VARIABLE ANNUITY LIFE INSURANCE CO SEPARATE ACCOUNT A, 497, 2000-12-13

VARIABLE ANNUITY LIFE INSURANCE CO SEPARATE ACCOUNT A
497, 2000-12-13

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<PAGE>
PORTFOLIO DIRECTOR
PORTFOLIO DIRECTOR 2
PORTFOLIO DIRECTOR PLUS
SEPARATE ACCOUNT A
FIXED AND VARIABLE ANNUITY
FOR SERIES 1-12

Prospectus
May 1, 2000
as revised December 11, 2000

[LOGO]
<PAGE>
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
UNITS OF INTEREST UNDER GROUP AND INDIVIDUAL
FIXED AND VARIABLE ANNUITY CONTRACTS
PORTFOLIO DIRECTOR-REGISTERED TRADEMARK- PLUS, PORTFOLIO DIRECTOR 2, AND
PORTFOLIO DIRECTOR
SEPARATE ACCOUNT A
FOR SERIES 1 TO 12 May 1, 2000
As Revised December 11, 2000

PROSPECTUS

The Variable Annuity Life Insurance Company ("VALIC") offers certain Series of
Portfolio Director Plus, Portfolio Director 2, and Portfolio Director (referred
to collectively as "Portfolio Director" in this prospectus), that consist of
group and individual fixed and variable annuity contracts (the "Contracts") to
Participants in certain employer sponsored retirement plans. 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 for certain employer plans as well as for certain after-tax
arrangements that are not part of an employer's plan.

Portfolio Director permits you to invest in and receive retirement benefits in
one or more Fixed Account Options and/or an array of Variable Account Options
described in this prospectus. If your contract is part of your employer's
retirement program, that program will describe which Variable Account Options
are available to you. If your contract is a tax-deferred nonqualified annuity
that is not part of your employer's retirement plan, those Variable Account
Options that are invested in Mutual Funds available to the public outside of
annuity contracts, life insurance contracts, or certain employer-sponsored
retirement plans will not be available within your contract.

--------------------------------------------------------------------------------

VALIC is a member of the Insurance Marketplace Standards Association ("IMSA").
IMSA is a voluntary membership organization created by the life insurance
industry to promote ethical market conduct for individual life insurance and
annuity products. VALIC's membership in IMSA applies to VALIC only and not to
its products or affiliates.

This prospectus provides you with information you should know before investing
in Portfolio Director. Please read and retain this prospectus for future
reference.

A Statement of Additional Information, dated May 1, 2000, contains additional
information about Portfolio Director and is part of this prospectus. For a free
copy call 1-800-448-2542. The Statement of Additional Information has been filed
with the Securities and Exchange Commission ("SEC") and is available along with
other related materials at the SEC's internet web site (http://www.sec.gov).

INVESTMENT IN THE CONTRACTS IS SUBJECT TO RISK THAT MAY CAUSE THE VALUE OF THE
OWNER'S INVESTMENT TO FLUCTUATE, AND WHEN THE CONTRACTS ARE SURRENDERED, THE
VALUE MAY BE HIGHER OR LOWER THAN THE PURCHASE PAYMENTS.

THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
ABOUT THE PROSPECTUS.............................. 1
FEE TABLE......................................... 2
SUMMARY........................................... 7
SELECTED PURCHASE UNIT DATA....................... 14
GENERAL INFORMATION............................... 15
About Portfolio Director...................... 15
About VALIC................................... 15
About VALIC Separate Account A................ 15
Units of Interests............................ 16
Distribution of the Contracts................. 16
VARIABLE ACCOUNT OPTIONS.......................... 16
PURCHASE PERIOD................................... 17
Purchase Payments............................. 17
Purchase Units................................ 18
Calculation of Purchase Unit Value............ 18
Choosing Investment Options................... 18
Fixed Account Options....................... 19
Variable Account Options.................... 19
Stopping Purchase Payments.................... 19
TRANSFERS BETWEEN INVESTMENT OPTIONS.............. 20
During the Purchase Period.................... 20
During the Payout Period...................... 20
Communicating Transfer or Reallocation
Instructions................................ 20
Effective Date of Transfer.................... 21
Market Timing................................. 21
FEES AND CHARGES.................................. 21
Account Maintenance Fee....................... 21
Surrender Charge.............................. 21
Amount of Surrender Charge.................. 22
10% Free Withdrawal......................... 22
Exceptions to Surrender Charge.............. 22
Premium Tax Charge............................ 22
Separate Account Charges...................... 23
Fund Annual Expense Charges................... 23
Other Tax Charges............................. 23
Reduction or Waiver of Account Maintenance
Fee, Surrender, Mortality and Expense Risk
Fee or Administration and Distribution Fee
Charges..................................... 23
Separate Account Expense Reimbursement........ 24
Market Value Adjustment....................... 24
PAYOUT PERIOD..................................... 25
Fixed Payout.................................. 25
Variable Payout............................... 25
Combination Fixed and Variable Payout......... 25
Payout Date................................... 25
Payout Options................................ 25
Enhancements to Payout Options................ 26
Payout Information............................ 26
SURRENDER OF ACCOUNT VALUE........................ 27
When Surrenders Are Allowed................... 27
Surrender Process............................. 27
Amount That May Be Surrendered................ 27
Surrender Restrictions........................ 27
Partial Surrenders............................ 28
Systematic Withdrawals........................ 28
Distributions Required by Federal Tax Law..... 28
<CAPTION>
PAGE
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<S> <C>
EXCHANGE PRIVILEGE................................ 28
Restrictions on Exchange Privilege............ 28
Taxes and Conversion Costs.................... 29
Surrender Charges............................. 29
Exchange Offers for Contracts Other Than
Portfolio Director.......................... 29
Comparison of Contracts....................... 29
Features of Portfolio Director................ 30
Agents' and Managers' Retirement Plan Exchange
Offer....................................... 30
DEATH BENEFITS.................................... 31
The Process................................... 31
Beneficiary Information....................... 31
Special Information for Individual Non-Tax
Qualified Contracts......................... 31
During the Purchase Period.................... 31
Interest Guaranteed Death Benefit........... 31
Standard Death Benefit...................... 32
During the Payout Period...................... 32
HOW TO REVIEW INVESTMENT PERFORMANCE OF SEPARATE
ACCOUNT DIVISIONS............................... 32
Types of Investment Performance Information
Advertised.................................. 32
Total Return Performance Information........ 33
Standard Average Annual Total Return........ 33
Nonstandard Average Annual Total Return..... 33
Cumulative Total Return..................... 33
Annual Change in Purchase Unit Value........ 33
Cumulative Change in Purchase Unit Value.... 33
Total Return Based on Different Investment
Amounts................................... 33
An Assumed Account Value of $10,000......... 34
Yield Performance Information................. 34
North American - AG 1 Money Market and North
American - AG 2 Money Market Divisions.... 34
Divisions Other Than The North American -
AG 1 Money Market and North American -
AG 2 Money Market Divisions............... 34
OTHER CONTRACT FEATURES........................... 34
Changes That May Not Be Made.................. 34
Change of Beneficiary......................... 34
Contingent Owner.............................. 34
Cancellation -- The 20 Day "Free Look"........ 35
We Reserve Certain Rights..................... 35
Relationship to Employer's Plan............... 35
VOTING RIGHTS..................................... 35
Who May Give Voting Instructions.............. 35
Determination of Fund Shares Attributable to
Your Account................................ 35
During Purchase Period...................... 35
During Payout Period or after a Death
Benefit Has Been Paid..................... 35
How Fund Shares Are Voted..................... 35
FEDERAL TAX MATTERS............................... 36
Type of Plans................................. 36
Tax Consequences in General................... 36
Effect of Tax-Deferred Accumulations.......... 37
</TABLE>

(i)
<PAGE>
[SIDE NOTE]

PARTICIPANT -- THE INDIVIDUAL, (IN MOST CASES YOU ARE THE PARTICIPANT) FOR WHOM
PURCHASE PAYMENTS ARE MADE.

