 196.17 186.68 202.18 201.45 211.80 191.97 208.26
65 164.06 186.79 165.97 187.87 172.17 191.42 183.18 198.06 199.09 208.64 187.72 203.85
66 158.90 181.57 161.01 182.76 167.82 186.68 179.81 193.99 196.89 205.61 183.39 199.37
67 153.73 176.29 156.06 177.60 163.54 181.89 176.57 189.99 194.86 202.74 179.26 194.78
68 148.57 170.95 151.14 172.29 159.35 177.13 173.47 186.07 193.01 200.04 174.96 190.35
69 143.43 165.55 146.27 167.13 155.25 172.38 170.53 182.26 191.32 197.53 170.59 185.72
70 138.31 160.09 141.44 161.82 151.26 167.66 167.77 178.58 189.80 195.21 166.51 181.19
71 133.23 154.57 136.68 156.49 147.39 162.98 165.18 175.04 188.45 193.10 162.20 176.54
72 128.19 149.00 131.99 151.15 143.57 158.37 162.77 171.67 187.26 191.20 157.82 171.80
73 123.21 143.41 127.38 145.81 140.09 153.85 160.55 168.49 186.22 189.52 153.85 167.29
74 118.28 137.81 122.86 140.50 136.67 149.45 158.53 165.52 185.31 188.05 149.58 162.58
75 113.41 132.21 118.44 135.22 133.42 145.19 156.68 162.78 184.54 186.78 145.24 157.76
76 108.62 126.64 114.13 130.03 130.26 141.10 155.03 160.27 183.89 185.70 141.43 153.37
77 103.91 121.11 109.95 124.92 127.49 137.18 153.54 158.00 183.34 184.79 137.25 148.63
78 99.29 115.64 105.91 119.90 124.81 133.48 152.23 155.99 182.89 184.04 133.00 144.22
79 94.79 110.24 102.03 115.01 122.34 129.99 151.08 154.21 182.53 183.43 129.41 139.63
80 90.40 104.92 98.31 110.26 120.07 126.75 150.08 152.66 182.22 182.93 125.38 134.94
81 86.14 99.70 94.78 105.68 117.99 123.77 149.22 151.33 182.01 182.54 121.28 130.79
82 82.03 94.60 91.43 101.27 116.10 121.05 148.49 150.20 181.82 182.23 117.92 126.32
83 78.07 89.63 88.27 97.07 114.40 118.59 147.87 149.25 181.70 181.99 114.08 121.77
84 74.27 84.81 85.31 93.08 112.88 116.39 147.35 148.46 181.60 181.81 110.17 117.98
85 70.64 80.16 82.54 89.34 111.52 114.46 146.93 147.80 181.53 181.67 107.03 113.74
</TABLE>
9
UITN-194 NR0IXST9
<PAGE> 10
TABLE A (CONTINUED)
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
- - --------------------------------------------------------------------------------- -----------------------------
Same
Female 7 6 5 4 3 2 1 Age 1 2 3
- - ------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $293.82 $291.43 $289.05 $286.69 $284.34 $282.03 $279.74 $277.49 $275.28 $273.11 $271.00
51 290.54 288.09 285.65 283.22 280.82 278.44 276.09 273.79 271.52 269.30 267.14
52 287.18 284.66 282.16 279.67 277.20 274.76 272.36 269.99 267.67 265.40 283.18
53 283.73 281.15 278.58 276.02 273.49 270.99 268.53 266.11 263.73 261.40 259.13
54 280.19 277.54 274.90 272.29 269.69 267.13 264.61 262.12 259.69 257.30 254.98
55 276.56 273.84 271.14 268.45 265.80 263.17 260.59 258.04 255.55 253.11 250.73
56 272.84 270.05 267.28 264.53 261.81 259.12 256.47 253.86 251.31 248.82 246.38
57 269.02 266.16 263.32 260.51 257.72 254.96 252.25 249.58 246.97 244.42 241.93
58 285.11 262.18 259.27 256.38 253.53 250.71 247.93 245.20 242.53 239.92 237.38
59 261.10 258.10 255.12 252.16 249.24 246.35 243.51 240.72 237.98 235.32 232.73
60 257.00 253.92 250.87 247.84 244.84 241.89 238.98 236.13 233.34 230.61 227.97
61 252.79 249.64 246.51 243.41 240.35 237.32 234.35 231.44 228.59 225.61 223.11
62 248.49 245.26 242.06 238.89 235.75 232.66 229.62 226.64 223.74 220.91 218.16
63 244.09 240.78 237.51 234.26 231.05 227.89 224.79 221.75 218.79 215.91 213.11
64 239.58 236.20 232.85 229.53 226.26 223.03 219.86 216.77 213.75 210.82 207.97
65 234.98 231.53 228.10 224.71 221.36 218.07 214.85 211.70 208.62 205.64 202.75
66 230.29 226.75 223.25 219.79 216.38 213.03 209.74 206.53 203.41 200.37 197.43
67 225.49 221.89 218.31 214.78 211.31 207.89 204.55 201.29 198.11 195.03 192.04
68 220.61 216.93 213.28 209.69 206.15 202.68 199.28 195.97 192.74 189.61 186.58
69 215.63 211.88 208.17 204.51 200.92 197.39 193.93 190.57 187.29 184.12 181.05
70 210.57 206.75 202.98 199.26 195.60 192.02 188.51 185.09 181.77 178.56 175.47
71 205.43 201.55 197.71 193.93 190.22 186.58 183.02 179.56 176.20 172.96 169.85
72 200.21 196.27 192.37 188.53 184.76 181.07 177.46 173.96 170.57 167.31 164.19
73 194.92 190.91 186.96 183.06 179.24 175.50 171.85 168.32 164.91 161.64 158.52
74 189.56 185.49 181.47 177.52 173.65 169.87 166.20 162.65 159.23 155.95 152.83
75 184.13 180.00 175.93 171.93 168.02 164.21 160.51 156.95 153.53 150.26 147.16
76 178.63 174.45 170.32 166.28 162.34 158.51 154.81 151.25 147.84 144.59 141.50
77 173.07 168.84 164.68 160.61 156.64 152.80 149.10 145.55 142.16 138.93 135.88
78 167.46 163.19 158.99 154.90 150.94 147.10 143.41 139.88 136.51 133.32 130.31
79 161.81 157.50 153.29 149.20 145.23 141.41 137.75 134.24 130.91 127.76 124.80
80 156.13 151.81 147.59 143.50 139.55 135.76 132.12 128.66 125.38 122.29 119.39
81 150.44 146.11 141.91 137.84 133.91 130.15 126.56 123.15 119.93 116.90 114.08
82 144.76 140.44 136.25 132.21 128.22 124.61 121.08 117.73 114.58 111.63 108.89
83 139.09 134.79 130.64 126.64 122.81 119.16 115.69 112.42 109.36 106.50 103.85
84 133.46 129.20 125.09 121.15 117.38 113.80 110.42 107.24 104.27 101.51 98.96
85 127.89 123.67 119.62 115.75 112.06 108.57 105.28 102.20 99.34 96.69 94.26
</TABLE>
10
UITN-194 NR0IXSTA
<PAGE> 11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2, and 3 -- Single Life Annuities -- Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
------------------------------------------------------------------------------------------------ ----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $219.33 $238.30 $219.91 $238.56 $221.71 $239.42 $224.73 $240.97 $229.11 $243.36 $229.83 $244.34
51 215.67 234.85 216.30 235.14 218.24 236.08 221.48 237.77 226.22 240.40 226.68 241.31
52 211.98 231.32 212.64 231.64 214.71 232.66 218.20 234.52 223.33 237.39 223.47 238.21
53 208.17 227.70 208.91 228.05 211.13 229.17 214.88 231.20 220.44 234.34 220.21 235.04
54 204.32 224.00 205.11 224.38 207.48 225.61 211.53 227.82 217.56 231.27 216.68 231.81
55 200.40 220.21 201.24 220.63 203.78 221.96 208.15 224.40 214.70 228.16 213.50 228.50
56 196.40 216.33 197.29 216.79 200.02 218.25 204.76 220.92 211.87 225.04 210.05 225.13
57 192.31 212.36 193.27 212.86 196.20 214.46 201.35 217.39 209.08 221.91 206.54 221.89
58 188.14 208.30 189.16 208.84 192.33 210.61 197.94 213.82 206.34 218.78 202.96 218.19
59 183.08 204.15 184.98 204.74 188.42 206.68 194.53 210.20 203.65 215.66 199.31 214.61
60 179.52 199.91 180.71 200.56 184.46 202.69 191.14 206.55 201.03 212.56 195.59 210.96
61 175.09 195.57 176.37 196.29 180.47 198.64 187.77 202.88 198.50 209.49 191.94 207.24
62 170.57 191.16 171.97 191.95 176.47 194.53 184.44 199.19 196.06 206.47 188.17 203.45
63 165.98 188.66 167.52 187.54 172.46 190.37 181.17 195.50 193.74 203.52 184.33 199.57
64 161.33 182.09 163.03 183.06 168.46 186.17 177.97 191.82 191.53 200.66 180.58 195.61
65 156.65 177.45 158.52 178.52 164.49 181.93 174.85 188.17 189.45 197.88 176.72 191.70
66 151.92 172.74 153.99 173.91 160.56 177.67 171.83 184.55 187.52 195.23 172.80 187.65
67 147.18 167.96 149.47 169.25 156.67 173.38 168.92 180.99 185.72 192.70 169.00 182.52
68 142.43 163.11 144.96 164.52 152.86 169.09 166.14 177.49 184.08 190.32 165.09 179.48
69 137.58 158.18 140.47 159.73 149.12 164.79 163.50 174.08 182.59 188.10 161.12 175.28
70 132.94 153.18 136.02 154.89 145.47 160.51 161.00 170.78 181.25 186.05 157.08 170.99
71 128.23 148.11 131.62 150.01 141.94 156.25 158.66 167.60 180.05 184.18 153.38 166.88
72 123.54 142.99 127.27 145.10 138.52 152.05 156.49 164.56 179.98 182.49 149.41 162.57
73 118.89 137.82 122.99 140.18 135.23 147.92 154.48 161.69 178.06 181.00 145.37 158.16
74 114.27 132.62 118.77 135.27 132.08 143.89 152.64 159.05 177.25 179.69 141.74 154.04
75 109.71 127.41 114.65 130.39 129.08 139.08 150.97 156.51 176.56 178.56 137.80 149.67
76 105.20 122.22 110.62 125.55 126.25 136.20 149.46 154.24 175.98 177.60 133.82 145.20
77 100.76 117.04 106.70 120.78 123.59 132.59 148.11 152.18 175.49 176.79 130.31 141.18
78 96.40 111.91 102.91 116.10 121.12 129.17 146.92 150.34 175.09 176.12 126.48 136.78
79 92.13 106.82 99.25 111.52 118.82 125.94 145.87 148.72 174.76 175.57 122.60 132.70
80 87.96 101.80 95.75 107.05 116.71 122.94 144.95 147.31 174.50 175.12 119.25 126.46
81 83.91 98.86 92.41 102.74 114.77 120.16 144.17 146.09 174.29 174.77 115.58 124.15
82 79.99 92.02 89.24 98.58 113.02 117.63 143.49 145.06 174.14 174.49 111.88 120.28
83 76.21 87.29 86.25 94.60 111.43 115.34 142.93 144.19 174.02 174.28 108.68 116.20
84 72.57 82.70 83.44 90.83 110.00 113.29 142.46 143.47 173.93 174.11 105.23 112.07
85 69.09 78.25 80.80 87.28 108.73 111.48 142.07 142.87 173.87 173.99 101.73 108.49
</TABLE>
11
UITN-194 NR0IXSTB
<PAGE> 12
TABLE B (CONTINUED)
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
- - --------------------------------------------------------------------------------- -----------------------------
Same
Female 7 6 5 4 3 2 1 Age 1 2 3
- - ------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $270.33 $268.39 $266.46 $264.53 $262.61 $260.70 $258.82 $256.95 $255.11 $253.31 $251.54
51 267.66 265.66 263.66 261.67 259.69 257.72 255.79 253.87 251.97 250.12 248.29
52 264.90 262.84 260.78 258.73 256.69 254.67 252.67 250.50 248.74 245.83 244.95
53 262.06 259.93 257.81 255.70 253.60 251.52 249.45 247.42 245.42 243.45 241.52
54 259.13 256.94 254.75 252.58 250.41 248.27 246.15 244.06 241.99 239.97 237.99
55 256.11 253.85 251.60 249.36 247.14 244.93 242.75 240.59 238.47 236.39 234.36
56 253.00 250.68 248.36 246.05 243.76 241.49 239.25 237.03 234.85 232.71 230.62
57 249.80 247.41 245.02 242.65 240.29 237.95 235.64 233.37 231.12 226.93 226.78
58 246.50 244.04 241.59 239.14 236.72 234.31 231.94 229.60 227.30 225.04 222.84
59 243.11 240.58 238.05 235.54 233.04 230.57 228.13 225.73 223.36 221.05 218.79
60 229.62 237.01 234.41 231.83 229.26 226.72 224.22 221.75 219.32 216.95 214.64
61 236.03 233.35 230.68 228.02 225.38 222.77 220.19 217.66 215.17 212.74 210.38
62 232.34 229.58 226.83 224.10 221.39 218.71 216.07 213.47 210.92 208.43 206.01
63 228.55 225.71 222.89 220.08 217.30 214.55 211.84 209.17 206.57 204.02 201.55
64 224.66 221.74 218.84 215.96 213.10 210.26 207.50 204.78 202.11 199.51 196.98
65 220.66 217.67 214.69 211.73 208.80 205.91 203.07 200.28 197.56 194.90 192.32
66 216.57 213.49 210.43 207.40 204.40 201.45 198.54 195.69 192.91 190.20 187.58
67 212.37 209.22 206.08 202.98 199.91 198.89 193.92 191.01 188.17 185.41 l82.72
68 208.07 204.84 201.64 198.46 195.33 192.24 189.21 186.24 183.34 180.52 177.79
69 203.58 200.38 197.10 193.85 190.65 187.50 184.41 181.38 178.43 175.56 172.78
70 199.20 195.82 192.47 189.16 185.89 182.68 179.52 176.44 173.43 170.52 167.70
71 194.62 191.17 187.75 184.37 181.04 177.77 174.55 171.42 168.37 165.41 162.57
72 189.96 186.44 182.95 179.51 176.11 172.78 169.51 166.33 163.24 160.25 157.39
73 185.22 181.63 178.07 174.56 171.10 167.71 164.40 161.17 158.06 155.05 152.17
74 180.39 176.73 173.11 169.52 166.02 162.58 159.22 155.97 152.83 149.82 146.93
75 175.48 171.75 168.07 164.44 160.87 157.39 154.01 150.73 147.58 144.56 141.68
76 170.50 166.70 162.96 159.28 155.67 152.16 148.75 145.47 142.31 139.30 136.42
77 165.44 161.59 157.79 154.06 150.43 146.89 143.48 140.19 137.04 134.04 131.19
78 160.31 156.41 157.57 148.81 145.16 141.62 138.20 134.92 131.78 128.80 125.98
79 155.13 151.18 147.32 143.54 139.88 136.33 132.93 129.66 126.55 123.60 120.82
80 149.91 145.93 142.04 138.26 134.60 131.07 127.68 124.44 121.37 118.46 115.73
81 144.65 140.66 136.77 132.99 129.34 125.83 122.47 119.28 116.25 113.40 110.73
82 139.39 135.39 131.50 127.74 124.12 120.64 117.33 114.18 111.21 108.42 105.83
83 134.12 130.13 126.26 122.52 118.94 115.51 112.25 109.17 106.27 103.56 101.05
84 128.88 124.91 121.07 117.37 113.84 110.47 107.27 104.27 101.45 98.83 96.41
85 122.66 119.73 115.93 112.29 108.82 105.52 102.41 99.49 96.77 94.25 91.93
</TABLE>
12
UITN-194 NR0IXSTC
<PAGE> 13
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2, and 3 -- Single Life Annuities -- Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
------------------------------------------------------------------------------------------------ ----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $193.60 $208.22 $194.16 $208.47 $195.83 $209.27 $198.51 $210.63 $202.20 $212.66 $201.07 $212.44
51 190.82 205.68 191.43 205.96 193.22 206.53 196.09 208.33 200.09 210.54 198.63 210.19
52 187.97 203.07 188.63 203.37 190.55 204.32 193.63 205.96 197.96 208.38 196.12 207.88
53 185.05 200.37 185.76 200.70 187.82 201.74 191.14 203.63 195.83 206.18 193.56 205.50
54 182.06 197.58 182.82 197.95 185.02 199.08 188.60 201.05 193.69 203.95 190.99 203.04
55 179.00 194.71 179.81 195.11 182.16 196.35 186.03 198.51 191.56 201.68 188.31 200.51
56 175.85 191.75 176.71 192.19 179.24 193.54 183.43 195.91 189.44 199.38 185.55 197.91
57 172.61 188.70 173.53 189.18 176.25 190.66 180.81 193.26 187.33 197.07 182.72 195.22
58 169.28 185.56 170.27 186.08 173.21 187.71 178.17 190.55 155.26 194.74 179.91 192.50
59 165.85 182.32 166.91 182.89 170.10 184.68 175.52 187.80 183.21 192.40 176.98 189.69
60 162.33 178.98 163.48 179.61 166.95 181.59 172.86 185.00 181.22 190.07 173.98 186.79
61 158.71 175.55 159.95 176.24 163.76 178.42 170.22 182.17 179.27 187.75 170.92 183.81
62 155.00 172.03 156.36 172.80 160.53 175.19 167.59 179.31 177.40 185.46 167.91 180.81
63 151.21 168.42 152.70 169.27 157.28 171.89 164.98 176.43 175.60 183.20 164.77 177.71
64 147.35 164.73 148.99 165.66 154.02 168.55 162.44 173.55 173.89 181.00 161.58 174.53
65 143.42 160.95 145.23 161.98 150.77 165.15 159.94 170.67 172.27 178.87 158.32 171.26
66 139.45 157.09 141.45 158.22 147.53 161.71 157.52 167.80 170.76 176.81 155.19 168.01
67 135.43 153.15 137.64 154.39 144.32 158.23 155.17 164.96 169.36 174.85 151.90 164.64
68 131.38 149.13 133.83 150.49 141.15 154.72 152.92 162.16 168.07 172.99 148.56 161.19
69 127.32 145.01 132.02 146.51 138.04 151.19 150.77 159.42 166.90 171.25 145.16 157.64
70 123.24 140.80 126.21 142.45 134.99 147.66 148.74 156.75 165.84 169.64 141.99 154.22
71 119.15 136.51 122.43 138.34 132.01 144.13 146.82 154.17 184.89 168.17 138.60 150.60
72 115.07 132.13 118.68 134.18 129.12 140.62 145.04 151.69 164.05 166.84 135.16 146.91
73 111.01 127.69 114.97 129.98 126.33 137.16 143.39 149.35 163.31 165.66 131.95 143.36
74 106.95 123.20 111.31 125.76 123.65 133.76 141.87 147.14 162.57 164.62 128.56 139.64
75 102.92 118.68 107.70 121.55 121.10 130.45 140.49 145.09 162.12 163.72 125.14 135.85
76 98.92 114.14 104.16 117.36 118.67 127.24 139.24 143.21 161.66 152.95 121.67 132.25
77 94.96 109.59 110.71 113.20 116.39 124.16 138.12 141.51 161.26 162.31 118.60 128.48
78 91.05 105.04 97.35 109.10 114.25 121.23 137.12 139.98 160.94 161.77 115.26 124.66
79 87.20 100.52 94.10 105.06 112.27 118.45 136.25 138.63 160.68 161.33 111.88 121.06
80 83.44 96.04 90.98 101.12 110.44 115.86 135.48 137.46 160.47 160.97 108.86 117.34
81 79.76 91.60 87.99 97.28 108.76 113.46 134.82 136.44 160.30 160.69 105.67 113.56
82 76.19 87.23 85.14 93.58 107.23 111.26 134.26 126.58 160.17 160.46 102.46 109.74
83 72.73 82.94 82.45 90.02 105.85 109.27 133.78 134.85 160.08 160.29 99.22 106.47
84 69.40 78.75 79.92 88.62 104.60 107.48 133.39 134.24 160.01 160.16 96.48 102.85
85 66.19 74.68 77.54 83.42 103.49 105.90 133.06 133.73 159.96 160.06 93.47 99.21
</TABLE>
13
UITN-194 NR0IXSTD
<PAGE> 14
TABLE C (CONTINUED)
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
- - --------------------------------------------------------------------------------- -----------------------------
Same
Female 7 6 5 4 3 2 1 Age 1 2 3
- - ------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $231.64 $230.36 $229.07 $227.77 $226.47 $225.17 $223.88 $222.59 $221.31 $220.05 $218.79
51 229.84 228.51 227.16 225.82 224.48 223.11 221.77 220.42 219.10 217.79 216.49
52 227.97 226.56 225.18 223.78 222.38 220.97 219.58 218.19 216.81 215.44 214.10
53 226.02 224.58 223.13 221.67 220.21 218.75 217.30 215.86 214.43 213.01 211.61
54 224.00 222.50 220.99 219.47 217.96 216.44 214.94 213.44 211.95 210.48 209.04
55 221.90 220.34 218.77 217.19 215.62 214.05 212.48 210.93 209.39 207.88 208.36
56 219.71 218.09 216.46 214.83 213.19 211.56 209.94 208.32 206.73 205.15 293.59
57 217.44 215.76 214.06 212.37 210.67 208.98 207.29 205.62 203.96 202.33 200.72
58 215.08 213.33 211.58 209.82 208.06 206.30 204.55 202.82 201.10 199.41 197.74
59 212.64 210.82 209.00 207.17 205.34 203.52 201.71 199.91 198.14 196.38 194.66
60 210.10 208.21 206.32 204.42 202.53 200.64 198.76 196.90 195.06 193.26 191.47
61 207.46 205.51 203.54 201.58 199.61 197.65 195.71 193.78 191.88 190.01 188.17
62 204.73 202.70 200.67 198.63 196.59 194.56 192.55 190.56 188.59 186.68 184.77
63 201.90 199.80 197.68 195.57 193.46 191.37 189.28 187.23 185.20 183.21 181.25
64 198.97 196.79 194.50 192.41 190.23 188.06 185.91 183.79 181.70 179.65 177.64
65 195.94 193.68 191.41 189.15 186.89 184.65 182.44 180.25 178.09 175.98 173.91
66 192.80 190.46 188.12 185.78 183.45 181.14 178.85 176.60 174.38 172.21 170.08
67 189.57 187.15 184.72 182.31 179.91 177.53 175.17 172.85 170.57 168.33 166.14
68 186.23 183.73 181.23 178.74 176.26 173.81 171.39 169.00 166.65 164.35 162.11
69 182.78 180.20 177.63 175.06 172.52 169.99 167.50 165.05 162.64 160.26 157.98
70 179.24 176.58 173.93 171.29 168.67 168.08 163.52 161.00 158.52 156.11 153.77
71 175.60 172.86 170.13 167.42 164.73 162.06 159.43 156.85 154.32 151.86 149.47
72 171.86 169.05 166.24 163.45 160.69 157.95 155.26 152.62 150.04 147.53 145.11
73 168.03 155.13 162.25 159.39 156.55 153.75 150.99 148.30 145.68 143.14 140.69
74 164.10 161.13 158.17 155.23 152.32 149.46 146.65 143.91 141.25 138.68 136.21
75 160.07 157.02 153.99 150.98 148.01 145.09 142.24 139.46 136.77 134.18 131.70
76 155.95 152.83 149.72 146.85 143.62 140.65 137.76 134.96 132.25 129.64 127.15
77 151.74 148.54 145.37 142.24 139.16 136.16 133.24 130.41 127.69 125.08 122.59
78 147.45 144.18 140.95 137.77 134.66 131.62 126.68 125.85 123.12 120.51 118.03
79 143.07 139.75 136.47 133.25 130.11 127.06 124.11 121.26 118.54 115.95 113.49
80 138.64 135.26 131.94 128.70 125.54 122.48 119.52 116.69 113.98 111.41 108.98
81 134.14 130.73 127.38 124.12 120.95 117.89 114.95 112.13 109.45 106.91 104.52
82 129.61 126.17 122.81 119.54 116.37 113.32 110.40 107.61 104.96 102.47 100.14
83 125.05 121.59 118.23 114.96 111.81 108.78 105.89 103.14 100.54 98.11 95.34
84 126.48 117.02 113.66 110.41 107.28 104.29 101.44 98.74 96.21 93.84 81.65
85 115.91 112.46 109.11 105.89 102.80 99.86 97.07 94.44 91.98 89.69 97.58
</TABLE>
14
UITN-194 NR0IXSTE
<PAGE> 15
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2, and 3 -- Single Life Annuities -- Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
------------------------------------------------------------------------------------------------ ----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $182.60 $195.49 $183.15 $195.74 $184.75 $196.50 $187.27 $197.79 $190.67 $199.65 $188.95 $199.02
51 180.16 193.30 180.75 193.58 182.48 194.41 185.18 195.82 188.86 197.85 186.82 197.07
52 177.65 191.04 178.30 191.34 180.15 192.25 183.05 193.79 187.03 196.02 184.63 195.06
53 175.08 188.70 175.77 189.02 177.75 190.02 180.87 191.71 185.19 194.15 182.36 193.01
54 172.43 186.27 173.18 186.63 175.29 187.72 178.66 189.57 183.34 192.23 180.08 190.87
55 169.71 183.76 170.50 184.15 172.77 185.35 176.41 187.37 181.49 190.29 177.70 188.66
56 166.90 181.17 167.75 181.59 170.18 182.90 174.13 185.12 179.65 188.22 175.25 186.38
57 164.01 178.48 164.92 178.94 167.54 180.38 171.83 182.81 177.82 186.32 172.72 184.02
58 161.02 175.70 161.99 176.21 164.82 177.78 169.50 180.45 176.01 184.20 170.13 181.58
59 157.94 172.83 158.98 173.79 162.06 175.12 167.15 178.05 174.23 182.28 167.55 179.12
60 154.76 169.86 155.88 170.47 159.23 172.28 164.80 175.59 172.48 180.25 164.88 176.55
61 151.48 166.80 152.70 167.48 156.37 169.57 162.44 173.10 170.77 178.23 162.10 173.89
62 148.11 163.64 149.44 164.39 155.46 166.70 160.10 170.58 169.12 176.23 159.27 171.16
63 144.65 160.40 146.12 161.23 150.53 163.76 157.79 168.03 167.54 174.22 156.48 168.41
64 141.12 157.06 142.73 157.98 147.58 160.76 155.50 165.47 166.03 172.32 153.59 165.55
65 137.52 153.65 139.30 154.66 144.63 157.71 153.27 162.91 164.61 170.44 150.63 162.61
66 133.86 150.15 135.82 151.26 141.69 154.61 151.09 160.35 163.27 164.63 147.62 159.59
67 130.15 146.56 132.33 147.78 138.77 151.47 148.98 157.81 162.03 166.90 144.69 156.58
68 126.41 142.88 128.81 144.22 135.87 148.20 146.95 155.30 160.88 165.26 141.65 153.44
69 122.64 139.11 125.29 140.58 133.02 145.10 145.01 152.84 159.84 163.72 138.55 150.23
70 118.84 135.24 121.77 138.86 130.22 141.88 143.17 150.43 158.90 162.29 135.40 146.93
71 115.03 131.28 118.26 133.08 127.49 138.65 141.44 148.10 158.05 160.98 132.40 143.71
72 111.22 127.23 114.77 129.24 124.83 135.45 139.82 145.87 157.30 159.79 129.27 140.35
73 107.41 123.10 111.91 125.35 122.26 132.27 138.32 143.74 156.65 158.74 126.09 135.90
74 103.60 118.92 107.88 121.44 119.78 129.15 136.94 141.74 156.07 157.81 122.86 132.28
75 99.80 114.70 104.50 117.52 117.42 126.09 135.68 139.88 155.58 157.01 119.89 130.08
76 96.03 110.44 101.18 113.61 115.17 123.13 134.54 138.17 155.17 156.33 116.74 126.56
77 92.28 106.17 97.94 109.72 113.05 120.28 133.52 136.62 154.82 155.75 113.55 122.96
78 88.57 101.89 94.77 105.88 111.07 117.56 132.61 135.23 154.53 155.27 110.33 119.62
79 84.92 97.62 91.71 102.09 109.22 114.99 121.81 133.99 154.29 154.87 107.51 116.08
80 81.34 93.37 88.76 98.37 107.52 112.58 131.11 132.92 154.10 154.55 104.44 112.49
81 77.83 89.16 85.93 94.75 105.95 110.34 130.51 131.99 153.95 154.30 101.34 109.17
82 74.42 85.00 83.23 91.25 104.53 108.29 129.99 131.20 153.84 154.10 98.23 105.71
83 71.11 80.91 80.67 87.87 103.23 106.43 129.55 130.53 153.75 153.94 95.63 102.22
84 67.91 76.91 78.26 84.66 102.07 104.76 129.19 129.97 153.69 153.82 92.73 98.71
85 64.83 73.01 75.99 81.61 101.02 103.28 128.88 129.51 153.64 153.74 89.90 95.72
</TABLE>
15
UITN-194 NR0IXSTF
<PAGE> 16
TABLE D (CONTINUED)
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
- - --------------------------------------------------------------------------------- -----------------------------
Same
Female 7 6 5 4 3 2 1 Age 1 2 3
- - ------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $215.64 $214.59 $213.53 $212.47 $211.39 $210.32 $209.24 $208.17 $207.10 $206.03 $204.98
51 214.16 213.06 211.96 210.84 209.72 208.60 207.47 206.35 205.23 204.13 203.03
52 212.61 211.47 210.31 209.15 207.98 206.80 205.63 204.46 203.29 202.14 200.99
53 210.99 209.80 208.59 297.37 206.15 204.93 203.71 202.49 201.37 200.07 198.27
54 209.30 208.06 206.79 205.53 204.25 202.98 201.70 200.43 199.16 197.91 198.67
55 207.54 206.24 204.92 203.60 202.27 200.94 199.61 198.28 196.97 195.66 194.37
56 205.70 204.34 202.67 201.59 200.20 198.82 197.43 196.05 194.68 193.32 191.67
57 203.78 202.36 200.93 199.49 198.05 196.60 195.16 193.72 192.29 190.88 189.49
58 201.78 200.30 198.81 197.31 195.80 194.30 192.79 191.30 189.81 188.34 186.88
59 199.70 198.15 195.60 195.03 193.47 191.90 190.33 188.77 187.23 185.70 184.19
60 197.52 195.91 194.29 192.66 191.03 189.40 187.77 186.15 184.54 182.95 181.39
61 195.26 193.58 191.89 190.19 188.49 186.79 185.10 183.41 181.75 180.10 178.48
62 192.90 191.15 189.39 157.63 185.86 184.09 182.33 180.58 178.85 177.14 175.46
63 190.44 188.63 186.79 184.96 183.12 181.28 179.45 177.64 175.84 174.07 172.34
64 187.89 186.00 184.09 182.18 180.27 178.36 176.47 174.59 172.73 170.90 169.11
65 185.24 183.27 181.29 179.31 177.32 175.34 173.08 171.43 169.51 167.62 165.77
66 182.49 180.45 178.39 176.33 174.27 172.22 170.19 168.17 166.19 164.24 162.32
67 179.64 177.51 175.38 173.24 171.11 168.99 166.89 164.81 162.76 160.74 158.77
68 176.69 174.48 172.27 170.06 167.85 165.66 153.49 161.34 159.23 157.15 155.11
69 173.63 171.34 169.06 166.77 164.49 162.23 159.99 157.77 155.59 153.45 151.35
70 170.47 168.11 165.74 163.08 161.03 158.69 156.38 154.10 151.85 149.65 147.51
71 167.22 164.77 162.33 159.89 157.46 155.05 152.67 150.32 148.01 145.76 143.57
72 163.86 161.34 158.81 156.30 153.80 151.32 148.86 146.45 144.09 141.79 139.56
73 160.40 157.80 155.20 152.61 150.03 147.48 144.96 142.49 140.08 137.74 135.48
74 156.85 154.17 151.49 148.82 146.17 143.55 140.97 138.45 136.00 133.63 131.34
75 153.19 150.43 147.67 144.93 142.21 139.53 136.91 134.34 131.86 129.45 127.14
76 149.44 146.60 143.76 140.95 138.17 135.44 132.77 130.17 127.65 125.23 122.91
77 145.59 142.67 139.76 135.89 134.06 131.28 128.58 125.95 123.42 120.95 118.65
78 141.65 108.66 135.69 132.76 129.88 127.07 124.34 121.69 119.15 116.70 114.38
79 137.63 134.57 131.54 128.57 125.65 122.82 120.07 117.41 114.86 112.42 110.11
80 133.53 130.41 127.34 124.33 121.39 118.54 115.77 113.12 110.57 108.15 105.86
81 129.36 126.20 123.10 120.06 117.11 114.24 111.48 108.63 106.30 103.91 101.65
82 125.15 121.96 118.83 115.77 112.81 109.94 107.19 104.56 102.07 99.71 97.49
83 120.90 117.68 114.54 111.48 108.52 105.67 102.94 100.34 97.88 95.57 93.41
84 116.63 113.39 110.24 107.19 104.25 101.42 98.73 96.17 93.77 91.51 89.42
85 112.34 109.11 105.96 102.93 100.01 97.23 94.58 92.08 89.74 87.56 85.54
</TABLE>
16
UITN-194 NR0IXSTG
<PAGE> 17
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 28 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.18 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity
designated by the Owner to receive any benefits payable upon the
Annuitant's death. See Section 5.01 which explains the
Beneficiary's rights when the Owner and Annuitant are different
persons.
(b) Designation of Beneficiary. During the Annuitant's lifetime, the
Owner has the right to designate a Beneficiary and to change the
designation. The change may be made by sending a written request
to Our Home Office. The change will take effect when We have
recorded the change. However, after the change is recorded, the
change will be deemed effective as of the date of the written
request for change. The change will be subject to any payment
made or action taken by Us before the request is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the
Beneficiary designation:
(1) If any Beneficiary dies prior to the Annuitant, that
Beneficiary's interest will pass to any other Beneficiary
according to the surviving Beneficiary's respective
interest.
(2) If no Beneficiary survives the Annuitant, death benefits
will be paid in one sum to the Owner or the Owner's estate.
(3) If any Beneficiary dies after the Annuitant, that
Beneficiary's interest will pass to his or her Beneficiary
or, if none, to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether a
Beneficiary or the Annuitant died first in a common disaster,
We will assume that the Beneficiary died first and make payments
on that basis.
(e) Multiple Beneficiaries. You may designate two or more
Beneficiaries to receive separate percentage interests in the
death benefits payable under this Contract. Each such Beneficiary
may separately exercise the rights that a Beneficiary has under
this Contract.
(f) Trust or Estate as Beneficiary. Payments to a Beneficiary that is
a trust or estate will be made only in a lump sum or in
installments over a period not to exceed five years.
4.19 CONTINGENT OWNER
(a) Definition of Contingent Owner. A Contingent Owner is the person
or entity designated by You to receive the Contract and its value
upon Your death during the Accumulation Period and during the
life of the Annuitant.
(b) Designation of Contingent Owner. If You are not also the
Annuitant, during the Accumulation Period You may designate a
Contingent' Owner and change the designation of the Contingent
Owner. The designation and any change may be made by sending a
written request to Our Home Office. The change will take effect
when We have recorded the change.
4.20 DEATH PAYMENT PROVISIONS
(a) Death of the Annuitant During Accumulation Period.
(1) If the Annuitant dies during the Accumulation Period, a
death benefit described in (a) or (b) below is payable.
17
UITN-194 NR0IXSTH
<PAGE> 18
(a) If the Annuitant dies on or after age 70, the death
benefit is the greater of (a) the Accumulation Value
on the date We receive proof of death, or (b) 100% of
Purchase Payments reduced by the amount of any prior
withdrawals and further reduced by any portion of the
Accumulation Value that has been applied under an
Annuity Income Option.
(b) If the Annuitant dies before age 70, the death
benefit is the sum of the benefits under the Fixed
Interest Options and the Variable Investment Options,
as follows:
The benefit under the Fixed Interest Options is the
greater of:
(1) the Fixed Interest Option Values on the date
We receive proof of death; or
(2) 100% of Purchase Payments allocated to the
Fixed Interest Options, reduced by the amount
of any prior withdrawals or transfers from
Fixed Interest Options and further reduced by
any portion of the Accumulation Value that
has been applied under an Annuity Income
Option.
The benefit under the Variable Investment Options
is the greater of:
(1) the Variable Investment Option Values on the
date We receive proof of death, or
(2) 100% of Purchase Payments allocated to
Variable Investment Options reduced by the
amount of any prior withdrawals or transfers
from the Variable Investment Options, plus
interest at an annual rate of 3%. For this
purpose, all amounts transferred into Variable
Investment Options are considered Purchase
Payments allocated to Variable Investment
Options.
(2) You may file an election with VALIC directing the form of
payment in the event of the Annuitant's death. If no such
election is filed, the Beneficiary may elect within 60 days
after benefits are payable to receive the death payment as
a lump sum or under an Annuity Income Option.
(3) Unless the Beneficiary is the Annuitant's surviving
spouse, payments must (i) be completed by the end of the
fifth calendar year following the year of the Annuitant's
death, or (ii) be paid over a period that does not exceed
the Beneficiary's life or life expectancy if payments begin
in the calendar year following the year of the Annuitant's
death.
(4) If the Beneficiary is the Annuitant's surviving spouse,
payments may be made at any time and in any manner
permitted under the Contract, and all terms of this
Contract, including payment requirements after the
Annuitant's death, will be applied by thereafter treating
the surviving spouse as the Owner.
(b) Death of the Owner - If You are not the Annuitant and die
during the Accumulation Period, no death benefit is payable, but
the Contract will be assigned to the Contingent Owner, if any, or
to Your estate if there is no Contingent Owner who survives You.
The contract values must be distributed in the same manner and
time as described in (2), (3), and (4) of Section 4.20 (a) above.
However, payments will be made to the Contingent Owner, or the
Owner's estate instead of to the Beneficiary. Unless You are also
the Annuitant, Your death during the Annuity Period will cause no
change in the operation of, or payments under, the Contract.
(c) Death of Annuitant During the Annuity Period - If the Annuitant
dies during the Annuity Period, a death benefit, if any, will be
paid to the Beneficiary in accordance with the applicable Annuity
Income Option. Unless the Annuity Income Option provides for
continuing payment for the life of a surviving Annuitant, the
Beneficiary may elect within 60 days after the benefit is
payable:
(1) to receive the death benefit in a lump sum,
(2) to continue to receive annuity payments under the terms
of the Annuity Income Option, or
(3) to have the value of any annuity payments applied to the
Fifth Option.
The lump sum under (1) is the present value of remaining
payments, discounted at the Assumed Investment Rate, and based on
the current Annuity Unit value. If the Beneficiary
18
UITN-194 NR0IXSTI
<PAGE> 19
elects (2) or (3), the Beneficiary is entitled to exercise all
the Investment Options and other rights under the Contract.
Unless the Beneficiary is the Annuitant's surviving spouse,
payments to the Beneficiary must be made on a basis that is at
least as rapid as under the Annuity Income Option that was in
effect on the Annuitant's death.
(d) Proof of Death. Proof of death may be made by sending VALIC a
certified copy of the death certificate, a certified copy of a
decree of a court of competent jurisdiction as to death, a
written statement by an attending physician, or any other
proof satisfactory to VALIC.
19
UITN-194 NR0IXSTJ
<PAGE> 20
SECTION 5 - GENERAL PROVISIONS
5.01 DIFFERENT OWNER AND ANNUITANT - Except as provided in (a) and (b)
below, the Owner will be the Annuitant:
(a) An Owner who is an individual may designate another individual as
Annuitant. The designated Annuitant may not be changed. The
Owner may be designated as Beneficiary for purposes of
receiving benefits upon the death of the Annuitant during the
Annuity Period.
(b) If the Owner is a trust or other entity that is not an
individual, an individual must be designated as Annuitant. The
designated Annuitant may not be changed. In that case, all
benefit payments will be made to the Annuitant during the
Annuitant's lifetime (unless directed to be paid to the Owner),
and the timing and availability of all benefit payments,
including death benefits, are based on the life of the Annuitant.
After the death of the Annuitant, any benefit payment will be
payable to the Beneficiary (which may be the Owner).
5.02 ASSIGNMENT - Any assignment of this Contract, or any right or interest
hereunder, must be filed with Us. Either the original assignment or a
duplicate copy thereof may be filed. The assignment shall be binding
on Us only after filing. We assume no responsibility for the
sufficiency or validity of any assignment. However an assignment of
this Contract may give rise to a recognition of taxable income which
we must report to the Internal Revenue Service.
5.03 WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
5.04 CHANGE OF CONTRACT - You and VALIC, by an agreement in writing, may
change any or all terms of this Contract. VALIC may unilaterally
change the contract if it is deemed advisable to do so in order to
conform the Contract to applicable laws or regulations.
5.05 REPORTS - We will send a Separate Account financial report twice each
year to Owners or Beneficiaries having values in any Variable
Investment Option.
We will send to You, at least annually, a statement showing the dollar
value of all investment options, investment performance since the
prior statement, and as applicable, the number and value of any
Variable Accumulation Units credited to this Contract. All statements
will be mailed within two months of the date of the information.
5.06 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of this Contract's participation
in the Separate Account through one or more Variable Investment
Options, We will vote those shares as instructed. You, or the
Beneficiary if You have died, will have the voting instruction rights.
5.07 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate Account for any period when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday
closings); (b) when trading on the Exchange is restricted; (c) when an
emergency prevents disposal of securities held in the Separate Account
or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
5.08 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
5.09 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that the Annuitant and any payee is alive on the date any benefit
payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
5.10 SUBSTITUTION OF INVESTMENT FUND SHARES - If shares of a particular
Investment Fund are not available or if, in the judgment of VALIC,
such shares are no longer appropriate for a Variable Investment
Option, shares of another Investment Fund may be substituted for the
Investment Fund shares already held under the Variable Investment
Option and for those to be purchased by future Purchase Payments or
transfers under this Contract. In the event any substitution occurs,
VALIC will notify You within five days.
5.11 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under this Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
5.12 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income gains or losses.
20
UITN-194 NR0IXSTK
<PAGE> 1
EXHIBIT 4(b)(iii)
(LOGO) The Variable Annuity
VALIC Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
- - --------------------------------------------------------------------------------
* An American General Company
PARTICIPANT:
GROUP CONTRACT OWNER: DATE OF ISSUE:
PARTICIPANT ACCOUNT NUMBER: ANNUITY DATE:
This Certificate is issued to the named Participant under the Group Annuity
Contract. It contains a summary of the Participant's rights and benefits
under the Group Annuity Contract, but it is not a part of the contract and does
not change any of the terms or provisions of the Contract. VALIC will pay
annuity and other benefits as provided in the Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
SEE INDEX ON PAGE 2
o MAINTENANCE CHARGE - There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each Participant Account for
each quarter and is assessed only if any portion of the Accumulaton Value
was applied to one or more Variable Investment Options during that quarter.
See Section 2.05 for a complete description.
o SEPARATE ACCOUNT CHARGE - There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily net
asset value of the Separate Account, based upon the Variable Investment
Option to which assets are allocated. This charge only applies to assets
under Variable Investment Options. See Section 2.06 for a complete
description.
o CASH SURRENDER OR WITHDRAWAL CHARGE - There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03 through 4.06 for a complete description and conditions under
which there is no charge.
The conditions and provisions of the Contract are subject to applicable state
laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ CYNTHIA A. TOLEN /s/ S.D. BICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THE CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
PARTICPANT CERTIFICATE
GROUP FIXED AND VARIABLE DEFERRED ANNUITY CONTRACT
INDIVIDUAL ALLOCATIONS
- NON-PARTICIPATING -
UITG-194P OR0PXST1
<PAGE> 2
INDEX
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . 3
SECTION 2 CONTRACT AND PURCHASE PAYMENTS . . . . . . 3
2.01 Incontestability . . . . . . . . . . . . . 3
2.02 Minimum Account Value . . . . . . . . . . 3
2.03 Plan Provisions . . . . . . . . . . . . . 3
2.04 Purchase Payments . . . . . . . . . . . . 3
2.05 Maintenance Charge . . . . . . . . . . . . 3
2.06 Separate Account Charge . . . . . . . . . 3
SECTION 3 INVESTMENT OPTIONS . . . . . . . . . . . . 4
3.01 Fixed Interest Options . . . . . . . . . . 4
3.02 Variable Investment Options . . . . . . . 4
3.03 Accumulation Unit . . . . . . . . . . . . 4
3.04 Accumulation Unit Value . . . . . . . . . 4
3.05 Transfers During the Accumulation Period . 4
3.06 Transfers During the Annuity Period . . . 5
SECTION 4 BENEFITS . . . . . . . . . . . . . . . . . 6
4.01 Cash Surrender . . . . . . . . . . . . . . 6
4.02 Withdrawals . . . . . . . . . . . . . . . 6
4.03 Charges for Cash Surrender or Withdrawal . 6
4.04 No Charge Systematic Withdrawals . . . . . 6
4.05 No Charge Minimum Distributions . . . . . 6
4.06 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted . . . 7
4.07 Annuity Period . . . . . . . . . . . . . . 7
4.08 Starting Annuity Income Benefits . . . . . 7
4.09 Partial Annuitization . . . . . . . . . . 7
4.10 Minimum Annuity Payments . . . . . . . . . 7
4.11 Misstatement of Age . . . . . . . . . . . 7
4.12 Annuity Income (Payment) Options . . . . . 8
4.13 Fixed or Variable Annuity Basis . . . . . 8
4.14 Variable Annuity Payments . . . . . . . . 8
4.15 Assumed Investment Rate (AIR) . . . . . . 8
4.16 Annuity Units and Annuity Unit Value . . . 8
4.17 Betterment of Rates . . . . . . . . . . . 9
4.18 Annuity Rate Tables . . . . . . . . . . . 9-14
4.19 Beneficiaries . . . . . . . . . . . . . . 14
4.20 Death Payment Provisions . . . . . . . . . 14
SECTION 5 CODE REQUIREMENTS AND
RETIREMENT PLAN PROVISIONS . . . . . . . . 16
5.01 Salary Reduction Purchase Payments . . . . 16
5.02 Minimum Distributions After Age 70 1/2 . . 16
5.03 Minimum Death Benefit Distributions . . . 16
5.04 Direct Rollovers . . . . . . . . . . . . . 17
5.05 Plan Provisions . . . . . . . . . . . . . 17
SECTION 6 GENERAL PROVISIONS . . . . . . . . . . . . 18
6.01 Assignment . . . . . . . . . . . . . . . . 18
6.02 Vesting . . . . . . . . . . . . . . . . . 18
6.03 Written Notices to Us . . . . . . . . . . 18
6.04 Reports . . . . . . . . . . . . . . . . . 18
6.05 Voting Rights . . . . . . . . . . . . . . 18
6.06 Suspension of Payments . . . . . . . . . . 18
6.07 Deferral of Cash Surrender or Withdrawal . 18
6.08 Proof of Survival . . . . . . . . . . . . 18
6.09 Substitution of Investment Fund Shares . . 18
6.10 Minimum Benefit . . . . . . . . . . . . . 18
6.11 Separate Account . . . . . . . . . . . . 18
</TABLE>
2
UITG-194P OR0PXST2
<PAGE> 3
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase
Payment and the Annuity Date for a Participant.
ACCUMULATION VALUE - equals the sum of the values of the Fixed Interest
Options and Variable Investment Options allocated to a Participant Account that
have not been applied to provide annuity payments.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CERTIFICATE YEAR - a twelve month period starting with the issue date of a
Participant's certificate and each anniversary of that date.
CODE - The Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The Variable
Annuity Life Insurance Company.
CONTRACT - The legal agreement between VALIC and the Contract Owner, under
which this Certificate is issued.
CONTRACT OWNER - The employer or other entity that makes application for the
Contract.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account
HOME OFFICE - the principal office of VALIC.
PARTICIPANT - a person for whom or with respect to whom Purchase Payments are
made under the Contract. Any reference to "You" or "Your" means Participant.
PARTICIPANT ACCOUNT - an individual account which is established for a
Participant to record the Accumulation Value for the Participant.
PLAN - the employer-sponsored retirement plan, annuity purchase arrangement,
or deferred compensation program for which the Contract is issued.
PURCHASE PAYMENT - an amount paid to VALIC for allocation to a Participant
Account.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of a Participant Account less any
applicable surrender charge.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - The Contract is incontestable. The Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM ACCOUNT VALUE - We can distribute the Surrender Value if the
Accumulation Value for the Participant Account falls below $300 and
there are no Purchase Payments for two Certificate Years.
2.03 PLAN PROVISIONS - As further explained in Section 5, the Contract is
subject to the provisions of the Plan. To the extent provided by the
Plan, any rights that may be exercised by a Participant under the
Contract may instead be exercised by the Contract Owner or a Plan
representative.
2.04 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period and may include amounts that are rolled over
or directly transferred from another plan. We require no payment
beyond the first. There is no penalty if any scheduled payments are
omitted or stopped.
If only one Purchase Payment is to be allocated to a Participant's
Account, it must be at least $1,000. Periodic payments must be at
least $30 each. VALIC may waive this minimum.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to Your directions
unless the Contract Owner has retained that right under the Plan.
2.05 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which the
Accumulation Value includes any Variable Investment Option. We will
not deduct the charge for any calendar quarter if the Accumulation
Value is credited only to the Fixed Interest Options throughout the
quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among the Variable Investment Options for the
Participant's Account. However, if all Variable Accumulation Values
are withdrawn or transferred to a Fixed Interest Option, the full
quarterly charge will be deducted at the time of surrender or
transfer.
The charge is $3.75 for each Participant Account for each quarter. The
maintenance charge may be waived or reduced uniformly on all
Participant Accounts for contracts issued under certain plans or
arrangements which are expected to result in administrative cost
savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
2.06 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option.
3
UITG-194P OR0PXST3
<PAGE> 4
SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by You. We reserve the right to limit allocations among
Investment Options to seven at any one time. Each selection must be a whole
percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately
to amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Investment returns on Variable Investment
Options may be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to Your Account due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited to Your Account is determined by dividing
the dollar amount of the transaction by the Accumulation Unit Value
for that Variable Investment Option at the next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, You may transfer amounts among Investment Options, except as
provided below.
(a) We reserve the right to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30 days
apart.
(c) Transfers from the Short Term Fixed Account. After a transfer to
the Short Term Fixed Account, You may not make any transfer from
the Short Term Fixed Account for 90 days. We may change this
transfer restriction at any time. However, the transfer
restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. You may transfer up to 20%
of the Accumulation Value allocated to Fixed Account Plus during
each Certificate Year. If multiple transfers are made in a
Certificate Year, the percentages of the Accumulation Value
transferred each time will be added together to determine the 20%
transfer limit for that Certificate Year. For each transfer, the
percentage transferred is the ratio of the amount transferred to
the portion of the Accumulation Value allocated to Fixed Account
Plus immediately prior to the transfer. However, if following a
20% transfer, the remaining amount allocated to Fixed Account
Plus would be less than $500, You may transfer the remaining
amount.
4
UITG-194P OR0PXST4
<PAGE> 5
3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, You
may transfer Annuity Unit values among the Variable Investment
Options. You may also transfer Annuity Unit values from the Variable
Investment Options underlying a Variable Annuity to provide a Fixed
Annuity. Transfers must be at least 365 days apart. We will not permit
any transfer from a Fixed Annuity during the Annuity Period.
5
UITG-194P OR0PXST5
<PAGE> 6
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - Subject to the restrictions in Sections 5.01 and
5.05, You may surrender Your Account before the Annuity Date for a
cash payment equal to the Surrender Value as of the date We receive
the request at the Home Office. The Surrender Value is the
Accumulation Value less any charges, as described below.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable Investment
Options or withdrawn.
4.02 WITHDRAWALS - Subject to the restrictions in Sections 5.01 and 5.05,
You may withdraw a portion of the Accumulation Value in cash at any
time before the Annuity Date. We may deduct a charge as described
below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1) the
amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat withdrawals as withdrawals
of Purchase Payments before any earnings. We treat the most
recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Certificate Year. Subject to the provisions of
Sections 4.04 and 4.05, in any Certificate Year You may withdraw
up to 10% of the Accumulation Value without a charge. The
surrender charge will be applicable only to the amount withdrawn
that exceeds 10%. The percentage withdrawn will be calculated as
the ratio of the amount withdrawn to the Accumulation Value
immediately prior to the withdrawal. If multiple withdrawals are
made in a Certificate Year, the percentages withdrawn for each
withdrawal will be added together to determine whether the 10%
limit has been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time.
However, no change in availability will result in any charge against
amounts withdrawn under a previously elected NCSW. A NCSW must meet
the following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to You.
(3) The NCSW is not available in any Certificate Year You have in
effect any other systematic withdrawal (with or without charge)
or a No Charge Minimum Distribution (NCMD).
(4) Once You begin a NCSW the terms of the election may not be
changed. However, You may revoke the election at any time. Once
the election is revoked You may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Certificate Year the NCSW has been, or is in
effect. Distributions under the NCSW may not begin in a
Certificate Year in which You have taken one or more Section
4.03 withdrawals without charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The
annual dollar amount chosen must be the same for each
year the NCSW is in effect and cannot be greater than 20%
of the Accumulation Value at the time of the NCSW election.
(b) Specified Percentage - an annual specified percentage.
The annual specified percentage chosen cannot be greater
than 20% of the Accumulation Value.
(c) Specified Period - payments for a designated time period.
We will determine each payment by dividing the
Accumulation Value by the number of payments remaining in
the elected period.
4.05 NO CHARGE MINIMUM DISTRIBUTIONS - We will waive applicable surrender
charges on No Charge Minimum Distributions (NCMD). A NCMD is a
withdrawal which meets the following conditions:
(1) You are at least age 70 1/2, and the NCMD is payable to You.
(2) The amount withdrawn does not exceed the amount required to be
distributed under the Code and regulations issued by the
Secretary of the Treasury for the Contract.
(3) The NCMD is not available in any Certificate Year You have
withdrawn any amount under a No Charge Systematic Withdrawal
(NCSW).
6
UITG-194P OR0PXST6
<PAGE> 7
4.06 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges from Your Account under any of
the following conditions:
(a) You elect an Annuity Income Option; or
(b) After Your death; or
(c) You have become totally and permanently disabled. This means
that You are unable, because of physical or mental impairment,
to perform the material and substantial duties of any occupation
for which You are suited by means of education, training or
experience. The impairment must have been in existence for more
than 180 days to qualify for this benefit.
Such impairment must be expected to result in death or be
long-standing and indefinite.
We require proof of disability. We will accept a certified
Social Security finding of disability or a doctor's verification;
or
(d) The withdrawal and any earlier withdrawals from Your Account
during the same Certificate Year do not exceed 10% of the
Accumulation Value (see Section 4.03); or
(e) On any amount You withdraw with respect to the NCSW decribed in
Section 4.04, or the NCMD described in Section 4.05; or
(f) You are at least 55 years old, Your Account was established at
least five years before the date of the surrender or withdrawal,
and You are separated from service with the employer that
maintains the Plan; or
(g) No Purchase Payments were made to Your Account in the five years
preceding the date of the surrender or withdrawal; or
(h) You are at least 59 1/2 years old and Your Account was
established at least seven years before the date of the
surrender or withdrawal; or
(i) Your Account was established at least fifteen years before the
date of the surrender or withdrawal.
The surrender charge may be waived or reduced uniformly on all
Participant Accounts for contracts issued under certain plans or
arrangements which are expected to result in administrative cost
savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
We may waive any withdrawal or surrender charge attributable to
Purchase Payments received during specific periods of time, and under
conditions and limitations set by Us. Any such waiver will be made by
Resolution of the Board of Directors. Notice of the right to surrender
without charge will be mailed to the Contract Owner when such waiver
is declared by the Board of Directors.
4.07 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
Your Accumulation Value is applied under an Annuity Income Option. You
may change the Annuity Date shown on the first page of Your
Certificate by giving Us at least 30 days notice. The selected Annuity
Date may be the first day of any calendar month, but if You choose a
life income option, the Annuity Date may not precede Your 50th
birthday without Our permission.
4.08 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, You must choose one of the Annuity Income Options in
Section 4.12 and provide acceptable proof of age for any person whose
age is taken into account under a life income option. If You fail to
select another Annuity Income Option, annuity payments will be made on
the basis of the Second Option with payments guaranteed for a ten-year
period, commencing on the Annuity Date.
4.09 PARTIAL ANNUITIZATION - You may choose to apply less than the full
Accumulation Value under an Annuity Income Option and may choose
different Annuity Dates and different Annuity Income Options for
different portions of the Accumulation Value. Therefore, the Contract
may, at times, be in both an Accumulation Period and an Annuity
Period. If You choose to do this, the provisions of the Contract
relating to the Accumulation Period and the Annuity Period will be
applied as though there were separate Contracts.
4.10 MINIMUM ANNUITY PAYMENTS - You may not choose any Annuity Income Option
if the resulting initial payment would be less than $25 under either a
Fixed or Variable Annuity. We reserve the right to convert monthly
payments to quarterly, semi-annual or annual payments so the initial
payment will be at least $25.
4.11 MISSTATEMENT OF AGE - If annuity payments depend upon an individual's
survival and the date of birth of any individual was misstated, We
will adjust the remaining payments. The amount remaining to be paid
will be the amount that should have been paid with the correct
information. We will credit or charge the amount of any underpayment
or overpayment against the next succeeding payment or payments, if any
remain. We reserve the right to collect any overpayment directly from
the payee.
7
UITG-194P OR0PXST7
<PAGE> 8
4.12 ANNUITY INCOME (PAYMENT) OPTIONS - You may choose to receive payments
under any of the Annuity Income Options below or any other option
agreed to by VALIC. Any option chosen must comply with applicable
state and federal laws and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income
payable during Your life. All payments cease at Your death with no
further amounts payable.
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An income payable during Your life. If, at Your death, We have
made payments for fewer than the number of years selected, We will
continue payments to the Beneficiary for the remainder of the
guarantee period.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An
income payable during Your life. Payments cease at Your death.
However, the Beneficiary may receive an additional payment.
For payments on a Fixed Annuity basis, the additional payment, if any,
will be the Accumulation Value applied to this option less the total
of all prior payments.
For payments on a Variable Annuity basis, the additional payment, if
any, will be the current value of the number of Annuity Units credited
at the Annuity Date less the number of Annuity Units that have been
paid. For this purpose, the number of Annuity Units credited equals
the Accumulation Value applied to this option divided by the Annuity
Unit Value at the date used to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable
during the joint lives of You and a second person and thereafter
during the life of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable
for a selected number of years between five and thirty. This option is
available for Fixed Annuities only.
4.13 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen Variable
Investment Options.
You may elect to receive payments under any annuity option as a Fixed
Annuity, a Variable Annuity, or a combination Fixed and Variable
Annuity. If You make no election, amounts in Fixed Interest Options
will provide a Fixed Annuity and amounts in Variable Investment
Options will provide a Variable Annuity.
4.14 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable Investment Option remains constant unless
You transfer a portion of the annuity benefit between the Variable
Investment Options or from a Variable Annuity to a Fixed Annuity.
However, the dollar amount payable is not fixed and may change from
month to month.
4.15 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, You must choose an Assumed Investment
Rate (AIR). The AIR is the assumed rate of return used to determine
the first annuity payment for a Variable Annuity Option. Rates of 3%,
3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if permitted by
state law and regulations. If no AIR is chosen, the AIR will be 3
1/2%. A higher AIR will result in a higher initial payment. Choice of
a lower AIR will result in a lower initial payment. Payments will
increase whenever the actual return exceeds the chosen AIR. Payments
will decrease whenever the actual return is less than the chosen AIR.
4.16 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed
at $1.00.
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option
at the immediately preceding computation date
8
UITG-194P OP0PXST8
<PAGE> 9
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised
to the power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
4.17 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments to You. If a commutation (cash out of remaining
annuity payments) is allowed, the rates previously used to calculate
the annuity payments will be used for the commutation request.
4.18 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to
purchase a first monthly payment of $1.00. Quarterly, semiannual, and
annual payments may also be selected.
The amount of each payment will depend upon Your adjusted age at the
time the first payment is due. Adjusted age will be determined in
accordance with the following:
Calendar Year Adjusted Age is
of Birth Actual Age Minus
------------- ----------------
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
Actual age, as used above, means Your age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.15) and to determine the minimum guarantees for Fixed
Annuities. Tables B, C, and D are to be used for Variable Annuities
with 3 1/2%, 4 1/2% and 5% AIRs respectively.
9
UITG-194P OR0PXST9
<PAGE> 10
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $250.48 $250.83 $251.98 $254.04 $257.21 $259.24
51 246.41 246.79 248.04 250.27 253.72 255.69
52 242.26 242.68 244.03 246.45 250.21 252.09
53 238.03 238.49 239.95 242.58 246.69 248.43
54 233.73 234.23 235.81 238.67 243.15 244.71
55 229.35 229.88 231.60 234.72 239.60 240.94
56 224.89 225.46 227.32 230.73 236.05 237.12
57 220.34 220.96 222.98 226.71 232.52 233.24
58 215.71 216.38 218.59 222.65 229.01 229.31
59 210.99 211.72 214.14 218.58 225.54 225.33
60 206.19 206.99 209.63 214.50 222.12 221.29
61 201.30 202.18 205.08 210.42 218.75 217.19
62 196.35 197.31 200.50 206.34 215.47 213.04
63 191.32 192.39 195.88 202.30 212.28 208.83
64 186.24 187.41 191.25 198.29 209.20 204.54
65 181.11 182.40 186.61 194.34 206.25 200.18
66 175.92 177.34 181.97 190.46 203.44 195.73
67 170.70 172.26 177.35 186.66 200.79 191.41
68 165.43 167.15 172.75 182.97 198.31 186.93
69 160.13 162.01 168.18 179.39 196.00 182.35
70 154.78 156.86 163.66 175.95 193.89 178.01
71 149.41 151.71 159.21 172.66 191.97 173.43
72 144.01 146.56 154.65 169.54 190.26 169.01
73 138.61 141.44 150.59 166.61 188.73 164.46
74 133.21 136.35 146.45 163.88 187.41 159.83
75 127.84 131.33 142.46 161.36 186.26 155.48
</TABLE>
Option 4 - Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $280.54 $282.36 $284.24 $286.16 $288.12 $290.13 $292.17 $294.25 $296.35 $298.47 $300.61
51 276.91 278.78 280.70 282.67 284.69 286.75 288.85 290.98 293.13 295.31 297.51
52 273.19 275.10 277.07 279.10 281.17 283.28 285.43 287.62 289.83 292.07 294.33
53 269.37 271.34 273.36 275.43 277.55 279.72 281.93 284.17 286.45 288.74 291.06
54 265.46 267.47 269.54 271.67 273.85 276.07 278.33 280.64 282.97 285.33 287.71
55 261.45 263.51 265.64 267.81 270.05 272.33 274.65 277.01 279.40 281.83 284.27
56 257.34 259.46 261.63 263.86 266.15 268.49 270.87 273.29 275.75 278.23 280.74
57 253.13 255.30 257.53 259.82 262.16 264.56 267.00 269.48 272.00 274.55 277.12
58 248.82 251.04 253.32 255.67 258.07 260.53 263.03 265.58 268.16 270.77 273.40
59 244.40 246.67 249.01 251.42 253.88 256.40 258.97 261.57 264.22 266.90 269.60
60 239.88 242.21 244.60 247.07 249.59 252.17 254.80 257.48 260.19 262.93 265.70
61 235.26 237.64 240.09 242.61 245.20 247.84 250.54 253.28 256.06 258.87 261.71
62 230.54 232.97 235.47 238.06 240.70 243.41 246.17 248.98 251.83 254.71 257.62
63 225.71 228.19 230.76 233.40 236.11 238.88 241.71 244.58 247.50 250.46 253.44
64 220.79 223.32 225.94 228.64 231.41 234.25 237.14 240.09 243.08 245.10 249.16
65 215.78 218.35 221.02 223.78 226.61 229.51 232.47 235.49 238.55 241.65 244.78
66 210.67 213.30 216.02 218.82 221.71 224.68 227.71 230.79 233.93 237.10 240.31
67 205.48 208.15 210.92 213.78 216.72 219.75 222.84 226.00 229.21 232.45 235.74
68 200.20 202.91 205.73 208.64 211.64 214.73 217.88 221.11 224.38 227.71 231.06
69 194.83 197.59 200.45 203.41 206.47 209.61 212.83 216.12 219.46 222.86 226.30
70 189.39 192.19 195.09 198.10 201.21 204.41 207.68 211.03 214.45 217.92 221.43
71 183.87 186.70 189.66 192.71 195.87 199.12 202.45 205.86 209.34 212.88 216.47
72 178.28 181.15 184.14 187.24 190.45 193.75 197.14 200.61 204.15 207.76 211.41
73 172.63 175.53 178.56 181.70 184.96 188.31 191.75 195.28 198.88 202.55 206.27
74 166.94 169.86 172.92 176.10 179.40 182.80 186.29 189.87 193.53 197.26 201.05
75 161.21 164.15 167.23 170.44 173.78 177.22 180.77 184.40 188.11 191.90 195.75
</TABLE>
10
UITG-194P OR0PXSTA
<PAGE> 11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $233.36 $233.71 $234.82 $236.75 $239.66 $240.70
51 229.87 230.25 231.45 233.54 236.72 237.65
52 226.30 226.72 228.01 230.29 233.74 234.54
53 222.65 223.10 224.51 226.98 230.75 231.36
54 218.93 219.41 220.93 223.62 227.73 228.12
55 215.11 215.64 217.28 220.22 224.70 224.82
56 211.21 211.78 213.57 216.77 221.66 221.45
57 207.23 207.84 209.79 213.28 218.62 218.02
58 203.15 203.81 205.94 209.76 215.60 214.53
59 198.98 199.70 202.03 206.21 212.60 210.96
60 194.73 195.51 198.06 202.64 209.63 207.33
61 190.38 191.24 194,04 199.05 206.70 203.63
62 185.95 186.90 189.97 195.47 203.84 199.85
63 181.45 182.50 185.86 191.89 201.06 195.99
64 176.88 178.03 181.73 188.35 198.37 192.18
65 172.25 173.52 177.57 184.84 195.78 188.25
66 167.56 168.95 173.41 181.39 193.31 184.24
67 162.81 164.34 169.24 178.00 190.97 180.31
68 158.01 159.70 165.09 174.70 188.78 176.25
69 153.16 155.01 160.95 171.49 186.75 172.11
70 148.26 150.30 156.85 168.40 184.88 168.10
71 143.31 145.57 152.79 165.44 183.18 163.94
72 138.33 140.83 148.81 162.62 181.65 159.70
73 133.32 136.10 144.91 159.98 180.30 155.66
74 128.31 131.39 141.11 157.51 179.12 151.45
75 123.30 126.73 137.44 155.22 178.10 147.15
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $259.51 $261.02 $262.56 $264.14 $265.75 $267.38 $269.05 $270.72 $272.42 $274.13 $275.84
51 256.50 258.05 259.64 261.26 262.92 264.61 266.32 268.06 269.80 271.57 273.33
52 253.39 254.99 256.63 258.30 260.01 261.75 263.52 265.30 267.11 268.92 270.75
53 250.19 251.84 253.53 255.25 257.01 258.80 260.62 262.47 264.33 266.20 268.08
54 246.90 248.59 250.33 252.11 253.92 255.77 257.64 259.54 261.46 263.39 265.33
55 243.51 245.25 247.04 248.87 250.74 252.64 254.57 256.53 258.51 260.50 262.50
56 240.02 241.82 243.66 245.54 247.47 249.42 251.41 253.43 255.46 257.52 259.58
57 236.43 238.28 240.17 242.11 244.09 246.11 248.16 250.23 252.33 254.44 256.57
58 232.74 234.64 236.59 238.58 240.62 242.70 244.81 246.94 249.10 251.28 253.47
59 228.94 230.89 232.90 234.95 237.05 239.19 241.36 243.56 245.78 248.03 250.28
60 225.03 227.04 229.10 231.22 233.38 235.58 237.81 240.08 242.37 244.68 247.00
61 221.02 223.08 225.20 227.38 229.60 231.87 234.17 236.50 238.85 241.23 243.62
62 216.90 219.02 221.20 223.43 225.72 228.05 230.42 232.82 235.24 237.69 240.15
63 212.68 214.85 217.09 219.38 221.73 224.13 226.56 229.03 231.53 234.05 236.58
64 208.35 210.58 212.87 215.23 217.64 220.10 222.61 225.15 227.71 230.31 232.91
65 203.92 206.20 208.55 210.97 213.44 215.97 218.55 221.16 223.80 226.46 229.15
66 199.40 201.73 204.13 206.60 209.14 211.74 214.38 217.06 219.78 222.52 225.28
67 194.78 197.16 199.61 202.14 204.74 207.40 210.11 212.87 215.66 218.48 221.31
68 190.06 192.49 195.00 197.58 200.24 202.96 205.74 208.57 211.43 214.33 217.24
69 185.25 187.72 190.28 192.92 195.64 198.42 201.27 204.16 207.10 210.07 213.07
70 180.35 182.87 185.48 188.17 190.95 193.79 196.70 199.66 202.67 205.72 208.79
71 175.35 177.92 180.58 183.33 186.16 189.06 192.03 195.06 198.14 201.26 204.41
72 170.28 172.89 175.60 178.40 181.28 184.24 187.27 190.37 193.51 196.70 199.93
73 165.14 167.78 170.53 173.38 176.32 179.34 182.43 185.58 188.80 192.06 195.36
74 159.93 162.60 165.39 168.29 171.28 174.35 177.50 180.72 183.99 187.32 190.69
75 154.67 157.37 160.19 163.13 166.16 169.29 172.49 175.77 179.11 182.51 185.95
</TABLE>
11
UITG-194P OR0PXSTB
<PAGE> 12
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2 and 3 - Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $204.42 $204.75 $205.77 $207.48 $209.94 $209.57
51 201.83 202.19 203.30 205.15 207.83 207.29
52 199.16 199.55 200.75 202.77 205.68 204.94
53 196.41 196.84 198.14 200.33 203.51 202.52
54 193.58 194.05 195.45 197.84 201.30 200.04
55 190.67 191.17 192.70 195.30 199.07 197.48
56 187.67 188.21 189.87 192.70 196.83 194.84
57 184.58 185.17 186.97 190.07 194.57 192.18
58 181.40 182.04 184.00 187.39 192.31 189.42
59 178.12 178.82 180.97 184.67 190.06 186.59
60 174.75 175.51 177.87 181.92 187.82 183.68
61 171.28 172.12 174.70 179.14 185.60 180.76
62 167.73 168.64 171.48 176.35 183.42 177.73
63 164.09 165.09 168.21 173.55 181.29 174.63
64 160.36 161.48 164.90 170.76 179.22 171.46
65 156.57 157.79 161.55 167.99 177.22 168.31
66 152.70 154.05 158.18 165.24 175.31 165.04
67 148.76 150.24 154.78 162.54 173.49 161.70
68 144.75 146.38 151.38 159.88 171.78 158.28
69 140.67 142.46 147.97 157.30 170.19 154.96
70 136.53 138.50 144.57 154.80 168.72 151.48
71 132.31 134.50 141.20 152.39 167.38 147.92
72 128.04 130.46 137.87 150.10 166.17 144.48
73 123.73 126.41 134.59 147.93 165.10 140.90
74 119.38 122.37 131.39 145.90 164.16 137.25
75 115.01 118.33 128.27 144.02 163.35 133.53
</TABLE>
Option 4 - Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $224.40 $225.44 $226.49 $227.57 $228.65 $229.75 $230.86 $231.97 $233.08 $234.19 $235.30
51 222.31 223.38 224.48 225.60 226.73 227.87 229.02 230.17 231.33 232.49 233.65
52 220.13 221.25 222.39 223.55 224.72 225.91 227.11 228.31 229.52 230.72 231.93
53 217.87 219.03 220.22 221.42 222.64 223.88 225.12 226.37 227.63 228.88 230.14
54 215.52 216.73 217.96 219.21 220.48 221.76 223.06 224.36 225.66 226.97 228.27
55 213.08 214.34 215.61 216.91 218.23 219.56 220.91 222.26 223.62 224.98 226.33
56 210.55 211.85 213.18 214.53 215.90 217.28 218.68 220.08 221.49 222.91 224.32
57 207.92 209.27 210.65 212.05 213.47 214.91 216.36 217.82 219.29 220.76 222.22
58 205.19 206.59 208.03 209.48 210.96 212.45 213.96 215.48 217.00 218.52 220.05
59 202.36 203.82 205.30 206.81 208.35 209.90 211.46 213.04 214.62 216.20 217.79
60 199.43 200.94 202.48 204.05 205.54 207.25 208.87 210.51 212.15 213.80 215.44
61 196.39 197.95 199.55 201.18 202.83 204.50 206.19 207.89 209.59 211.30 213.01
62 193.24 194.86 196.51 198.20 199.91 201.65 203.40 205.16 206.94 208.71 210.48
63 189.98 191.66 193.37 195.12 196.90 198.70 200.51 202.34 204.18 206.03 207.87
54 186.62 188.35 190.13 191.93 193.77 195.64 197.53 199.42 201.33 203.24 205.16
65 183.16 184.94 186.77 188.64 190.55 192.48 194.43 196.40 198.38 200.36 202.35
66 179.59 181.42 183.31 185.24 187.21 189.21 191.23 193.27 195.32 197.38 199.44
67 175.91 177.80 179.75 181.74 183.77 185.83 187.93 190.04 192.16 194.30 196.43
68 172.13 174.07 176.07 178.12 180.22 182.35 184.51 186.70 188.90 191.11 193.32
69 168.24 170.24 172.30 174.41 176.56 178.76 180.99 183.25 185.52 187.81 190.10
70 164.24 166.30 168.41 170.58 172.80 175.06 177.36 179.69 182.04 184.41 186.78
71 160.14 162.25 164.42 166.65 168.94 171.26 173.63 176.03 178.46 180.90 183.35
72 155.95 158.10 160.33 162.62 164.97 167.36 169.80 172.27 174.77 177.28 179.82
73 151.66 153.86 156.15 158.49 160.90 163.36 165.86 168.40 170.97 173.57 176.18
74 147.29 149.54 151.87 154.27 156.74 159.26 161.83 164.44 167.08 169.75 172.44
75 142.84 145.13 147.50 149.96 152.48 155.07 157.70 160.38 163.10 165.84 168.60
</TABLE>
12
UITG-194P OR0PXSTC
<PAGE> 13
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2 and 3 - Single Life Annuities
<TABLE>
<CAPTION>
Monthy Payments Guaranteed
----------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $192.14 $192.47 $193.45 $195.06 $209.94 $196.46
51 189.89 190.25 191.32 193.06 195.52 194.47
52 187.57 187.96 189.12 191.01 193.69 192.45
53 185.18 185.60 186.85 188.91 191.83 190.34
54 182.70 183.16 184.51 186.76 189.94 188.17
55 180.14 180.64 182.11 184.55 188.03 185.92
56 177.50 178.04 179.63 182.30 186.09 183.60
57 174.77 175.35 177.09 180.00 184.14 181.21
58 171.95 172.58 174.47 177.65 182.18 178.81
59 169.03 169.71 171.79 175.27 180.22 176.29
60 166.02 166.77 169.04 172.85 178.27 173.70
61 162.91 163.73 166.22 170.40 176.34 171.03
62 159.72 160.62 163.35 167.93 174.43 168.35
63 156.43 157.42 160.43 165.45 172.56 165.57
64 153.06 154.16 157.45 162.97 170.74 162.71
65 149.62 150.82 154.44 160.50 168.98 159.78
66 146.09 147.42 151.40 158.04 167.30 156.86
67 142.49 143.95 148.32 155.62 165.69 153.83
68 138.82 140.42 145.24 153.24 164.18 150.73
69 135.07 136.83 142.14 150.92 162.77 147.55
70 131.25 133.19 139.04 146.66 161.46 144.44
71 127.35 129.50 135.96 146.49 160.27 141.20
72 123.39 125.77 132.90 144.42 159.20 137.89
73 119.38 122.02 129.89 142.45 158.24 134.51
74 115.32 118.25 126.94 140.61 157.41 131.31
75 111.23 114.50 124.08 138.90 156.68 127.92
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $209.69 $210.56 $211.44 $212.32 $213.22 $214.12 $215.03 $215.93 $216.84 $217.74 $218.64
51 207.94 208.84 209.76 210.69 211.62 212.56 213.51 214.46 215.41 216.35 217.29
52 206.11 207.05 208.01 208.98 209.96 210.94 211.93 212.92 213.91 214.90 215.88
53 204.21 205.19 206.18 207.19 208.21 209.24 210.28 211.31 212.35 213.38 214.40
54 202.21 203.24 204.28 205.33 206.40 207.47 208.55 209.63 210.71 211.79 212.86
55 200.14 201.21 202.29 203.39 204.50 205.62 206.75 207.88 209.01 210.13 211.25
56 197.97 199.09 200.22 201.37 202.53 203.69 204.87 206.05 207.22 208.40 209.57
57 195.72 196.88 198.06 199.26 200.46 201.68 202.91 204.14 205.37 206.60 207.82
58 193.37 194.58 195.81 197.05 198.32 199.59 200.86 202.15 203.43 204.71 205.99
59 190.92 192.18 193.46 194.76 196.07 197.40 198.73 200.07 201.41 202.75 204.08
60 188.36 189.68 191.01 192.37 193.74 195.12 196.51 197.91 199.30 200.70 202.09
61 185.71 187.08 188.47 189.88 191.31 192.75 194.20 195.65 197.11 198.56 200.01
62 182.95 184.37 185.82 187.29 188.78 190.28 191.79 193.31 194.83 196.34 197.85
63 180.09 181.56 183.07 184.60 186.15 187.71 189.28 190.87 192.45 194.03 195.61
64 177.12 178.65 180.21 181.80 183.41 185.04 186.68 188.33 189.98 191.62 193.27
65 174.04 175.63 177.25 178.90 180.57 182.26 183.97 185.69 187.40 189.12 190.83
66 170.86 172.50 174.18 175.89 177.62 179.38 181.16 182.94 184.73 186.52 188.30
67 167.57 169.27 171.00 172.77 174.57 176.40 178.24 180.10 181.96 183.82 185.68
68 164.18 165.93 167.72 169.55 171.41 173.30 175.21 177.14 179.08 181.01 182.95
69 160.67 162.48 164.33 166.22 168.14 170.10 172.08 174.08 176.09 178.10 180.11
70 157.06 158.92 160.83 162.78 164.77 166.79 168.84 170.91 173.00 175.09 177.18
71 153.34 155.25 157.22 159.23 161.29 163.38 165.50 167.64 169.80 171.96 174.13
72 149.51 151.48 153.51 155.58 157.70 159.86 162.05 164.26 166.49 168.74 170.98
73 145.59 147.61 149.69 151.83 154.01 156.24 158.49 160.78 163.08 165.40 167.73
74 141.58 143.65 145.78 147.97 150.22 152.51 154.84 157.19 159.57 161.97 164.37
75 137.49 139.59 141.77 144.02 146.33 148.68 151.08 153.51 155.96 158.43 160.91
</TABLE>
13
UITG-194P OR0PXSTD
<PAGE> 14
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 26 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under the Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.19 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity
You designate to receive any benefits payable upon Your death.
(b) Designation of Beneficiary. During Your lifetime, You have the
right to designate a Beneficiary and to change the designation.
The change may be made by sending a written request to Our Home
Office. The change will take effect when We have recorded the
change. However, after the change is recorded, the change will be
deemed effective as of the date of the written request for
change. The change will be subject to any payment made or action
taken by Us before the request is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the
Beneficiary designation:
(1) If any Beneficiary dies prior to You, that Beneficiary's
interest will pass to any other Beneficiary according to
the surviving Beneficiary's respective interest.
(2) If no Beneficiary survives You, death benefits will be
paid to Your estate.
(3) If any Beneficiary dies after You, that Beneficiary's
interest will pass to his or her Beneficiary or, if none,
to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether You
or a Beneficiary died first in a common disaster, We will assume
that the Beneficiary died first and make payments on that basis.
(e) Multiple Beneficiaries. You may designate two or more
Beneficiaries to receive separate percentage interests in the
death benefits payable under the Contract. Each such Beneficiary
may separately exercise his or her rights.
(f) Trust or Estate as Beneficiary. Payments to a beneficiary that is
a trust or estate will be made only in a lump sum or in
installments over a period not to exceed five years.
4.20 DEATH PAYMENT PROVISIONS
(a) Death During Accumulation Period. If You die during the
Accumulation Period, a death benefit described in (1) or (2)
below is payable.
(1) If You die on or after age 70, the death benefit is the
greater of (a) the Accumulation Value of Your Account on
the date We receive proof of death, or (b) 100% of Purchase
Payments reduced by the amount of any prior withdrawals and
further reduced by any portion of the Accumulation Value
that has been applied under an Annuity Income Option.
(2) If You die before age 70, the death benefit is the sum of
the benefits under the Fixed Interest Options and the
Variable Investment Options, as follows:
The benefit under the Fixed Interest Options is the greater
of:
(a) the Fixed Interest Option Values on the date We
receive proof of death; or
14
UITG-194P OR0PXSTE
<PAGE> 15
(b) 100% of Purchase Payments allocated to the Fixed
Interest Options, reduced by the amount of any prior
withdrawals or transfers from Fixed Interest Options
and further reduced by any portion of the
Accumulation Value that has been applied under an
Annuity Income Option.
The benefit under the Variable Investment Options is the
greater of:
(a) the Variable Investment Option Values on the date We
receive proof of death, or
(b) 100% of Purchase Payments allocated to Variable
Investment Options reduced by the amount of any
prior withdrawals or transfers from the Variable
Investment Options, plus interest at an annual rate
of 3%. For this purpose, all amounts transferred
into Variable Investment Options are considered
Purchase Payments allocated to Variable Investment
Options.
Subject to Section 5.03, the death benefit is payable at any
time Your Beneficiary selects and in any form You could have
selected under the Contract.
(b) Death During Annuity Period. If You die during the Annuity
Period, the amount of the death benefit, if any, will be based
on the terms of the Annuity Income Option. Unless You elected
the Fourth Option, the Beneficiary may elect to receive the
death benefit in one of the following forms:
(1) Continuing annuity payments under the terms of Your
Annuity Income Option with the right, for Variable
Annuities only, to receive the remaining payments in a
lump sum at any time thereafter;
(2) A lump sum; or
(3) Annuity payments under another Annuity Income Option,
based on the available lump sum and subject to the
limitations of Section 5.03.
The lump sum available under these alternatives is the present
value of remaining payments, discounted at the Assumed
Investment Rate, and based on the current Annuity Unit Value for
(2) and (3), or the value next determined after receipt of the
request at VALIC's Home Office for (1).
(c) Investment Options and Other Rights. Until the death benefits
have been fully paid, Your Beneficiary will be entitled to
exercise all the Investment Options and other rights You can
exercise under the Contract. Unpaid death benefits that have not
been applied under an Annuity Income Option will have an
Accumulation Value determined in the same manner as Your
Accumulation Value.
(d) Proof of Death. Proof of death may be made by sending VALIC a
certified copy of the death certificate, a certified copy of a
decree of a court of competent jurisdiction as to death, a
written statement by an attending physician, or any other proof
satisfactory to VALIC.
15
UITG-194P OR0PXSTF
<PAGE> 16
SECTION 5 - CODE REQUIREMENTS AND RETIREMENT PLAN PROVISIONS
5.01 SALARY REDUCTION PURCHASE PAYMENTS - If Your Purchase Payments are
made under a voluntary salary reduction agreement as part of a
Tax-Deferred Annuity arrangement under Section 403(b) of the Code, i)
there may not be a separate Plan document, in which case the Contract
is the Plan, and ii) in either case the following restrictions apply:
(a) Limit on Purchase Payments. Your salary reduction Purchase
Payments may not exceed the limits of Section 402(g) of the
Code. We reserve the right to refund excess Purchase Payments.
(b) Withdrawal Restrictions. Your Accumulation Value attributable to
salary reduction Purchase Payments cannot be withdrawn or
otherwise distributed before You are 59 1/2 years old, unless
You (1) have separated from service with the employer
maintaining the Plan, (2) die, (3) become disabled (see Section
4.06(c)), or (4) have incurred a hardship (hardship withdrawals
are not available for earnings on salary reduction purchase
payments). This limitation will be applied in a manner
consistent with the requirements of Section 403(b)(11) of the
Code. Equivalent withdrawal restrictions apply to any portion of
the Accumulation Value that is attributable to Purchase
Payments representing amounts directly transferred from a
custodial account under Section 403(b)(7) of the Code.
5.02 MINIMUM DISTRIBUTIONS AFTER AGE 70 1/2
(a) General Rules. Your benefits under the Contract must satisfy
minimum distribution rules of the applicable section of the Code
and regulations issued by the Secretary of the Treasury under
the applicable section. These minimum distribution rules
generally require that benefits begin after You are 70 1/2 years
old and that the minimum amount is paid each year. Payments may
be made in the form of annual withdrawals or under an Annuity
Income Option.
Code Sections which apply are: (i) Section 401(a)(9) for
contracts issued for a Plan intended to meet Sections 401(a)
and/or 403(a), (ii) Section 403(b)(10) for Section 403(b)
contracts, and (iii) Section 457(d) for deferred compensation
plans under Section 457.
(b) Minimum Annual Withdrawals. The minimum withdrawal is set each
year based on the Accumulation Value and the life expectancy of
You and Your Beneficiary. You may elect to have life
expectancies computed for each year's distribution, or to use
the life expectancies computed at the first distribution
(reduced by one year for each annual withdrawal) for all later
distributions. If Your Beneficiary is not Your spouse, the
annual withdrawal must meet the minimum distribution incidental
benefit requirements.
(c) Annuity Income Option. If You elect payments under an Annuity
Income Option, the guaranteed or expected period of payments
under the Annuity Income Option may not exceed Your life
expectancy and that of Your Beneficiary at the Annuity Date, or
a shorter period if Your Beneficiary is not Your spouse.