[END SIDE NOTE]

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.

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:

<TABLE>
<CAPTION>
DEFINED TERMS PAGE NO.
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<S> <C>

Account Value..................................... 20

Annuitant......................................... 31

Assumed Investment Rate........................... 25

Beneficiary....................................... 31

Contract Owner.................................... 31

Divisions......................................... 32

Fixed Account Options............................. 31

Home Office....................................... 20

Mutual Fund or Fund............................... 15

Participant....................................... 01

Participant Year.................................. 22

Payout Period..................................... 20

Payout Unit....................................... 25

Proof of Death.................................... 31

Purchase Payments................................. 17, 32

Purchase Period................................... 20

Purchase Unit..................................... 18

VALIC Separate Account A.......................... 35

Variable Account Options.......................... 16, 31
</TABLE>

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 may refer to
the mutual fund prospectuses, available at www.valic.com (or call
1-800-448-2542).

Following this introduction is a summary of the major features and options of
Portfolio Director. It is intended to provide you with a brief overview of those
sections discussed in more detail in this prospectus.

1
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FEE TABLE
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<TABLE>
<S> <C>
CONTRACT OWNER/PARTICIPANT EXPENSES(1)
Maximum Surrender Charge(2) 5.00%
ACCOUNT MAINTENANCE FEE ($3.75 per quarter,
annualized)(2) $ 15
SEPARATE ACCOUNT EXPENSES
(as a percentage of Separate Account net assets):
</TABLE>