(d) 403(b) Exception to General Rule. Any amount added to the
Contract which was initially within a Section 403(b) contract
prior to January 1, 1987 and continually since then, may either
be paid in a manner which meets these rules or must (1) begin to
be paid when You are age 75; and (2) the present value of
payments expected to be made to You, over life, under the option
chosen must exceed 50% of the present value of all payments
expected to be made ("the 50% rule"). Notwithstanding, Your
entire Section 403(b) Contract balance must meet the minimum
distribution incidental benefit requirement of Section
403(b)(10).
5.03 MINIMUM DEATH BENEFIT DISTRIBUTIONS
(a) General Rules. The death benefit, if any, payable to Your
Beneficiary must also satisfy the rules of Section 401(a)(9)(B),
Section 403(b)(10) or Section 457(d), whichever may be
applicable, and the regulations issued under such sections by
the Secretary of the Treasury. The post-death rules of these
sections limit the extent to which a Beneficiary may delay
payment of death benefits. Your Beneficiary may satisfy these
rules by receiving a lump sum, annual withdrawals, or payments
under an Annuity Income Option.
(b) Death Before Distributions Begin. If You die before payments
under an Annuity Income Option (or post-age 70 1/2 withdrawals)
have begun, Your Beneficiary must either receive the whole
benefit by the end of the fifth year following the year of Your
death or receive the benefit in installment payments over his or
her life or life expectancy if payments begin by the calendar
year following the year of Your
16
UITG-194P OR0PXSTG
<PAGE> 17
death, Your spouse beneficiary may delay distributions until You
would have reached age 70 1/2.
(c) Death After Distributions Begin. If You die after payments under
an Annuity Income Option (or post-age 70 1/2 withdrawals) have
begun, the death benefit must be paid at least as fast as under
the method You selected.
5.04 DIRECT ROLLOVERS - If any benefit payable under this Contract
constitutes an "eligible rollover distribution" within the meaning of
Section 402 of the Code, You have the right to elect to have such
distribution paid directly to an "eligible retirement plan" in a
transaction designated under the Code as a "direct rollover." Before
any eligible rollover distribution is made to You, we will provide You
with a written explanation of Your right to make a direct rollover and
the tax consequences of making or not making a direct rollover. No
surrender, withdrawal, or other benefit distribution that constitutes
an eligible rollover distribution will be made to You under the
Contract, unless the Code's requirements applicable to eligible
rollover distributions have been satisfied. Except for eligible
rollover distributions, We reserve the right to make payments only to
You or Your Beneficiary.
5.05 PLAN PROVISIONS - The Plan, including certain Plan provisions required
by the Employee Retirement Income Security Act of 1974 (ERISA) or other
applicable law, may limit Your rights under the Contract. The Plan
provisions may:
(a) Limit Your right to make Purchase Payments;
(b) Restrict the time when You may elect to receive payments under
the Contract;
(c) Require the consent of Your spouse before You may elect to
receive payments under the Contract;
(d) Require that all distributions be made in the form of a joint and
survivor annuity for You and Your spouse, unless both consent to
a different form of distribution;
(e) Require that Your spouse be designated as Beneficiary;
(f) Require that You remain employed with the Contract Owner for a
specified period of time before Your rights under the Contract
become fully vested; or
(g) Otherwise restrict Your exercise of rights under the Contract or
give the Contract Owner (or a Plan representative) the right to
exercise certain rights on Your behalf.
No such Plan provision shall limit Your rights under the Contract,
unless the Contract Owner has provided VALIC with written notification
of such provision. In no event shall any such Plan provision enlarge
VALIC's obligations under the Contract.
17
UITG-194P OR0PXSTH
<PAGE> 18
SECTION 6 - GENERAL PROVISIONS
6.01 ASSIGNMENT - No interest in the Contract may be sold, assigned,
discounted, or pledged as collateral for a loan or as security for the
performance of an obligation. The benefits, values, and rights are not
subject to any creditor claims to the fullest extent permitted by law.
The Contract and its rights cannot be transferred to anyone other than
Us, except as provided under the Plan or under a domestic relations
order properly issued by a court of competent jurisdiction and that
complies with ERISA, if applicable.
6.02 VESTING - Except as may be provided in the Plan, Your rights under the
Contract are fully vested and nonforfeitable. Separate Account A holds
all assets for Variable investment Options for the exclusive benefit
of Participants, Beneficiaries, and other holders of annuity
contracts.
6.03 WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
6.04 REPORTS - We will send You a Separate Account financial report twice
each year if You have values in any Variable Investment Option.
We will send to You, at least annually, a statement showing the dollar
value of all investment options, investment performance since the
prior statement, and as applicable, the number and value of any
Variable Accumulation Units credited to Your Account. All statements
will be mailed within two months of the date of the information.
6.05 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of the Contract's participation in
the Separate Account through one or more Variable investment Options,
We will vote those shares as instructed. You, or Your Beneficiary, if
You have died, will have the voting instruction rights prior to the
Annuity Date. The annuity payee will have the voting instruction
rights on and after the Annuity Date.
6.06 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate Account for any period when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday
closings); (b) when trading on the Exchange is restricted; (c) when an
emergency prevents disposal of securities held in the Separate Account
or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
6.07 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
6.08 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that You and any payee is alive on the date any benefit payment is due.
If this proof is not received after requested in writing, VALIC will
have the right to make reduced payments or to withhold payments
entirely until such proof is received.
6.09 SUBSTITUTION OF INVESTMENT FUND SHARES - If shares of a particular
Investment Fund are not available or if, in the judgment of VALIC, such
shares are no longer appropriate for a Variable Investment Option,
shares of another Investment Fund may be substituted for the Investment
Fund shares already held under the Variable Investment Option and for
those to be purchased by future Purchase Payments or transfers under
the Contract. In the event any substitution occurs, VALIC will notify
the Contract Owner within five days.
6.10 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under the Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
6.11 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income, gains or losses.
18
UITG-194P OR0PXSTI
<PAGE> 1
EXHIBIT 4(b)(iv)
(LOGO) The Variable Annuity
VALIC Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
- - --------------------------------------------------------------------------------
* An American General Company
ANNUITANT:
DATE OF ISSUE: ANNUITY DATE:
CONTRACT NUMBER: DATE OF BIRTH:
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
See Index on Page 2
o MAINTENANCE CHARGE - There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each quarter and is assessed
only if any portion of the Accumulaton Value was applied to one or more
Variable Investment Options during that quarter. See Section 2.04 for a
complete description.
o SEPARATE ACCOUNT CHARGE - There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily net
asset value of the Separate Account, based upon the Variable Investment
Option to which assets are allocated. This charge only applies to assets
under Variable Investment Options. See Section 2.05 for a complete
description.
o CASH SURRENDER OR WITHDRAWAL CHARGE - There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03 through 4.06 for a complete description and conditions under
which there is no charge.
The conditions and provisions on this and the following pages are the entire
legal Contract between VALIC and the Annuitant. No agent has the authority
to change this Contract or waive any of its provisions. Only the President or
a Vice President of VALIC may change this Contract. Any such changes must be in
writing. All conditions and provisions are subject to applicable state laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ CYNTHIA A. TOLEN /s/ S.D. BICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
NOTICE OF TWENTY DAY RIGHT TO EXAMINE CONTRACT
YOU MAY CANCEL THIS CONTRACT BY DELIVERING OR MAILING A WRITTEN NOTICE TO: THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, 2929 ALLEN PARKWAY, HOUSTON, TEXAS
77019, AND BY RETURNING THE CONTRACT BEFORE MIDNIGHT OF THE TWENTIETH (20) DAY
AFTER THE DATE YOU RECEIVE THE CONTRACT. NOTICE GIVEN BY MAIL AND RETURN OF THE
CONTRACT BY MAIL ARE EFFECTIVE ON BEING POSTMARKED, PROPERLY ADDRESSED AND
POSTAGE PREPAID. VALIC WILL RETURN ALL PAYMENTS ALLOCATED TO THE CONTRACT WITHIN
TEN DAYS AFTER IT RECEIVES NOTICE OF CANCELLATION AND THE RETURNED POLICY.
INDIVIDUAL FIXED AND VARIABLE DEFERRED RETIREMENT ANNUITY CONTRACT
- NON-PARTICIPATING -
UIT-IRA-194 IR0IXST1
<PAGE> 2
INDEX
<TABLE>
<S> <C> <C>
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . 3
SECTION 2 CONTRACT AND PURCHASE PAYMENTS . . . . . . 3
2.01 Incontestability . . . . . . . . . . . . . 3
2.02 Minimum Contract Value . . . . . . . . . . 3
2.03 Purchase Payments. . . . . . . . . . . . . 3
2.04 Maintenance Charge . . . . . . . . . . . . 3
2.05 Separate Account Charge. . . . . . . . . . 3
SECTION 3 INVESTMENT OPTIONS . . . . . . . . . . . . 4
3.01 Fixed Interest Options . . . . . . . . . . 4
3.02 Variable Investment Options . . . . . . . 4
3.03 Accumulation Unit . . . . . . . . . . . . 4
3.04 Accumulation Unit Value. . . . . . . . . . 4
3.05 Transfers During the Accumulation
Period . . . . . . . . . . . . . . . . . . 4
3.06 Transfers During the Annuity Period. . . . 5
SECTION 4 BENEFITS . . . . . . . . . . . . . . . . . 6
4.01 Cash Surrender . . . . . . . . . . . . . . 6
4.02 Withdrawals . . . . . . . . . . . . . . . 6
4.03 Charges for Cash Surrender or
Withdrawal . . . . . . . . . . . . . . . . 6
4.04 No Charge Systematic Withdrawals . . . . . 6
4.05 No Charge Minimum Distributions. . . . . . 6
4.06 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted. . . . 7
4.07 Annuity Period . . . . . . . . . . . . . . 7
4.08 Starting Annuity Income Benefits . . . . . 7
4.09 Partial Annuitization. . . . . . . . . . . 7
4.10 Minimum Annuity Payments . . . . . . . . . 7
4.11 Misstatement of Age or Sex . . . . . . . . 7
4.12 Annuity Income (Payment) Options . . . . . 7
4.13 Fixed or Variable Annuity Basis. . . . . . 8
4.14 Variable Annuity Payments. . . . . . . . . 8
4.15 Assumed Investment Rate (AIR). . . . . . . 8
4.16 Annuity Units and Annuity Unit Value . . . 8
4.17 Betterment of Rates. . . . . . . . . . . . 9
4.18 Annuity Rate Tables. . . . . . . . . . . . 9-14
4.19 Beneficiaries. . . . . . . . . . . . . . . 14
4.20 Death Payment Provisions . . . . . . . . . 14
SECTION 5 CODE REQUIREMENTS 16
5.01 Minimum Distributions After Age 70 1/2 . . 16
5.02 Minimum Death Benefit Distributions. . . . 16
SECTION 6 GENERAL PROVISIONS . . . . . . . . . . . . 17
6.01 Nontransferability . . . . . . . . . . . . 17
6.02 Exclusive Benefit and Nonforfeitability. . 17
6.03 Written Notices to Us. . . . . . . . . . . 17
6.04 Change of Contract . . . . . . . . . . . . 17
6.05 Amendment. . . . . . . . . . . . . . . . . 17
6.06 Reports . . . . . . . . . . . . . . . . . 17
6.07 Voting Rights. . . . . . . . . . . . . . . 17
6.08 Suspension of Payments . . . . . . . . . . 17
6.09 Deferral of Cash Surrender or
Withdrawal . . . . . . . . . . . . . . . . 17
6.10 Proof of Survival. . . . . . . . . . . . . 17
6.11 Substitution of Investment Fund
Shares . . . . . . . . . . . . . . . . . . 17
6.12 Minimum Benefit. . . . . . . . . . . . . . 17
6.13 Separate Account . . . . . . . . . . . . . 17
</TABLE>
2
UIT-IRA-194 IR0IXST2
<PAGE> 3
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase
Payment and the Annuity Date.
ACCUMULATION VALUE - equals the sum of the values of Your Fixed Interest
Options and Variable Investment Options that have not been applied to provide
annuity payments.
ANNUITANT - the Contract Owner. Any reference to "You" or "Your" means
Annuitant.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The Variable
Annuity Life Insurance Company.
CONTRACT YEAR - the twelve month period starting with the date of issue and
subsequently with each anniversary of that date.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account.
HOME OFFICE - the principal office of VALIC.
PURCHASE PAYMENT - an amount paid to VALIC in consideration for the benefits
of this Contract.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of Your Contract less any charges.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - This Contract is incontestable. This Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM CONTRACT VALUE - We can end the Contract and pay the Surrender
Value to You if, during the Accumulation Period, the total
Accumulation Value for this Contract falls below $300 and there are no
Purchase Payments for two consecutive Contract Years and the paid up
annuity benefit at retirement would be less than $20 per month.
2.03 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period. We require no payment beyond the first. We
will not penalize You if any scheduled payments are omitted or
stopped.
If only one Purchase Payment is to be made, it must be at least
$1,000. Periodic payments must be at least $50 each. VALIC may waive
this minimum. Purchase Payments for a tax year must be made on or
before the due date of Your tax return.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to Your
directions.
Purchase Payments shall be in the form of cash and may not exceed
$2,000 or 100% of compensation per tax year or such other amount
prescribed by law. Compensation shall include wages, salaries, and
professional fees, as well as amounts received as alimony. The
preceding two sentences shall not apply to any rollover contributions
permitted under Code sections 402(c), 403(a)(4), 403(b)(8), or
408(d)(3), or to Purchase Payments made to a Simplified Employee
Pension Plan as described in Code section 408(k).
2.04 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which any
Variable Investment Option Accumulation Value is credited to this
Contract. We will not deduct the charge for any calendar quarter if
the Accumulation Value for this Contract is credited only to the Fixed
Interest Options throughout the quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among Your Variable Investment Options. However,
if You surrender the Contract or transfer all Variable Accumulation
Values to a Fixed Interest Option, the full quarterly charge will be
deducted at the time of surrender or transfer.
The charge is $3.75 for each quarter. The maintenance charge may be
waived or reduced uniformly on all contracts issued under certain
plans or arrangements which are expected to result in administrative
cost savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
2.05 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option. The rate is fixed and may not be increased by Us.
3
UIT-IRA-194 IR0IXST3
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SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by You. We reserve the right to limit allocations among
Investment Options to seven at any one time. Each selection must be a whole
percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately
to amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Investment returns on Variable Investment
Options may be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to Your Contract due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited to Your Contract is determined by dividing
the dollar amount of the transaction by the Accumulation Unit Value
for that Variable Investment Option at the next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, You may transfer amounts among Investment Options, except as
provided below.
(a) We reserve the right to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30 days
apart.
(c) Transfers from the Short Term Fixed Account. After a transfer to
the Short Term Fixed Account, You may not make any transfer from
the Short Term Fixed Account for 90 days. We may change this
transfer restriction at any time. However, the transfer
restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. You may transfer up to 20% of
the Accumulation Value allocated to Fixed Account Plus during
each Contract Year. If multiple transfers are made in a Contract
Year, the percentages of the Accumulation Value transferred each
time will be added together to determine the 20% transfer limit
for that Contract Year. For each transfer, the percentage
transferred is the ratio of the amount transferred to the
portion of the Accumulation Value allocated to Fixed Account
Plus immediately prior to the transfer. However, if following a
20% transfer, the remaining amount allocated to Fixed Account
Plus would be less than $500, You may also transfer the
remaining amount.
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UIT-IRA-194 IR0IXST4
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3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, You
may transfer Annuity Unit values among the Variable Investment
Options. You may also transfer Annuity Unit values from the Variable
Investment Options underlying a Variable Annuity to provide a Fixed
Annuity. Transfers must be at least 365 days apart. We will not permit
any transfer from a Fixed Annuity during the Annuity Period.
5
UIT-IRA-194 IR0IXST5
<PAGE> 6
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - Subject to the restrictions in Section 5.01, You may
surrender this Contract before the Annuity Date for a cash payment
equal to the Surrender Value as of the date We receive the request at
the Home Office. The Surrender Value is the Accumulation Value less
any charges, as described below. Upon surrender for cash, all of Our
obligations under this Contract will be terminated.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable Investment
Options or withdrawn.
4.02 WITHDRAWALS - Subject to the restrictions in Section 5.01, You may
withdraw a portion of Your Accumulation Value in cash at any time
before the Annuity Date. We may deduct a charge as described below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1)
the amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat all withdrawals as
withdrawals of Purchase Payments before any earnings. We treat
the most recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Contract Year. Subject to the provisions of
Sections 4.04 and 4.05 in any Contract Year You may withdraw up
to 10% of the Accumulation Value without a charge. The surrender
charge will be applicable only to the amount withdrawn that
exceeds 10%. The percentage withdrawn will be calculated as the
ratio of the amount withdrawn to the Accumulation Value imme-
diately prior to the withdrawal. If multiple withdrawals are
made in a Contract Year, the percentages withdrawn for each
withdrawal will be added together to determine whether the 10%
limit has been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time.
However, no change in availability will result in any charge against
amounts withdrawn under a previously elected NCSW. A NCSW must meet
the following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to You.
(3) The NCSW is not available in any Contract Year You have in
effect any other systematic withdrawal (with or without charge)
or a No Charge Minimum Distribution (NCMD).
(4) Once You begin a NCSW You may not change the terms of the
election. However, You may revoke the election at any time. Once
the election is revoked You may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Contract Year the NCSW has been, or is in
effect. Distributions under the NCSW may not begin in a Contract
Year in which You have taken one or more Section 4.03
withdrawals without charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The
annual dollar amount chosen must be the same for each year
the NCSW is in effect and cannot be greater than 20% of
the Accumulation Value at the time of the NCSW election.
(b) Specified Percentage - an annual specified percentage. The
annual specified percentage chosen cannot be greater than
20% of the Accumulation Value.
(c) Specified Period - payments for a designated time period.
We will determine each payment by dividing the
Accumulation Value by the number of payments remaining in
the elected period.
4.05 NO CHARGE MINIMUM DISTRIBUTIONS - We will waive applicable surrender
charges on No Charge Minimum Distributions (NCMD). A NCMD is a
withdrawal which meets the following conditions:
(1) You are at least age 70 1/2, and the NCMD is payable to You.
(2) The amount withdrawn does not exceed the amount required to be
distributed under the Code and regulations issued by the
Secretary of the Treasury for this Contract.
(3) The NCMD is not available in any Contract Year You have
withdrawn any amount under a No Charge Systematic Withdrawal
(NCSW).
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UIT-IRA-194 IR0IXST6
<PAGE> 7
4.06 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges under any of the following
conditions:
(a) You elect an Annuity Income Option; or
(b) Payment of any death benefit; or
(c) You have become totally and permanently disabled. This means
that You are unable, because of physical or mental impairment,
to perform the material and substantial duties of any occupation
for which You are suited by means of education, training or
experience. The impairment must have been in existence for more
than 180 days to qualify for this benefit.
Such impairment must be expected to result in death or be
long-standing and indefinite.
We require proof of disability. We will accept a certified
Social Security finding of disability or a doctor's
verification; or
(d) The withdrawal and any earlier withdrawals during the same
Contract Year do not exceed 10% of the Accumulation Value (see
Section 4.03); or
(e) On any amount You withdraw with respect to the NCSW described in
Section 4.04, or the NCMD described in Section 4.05; or
(f) No Purchase Payments have been made in the five years preceding
the date of the surrender or withdrawal; or
(g) You are at least 59 1/2 years old and Your Contract is at least
seven years old; or
(h) Your Contract is fifteen or more years old.
The surrender charge may be waived or reduced uniformly on all
contracts issued under certain plans or arrangements which are
expected to result in administrative cost savings. No reduction or
waiver will be made that is unfairly discriminatory to any person.
We may waive any withdrawal or surrender charge attributable to
Purchase Payments received during specific periods of time, and under
conditions and limitations set by Us. Any such waiver will be made by
Resolution of the Board of Directors. Notice of the right to surrender
without charge will be mailed to affected contractholders when such
waiver is declared by the Board of Directors.
4.07 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
Your Accumulation Value is applied under an Annuity Income Option. You
may change the Annuity Date shown on the first page of Your Contract
by giving Us at least 30 days notice.
The selected Annuity Date may be the first day of any calendar month,
but if You choose a life income option, the Annuity Date may not
precede Your 50th birthday without Our permission.
4.08 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, You must choose one of the Annuity Income Options in
Section 4.12 and provide acceptable proof of age for any person whose
age is taken into account under a life income option. If You fail to
select another Annuity Income Option, annuity payments will be made on
the basis of the Second Option with payments guaranteed for a ten-year
period, commencing on the Annuity Date.
4.09 PARTIAL ANNUITIZATION - You may choose to apply less than the full
Accumulation Value under an Annuity Income Option and may choose
different Annuity Dates and different Annuity Income Options for
different portions of the Accumulation Value. Therefore, the Contract
may, at times, be in both an Accumulation Period and an Annuity
Period. If You choose to do this, the provisions of the Contract
relating to the Accumulation Period and the Annuity Period will be
applied as though there were separate Contracts.
4.10 MINIMUM ANNUITY PAYMENTS - You may not choose any Annuity Income
Option if the resulting initial payment would be less than $25 under
either a Fixed or Variable Annuity. We reserve the right to convert
monthly payments to quarterly, semi-annual or annual payments so the
initial payment will be at least $25.
4.11 MISSTATEMENT OF AGE OR SEX - If annuity payments depend upon an
individual's survival and the date of birth or the sex of any
individual was misstated, We will adjust the remaining payments. The
amount remaining to be paid will be the amount that should have been
paid with the correct information. We will credit or charge the amount
of any underpayment or overpayment against the next succeeding payment
or payments, if any remain. We reserve the right to collect any
overpayment directly from the payee.
4.12 ANNUITY INCOME (PAYMENT) OPTIONS - You may choose to receive payments
under any of the Annuity Income Options below or any other option
agreed to by VALIC. Any option chosen must comply with applicable
state and federal laws and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income
payable during Your life. All payments cease at Your death with no
further amounts payable.
7
UIT-IRA-194 IR0IXST7
<PAGE> 8
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An income payable during Your life. If, at Your death, We
have made payments for fewer than the number of years selected, We
will continue payments to the Beneficiary for the remainder of the
guarantee period.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An
income payable during Your life. Payments cease at Your death.
However, the Beneficiary may receive an additional payment.
For payments on a Fixed Annuity basis, the additional payment, if any,
will be the Accumulation Value applied to this option less the total
of all prior payments.
For payments on a Variable Annuity basis, the additional payment, if
any, will be the current value of the number of Annuity Units credited
at the Annuity Date less the number of Annuity Units that have been
paid. For this purpose, the number of Annuity Units credited equals
the Accumulation Value applied to this option divided by the Annuity
Unit Value at the date used to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable
during the joint lives of You and a second person and thereafter
during the life of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable
for a selected number of years between five and thirty. This option is
available for Fixed Annuities only.
Life expectancy and joint and last survivor expectancy under the
annuity options above are computed by use of the return multiples
contained in section 1.72-9 of the Income Tax Regulations.
Under the Second or Fifth Options, the Beneficiary may elect to
receive in one sum the present value of the remaining payments. For
the Second and Fifth Options, the present value of fixed payments is
computed at an interest rate of 3 1/2%. For variable payments under
the Second Option, the present value is computed on the basis of an
Assumed Investment Rate equal to that rate used to calculate the
Annuitant's first annuity payment.
The Annuity Period under the Second and Fifth Options may not exceed
Your life expectancy or the joint life expectancies of You and Your
Beneficiary on the Annuity Date.
4.13 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen Variable
Investment Options.
You may elect to receive payments under any annuity option as a Fixed
Annuity, a Variable Annuity, or a combination Fixed and Variable
Annuity. If You make no election, amounts in Fixed Interest Options
will provide a Fixed Annuity and amounts in Variable Investment
Options will provide a Variable Annuity.
4.14 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable Investment Option remains constant unless
You transfer a portion of the annuity benefit between the Variable
Investment Options or from a Variable Annuity to a Fixed Annuity.
However, the dollar amount payable is not fixed and may change from
month to month.
4.15 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, You must choose an Assumed Investment
Rate (AIR). The AIR is the assumed rate of return used to determine
the first annuity payment for a Variable Annuity Option. Rates of 3%,
3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if permitted by
state law and regulations. If no AIR is chosen, the AIR will be 3
1/2%. A higher AIR will result in a higher initial payment. Choice of
a lower AIR will result in a lower initial payment. Payments will
increase whenever the actual return exceeds the chosen AIR. Payments
will decrease whenever the actual return is less than the chosen AIR.
4.16 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed at
$1.00.
8
UIT-IRA-194 IR0IXST8
<PAGE> 9
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The Value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option at
the immediately preceding computation date
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised to
the power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
4.17 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments. If a commutation (cash out of remaining annuity
payments) is allowed, the rates previously used to calculate the
annuity payments will be used for the commutation request.
4.18 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to
purchase a first monthly payment of $1.00. Quarterly, semiannual, and
annual payments may also be selected.
The amount of each payment will depend upon the Annuitant's adjusted
age and Annuitant's sex at the time the first payment is due. Adjusted
age will be determined in accordance with the following:
Calendar Year Adjusted Age is
of Birth Actual Age Minus
------------- ----------------
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
Actual age, as used above, means the Annuitant's age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.15) and to determine the minimum guarantees for Fixed
Annuities. Tables B, C, and D are to be used for Variable Annuities
with 3 1/2%, 4 1/2% and 5% AIRs respectively.
9
UIT-IRA-194 IR0IXST9
<PAGE> 10
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2, and 3 -- Single Life Annuities -- Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
------------------------------------------------------------------------------------------------ ------------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $234.40 $256.13 $235.00 $256.40 $236.87 $257.29 $240.08 $258.94 $244.85 $261.55 $246.89 $263.37
51 230.20 252.09 230.84 252.38 232.85 253.36 236.30 255.16 241.46 258.02 243.28 259.83
52 225.93 247.97 226.63 248.29 228.78 249.36 232.49 251.33 238.08 254.46 239.63 256.21
53 221.61 243.76 222.36 244.12 224.66 245.28 228.65 247.44 234.71 250.86 235.93 252.54
54 217.22 239.47 218.02 239.86 220.48 241.13 224.79 243.50 231.36 247.24 232.18 248.81
55 212.76 235.10 213.62 235.52 216.26 236.91 220.91 239.51 228.04 243.60 228.39 245.01
56 208.23 230.64 209.14 231.10 211.98 232.62 217.02 235.47 224.77 239.96 224.54 241.16
57 203.62 226.10 204.60 226.60 207.65 228.27 213.12 231.38 221.54 236.31 220.65 237.25
58 198.93 221.46 199.98 222.01 203.27 223.85 209.24 227.26 218.38 232.66 216.71 233.28
59 194.16 216.74 195.28 217.35 198.86 219.36 205.36 223.10 215.29 229.05 212.71 229.26
60 189.31 211.94 190.52 212.60 194.41 214.82 201.52 218.92 212.29 225.46 208.65 225.18
61 184.38 207.05 185.69 207.78 189.95 210.22 197.71 214.73 209.39 221.93 204.54 221.04
62 179.37 202.08 180.80 202.89 185.48 205.57 193.96 210.53 206.61 218.46 200.36 216.84
63 174.31 197.05 175.88 197.94 181.01 200.89 190.27 206.34 203.96 215.08 196.10 212.58
64 169.20 191.95 170.93 192.93 176.57 196.17 186.68 202.18 201.45 211.80 191.97 208.26
65 164.06 186.79 165.97 187.87 172.17 191.42 183.18 198.06 199.09 208.64 187.72 203.85
66 158.90 181.57 161.01 182.76 167.82 186.66 179.81 193.99 196.89 205.61 183.39 199.37
67 153.73 176.29 156.06 177.60 163.54 181.89 176.57 189.99 194.86 202.74 179.26 194.78
68 148.57 170.95 151.14 172.39 159.35 177.13 173.47 186.07 193.01 200.04 174.96 190.35
69 143.43 165.55 146.27 167.12 155.25 172.38 170.53 182.26 191.32 197.53 170.59 185.72
70 138.31 160.09 141.44 161.83 151.26 167.66 167.77 178.58 189.80 195.21 166.51 181.19
71 133.23 154.57 136.68 156.49 147.39 162.98 165.18 175.04 188.45 193.10 162.20 176.54
72 128.19 149.00 131.99 151.15 143.67 158.37 162.77 171.67 187.26 191.20 157.82 171.80
73 123.21 143.41 127.38 145.81 140.09 153.85 160.55 168.49 186.22 189.52 153.85 167.29
74 118.28 137.81 122.86 140.50 136.67 149.45 158.53 165.52 185.31 188.05 149.58 162.58
75 113.41 132.21 118.44 135.23 133.42 145.19 156.68 162.78 184.54 186.78 145.24 157.76
</TABLE>
Option 4 - Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
---------------------------------------------------------------------- --------------------------
Same
Female: 7 6 5 4 3 2 1 Age 1 2 3
- - ---------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $293.82 $291.43 $289.05 $286.69 $284.34 $282.03 $279.74 $277.49 $275.28 $273.11 $271.00
51 290.54 288.09 285.65 283.22 280.82 278.44 276.09 273.79 271.52 269.30 267.14
52 287.18 284.66 282.16 279.67 277.20 274.76 272.36 269.99 267.67 265.40 263.18
53 283.73 281.15 278.58 276.02 273.49 270.99 268.53 266.11 263.73 261.40 259.13
54 280.19 277.54 274.90 272.29 269.69 267.13 264.61 262.12 259.69 257.30 254.98
55 276.56 273.84 271.14 268.45 265.80 263.17 260.59 258.04 255.55 253.11 250.73
56 272.84 270.05 267.28 264.53 261.81 259.12 256.47 253.86 251.31 248.82 246.38
57 269.02 266.16 263.32 260.51 257.72 254.96 252.25 249.58 246.97 244.42 241.93
58 265.11 262.18 259.27 256.38 253.53 250.71 247.93 245.20 242.53 239.92 237.38
59 261.10 258.10 255.12 252.16 249.24 245.35 243.51 240.72 237.98 235.32 232.73
60 257.00 253.92 250.87 247.84 244.84 241.89 238.98 236.13 233.34 230.61 227.97
61 252.79 249.64 246.51 243.41 240.35 237.32 234.35 231.44 228.59 225.81 223.11
62 248.49 245.26 242.06 238.89 235.75 232.66 229.62 226.64 223.74 220.91 218.16
63 244.09 240.78 237.51 234.26 231.05 227.89 224.79 221.75 218.79 215.91 213.11
64 239.58 236.20 232.85 229.53 226.26 222.03 219.86 216.77 213.75 210.82 207.97
65 234.98 231.53 228.10 224.71 221.36 218.07 214.85 211.70 208.62 205.64 202.75
66 230.29 226.75 223.25 219.79 216.38 213.03 209.74 206.53 203.41 200.37 197.43
67 225.49 221.89 218.31 214.78 211.31 207.89 204.55 201.29 198.11 195.03 192.04
68 220.61 216.93 213.28 209.69 206.15 202.68 199.28 195.97 192.74 189.61 186.58
69 215.63 211.98 208.17 204.51 200.92 197.39 193.93 190.57 187.29 184.12 181.05
70 210.57 206.75 202.98 199.26 195.60 192.02 188.51 185.09 181.77 178.56 175.47
71 205.43 201.55 197.71 193.93 190.22 186.58 183.02 179.56 176.20 172.96 169.85
72 200.21 196.27 192.37 188.53 184.76 181.07 177.46 173.96 170.57 167.31 164.19
73 194.92 190.91 186.96 183.06 179.24 175.50 171.85 168.22 164.91 161.64 158.52
74 189.56 185.49 181.47 177.52 173.65 169.87 166.20 162.65 159.23 155.95 152.83
75 184.13 180.00 175.93 171.93 168.02 164.21 160.61 156.95 153.53 150.26 147.16
</TABLE>
10
UIT-IRA-194 IR0IXSTA
<PAGE> 11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2, and 3 -- Single Life Annuities -- Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
----------------------------------------------------------------------------------------------- -----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $219.33 $238.30 $219.91 $238.56 $221.71 $239.42 $224.73 $240.97 $229.11 $243.36 $229.83 $244.34
51 215.67 234.85 216.30 235.14 218.24 236.08 221.48 237.77 226.22 240.40 226.68 241.31
52 211.96 231.32 212.64 231.64 214.71 232.66 218.20 234.52 223.33 237.39 223.47 238.21
53 208.17 227.70 208.91 228.05 211.13 229.17 214.88 231.20 220.44 234.34 220.21 235.04
54 204.32 224.00 205.11 224.38 207.48 225.61 211.53 227.83 217.56 231.27 216.88 231.81
55 200.40 220.21 201.24 220.63 203.78 221.96 208.15 224.40 214.70 228.16 213.50 228.50
56 196.40 216.33 197.29 216.79 200.02 218.25 204.76 220.92 211.87 225.04 210.05 225.13
57 192.31 212.36 193.27 212.86 196.20 214.46 201.35 217.39 209.08 221.91 206.54 221.69
58 188.14 208.30 189.16 208.84 192.33 210.61 197.94 213.82 206.34 218.78 202.96 218.19
59 183.88 204.15 184.98 204.74 188.42 206.68 194.53 210.20 203.65 215.66 199.31 214.61
60 179.52 199.91 180.71 200.56 184.46 202.69 191.14 206.55 201.03 212.56 195.59 210.96
61 175.09 195.57 176.37 196.29 180.47 198.64 187.77 202.88 198.50 209.49 191.94 207.24
62 170.57 191.16 171.97 191.95 176.47 194.53 184.44 199.19 196.06 206.47 188.17 203.45
63 165,98 186.66 167.52 187.54 172.46 190.37 181.17 195.50 193.74 203.52 184.33 199.57
64 161.33 182.09 163.03 183.06 168.46 186.17 177.97 191.82 191.53 200.66 180.58 195.61
65 156.65 177.45 158.52 178.52 164.49 181.93 174.85 188.17 189.45 197.88 176.72 191.70
66 151.92 172.74 153.99 173.91 160.56 177.67 171.83 184.55 187.52 195.23 172.80 187.65
67 147.18 167.96 149.47 169.25 156.67 173.38 168.92 180.99 185.72 192.70 169.00 183.52
68 142.43 163.11 144.96 164.52 152.86 169.09 166.14 177.49 184.08 190.32 165.09 179.48
69 137.68 158.18 140.47 159.73 149.12 164.79 163.50 174.08 182.59 188.10 161.12 175.28
70 132.94 153.18 136.02 154.89 145.47 160.51 161.00 170.78 181.25 186.05 157.08 170.99
71 128.23 148.11 131.62 150.01 141.94 156.25 158.66 167.60 180.05 184.18 153.38 166.88
72 123.54 142.99 127.27 145.10 138.52 152.05 156.49 164.56 178.98 182.49 149.41 162.57
73 118.89 137.82 122.99 140.18 135.23 147.92 154.48 161.69 178.06 181.00 145.37 158.16
74 114.27 132.62 118.77 135.27 132.08 143.89 152.64 159.00 177.25 179.69 141.74 154.04
75 109.71 127.41 114.65 130.39 129.08 139.98 150.97 156.51 176.56 178.56 137.80 149.67
</TABLE>
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
-------------------------------------------------------------------- -----------------------------
Same
Female: 7 6 5 4 3 2 1 Age 1 23
- - --------------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $270.33 $268.39 $266.46 $264.53 $262.61 $260.70 $258.82 S256.95 $255.11 $253.31 $251.54
51 267.66 265.66 263.66 261.67 259.69 257.73 255.79 253.87 251.97 250.12 248.29
52 264.90 262.84 260.78 258.73 256.69 254.67 252.67 250.69 248.74 246.83 244.95
53 262.06 259.93 257.81 255.70 253.60 251.52 249.45 247.42 245.42 243.45 241.52
54 259.13 256.94 254.75 252.58 250.41 248.27 246.15 244.06 241.99 239.97 237.99
55 256.11 253.85 251.60 249.36 247.14 244.93 242.75 240.59 238.47 236.39 234.36
56 253.00 250.68 248.36 246.05 243.76 241.49 239.25 237.03 234.85 232.71 230.62
57 249.80 247.41 245.02 242.65 240.29 237.95 235.64 233.37 231.13 228.93 226.78
58 246.50 244.04 241.59 239.14 236.72 234.31 231.94 229.60 227.30 225.04 222.84
59 243.11 240.58 238.05 235.54 233.04 230.57 228.13 225.73 223.36 221.05 218.79
60 239.62 237.01 234.41 231.83 229.26 226.72 224.22 221.75 219.32 216.95 214.64
61 236.03 233.35 230.68 228.02 225.38 222.77 220.19 217.66 215.17 212.74 210.38
62 232.34 229.58 226.83 224.10 221.39 218.71 216.07 213.47 210.92 208.43 206.01
63 228.55 225.71 222.89 220.08 217.30 214.55 211.84 209.17 206.57 204.02 201.55
64 224.66 221.74 218.84 215.96 213.10 210.28 207.50 204.78 202.11 199.51 196.98
65 220.66 217.67 214.69 211.73 208.80 205.91 203.07 200.28 197.56 194.90 192.32
66 216.57 213.49 210.43 207.40 204.40 201.45 198.54 195.69 192.91 190.20 187.56
67 212.37 209.22 206.08 202.98 199.91 196.89 193.92 191.01 188.17 185.41 182.72
68 208.07 204.84 201.64 198.46 195.33 192.24 189.21 186.24 183.34 180.52 177.79
69 203.68 200.38 197.10 193.85 190.65 187.50 184.41 181.38 178.43 175.56 172.78
70 199.20 195.82 192.47 189.16 185.89 182.68 179.52 176.44 173.43 170.52 167.70
71 194.62 191.17 187.75 184.37 181.04 177.77 174.55 171.42 168.37 165.41 162.57
72 189.96 186.44 182.95 179.51 176.11 172.78 169.51 166.33 163.24 160.25 157.39
73 185.22 181.63 178.07 174.56 171.10 167.71 164.40 161.17 158.06 155.05 152.17
74 180.39 176.73 173.11 169.53 166.02 162.58 159.22 155.97 152.83 149.82 146.93
75 175.48 171.75 168.07 164.44 160.87 157.39 154.01 150.73 147.58 144.56 141.68
</TABLE>
11
UIT-IRA-194 IR0IXSTB
<PAGE> 12
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2, and 3 -- Single Life Annuities - Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
----------------------------------------------------------------------------------------------- -----------------
None 6O 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $193.60 $208.22 $194.16 $208.47 $195.83 $209.27 $198.51 $210.63 $202.20 $212.66 $201.07 $212.44
51 190.82 205.68 191.43 205.96 193.22 206.83 196.09 208.33 200.09 210.54 198.63 210.19
52 187.97 203.07 188.63 203.37 190.55 204.32 193.63 205.96 197.96 208.38 196.13 207.88
53 185.05 200.37 185.76 200.70 187.82 201.74 191.14 203.53 195.83 206.18 193.56 205.50
54 182.06 197.58 182.82 197.95 185.02 199.08 188.60 201.05 193.69 203.95 190.99 203.04
55 179.00 194.71 179.81 195.11 182.16 196.35 186.03 198.51 191.56 201.68 188.31 200.51
56 175.85 191.75 176.71 192.19 179.24 193.54 183.43 195.91 189.44 199.38 185.55 197.91
57 172.61 188.70 173.53 189.18 176.25 190.66 180.81 193.26 187.33 197.07 182.72 195.22
58 169.28 185.56 170.27 186.08 173.21 187.71 178.17 190.55 185.26 194.74 179.91 192.50
59 165.85 182.32 166.91 182.89 170.10 184.68 175.52 187.80 183.21 192.40 176.98 189.69
60 162.33 178.98 163.48 179.61 166.95 181.59 172.86 185.00 181.22 190.07 173.98 186.79
61 158.71 175.55 159.95 176.24 163.76 178.42 170.22 182.17 179.27 187.75 170.92 183.81
62 155.00 172.03 156.36 172.80 160.53 175.19 167.59 179.31 177.40 185.46 167.91 180.81
63 151.21 168.42 152.70 169.27 157.28 171.89 164.99 176.43 175.60 183.20 164.77 177.71
64 147.35 164.73 148.99 165.66 154.02 168.55 162.44 173.55 173.89 181.00 161.58 174.53
65 143.42 160.95 145.23 161.98 150.77 165.15 159.94 170.67 177.27 178.87 158.32 171.26
66 139.45 157.09 141.45 158.22 147.53 161.71 157.52 167.80 170.76 176.81 155.19 168.01
67 135.43 153.15 137.64 154.39 144.32 158.23 155.17 164.96 169.36 174.85 151.90 164.64
68 131.38 149.13 133.83 150.49 141.15 154.72 152.92 162.16 168.07 172.99 148.56 161.19
69 127.32 145.01 132.02 146.51 138.04 151.19 150.77 159.42 166.90 171.25 145.16 157.64
70 123.24 140.80 126.21 142.45 134.99 147.66 148.74 156.75 165.84 169.64 141.99 154.22
71 119.15 136.51 122.43 138.34 132.01 144.13 146.82 154.17 164.89 168.17 138.60 150.60
72 115.07 132.13 118.68 134.18 129.12 140.62 145.04 151.69 164.05 166.84 135.16 146.91
73 111.01 127.69 114.97 129.98 126.33 137.16 143.39 149.35 163.31 165.66 131.95 143.36
74 106.95 123.20 111.31 125.76 123.65 133.76 141.87 147.14 162.67 164.62 128.56 139.64
75 102.92 118.68 107.70 121.55 121.10 130.45 140.49 145.09 162.12 163.72 125.14 135.85
</TABLE>
Option 4 -- Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
------------------------------------------------------------------ Same ---------------------------
Female: 7 6 5 4 3 2 1 Age 1 2 3
- - -----------------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $231.64 $230.36 $229.07 $227.77 $226.47 $225.17 $223.88 $222.59 $221.31 $220.05 $218.79
51 229.84 228.51 227.16 225.82 224.46 223.11 221.77 220.43 219.10 217.79 216.49
52 227.97 226.58 225.18 223.78 222.38 220.97 219.58 218.19 216.81 215.44 214.10
53 226.02 224.58 223.13 221.67 220.21 218.75 217.30 215.86 214.43 213.01 211.61
54 224.00 222.50 220.99 219.47 217.96 216.44 214.94 213.44 211.95 210.48 209.04
55 221.90 220.34 218.77 217.19 215.62 214.05 212.48 210.93 209.39 207.86 208.36
56 219.71 218.09 216.46 214.83 213.19 211.56 209.94 208.32 206.73 205.15 203.59
57 217.44 215.76 214.06 212.37 210.67 208.98 207.29 205.62 203.96 202.33 200.72
58 215.08 213.33 211.58 209.82 208.06 206.30 204.55 202.82 201.10 199.41 197.74
59 212.64 210.82 209.00 207.17 205.34 203.52 201.71 199.91 198.14 196.38 194.66
60 210.10 208.21 206.32 204.42 202.53 200.64 198.76 196.90 195.06 193.25 191.47
61 207.46 205.51 203.54 201.58 199.61 197.65 195.71 193.78 191.88 190.01 188.17
62 204.73 202.70 200.67 198.63 196.59 194.56 192.55 190.56 188.59 186.66 184.77
63 201.90 199.80 197.68 195.57 193.46 191.37 189.28 187.23 185.20 183.21 181.25
64 198.97 196.79 194.60 192.41 190.23 188.06 185.91 183.79 181.70 179.65 177.64
65 195.94 193.68 191.41 189.15 186.89 184.65 182.44 180.25 178.09 175.98 173.91
66 192.80 190.46 188.12 185.78 183.45 181.14 178.85 176.60 174.38 172.21 170.08
67 189.57 187.15 184.72 182.31 179.91 177.53 175.17 172.85 170.57 168.33 166.14
68 186.23 183.73 181.23 178.74 176.26 173.81 171.39 166.00 166.65 164.35 162.11
69 182.78 180.20 177.63 175.06 172.52 169.99 167.50 165.05 162.64 160.28 157.98
70 179.24 176.58 173.93 171.29 168.67 166.08 163.52 161.00 158.52 156.11 153.77
71 175.60 172.86 170.13 167.42 164.73 162.06 159.43 156.85 154.32 151.86 149.47
72 171.86 169.05 166.24 163.45 160.69 157.95 155.26 152.62 150.04 147.53 145.11
73 168.03 165.13 162.25 159.39 156.55 153.75 150.99 148.30 145.68 143.14 140.69
74 164.10 161.13 158.17 155.23 152.32 149.46 146.65 143.91 141.25 138.68 135.21
75 160.07 157.02 153.99 150.98 148.01 145.09 142.24 139.46 136.77 134.18 131.70
</TABLE>
12
UIT-IRA-194 IR0IXSTC
<PAGE> 13
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2, and 3 -- Single Life Annuities - Male(M), Female(F)
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
----------------------------------------------------------------------------------------------- -----------------
None 60 120 180 240 Cash Refund
Age M F M F M F M F M F M F
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $182.60 $195.49 $183.15 $195.74 $184.75 $196.50 $187.27 $197.79 $190.67 $199.65 $188.95 $199.02
51 180.16 193.30 180.75 193.58 182.48 194.41 185.18 195.82 188.86 197.85 186.82 197.07
52 177.65 191.04 178.30 191.34 180.15 192.25 183.05 193.79 187.03 196.02 184.63 195.06
53 175.08 188.70 175.77 189.02 177.75 190.02 180.87 191.71 185.19 194.15 182.36 193.01
54 172.43 186.27 173.18 186.63 175.29 187.72 178.66 189.57 183.34 192.23 180.08 190.87
55 169.71 183.76 170.50 184.15 172.77 185.35 176.41 187.37 181.49 190.29 177.70 188.66
56 166.90 181.17 167.75 181.59 170.18 182.90 174.13 185.12 179.65 188.32 175.25 186.38
57 164.01 178.48 164.92 178.94 167.54 180.38 171.83 182.81 177.82 186.32 172.72 184.02
58 161.02 175.70 161.99 176.21 164.82 177.78 169.50 180.45 176.01 184.30 170.13 181.58
59 157.94 172.83 158.98 173.79 162.06 175.12 167.15 178.05 174.23 182.28 167.55 179.12
60 154.76 169.86 155.88 170.47 159.23 172.38 164.80 175.59 172.48 180.25 164.86 176.55
61 151.48 166.80 152.70 167.48 156.37 169.57 162.44 173.10 170.77 178.23 162.10 173.89
62 148.11 163.64 149.44 164.39 153.46 166.70 160.10 170.58 169.12 176.23 159.27 171.16
63 144.65 160.40 146.12 161.23 150.53 163.76 157.79 168.03 167.54 174.23 156.48 168.41
64 141.12 157.06 142.73 157.98 147.58 160.76 155.50 165.47 166.03 172.32 153.59 165.55
65 137.52 153.65 139.30 154.66 144.63 157.71 153.27 162.91 164.61 170.44 150.63 162.61
66 133.86 150.15 135.82 151.26 141.69 154.61 151.09 160.35 163.27 164.63 147.62 159.59
67 130.15 146.56 132.33 147.78 138.77 151.47 148.98 157.81 162.03 166.90 144.69 156.58
68 126.41 142.88 128.81 144.22 135.87 148.30 146.95 155.30 160.88 165.26 141.65 153.44
69 122.64 139.11 125.29 140.58 133.02 145.10 145.01 152.84 159.84 163.72 138.55 150.23
70 118.84 135.24 121.77 136.86 130.22 141.88 143.17 150.43 158.90 162.29 135.40 146.93
71 115.03 131.28 118.26 133.08 127.49 138.65 141.44 148.10 158.05 160.98 132.40 143.71
72 111.22 127.23 114.77 129.24 124.83 135.45 139.82 145.87 157.30 159.79 129.27 140.35
73 107.41 123.10 111.31 125.35 122.26 132.27 138.32 143.74 156.65 158.74 126.09 136.90
74 103.60 118.92 107.88 121.44 119.78 129.15 136.94 141.74 156.07 157.81 122.86 133.38
75 99.80 114.70 104.50 117.52 117.42 126.09 135.68 139.88 155.58 157.01 119.89 130.08
</TABLE>
Option 4 - Joint and Last Survivor Annuity
<TABLE>
<CAPTION>
Number of Years Younger Number of Years Older
-------------------------------------------------------------------- Same ----------------------------
Female: 7 6 5 4 3 2 1 Age 1 2 3
------------------------------------------------------------------------------------------------------------
Male Age:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $215.64 $214.59 $213.53 $212.47 $211.39 $210.32 $209.24 $208.17 $207.10 $206.03 $204.98
51 214.16 213.06 211.96 210.84 209.72 208.60 207.47 206.35 205.23 204.13 203.03
52 212.61 211.47 210.31 209.15 207.98 206.80 205.63 204.46 203.29 202.14 200.99
53 210.99 209.80 208.59 207.37 206.15 204.93 203.71 202.49 201.27 200.07 198.87
54 209.30 208.06 206.79 205.53 204.25 202.98 201.70 200.43 199.16 197.91 196.67
55 207.54 206.24 204.92 203.60 202.27 200.94 199.61 198.28 196.97 195.66 194.37
56 205.70 204.34 202.97 201.59 200.20 198.82 197.43 196.05 194.68 193.32 191.97
57 203.78 202.36 200.93 199.49 198.05 196.60 195.16 193.72 192.29 190.88 189.48
58 201.78 200.30 198.81 197.31 195.80 194.30 192.79 191.30 189.81 188.34 186.88
59 199.70 198.15 196.60 195.03 193.47 191.90 190.33 188.77 187.23 185.70 184.19
60 197.52 195.91 194.29 192.66 191.03 189.40 187.77 186.15 184.54 182.95 181.39
61 195.26 193.58 191.89 190.19 188.49 186.79 185.10 183.41 181.75 180.10 178.48
62 192.90 191.15 189.39 187.63 185.86 184.09 182.33 180.58 178.85 177.14 175.46
63 190.44 188.63 186.79 184.96 183.12 181.28 179.45 177.64 175.84 174.07 172.34
64 187.89 186.00 184.09 182.18 180.27 178.36 176.47 174.59 172.73 170.90 169.11
65 185.24 183.27 181.29 179.31 177.32 175.34 173.38 171.43 169.51 167.62 165.77
66 182.49 180.45 178.39 176.33 174.27 172.22 170.19 168.17 166.19 164.24 162.32
67 179.64 177.51 175.38 173.24 171.11 168.99 166.89 164.81 162.76 160.74 158.77
68 176.69 174.48 172.27 170.06 167.85 165.66 163.49 161.34 159.23 157.15 155.11
69 173.63 171.34 169.06 166.77 164.49 162.23 159.99 157.77 155.59 153.45 151.35
70 170.47 168.11 165.74 163.38 161.03 158.69 156.38 154.10 151.85 149.65 147.51
71 167.22 164.77 162.33 159.89 157.46 155.05 152.67 150.32 148.01 145.76 143.57
72 163.86 161.34 158.81 156.30 153.80 151.32 148.86 146.45 144.09 141.79 139.56
73 160.40 157.80 155.20 152.61 150.03 147.48 144.96 142.49 140.08 137.74 135.48
74 156.85 154.17 151.49 148.82 146.17 143.55 140.97 138.45 136.00 133.63 131.34
75 153.19 150.43 147.67 144.93 142.21 139.53 136.91 134.34 131.86 129.45 127.14
</TABLE>
13
UIT-IRA-194 IR0IXSTD
<PAGE> 14
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 28 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.19 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity
You designate to receive any benefits payable upon Your death.