<TABLE>
<CAPTION>
MORTALITY ADMINISTRATION SEPARATE TOTAL
AND EXPENSE AND DISTRIBUTION ACCOUNT EXPENSE SEPARATE
FUND RISK FEE(3) FEE(3) REIMBURSEMENT(4) ACCOUNT FEE
---- ----------- ---------------- ---------------- -----------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund 0.25% 0.75% -- 1.00%
North American - AG Capital Conservation Fund 0.25 0.75 -- 1.00
North American - AG Government Securities Fund 0.25 0.75 -- 1.00
North American - AG Growth & Income Fund 0.25 0.75 -- 1.00
North American - AG International Equities Fund 0.25 0.75 -- 1.00
North American - AG International Government
Bond Fund 0.25 0.75 -- 1.00
North American - AG MidCap Index Fund 0.25 0.75 -- 1.00
North American - AG 1 Money Market Fund 0.25 0.75 -- 1.00
North American - AG Nasdaq-100-Registered
Trademark- Index Fund 0.25 0.75 -- 1.00
North American - AG Small Cap Index Fund 0.25 0.75 -- 1.00
North American - AG Social Awareness Fund 0.25 0.75 -- 1.00
North American - AG Stock Index Fund 0.25 0.75 -- 1.00
North American - American Century Income &
Growth Fund 0.25 0.75 -- 1.00
North American - American Century International
Growth Fund 0.25 0.75 -- 1.00
North American Core Equity Fund 0.25 0.75 -- 1.00
North American - Founders Large Cap Growth Fund 0.25 0.75 -- 1.00
North American - Founders/T. Rowe Price Small
Cap Fund 0.25 0.75 -- 1.00
North American - Putnam Opportunities Fund 0.25 0.75 -- 1.00
North American - T. Rowe Price Blue Chip Growth
Fund 0.25 0.75 -- 1.00
North American - T. Rowe Price Health Sciences
Fund 0.25 0.75 -- 1.00
North American - T. Rowe Price Science &
Technology Fund 0.25 0.75 -- 1.00
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle
Fund 0.25 0.75 (0.25%) 0.75
North American - AG Conservative Growth
Lifestyle Fund 0.25 0.75 (0.25) 0.75
North American - AG Core Bond Fund 0.25 0.75 (0.25) 0.75
North American - AG High Yield Bond Fund 0.25 0.75 (0.25) 0.75
North American - AG Moderate Growth Lifestyle
Fund 0.25 0.75 (0.25) 0.75
North American - AG 2 Money Market Fund 0.25 0.75 (0.25) 0.75
North American - AG Socially Responsible Fund 0.25 0.75 (0.25) 0.75
North American - AG Strategic Bond Fund 0.25 0.75 (0.25) 0.75
North American - Goldman Sachs Large Cap Growth
Fund 0.25 0.75 (0.25) 0.75
North American International Growth Fund 0.25 0.75 (0.25) 0.75
North American - INVESCO MidCap Growth Fund 0.25 0.75 (0.25) 0.75
North American - J.P. Morgan Small Cap Growth
Fund 0.25 0.75 (0.25) 0.75
North American - Neuberger Berman MidCap Value
Fund 0.25 0.75 (0.25) 0.75
North American Small Cap Value Fund 0.25 0.75 (0.25) 0.75
North American - State Street Large Cap Value
Fund 0.25 0.75 (0.25) 0.75
American Century Ultra Fund 0.25 1.00 (0.21) 1.04
Ariel Appreciation Fund 0.25 1.00 (0.25) 1.00
Ariel Fund 0.25 1.00 (0.25) 1.00
Dreyfus Basic GNMA Fund 0.25 1.00 (0.25) 1.00
Evergreen Growth and Income Fund, Class A 0.25 1.00 (0.25) 1.00
Evergreen Small Cap Value Fund, Class A 0.25 1.00 (0.25) 1.00
Evergreen Value Fund, Class A 0.25 1.00 (0.25) 1.00
Evergreen Special Equity Fund, Class A 0.25 1.00 (0.25) 1.00
INVESCO Blue Chip Growth Fund, Investor Class 0.25 1.00 (0.25) 1.00
Janus Adviser Worldwide Fund 0.25 1.00 (0.25) 1.00
Janus Fund 0.25 1.00 (0.25) 1.00
Lou Holland Growth Fund 0.25 1.00 (0.25) 1.00
MAS Mid Cap Growth Portfolio, Adviser Class 0.25 1.00 (0.25) 1.00
Putnam Global Growth Fund, Class A 0.25 1.00 (0.25) 1.00
Putnam New Opportunities Fund, Class A 0.25 1.00 (0.25) 1.00
Putnam OTC & Emerging Growth Fund, Class A 0.25 1.00 (0.25) 1.00
Sit Mid Cap Growth Fund 0.25 1.00 (0.25) 1.00
Sit Small Cap Growth Fund 0.25 1.00 (0.25) 1.00
Templeton Asset Strategy Fund, Class 1 0.25 1.00 -- 1.25
Templeton Foreign Fund, Class A 0.25 1.00 (0.25) 1.00
Vanguard LifeStrategy Conservative Growth Fund 0.25 1.00 -- 1.25
Vanguard LifeStrategy Growth Fund 0.25 1.00 -- 1.25
Vanguard LifeStrategy Moderate Growth Fund 0.25 1.00 -- 1.25
Vanguard Long - Term Corporate Fund (5) 0.25 1.00 (0.25) 1.00
Vanguard Long - Term Treasury Fund (5) 0.25 1.00 (0.25) 1.00
Vanguard Wellington Fund 0.25 1.00 -- 1.25
Vanguard Windsor II Fund 0.25 1.00 -- 1.25
Warburg Pincus Small Company Growth Fund, Common
Class 0.25 1.00 (0.25) 1.00
</TABLE>

2
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FEE TABLE -- (CONTINUED)
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<TABLE>
<S> <C>
FUND ANNUAL EXPENSES
(as a percentage of net assets):
</TABLE>