(b) Designation of Beneficiary. During Your lifetime, You have the
right to designate a Beneficiary and to change the designation.
The change may be made by sending a written request to Our Home
Office. The change will take effect when We have recorded the
change. However, after the change is recorded, the change will be
deemed effective as of the date of the written request for
change. The change will be subject to any payment made or action
taken by Us before the request is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the
Beneficiary designation:
(1) If any Beneficiary dies prior to the Annuitant, that
Beneficiary's interest will pass to any other Beneficiary
according to the surviving Beneficiary's respective
interest.
(2) If no Beneficiary survives the Annuitant, death benefits
will be paid to the Annuitant's estate.
(3) If any Beneficiary dies after the Annuitant, that
Beneficiary's interest will pass to his or her Beneficiary
or, if none, to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether You
or a Beneficiary died first in a common disaster, We will assume
that the Beneficiary died first and make payments on that basis.
(e) Multiple Beneficiaries. You may designate two or more
Beneficiaries to receive separate percentage interests in the
death benefits payable under this Contract. Each such Beneficiary
may separately exercise the rights that a Beneficiary has under
this Contract.
(f) Trust or Estate as Beneficiary. Payments to a Beneficiary that is
a trust or estate will be made only in a lump sum or in
installments over a period not to exceed five years.
4.20 DEATH PAYMENT PROVISIONS
(a) Death During Accumulation Period. If You die during the
Accumulation Period, a death benefit described in (1) or (2)
below is payable.
(1) If You die on or after age 70, the death benefit is the
greater of (a) the Accumulation Value on the date We
receive proof of death, or (b) 100% of Purchase Payments
reduced by the amount of any prior withdrawals and further
reduced by any portion of the Accumulation Value that has
been applied under an Annuity Income Option.
(2) If You die before age 70, the death benefit is the sum of
the benefits under the Fixed Interest Options and the
Variable Investment Options, as follows:
The benefit under the Fixed Interest Options is the
greater of:
(a) the Fixed Interest Option Values on the date We
receive proof of death; or
14
UIT-IRA-194 IR0IXSTE
<PAGE> 15
(b) 100% of Purchase Payments allocated to the Fixed
Interest Options, reduced by the amount of any prior
withdrawals or transfers from Fixed Interest Options
and further reduced by any portion of the
Accumulation Value that has been applied under an
Annuity Income Option.
The benefit under the Variable Investment Options is the
greater of:
(a) the Variable Investment Option Values on the date We
receive proof of death, or
(b) 100% of Purchase Payments allocated to Variable
Investment Options reduced by the amount of any prior
withdrawals or transfers from the Variable Investment
Options, plus interest at an annual rate of 3%. For
this purpose, all amounts transferred into Variable
Investment Options are considered Purchase Payments
allocated to Variable Investment Options.
Subject to Section 5.02, the death benefit is payable at any time
Your Beneficiary selects and in any form You could have selected
under this Contract.
(b) Death During Annuity Period. If You die during the Annuity
Period, the amount of the death benefit, if any, will be based on
the terms of the Annuity Income Option. Unless You elected the
Fourth Option, the Beneficiary may elect to receive the death
benefit in one of the following forms:
(1) Continuing annuity payments under the terms of Your Annuity
Income Option with the right, for Variable Annuities only,
to receive the remaining payments in a lump sum at any time
thereafter;,
(2) A lump sum; or
(3) Annuity payments under another Annuity Income Option, based
on the available lump sum and subject to the limitations of
Section 5.02.
The lump sum available under these alternatives is the present
value of remaining payments, discounted at the Assumed Investment
Rate, and based on the current Annuity Unit Value for (2) and
(3), or the value next determined after receipt of the request at
VALIC's Home Office for (1).
(c) Investment Options and Other Rights. Until the death benefits
have been fully paid, Your Beneficiary will be entitled to
exercise all the Investment Options and other rights the
Annuitant can exercise under this Contract. Unpaid death benefits
that have not been applied under an Annuity Income Option will
have an Accumulation Value determined in the same manner as Your
Accumulation Value.
(d) Proof of Death. Proof of death may be made by sending VALIC a
certified copy of the death certificate, a certified copy of a
decree of a court of competent jurisdiction as to death, a
written statement by an attending physician, or any other proof
satisfactory to VALIC.
15
UIT-IRA-194 IR0IXSTF
<PAGE> 16
SECTION 5 - CODE REQUIREMENTS
This Contract is issued on a tax-qualified basis under Section 408(b) of the
Code.
5.01 MINIMUM DISTRIBUTIONS AFTER AGE 70 1/2 - The entire balance of the
Individual Retirement Annuity (IRA) must be distributed to You by no
later than April 1 of the calendar year following the calendar year in
which You attain age 70 1/2 (Required Beginning Date). Alternatively,
distributions must commence to You by the Required Beginning Date and
must be made over (a) Your life or over the lives of You and Your
designated Beneficiary, or (b) a period certain that does not exceed
Your life expectancy or the joint life expectancies of You and Your
designated Beneficiary.
Distributions must be made at least once each calendar year. Also,
distributions must either be nonincreasing or they may increase only
as provided in Section 1.401(a)(9)-1, Q & A F-3, of the Proposed
Income Tax Regulations.
All distributions described in this Section must comply with Code
section 401(a)(9), including the incidental death benefit requirements
of Code section 401(a)(9)(G), and the regulations thereunder, and the
minimum death incidental benefit (MDIB) rules described in Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Life expectancy is calculated using the expected return multiples in
Tables V and VI of Regulations 1.72-9. Life expectancy shall be
recalculated annually unless elected otherwise by You at the time
distributions are required to begin. Any such election shall be
forever irrevocable. Life expectancy of a nonspouse Beneficiary may
not be recalculated and will instead by calculated by using his or her
attained age during the calendar year in which he or she attains age
70 1/2. Payments for subsequent years shall be calculated based on
such life expectancy reduced by one for each calendar year which has
elapsed since the calendar year life expectancy was first calculated.
5.02 MINIMUM DEATH BENEFIT DISTRIBUTIONS - Distributions under this Section
5.02 are deemed to have begun if distributions are made due to Your
reaching the Required Beginning Date or, if prior to the Required
Beginning Date, distributions irrevocably commence to You over a period
permitted and in the form of an annuity permitted under Section
1.401(a)(9) of the Proposed Regulations.
(a) Distributions Beginning Before Death. If You die after you begin
to receive distributions from this IRA, the remaining portion
must be distributed using a method at least as rapid as the
method of distribution being used prior to Your death.
(b) Distributions Beginning After Death. If You die before receiving
any distributions from this IRA, Your entire IRA must be
distributed by no later than the December 31 of the calendar year
containing the fifth anniversary of Your death. However;
(1) If Your IRA is payable to a designated Beneficiary, then
the entire IRA may be distributed over the life of the
designated Beneficiary or a period certain not greater than
the designated Beneficiary's life expectancy provided
distribution begins no later than the December 31 of the
calendar year immediately following the calendar year of
Your death.
(2) If the designated Beneficiary is Your surviving spouse,
distributions must commence by no later than the date
described in (1) above or the December 31 of the calendar
year in which you would have attained age 70 1/2.
(3) If the designated Beneficiary is Your surviving spouse,
Your spouse may treat this IRA as his or her own IRA by
making a regular or rollover contribution to this IRA or by
failing to elect any of the above distribution options.
(c) Life Expectancy. Life expectancy is computed by using the return
multiples of Tables V and VI of Treasury Regulations 1.72-9. Life
expectancy of a surviving spouse Beneficiary shall be
recalculated annually unless otherwise elected (such election is
forever irrevocable) by the time distributions are required to
begin by the surviving spouse Beneficiary.
For all other designated Beneficiaries, life expectancy is
calculated using the designated Beneficiary's age attained during
the calendar year in which distributions are required to begin
pursuant to this section. Payments for each subsequent calendar
year shall be calculated based on such life expectancy reduced by
one for each calendar year which has elapsed since the calendar
year life expectancy was first calculated.
16
UIT-IRA-194 IR0IXSTG
<PAGE> 17
SECTION 6 - GENERAL PROVISIONS
6.01 NONTRANSFERABILITY - Your account under this IRA is nontransferable
and may not be assigned, sold or used as collateral for a loan. A
transfer made pursuant to a divorce decree in accordance with Code
section 408(d)(6) is permitted.
6.02 EXCLUSIVE BENEFIT AND NONFORFEITABILITY - This IRA is established for
the exclusive benefit of You and Your designated Beneficiaries and
Your (and designated Beneficiary's if applicable) account under this
IRA is nonforfeitable. All distributions made while You are alive must
be made to You. Your and Your Beneficiary's rights under this Contract
are fully vested and nonforfeitable. Separate Account A holds all
assets for Variable Investment Options for the exclusive benefit of
Annuitants, Beneficiaries, and other holders of annuity contracts.
6.03 WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
6.04 CHANGE OF CONTRACT - You and VALIC, by an agreement in writing, may
change any or all terms of this Contract.
6.05 AMENDMENT - We may unilaterally amend this Contract as necessary to
maintain compliance with the Code or state insurance laws. Any such
amendment shall be filed, if required, with the Internal Revenue
Service and the state insurance department in order to obtain their
approval of the amendment.
6.06 REPORTS - We will furnish to You annual calendar year reports
concerning the status of Your IRA. We will send You a Separate Account
financial report twice each year if You have values in any Variable
Investment Option.
We will send to You, at least annually, a statement showing the dollar
value of all investment options, investment performance since the
prior statement, and as applicable, the number and value of any
Variable Accumulation Units credited to this Contract. All statements
will be mailed within two months of the date of the information.
6.07 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of this Contract's participation
in the Separate Account through one or more Variable Investment
Options, We will vote those shares as instructed. You, or the
Beneficiary if You have died, will have the voting instruction rights
prior to the Annuity Date. The annuity payee will have the voting
instruction rights on and after the Annuity Date.
6.08 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate account for any period when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday
closings); (b) when trading on the Exchange is restricted; (c) when an
emergency prevents disposal of securities held in the Separate Account
or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
6.09 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
6.10 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that the Annuitant and any payee is alive on the date any benefit
payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
6.11 SUBSTITUTION OF INVESTMENT FUND SHARES - If shares of a particular
Investment Fund are not available or if, in the judgment of VALIC,
such shares are no longer appropriate for a Variable Investment
Option, shares of another Investment Fund may be substituted for the
Investment Fund shares already held under the Variable Investment
Option and for those to be purchased by future Purchase Payments or
transfers under this Contract. In the event any substitution occurs,
VALIC will notify You within five days.
6.12 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under this Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
6.13 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income, gains or losses.
17
UIT-IRA-194 IR0IXSTH
<PAGE> 1
EXHIBIT 4(b)(v)
(LOGO) The Variable Annuity
VALIC Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
- - --------------------------------------------------------------------------------
* An American General Company
ANNUITANT:
OWNER:
DATE OF ISSUE: ANNUITY DATE:
CONTRACT NUMBER: DATE OF BIRTH:
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
See Index on Page 2
o MAINTENANCE CHARGE - There may be an account maintenance charge during the
accumulation period. The charge is $3.75 for each quarter and is assessed
only if any portion of the Accumulation Value was applied to one or more
Variable Investment Options during that quarter. See Section 2.04 for a
complete description.
o SEPARATE ACCOUNT CHARGE - There is a daily charge against the Separate
Account at an annual rate ranging from 1% to 1.25% of the average daily net
asset value of the Separate Account, based upon the Variable Investment
Option to which assets are allocated. This charge only applies to assets
under Variable Investment Options. See Section 2.05 for a complete
description.
o CASH SURRENDER OR WITHDRAWAL CHARGE - There is a charge at the time of
surrender or withdrawal equal to 5% of (i) the amount withdrawn, or (ii)
the amount of any Purchase Payments received during the most recent 60
months prior to the surrender or withdrawal, whichever is less. See
Sections 4.03 through 4.06 for a complete description and conditions under
which there is no charge.
The conditions and provisions on this and the following pages are the entire
legal Contract between VALIC and the Annuitant. No agent has the authority
to change this Contract or waive any of its provisions. Only the President or
a Vice President of VALIC may change this Contract. Any such changes must be in
writing. All conditions and provisions are subject to applicable state laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ CYNTHIA A. TOLEN /s/ S.D. BICKEL
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
NOTICE OF TWENTY DAY RIGHT TO EXAMINE CONTRACT
YOU MAY CANCEL THIS CONTRACT BY DELIVERING OR MAILING A WRITTEN NOTICE TO: THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, 2929 ALLEN PARKWAY, HOUSTON, TEXAS
77019, AND BY RETURNING THE CONTRACT BEFORE MIDNIGHT OF THE TWENTIETH (20) DAY
AFTER THE DATE YOU RECEIVE THE CONTRACT. NOTICE GIVEN BY MAIL AND RETURN OF THE
CONTRACT BY MAIL ARE EFFECTIVE ON BEING POSTMARKED, PROPERLY ADDRESSED AND
POSTAGE PREPAID. VALIC WILL RETURN ALL PAYMENTS ALLOCATED TO THE CONTRACT WITHIN
TEN DAYS AFTER IT RECEIVES NOTICE OF CANCELLATION AND THE RETURNED POLICY.
INDIVIDUAL FIXED AND VARIABLE DEFERRED RETIREMENT ANNUITY CONTRACT
- NON-PARTICIPATING -
UIT-SEP-194 IR0ISST1
<PAGE> 2
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
OR0CXST2
<PAGE> 3
INDEX
<TABLE>
<S> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . 3
SECTION 2 CONTRACT AND PURCHASE
PAYMENTS . . . . . . . . . . . . . . . . 3
2.01 Incontestability . . . . . . . . . . . . 3
2.02 Minimum Contract Value . . . . . . . . . 3
2.03 Purchase Payments . . . . . . . . . . . 3
2.04 Maintenance Charge . . . . . . . . . . . 3
2.05 Separate Account Charge . . . . . . . . 3
SECTION 3 INVESTMENT OPTIONS . . . . . . . . . . . 4
3.01 Fixed Interest Options . . . . . . . . . 4
3.02 Variable Investment Options . . . . . . 4
3.03 Accumulation Unit . . . . . . . . . . . . 4
3.04 Accumulation Unit Value . . . . . . . . . 4
3.05 Transfers During the Accumulation
Period . . . . . . . . . . . . . . . . . 4
3.06 Transfers During the Annuity Period . . . 5
SECTION 4 BENEFITS . . . . . . . . . . . . . . . . 6
4.01 Cash Surrender . . . . . . . . . . . . . 6
4.02 Withdrawals . . . . . . . . . . . . . . . 6
4.03 Charges for Cash Surrender or
Withdrawal . . . . . . . . . . . . . . . 6
4.04 No Charge Systematic Withdrawals . . . . 6
4.05 No Charge Minimum Distributions . . . . . 6
4.06 Conditions Under Which No Surrender or
Withdrawal Charges Will Be Deducted . . . 7
4.07 Annuity Period . . . . . . . . . . . . . 7
4.08 Starting Annuity Income Benefits . . . . 7
4.09 Partial Annuitization . . . . . . . . . . 7
4.10 Minimum Annuity Payments . . . . . . . . 7
4.11 Misstatement of Age . . . . . . . . . . 7
4.12 Annuity Income (Payment) Options . . . 7
4.13 Fixed or Variable Annuity Basis . . . . . 8
4.14 Variable Annuity Payments . . . . . . . . 8
4.15 Assumed Investment Rate (AIR) . . . . . 8
4.16 Annuity Units and Annuity Unit Value . . 8
4.17 Betterment of Rates . . . . . . . . . . . 9
4.18 Annuity Rate Tables . . . . . . . . . . . 9-14
4.19 Beneficiaries . . . . . . . . . . . . . . 14
4.20 Death Payment Provisions . . . . . . . . 14
SECTION 5 CODE REQUIREMENTS . . . . . . . . . . . . 16
5.01 Minimum Distributions After Age 70 1/2 . 16
5.02 Minimum Death Benefit Distributions . . . 16
SECTION 6 GENERAL PROVISIONS . . . . . . . . . . . 17
6.01 Nontransferability . . . . . . . . . . . 17
6.02 Exclusive Benefit and
Nonforfeitability . . . . . . . . . . . 17
6.03 Written Notices to Us . . . . . . . . . . 17
6.04 Change of Contract . . . . . . . . . . . 17
6.05 Amendment . . . . . . . . . . . . . . . . 17
6.06 Reports . . . . . . . . . . . . . . . . 17
6.07 Voting Rights . . . . . . . . . . . . . 17
6.08 Suspension of Payments . . . . . . . . . 17
6.09 Deferral of Cash Surrender or
Withdrawal . . . . . . . . . . . . . . . 17
6.10 Proof of Survival . . . . . . . . . . . . 17
6.11 Substitution of Investment Fund
Shares . . . . . . . . . . . . . . . . . 17
6.12 Minimum Benefit . . . . . . . . . . . . 17
6.13 Separate Account . . . . . . . . . . . . 17
</TABLE>
2
UIT-SEP-194 IR0ISST2
<PAGE> 4
SECTION 1 - DEFINITIONS
ACCUMULATION PERIOD - the time between the date of the first Purchase
Payment and the Annuity Date.
ACCUMULATION VALUE - equals the sum of the values of Your Fixed Interest
Options and Variable Investment Options that have not been applied to provide
annuity payments.
ANNUITANT - the Contract Owner. Any reference to "You" or "Your" means
Annuitant.
ANNUITY PERIOD - the time during which VALIC makes annuity payments.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY REFERENCE - "We," "Our," "Us," or "VALIC," means The Variable Annuity
Life Insurance Company.
CONTRACT YEAR - the twelve month period starting with the date of issue and
subsequently with each anniversary of that date.
EMPLOYER - the employer that has established the retirement program under
which this Contract is issued.
INVESTMENT FUND - an investment portfolio which is the underlying investment
medium for a Variable Investment Option.
GENERAL ACCOUNT - the assets of VALIC other than those in the Separate
Account or any other segregated asset account.
HOME OFFICE - the principal office of VALIC.
PURCHASE PAYMENT - an amount paid to VALIC in consideration for the benefits
of this Contract.
SEPARATE ACCOUNT - a segregated asset account established under the Texas
Insurance Code (known as Separate Account A).
SURRENDER VALUE - the Accumulation Value of Your Contract less any charges.
SECTION 2 - CONTRACT AND PURCHASE PAYMENTS
2.01 INCONTESTABILITY - This Contract is incontestable. This Contract is
non-participating and does not share in the profits or surplus of
VALIC.
2.02 MINIMUM CONTRACT VALUE - We can end the Contract and pay the Surrender
Value to You if, during the Accumulation Period, the total Accumulation
Value for this Contract falls below $300 and there are no Purchase
Payments for two consecutive Contract Years and the paid up annuity
benefit at retirement would be less than $20 per month.
2.03 PURCHASE PAYMENTS - Purchase Payments may be made at any time during
the Accumulation Period. We require no payment beyond the first. We
will not penalize You if any scheduled payments are omitted or
stopped.
If only one Purchase Payment is to be made, it must be at least
$1,000. Periodic payments must be at least $50 each. VALIC may waive
this minimum. Purchase Payments for a tax year must be made on or
before the due date of Your tax return.
We may deduct amounts from Purchase Payments or from the Accumulation
Value for applicable premium taxes. We will allocate the net Purchase
Payment to one or more Investment Options according to Your
directions.
Purchase Payments shall be in the form of cash and may not exceed the
lesser of $2,000 or 100% of compensation per tax year or such other
amount prescribed by law. Compensation shall include wages, salaries,
and professional fees, as well as amounts received as alimony. The
preceding two sentences shall not apply to any rollover contributions
permitted under Code sections 402(c), 403(a)(4), 403(b)(8), or
408(d)(3), or to Purchase Payments made to a Simplified Employee
Pension Plan as described in Code section 408(k).
2.04 MAINTENANCE CHARGE - During the Accumulation Period We may deduct a
charge from the Accumulation Value for certain account maintenance
expenses. The charge is due each calendar quarter during which any
Variable Investment Option Accumulation Value is credited to this
Contract. We will not deduct the charge for any calendar quarter if
the Accumulation Value for this Contract is credited only to the Fixed
Interest Options throughout the quarter.
We will deduct the charge at the end of the calendar quarter in which
it is due, allocated among Your Variable Investment Options. However,
if You surrender the Contract or transfer all Variable Accumulation
Values to a Fixed Interest Option, the full quarterly charge will be
deducted at the time of surrender or transfer.
The charge is $3.75 for each quarter. The maintenance charge may be
waived or reduced uniformly on all contracts issued under certain
plans or arrangements which are expected to result in administrative
cost savings. No reduction or waiver will be made that is unfairly
discriminatory to any person.
2.05 SEPARATE ACCOUNT CHARGE - We deduct a daily charge from the Separate
Account. The amount of the charge depends on the Variable Investment
Option from which it is deducted, and is imposed at an annual rate
which ranges from 1% to 1.25% of the assets of the Variable Investment
Option. The rate is fixed and may not be increased by Us.
3
UIT-SEP-194 IR0ISST3
<PAGE> 5
SECTION 3 - INVESTMENT OPTIONS
We will allocate Purchase Payments (less any charges) to one or more Investment
Options selected by You. We reserve the right to limit allocations among
Investment Options to seven at any one time. Each selection must be a whole
percentage of Purchase Payments.
3.01 FIXED INTEREST OPTIONS - Fixed Interest Options are based on the
General Account. Allocations to Fixed Interest Options earn interest
as credited by VALIC during the Accumulation Period. The interest
credited will be at least 3% per year.
There are two Fixed Interest Options: Short Term Fixed Account and
Fixed Account Plus.
(a) Short Term Fixed Account. We will credit interest to the Short
Term Fixed Account on a portfolio basis. On the portfolio basis,
all amounts accumulated will be credited with the same rate of
interest for the current period.
(b) Fixed Account Plus. We will credit interest to the Fixed Account
Plus on the following basis. Periodically, but not less than
annually, We will declare interest rates that apply separately
to amounts accumulated in separate time periods.
3.02 VARIABLE INVESTMENT OPTIONS - Variable Investment Options are based
upon Investment Funds available within Separate Account A. Separate
Account A invests in a number of Investment Funds. Each Investment
Fund underlying a Variable Investment Option has a different
investment objective. Investment returns on Variable Investment
Options may be positive or negative.
3.03 ACCUMULATION UNIT - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to Your Contract due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited to Your Contract is determined by dividing
the dollar amount of the transaction by the Accumulation Unit Value
for that Variable investment Option at the next time it is computed.
3.04 ACCUMULATION UNIT VALUE - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it at the end of trading each day the New York Stock
Exchange is open, except as otherwise permitted by the Securities and
Exchange Commission. The value of an Accumulation Unit of a Variable
Investment Option is the Accumulation Unit Value last computed,
multiplied by one plus the Investment Rate for the period. The
Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment
Fund's portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount
of assets at the beginning of the period, less a factor for
(a) the Separate Account Charge for the period at the applicable
annualized rate ranging from 1% to 1.25%, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
3.05 TRANSFERS DURING THE ACCUMULATION PERIOD - During the Accumulation
Period, You may transfer amounts among Investment Options, except as
provided below.
(a) We reserve the right to limit allocations among Investment
Options to seven at any one time.
(b) We reserve the right to require transfers to be at least 30 days
apart.
(c) Transfers from the Short Term Fixed Account. After a transfer to
the Short Term Fixed Account, You may not make any transfer from
the Short Term Fixed Account for 90 days. We may change this
transfer restriction at any time. However, the transfer
restriction period may not exceed 180 days.
(d) Transfers from Fixed Account Plus. You may transfer up to 20% of
the Accumulation Value allocated to Fixed Account Plus during
each Contract Year. If multiple transfers are made in a Contract
Year, the percentages of the Accumulation Value transferred each
time will be added together to determine the 20% transfer limit
for that Contract Year. For each transfer, the percentage
transferred is the ratio of the amount transferred to the portion
of the Accumulation Value allocated to Fixed Account Plus
immediately prior to the transfer. However, if following a 20%
transfer, the remaining amount allocated to Fixed Account Plus
would be less than $500, You may also transfer the remaining
amount.
4
UIT-SEP-194 IR0ISST4
<PAGE> 6
3.06 TRANSFERS DURING THE ANNUITY PERIOD - During the Annuity Period, You
may transfer Annuity Unit values among the Variable Investment
Options. You may also transfer Annuity Unit values from the Variable
Investment Options underlying a Variable Annuity to provide a Fixed
Annuity. Transfers must be at least 365 days apart. We will not permit
any transfer from a Fixed Annuity during the Annuity Period.
5
UIT-SEP-194 IR0ISST5
<PAGE> 7
SECTION 4 - BENEFITS
4.01 CASH SURRENDER - Subject to the restrictions in Section 5.01, You may
surrender this Contract before the Annuity Date for a cash payment
equal to the Surrender Value as of the date We receive the request at
the Horne Office. The Surrender Value is the Accumulation Value less
any charges, as described below. Upon surrender for cash, all of Our
obligations under this Contract will be terminated.
The Surrender Value of the Fixed Interest Options will never be less
than the amount of all Purchase Payments allocated to the Fixed
Interest Options, less any amounts transferred to Variable
Investment Options or withdrawn.
4.02 WITHDRAWALS - Subject to the restrictions in Section 5.01, You may
withdraw a portion of Your Accumulation Value in cash at any time
before the Annuity Date. We may deduct a charge as described below.
4.03 CHARGES FOR CASH SURRENDER OR WITHDRAWAL
(a) General. The Cash Surrender or Withdrawal charge is 5% of (1) the
amount withdrawn, or (2) the amount of any Purchase Payments
received during the most recent 60 months prior to the surrender
or withdrawal, whichever is less.
For purposes of this charge, We treat all withdrawals as
withdrawals of Purchase Payments before any earnings. We treat
the most recent Purchase Payments as being withdrawn first.
(b) 10% Withdrawal in Contract Year. Subject to the provisions of
Sections 4.04 and 4.05 in any Contract Year You may withdraw up
to 10% of the Accumulation Value without a charge. The surrender
charge will be applicable only to the amount withdrawn that
exceeds 10%. The percentage withdrawn will be calculated as the
ratio of the amount withdrawn to the Accumulation Value
immediately prior to the withdrawal. If multiple withdrawals
are made in a Contract Year, the percentages withdrawn for each
withdrawal will be added together to determine whether the 10%
limit has been exceeded.
4.04 NO CHARGE SYSTEMATIC WITHDRAWALS - We will waive applicable surrender
charges under a No Charge Systematic Withdrawal (NCSW). We reserve the
right to limit the terms and conditions under which systematic
withdrawals (including NCSWs) can be elected and to discontinue the
availability of any or all systematic withdrawals at any time. However,
no change in availability will result in any charge against amounts
withdrawn under a previously elected NCSW. A NCSW must meet the
following conditions:
(1) The elected stream of payments must be expected to last for at
least five years.
(2) The NCSW must be payable to You.
(3) The NCSW is not available in any Contract Year You have in effect
any other systematic withdrawal (with or without charge) or a No
Charge Minimum Distribution (NCMD).
(4) Once You begin a NCSW You may not change the terms of the
election. However, You may revoke the election at any time. Once
the election is revoked You may not elect a NCSW again.
(5) Withdrawals without charge as provided in Section 4.03, are not
available in any Contract Year the NCSW has been, or is in
effect. Distributions under the NCSW may not begin in a Contract
Year in which You have taken one or more Section 4.03 withdrawals
without charge.
(6) Any of the following distribution methods may be elected.
(a) Specified Payment - payments of a designated amount. The
annual dollar amount chosen must be the same for each year
the NCSW is in effect and cannot be greater than 20% of the
Accumulation Value at the time of the NCSW election.
(b) Specified Percentage - an annual specified percentage. The
annual specified percentage chosen cannot be greater than
20% of the Accumulation Value.
(c) Specified Period - payments for a designated time period.
We will determine each payment by dividing the Accumulation
Value by the number of payments remaining in the elected
period.
4.05 NO CHARGE MINIMUM DISTRIBUTIONS - We will waive applicable surrender
charges on No Charge Minimum Distributions (NCMD). A NCMD is a
withdrawal which meets the following conditions:
(1) You are at least age 70 1/2, and the NCMD is payable to You.
(2) The amount withdrawn does not exceed the amount required to be
distributed under the Code and regulations issued by the
Secretary of the Treasury for this Contract.
(3) The NCMD is not available in any Contract Year You have withdrawn
any amount under a No Charge Systematic Withdrawal (NCSW).
6
UIT-SEP-194 IR0ISST6
<PAGE> 8
4.06 CONDITIONS UNDER WHICH NO SURRENDER OR WITHDRAWAL CHARGES WILL BE
DEDUCTED - We will not deduct charges under any of the following
conditions:
(a) You elect an Annuity Income Option; or
(b) Payment of any death benefit; or
(c) You have become totally and permanently disabled. This means that
You are unable, because of physical or mental impairment, to
perform the material and substantial duties of any occupation for
which You are suited by means of education, training or
experience. The impairment must have been in existence for more
than 180 days to qualify for this benefit.
Such impairment must be expected to result in death or be
long-standing and indefinite.
We require proof of disability. We will accept a certified
Social Security finding of disability or a doctor's
verification; or
(d) The withdrawal and any earlier withdrawals during the same
Contract Year do not exceed 10% of the Accumulation Value (see
Section 4.03); or
(e) On any amount You withdraw with respect to the NCSW described in
Section 4.04, or the NCMD described in Section 4.05; or
(f) You are at least 55 years old, Your Contract is at least five
years old, and You are separated from service from Your Employer;
or
(g) No Purchase Payments have been made in the five years preceding
the date of the surrender or withdrawal; or
(h) You are at least 59 1/2 years old and Your Contract is at least
five years old; or
(i) Your Contract is fifteen or more years old.
The surrender charge may be waived or reduced uniformly on all
contracts issued under certain plans or arrangements which are expected
to result in administrative cost savings. No reduction or waiver will
be made that is unfairly discriminatory to any person.
We may waive any withdrawal or surrender charge attributable to
Purchase Payments received during specific periods of time, and under
conditions and limitations set by Us. Any such waiver will be made by
Resolution of the Board of Directors. Notice of the right to surrender
without charge will be mailed to affected contractholders when such
waiver is declared by the Board of Directors.
4.07 ANNUITY PERIOD - The Annuity Period begins at the Annuity Date, when
Your Accumulation Value is applied under an Annuity Income Option. You
may change the Annuity Date shown on the first page of Your Contract
by giving Us at least 30 days notice. The selected Annuity Date may
be the first day of any calendar month, but if You choose a life
income option, the Annuity Date may not precede Your 50th birthday
without Our permission.
4.08 STARTING ANNUITY INCOME BENEFITS - At least 30 days in advance of the
Annuity Date, You must choose one of the Annuity Income Options in
Section 4.12 and provide acceptable proof of age for any person whose
age is taken into account under a life income option. If You fail to
select another Annuity Income Option, annuity payments will be made on
the basis of the Second Option with payments guaranteed for a ten-year
period, commencing on the Annuity Date.
4.09 PARTIAL ANNUITIZATION - You may choose to apply less than the full
Accumulation Value under an Annuity Income Option and may choose
different Annuity Dates and different Annuity Income Options for
different portions of the Accumulation Value. Therefore, the Contract
may, at times, be in both an Accumulation Period and an Annuity Period.
If You choose to do this, the provisions of the Contract relating to
the Accumulation Period and the Annuity Period will be applied as
though there were separate Contracts.
4.10 MINIMUM ANNUITY PAYMENTS - You may not choose any Annuity Income Option
if the resulting initial payment would be less than $25 under either a
Fixed or Variable Annuity. We reserve the right to convert monthly
payments to quarterly, semi-annual or annual payments so the initial
payment will be at least $25.
4.11 MISSTATEMENT OF AGE - If annuity payments depend upon an individual's
survival and the date of birth of any individual was misstated, We will
adjust the remaining payments. The amount remaining to be paid will be
the amount that should have been paid with the correct information. We
will credit or charge the amount of any underpayment or overpayment
against the next succeeding payment or payments, if any remain. We
reserve the right to collect any overpayment directly from the payee.
4.12 ANNUITY INCOME (PAYMENT) OPTIONS - Subject to Sections 5.01 and 5.02,
when applicable, you may choose to receive payments under any of the
Annuity Income Options below or any other option agreed to by VALIC.
Any option chosen must comply with applicable state and federal laws
and regulations.
FIRST OPTION - Life Annuity With No Guarantee Period - An income
payable during Your life. All payments cease at Your death with no
further amounts payable.
7
UIT-SEP-194 IR0ISST7
<PAGE> 9
SECOND OPTION - Life Annuity With Guarantee Period of 5, 10, 15, or 20
Years - An income payable during Your life. If, at Your death, We have
made payments for fewer than the number of years selected, We will
continue payments to the Beneficiary for the remainder of the guarantee
period. The Annuity Period may not exceed Your life expectancy or the
joint life expectancies of You and Your Beneficiary on the Annuity
Date.
THIRD OPTION - Life Annuity With Cash or Unit Refund Option - An income
payable during Your life. The annual payment under this Option must be
large enough to satisfy the requirements under Sections 5.01 and 5.02.
Payments cease at Your death. However, the Beneficiary will receive the
additional payment, if any, as explained in the remaining paragraphs
under this Third Option. The Annuity Period may not exceed Your life
expectancy or the joint life expectancies of You and Your Beneficiary
on the Annuity Date.
For payments on a Fixed Annuity basis, the additional payment, if any,
will be the Accumulation Value applied to this option less the total of
all prior payments.
For payments on a Variable Annuity basis, the additional payment, if
any, will be the current value of the number of Annuity Units credited
at the Annuity Date less the number of Annuity Units that have been
paid. For this purpose, the number of Annuity Units credited equals the
Accumulation Value applied to this option divided by the Annuity Unit
Value at the date used to calculate the first annuity payment.
FOURTH OPTION - Joint and Survivor Life Annuity - An income payable
during the joint lives of You and a second person and thereafter during
the life of the survivor.
FIFTH OPTION - Payments for a Designated Period - An income payable for
a selected number of years between five and thirty. The Annuity Period
may not exceed Your life expectancy or the joint life expectancies of
You and Your Beneficiary on the Annuity Date. This option is available
for Fixed Annuities only.
Life expectancy and joint and last survivor expectancy under the
annuity options above are computed by use of the return multiples
contained in section 1.72-9 of the Income Tax Regulations.
Under the Second or Fifth Options, the Beneficiary may elect to
receive in one sum the present value of the remaining payments. For
the Second and Fifth Options, the present value of fixed payments is
computed at an interest rate equal to the rate used to calculate the
annuity payment, but no less than 3.0%. For variable payments under
the Second Option, the present value is computed on the basis of an
Assumed Investment Rate equal to that rate used to calculate the
Annuitant's first annuity payment.
4.13 FIXED OR VARIABLE ANNUITY BASIS - A Fixed Annuity provides benefit
payments of a fixed dollar amount. A Variable Annuity provides benefit
payments which vary with the investment return of the chosen
Variable Investment Options.
You may elect to receive payments under any annuity option as a Fixed
Annuity, a Variable Annuity, or a combination Fixed and Variable
Annuity. If You make no election, amounts in Fixed Interest Options
will provide a Fixed Annuity and amounts in Variable Investment
Options will provide a Variable Annuity.
4.14 VARIABLE ANNUITY PAYMENTS - We will determine the amount of each
Variable Annuity payment by multiplying the number of Annuity Units
payable by the Annuity Unit Value on the tenth day (or the preceding
business day if the tenth day is not a business day) prior to the
payment due date.