<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
(AFTER FEE (AFTER EXPENSE (AFTER EXPENSE
FUND WAIVER) 12B-1 FEES WAIVER)(6) WAIVER)
---- ---------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund (7) 0.50% -- 0.07% 0.57%
North American - AG Capital Conservation Fund 0.50 -- 0.10 0.60
North American - AG Government Securities Fund 0.50 -- 0.09 0.59
North American - AG Growth & Income Fund 0.75 -- 0.07 0.82
North American - AG International Equities Fund 0.35 -- 0.08 0.43
North American - AG International Government
Bond Fund 0.50 -- 0.07 0.57
North American - AG MidCap Index Fund 0.31 -- 0.07 0.38
North American - AG 1 Money Market Fund 0.50 -- 0.07 0.57
North American - AG Nasdaq-100-Registered
Trademark- Index Fund 0.40 -- 0.10 0.50
North American - AG Small Cap Index Fund 0.35 -- 0.06 0.41
North American - AG Social Awareness Fund 0.50 -- 0.07 0.57
North American - AG Stock Index Fund 0.26 -- 0.06 0.32
North American - American Century Income &
Growth Fund 0.77 -- 0.06 0.83
North American - American Century International
Growth Fund 1.00 -- 0.06 1.06
North American Core Equity Fund 0.80 -- 0.05 0.85
North American - Founders Large Cap Growth Fund 1.00 -- 0.06 1.06
North American - Founders/T. Rowe Price Small
Cap Fund 0.90 -- 0.05 0.95
North American - Putnam Opportunities Fund 0.95 -- 0.06 1.01
North American - T. Rowe Price Blue Chip Growth
Fund 0.80 -- 0.06 0.86
North American - T. Rowe Price Health Sciences
Fund 1.00 -- 0.06 1.06
North American - T. Rowe Price Science &
Technology Fund 0.90 -- 0.06 0.96
NORTH AMERICAN FUNDS VARIABLE PRODUCT
SERIES II (8)
North American - AG Aggressive Growth Lifestyle
Fund (9) 0.10 -- -- 0.10
North American - AG Conservative Growth
Lifestyle Fund (9) 0.10 -- -- 0.10
North American - AG Core Bond Fund 0.50 -- 0.27 0.77
North American - AG High Yield Bond Fund 0.70 -- 0.29 0.99
North American - AG Moderate Growth Lifestyle
Fund (9) 0.10 -- -- 0.10
North American - AG 2 Money Market Fund 0.25 -- 0.31 0.56
North American - AG Socially Responsible Fund 0.25 -- 0.31 0.56
North American - AG Strategic Bond Fund 0.60 -- 0.29 0.89
North American - Goldman Sachs Large Cap Growth
Fund 0.55 -- 0.31 0.86
North American International Growth Fund 0.90 -- 0.11 1.01
North American - INVESCO MidCap Growth Fund 0.65 -- 0.14 0.79
North American - J.P. Morgan Small Cap Growth
Fund 0.85 -- 0.31 1.16
North American - Neuberger Berman MidCap Value
Fund 0.75 -- 0.30 1.05
North American Small Cap Value Fund 0.75 -- 0.20 0.95
North American - State Street Large Cap Value
Fund 0.50 -- 0.31 0.81
American Century Ultra Fund (10) 1.00 -- -- 1.00
Ariel Appreciation Fund 0.75 0.25% 0.26 1.26
Ariel Fund 0.65 0.25 0.35 1.25
Dreyfus Basic GNMA Fund (11) 0.26 -- 1.29 1.55
Evergreen Growth and Income Fund, Class A 0.89 0.25 0.29 1.43
Evergreen Small Cap Value Fund, Class A (10) 1.00 0.25 0.42 1.67
Evergreen Value Fund, Class A 0.50 0.25 0.25 1.00
Evergreen Special Equity Fund, Class A (12) 0.90 0.25 0.16 1.31
INVESCO Blue Chip Growth Fund, Investor Class 0.53 0.25 0.26 1.04
Janus Adviser Worldwide Fund (13) 0.65 0.25 0.30 1.20
Janus Fund 0.65 -- 0.20 0.85
Lou Holland Growth Fund (14) 0.85 -- 0.50 1.35
MAS Mid Cap Growth Portfolio, Adviser Class 0.50 0.25 0.13 0.88
Putnam Global Growth Fund, Class A 0.63 0.25 0.22 1.10
Putnam New Opportunities Fund, Class A 0.48 0.25 0.20 0.93
Putnam OTC & Emerging Growth Fund, Class A 0.55 0.25 0.18 0.98
Sit Mid Cap Growth Fund (15) 1.00 -- -- 1.00
Sit Small Cap Growth Fund 1.50 -- -- 1.50
Templeton Asset Strategy Fund, Class 1 (16) 0.60 -- 0.18 0.78
Templeton Foreign Fund, Class A (10) 0.61 0.25 0.27 1.13
Vanguard LifeStrategy Conservative Growth Fund
(10, 17) 0.28 -- -- 0.28
Vanguard LifeStrategy Growth Fund (10, 17) 0.29 -- -- 0.29
Vanguard LifeStrategy Moderate Growth Fund (10,
17) 0.29 -- -- 0.29
Vanguard Long-Term Corporate Fund (10) 0.28 -- 0.02 0.30
Vanguard Long-Term Treasury Fund (10) 0.25 -- 0.03 0.28
Vanguard Wellington Fund (10) 0.28 -- 0.02 0.30
Vanguard Windsor II Fund (10) 0.35 -- 0.02 0.37
Warburg Pincus Small Company Growth Fund, Common
Class (18) 0.00 0.25 1.15 1.40
</TABLE>

3
<PAGE>
FEE TABLE -- (CONTINUED)
------------------------------------------------------------------
------------

(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, Surrender, Mortality and Expense Risk Fee or
Administration and Distribution Fee Charges" and "Exceptions to Surrender
Charge" in this prospectus.
(3) Reductions in the mortality and expense risk fee or administration and
distribution fee may be available for plan types meeting certain criteria.
See "Reduction or Waiver of Account Maintenance Fee, Surrender, Mortality
and Expense Risk Fee or Administration Fee Charges" in this prospectus.
(4) For these Funds, the Total Separate Account Fee equals the VALIC Separate
Account A mortality and expense risk fee plus the administration and
distribution fee reduced by the Separate Account Expense Reimbursement.
Pursuant to the Separate Account Expense Reimbursement the Company's
charges to these Divisions are reduced by certain payments received from
the underlying Fund and/or its affiliates or distributors for
administrative and shareholder services provided by the Company. See "Fees
and Charges -- Separate Account Expense Reimbursement" in this prospectus
for more information.
(5) For these Funds the Total Separate Account Fee equals the VALIC Separate
Account A mortality and expense risk fee plus the administration and
distribution fee reduced by the Separate Account Expense Reimbursement. The
Separate Account Expense Reimbursement reflects a voluntary expense
reimbursement made by the Company directly to the Division, which may be
terminated by the Company at any time without notice.
(6) OTHER EXPENSES includes custody, accounting, reports to shareholders,
audit, legal, administrative and other miscellaneous expenses. See each
Fund's prospectus for a detailed explanation of these fees.
(7) The North American - AG Asset Allocation Fund was formerly known as the
Timed Opportunity Fund.
(8) As of August 31, 1999, in the absence of management fee waiver, other
expense waiver and total annual portfolio operating expense waiver,
management fees, other expenses and total annual portfolio operating
expenses, respectively, would be: North American - AG Core Bond Fund,
0.50%, 1.05% and 1.55%; North American - AG High Yield Bond Fund, 0.70%,
1.05% and 1.75%; North American International Growth Fund, 0.90%, 1.03% and
1.93%; North American - Goldman Sachs Large Cap Growth Fund, .055%, 0.98%
and 1.53%; North American - State Street Large Cap Value Fund, 0.50%, 1.02%
and 1.52%; North American - INVESCO MidCap Growth Fund, 0.65%, 1.03% and
1.68%; North American - Neuberger Berman MidCap Value Fund, 0.75%, 1.01%
and 1.76%; North American - AG 2 Money Market Fund, 0.25%, 1.02% and 1.27%;
North American - J.P. Morgan Small Cap Growth Fund, 0.85%, 1.01% and 1.86%;
North American Small Cap Value Fund, 0.75%, 1.03% and 1.78%; North
American - AG Socially Responsible Fund, 0.25%, 1.01% and 1.26%; and North
American - AG Strategic Bond Fund, 0.60%, 1.05% and 1.65%.
(9) Total Combined Operating Expenses based on estimated total average weighted
combined operating expenses for the North American - AG Conservative Growth
Lifestyle Fund is 0.95%, for North American - AG Aggressive Growth
Lifestyle Fund 1.04% and for North American - AG Moderate Growth Lifestyle
Fund 0.98%. Estimated Total Combined Operating Expenses of each Lifestyle
Fund is based on the Total Fund Operating Expenses of the underlying Funds
and the Lifestyle Funds, assuming each Lifestyle Fund's projected asset
allocation among the underlying Funds is maintained.
(10) The American Century Ultra Fund was formerly known as the American Century
-- Twentieth Century Ultra Fund. The Evergreen Small Cap Value Fund was
formerly known as the Evergreen Small Cap Equity Income Fund. The Franklin
Templeton Variable Insurance Products Trust was formerly known as the
Templeton Variable Products Series Fund. The Templeton Foreign Fund --
Class A was formerly known as the Templeton Foreign Fund -- Class 1. VALIC