We will determine the number of Annuity Units payable at the beginning
of the Annuity Period. We will divide the dollar amount of the first
payment by the Annuity Unit Value for that Variable Investment Option
on the tenth day before the Annuity Date. The number of Annuity Units
payable from each Variable Investment Option remains constant unless
You transfer a portion of the annuity benefit between the Variable
Investment Options or from a Variable Annuity to a Fixed Annuity.
However, the dollar amount payable is not fixed and may change from
month to month.
4.15 ASSUMED INVESTMENT RATE (AIR) - Since the future rate of return on
Variable Options is unknown, You must choose an Assumed Investment
Rate (AIR). The AIR is the assumed rate of return used to determine
the first annuity payment for a Variable Annuity Option. Rates of 3%,
3 1/2%, 4 1/2%, 5% or a higher rate may be chosen if permitted by
state law and regulations. If no AIR is chosen, the AIR will be 3
1/2%. A higher AIR will result in a higher initial payment. Choice of
a lower AIR will result in a lower initial payment. Payments will
increase whenever the actual return exceeds the chosen AIR. Payments
will decrease whenever the actual return is less than the chosen AIR.
4.16 ANNUITY UNITS AND ANNUITY UNIT VALUE - An Annuity Unit is a measuring
unit We use to determine the amount of the annuity payments to be
made. All or a portion of the Accumulation Value is used to purchase a
stream of annuity payments represented by a number of Annuity Units
payable each period. The value of these Annuity Units represents the
benefit amount paid each period.
For Fixed Annuity options the number of Annuity Units equals the
dollar amount of each payment since the Annuity Unit Value is fixed at
$1.00.
8
UIT-SEP-164 IR0ISST8
<PAGE> 10
For Variable Annuity options, the Annuity Unit Value varies with the
investment rate each period. The Annuity Unit Value is the value of
one Annuity Unit of an Investment Option.
The Value of a Variable Annuity Unit is A multiplied by B multiplied
by C (AxBxC).
A = the Annuity Unit Value for the Variable Investment Option at
the immediately preceding computation date
B = 1 + the investment rate for the variable fund for the period
C = the applicable AIR Factor from the following table raised to
the power of the number of days in the period.
AIR AIR Factor
--- ----------
3% 0.999919
3 1/2% 0.999906
4 1/2% 0.999879
5% 0.999866
4.17 BETTERMENT OF RATES - Fixed Annuity - We will use the applicable
current settlement option rates if these will provide higher fixed
annuity payments. If a commutation (cash out of remaining annuity
payments) is allowed, the rates previously used to calculate the
annuity payments will be used for the commutation request.
4.18 ANNUITY RATE TABLES - The value We use to determine annuity payments
will be the applied portion of the Accumulation Value on the tenth day
(or the preceding business day if the tenth day is not a business day)
preceding the date of the first annuity payment, less any applicable
premium taxes.
The following tables are based on the 1983a mortality table and assume
births in the year 1900. The tables show the amount required to
purchase a first monthly payment of $1.00. Quarterly, semiannual, and
annual payments may also be selected.
The amount of each payment will depend upon the Annuitant's adjusted
age at the time the first payment is due. Adjusted age will be
determined in accordance with the following:
Calendar Year Adjusted Age is
of Birth Actual Age Minus
------------- ----------------
Before 1916 0
1916 - 1935 1
1936 - 1955 2
1956 - 1975 3
After 1975 4
Actual age, as used above, means the Annuitant's age at the birthday
nearest to the Annuity Date.
Table A is the Table to use for Variable Annuities with a 3% AIR (see
Section 4.15) and to determine the minimum guarantees for Fixed
Annuities. Tables B, C, and D are to be used for Variable Annuities
with 3 1/2% 4 1/2% and 5% AIRs respectively.
9
UIT-SEP-194 IR0ISST9
<PAGE> 11
TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
--------------------------------------------------------------------------- -------------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $250.48 $250.83 $251.98 $254.04 $257.21 $259.24
51 246.41 246.79 248.04 250.27 253.72 255.69
52 242.26 242.68 244.03 246.45 250.21 252.09
53 238.03 238.49 239.95 242.58 246.69 248.43
54 233.73 234.23 235.81 238.67 243.15 244.71
55 229.35 229.88 231.60 234.72 239.60 240.94
56 224.89 225.46 227.32 230.73 236.05 237.12
57 220.34 220.96 222.98 226.71 232.52 233.24
58 215.71 216.38 218.59 222.65 229.01 229.31
59 210.99 211.72 214.14 218.58 225.54 225.33
60 206.19 206.99 209.63 214.50 222.12 221.29
61 201.30 202.18 205.08 210.42 218.75 217.19
62 196.35 197.31 200.50 206.34 215.47 213.04
63 191.32 192.39 195.88 202.30 212.28 208.83
64 186.24 187.41 191.25 198.29 209.20 204.54
65 181.11 182.40 186.61 194.34 206.25 200.18
66 175.92 177.34 181.97 190.46 203.44 195.73
67 170.70 172.26 177.35 186.66 200.79 191.41
68 165.43 167.15 172.75 182.97 198.31 186.93
69 160.13 162.01 168.18 179.39 196.00 182.35
70 154.78 156.86 163.66 175.95 193.89 178.01
71 149.41 151.71 159.21 172.66 191.97 173.43
72 144.01 146.56 154.85 169.54 190.26 169.01
73 138.61 141.44 150.59 166.61 188.73 164.46
74 133.21 136.35 146.45 163.88 187.41 159.83
75 127.84 131.33 142.46 161.36 186.26 155.48
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant:
Age of Older Number of Years Younger Than Older Annuitant
Annuitant --------------------------------------------------------------------------------------------------
0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $280.54 $282.36 $284.24 $286.16 $288.12 $290.13 $292.17 $294.25 $296.35 $298.47 $300.61
51 276.91 278.78 280.70 282.67 284.69 286.75 288.85 290.98 293.13 295.31 297.51
52 273.19 275.10 277.07 279.10 281.17 283.28 285.43 287.62 289.83 292.07 294.33
53 269.37 271.34 273.36 275.43 277.55 279.72 281.93 284.17 286.45 288.74 291.06
54 265.46 267.47 269.54 271.67 273.85 276.07 278.33 280.64 282.97 285.33 287.71
55 261.45 263.51 265.64 267.81 270.05 272.33 274.65 277.01 279.40 281.83 284.27
56 257.34 259.46 261.63 263.86 266.15 268.49 270.87 273.29 275.75 278.23 280.74
57 253.13 255.30 257.53 259.82 262.16 264.56 267.00 269.48 272.00 274.55 277.12
58 248.82 251.04 253.32 255.67 258.07 260.53 263.03 265.58 268.16 270.77 273.40
59 244.40 246.67 249.01 251.42 253.88 256.40 258.97 261.57 264.22 266.90 269.60
60 239.88 242.21 244.60 247.07 249.59 252.17 254.80 257.48 260.19 262.93 265.70
61 235.26 237.64 240.09 242.61 245.20 247.84 250.54 253.28 256.06 258.87 261.71
62 230.54 232.97 235.47 238.06 240.70 243.41 246.17 248.98 251.83 254.71 257.62
63 225.71 228.19 230.76 233.40 236.11 238.88 241.71 244.58 247.50 250.46 253.44
64 220.79 223.32 225.94 228.64 231.41 234.25 237.14 240.09 243.08 246.10 249.16
65 215.78 218.35 221.02 223.78 226.61 229.51 232.47 235.49 238.55 241.65 244.78
66 210.67 213.30 216.02 218.82 221.71 224.68 227.71 230.79 233.93 237.10 240.31
67 205.48 208.15 210.92 213.78 216.72 219.75 222.84 226.00 229.21 232.45 235.74
68 200.20 202.91 205.73 208.64 211.64 214.73 217.88 221.11 224.38 227.71 231.06
69 194.83 197.59 200.45 203.41 206.47 209.61 212.83 216.12 219.46 222.86 226.30
70 189.39 192.19 195.09 198.10 201.21 204.41 207.68 211.03 214.45 217.92 221.43
71 183.87 186.70 189.66 192.71 195.87 199.12 202.45 205.86 209.34 212.88 216.47
72 178.28 181.15 184.14 187.24 190.45 193.75 197.14 200.61 204.15 207.76 211.41
73 172.63 175.53 178.56 181.70 184.96 188.31 191.75 195.28 198.88 202.55 206.27
74 166.94 169.86 172.92 176.10 179.40 182.80 186.29 189.87 193.53 197.26 201.05
75 161.21 164.15 167.23 170.44 173.78 177.22 180.77 184.40 188.11 191.90 195.75
</TABLE>
10
UIT-SEP-194 IR0ISSTA
<PAGE> 12
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
--------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C>
50 $233.36 $233.71 $234.82 $236.75 $239.66 $240.70
51 229.87 230.25 231.45 233.54 236.72 237.65
52 226.30 226.72 228.01 230.29 233.74 234.54
53 222.65 223.10 224.51 226.98 230.75 231.36
54 218.93 219.41 220.93 223.62 227.73 228.12
55 215.11 215.64 217.28 220.22 224.70 224.82
56 211.21 211.78 213.57 216.77 221.66 221.45
57 207.23 207.84 209.79 213.28 218.62 218.02
58 203.15 203.81 205.94 209.76 215.60 214.53
59 198.98 199.70 202.03 206.21 212.60 210.96
60 194.73 195.51 198.06 202.64 209.63 207.33
61 190.38 191.24 194.04 199.05 206.70 203.63
62 185.95 186.90 189.97 195.47 203.84 199.85
63 181.45 182.50 185.86 191.89 201.06 195.99
64 176.88 178.03 181.73 188.35 198.37 192.18
65 172.25 173.52 177.57 184.84 195.78 188.25
66 167.56 168.95 173.41 181.39 193.31 184.24
67 162.81 164.34 169.24 178.00 190.97 180.31
68 158.01 159.70 165.09 174.70 188.78 176.25
69 153.16 155.01 160.95 171.49 186.75 172.11
70 148.26 150.30 156.85 168.40 184.88 168.10
71 143.31 145.57 152.79 165.44 183.18 163.94
72 138.33 140.83 148.81 162.62 181.65 159.70
73 133.32 136.10 144.91 159.98 180.30 155.66
74 128.31 131.39 141.11 157.51 179.12 151.45
75 123.30 126.73 137.44 155.22 178.10 147.15
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older --------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $259.51 $261.02 $262.56 $264.14 $265.75 $267.38 $269.05 $270.72 $272.42 $274.13 $275.84
51 256.50 258.05 259.64 261.26 262.92 264.61 266.32 268.06 269.80 271.57 273.33
52 253.39 254.99 256.63 258.30 260.01 261.75 263.52 265.30 267.11 268.92 270.75
53 250.19 251.84 253.53 255.25 257.01 258.80 260.62 262.47 264.33 266.20 268.08
54 246.90 248.59 250.33 252.11 253.92 255.77 257.64 259.54 261.46 263.39 265.33
55 243.51 245.25 247.04 248.87 250.74 252.64 254.57 256.53 258.51 260.50 262.50
56 240.02 241.82 243.66 245.54 247.47 249.42 251.41 253.43 255.46 257.52 259.58
57 236.43 238.28 240.17 242.11 244.09 246.11 248.16 250.23 252.33 254.44 256.57
58 232.74 234.64 236.59 238.58 240.62 242.70 244.81 246.94 249.10 251.28 253.47
59 228.94 230.89 232.90 234.95 237.05 239.19 241.36 243.56 245.78 248.03 250.28
60 225.03 227.04 229.10 231.22 233.38 235.58 237.81 240.08 242.37 244.68 247.00
61 221.02 223.08 225.20 227.38 229.60 231.87 234.17 236.50 238.85 241.23 243.62
62 216.90 219.02 221.20 223.43 225.72 228.05 230.42 232.82 235.24 237.69 240.15
63 212.68 214.85 217.09 219.38 221.73 224.13 226.56 229.03 231.53 234.05 236.58
64 208.35 210.58 212.87 215.23 217.64 220.10 222.61 225.15 227.71 230.31 232.91
65 203.92 206.20 208.55 210.97 213.44 215.97 218.55 221.16 223.80 226.46 229.15
66 199.40 201.73 204.13 206.60 209.14 211.74 214.38 217.06 219.78 222.52 225.28
67 194.78 197.16 199.61 202.14 204.74 207.40 210.11 212.87 215.66 218.48 221.31
68 190.06 192.49 195.00 197.58 200.24 202.96 205.74 208.57 211.43 214.33 217.24
69 185.25 187.72 190.28 192.92 195.64 198.42 201.27 204.16 207.10 210.07 213.07
70 180.35 182.87 185.48 188.17 190.95 193.79 196.70 199.66 202.67 205.72 208.79
71 175.35 177.92 180.58 183.33 186.16 189.06 192.03 195.06 198.14 201.26 204.41
72 170.28 172.89 175.60 178.40 181.28 184.24 187.27 190.37 193.51 196.70 199.93
73 165.14 167.78 170.53 173.38 176.32 179.34 182.43 185.58 188.80 192.06 195.36
74 159.93 162.60 165.39 166.29 171.28 174.35 177.50 180.72 183.99 187.32 190.69
75 154.67 157.37 160.19 163.13 166.16 169.29 172.49 175.77 179.11 182.51 185.95
</TABLE>
11
UIT-SEP-194 IR0ISSTB
<PAGE> 13
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
-------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $204.42 $204.75 $205.77 $207.48 $209.94 $209.57
51 201.83 202.19 203.30 205.15 207.83 207.29
52 199.16 199.55 200.75 202.77 205.68 204.94
53 196.41 196.84 198.14 200.33 203.51 202.52
54 193.58 194.05 195.45 197.84 201.30 200.04
55 190.67 191.17 192.70 195.30 199.07 197.48
56 187.67 188.21 189.87 192.70 196.83 194.84
57 184.58 185.17 186.97 190.07 194.57 192.18
58 181.40 182.04 184.00 187.39 192.31 189.42
59 178.12 178.82 180.97 184.67 190,06 186.59
60 174.75 175.51 177.87 181.92 187.82 183.68
61 171.28 172.12 174.70 179.14 185.60 180.76
62 167.73 168.64 171.48 176.35 183.42 177.73
63 164.09 165.09 168.21 173.55 181.29 174.63
64 160.36 161.48 164.90 170.76 179.22 171.46
65 156.57 157.79 161.55 167.99 177.22 168.31
66 152.70 154.05 158.18 165.24 175.31 165.04
67 148.76 150.24 154.78 162.54 173.49 161.70
68 144.75 146.38 151.38 159.88 171.78 158.28
69 140.67 142.46 147.97 157.30 170.19 154.96
70 136.53 138.50 144.57 154.80 168.72 151.48
71 132.31 134.50 141.20 152.39 167.38 147.92
72 128.04 130.46 137.87 150.10 166.17 144.48
73 123.73 126.41 134.59 147.93 165.10 140.90
74 119.38 122.37 131.39 145.90 164.16 137.25
75 115.01 118.33 128.27 144.02 163.35 133.53
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older -----------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 $224.40 $225.44 $226.49 $227.57 $228.65 $229.75 $230.86 $231.97 $233.08 $234.19 $235.30
51 222.31 223.38 224.48 225.60 226.73 227.87 229.02 230.17 231.33 232.49 233.65
52 220.13 221.25 222.39 223.55 224.72 225.91 227.11 228.31 229.52 230.72 231.93
53 217.87 219.03 220.22 221.42 222.64 223.88 225.12 226.37 227.63 228.88 230.14
54 215.52 216.73 217.96 219.21 220.48 221.76 223.06 224.36 225.66 226.97 228.27
55 213.08 214.34 215.61 216.91 218.23 219.56 220.91 222.26 223.62 224.98 226.33
56 210.55 211.85 213.18 214.53 215.90 217.28 218.68 220.08 221.49 222.91 224.32
57 207.92 209.27 210.65 212.05 213.47 214.91 216.36 217.82 219.29 220.76 222.22
58 205.19 206.59 208.03 209.48 210.96 212.45 213.96 215.48 217.00 218.52 220.05
59 202.36 203.82 205.30 206.81 208.35 209.90 211.46 213.04 214.62 216.20 217.79
60 199.43 200.94 202.48 204.05 205.64 207.25 208.87 210.51 212.15 213.80 215.44
61 196.39 197.95 199.55 201.18 202.83 204.50 206.19 207.89 209.59 211.30 213.01
62 193.24 194.86 196.51 198.20 199.91 201.65 203.40 205.16 206.94 208.71 210.48
63 189.98 191.66 193.37 195.12 196.90 198.70 200.51 202.34 204.18 206.03 207.87
64 186.62 188.35 190.13 191.93 193.77 195.64 197.53 199.42 201.33 203.24 205.16
65 183.16 184.94 186.77 188.64 190.55 192.48 194.43 196.40 198.38 200.36 202.35
66 179.59 181.42 183.31 185.24 187.21 189.21 191.23 193.27 195.32 197.38 199.44
67 175.91 177.80 179.75 181.74 183.77 185.83 187.93 190.04 192.16 194.30 196.43
68 172.13 174.07 176.07 178.12 180.22 182.35 184.51 186.70 188.90 191.11 193.32
69 168.24 170.24 172.30 174.41 176.56 178.76 180.99 183.25 185.52 187.81 190.10
70 164.24 166.30 168.41 170.58 172.80 175.06 177.36 179.69 182.04 184.41 186.78
71 160.14 162.25 164.42 166.65 168.94 171.26 173.63 176.03 178.46 180.90 183.35
72 155.95 158.10 160.33 162.62 164.97 167.36 169.80 172.27 174.77 177.28 179.82
73 151.66 153.86 156.15 158.49 160.90 163.36 165.86 168.40 170.97 173.57 176.18
74 147.29 149.54 151.87 154.27 156.74 159.26 161.83 164.44 167.08 169.75 172.44
75 142.84 145.13 147.50 149.96 152.48 155.07 157.70 160.38 163.10 165.84 168.60
</TABLE>
12
UIT-SEP-194 IR0ISSTC
<PAGE> 14
TABLE D
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Options 1, 2 and 3 -- Single Life Annuities
<TABLE>
<CAPTION>
Monthly Payments Guaranteed
--------------------------------------------------------------------------- -----------
Age None 60 120 180 240 Unit Refund
<S> <C> <C> <C> <C> <C> <C>
50 $192.14 $192.47 $193.45 $195.06 $209.94 $196.46
51 189.89 190.25 191.32 193.06 195.52 194.47
52 187.57 187.96 189.12 191 01 193.69 192.45
53 185.18 185.60 186.85 188.91 191.83 190.34
54 182.70 183.16 184.51 186.76 189.94 188.17
55 180.14 180.64 182.11 184.55 188.03 185.92
56 177.50 178.04 179.63 182.30 186.09 183.60
57 174.77 175.35 177.09 180.00 184.14 181.21
58 171.95 172.58 174.47 177.65 182.18 178.81
59 169.03 169.71 171.79 175.27 180.22 176.29
60 166.02 166.77 169.04 172.85 178.27 173.70
61 162.91 163.73 166.22 170.40 176.34 171.03
62 159.72 160.62 163.35 167.93 174.43 168.35
63 156.43 157.42 160.43 165.45 172.56 165.57
64 153.06 154.16 157.45 162.97 170.74 162.71
65 149.62 150.82 154.44 160.50 168.98 159.78
66 146.09 147.42 151.40 158.04 167.30 156.86
67 142.49 143.95 148.32 155.62 165.69 153.83
68 138.82 140.42 145.24 153.24 164.18 150.73
69 135.07 136.83 142.14 150.92 162.77 147.55
70 131.25 133.19 139.04 148.66 161.46 144.44
71 127.35 129.50 135.96 146.49 160.27 141.20
72 123.39 125.77 132.90 144.42 159.20 137.89
73 119.38 122.02 129.89 142.45 158.24 134.51
74 115.32 118.25 126.94 140.61 157.41 131.31
75 111.23 114.50 124.08 138.90 156.68 127.92
</TABLE>
Option 4 -- Joint and Survivor Life Annuity
<TABLE>
<CAPTION>
Younger Annuitant: Number of Years Younger Than Older Annuitant
Age of Older ------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
<S> <C>
50 $209.69 $210.56 $211.44 $212.32 $213.22 $214.12 $215.03 $215.93 $216.84 $217.74 $218.64
51 207.94 208.84 209.76 210.69 211.62 212.56 213.51 214.46 215.41 216.35 217.29
52 206.11 207.05 208.01 208.98 209.96 210.94 211.93 212.92 213.91 214.90 215.88
53 204.21 205.19 206.18 207.19 208.21 209.24 210.28 211.31 212.35 213.38 214.40
54 202.21 203.24 204.28 205.33 206.40 207.47 208.55 209.83 210.71 211.79 212.86
55 200.14 201.21 202.29 203.39 204.50 205.62 206.75 207.88 209.01 210.13 211.25
56 197.97 199.09 200.22 201.37 202.53 203.69 204.87 206.05 207.22 208.40 209.57
57 195.72 196.88 198.06 199.26 200.46 201.68 202.91 204.14 205.37 206.60 207.82
58 193.37 194.58 195.81 197.05 198.32 199.59 200.86 202.15 203.43 204.71 205.99
59 190.92 192.18 193.46 194.76 196.07 197.40 198.73 200.07 201.41 202.75 204.08
60 188.36 189.68 191.01 192.37 193.74 195.12 196.51 197.91 199.30 200.70 202.09
61 185.71 187.08 188.47 189.88 191.31 192.75 194.20 195.65 197.11 198.58 200.01
62 182.95 184.37 185.82 187.29 188.78 190.28 191.79 193.31 194.83 196.34 197.85
63 180.09 181.56 183.07 184.60 186.15 187.71 189.28 190.87 192.45 194.03 195.61
64 177.12 178.65 180.21 181.80 183.41 185.04 186.68 188.33 189.98 191.62 193.27
65 174.04 175.63 177.25 178.90 180.57 182.26 183.97 185.69 187.40 189.12 190.83
66 170.86 172.50 174.18 175.89 177.62 179.38 181.16 182.94 184.73 186.52 188.30
67 167.57 169.27 171.00 172.77 174.57 176.40 178.24 180.10 181.96 183.82 185.68
68 164.18 165.93 167.72 169.55 171.41 173.30 175.21 177.14 179.08 181.01 182.95
69 160.67 162.48 164.33 166.22 168.14 170.10 172.08 174.08 176.09 178.10 180.11
70 157.06 158.92 160.83 162.78 164.77 166.79 168.84 170.91 173.00 175.09 177.18
71 153.34 155.25 157.22 159.23 161.29 163.38 165.50 167.64 169.80 171.96 174.13
72 149.51 151.48 153.51 155.58 157.70 159.86 162.05 164.26 166.49 168.74 170.98
73 145.59 147.61 149.69 151.83 154.01 156.24 158.49 160.78 163.08 165.40 167.73
74 141.58 143.65 145.78 147.97 150.22 152.51 154.84 157.19 159.57 161.97 164.37
75 137.49 139.59 141.77 144.02 146.33 146.68 151.08 153.51 155.96 158.43 160.91
</TABLE>
13
UIT-SEP-194 IR0ISSTD
<PAGE> 15
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Option 5 -- Payment for a Designated Period
<TABLE>
<CAPTION>
Years of Payment Years of Payment
- - ---------------- ----------------
<S> <C> <C> <C>
5 $ 55.83 18 $167.79
6 66.05 19 174.52
7 75.99 20 181.49
8 85.62 21 187.97
9 94.97 22 194.17
10 104.06 23 200.40
11 112.87 24 206.61
12 121.36 25 212.31
13 129.70 26 217.86
14 137.74 27 223.71
15 145.56 28 228.83
16 153.14 29 234.19
17 160.51 30 239.23
</TABLE>
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, We reserve the
right to make less frequent payments. If at any time the annual rate of payment
to any payee is less than $100, We may make a lump sum payment of the remaining
annuity value.
4.19 BENEFICIARIES
(a) Definition of Beneficiary. A Beneficiary is the person or entity
You designate to receive any benefits payable upon Your death.
(b) Designation of Beneficiary. During Your lifetime, You have the
right to designate a Beneficiary and to change the designation.
The change may be made by sending a written request to Our Home
Office. The change will take effect when We have recorded the
change. However, after the change is recorded, the change will be
deemed effective as of the date of the written request for
change. The change will be subject to any payment made or action
taken by Us before the request is recorded.
(c) Payments to Beneficiary. Unless otherwise provided in the
Beneficiary designation:
(1) If any Beneficiary dies prior to the Annuitant, that
Beneficiary's interest will pass to any other Beneficiary
according to the surviving Beneficiary's respective
interest.
(2) If no Beneficiary survives the Annuitant, death benefits
will be paid to the Annuitant's estate.
(3) If any Beneficiary dies after the Annuitant, that
Beneficiary's interest will pass to his or her Beneficiary
or, if none, to his or her estate.
(d) Simultaneous Death Provision. If We cannot determine whether You
or a Beneficiary died first in a common disaster, We will assume
that the Beneficiary died first and make payments on that basis.
(e) Multiple Beneficiaries. You may designate two or more
Beneficiaries to receive concurrently separate percentage
interests in the death benefits payable under this Contract. Each
such Beneficiary may separately exercise the rights that a
Beneficiary has under this Contract.
(f) Trust or Estate as Beneficiary. Payments to a Beneficiary that is
a trust or estate will be made only in a lump sum or in
installments over a period not to exceed five years.
4.20 DEATH PAYMENT PROVISIONS
(a) Death During Accumulation Period. If You die during the
Accumulation Period, a death benefit described in (1) or (2)
below is payable.
(1) If You die on or after age 70, the death benefit is the
greater of (a) the Accumulation Value on the date We
receive proof of death, or (b) 100% of Purchase Payments
reduced by the amount of any prior withdrawals and further
reduced by any portion of the Accumulation Value that has
been applied under an Annuity Income Option.
(2) If You die before age 70, the death benefit is the sum of
the benefits under the Fixed Interest Options and the
Variable Investment Options, as follows:
The benefit under the Fixed Interest Options is the
greater of:
(a) the Fixed Interest Option Values on the date We
receive proof of death; or
14
UIT-SEP-194 IR0ISSTE
<PAGE> 16
(b) 100% of Purchase Payments allocated to the Fixed
Interest Options, reduced by the amount of any prior
withdrawals or transfers from Fixed Interest Options
and further reduced by any portion of the
Accumulation Value that has been applied under an
Annuity Income Option.
The benefit under the Variable Investment Options is the
greater of:
(a) the Variable Investment Option Values on the date We
receive proof of death, or
(b) 100% of Purchase Payments allocated to Variable
Investment Options reduced by the amount of any
prior withdrawals or transfers from the Variable
Investment Options, plus interest at an annual rate
of 3%. For this purpose, all amounts transferred
into Variable Investment Options are considered
Purchase Payments allocated to Variable Investment
Options.
Subject to Section 5.02, the death benefit is payable at any
time Your Beneficiary selects and in any form You could have
selected under this Contract.
(b) Death During Annuity Period. If You die during the Annuity
Period, the amount of the death benefit, if any, will be based
on the terms of the Annuity Income Option. Unless You elected
the Fourth Option, the Beneficiary may elect to receive the
death benefit in one of the following forms:
(1) Subject to Section 5.02, continuing annuity payments under
the terms of Your Annuity Income Option with the right,
for Variable Annuities only, to receive the remaining
payments in a lump sum at any time thereafter;
(2) A lump sum; or
(3) Annuity payments under another Annuity Income Option,
based on the available lump sum and subject to the
limitations of Section 5.02.
The lump sum available under these alternatives is the present
value of remaining payments, discounted at the Assumed
Investment Rate, and based on the current Annuity Unit Value for
(2) and (3), or the value next determined after receipt of the
request at VALIC's Home Office for (1).
(c) Investment Options and Other Rights. Until the death benefits
have been fully paid, Your Beneficiary will be entitled to
exercise all the Investment Options and other rights the
Annuitant can exercise under this Contract. Unpaid death
benefits that have not been applied under an Annuity Income
Option will have an Accumulation Value determined in the same
manner as Your Accumulation Value.
(d) Proof of Death. Proof of death may be made by sending VALIC a
certified copy of the death certificate, a certified copy of a
decree of a court of competent jurisdiction as to death, a
written statement by an attending physician, or any other proof
satisfactory to VALIC.
15
UIT-SEP-194 IR0ISSTF
<PAGE> 17
SECTION 5 - CODE REQUIREMENTS
This Contract is issued on a tax-qualified basis under Section 408(b) of the
Code.
5.01 MINIMUM DISTRIBUTIONS AFTER AGE 70 1/2 - The entire balance of the
individual Retirement Annuity (IRA) must be distributed to You by no
later than April 1 of the calendar year following the calendar year in
which You attain age 70 1/2 (Required Beginning Date). Alternatively,
distributions must commence to You by the Required Beginning Date and
must be made over (a) Your life or over the lives of You and Your
designated Beneficiary, or (b) a period certain that does not exceed
Your life expectancy or the joint life expectancies of You and Your
designated Beneficiary.
Distributions must be made at least once each calendar year. Also,
distributions must either be nonincreasing or they may increase only
as provided in Section 1.401(a)(9)-1, Q & A F-3, of the Proposed
Income Tax Regulations.
All distributions described in this Section must comply with Code
section 401(a)(9), including the incidental death benefit requirements
of Code section 401 (a)(9)(G), and the regulations thereunder, and the
minimum death incidental benefit (MDIB) rules described in Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Life expectancy is calculated using the expected return multiples in
Tables V and VI of Regulations 1.72-9. Life expectancy shall be
recalculated annually unless elected otherwise by You at the time
distributions are required to begin. Any such election shall be
forever irrevocable. Life expectancy of a nonspouse Beneficiary may
not be recalculated and will instead be calculated by using his or her
attained age during the calendar year in which You attain age 70 1/2.
Payments for subsequent years shall be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
5.02 MINIMUM DEATH BENEFIT DISTRIBUTIONS - Distributions under this Section
5.02 are deemed to have begun if distributions are made due to Your
reaching the Required Beginning Date or, if prior to the Required
Beginning Date, distributions irrevocably commence to You over a
period permitted and in the form of an annuity permitted under Section
1.401(a)(9) of the Proposed Regulations.
(a) Distributions Beginning Before Death. If You die after you begin
to receive distributions from this IRA, the remaining portion
must be distributed using a method at least as rapid as the
method of distribution being used prior to Your death.
(b) Distributions Beginning After Death. If You die before receiving
any distributions from this IRA, Your entire IRA must be
distributed by no later than the December 31 of the calendar
year containing the fifth anniversary of Your death. However:
(1) If Your IRA is payable to a designated Beneficiary, then
the entire IRA may be distributed over the life of the
designated Beneficiary or a period certain not greater
than the designated Beneficiary's life expectancy provided
distribution begins no later than the December 31 of the
calendar year immediately following the calendar year of
Your death.
(2) If the designated Beneficiary is Your surviving spouse,
the date distributions are required to begin in accordance
with (1) above shall not be earlier than the later of (a)
December 31 of the calendar year immediately following the
calendar year in which You died or (b) December 31 of the
calendar year in which You would have attained age 70 1/2.
(3) If the designated Beneficiary is Your surviving spouse,
Your spouse may treat this IRA as his or her own IRA by
making a regular or rollover contribution to this IRA or
by failing to elect any of the above distribution options.
(c) Life Expectancy. Life expectancy is computed by using the return
multiples of Tables V and VI of Treasury Regulations 1.72-9.
Life expectancy of a surviving spouse Beneficiary shall be
recalculated annually unless otherwise elected by Your surviving
spouse Beneficiary (such election is forever irrevocable) by
the time distributions are required to begin pursuant to this
section to Your surviving spouse Beneficiary.
For all other designated Beneficiaries, life expectancy is
calculated using the designated Beneficiary's age attained
during the calendar year in which distributions are required to
begin pursuant to this section. Payments for each subsequent
calendar year shall be calculated based on such life expectancy
reduced by one for each calendar year which has elapsed since
the calendar year life expectancy was first calculated.
16
UIT-SEP-194 IR0ISSTG
<PAGE> 18
SECTION 6 - GENERAL PROVISIONS
6.01 NONTRANSFERABILITY - Your account under this IRA is nontransferable
and may not be assigned, sold or used as collateral for a loan. A
transfer made pursuant to a divorce decree in accordance with Code
section 408(d)(6) is permitted.
6.02 EXCLUSIVE BENEFIT AND NONFORFEITABILITY - This IRA is established for
the exclusive benefit of You and Your designated Beneficiaries and
Your (and designated Beneficiary's if applicable) account under this
IRA is nonforfeitable. All distributions made while You are alive must
be made to You.
Your and Your Beneficiary's rights under this Contract are fully
vested and nonforfeitable. Separate Account A holds all assets for
Variable Investment Options for the exclusive benefit of Annuitants,
Beneficiaries, and other holders of annuity contracts.
6.03 WRITTEN NOTICES TO US - Except as specifically provided otherwise, any
Notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such Notice will be
effective when it is received in Our Home Office.
6.04 CHANGE OF CONTRACT - You and VALIC, by an agreement in writing, may
change any or all terms of this Contract.
6.05 AMENDMENT - We may unilaterally amend this Contract as necessary to
maintain compliance with the Code or state insurance laws. Any such
amendment shall be filed, if required, with the Internal Revenue
Service and the state insurance department in order to obtain their
approval of the amendment.
6.06 REPORTS - We will furnish to You annual calendar year reports
concerning the status of Your IRA. We will send You a Separate Account
financial report twice each year if You have values in any Variable
Investment Option.
We will send to You, at least annually, a statement showing the dollar
value of all investment options, investment performance since the
prior statement, and as applicable, the number and value of any
Variable Accumulation Units credited to this Contract. All statements
will be mailed within two months of the date of the information.
6.07 VOTING RIGHTS - We will hold the voting rights on all shares held in
the Separate Account. To the extent of this Contract's participation
in the Separate Account through one or more Variable Investment
Options, We will vote those shares as instructed. You, or the
Beneficiary if You have died, will have the voting instruction rights
prior to the Annuity Date. The annuity payee will have the voting
instruction rights on and after the Annuity Date.
6.08 SUSPENSION OF PAYMENTS - VALIC reserves the right to suspend payments
under the Separate Account for any period-when: (a) the New York Stock
Exchange is closed (other than customary weekend and holiday
closings); (b) when trading on the Exchange is restricted; (c) when an
emergency prevents disposal of securities held in the Separate Account
or it is not reasonably practicable to determine the value of the
Separate Account's net assets; or (d) during any other period when the
Securities and Exchange Commission, by order, so permits for the
protection of security holders.
6.09 DEFERRAL OF CASH SURRENDER OR WITHDRAWAL - VALIC may defer payment of
any surrender of amounts accumulated in Fixed Interest Options.
Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is
deferred for thirty days or more at a rate as determined by VALIC.
6.10 PROOF OF SURVIVAL - We reserve the right to require satisfactory proof
that the Annuitant and any payee is alive on the date any benefit
payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
6.11 Substitution of Investment Fund Shares - If shares of a particular
investment Fund are not available or if, in the judgment of VALIC,
such shares are no longer appropriate for a Variable Investment
Option, shares of another Investment Fund may be substituted for the
Investment Fund shares already held under the Variable Investment
Option and for those to be purchased by future Purchase Payments or
transfers under this Contract. In the event any substitution occurs,
VALIC will notify You within five days.
6.12 MINIMUM BENEFIT - The paid up annuity, cash surrender or death payment
available under this Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered.
6.13 SEPARATE ACCOUNT - That portion of the assets of the Separate Account
equal to the reserves and other contract liabilities with respect to
the Separate Account shall not be chargeable with liabilities arising
out of any other business We may conduct. Income, gains and losses,
whether or not realized, from assets allocable to the Separate Account
are credited to or charged against such account without regard to Our
other income, gains or losses.
17
UIT-SEP-194 IR0ISSTH
<PAGE> 1
EXHIBIT 5(a)
o When the contract applied for is to be used as a periodic payment (salary
reduction or deduction) type plan, please indicate the "from-to" dates for
the Exclude Periods, when applicable.
o Complete Product, Plan Type, and Plan Number.
INVESTMENT OPTION ALLOCATION
Purchase payments may be allocated to the Fixed Investment Options and/or
Variable Investment Options. Eighteen Investment Options are currently
available. Purchase Payments may be allocated among as many as seven of the
following Investment Options:
<TABLE>
<S> <C>
1 - Fixed Account Plus
2 - Short Term Fixed Account
3 - Not in use
4 - MidCap Index Fund
5 - Timed Opportunity Fund
6 - Money Market Fund
7 - Capital Conservation Fund
8 - Government Securities Fund
9 - Not in use
10 - Stock Index Fund
11 - International Equities Fund
12 - Social Awareness Fund
13 - International Government Bond Fund
14 - Small Cap Index Fund
15 - Growth Fund (T. Rowe)
16 - Growth & Income Fund (Value Line)
17 - Science & Technology Fund (T. Rowe)
18 - Dreyfus Small Cap Fund
19 - Templeton Asset Allocation Fund
20 - Templeton International Fund
</TABLE>
[VALIC LOGO]
PORTFOLIO DIRECTOR FIXED
AND VARIABLE ANNUITY
APPLICATION
[PICTURE]
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
VA 8809-4 REV 295
<PAGE> 2
INFORMATION/INSTRUCTIONS
TEXAS OPTIONAL RETIREMENT PROGRAM REDEMPTION INFORMATION:
o Benefits in the Texas Optional Retirement Program vest after one year of
participation in one or more optional retirement plans.
o Benefits under the Texas Optional Retirement Program are available to you
only after you attain the age of 70 1/2 years, or terminate participation
by death, retirement, or termination of employment in all Texas
institutions of higher education.
o VALIC will require written verification of your qualification for any
requested redemption of any annuity benefits purchased under the Texas
Optional Retirement Program from the program administrator.
WITHDRAWAL RESTRICTIONS FOR 403(b)
PARTICIPANTS
According to federal tax laws regulating certain 403(b) plans, any
interest and earnings credited to your account after 12/31/88 and any
elective contributions made after that date may be withdrawn only under
any of the following circumstances.
o Separation from service o Death
o Age 59 1/2 or older o Disability
o Hardship (Contributions only)
Your employer's plan may contain other withdrawal restrictions. Additionally,
some employer plans have alternative investment options among which plan
participants may transfer contract values.
BENEFICIARY DESIGNATIONS
(PRIMARY AND/OR CONTINGENT)
A beneficiary should always be designated. Beneficiary categories are:
PRIMARY BENEFICIARY -
One who receives any benefits after the Annuitant dies.
CONTINGENT BENEFICIARY -
One who receives any benefits if the primary beneficiary dies before the
Annuitant dies.
Beneficiaries can be an INDIVIDUAL, an INSTITUTION, or a TRUSTEE.
NAMING YOUR BENEFICIARY
INDIVIDUAL as beneficiary:
Jane A. Doe
INSTITUTION as beneficiary (Full legal name and address should be stated; also
state whether the institution is a corporation):
The Evergreen Company, a Texas Corporation
TRUSTEE as beneficiary (Named inter vivos [living] trust agreement):
XYZ Bank and Trust Company or its successors, as Trustee under trust
agreement dated January 31, 1982.
SALARY REDUCTION AGREEMENT FOR 403(b) AND 401(k) PLANS
The Employer is hereby or by a separate document authorized and directed to
reduce your pay in the amount indicated under "Contribution Information"
beginning on the date indicated on this form and to purchase an annuity
contract qualified under Section 403(b) of the Internal Revenue Code or a
non-forfeitable annuity contract to provide retirement benefits under Internal
Revenue Code (IRC) 401(k) from The Variable Annuity Life Insurance Company.
This agreement shall be legally binding and irrevocable as to both the parties
hereto while employment continues; provided, however, that either party may
change or terminate this agreement as of the end of any month, so that it will
not apply to salary subsequently earned, by giving at least thirty (30) days
written notice of the date of said change or termination. Salary reductions
are to be effective with respect to amounts earned on or after the first day of
the pay period listed under "Date Payment Begins" (which is subsequent to this
agreement). For purposes of a 403(b) contract, amounts earned prior to making
the salary reduction agreement may not be deferred. Only amounts earned after
such agreement may be deferred. For the purposes of a 401(k) contract, amounts
not currently available to the employee are eligible for salary reduction.
CONTRIBUTION INFORMATION
o Contribution Sources:
EE(1) - Employee Voluntary;
EE(2) - Employee Mandatory or Matched;
ER(3) - Employer Basic;
ER(4) - Employer Supplemental or Matching
NOTE: Separate account numbers must be set up for each Contribution
Source.
o Choose either a percent of salary or an amount, and fill in the number of
payments, payment code, and the date you will begin making payment.
Payment codes: 1 - Periodic; 2 - Single Sum;
3 - Flex Pay 4 - Capital Transfer
<PAGE> 3
PORTFOLIO DIRECTOR FIXED AND
VARIABLE ANNUITY APPLICATION
APPLICANT/ANNUITANT INFORMATION
SS# or Tax ID#: ________________________________________________________________
Name: __________________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
City: __________________________________________________________________________
State: _________________________________ Zip: _____________________ - __________
Birthdate: ______ /______ / _____________ Sex: / / Male / / Female
Marital Status: / / Married / / Single
Occupation: ____________________________________________________________________
Home Phone: ____________________________________________________________________
Work Phone: ____________________________________________________________________
ADMINISTRATIVE DATA
Group/Plan Name: _______________________________________________________________
Group #: _______________________________________________________________________
Date of Hire: _____________ / ___________ / ____________
Annual Salary: $ _______________________________________________________________
Expected Annuity Date: _____________ / ___________ / ____________
In the absence of an election, age 85 for NQDA and age 75 for all other plan
types.
REPLACEMENT
Is this a replacement of an existing annuity or life insurance contract?
/ / No / / Yes If yes, complete the following:
Insured's Name: ________________________________________________________________
Policy Number(s): ______________________________________________________________
Insurer's (Company) Name: ______________________________________________________
BENEFICIARY (Note: If Group is subject to ERISA, Beneficiary must be spouse
unless waived by spouse in writing on an Election and Consent Form)
CONTRIBUTION INFORMATION (This form may only be used for Portfolio Director
Fixed and Variable Annuity. See back for more information.)
Is there an expected Capital Transfer Rollover? / / No / / Yes If yes, complete
transfer rollover form VA 4300.
<TABLE>
<CAPTION>
Date Exclude
Contribution: # of Annualized Pymt Pymt Periods Investment Plan Plan Sub Account
CS % or $ Pymts Amount Begins Code from-to Options Product Type No Grp Number
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
- - -------------------------------------------------------------------------------------------------------------------------
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
- - -------------------------------------------------------------------------------------------------------------------------
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
- - -------------------------------------------------------------------------------------------------------------------------
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
$ %
----- -----
- - -------------------------------------------------------------------------------------------------------------------------
Initial Flexible Payment Amount: $___________________
</TABLE>
<PAGE> 4
Primary Beneficiary:____________________________________
Relationship:___________________________________________
Birthdate:__/__/__ SS#:_________________________________
Address (Include Zip): _________________________________
________________________________________________________
Contingent Beneficiary:_________________________________
Relationship:___________________________________________
Birthdate:__/__/__ SS#:_________________________________
Address (Include Zip): _________________________________
________________________________________________________
OWNER (NQDA) (Only if other than applicant.)