Separate Account A purchases shares of the Templeton Foreign Fund -- Class
A at net asset value and without sales charges generally applicable to
Class A shares. The Vanguard Long-Term Corporate Fund was formerly known as
the Vanguard Fixed Income Securities Fund -- Long-Term Corporate Portfolio;
the Vanguard Long-Term Treasury Fund was formerly known as the Vanguard
Fixed Income Securities Fund -- Long-Term U.S. Treasury Portfolio; the
Vanguard LifeStrategy Conservative Growth Fund was formerly known as the
Vanguard LifeStrategy Conservative Growth Portfolio; the Vanguard
LifeStrategy Growth Fund was formerly known as the Vanguard LifeStrategy
Growth Portfolio; the Vanguard LifeStrategy Moderate Growth Fund was
formerly known as the Vanguard LifeStrategy Moderate Growth Portfolio; the
Vanguard Wellington Fund was formerly known as the Vanguard/Wellington Fund
and the Vanguard Windsor II Fund was formerly known as the Vanguard/Windsor
II Fund.
(11) Dreyfus Basic GNMA Fund: During 1999, Dreyfus waived a portion of its fee
so that the effective management fee paid by the fund was 0.26%. This
waiver reflects an undertaking by Dreyfus to limit fund expenses, exclusive
of taxes, brokerage, interest on borrowings and extraordinary expenses, to
0.65%. This undertaking may be terminated upon 90 days' notice to
shareholders.
(12) Evergreen Special Equity Fund: The Fund's investment advisor may reduce or
waive its fees or reimburse a fund for certain expenses in order to reduce
expense ratios. The Fund's investment advisor may cease these waivers or
reimbursements at any time. Including fee waivers and expense
reimbursements and restating to reflect current fees, estimated total fund
operating expenses for the fiscal year ending 6/30/2000 would be 1.31% for
Class A shares.
(13) Janus Adviser Worldwide Fund: Janus Capital has contractually agreed to
waive the Fund's total operating expenses (excluding brokerage commissions,
interest, taxes and extraordinary expenses) so that it will not exceed
1.20% until at least July 31, 2003.
(14) Lou Holland Growth Fund: The Investment Manager has contractually agreed to
waive its fees and reimburse other expenses of the Growth Fund to the
extent that the Fund's total operating expenses exceed 1.35%. This
agreement may be terminated only by the Fund's Board of Trustees.
(15) Sit Mid Cap Growth Fund: The Adviser voluntarily waived 0.25% of its fee.
It may terminate this fee waiver at any time after December 31, 2000.
(16) On February 8, 2000, shareholders of the Templeton Asset Allocation Fund
(previously offered under the Contract) approved a merger and
reorganization that combined the Templeton Asset Allocation Fund with the
Templeton Global Asset Allocation Fund, effective May 1, 2000. At the same
time as the merger, the Templeton Asset Allocation Fund changed its name to
the Templeton Asset Strategy Fund. The table shows restated total expenses
for the Templeton Asset Strategy Fund based on the new fund fees and the
assets of the Templeton Asset Allocation Fund as of December 31, 1999, and
not the assets of the combined fund. However, if the table reflected both
the new fund fees and the fund's combined assets, the fund's expenses after
May 1, 2000 would be estimated as: Management Fees 0.60%, Other Expenses
0.14%, and Annual Expenses 0.74%.
(17) The Vanguard LifeStrategy Funds did not incur any expenses in fiscal year
1999. However, while the Funds are expected to operate without expenses,
shareholders in the Vanguard LifeStrategy Funds bear indirectly the
expenses of the underlying Vanguard Funds in which the Funds invest. The
indirect expense ratios that the Vanguard LifeStrategy Conservative Growth
Fund, Vanguard LifeStrategy Growth Fund and Vanguard LifeStrategy Moderate
Growth Fund incurred for the year ended December 31, 1999 was 0.28%, 0.29%
and 0.29%, respectively.
(18) Warburg Pincus Small Company Growth Fund: Fee waivers and expense
reimbursements or credits reduced expenses for the Fund during 1999 but may
be discontinued at any time.