Owner: _________________________________________________
Address: (Include Zip): ________________________________
________________________________________________________
Birthdate:__/__/__ SS# or Tax ID#: _____________________
Home Phone:________________ Work Phone: ________________
Contingent Owner: ______________________________________
Address (Include Zip): _________________________________
________________________________________________________
Birthdate: __/__/__ SS# or Tax ID#: ____________________
Home Phone:________________ Work Phone: ________________
INVESTOR PROFILE (If required)
Investment Objectives (check one):
/ / Safety of Principal / / Long-term growth
/ / Retirement Income / / Income
/ / Other ____________________________________________
Occupation:_____________________________________________
Financial Situations (approximate amounts in thousands):
Under $50 $50-$100 Over $100
Household Income / / / / / /
Net Worth / / / / / /
Life Insurance / / / / / /
Dependents: Number ___ Ages:____________________________
APPLICANT AFFIRMATIONS AND STATEMENTS
A current prospectus for the Company's Separate Account was provided with the
application. Also a current prospectus was provided for each Fund available
under this Plan. The prospectus for the Separate Account gives sales expenses
and other data. ANNUITY PAYMENTS OR SURRENDER VALUES ARE VARIABLE WHEN BASED ON
THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THEY ARE NOT GUARANTEED AS
TO DOLLAR AMOUNT. By signing this form I hereby acknowledge that I have read
and understand the withdrawal restrictions for 403(b) plans as shown on the
back of this form.
This application is subject to acceptance by the Company at its Home Office.
Proof of age must be furnished before Annuity Payments begin. Upon written
request, we will provide you with factual information regarding the benefits
and provisions of the annuity contract for which you are applying. If you are
not satisfied with your annuity contract for any reason, you may return it
within 20 days after receipt for a refund of premium (applicable to all
individual and some group contracts). In some states we are required to advise
you of the following: Any person who, with intent to defraud or knowing that he
is facilitating a fraud against an insurer, submits an application or files a
claim containing a false, incomplete, or deceptive statement of a material fact
may be guilty of insurance fraud. I represent that all statements and answers
made in the application are full, complete, and true to the best of my
knowledge and belief.
FOR TEXAS OPTIONAL RETIREMENT PROGRAM APPLICANTS ONLY: I have read and
understand the redemption information on the back of this form.
SALARY REDUCTION AGREEMENT FOR 403(b) AND 401(k) PLANS: I have read and
understand the Salary Reduction Agreement on the back of this form.
/ / Check if you currently own or participate in another VALIC Annuity
Contract.
Annuitant's Signature: _________________________________________________________
Dated at _____________________________ , date _______________________ ,19______.
Owner's Signature: _____________________________________________________________
Dated at _____________________________ , date _______________________ ,19______.
REPRESENTATIVE OF RECORD
No. ________________________________ Issue State (Abv): ________________________
Region Code: _______________________ Branch Code: ______________________________
As representative I / / do / / do not have reason to believe that replacement of
existing life insurance or annuity may be involved.
Representative's Name: _________________________________________________________
Representative's Signature: ____________________________________________________
State License ID No.: __________________________________________________________
Principal Approval: ____________________________________________________________
Date: ________________________________ Date of Input: __________________________
Week Ending: ___________________________________________________________________
VA 8809-4 REV 295 .
<PAGE> 1
EXHIBIT 5(B)
[VALIC LOGO] MASTER APPLICATION
UITG-194 - PORTFOLIO DIRECTOR (FIXED and VARIABLE ANNUITY)
<TABLE>
<S> <C>
=============================================================================================================================
1. APPLICANT (check one): [ ] Employer [ ] Other
---------------------------------------------------------------------
(SPECIFY)
Name (exact legal):
------------------------------------------------------------------
Mailing Address: Tax I.D. No:
------------------------------------------------------- -------------------------------
NO. STREET
Telephone No.: ( )
------------------------------------------------------------------------ --------- ------------------
CITY STATE (ABV.) ZIP CODE AREA CODE
- - -----------------------------------------------------------------------------------------------------------------------------
2. OWNERSHIP/CONTROL 3. TYPE OF PLAN (check one):
For Deferred Compensation: [ ] 403(b) Voluntary Deferred Annuity
------------------------- [ ] 403(b) State Optional Retirement Plan
For other Plan Types (check one): [ ] 403(b) Employer Retirement Plan
[ ] Employer [ ] Deferred Compensation Plan (check one):
[ ] Trustee [ ] 457 Public Employer [ ] 457 Private Non-Profit
[ ] Other: [ ] Other:
------------------------------------------ -------------------------------------------
[ ] 401(a) or 403(a) Employer Retirement Plan
- - ----------------------------------------------------------- [ ] 401(a) or 403(a) Self Employed Retirement Plan
[ ] Other:
4. TYPE OF ORGANIZATION (check one): -----------------------------------------------
[ ] PS --Public Educational Institutions Name of Plan:
[ ] NP --Non-Profit Organizations (check one): --------------------------------------------
[ ] 501(c)(3)* [ ] Other
[ ] PFP --Private Profit Organizations ----------------------------------------------------------------
[ ] SLGOV --State and Local Governments
[ ] SELF --Self Employed Individuals 5. ADDITIONAL INFORMATION/REQUESTS
Nature of Business:
--------------------------------
----------------------------------------------------
*ATTACH IRS DETERMINATION LETTER.
- - -----------------------------------------------------------------------------------------------------------------------------
6. STATEMENTS/AGREEMENTS FOR GROUP FIXED/VARIABLE ANNUITY CONTRACTS
A current prospectus for the Company's Separate Account for the contract was provided with this application. Also, a current
prospectus was provided for each Fund applicable to this plan. The prospectus for the Separate Account provides sales
expenses and other data. It is understood that annuity payments (and termination values, if any) provided by the contract
applied for are variable and not guaranteed as to dollar amount when based on the investment experience of the Company's
Separate Account.
SIGNATURES
Dated at Date: , 19 .
----------------------------------------------------- ------------------------------------- -----
(CITY, STATE)
- - -------------------------------------------------------------- ----------------------------------------------------
APPLICANT SIGNATURE APPLICANT TITLE
- - -------------------------------------------------------------- ----------------------------------------------------
AGENT NAME (PLEASE PRINT) AGENT SIGNATURE DATE
- - -------------------------------------------------------------- ------------------------ ------------------------
STATE LICENSE ID# DATE GROUP NO.
- - --------------------------------------------------------------
MANAGER SIGNATURE
- - -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
GROUP HOLDER' APPLICANT COPY
VA 8863-1
<PAGE> 1
EXHIBIT 6(a)
STATE BOARD OF INSURANCE
STATE OF TEXAS
(STATE OF TEXAS SEAL)
As the chief executive and administrative officer of the State Board of
Insurance, the Commissioner of Insurance is the official custodian of the
records of the agency. TEX. INS. CODE ANN. art. 1.09a, Texas Open Records Act
TEX. REV. CIV. STAT. ANN. art. 6252-17a Section 5(a). Pursuant to the power
vested in the Commissioner under article 1.09(g), the Commissioner authorizes
such deputies as are necessary to carry out the provisions of the Open Records
Act.
As a duly authorized representative of the Commissioner of Insurance, I hereby
certify that the hereunto attached document is a true, complete and correct
copy of:
The Amended and Restated Articles of Incorporation for THE VARIABLE ANNUITY
LIFE INSURANCE COMPANY, Houston, Texas, and Commissioner's Order No. 89-1437
together consisting of eight (8) pages.
Be it known that the official records of the State Board of Insurance contain a
copy of aforesaid instrument.
WITNESS MY HAND, and the seal of the Texas State Board of Insurance, this 25th
day of September, 1989
A. W. POGUE
COMMISSIONER OF INSURANCE
By: /s/ BEVERLY McVEY
-----------------------------------
<PAGE> 2
No. 89 - 1437
OFFICIAL ORDER
of the
COMMISSIONER OF INSURANCE
of the
STATE OF TEXAS
AUSTIN, TEXAS
Date SEP 20 1989
Subject Considered: THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Houston, Texas
CHARTER AMENDMENT
General remarks and official action taken:
On this day came on for consideration by the Commissioner of Insurance the
application of approval of an amendment to the charter of THE VARIABLE ANNUITY
LIFE INSURANCE COMPANY, Houston, Texas, changing the street address of the home
office of the company from 2727 Allen Parkway, Houston, Texas to 2929 Allen
Parkway, Houston, Harris County, Texas 77019. Since the charter amendment
involves only a change of the street address of the home office of the company
to another location in Houston, a new Certificate of Authority is not needed
and a hearing is not required by law.
Action by the Board of Directors and Shareholders, as required and permitted by
TEX. INS. CODE art. 3.05 and TEX. BUS. CORP. ACT arts. 4.02, 4.04 and 9.10,
has been evidenced to the Commissioner of Insurance and the amendment is
properly supported by the required documents.
Based upon the evidence submitted, it is hereby ordered that such amendment be,
and the same is hereby, approved.
/s/ A. W. POGUE
---------------------------
A. W. POGUE
COMMISSIONER OF INSURANCE
RECOMMENDED BY:
/s/ JACK EVINS
- - ----------------------------
JACK EVINS
SPECIAL DEPUTY COMMISSIONER
LICENSING GROUP
<PAGE> 3
AMENDED AND RESTATED ARTICLES OF INCORPORATION
for
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
1. The Variable Annuity Life Insurance Company, pursuant to the provisions of
Article 3.05 of the Insurance Code of Texas and Article 4.07 of the Texas
Business Corporation Act hereby adopts Amended and Restated Articles of
Incorporation containing all amendments thereto that are in effect to date,
and as further amended by such Amended and Restated Articles of
Incorporation as hereinafter set forth, and which contain no other change
in any provision thereof.
2. Article II of the Company's Amended and Restated Articles of Incorporation
is amended as follows:
ARTICLE II
The location of the home office of the corporation is 2929
Allen Parkway, Houston, Harris County, Texas 77019.
3. Each such amendment made by these Amended and Restated Articles of
Incorporation has been effected in conformity with the provisions of the
Texas Business Corporation Act and such amended and restated articles of
incorporation, and each such amendment made by the amended and restated
articles of incorporation were duly adopted by the shareholders of the
corporation, the amendment to Article IV being adopted by the shareholders
on the 7th day of December, 1987 and the amendment to Article II being
adopted by the shareholders on the 28th day of April, 1989.
<PAGE> 4
4. The number of shares of the corporation outstanding at the time of such
adoption was 3,850,000; and the number of shares entitled to vote thereon
was 3,850,000. The number of shares voted for such Amended and Restated
Articles was 3,850,000.
5. The Articles of Incorporation and all amendments and supplements thereto
are hereby superseded by the following Amended and Restated Articles of
Incorporation which accurately copy the entire text thereof and as amended
as above set forth:
<PAGE> 5
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Effective as of April 28, 1989
ARTICLE I
The name of the corporation is The Variable Annuity Life Insurance Company.
ARTICLE II
The location of the home office of the corporation is 2929 Allen Parkway,
Houston, Harris County, Texas 77019.
ARTICLE III
The corporation proposes to transact business as a life, health and accident
insurance company as provided in Chapter Three of the Insurance Code of Texas,
as presently existing and as the same may hereafter be amended, including,
without limitation, the sale, issue, delivery and use of variable annuity
contracts, on an individual and a group basis, and in connection therewith the
establishment and operation of one or more separate variable annuity accounts;
and to do and perform any lawful act incident thereto.
ARTICLE IV
(a) The aggregate number of shares of stock which the corporation shall have
authority to issue is seven million (7,000,000) shares, consisting of two
million (2,000,000) shares of Preferred Stock of the par value of One
Dollar ($1.00) per share ("Preferred Stock") and five million (5,000,000)
shares of Common Stock of the par value of One Dollar ($1.00) per share
("Common Stock"), of which at least fifty per cent (50%,), including the
minimum amount of capital ($100,000) prescribed by Article 3.02 of the
Insurance Code of Texas, has been subscribed and fully paid for. The
minimum amount of capital consists only of those assets prescribed by
Article 3.02 of the Insurance Code of Texas, as amended.
(b) The Board of Directors is hereby expressly vested with the authority to
adopt a resolution or resolutions providing for the issue of authorized but
unissued shares of Preferred Stock, which shares may be issued from time to
time in one or more series and in such amounts as may be determined by the
Board of Directors in such resolution or resolutions. The rights, voting
rights, designations, preferences, and the relative, participating,
optional or other rights, if any, of each series of Preferred Stock and the
qualifications, limitations or restrictions, if any, of such preferences
and/or rights (collectively the "Series Terms"), shall be such as are
stated and expressed in a resolution or resolutions providing for the
creation or revision of such Series Terms adopted by the Board of
Directors (a "Directors' Resolution"). The Board shall have the power
and authority,
<PAGE> 6
to the fullest extent permissible under the Texas Business Corporation Act (the
"Act") as currently in effect or as amended, to determine and establish by
Directors' Resolution, the Series Terms of a particular series, including,
without limitation, determination of the following:
(1) The number of shares constituting that series and the distinctive
designation of that series, or any increase or decrease (but not below
the number of shares thereof then outstanding) in such number;
(2) The dividend rate on the shares of that series; whether such
dividends, if any, shall be cumulative, noncumulative, or partially
cumulative, and, if cumulative or partially cumulative, the date or
dates from which dividends payable on such shares shall accumulate;
and the relative rights of priority, if any, of payment of dividends
on shares of that series;
(3) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting
rights;
(4) Whether that series shall have conversion privileges with respect to
shares of any other class or classes of stock or of any other series
of any class of stock, and, if so, the terms and conditions of such
conversion, including provision for adjustment of the conversion rate
upon occurrence of such events as the Board of Directors shall
determine;
(5) Whether the shares of that series shall be redeemable at the option of
either the corporation or the holder, and, if so, the terms and
conditions of such redemption, including relative rights of priority,
if any, of redemption, the date or dates upon or after which they
shall be redeemable, provisions regarding redemption notices, and the
amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(6) Whether the corporation shall have any repurchase obligation with
respect to the shares of that series, and, if so, the terms and
conditions of such obligation, subject, however, to the limitations of
the Act;
(7) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of
such sinking fund;
(8) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation,
and the relative rights of priority, if any, of payment of shares of
that series;
(9) The conditions or restrictions upon the creation of indebtedness of
the corporation or upon the issuance of additional Preferred Stock or
other capital stock ranking on a parity therewith, or prior thereto,
with respect to dividends or distribution of assets upon liquidation;
2
<PAGE> 7
(10) The conditions or restrictions with respect to the issuance of,
payment of dividends upon, or the making of other distributions
to, or the acquisition or redemption of, shares ranking junior to
the Preferred Stock or to any series thereof with respect to
dividends or distribution of assets upon liquidation;
(11) The relative priority of each series of Preferred Stock in
relation to other series of Preferred Stock with respect to
dividends or distribution of assets upon liquidation; and
(12) Any other designations, powers, preferences and rights, including,
without limitation, any qualifications, limitations or
restrictions thereof.
Any of the Series Terms, including voting rights, of any series may be made
dependent upon facts ascertainable outside the Articles of Incorporation
and the Directors' Resolution, provided that the manner in which such facts
shall operate upon such Series Terms is clearly and expressly set forth in
the Directors' Resolution. The Series Terms may vary between series of
Preferred Stock in any and all respects so long as all shares of the same
series are identical in all respects.
Subject to the provisions of this Article IV, shares of one or more series
of Preferred Stock may be authorized or issued from time to time as shall
be determined by and for such consideration as shall be fixed by the Board
of Directors, in an aggregate amount not exceeding the total number of
shares of Preferred Stock authorized by the Articles of Incorporation.
Notwithstanding the authority of the Board of Directors to determine and
establish the Series Terms of a particular series, all shares of Preferred
Stock shall rank senior to all shares of Common Stock with respect to
priority of payment of dividends or distribution of assets upon
liquidation.
(c) The Common Stock shall rank junior to the Preferred Stock and is subject to
all rights, privileges, preferences and priorities of the Preferred Stock
as set forth herein or as set forth in any Directors' Resolution providing
for the issuance of any series of Preferred Stock. Subject to all rights of
the Preferred Stock, dividends may be paid on the Common Stock as and when
declared by the Board of Directors of the corporation out of any funds of
the corporation legally available for the payment thereof. After payment
shall have been made in full to the holders of the Preferred Stock in the
event of any liquidation, dissolution or winding up of the affairs of the
corporation, the remaining assets and funds of the corporation shall be
distributed to the holders of Common Stock according to their respective
shares. The holders of shares of Common Stock shall possess full voting
power for the election of directors and for all other purposes, each holder
of Common Stock on the date fixed for determining shareholders entitled to
vote being entitled to one vote for each share of Common Stock held of
record by such holder."
ARTICLE V
The period of time for which the corporation is to exist is five hundred
(500) years.
3
<PAGE> 8
ARTICLE VI
No holder of shares of stock of the corporation shall have any preemptive
right to subscribe for or acquire additional shares of stock of the
corporation, whether such shares shall be hereby or hereafter authorized; and
no holder of shares of stock of the corporation shall have any right to acquire
any shares of stock which may be held in the treasury of the corporation. All
such additional or treasury shares may be sold for such consideration, at such
time, and to such person or persons as the Board of Directors may from time to
time determine.
ARTICLE VII
Cumulative voting of shares of stock in the election of directors is
prohibited.
ARTICLE VIII
The Board of Directors is expressly authorized to alter, amend, or repeal
the bylaws or to adopt new bylaws.
ARTICLE IX
Each director, officer and former director or officer of the corporation,
and any person who may have served or who may hereafter serve at its request as
a director or officer of another corporation in which it owns shares of capital
stock or of which it is a creditor, is hereby indemnified by the corporation
against expenses actually and necessarily incurred by him in connection with
the defense of any action, suit or proceeding in which he is made a party by
reason of being or having been a director or officer, except in relation to
matters as to which he shall be adjudged in such action, suit or proceeding to
be liable for negligence or misconduct in the performance of duty. Such
indemnification shall not be deemed exclusive of any other right to which such
director, officer or person may be entitled under any bylaws, amendment, vote
of stockholders, or otherwise.
ARTICLE X
The Board of Directors from time to time, by resolution duly adopted at any
regular or special meeting, may establish one or more separate variable annuity
accounts pursuant to Section 7 of Article 3.72 of the Insurance Code of Texas,
as presently existing and as the same may hereafter be amended, for the purpose
of receiving, holding, investing and reinvesting amounts received in connection
with individual or group variable annuity contracts issued by the corporation
or by any life insurance company which was a predecessor to, or which has been
acquired by, the corporation. With respect to each such separate account, such
resolution shall authorize and direct the officers of the corporation to do all
of the acts and things necessary or appropriate to cause each such separate
account to be registered under the Investment Company Act of 1940 of the United
States as a unit investment trust investment company or as a diversified,
open-end management investment company, to make application for and obtain such
exemptions under such act as may be necessary or appropriate, and to file and
cause to become effective such registration statements under the Securities Act
of 1933 of the United States as may be necessary or appropriate. With respect
4
<PAGE> 9
to each such separate account, such resolution shall also make provisions for
rules regarding the regulation and management of the affairs of the separate
account; if appropriate, for a Board of Managers with certain duties and powers
regarding the separate account; for the rendering of investment, underwriting,
accounting and administrative services to the separate account; if appropriate,
for special voting rights and procedures for the owners of and participants
under variable annuity contracts issued in connection with the separate account
to give them jurisdiction over matters relating to investment policies,
investment advisory services, underwriting services and the selection of
certified public accountants in relation to the administration of the separate
account, and in order to comply with the Investment Company Act of 1940 of the
United States and such other requirements of federal law as may be applicable
to the separate account; and for the sale, issue, delivery and use by the
corporation of individual and group variable annuity contracts under the terms
of which amounts received in connection therewith and required to be allocated
or applied to the separate account.
Dated 28th day of July, 1989.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ STEPHEN D. BICKEL
---------------------------------------
STEPHEN D. BICKEL President
By: /s/ WILLIAM A. WILSON
---------------------------------------
WILLIAM A. WILSON
Vice President and General Counsel
STATE OF TEXAS )
)
COUNTY OF HARRIS )
I, Karen V. Shanklin, a notary public, do hereby certify that on this 28th
day of July, 1989, personally appeared before me Stephen D. Bickel and William
A. Wilson, who being by me first duly sworn, declared that they were the
President and Vice President and General Counsel, respectively, of The Variable
Annuity Life Insurance Company, and that they signed the foregoing document as
officers of the said corporation and that the statements contained therein are
true.
/s/ KAREN V. SHANKLIN
--------------------------------------
Notary Public in and for
Harris County, Texas
KAREN V. SHANKLIN NOTARY PUBLIC IN AND
(Seal) FOR THE STATE OF TEXAS. MY COMMISSI0N
EXPIRES 9-19 1989.
5
<PAGE> 1
EXHIBIT 6(b)
STATE BOARD OF INSURANCE
STATE OF TEXAS
(STATE OF TEXAS SEAL)
As the chief executive and administrative officer of the State Board of
Insurance, the Commissioner of Insurance is the official custodian of the
records of the agency. TEX. INS. CODE ANN. art. 1.09a, Texas Open Records Act
TEX. REV. CIV. STAT. ANN. art. 6252-17a Section 5(a). Pursuant to the power
vested in the Commissioner under article 1.09(g), the Commissioner authorizes
such deputies as are necessary to carry out the provisions of the Open Records
Act.
As a duly authorized representative of the Commissioner of Insurance, I hereby
certify that the hereunto attached document is a true, complete and correct
copy of:
Amendment to the Amended and Restated Articles of Incorporation of THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, Houston, Texas, together with
Commissioner Order No. 90-0819, dated June 1, 1990, altogether consisting
of five (5) pages.
Be it known that the official records of the State Board of Insurance contain a
copy of aforesaid instrument.
WITNESS MY HAND, and the seal of the Texas State Board of Insurance, this
9th day of June, 1990.
A. W. POGUE
COMMISSIONER OF INSURANCE
By: /s/ BEVERLY MCVAY
-----------------------
<PAGE> 2
No. 90-0819
OFFICIAL ORDER
of the
COMMISSIONER OF INSURANCE
of the
STATE OF TEXAS
AUSTIN, TEXAS
Date JUN 1, 1990
Subject Considered:
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
Houston, Texas
CHARTER AMENDMENT
Docket No. 10807
General remarks and official action taken:
On this day came on for consideration by the Commissioner of Insurance,
pursuant to TEX. INS. CODE arts. 3.04 and 3.05 and TEX. BUS. CORP. ACT arts.
4.02 and 4.04, the application of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY,
Houston, Texas, hereinafter called VALIC, for the approval of an amendment to
its charter limiting director liability.
On May 21, 1990, a public hearing concerning the charter amendment proposed by
VALIC was held before Lisa Lyons, Hearings Officer, in the offices of the State
Board of Insurance, 1110 San Jacinto, Austin, Texas. The Commissioner's staff
was represented by Joyce Arnold, Staff Attorney. VALIC was represented by Will
Davis, Attorney, and James Janke, Senior Associate General Counsel of VALIC.
Evidence in the form of exhibits and testimony was presented at the hearing.
JURISDICTION
The Commissioner of Insurance has jurisdiction over the application of VALIC
pursuant to TEX. INS. CODE arts. 3.04 and 3.05 and TEX. BUS. CORP. ACT arts.
4.02 and 4.04. The notice of hearing, dated April 12, 1990, was properly
addressed and sent by certified mail, return receipt requested, to VALIC,
Houston, Texas, pursuant to TEX. REV. CIV. STAT. art. 6252-13a Section 13. The
notice of hearing contained a statement of the time, place and nature of the
hearing and a statement of the matters asserted and of the legal authority and
jurisdiction under which the hearing was to be held.
<PAGE> 3
COMMISSIONER'S ORDER
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
PAGE 2 OF 3
FINDINGS OF FACT
Based upon the evidence presented at the hearing and the recommendations of the
Hearings 0fficer, the Commissioner of Insurance makes the following findings of
fact:
1. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, Houston, Texas, is a domestic
stock life insurance company engaged in the business of insurance pursuant
to the provisions of Chapter 3 of the Insurance Code.
2. Action by the board of directors and shareholders of VALIC authorizing the
proposed amendment as required and permitted by TEX. INS. CODE arts.
3.04 and 3.05 and TEX. BUS. CORP. ACT arts. 4.02 and 4.04 has been
evidenced to the Commissioner of Insurance.
3. As a result of the amendment to VALIC's Amended and Restated Articles
of Incorporation, a new Article XI was added. The amendment permits the
limitation of the liability of a director of VALIC.
4. The minimum capital and surplus, as required by law, is the bona fide
property of VALIC.
5. Testimony indicates that the officers, directors and managing executives
of VALIC possess sufficient insurance experience, ability and standing to
render the continued success of the company probable.
6. Testimony indicates that VALIC is acting in good faith.
7. Notice of the hearing on the appiicatlon was published in a newspaper of
general circulation in the county of the home office of VALIC.
CONCLUSION OF LAW
Based upon the foregoing findings of fact, the Commissioner of Insurance makes
the following conclusion of law:
The proposed amendment to the Amended and Restated Articles of
Incorporation of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, Houston,
Texas, has been evidenced to the Commissioner of Insurance, is
properly supported by the required documents and meets all
requirements of law for its approval.
<PAGE> 4
COMMISSIONER'S ORDER
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
PAGE 3 OF 3
IT IS, THEREFORE, THE ORDER of the Commissioner of Insurance that the charter
amendment of THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, Houston, Texas,
adding a new Article XI limiting the liability of directors, be, and the same
is hereby, approved.
/s/ A.W. POGUE
--------------------------
A.W. POGUE
COMMISSIONER OF INSURANCE
RECOMMENDED BY:
/s/ LISA LYONS
- - --------------------------------
LISA LYONS
HEARINGS OFFICER
<PAGE> 5
AMENDMENT NUMBER ONE
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
(as amended and restated through April 28, 1989)
OF
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
("AMENDMENT")
The Variable Annuity Life Insurance Company (the "Company"), pursuant to the
provisions of Article 3.05 of the Insurance Code of Texas and Article 4.04 of
the Texas Business Corporation Act, hereby amends its Amended and Restated
Articles of Incorporation as follows:
1. The name of the Company is The Variable Annuity Life Insurance
Company.
2. Article XI is an addition to the Company's Amended and Restated
Articles and the full text of such provision added is as follows:
ARTICLE XI
A director of the corporation shall not be liable to the
corporation or its shareholders for monetary damages for an act or
omission in the director's capacity as a director, except that this
Article XI does not eliminate or limit the liability of a director
for (i) a breach of a director's duty of loyalty to the corporation
or its shareholders; (ii) an act or omission not in good faith or
that involves intentional misconduct or a knowing violation of the
law; (iii) a transaction from which a director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the director's officer; (iv) an act or omission
for which the liability of a director is expressly provided for by
statute; or (v) an act related to an unlawful stock repurchase or
payment of a dividend. Any repeal or amendment of this Article by
the shareholders of the corporation shall be prospective only, and
shall not adversely affect any limitation on the liability of a
director of the corporation existing at the time of such repeal or
amendment. In addition to the circumstances in which a director of
the corporation is not liable as set forth in the preceding
sentences, a director shall not be liable to the fullest extent
permitted by any provision of the statutes of Texas hereafter
enacted that further limits the liability of a director.
<PAGE> 6
3. The Amendment was adopted by the shareholders of the Company on
March 7, 1990.
4. The number of shares of the corporation outstanding at the time
of such adoption was 3,850,000; and the number of shares entitled
to vote thereon was 3,850,000.
5. The number of shares that voted for such amendment was 3,850,000.
The number of shares that voted against such amendment was 0.
6. The Amendment does not provide for an exchange, reclassification
or cancellation of issued shares.
7. The Amendment does not effect a change in the amount of stated
capital.
Dated 28th day of March, 1990.
THE VARIABLE ANNUITY
LIFE INSURANCE COMPANY
By: /s/ STEPHEN D. BICKEL
---------------------------------------
STEPHEN D. BICKEL President
By: /s/ CYNTHIA A. TOLES
---------------------------------------
Cynthia A. Toles, Secretary
STATE OF TEXAS )
)
COUNTY OF HARRIS )
I, Karen V. Shanklin, a notary public, do hereby certify that on this 28th day
of March, 1990, personally appeared before me Stephen D. Bickel and Cynthia A.
Toles, who being by me first duly sworn, declared that they were the
President and Secretary respectively, of The Variable Annuity Life Insurance
Company, and that they signed the foregoing document as officers of the said
corporation and that the statements contained therein are true.
/s/ Karen V. Shanklin
--------------------------------
Notary Public in and for
Harris County, Texas
(Seal)
<PAGE> 1
EXHIBIT 8(A)
PARTICIPATION AGREEMENT
among
TEMPLETON VARIABLE PRODUCTS SERIES FUND,
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
and
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this _______ day of
_______________________, 199______, by and among THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY (hereinafter the "Company"), a Texas corporation), on its own
behalf and on behalf of each segregated asset account of the Company set forth
on Schedule A hereto as may be amended from time to time (each such account
hereinafter referred to as the "Account"), and the TEMPLETON VARIABLE PRODUCTS
SERIES FUND, an unincorporated business trust organized under the laws of the
Commonwealth of Massachusetts (hereinafter the "Fund") and FRANKLIN/TEMPLETON
DISTRIBUTORS, INC. (hereinafter the "Underwriter"), a California corporation.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable annuity and variable life insurance
contracts to be offered by insurance companies which have entered into
participation agreements with the Fund and the Underwriter (hereinafter
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, as set forth on Schedule B hereto, each representing the
interest in a particular managed portfolio of securities and other assets and
one or more of which may be made available under this agreement as set forth on
Schedule C hereto as may be amended from time to time by mutual agreement of
the parties hereto (each such series hereinafter referred to as a "Portfolio");
and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated November 16, 1993 (File No. 812-8546), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of Sections 9(a),
13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended, (the
"1940 Act") and Rules 6e 2(b)(15) and 6e3-T(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by separate
accounts funding variable annuity and variable life insurance contracts issued
by both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under
1
<PAGE> 2
the 1940 Act and its shares are registered under the Securities Act of 1933, as
amended (the "1933 Act"); and
WHEREAS, Templeton Investment Counsel, Inc. (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act
of 1940 and any applicable state securities laws; and
WHEREAS, the Company has registered or will register certain variable
annuity and variable life insurance contracts under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to one or more variable annuity and variable
life insurance contracts; and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (hereinafter the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid variable annuity and variable
life insurance contracts and the Underwriter is authorized to sell such shares
to unit investment trusts such as each Account at net asset value.
NOW THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1 The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. The Company's order may net the purchase and
redemption requests related to each Portfolio. For purposes of this Section
1.1, the Company shall be the designee of the Fund for receipt of such orders
from each Account and receipt by such designee shall constitute receipt by the
Fund; provided that the Fund receives notice of such order by 10:00 a.m., St.
Petersburg time on the next following Business Day. "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading and on which
the Fund calculates its net asset value pursuant to the rules of the Securities
and Exchange Commission.
2
<PAGE> 3
1.2 The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value
pursuant to rules of the Securities and Exchange Commission and the Fund shall
use reasonable efforts to calculate such net asset value on each day which the
New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of the fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the shareholders of
such Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will
be sold only to Participating Insurance Companies and their separate accounts.
No shares of any Portfolio will be sold to the general public.
1.4 The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5 The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.
1.6 The Company agrees to purchase and redeem the shares of each
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus. The Company agrees that all net
amounts available under the variable annuity and variable life insurance
contracts with the form number(s) which are listed on Schedule D attached
hereto and incorporated herein by this reference, as such Schedule D may be
amended from time to time hereafter by mutual written agreement of all the
parties hereto (the "Contracts"), shall be invested in the Fund, in such other
Funds advised by the Adviser as may be mutually agreed to in writing by the
parties hereto, or in the Company's general account, provided that such amounts
may also be invested in an investment company other than the Fund if (a) such
other investment company, or series thereof, has investment objectives or
policies that are substantially different from the investment objectives and
policies of all the Portfolios of the Fund; or (b) the Company gives the Fund
and the Underwriter 45 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts; or (c)
such other investment company is available as a funding vehicle for the
Contracts at the date of this Agreement and the Company so informs the Fund and
the Underwriter prior to their signing this Agreement (a list of such funds
appearing on Schedule E to this agreement); or (d) the Fund or Underwriter
consents to the use
3
<PAGE> 4
of such other investment company.
1.7 The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted
by wire. For purposes of Section 2.10 and 2.11, upon receipt by the Fund of
the federal funds so wired, such funds shall cease to be the responsibility of
the Company and shall become the responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate sub-account of each Account.
1.9 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio.
The Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.10 The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. St. Petersburg time) and shall use its best efforts to make such net
asset value per share available by 7:00 p.m., St. Petersburg time.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a segregated
asset account under Section 3.75 of the Texas Insurance Code and has registered
or, prior to any issuance or sale of the Contracts, will register each Account
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a segregated investment account for the Contracts.
2.2 The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the Commonwealth of
Massachusetts and all applicable state and federal securities laws and that the
Fund is and shall remain registered under the 1940 Act. The Fund shall amend
4
<PAGE> 5
the Registration Statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund or the Underwriter.
2.3 The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.4 The Company represents that the Contracts are currently treated
as endowment, annuity or life insurance contracts, under applicable provisions
of the Code and that it will make every effort to maintain such treatment and
that it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.
2.5 The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. To the extent
that it decides to finance distribution expenses pursuant to Rule 12b-1, the
Fund undertakes to have a board of trustees, a majority of whom are not
interested persons of the Fund, formulate and approve any plan under Rule 12b-1
to finance distribution expenses.
2.6 The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
Commonwealth of Massachusetts and the Fund and the Underwriter represent that
their respective operations are and shall at all times remain in material
compliance with the laws of the Commonwealth of Massachusetts and the State of
California to the extent required to perform this Agreement.
2.7 The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker dealer with the
Securities and Exchange Commission. The Underwriter further represents that it
will sell and distribute the Fund shares in accordance with the laws of the
State of California, and all applicable state and federal securities laws,
including without limitation, the 1933 Act, the 1934 Act and the 1940 Act.
2.8 The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
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<PAGE> 6
2.9 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
state and federal securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws
of the State of Florida and any applicable state and federal securities laws.
2.10 The Fund and the Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities
dealing with the money and/or securities of the Fund are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund, in an amount not less than $5 million. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company agrees to make all reasonable efforts
to see that this bond or another bond containing these provisions is always in
effect, and agrees to notify the Fund and the Underwriter in the event that
such coverage no longer applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1 The Underwriter shall provide the Company (at the Company's
expense) with as many copies of the Fund's current prospectus as the Company
may reasonably request or, at the option of the Company, with camera ready copy
of the Fund's current prospectus. If requested by the Company in lieu thereof,
the Fund shall provide such documentation (including a final copy of the new
prospectus as set in type at the Fund's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the prospectus
for the Contracts and the Fund's prospectus printed together in one document
(such printing to be at the Company's expense).
3.2 The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter (or in
the Fund's discretion, the Prospectus shall state that such Statement is
available from the Fund), and the Underwriter (or the Fund), at its expense,
shall print and provide such Statement free of charge to the Company and to any
owner of a Contract or prospective owner who requests such Statement.
3.3 The Fund, at its expense, shall provide the Company with copies
of its proxy material, reports to stockholders and other communications to
stockholders in such quantity as the Company shall reasonably require for
distributing to Contract Owners.
3.4 If and to the extent required by law, the Company shall: (i)
solicit voting instructions
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<PAGE> 7
from Contract owners; (ii) vote the Fund shares in accordance with the
instructions received from Contract owners; and (iii) vote Fund shares for
which no instructions have been received in the same proportion as Fund shares
of such Portfolio for which instructions have been received; so long as and to
the extent that the Securities and Exchange Commission continues to interpret
the 1940 Act to require pass-through voting privileges for variable contract
owners. The Company reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that each
of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule F
attached hereto, and incorporated herein by reference, which standards will
also be provided to the other Participating Insurance Companies.
3.5 The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the Fund will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities and Exchange
Commission's interpretation of the requirements of Section 16(a) with respect
to periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.
ARTICLE IV. SALES MATERIALS AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
materials in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional materials approved by the Fund or
its designee or by the Underwriter, except with the permission of the Fund or
the Underwriter or the designee of either.
4.3 The Fund, Underwriter or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company and/or its
separate account(s), is named at least fifteen Business Days prior to its use.
No such material shall be used if the Company or its designee reasonably
objects to such use within fifteen Business Days after receipt of such
material.
4.4 The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the
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<PAGE> 8
Contracts other than the information or representations contained in a
registration statement or prospectus for the Contracts, as such registration
statement and prospectus may be amended or supplemented from time to time, or
in published reports for each Account which are in the public domain or
approved by the Company for distribution to Contract Owners, or in sales
literature or other promotional materials approved by the Company or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, applications for exemptions, requests
for no-action letters, relevant portions of sales literature and other
promotional materials, and all amendments to any of the above that relate to
the Fund or its shares, contemporaneously with the filing of such document with
the Securities and Exchange Commission.
4.6 The Company will provide to the Fund at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such documents
with the Securities and Exchange Commission or other regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, portions of the
following that refer to the Fund or affiliates of the Fund: advertisements
(such as material published or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
Underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter or other resources
available to the Underwriter. No such payments shall be made directly by the
Fund. Currently, no such payments are contemplated.
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<PAGE> 9
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law, and, if and to the extent deemed advisable by the Fund, in
accordance with the applicable state laws prior to their sale. The Fund shall
bear the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any state or federal law,
all taxes on the issuance and transfer of the Fund's shares.
5.3 The Company shall bear the expenses of printing and distributing
the Fund's prospectus to owners of the Contracts issued by the Company and of
distributing the Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. DIVERSIFICATION
6.1 The Fund will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will at all times comply with
Section 817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance with the grace period
afforded by Regulation 817-5.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by variable annuity and variable life insurance contract
owners; or (f) a decision by an insurer to disregard the voting instructions of
contract owners. The Board shall promptly inform the Company if it determines
that an irreconcilable material conflict exists and the implications thereof.
7.2 The Company will report any potential or existing conflicts of
which it is aware to
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<PAGE> 10
the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a
vote of all affected Contract Owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to
the affected contract owners the option of making such a change; and (2)
establishing a new registered management investment company or managed separate
account.
7.4 If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and
that decision represents a minority position or would preclude a majority vote,
the Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Any such withdrawal and termination must take place within six (6) months after
the Fund gives written notice that this provision is being implemented, and
until the end of that six month period the Underwriter and the Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because of a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Fund and terminate this
Agreement with respect to such Account within six months after the Board
informs the Company in writing that it has determined that such decision has
created an irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board. Until the end of the foregoing six month
period, the Underwriter and the Fund shall continue to accept and implement
orders by the Company for the purchase (and redemption) of shares of the Fund.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately
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<PAGE> 11
remedies any irreconcilable material conflict, but in no event will the Fund be
required to establish a new funding medium for the Contracts. The Company
shall not be required by Section 7.3 to establish a new funding medium for the
Contracts if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed action does
not adequately remedy any irreconcilable material conflict, then the Company
will withdraw the Account's investment in the Fund and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board.
7.7 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act of the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4
and 7.5 of this Agreement shall continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 Indemnification By The Company
(a) The Company agrees to indemnify and hold harmless the Fund and
each trustee of the Board and officers and each person, if any, who controls
the Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration Statement
or prospectus for the Contracts or contained in the Contracts or sales
literature for the Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
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<PAGE> 12
in reliance upon and in conformity with information furnished to the Company by
or on behalf of the Fund or the Underwriter for use in the Registration
Statement or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied by the
Company, or persons under its control) or wrongful conduct of the Company or
persons under its control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement, prospectus, or sales
literature of the Fund or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such a statement or omission was made in reliance upon information furnished to
the Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
(b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund or the Underwriter, whichever is applicable.
(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Company shall be entitled to
participate, at its own expense, in the defense of such action. The Company
also shall be entitled to assume the defense thereof,
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<PAGE> 13
with counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of
the Fund.
8.2. Indemnification By The Underwriter
(a) The Underwriter agrees to indemnify and hold harmless the
Company, the underwriter of the contracts and each of its directors and
officers and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 8.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including legal and other expenses) to which
the Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
prospectus or sales literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the Registration Statement or
prospectus for the Fund or in sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts or Fund
shares; or
(ii) arise out of or as a result of statements or representations (other than
statements or representations contained in the Registration Statement,
prospectus or sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of the Fund,
Adviser or Underwriter or persons under their control, with respect to the sale
or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material fact
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<PAGE> 14
required to be stated therein or necessary to make t:he statement or statements
therein not misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide the services and
furnish the materials under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply with the
qualification representation specified in Section 2.3 of this Agreement and the
diversification requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Underwriter in this Agreement or arise out of or
result from any other material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.
(b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad faith, or gross negligence
in the performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to each Company or the Account, whichever is applicable.
(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Underwriter
of any such claim shall not relieve the Underwriter from any liability which it
may have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by
it, and the Underwriter will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable
costs of investigation.
(d) The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification By The Fund
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<PAGE> 15
(a) The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements result
from the gross negligence, bad faith or willful misconduct of the Board or any
member thereof, are related to the operations of the Fund, and arise out of or
result from any material breach of any representation and/or warranty made by
the Fund in this Agreement or arise out of or result from any other material
breach of this Agreement by the Fund; as limited by and in accordance with the
provisions of Sections 8.3(b) and 8.3(c) hereof. It is understood and
expressly stipulated that neither the holders of shares of the Fund nor any
Trustee, officer, agent or employee of the Fund shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Fund only shall be
liable.
(b) The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or each Account, whichever is
applicable.
(c) The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of t:he Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such
party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
(d) The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement:, the
issuance or sale of the Contracts, with respect
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<PAGE> 16
to the operation of either Account, or the sale or acquisition of shares of the
Fund.
ARTICLE IX. APPLICABLE LAW
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Florida.
9.2 This Agreement shall be subject to the provisions of the 1933,
1934, and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
Securities and Exchange Commission may grant (including, but not limited to,
the Shared Funding Exemptive Order) and the terms hereof shall be interpreted
and construed in accordance therewith.
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) immediate termination by the Company upon written notice to
the Fund and the Underwriter with respect to any Portfolio
based upon the Company's determination that shares of such
Portfolio are not reasonably available to meet the
requirements of the Contracts; or
(c) immediate termination by the Company upon written notice to
the Fund and the Underwriter with respect to any Portfolio in
the event any of the Portfolio's shares are not registered,
issued, or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as
the underlying investment media of the Contracts issued or to
be issued by the Company; or
(d) immediate termination by the Company upon written notice to
the Fund and the Underwriter with respect to any Portfolio in
the event that such Portfolio ceases to qualify as a Regulated
Investment Company under Subchapter M of the Code or under any
successor or similar provision, or if the Company reasonably
believes that the Fund may fail to so qualify; or
(e) immediate termination by the Company upon written notice to
the Fund and the Underwriter with respect to any Portfolio in
the event that such Portfolio fails to meet the
diversification requirements specified in Article VI hereof;
or
16
<PAGE> 17
(f) immediate termination by either the Fund or the Underwriter
upon written notice to the Company, if either one or both of
the Fund or the Underwriter respectively, shall determine, in
their sole judgment exercised in good faith, that the Company
and/or its affiliated companies has suffered a material
adverse change in its business, operations, financial
condition or prospects since the date of this Agreement or is
the subject of material adverse publicity; or
(g) immediate termination by the Company upon written notice to
the Fund and the Underwriter, if the Company shall determine,
in its sole judgment exercised in good faith, that either the
Fund or the Underwriter has suffered a material adverse change
in its business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material
adverse publicity; or
(h) termination by the Fund or the Underwriter by written notice
to the Company, if the Company gives the Fund and the
Underwriter the written notice specified in Section 1.6(b)
hereof and at the time such notice was given there was no
notice of termination outstanding under any other provision
of this Agreement; provided, however any termination under
this Section 10.1(h) shall be effective forty five (45) days
after the notice specified in Section 1.6(b) was given.
10.2 Effect or Termination. Notwithstanding any termination of
this Agreement, the Fund and the Underwriter shall at the option of the
Company, continue to make available additional shares of the Fund pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investments in the Fund,
redeem investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.2 shall not apply to any terminations under Article VII
and the effect of such Article VII terminations shall be governed by Article
VII of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated
or approved transactions (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the Securities and Exchange Commission pursuant to
Section 26(b) of the Investment Company Act of 1940. Upon request, the Company
will promptly furnish to the Fund and the Underwriter the opinion of counsel
for the Company (which counsel shall be reasonably satisfactory to the Fund and
the Underwriter) to the effect that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contracts, the Company shall not prevent
Contract Owners from allocating payments to a Portfolio that was otherwise
available under the
17
<PAGE> 18
Contracts without first giving the Fund or the Underwriter 90 days notice or
its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund:
700 Central Avenue
St. Petersburg, Florida 33701
Attention: Secretary
If to the Company:
The Variable Annuity Life Insurance Company
2929 Allen Parkway
Houston, Texas 77019
Attention: Secretary
If to the Underwriter:
700 Central Avenue
St. Petersburg, Florida 33701
Attention: Thomas M. Mistele
Vice President
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information until such time as it
may come into the public domain without the express written consent of the
affected party.
12.3 The captions in this Agreement are included for convenience of
reference only
18
<PAGE> 19
and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the NASD and state insurance regulators)
and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the generality of the
foregoing, each party hereto further agrees to furnish the Texas Insurance
Commissioner with any information or reports in connection with services
provided under this Agreement which such Commissioner may request in order to
ascertain whether the insurance operations of the Company are being conducted
in a manner consistent with the Texas Life Insurance Regulations and any other
applicable law or regulations.
12.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.8 This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or company
under common control with the Underwriter, if such assignee is duly licensed
and registered to perform the obligations of the Underwriter under this
Agreement.
19
<PAGE> 20
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
Company:
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
By its authorized officer,
SEAL
By:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
Fund:
TEMPLETON VARIABLE PRODUCTS SERIES FUND
By its authorized officer,
SEAL
By:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
Underwriter:
FRANKLIN/TEMPLETON DISTRIBUTORS, INC.
By its authorized officer,
SEAL
By:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
20
<PAGE> 21
Schedule A
VALIC Segregated Asset Accounts
<TABLE>
<CAPTION>
Date of Resolution of Company's Board
Name of Account which Established the Account
- - --------------- --------------------------------------
<S> <C>
The Variable Annuity Life Insurance Company
Separate Account A April 18, 1979
</TABLE>
21
<PAGE> 22
Schedule B
Templeton Variable Product Series Fund Portfolios
Templeton Money Market Fund
Templeton Bond Fund
Templeton Stock Fund
Templeton Asset Allocation Fund
Templeton International Fund
22
<PAGE> 23
Schedule C
Templeton Variable Products Series Fund Portfolios available under
this Agreement:
Templeton Asset Allocation Fund
Templeton International Fund
23
<PAGE> 24
Schedule D
VALIC variable annuity contracts which may be invested in the Portfolios listed
on Schedule C:
<TABLE>
<CAPTION>
Form Number Name
- - ----------- ----
<S> <C>
UITG-194 Group Fixed and Variable Deferred Annuity Contract
UIT-194 Individual Fixed and Variable Deferred Annuity Contract
UITN-194 Individual Fixed and Variable Nonqualified Deferred Annuity Contract
UIT-IRA-194 Individual Fixed and Variable Deferred Retirement Annuity Contract
IRA-SEP-194 Individual Fixed and Variable Simplified Employee Pension Annuity
Contract
</TABLE>
VALIC variable life contracts which may be invested in the Portfolios
listed on Schedule C:
None
24
<PAGE> 25
Schedule E
Other investment companies currently available under variable annuity contracts
listed on Schedule D:
American General Series Portfolio Company
Stock Index Portfolio
MidCap Index Portfolio
Small Cap Index Portfolio
International Equities Portfolio
Growth Portfolio
Growth & Income Portfolio
Science & Technology Portfolio
Social Awareness Portfolio
Timed Opportunity Portfolio
Capital Conservation Portfolio
Government Securities Portfolio
International Government Bond Portfolio
Money Market Portfolio
Dreyfus Investment Fund, Small Cap Portfolio
25
<PAGE> 1
EXHIBIT 8(b)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the ______ day of __________________,
l994, between THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("Insurance
Company"), a life insurance company organized under the laws of the State of
Texas, and DREYFUS VARIABLE INVESTMENT FUND ("Fund"), an unincorporated
business trust, organized under the laws of the Commonwealth of Massachusetts.
ARTICLE I
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Trustees of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean the variable annuity contract(s) issued by
Insurance Company as specified in Schedule A hereto, as it may be
amended from time to time by mutual agreement of the parties hereto,
that uses the Fund as an underlying investment medium.
1.6 "Contractholder" shall mean any owner of a Contract with a
Participating Company. Individuals who participate under a group
Contract are "Participants".
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as defined
by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its affiliates,
including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company (including
Insurance Company), which offers variable annuity and/or variable life
insurance contracts to the public and which has entered into an
agreement with the Fund for the purpose of making Fund shares
available to serve as the underlying investment medium for the
aforesaid Contracts.
1
<PAGE> 2
1.10 "Prospectus" shall mean the Fund's current prospectus and statement of
additional information, as it relates specifically and only to those
Series offering shares to the Insurance Company, as most recently
filed with the Commission.
1.11 "Separate Account" shall mean the separate investment account(s) as
specified in Schedule B hereto, as it may be amended from time to time
by mutual agreement of the parties hereto, established by Insurance
Company in accordance with the laws of the State of Texas.
1.12 "Software Program" shall mean the software program used by the Fund
for providing Fund and account balance information including net asset
value per share. Such Program may include the Lion System. In
situations where the Lion System or any other Software Program used by
the Fund is not available, such information may be provided by
telephone. The Lion System shall be provided to Insurance Company at
no charge.
1.13 "Insurance Company's General Account" shall mean the general account
of Insurance Company.
ARTICLE II
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b)
it has legally and validly established each Separate Account pursuant
to the Section 3.75 of the Texas Insurance Code for the purpose of
offering to the public certain variable annuity contracts; (c) it has
registered the Separate Account as a unit investment trust under the
Act to serve as the segregated investment account for the Contracts.
2.2 Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities
Act of l933, as amended ("1933 Act"); (b) the Contracts will be issued
and sold in compliance in all material respects with all applicable
federal and state laws; (c) the sale of the Contracts shall comply in
all material respects with state insurance law requirements. Insurance
Company agrees to inform the Fund promptly of any investment
restrictions imposed by state insurance law and applicable to the
Fund; and (d) the Separate Account is eligible to invest in shares of
the Fund without such investment disqualifying the Fund as an
investment medium for insurance company separate accounts supporting
variable annuity contracts or variable life insurance contracts.
2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the applicable Contracts, to be
credited to or charged against such Separate Account without
2
<PAGE> 3
regard to other income, gains or losses from assets allocated to any
other accounts of Insurance Company. Insurance Company represents and
warrants that the assets of each Separate Account are and will be kept
separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged
with liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance Company
except to the extent of assets of a Separate Account in excess of the
reserves and other liabilities of that Separate Account.
2.4 Fund represents and warrants that the Fund is registered with the
Commission under the Act as an open-end management investment company
and possesses, and shall maintain, all legal and regulatory licenses,
approvals, consents and/or exemptions required for Fund to operate and
offer its shares as an underlying investment medium for Participating
Companies. The Fund has established eight series of shares (each, a
"Series") and may in the future establish other series of shares.
2.5 Fund represents and warrants that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and that it shall be
operated and its assets shall be managed and invested so as to
maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify Insurance Company
immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
2.6 Insurance Company represents and warrants that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make every
effort to maintain such treatment and that it will notify the Fund and
Dreyfus immediately upon having a reasonable basis for believing that
the Contracts have ceased to be so treated or that they might not be
so treated in the future.
2.7 Fund represents and warrants that the Fund's assets shall be managed
and invested in a manner that complies with the requirements of
Section 817(h) of the Code. The Fund also represents and warrants
that the Series specified in Schedule C shall be managed and invested
in a manner that complies with the requirements of Section 5(b)(1) of
the Act.
2.8 Insurance Company agrees that the Fund shall be permitted (subject to
the other terms of this Agreement) to make Series shares available to
other Participating Companies and Contractholders.
2.9 Fund represents and warrants that any of its trustees, officers,
employees, investment advisers, and other individuals/entities who
deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less
than that required, treating each
3
<PAGE> 4
Series of the Fund as a separate investment company, by Rule 17g-1
under the Act. The aforesaid Bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage in an amount not less than the coverage
required to be maintained by the Fund. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11 Insurance Company agrees that Dreyfus shall be deemed a third party
beneficiary under this Agreement and may enforce any and all rights
conferred by virtue of this Agreement.
ARTICLE III
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for the
investment of certain amounts in the Series' shares.
3.2 Fund agrees to make the shares of its Series specified in Schedule C
available through its principal underwriter for purchase by Insurance
Company and each Separate Account at the then applicable net asset
value per share on each Business Day pursuant to rules of the
Commission. Notwithstanding the foregoing and subject to Section 10.3
of this Agreement, it is understood and agreed that the Fund may
refuse to sell the shares of any Series to any person, or suspend or
terminate the offering of the shares of any Series if such action is
required by law or by regulatory authorities having jurisdiction or
is, in the sole discretion of the Board, acting in good faith and in
light of its fiduciary duties under federal and any applicable state
laws, necessary and in the best interests of the shareholders of such
Series.
3.3 Fund agrees that, except for any shares sold to Dreyfus in connection
with the establishment of a series, shares of the Fund will be sold
only to Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates. No shares of any Series will be sold to the general
public.
3.4 Fund shall use its best efforts to make closing net asset value,
dividend and capital gain information for each Series available on a
per-share and Series basis to Insurance Company by 6:00 p.m. Eastern
Time on each Business Day. If the Fund provides Insurance Company with
the incorrect share net asset value information for any Series through
no fault of Insurance Company, Insurance Company, on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of
shares purchased or
4
<PAGE> 5
redeemed to reflect the correct share net asset value. Any error in
the calculation of net asset value, dividend and capital gain
information for a Series greater than or equal to $.01 per share of
such Series, shall be reported immediately upon discovery to Insurance
Company. Any error of a lesser amount shall be corrected in the next
Business Day's net asset value per share for the Series in question.
3.5 At the end of each Business Day for which Insurance Company computes
unit values for a Separate Account, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account transactions
received by it by the close of trading on the floor of the New York
Stock Exchange (currently 4:00 p.m. Eastern time) to determine the net
dollar amount of Series shares which will be purchased or redeemed at
that day's closing net asset value per share for such Series. The net
purchase or redemption orders will be transmitted to the Fund by
Insurance Company by 11:00 a.m. Eastern Time on the Business Day next
following Insurance Company's receipt of that information. Subject to
Sections 3.6 and 3.8, all purchase and redemption orders for Insurance
Company's General Accounts shall be effected at the net asset value
per share of the relevant Series next calculated after receipt of the
order by the Fund or its Transfer Agent.
3.6 Fund appoints Insurance Company as its agent for the limited purpose
of accepting orders for the purchase and redemption of shares of each
Series for the Separate Account. Fund will execute orders for any
Series at the applicable net asset value per share determined as of
the close of trading on the day of receipt of such orders by Insurance
Company acting as agent ("effective trade date"), provided that the
Fund receives notice of such orders by 11:00 a.m. Eastern Time on the
next following Business Day and, if such orders request the purchase
of Series shares, the conditions specified in Section 3.8, as
applicable, are satisfied. A redemption or purchase request for any
Series that does not satisfy the conditions specified above and in
Section 3.8, as applicable, will be effected at the net asset value
computed for such Series on the Business Day immediately preceding the
next following Business Day upon which such conditions have been
satisfied.
3.7 Insurance Company will make its best efforts to notify Fund in advance
of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Series shares,
Insurance Company will pay for such purchases by wiring Federal Funds
to Fund or its designated custodial account on the day the order is
transmitted. Insurance Company shall make all reasonable efforts to
transmit to the Fund payment in Federal Funds by 12:00 noon Eastern
Time on the Business Day the Fund receives the notice of the order
pursuant to Section 3.5. Fund will execute such orders at the
applicable net asset value per share determined as of the close of
trading on the effective trade date if Fund receives payment in
Federal Funds by 12:00 midnight Eastern Time on the Business Day the
Fund receives the notice of the
5
<PAGE> 6
order pursuant to Section 3.5. If payment in Federal Funds for any
purchase is not received or is received by the Fund after 12:00 noon
Eastern Time on such Business Day, Insurance Company shall promptly
upon the Fund's request, reimburse the Fund for any charges, costs,
fees, interest or other expenses incurred by the Fund in connection
with any advances to, or borrowings or overdrafts by, the Fund, or any
similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request.
If Insurance Company's order requests a net redemption resulting in a
payment of redemption proceeds to Insurance Company, the Fund shall
wire the redemption proceeds to Insurance Company by the next Business
Day, unless doing so would require the Fund or a Series to dispose of
portfolio securities or otherwise incur additional costs, but in such
event, proceeds shall be wired to Insurance Company within seven days
and the Fund shall notify the person designated in writing (in
accordance with Article XII of this Agreement) by Insurance Company as
the recipient for such notice, of such delay by 3:00 p.m. Eastern Time
the same Business Day that Insurance Company transmits the redemption
order to the Fund. If Insurance Company's order requests the
application of redemption proceeds from the redemption of shares of a
Series to the purchase of shares of another Series or another fund
managed or distributed by Dreyfus, the Fund shall so apply such
proceeds the same Business Day that Insurance Company transmits such
order to the Fund. If, however, such redemption of shares would
require the redeeming Series to dispose of portfolio securities or
otherwise incur additional costs, the Fund shall have until seven days
after the receipt of the order to apply the redemption proceeds to the
purchase of shares of another Series or another fund, provided that at
such time there is no prohibition or other formal objection of the SEC
or applicable state insurance regulatory authority to such a delay in
the application of redemption proceeds by the Fund or Insurance
Company and provided further that the Fund notifies Insurance Company
of such delay within the same time and in the same manner as in the
case of a delay in the payment of redemption proceeds.
3.9 Fund has the obligation to ensure that Series shares are registered
with applicable federal agencies at all times.
3.10 Fund shall confirm each purchase or redemption order made by Insurance
Company. Transfer of Series shares shall be by book entry only. No
share certificates shall be issued to Insurance Company. Insurance
Company shall record shares ordered from Fund in an appropriate title
for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on the
first Business Day thereafter, Fund shall communicate to Insurance
Company the amount of dividend and capital gain, if any, per share of
each Series. All dividends and capital gains of any Series shall be
automatically reinvested in additional shares of the relevant Series
at the applicable net asset value per share of such Series on the
payable date. Fund shall, on the day after
6
<PAGE> 7
the payable date or, if not a Business Day, on the first Business Day
thereafter, notify Insurance Company of the number of shares so
issued.
ARTICLE IV
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of each
month for all of Insurance Company's accounts by the fifteenth (15th)
Business Day of the following month.
4.2 Upon request and subject to Article V hereof, Fund shall distribute to
Insurance Company copies of the Fund's Prospectuses, proxy
solicitation materials, notices, periodic reports and other printed
materials (which the Fund customarily provides to its shareholders) in
quantities as Insurance Company may reasonably request, to permit
timely distribution to each Contractholder and Participant. Insurance
Company agrees to make timely distribution of such materials to each
Contractholder and Participant to the extent required by law.
4.3 Fund will provide to Insurance Company at least one complete copy of
all registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the Commission or other
regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Contracts or the Separate Account,
contemporaneously with the filing of such document with the
Commission.
4.5 Each party hereto shall cooperate with the other party and all
appropriate governmental authorities (including without limitation the
SEC, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
ARTICLE V
EXPENSES
5.1 The charge to the Fund for all expenses and costs of each Series,
including but not limited
7
<PAGE> 8
to management fees, administrative expenses and legal and regulatory
costs, shall be made in the determination of the relevant Series'
daily net asset value per share so as to accumulate to an annual
charge at the rate set forth in the Fund's Prospectus. Brokerage
commissions, transaction fees and extraordinary expenses will be
charged to the appropriate Series, but will be excluded from the
calculation of expenses and costs described in the immediately
preceding sentence.
5.2 The Fund shall not be charged for the costs of printing and
distributing to prospective Contractholders or for use in the
marketing of the Contracts, copies of the Prospectus or supplements
thereto, notices, proxy solicitation materials, periodic reports or
other printed materials. However, the Fund shall be charged for the
costs of printing such materials for existing Contractholders who have
Contract values allocated to the Fund.
ARTICLE VI
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December 23,
1987 of the Securities and Exchange Commission under Section 6(c) of
the Act and, in particular, has reviewed the conditions to the relief
set forth in the related Notice. As set forth therein, Insurance
Company agrees to report any potential or existing conflicts promptly
to the Board, and in particular whenever contract voting instructions
are disregarded, and recognizes that it will be responsible for
assisting the Board in carrying out its responsibilities under such
application. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists
with regard to Contractholder investments in the Fund, the Board shall
give prompt notice to all Participating Companies. If the Board
determines that Insurance Company is responsible for causing or
creating said conflict, Insurance Company shall at no cost and expense
to the Fund, and to the extent reasonably practicable (as determined
by a majority of the Disinterested Board Members), take such action as
is necessary to remedy or eliminate the irreconcilable material
conflict. Such necessary action may include, but shall not be limited
to:
(a) Withdrawing the assets allocable to the Separate Account from
the Series and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote of all affected
Contractholders; and/or
(b) Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions
and said decision represents a minority
8
<PAGE> 9
position or would preclude a majority vote by all Contractholders
having an interest in the Fund, Insurance Company may be required, at
the Board's election, to withdraw the Separate Account's investment in
the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict, but in no event will
the Fund be required to bear the expense of establishing a new funding
medium for any Contract. Insurance Company shall not be required by
this Article to establish a new funding medium for any Contract if an
offer to do so has been declined by vote of a majority of the
Contractholders materially adversely affected by the irreconcilable
material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by the
Separate Account or the Fund taken or omitted as a result of any act
or failure to act by Insurance Company pursuant to this Article VI
shall relieve Insurance Company of its obligations under, or otherwise
affect the operation of, this Article VI.
ARTICLE VII
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies, subject to Article V
of this Agreement, of the Fund's proxy solicitation materials, reports
to shareholders and other communications to shareholders in a timely
manner and in such quantity as Insurance Company shall reasonably
require for distributing to Contractholders or Participants.
Insurance Company shall:
(a) solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
(b) vote the Series shares in accordance with instructions
received from Contractholders or Participants; and
(c) vote Series shares for which no instructions have been
received in the same proportion as Series shares for which
instructions have been received.
Insurance Company agrees at all times to vote its General Account
shares in the same proportion as Series shares for which instructions
have been received from Contractholders or Participants. Insurance
Company further agrees to be responsible for assuring that voting Fund
shares for the Separate Account is conducted in a manner consistent
with other Participating Companies.
7.2 Except to the extent otherwise prohibited or required by applicable
federal or state law,
9
<PAGE> 10
Insurance Company agrees that it shall not, without the prior written
consent of the Fund and Dreyfus, solicit, induce or encourage
Contractholders to (a) change or supplement the Fund's current
investment adviser or (b) change, modify, substitute, add to or delete
the Fund from the current investment media for the Contracts.
ARTICLE VIII
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish Insurance
Company with the following documents, in quantities as Insurance
Company may reasonably request:
(a) Current Prospectus and any supplements thereto;
(b) other marketing materials.
Expenses for the production of such documents shall be charged in
accordance with Article V of this Agreement.
8.2 Insurance Company shall authorize certain persons or entities which
shall have the requisite licenses to solicit applications for the sale
of Contracts. No representation is made as to the number or amount of
Contracts that are to be sold by Insurance Company. Insurance Company
shall require of each person authorized to solicit applications for
the sale of the Contracts that such person make reasonable efforts to
market the Contracts and to comply with applicable federal and state
laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
the Fund, each piece of sales literature or other promotional material
in which the Fund, its investment adviser or the administrator is
named, at least fifteen Business Days prior to its use. No such
material shall be used unless the Fund approves such material. Such
approval (if given) must be in writing and shall be presumed not given
if not received by Insurance Company within ten Business Days after
receipt by the Fund of such material. The Fund shall use all
reasonable efforts to respond within ten days of receipt. The Fund
shall hold confidential all sales literature and other promotional
material furnished by Insurance Company pursuant to this section
except (a) as reasonably requested by court or administrative agency
(provided the Fund gives Insurance Company sufficient prior notice to
contest any request for disclosure) or (b) to designated employees who
require it solely and only for the purpose of approving such sales
literature or and other promotional material for use. The Fund may
not use or employ the sales literature or promotional material,
directly or indirectly, for any other purpose. All sales literature
or promotional material acquired by the Fund pursuant to this section
shall be and remain the property of Insurance Company.
10
<PAGE> 11
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund or any Series in connection with the sale of the Contracts other
than the information or representations contained in the
then-effective registration statement or Prospectus, as may be amended
or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material
approved by the Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use. No
such material shall be used unless Insurance Company approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received by the Fund within ten Business
days after receipt of such material by Insurance Company. Insurance
Company shall use all reasonable efforts to respond within ten days of
receipt by Insurance Company.
8.6 Fund shall not, in connection with the sale of Series shares, give any
information or make any representations on behalf of Insurance Company
or concerning Insurance Company, the Separate Account, or the
Contracts other than the information or representations contained in a
registration statement or prospectus for the Contracts, as it may be
amended or supplemented from time to time, or in published reports for
the Separate Account which are in the public domain or approved by
Insurance Company for distribution to Contractholders or Participants,
or in sales literature or other promotional material approved by
Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed
for use, in a newspaper, magazine or other periodical, radio,
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures or other public media), sales literature
(such as any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or all
agents or employees, registration statements, prospectuses, statements
of additional information, shareholder reports and proxy materials,
and any other material constituting sales literature or advertising
under National Association of Securities Dealers, Inc. rules, the Act
or the 1933 Act.
ARTICLE IX
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund,
Dreyfus, any
11
<PAGE> 12
sub-investment adviser of a Series, and their affiliates, and each of
their directors, trustees, officers, employees, agents and each
person, if any, who controls or is associated with any of the
foregoing entities or persons within the meaning of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of Section 9.1),
against any and all losses, claims, damages or liabilities, joint or
several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claims asserted)
for which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (a) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in information furnished by Insurance Company
for use in the registration statement or Prospectus or sales
literature or advertisements of the Fund or with respect to the
Separate Account or Contracts, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (b) arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the Prospectus and sales literature or
advertisements prepared by the Fund) of Insurance Company or its
agents, with respect to the sale and distribution of Contracts for
which Series' shares are an underlying investment; (c) arise out of
the wrongful conduct of Insurance Company or persons under its control
with respect to the sale or distribution of the Contracts or Series'
shares; (d) arise out of Insurance Company's incorrect calculation
and/or untimely reporting of net purchase or redemption orders; or (e)
arise out of any breach by Insurance Company of a material term of
this Agreement or as a result of any failure by Insurance Company to
provide the services and furnish the materials or to make any payments
provided for in this Agreement. Insurance Company will reimburse any
Indemnified Party in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
with respect to clauses (a) and (b) above Insurance Company will not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue
statement or omission or alleged omission made in such registration
statement, prospectus, sales literature, or advertisement in
conformity with written information furnished to Insurance Company by
the Fund or by Dreyfus or any of its affiliates specifically for use
therein. This indemnity agreement shall be in addition to any
liability which Insurance Company may otherwise have.
9.2 The Fund agrees to indemnify and hold harmless Insurance Company and
its affiliates, and each of their respective directors, officers,
employees, agents and each person, if any, who controls or is
associated with any of the foregoing entities or persons within the
meaning of the 1933 Act against any losses, claims, damages or
liabilities, joint or several (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or any claims
asserted) for which Insurance Company or any such director, officer,
employee, agent or controlling person may become subject, under the
1933 Act or otherwise, insofar as such
12
<PAGE> 13
losses, claims, damages or liabilities (or actions in respect thereof)
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or Prospectus or sales literature or advertisements prepared
by the Fund; (b) arise out of or are based upon the omission to state
in the registration statement or Prospectus or sales literature or
advertisements prepared by the Fund any material fact required to be
stated therein or necessary to make the statements therein not
misleading; or (c) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
registration statement or Prospectus or sales literature or
advertisements with respect to the Separate Account or the Contracts
and such statements were based on written information provided to
Insurance Company by the Fund; and the Fund will reimburse any legal
or other expenses reasonably incurred by Insurance Company or any such
director, officer, employee, agent or controlling person in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Fund will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement
or omission or alleged omission made in such registration statement,
Prospectus, sales literature or advertisements in conformity with
written information furnished to the Fund by Insurance Company or its
affiliates specifically for use therein. This indemnity agreement will
be in addition to any liability which the Fund may otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless against
any and all liability, loss, damages, costs or expenses which
Insurance Company may incur, suffer or be required to pay due to the
Fund's (a) incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate of a Series; (b)
incorrect reporting of the daily net asset value, dividend rate or
capital gain distribution rate; and (c) untimely reporting of the net
asset value, dividend rate or capital gain distribution rate; provided
that the Fund shall have no obligation to indemnify and hold harmless
Insurance Company if the incorrect calculation or incorrect or
untimely reporting was the result of incorrect information furnished
by Insurance Company or information furnished untimely by Insurance
Company or otherwise as a result of or relating to a breach of this
Agreement by Insurance Company.
9.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Article, notify the indemnifying party of the
commencement thereof. The omission to so notify the indemnifying party
will not relieve the indemnifying party from any liability under this
Article IX, except to the extent that the omission results in a
failure of actual notice to the indemnifying party and such
indemnifying party is damaged solely as a result of the failure to
give such notice. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such indemnified party,
and to the extent that the indemnifying party has
13
<PAGE> 14
given notice to such effect to the indemnified party and is performing
its obligations under this Article, the indemnifying party shall not
be liable for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof, other
than reasonable costs of investigation. Notwithstanding the
foregoing, in any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (a)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (b) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent.
A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article IX.
ARTICLE X
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.
10.2 This Agreement shall terminate without penalty as to one or more
Series at the option of the terminating party in accordance with the
following provisions:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of any Series
are not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice of
election to terminate shall be furnished by Insurance Company,
said termination to be effective ten days after receipt of
notice unless the Fund makes available a sufficient number of
shares to meet the requirements of the Contracts within said
ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
14
<PAGE> 15
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt of
notice;
e. At the option of the Fund, if the Fund shall determine, in its
sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change or
material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
Dreyfus, the Fund shall have notified Insurance Company in
writing of such determination and its intent to terminate this
Agreement, and after consideration on the actions taken by
Insurance Company and any other changes in circumstances since
the giving of such notice, such determination of the Fund
shall continue to apply on the sixtieth (60th) day following
the giving of such notice, which sixtieth day shall be the
effective date of termination;
f. At the option of Insurance Company after having been notified
by the Fund of a termination or proposed termination of the
Investment Advisory Agreement between the Fund and Dreyfus or
its successors, which notice the Fund shall provide promptly
to Insurance Company, the effective date of termination of
this Agreement to be as determined by Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon such
occurrence without notice;
h. At the option of the Fund upon a reasonable determination by
the Board in good faith that it is no longer advisable and in
the best interests of shareholders for the Fund to continue to
operate pursuant to this Agreement. Termination pursuant to
this Subsection (h) shall be effective upon notice by the Fund
to Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify as
annuity contracts under the Code, or if the Fund reasonably
believes that the Contracts may fail to so qualify;
15
<PAGE> 16
j. At the option of any party to this Agreement, upon another
party's breach of any material provision of this Agreement,
which breach has not been cured to the satisfaction of the
other parties within ten days after written notice of such
breach is delivered to the party committing the breach;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law;
l. At the option of Insurance Company, if Insurance Company shall
determine, in its sole judgment reasonably exercised in good
faith, that the investment adviser to the Fund has suffered a
material adverse change in its business or financial
condition, or the Fund or the investment adviser to the Fund
is the subject of material adverse publicity, and such
material adverse change or material adverse publicity is
likely to have a material adverse impact on the sale of the
Contracts and/or the operations or business reputation of
Insurance Company, the Insurance Company shall have notified
the Fund in writing of such determination and its intent to
terminate this Agreement, and after consideration on the
actions taken by the Fund or the investment adviser to the
Fund and any other changes in circumstances since the giving
of such notice, such determination of Insurance Company shall
continue to apply on the sixtieth (60th) day following the
giving of such notice, which sixtieth day shall be the
effective date of termination; or
m. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, 10.2d, 10.2e, 10.2f or
10.2k herein shall not affect the operation of Article V of this
Agreement. Any termination of this Agreement shall not affect the
operation of Article IX of this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant to Section
10.2 hereof, the Fund may, at its option, continue to make available
additional Series shares for so long as the Fund desires pursuant to
the terms and conditions of this Agreement as provided below, for all
Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, if the Fund so elects to make
additional Series shares available, the owners of the Existing
Contracts or Insurance Company, whichever shall have legal authority
to do so, shall be permitted to reallocate investments in the Series,
redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts.
In the event of a termination of this Agreement pursuant to Section
10.2 hereof, the Fund and Dreyfus, as promptly as is practicable under
the circumstances, shall notify Insurance Company whether the Fund
shall elect to continue to make Series shares available after such
termination. If Series shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect
and thereafter either
16
<PAGE> 17
the Fund or Insurance Company may terminate the Agreement, as so
continued pursuant to this Section 10.3, upon prior written notice to
the other party, such notice to be for a period that is reasonable
under the circumstances but, if given by the Fund, need not be more
than six months prior to termination. In determining whether to elect
to continue to make available additional Fund shares, the Fund shall
act in good faith, giving due consideration to the interests of
existing shareholders, including holders of Existing Contracts.
ARTICLE XI
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
17
<PAGE> 18
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company: The Variable Annuity Life Insurance Company
2929 Allen Parkway, L4-01
Houston, Texas 77019
Attn: Cynthia Toles, Secretary
Fund: Dreyfus Variable Investment Fund
200 Park Avenue
New York, New York 10166
Attn: Daniel C. Maclean, Secretary
with copies to: Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Attn: Lewis G. Cole, Esq.
Stuart H. Coleman, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
ARTICLE XIV
LAW
14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.
18
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be duly
executed and attested as of the date first above written.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By:
--------------------------------------
Its:
--------------------------------------
Attest:
--------------------------------
DREYFUS VARIABLE INVESTMENT FUND
By:
---------------------------------------
Its:
--------------------------------------
Attest:
---------------------------------
19
<PAGE> 20
Schedule A
VALIC Variable Annuity Contracts
<TABLE>
<CAPTION>
Form Number Name
- - ----------- ----
<S> <C>
UITG-194 Group Fixed and Variable Deferred Annuity Contract
UIT-194 Individual Fixed and Variable Deferred Annuity Contract
UTN-194 Individual Fixed and Variable Nonqualified Deferred
Annuity Contract
UIT-IRA-194 Individual Fixed and Variable Deferred Retirement
Annuity Contract
IRA-SEP-194 Individual Fixed and Variable Simplified Employee Pension
Annuity Contract
</TABLE>
20
<PAGE> 21
Schedule B
VALIC Segregated Asset Accounts
<TABLE>
<CAPTION> Date of Resolution of Company's Board
Name of Account which Established the Account
- - --------------- --------------------------------------
<S> <C>
The Variable Annuity Life Insurance Company
Separate Account A April 18, 1979
</TABLE>
21
<PAGE> 22
Schedule C
Series of Dreyfus Variable Investment Fund
Available Under the Contracts:
Small Cap Portfolio
22
<PAGE> 1
EXHIBIT 9
[VALIC LETTERHEAD]
February 10, 1994
Board of Directors
The Variable Annuity Life
Insurance Company
2929 Allen Parkway
Houston, TX 77019
Gentlemen:
This opinion is furnished in connection with the filing of a registration
statement on Form N-4 ("Registration Statement") by The Variable Annuity Life
Insurance Company ("VALIC") and The Variable Annuity Life Insurance Company
Separate Account A ("Separate Account A"). The securities being registered
under the Registration Statement are units of interest ("Units") to be issued
by Separate Account A pursuant to certain single payment and flexible payment
individual and group variable annuity contracts ("Contracts") described in the
Registration Statement.
I am Senior Associate General Counsel and Secretary of VALIC, and in such
capacity I am familiar with VALIC's Articles of Incorporation and By-Laws and
have reviewed all statements, records, instruments and documents which I have
deemed it necessary to examine for the purpose of this option. I have examined
the form of the Registration Statement to be filed with the Securities and
Exchange Commission in connection with the registration under the Securities
Act of 1933, as amended, of an indefinite number of Units to be issued by
Separate Account A in connection with the Contracts. I am familiar with the
proceedings taken and proposed to be taken in connection with the
authorization, issuance and sale of the Units. Based upon a review of these
documents and such laws that I consider appropriate, I am of the opinion that:
1. VALIC is a duly incorporated life insurance company under the
laws of the State of Texas.
2. Separate Account A is duly organized under the provisions of
the Texas Insurance Code, under which income, gains, or
losses, whether realized or unrealized, from assets allocated
to the Separate Account, are, in accordance with the terms of
the Contracts, credited to or charged against Separate Account
A without regard to the income, gains, or losses to VALIC.
<PAGE> 2
Board of Directors
February 10, 1994
Page Two
3. The portion of the assets to be held in Separate Account A
equal to the reserves and other liabilities under the
Contracts will not be chargeable with liabilities arising out
of any other business VALIC may conduct.
4. The Contracts have been duly authorized by VALIC and, when
issued in the manner contemplated by the Registration
Statement, the Units thereunder will constitute legal, validly
issued, and binding obligations of VALIC in accordance with
the terms of the Contracts.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Respectfully submitted
/s/ CYNTHIA TOLES
Cynthia A. Toles
<PAGE> 1
EXHIBIT 13
CALCULATIONS FOR PERFORMANCE INFORMATION
IN PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Illustration of Calculation of
Average Annual Total Return
SEPARATE ACCOUNT A - WITH SURRENDER CHARGES AND MAINTENANCE FEES
<TABLE>
<CAPTION>
=========================================================================================================================
DIVISION 5 (PERIOD ENDING 12/31/95) 1 year 3 years 5 years 10 years Since
Inception Date: September 06, 1983 Inception
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
Ending value before surrender charges: 1,233.84 1,300.93 1,531.94 0.00 0.00
(90 % limit) x 90 % x 90 % x 90 % x 90 % x 90 %
------------------------------------------------------------------------
1,110.46 1,170.84 1,378.75 0.00 0.00
5 % surrender charge: x 5 % x 5 % x 5 % x 5 % x 5 %
------------------------------------------------------------------------
Surrender charge: 55.52 58.54 68.94 0.00 0.00
========================================================================
Ending value before surrender charge: 1,233.84 1,300.93 1,531.94 0.00 0.00
Less surrender charge: $50.00 LIMIT 50.00 50.00 50.00 0.00 0.00
------------------------------------------------------------------------
Ending value after surrender charge: 1,183.84 1,250.93 1,481.94 0.00 0.00
- - --------------------------------------------------------------------------------------------------------------------------
Average Annual Total Return Data
- - --------------------------------------------------------------------------------------------------------------------------
Present Value - Initial Purchase (P): 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
Future Value - End. Value after surr. chg (ERV): 1,183.84 1,250.93 1,481.94 2,161.00 2,371.29
Number of years (n): 1.00 3.00 5.00 10.00 12.328767
Average Annual Total Return (T): 18.38% 7.75% 8.18% 8.01% 7.25%
==========================================================================================================================
</TABLE>
<PAGE> 2
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
* Inception date 9/6/83
06-Sep-83 1.000000 1,000.00
Sep-83 1 0.987683 -0.0123170 0.33 987.35
Oct-83 0.971409 -0.0164769 0.00 971.09
Nov-83 0.990130 0.0192720 0.00 989.80
Dec-83 1 0.985674 -0.0045004 0.33 985.02
Jan-84 0.965920 -0.0200411 0.00 965.28
Feb-84 0.952289 -0.0141119 0.00 951.66
Mar-84 1 0.957428 0.0053965 0.32 956.47
Apr-84 0.947611 -0.0102535 0.00 946.67
May-84 0.931157 -0.0173637 0.00 930.23
Jun-84 1 0.941969 0.0116114 0.31 940.72
Jul-84 0.940896 -0.0011391 0.00 939.65
Aug-84 0.981187 0.0428219 0.00 979.88
Sep-84 1 0.963841 -0.0176786 0.32 962.24
Oct-84 0.965426 0.0016445 0.00 963.82
Nov-84 0.977640 0.0126514 0.00 976.02
Dec-84 1 0.985271 0.0078055 0.33 983.31
Jan-85 0.993855 0.0087123 0.00 991.88
Feb-85 1.002913 0.0091140 0.00 1,000.92
Mar-85 1 0.991748 -0.0111326 0.33 989.44
Apr-85 0.980883 -0.0109554 0.00 978.60
May-85 1.026204 0.0462043 0.00 1,023.82
Jun-85 1 1.032557 0.0061908 0.34 1,029.82
Jul-85 1.034774 0.0021471 0.00 1,032.03
Aug-85 1.033037 -0.0016786 0.00 1,030.29
</TABLE>
<PAGE> 3
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sep-85 1 1.020039 -0.0125823 0.34 1,016.99
Oct-85 1.032404 0.0121221 0.00 1,029.32
Nov-85 1.075041 0.0412988 0.00 1,071.83
Dec-85 1 1.100420 0.0236075 0.36 1,096.77 1,000.00
Jan-86 1.100680 0.0002363 0.00 1,097.03 0.00 1,000.24
Feb-86 1.130400 0.0270015 0.00 1,126.65 0.00 1,027.24
Mar-86 1 1.189659 0.0524230 0.39 1,185.32 0.36 1,080.74
Apr-86 1.174715 -0.0125616 0.00 1,170.43 0.00 1,067.16
May-86 1.218589 0.0373486 0.00 1,214.14 0.00 1,107.02
Jun-86 1 1.227338 0.0071796 0.41 1,222.45 0.37 1,114.59
Jul-86 1.183807 -0.0354678 0.00 1,179.10 0.00 1,075.06
Aug-86 1.259110 0.0636109 0.00 1,254.10 0.00 1,143.45
Sep-86 1 1.183248 -0.0602505 0.39 1,178.15 0.36 1,074.20
Oct-86 1.192003 0.0073991 0.00 1,186.86 0.00 1,082.15
Nov-86 1.195475 0.0029127 0.00 1,190.32 0.00 1,085.30
Dec-86 1 1.198662 0.0026659 0.40 1,193.10 0.36 1,087.83
Jan-87 1.267390 0.0573373 0.00 1,261.51 0.00 1,150.20
Feb-87 1.313333 0.0362501 0.00 1,307.24 0.00 1,191.90
Mar-87 1 1.352184 0.0295820 0.45 1,345.46 0.41 1,226.75
Apr-87 1.335629 -0.0122432 0.00 1,328.99 0.00 1,211.73
May-87 1.336380 0.0005623 0.00 1,329.74 0.00 1,212.41
Jun-87 1 1.395042 0.0438962 0.46 1,387.64 0.42 1,265.21
Jul-87 1.440217 0.0323825 0.00 1,432.58 0.00 1,306.18
Aug-87 1.469473 0.0203136 0.00 1,461.68 0.00 1,332.71
Sep-87 1 1.447605 -0.0148815 0.48 1,439.45 0.44 1,312.45
Oct-87 1.308655 -0.0959861 0.00 1,301.28 0.00 1,186.47
Nov-87 1.209275 -0.0759406 0.00 1,202.46 0.00 1,096.37
</TABLE>
<PAGE> 4
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dec-87 1 1.286227 0.0636348 0.42 1,278.56 0.39 1,165.75
Jan-88 1.310304 0.0187191 0.00 1,302.49 0.00 1,187.57
Feb-88 1.343047 0.0249889 0.00 1,335.04 0.00 1,217.25
Mar-88 1 1.322879 -0.0150166 0.44 1,314.55 0.40 1,198.57
Apr-88 1.329623 0.0050980 0.00 1,321.25 0.00 1,204.68
May-88 1.334663 0.0037905 0.00 1,326.26 0.00 1,209.24
Jun-88 1 1.356471 0.0163397 0.45 1,347.49 0.41 1,228.60
Jul-88 1.359568 0.0022831 0.00 1,350.56 0.00 1,231.40
Aug-88 1.357732 -0.0013504 0.00 1,348.74 0.00 1,229.74
Sep-88 1 1.373521 0.0116290 0.45 1,363.97 0.41 1,243.62
Oct-88 1.387574 0.0102314 0.00 1,377.92 0.00 1,256.35
Nov-88 1.389361 0.0012879 0.00 1,379.70 0.00 1,257.97
Dec-88 1 1.397280 0.0056997 0.46 1,387.10 0.42 1,264.72
Jan-89 1.441583 0.0317066 0.00 1,431.08 0.00 1,304.82
Feb-89 1.429129 -0.0086391 0.00 1,418.72 0.00 1,293.54
Mar-89 1 1.448583 0.0136125 0.48 1,437.55 0.44 1,310.72
Apr-89 1.475114 0.0183151 0.00 1,463.88 0.00 1,334.72
May-89 1.506364 0.0211848 0.00 1,494.89 0.00 1,363.00
Jun-89 1 1.520829 0.0096026 0.50 1,508.75 0.46 1,375.63
Jul-89 1.573539 0.0346587 0.00 1,561.04 0.00 1,423.31
Aug-89 1.584678 0.0070789 0.00 1,572.09 0.00 1,433.38
Sep-89 1 1.583192 -0.0009377 0.52 1,570.09 0.48 1,431.56
Oct-89 1.574485 -0.0054996 0.00 1,561.46 0.00 1,423.69
Nov-89 1.598677 0.0153650 0.00 1,585.45 0.00 1,445.56
Dec-89 1 1.618165 0.0121901 0.53 1,604.24 0.49 1,462.70
Jan-90 1.560079 -0.0358962 0.00 1,546.66 0.00 1,410.19
Feb-90 1.568791 0.0055843 0.00 1,555.30 0.00 1,418.07
</TABLE>
<PAGE> 5
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mar-90 1 1.583093 0.0091166 0.52 1,568.95 0.48 1,430.52
Apr-90 1.556364 -0.0168840 0.00 1,542.46 0.00 1,406.37
May-90 1.641457 0.0546742 0.00 1,626.80 0.00 1,483.26
Jun-90 1 1.630363 -0.0067586 0.54 1,615.26 0.49 1,472.75
Jul-90 1.622727 -0.0046836 0.00 1,607.70 0.00 1,465.85
Aug-90 1.508869 -0.0701646 0.00 1,494.89 0.00 1,363.00
Sep-90 1 1.463686 -0.0299449 0.48 1,449.65 0.44 1,321.74
Oct-90 1.459124 -0.0031168 0.00 1,445.13 0.00 1,317.62
Nov-90 1.531418 0.0495462 0.00 1,516.73 0.00 1,382.91
Dec-90 1 1.563444 0.0209126 0.51 1,547.94 0.47 1,411.36 1,000.00
Jan-91 1.615726 0.0334403 0.00 1,599.70 0.00 1,458.56 0.00 1,033.44
Feb-91 1.695727 0.0495140 0.00 1,678.91 0.00 1,530.77 0.00 1,084.61
Mar-91 1 1.712993 0.0101821 0.56 1,695.44 0.51 1,545.85 0.36 1,095.29
Apr-91 1.717816 0.0028155 0.00 1,700.21 0.00 1,550.20 0.00 1,098.37
May-91 1.783504 0.0382393 0.00 1,765.23 0.00 1,609.48 0.00 1,140.37
Jun-91 1 1.709971 -0.0412295 0.56 1,691.88 0.51 1,542.61 0.36 1,092.99
Jul-91 1.771356 0.0358983 0.00 1,752.62 0.00 1,597.98 0.00 1,132.23
Aug-91 1.802028 0.0173155 0.00 1,782.97 0.00 1,625.65 0.00 1,151.84
Sep-91 1 1.777373 -0.0136818 0.58 1,757.99 0.53 1,602.88 0.38 1,135.70
Oct-91 1.794173 0.0094522 0.00 1,774.61 0.00 1,618.03 0.00 1,146.43
Nov-91 1.746751 -0.0264311 0.00 1,727.70 0.00 1,575.26 0.00 1,116.13
Dec-91 1 1.878219 0.0752643 0.62 1,857.12 0.56 1,693.26 0.40 1,199.74
Jan-92 1.849582 -0.0152469 0.00 1,828.80 0.00 1,667.44 0.00 1,181.45
Feb-92 1.870046 0.0110641 0.00 1,849.04 0.00 1,685.89 0.00 1,194.52
Mar-92 1 1.808780 -0.0327618 0.59 1,787.86 0.54 1,630.12 0.38 1,155.00
Apr-92 1.791751 -0.0094146 0.00 1,771.03 0.00 1,614.77 0.00 1,144.13
May-92 1.781269 -0.0058501 0.00 1,760.67 0.00 1,605.33 0.00 1,137.43
</TABLE>
<PAGE> 6
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Jun-92 1 1.758850 -0.0125860 0.58 1,737.93 0.53 1,584.59 0.37 1,122.74
Jul-92 1.807615 0.0277255 0.00 1,786.12 0.00 1,628.53 0.00 1,153.87
Aug-92 1.778560 -0.0160737 0.00 1,757.41 0.00 1,602.35 0.00 1,135.33
Sep-92 1 1.799490 0.0117679 0.59 1,777.50 0.54 1,620.67 0.38 1,148.30
Oct-92 1.788869 -0.0059022 0.00 1,767.01 0.00 1,611.10 0.00 1,141.53
Nov-92 1.823749 0.0194984 0.00 1,801.46 0.00 1,642.52 0.00 1,163.78
Dec-92 1 1.846025 0.0122144 0.61 1,822.86 0.55 1,662.03 0.39 1,177.61 1,000.00
Jan-93 1.868994 0.0124424 0.00 1,845.54 0.00 1,682.71 0.00 1,192.26 0.00 1,012.44
Feb-93 1.897488 0.0152456 0.00 1,873.68 0.00 1,708.36 0.00 1,210.44 0.00 1,027.88
Mar-93 1 1.923754 0.0138425 0.63 1,898.98 0.58 1,731.43 0.41 1,226.78 0.35 1,041.76
Apr-93 1.897751 -0.0135168 0.00 1,873.32 0.00 1,708.03 0.00 1,210.20 0.00 1,027.68
May-93 1.925229 0.0144792 0.00 1,900.44 0.00 1,732.76 0.00 1,227.73 0.00 1,042.56
Jun-93 1 1.939938 0.0076401 0.64 1,914.32 0.58 1,745.42 0.41 1,236.69 0.35 1,050.17
Jul-93 1.934317 -0.0028975 0.00 1,908.78 0.00 1,740.36 0.00 1,233.11 0.00 1,047.13
Aug-93 1.992589 0.0301254 0.00 1,966.28 0.00 1,792.79 0.00 1,270.26 0.00 1,078.68
Sep-93 1 1.988002 -0.0023020 0.65 1,961.10 0.59 1,788.07 0.42 1,266.91 0.36 1,075.84
Oct-93 2.011106 0.0116217 0.00 1,983.89 0.00 1,808.85 0.00 1,281.64 0.00 1,088.34
Nov-93 1.984529 -0.0132151 0.00 1,957.67 0.00 1,784.95 0.00 1,264.70 0.00 1,073.96
Dec-93 1 1.997266 0.0064181 0.65 1,969.58 0.60 1,795.81 0.42 1,272.39 0.36 1,080.49
Jan-94 2.051410 0.0271091 0.00 2,022.98 0.00 1,844.49 0.00 1,306.89 0.00 1,109.78
Feb-94 1.996314 -0.0268576 0.00 1,968.65 0.00 1,794.95 0.00 1,271.79 0.00 1,079.98
Mar-94 1 1.933794 -0.0313177 0.63 1,906.36 0.58 1,738.16 0.41 1,231.55 0.35 1,045.81
Apr-94 1.932875 -0.0004752 0.00 1,905.45 0.00 1,737.33 0.00 1,230.96 0.00 1,045.31
May-94 1.941463 0.0044431 0.00 1,913.92 0.00 1,745.05 0.00 1,236.43 0.00 1,049.95
Jun-94 1 1.911957 -0.0151978 0.63 1,884.20 0.57 1,717.96 0.40 1,217.24 0.34 1,033.65
Jul-94 1.949585 0.0196804 0.00 1,921.29 0.00 1,751.77 0.00 1,241.19 0.00 1,054.00
Aug-94 1.984098 0.0177027 0.00 1,955.30 0.00 1,782.78 0.00 1,263.17 0.00 1,072.65
</TABLE>
<PAGE> 7
Data for Division 5 TIMED OPPORTUNITY
Maintenance fee charged quarterly
Monthly contribution (14) = 0
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
[(2b-2a)/2a] [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)* [(3b+1)*
(5a+(14))- (7a+(14))- (9a+(14))- (11a+(14))- (13a+(14))-
(4)] (6)] (8)] (10)] (12)]
Date Unit Value % Change Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000 Maint $1,000
In Unit Fee Investment Fee Investment Fee Investment Fee Investment Fee Investment
Values Since For For For For
DIV 5 Inception 10 Years 5 Years 3 Years 1 Year
|--------------------------------------maximum maintenence fee $3.75 per quarter------------|
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sep-94 1 1.950753 -0.0168061 0.64 1,921.80 0.58 1,752.24 0.41 1,241.52 0.35 1,054.28
Oct-94 1.970570 0.0101586 0.00 1,941.32 0.00 1,770.04 0.00 1,254.14 0.00 1,064.99
Nov-94 1.934682 -0.0182120 0.00 1,905.97 0.00 1,737.80 0.00 1,231.30 0.00 1,045.59
Dec-94 1 1.951533 0.0087100 0.64 1,921.93 0.58 1,752.35 0.41 1,241.61 0.35 1,054.35 1,000.00
Jan-95 1.978929 0.0140382 0.00 1,948.91 0.00 1,776.95 0.00 1,259.04 0.00 1,069.15 0.00 1,014.04
Feb-95 2.026612 0.0240954 0.00 1,995.87 0.00 1,819.77 0.00 1,289.37 0.00 1,094.91 0.00 1,038.47
Mar-95 1 2.055344 0.0141774 0.67 2,023.49 0.61 1,844.96 0.43 1,307.22 0.37 1,110.06 0.35 1,052.84
Apr-95 2.094413 0.0190085 0.00 2,061.96 0.00 1,880.03 0.00 1,332.07 0.00 1,131.16 0.00 1,072.86
May-95 2.161143 0.0318610 0.00 2,127.65 0.00 1,939.93 0.00 1,374.51 0.00 1,167.20 0.00 1,107.04
Jun-95 1 2.191530 0.0140606 0.72 2,156.85 0.65 1,966.55 0.46 1,393.37 0.39 1,183.22 0.37 1,122.23
Jul-95 2.221036 0.0134637 0.00 2,185.89 0.00 1,993.03 0.00 1,412.13 0.00 1,199.15 0.00 1,137.34
Aug-95 2.233194 0.0054740 0.00 2,197.86 0.00 2,003.94 0.00 1,419.86 0.00 1,205.72 0.00 1,143.57
Sep-95 1 2.295129 0.0277338 0.75 2,258.06 0.68 2,058.83 0.48 1,458.76 0.41 1,238.75 0.39 1,174.89
Oct-95 2.303688 0.0037292 0.00 2,266.48 0.00 2,066.51 0.00 1,464.20 0.00 1,243.36 0.00 1,179.27
Nov-95 2.371530 0.0294493 0.00 2,333.23 0.00 2,127.36 0.00 1,507.32 0.00 1,279.98 0.00 1,214.00
31-Dec-95 1 2.411022 0.0166525 0.79 2,371.29 0.72 2,161.00 0.51 1,531.94 0.43 1,300.93 0.41 1,233.84
</TABLE>
n= 12.328767 yrs
as of 12/31/95
Note: a denotes previous month
b denotes current month
1-Maintenance fee applied at quarter end has been converted to 0.1329% / 4
quarters x accumulation value + monthly contribution. The maximum
maintenance fee is $15 per year; $3.75 per quarter.
<PAGE> 8
NON-STANDARD AVERAGE ANNUAL TOTAL RETURNS
(Without surrender charges or maintenance fees)
As of December 31, 1995
Division 5
n
P(1+T) = ERV
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years
<S> <C> <C> <C> <C> <C>
P = $1,000.00 P = $1,000.00 P = $1,000.00
n = 1 n = 3 n = 5
ERV = $1,235.50 ERV = $1,306.10 ERV = $1,542.10
T = 23.55% T = 9.31% T = 9.04%
</TABLE>
<TABLE>
<CAPTION>
10 Years Since Inception
<S> <C> <C> <C>
P = $1,000.00 P = $1,000.00
n = 10 n = 12.328767
ERV = $2,191.00 ERV = $2,411.00
T = 8.15% T = 7.40%
</TABLE>
<PAGE> 9
Illustration of
---------------
Calculation of Cumulative Return
--------------------------------
Division 5
----------
<TABLE>
<S> <C>
1 Year
-----------------
Value at 12-31-95 $12,355
Less Value at 12-31-94 $10,000
--------
$2,355
Divided by Value at 12-31-94 $10,000
--------
Cumulative Return 23.55%
========
3 Years
-----------------
Value at 12-31-95 $13,061
Less Value at 12-31-92 $10,000
--------
$3,061
Divided by Value at 12-31-92 $10,000
--------
Cumulative Return 30.61%
========
5 Years
-----------------
Value at 12-31-95 $15,421
Less Value at 12-31-90 $10,000
--------
$5,421
Divided by Value at 12-31-90 $10,000
--------
Cumulative Return 54.21%
========
10 Years
-----------------
Value at 12-31-95 $21,910
Less Value at 12-31-85 $10,000
--------
$11,910
Divided by Value at 12-31-85 $10,000
--------
Cumulative Return 119.10%
========
Since Inception
-----------------
Value at 12-31-95 $24,110
Less Value at 09-06-83 $10,000
--------
$14,110
Divided by Value at 09-06-83 $10,000
--------
Cumulative Return 141.10%
========
</TABLE>
<PAGE> 10
Illustration of
Calculation of Annual and Cumulative Change in Accumulation Unit Value
DIVISION 5
<TABLE>
<CAPTION>
(1) (2) (3) [(1)-(2)]/(2) [(1)-(3)]/(3)
Cumulative
AUV AUV AUV Annual Change Year
In Yr N In Yr N-1 In Yr 1 Change Since 12/31/85 N
- - ------------- ------------- ------------- ------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
2.411022 1.951533 1.100420 23.55% 119.10% 1995
1.951533 1.997266 1.100420 -2.29% 77.34% 1994
1.997266 1.846025 1.100420 8.19% 81.50% 1993
1.846025 1.878219 1.100420 -1.71% 67.76% 1992
1.878219 1.563444 1.100420 20.13% 70.68% 1991
1.563444 1.618165 1.100420 -3.38% 42.08% 1990
1.618165 1.397280 1.100420 15.81% 47.05% 1989
1.397280 1.286227 1.100420 8.63% 26.98% 1988
1.286227 1.198662 1.100420 7.31% 16.89% 1987
1.198662 1.100420 1.100420 8.93% 8.93% 1986
</TABLE>
<PAGE> 11
Illustration of 30-Day
Standardized Yield for Division Seven
AGSPC
30-DAY STANDARDIZED YIELD
FOR NON-MONEY MARKET DIVISIONS
OF SEPARATE ACCOUNT A
FOR THE MONTH ENDED
DECEMBER 31, 1995
Division 7
<TABLE>
<S> <C> <C>
6
Yield = 2[(((a-b)/(cd)+1) )-1] = 5.23%
a = $295,420.48
b = $66,295.35
c = 29,312,615.70
d = 1.812011
</TABLE>
<PAGE> 12
Illustration of 7 - Day
Current and Effective Yields for Division 6
Money Market Division Six
As of December 31, 1995
<TABLE>
<S> <C> <C> <C>
(1) Seven Day Current Yield:
1.545802-1.544572 365
------------------------- X ----------- = 0.041523 = 4.15%
1.544572 7 =======
(2) Seven Day Effective Yield:
1.545802-1.544572 365/7
[ ------------------------- + 1] - 1
1.544572
365/7
[ 1.0007963371083 ] - 1 0.042380 = 4.24%
=======
</TABLE>
<PAGE> 1
EXHIBIT 15
THIS FORM MUST ACCOMPANY APPLICATIONS FOR ANY PRODUCT
WHICH OFFERS RELOCATION OF PURCHASE PAYMENTS TO A VARIABLE ACCOUNT
(EXCEPT TEXT ORP o USE FORM #VA 7181-1)
<TABLE>
<S> <C> <C>
- - -----------------------------------------------------------------------------------------
[VALIC LOGO] THE VARIABLE ANNUITY
LIFE INSURANCE COMPANY CONFIDENTIAL PERSONAL DATA FORM
P.O. BOX 3206 - HOUSTON, TEXAS 77253
- - -----------------------------------------------------------------------------------------
PLEASE PRINT ALL INFORMATION.
1. ANNUITANT/PARTICIPANT: 2. OCCUPATION:
Social Security No:
--------------------------- -----------------------
Name:
---------------------------------------------------- -----------------------
LAST FIRST MIDDLE INITIAL
- - -----------------------------------------------------------------------------------------
3. INVESTMENT OBJECTIVES (CHECK ONE):
[ ] Safety of Principal [ ] Income [ ] Long-term Growth [ ] Retirement Income
[ ] Other:
----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------
4. FINANCIAL SITUATION (APPROXIMATE AMOUNTS):
Household Income Net Worth Life Insurance in Force
---------------- --------- -----------------------
[ ] Under $25,000 [ ] Under $25,000 [ ] Under $25,000
[ ] 25,000 - 50,000 [ ] 25,000 - 50,000 [ ] 25,000 - 50,000
[ ] 50,000 - 100,000 [ ] 50,000 - 100,000 [ ] 50,000 - 100,000
[ ] Over 100,000 [ ] Over 100,000 [ ] Over 100,000
- - ----------------------------------------------------------------------------------------
5. DEPENDENTS:
Number and Ages of Dependents: Number: Ages:
--------- -----------------------------
- - ----------------------------------------------------------------------------------------
6. EDUCATION:
Number of School Years Completed (circle one): 8 9 10 11 12 13 14 15 16 16+
- - ----------------------------------------------------------------------------------------
7. SPECIAL INFORMATION FOR 403(b) PARTICIPANTS:
According to federal tax laws regulating certain 403(b) plans, any interest and
earnings credited to your account after 12/31/88 and any elective contributions made
after that date may be withdrawn under any of the following circumstances:
o Separation from service
o Death
o Age 59 1/2 or older
o Disability
o Hardship (Contributions only)
Your employer's plan may contain other withdrawal restrictions. Additionally, some
employer plans have alternative investment options among which plan participants may
transfer contract values.
- - ----------------------------------------------------------------------------------------
THIS FORM MUST BE SIGNED AND INCLUDED IN THE APPLICANT'S FILE.
Dated at , on , 19 .
------------------------------ -------------------- ----
-----------------------------------------------------
ANNUITANT/PARTICIPANT'S SIGNATURE
HOME OFFICE -1 FIELD OFFICE - 2 FIELD OFFICE - 3
</TABLE>
VA 7181 REV 890
<PAGE> 2
TEXAS OPTIONAL RETIREMENT PROGRAM
THIS FORM MUST ACCOMPANY APPLICATIONS FOR ANY PRODUCT WHICH
OFFERS ALLOCATION OF PURCHASE PAYMENTS TO A VARIABLE ACCOUNT
IT MUST BE SIGNED AND KEPT IN THE APPLICANT'S FILE
<TABLE>
<S> <C> <C>
- - -----------------------------------------------------------------------------------------
[VALIC LOGO] THE VARIABLE ANNUITY CONFIDENTIAL PERSONAL DATA FORM
LIFE INSURANCE COMPANY
P.O. BOX 3206 - HOUSTON, TEXAS 77253
- - -----------------------------------------------------------------------------------------
PLEASE PRINT ALL INFORMATION
1. ANNUITANT/PARTICIPANT: 2. OCCUPATION:
Social Security No.: -- --
--------------------------- -----------------------
Name:
---------------------------------------------------- -----------------------
LAST FIRST MIDDLE INITIAL
- - -----------------------------------------------------------------------------------------
3. INVESTMENT OBJECTIVES (CHECK ONE):
[ ] Safety of Principal [ ] Income [ ] Long-term Growth [ ] Retirement Income
[ ] Other:
----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------
4. FINANCIAL SITUATION (APPROXIMATE AMOUNTS):
Household Income Net Worth Life Insurance in Force
---------------- --------- -----------------------
[ ] Under $25,000 [ ] Under $25,000 [ ] Under $25,000
[ ] 25,000 - 50,000 [ ] 25,000 - 50,000 [ ] 25,000 - 50,000
[ ] 50,000 - 100,000 [ ] 50,000 - 100,000 [ ] 50,000 - 100,000
[ ] Over 100,000 [ ] Over 100,000 [ ] Over 100,000
- - ----------------------------------------------------------------------------------------
5. DEPENDENTS:
Number and Ages of Dependents: Number: Ages:
--------- -----------------------------
- - ----------------------------------------------------------------------------------------
6. EDUCATION:
Number of School Years Completed (circle one): 8 9 10 11 12 13 14 15 16 16+
- - ----------------------------------------------------------------------------------------
7. TEXAS OPTIONAL RETIREMENT PROGRAM REDEMPTION ACKNOWLEDGEMENT.
I understand that:
1. Benefits in the Texas Optional Retirement Program vest after one year of
participation in one or more optional retirement plans;
2. Benefits under the Texas Optional Retirement Program are available to me only
after I obtain the age of 70 1/2 years, or terminate participation by death,
retirement, or termination of employment in all Texas institutions of higher
education;
3. VALIC will require from the program administrator written verification of my
qualification for any requested redemption of any annuity benefits purchased
under the Texas Optional Retirement Program.
I acknowledge the above information and statements and represent that
information provided by me is correct to the best of my knowledge and belief.
- - ------------------------------------------------- -------------------
PARTICIPANT'S SIGNATURE DATE
- - ------------------------------------------------- -------------------
REPRESENTATIVE'S SIGNATURE DATE
</TABLE>
VA 7181-1
<PAGE> 1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint James R. Tuerff, Stephen D.
Bickel and Cynthia A. Toles, and each of them, with full power of substitution
as his true and lawful attorney and agent, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable:
(i) to enable the said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of the
said corporation, interests under benefit plans for employees and agents and
managers of said corporation and of its affiliates, and the variable annuity
contracts of the said corporation with respect to such benefit plans
(hereinafter collectively called "VALIC Securities"), including specifically,
but without limiting the generality of the foregoing, the power and authority to
sign for and on behalf of the undersigned the name of the undersigned as officer
and/or director of the said corporation to a registration statement or to any
amendment thereto filed with the Securities and Exchange Commission in respect
to said VALIC Securities and to any instrument or document filed as a part of,
as an exhibit to or in connection with, said registration statement or
amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said VALIC Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
10th day of February, 1994.
/s/ ROBERT M. DEVLIN
--------------------
Robert M. Devlin
In the Presence of:
/s/ KAREN V. SHANKLIN [SEAL]
- - ---------------------
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint James R. Tuerff, Stephen D.
Bickel and Cynthia A. Toles, and each of them, with full power of substitution
as his true and lawful attorney and agent, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable:
(i) to enable the said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of the
said corporation, interests under benefit plans for employees and agents and
managers of said corporation and of its affiliates, and the variable annuity
contracts of the said corporation with respect to such benefit plans
(hereinafter collectively called "VALIC Securities"), including specifically,
but without limiting the generality of the foregoing, the power and authority to
sign for and on behalf of the undersigned the name of the undersigned as officer
and/or director of the said corporation to a registration statement or to any
amendment thereto filed with the Securities and Exchange Commission in respect
to said VALIC Securities and to any instrument or document filed as a part of,
as an exhibit to or in connection with, said registration statement or
amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said VALIC Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
10th day of February, 1994.
/s/ PETER V. TUTERS
-------------------
Peter V. Tuters
In the Presence of:
/s/ KAREN V. SHANKLIN [SEAL]
- - ---------------------
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint James R. Tuerff and Cynthia
A. Toles, and each of them, with full power of substitution as his true and
lawful attorney and agent, to do any and all acts and things and to execute any
and all instruments which said attorney and agent may deem necessary or
advisable:
(i) to enable the said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of the
said corporation with the registration under the said Securities Act of
variable annuity contracts of the said corporation, interests under benefit
plans for employees and agents and managers of said corporation and of its
affiliates, and the variable annuity contracts of the said corporation with
respect to such benefit plans (hereinafter collectively called "VALIC
Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer and/or director of the said
corporation to a registration statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect to said VALIC Securities and
to any instrument or document filed as a part of, as an exhibit to or in
connection with, said registration statement or amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said VALIC Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
10th day of February, 1994.
/s/ STEPHEN D. BICKEL
---------------------
Stephen D. Bickel
In the Presence of:
/s/ KAREN V. SHANKLIN [SEAL]
- - ---------------------
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint James R. Tuerff, Stephen D.
Bickel and Cynthia A. Toles, and each of them, with full power of substitution
as his true and lawful attorney and agent, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable:
(i) to enable the said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of the
said corporation with the registration under the said Securities Act of
variable annuity contracts of the said corporation, interests under benefit
plans for employees and agents and managers of said corporation and of its
affiliates, and the variable annuity contracts of the said corporation with
respect to such benefit plans (hereinafter collectively called "VALIC
Securities"), including specifically, but without limiting the generality of
the foregoing, the power and authority to sign for and on behalf of the
undersigned the name of the undersigned as officer and/or director of the said
corporation to a registration statement or to any amendment thereto filed with
the Securities and Exchange Commission in respect to said VALIC Securities and
to any instrument or document filed as a part of, as an exhibit to or in
connection with, said registration statement or amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said Valic Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
10th day of February, 1994.
/s/ JOE C. OSBORNE
------------------
Joe C. Osborne
In the Presence of:
/s/ KAREN V. SHANKLIN [SEAL]
- - ---------------------
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint James R. Tuerff, Stephen D.
Bickel and Cynthia A. Toles, and each of them, with full power of substitution
as his true and lawful attorney and agent, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable:
(i) to enable the said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of the
said corporation, interests under benefit plans for employees and agents and
managers of said corporation and of its affiliates, and the variable annuity
contracts of the said corporation with respect to such benefit plans
(hereinafter collectively called "VALIC Securities"), including specifically,
but without limiting the generality of the foregoing, the power and authority to
sign for and on behalf of the undersigned the name of the undersigned as officer
and/or director of the said corporation to a registration statement or to any
amendment thereto filed with the Securities and Exchange Commission in respect
to said VALIC Securities and to any instrument or document filed as a part of,
as an exhibit to or in connection with, said registration statement or
amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said VALIC Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
10th day of February, 1994.
/s/ SAM E. MAGEE
----------------
Sam E. Magee
In the Presence of:
/s/ KAREN V. SHANKLIN [SEAL]
- - ---------------------
<PAGE> 1
EXHIBIT 16(b)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer
and/or director of The Variable Annuity Life Insurance Company, a life
insurance corporation organized and existing under Chapter 3 of the Texas
Insurance Code, does hereby constitute and appoint Michael J. Poulos, Joe D.
Heusi and Campbell D. McHugh, and each of them, with full power of substitution
as his true and lawful attorney and agent, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable:
(i) to enable the said corporation to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, in connection with the registration
under the said Securities Act of variable annuity contracts of the said
corporation, interests under benefit plans for employees and agents and managers
of said corporation and of its affiliates, and the variable annuity contracts of
the said corporation with respect to such benefit plans (hereinafter
collectively called "VALIC Securities"), including specifically, but without
limiting the generality of the foregoing, the power and authority to sign for
and on behalf of the undersigned the name of the undersigned as officer and/or
director of the said corporation to a registration statement or to any amendment
thereto filed with the Securities and Exchange Commission in respect to said
VALIC Securities and to any instrument or document filed as a part of, as an
exhibit to or in connection with, said registration statement or amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky Laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other instrument
or document, or to any amendment thereto, or to any exhibit filed as a part
thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said Valic Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
23rd day of April, 1985.
/s/ HAROLD S. HOOK
------------------
Harold S. Hook
In the Presence of:
/s/ IDA L. STEPHENSON
- - ---------------------
<PAGE> 1
Exhibit 16(c)
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, an officer and/or
director of The Variable Annuity Life Insurance Company, a life insurance
corporation organized and existing under Chapter 3 of the Texas Insurance Code,
does hereby constitute and appoint Robert M. Devlin, Stephen D. Bickel and
Cynthia A. Toles, and each of them, with full power of substitution as his true
and lawful attorney and agent, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable:
(i) to enable the said corporation to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under the said Securities Act of variable annuity contracts of
the said corporation, interests under benefit plans for employees and agents
and managers of said corporation and of its affiliates, and the variable
annuity contracts of the said corporation with respect to such benefit plans
(hereinafter collectively called "VALIC Securities"), including specifically,
but without limiting the generality of the foregoing, the power and authority
to sign for and on behalf of the undersigned the name of the undersigned as
officer and/or director of the said corporation to a registration statement or
to any amendment thereto filed with the Securities and Exchange Commission in
respect to said VALIC Securities and to any instrument or document filed as a
part of, as an exhibit to or in connection with, said registration statement or
amendment; and
(ii) to register or qualify said VALIC Securities for sale and to
register or license said corporation or any subsidiary thereof as a broker or
dealer in said VALIC Securities under the securities or Blue Sky laws of all
such states as may be necessary or appropriate to permit therein the offering
and sale of said VALIC Securities as contemplated by said registration
statement, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign for and on behalf of the undersigned
the name of the undersigned as an officer and/or director of said corporation
to any application, statement, petition, prospectus, notice or other
instrument or document, or to any amendment thereto, or to any exhibit filed as
a part thereto or in connection therewith, which is required to be signed by the
undersigned and to be filed with the public authority or authorities
administering said securities or Blue Sky Laws for the purpose of so
registering or qualifying said VALIC Securities or registering or licensing
said corporation;
and the undersigned does hereby ratify and confirm as his own act and deed all
that said attorney and agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
14 day of February, 1996.
/s/ AUSTIN P. YOUNG
--------------------------
Austin P. Young
In the Presence of:
/s/ DAVID den BOER
- - ---------------------
David den Boer
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Valic Separate Account A - Division 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 7,403,962
<INVESTMENTS-AT-VALUE> 7,770,858
<RECEIVABLES> 12,591
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,783,449
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 7,783,449
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 7,783,449
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2,402,085
<SHARES-COMMON-PRIOR> 2,953,861
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,783,449
<DIVIDEND-INCOME> 528,894
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 79,783
<NET-INVESTMENT-INCOME> 449,111
<REALIZED-GAINS-CURRENT> 65,122
<APPREC-INCREASE-CURRENT> 906,759
<NET-CHANGE-FROM-OPS> 1,420,992
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 96,297
<NUMBER-OF-SHARES-REDEEMED> 648,073
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (551,776)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> Valic Separate Account A - Division 2
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 6,379,563
<INVESTMENTS-AT-VALUE> 6,379,563
<RECEIVABLES> 11,459
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,391,022
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 6,391,022
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 6,391,022
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2,917,361
<SHARES-COMMON-PRIOR> 3,442,237
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 6,391,022
<DIVIDEND-INCOME> 376,138
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 69,614
<NET-INVESTMENT-INCOME> 306,524
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 306,524
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 165,743
<NUMBER-OF-SHARES-REDEEMED> 690,619
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (524,876)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> Valic Separate Account A - Division 4
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 397,011,660
<INVESTMENTS-AT-VALUE> 480,090,535
<RECEIVABLES> 316,741
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 480,407,276
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 480,407,276
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 480,407,276
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 172,613,690
<SHARES-COMMON-PRIOR> 171,442,018
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 480,407,276
<DIVIDEND-INCOME> 6,653,173
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 4,261,471
<NET-INVESTMENT-INCOME> 2,391,702
<REALIZED-GAINS-CURRENT> 27,981,126
<APPREC-INCREASE-CURRENT> 76,322,743
<NET-CHANGE-FROM-OPS> 106,695,571
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 35,874,094
<NUMBER-OF-SHARES-REDEEMED> 34,702,422
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,171,672
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> Valic Separate Account A - Division 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 160,827,715
<INVESTMENTS-AT-VALUE> 182,869,410
<RECEIVABLES> 84,295
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,953,705
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 182,953,705
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 182,953,705
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 75,851,431
<SHARES-COMMON-PRIOR> 89,377,560
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 182,953,705
<DIVIDEND-INCOME> 7,221,681
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,769,561
<NET-INVESTMENT-INCOME> 5,452,120
<REALIZED-GAINS-CURRENT> 5,193,379
<APPREC-INCREASE-CURRENT> 26,710,438
<NET-CHANGE-FROM-OPS> 37,355,937
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,806,864
<NUMBER-OF-SHARES-REDEEMED> 23,333,293
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (13,526,429)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> Valic Separate Account A - Division 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 80,556,398
<INVESTMENTS-AT-VALUE> 80,556,398
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 80,556,398
<PAYABLE-FOR-SECURITIES> 299,003
<SENIOR-LONG-TERM-DEBT> 80,257,395
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 80,556,398
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 51,907,757
<SHARES-COMMON-PRIOR> 75,765,781
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 80,257,395
<DIVIDEND-INCOME> 4,020,847
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 743,521
<NET-INVESTMENT-INCOME> 3,277,326
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,277,326
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,072,687
<NUMBER-OF-SHARES-REDEEMED> 41,930,711
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (23,858,024)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> Valic Separate Account A - Division 7
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 52,028,118
<INVESTMENTS-AT-VALUE> 53,368,978
<RECEIVABLES> 219,088
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 53,588,066
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 53,588,066
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 53,588,066
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 29,573,808
<SHARES-COMMON-PRIOR> 26,859,219
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 53,588,066
<DIVIDEND-INCOME> 3,067,082
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 459,535
<NET-INVESTMENT-INCOME> 2,607,547
<REALIZED-GAINS-CURRENT> (138,616)
<APPREC-INCREASE-CURRENT> 5,643,853
<NET-CHANGE-FROM-OPS> 8,112,784
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,253,935
<NUMBER-OF-SHARES-REDEEMED> 3,539,346
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,714,589
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> Valic Separate Account A - Division 8
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 70,467,996
<INVESTMENTS-AT-VALUE> 71,615,518
<RECEIVABLES> 88,257
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 71,703,775
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 71,703,775
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 71,703,775
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 39,847,053
<SHARES-COMMON-PRIOR> 26,667,073
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 71,703,775
<DIVIDEND-INCOME> 3,526,257
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 543,762
<NET-INVESTMENT-INCOME> 2,982,495
<REALIZED-GAINS-CURRENT> (28,711)
<APPREC-INCREASE-CURRENT> 5,103,399
<NET-CHANGE-FROM-OPS> 8,057,183
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,329,931
<NUMBER-OF-SHARES-REDEEMED> 1,149,951
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 13,179,980
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 101
<NAME> Valic Separate Account A - Division 10A
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 250,277,850
<INVESTMENTS-AT-VALUE> 341,205,299
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 341,205,299
<PAYABLE-FOR-SECURITIES> 36,122
<SENIOR-LONG-TERM-DEBT> 341,169,177
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 341,205,299
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 29,995,363
<SHARES-COMMON-PRIOR> 33,814,520
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 341,169,177
<DIVIDEND-INCOME> 6,876,645
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3,115,912
<NET-INVESTMENT-INCOME> 3,760,733
<REALIZED-GAINS-CURRENT> 12,224,777
<APPREC-INCREASE-CURRENT> 78,996,842
<NET-CHANGE-FROM-OPS> 94,982,352
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 497,922
<NUMBER-OF-SHARES-REDEEMED> 4,317,079
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (3,819,157)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 102
<NAME> Valic Separate Account A - Division 10B
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 20,779,128
<INVESTMENTS-AT-VALUE> 28,301,222
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28,301,222
<PAYABLE-FOR-SECURITIES> 7,529
<SENIOR-LONG-TERM-DEBT> 28,293,693
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 28,301,222
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,560,525
<SHARES-COMMON-PRIOR> 1,836,094
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 28,293,693
<DIVIDEND-INCOME> 578,463
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 85,040
<NET-INVESTMENT-INCOME> 493,423
<REALIZED-GAINS-CURRENT> 1,201,388
<APPREC-INCREASE-CURRENT> 6,528,773
<NET-CHANGE-FROM-OPS> 8,223,584
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,513
<NUMBER-OF-SHARES-REDEEMED> 315,082
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (275,569)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 103
<NAME> Valic Separate Account A - Division 10C
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 803,186,859
<INVESTMENTS-AT-VALUE> 1,066,560,864
<RECEIVABLES> 822,847
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,067,383,711
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 1,067,383,711
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 1,068,383,711
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 455,255,243
<SHARES-COMMON-PRIOR> 416,234,288
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,067,383,711
<DIVIDEND-INCOME> 19,463,430
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8,765,099
<NET-INVESTMENT-INCOME> 10,698,331
<REALIZED-GAINS-CURRENT> 32,259,276
<APPREC-INCREASE-CURRENT> 221,238,425
<NET-CHANGE-FROM-OPS> 264,196,032
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 76,950,994
<NUMBER-OF-SHARES-REDEEMED> 37,930,039
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,020,955
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 104
<NAME> Valic Separate Account A - Division 10D
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 31,264,620
<INVESTMENTS-AT-VALUE> 41,200,277
<RECEIVABLES> 4,929
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 41,205,206
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 41,205,206
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 41,205,206
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 9,885,873
<SHARES-COMMON-PRIOR> 12,207,684
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 41,205,206
<DIVIDEND-INCOME> 868,192
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 395,429
<NET-INVESTMENT-INCOME> 472,763
<REALIZED-GAINS-CURRENT> 2,167,227
<APPREC-INCREASE-CURRENT> 9,456,579
<NET-CHANGE-FROM-OPS> 12,096,569
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 341,405
<NUMBER-OF-SHARES-REDEEMED> 2,663,216
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2,321,811)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> Valic Separate Account A - Division 11
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 187,888,444
<INVESTMENTS-AT-VALUE> 199,139,104
<RECEIVABLES> 548,336
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 199,687,440
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 199,687,440
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 199,687,440
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 172,564,018
<SHARES-COMMON-PRIOR> 187,749,916
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 199,687,440
<DIVIDEND-INCOME> 3,271,083
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,966,236
<NET-INVESTMENT-INCOME> 1,304,847
<REALIZED-GAINS-CURRENT> 17,579,200
<APPREC-INCREASE-CURRENT> (725,229)
<NET-CHANGE-FROM-OPS> 18,158,818
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 49,402,081
<NUMBER-OF-SHARES-REDEEMED> 64,587,979
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (15,185,898)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> Valic Separate Account A - Division 12
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 52,197,124
<INVESTMENTS-AT-VALUE> 59,966,151
<RECEIVABLES> 133,659
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 60,099,810
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 60,099,810
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 60,099,810
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 32,750,120
<SHARES-COMMON-PRIOR> 29,015,764
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 60,099,810
<DIVIDEND-INCOME> 1,076,551
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 476,629
<NET-INVESTMENT-INCOME> 599,922
<REALIZED-GAINS-CURRENT> 3,980,637
<APPREC-INCREASE-CURRENT> 10,227,915
<NET-CHANGE-FROM-OPS> 14,808,474
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,860,477
<NUMBER-OF-SHARES-REDEEMED> 3,126,121
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,734,356
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> Valic Separate Account A - Division 13
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 109,565,749
<INVESTMENTS-AT-VALUE> 112,179,184
<RECEIVABLES> 132,996
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 112,312,180
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 112,312,180
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 112,312,180
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 73,369,250
<SHARES-COMMON-PRIOR> 25,691,713
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 112,312,180
<DIVIDEND-INCOME> 4,148,671
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 689,381
<NET-INVESTMENT-INCOME> 3,459,290
<REALIZED-GAINS-CURRENT> 1,025,871
<APPREC-INCREASE-CURRENT> 3,111,995
<NET-CHANGE-FROM-OPS> 7,597,156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 48,963,873
<NUMBER-OF-SHARES-REDEEMED> 1,286,336
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 47,677,537
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> Valic Separate Account A - Division 14
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 129,522,422
<INVESTMENTS-AT-VALUE> 152,407,246
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 152,407,245
<PAYABLE-FOR-SECURITIES> 416,173
<SENIOR-LONG-TERM-DEBT> 151,991,072
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 152,407,245
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 98,335,995
<SHARES-COMMON-PRIOR> 100,383,839
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 151,991,072
<DIVIDEND-INCOME> 1,907,029
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,343,735
<NET-INVESTMENT-INCOME> 563,294
<REALIZED-GAINS-CURRENT> 5,909,089
<APPREC-INCREASE-CURRENT> 24,766,420
<NET-CHANGE-FROM-OPS> 31,238,803
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,141,511
<NUMBER-OF-SHARES-REDEEMED> 32,189,355
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2,047,844)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> Valic Separate Account A - Division 15
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 201,132,365
<INVESTMENTS-AT-VALUE> 240,566,401
<RECEIVABLES> 577,364
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 241,143,765
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 241,143,765
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 241,143,765
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 164,417,848
<SHARES-COMMON-PRIOR> 32,633,370
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 241,143,765
<DIVIDEND-INCOME> 309,137
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,178,715
<NET-INVESTMENT-INCOME> (869,578)
<REALIZED-GAINS-CURRENT> 3,658,986
<APPREC-INCREASE-CURRENT> 39,103,633
<NET-CHANGE-FROM-OPS> 41,893,041
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 133,051,369
<NUMBER-OF-SHARES-REDEEMED> 1,266,891
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 131,784,478
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 16
<NAME> Valic Separate Account A - Division 16
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 58,002,292
<INVESTMENTS-AT-VALUE> 66,881,957
<RECEIVABLES> 253,619
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,135,576
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 67,135,576
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 67,135,576
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 51,779,089
<SHARES-COMMON-PRIOR> 12,386,502
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 67,135,576
<DIVIDEND-INCOME> 301,811
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 377,236
<NET-INVESTMENT-INCOME> (75,425)
<REALIZED-GAINS-CURRENT> 492,738
<APPREC-INCREASE-CURRENT> 5,794,032
<NET-CHANGE-FROM-OPS> 9,211,345
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,847,752
<NUMBER-OF-SHARES-REDEEMED> 455,265
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 39,392,487
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 17
<NAME> Valic Separate Account A - Division 17
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 330,145,481
<INVESTMENTS-AT-VALUE> 374,148,985
<RECEIVABLES> 1,064,371
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 375,213,356
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 375,213,356
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 375,213,356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 187,862,232
<SHARES-COMMON-PRIOR> 42,726,137
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 375,213,356
<DIVIDEND-INCOME> 608,070
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,040,192
<NET-INVESTMENT-INCOME> (1,432,122)
<REALIZED-GAINS-CURRENT> 43,926,574
<APPREC-INCREASE-CURRENT> 41,310,631
<NET-CHANGE-FROM-OPS> 83,805,083
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 146,720,425
<NUMBER-OF-SHARES-REDEEMED> 1,584,330
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 145,136,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 18
<NAME> Valic Separate Account A - Division 18
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 308,998,162
<INVESTMENTS-AT-VALUE> 356,075,243
<RECEIVABLES> 828,651
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 356,903,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 356,903,894
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 356,903,894
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 267,735,219
<SHARES-COMMON-PRIOR> 85,169,871
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 356,903,894
<DIVIDEND-INCOME> 1,283,472
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,724,815
<NET-INVESTMENT-INCOME> (1,441,343)
<REALIZED-GAINS-CURRENT> 6,822,960
<APPREC-INCREASE-CURRENT> 47,179,100
<NET-CHANGE-FROM-OPS> 52,560,717
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 185,520,125
<NUMBER-OF-SHARES-REDEEMED> 2,954,777
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 182,565,348
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 19
<NAME> Valic Separate Account A - Division 19
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 83,141,995
<INVESTMENTS-AT-VALUE> 94,348,477
<RECEIVABLES> 276,875
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 94,625,352
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 94,625,352
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 94,625,352
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 78,494,505
<SHARES-COMMON-PRIOR> 32,807,602
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 94,625,352
<DIVIDEND-INCOME> 1,162,767
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 802,159
<NET-INVESTMENT-INCOME> 360,608
<REALIZED-GAINS-CURRENT> 87,754
<APPREC-INCREASE-CURRENT> 11,935,576
<NET-CHANGE-FROM-OPS> 12,383,938
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 46,651,671
<NUMBER-OF-SHARES-REDEEMED> 964,768
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,686,903
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 20
<NAME> Valic Separate Account A - Division 20
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 228,724,327
<INVESTMENTS-AT-VALUE> 249,894,383
<RECEIVABLES> 486,968
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 250,381,351
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 250,381,351
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 250,381,351
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 219,124,926
<SHARES-COMMON-PRIOR> 71,716,511
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 250,381,351
<DIVIDEND-INCOME> 817,765
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,987,393
<NET-INVESTMENT-INCOME> (1,169,628)
<REALIZED-GAINS-CURRENT> 376,098
<APPREC-INCREASE-CURRENT> 23,406,038
<NET-CHANGE-FROM-OPS> 22,612,508
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 149,607,324
<NUMBER-OF-SHARES-REDEEMED> 2,198,909
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 147,408,415
<ACCUMULATED-NII-PRIOR> 0
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</TABLE>