4
<PAGE>
EXAMPLE #1 -- If you do not surrender Portfolio Director at the end of the
period shown or you receive Payout Payments under a Payout Option:
--------------------------------------------------------------------------------

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>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund $16 $51 $ 88 $192
North American - AG Capital Conservation Fund 17 52 89 195
North American - AG Government Securities Fund 17 51 89 194
North American - AG Growth & Income Fund 19 58 101 218
North American - AG International Equities Fund 15 46 80 176
North American - AG International Government
Bond Fund 16 51 88 192
North American - AG MidCap Index Fund 14 45 78 171
North American - AG 1 Money Market Fund 16 51 88 192
North American - AG Nasdaq-100-Registered
Trademark- Index Fund 16 49 84 184
North American - AG Small Cap Index Fund 15 46 79 174
North American - AG Social Awareness Fund 16 51 88 192
North American - AG Stock Index Fund 14 43 75 164
North American - American Century Income &
Growth Fund 19 59 101 219
North American - American Century International
Growth Fund 21 66 113 244
North American Core Equity Fund 19 59 102 222
North American - Founders Large Cap Growth Fund 21 66 113 244
North American - Founders/T. Rowe Price Small
Cap Fund 20 62 107 232
North American - Putnam Opportunities Fund 21 64 110 238
North American - T. Rowe Price Blue Chip Growth
Fund 19 60 103 223
North American - T. Rowe Price Health Sciences
Fund 21 66 113 244
North American - T. Rowe Price Science &
Technology Fund 20 63 108 233
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle
Fund 9 28 49 110
North American - AG Conservative Growth
Lifestyle Fund 9 28 49 110
North American - AG Core Bond Fund 16 49 85 186
North American - AG High Yield Bond Fund 18 56 97 210
North American - AG Moderate Growth Lifestyle
Fund 9 28 49 110
North American - AG 2 Money Market Fund 14 43 74 163
North American - AG Socially Responsible Fund 14 43 74 163
North American - AG Strategic Bond Fund 17 53 91 199
North American - Goldman Sachs Large Cap Growth
Fund 17 52 90 196
North American International Growth Fund 19 57 98 212
North American - INVESCO MidCap Growth Fund 16 50 86 188
North American - J.P. Morgan Small Cap Growth
Fund 20 61 105 228
North American - Neuberger Berman MidCap Value
Fund 19 58 100 216
North American Small Cap Value Fund 16 50 87 189
North American - State Street Large Cap Value
Fund 16 51 87 190
American Century Ultra Fund 21 65 112 241
Ariel Appreciation Fund 23 72 123 264
Ariel Fund 23 72 123 263
Dreyfus Basic GNMA Fund 26 81 138 293
Evergreen Growth and Income Fund, Class A 25 77 132 281
Evergreen Small Cap Value Fund, Class A 27 84 144 304
Evergreen Value Fund, Class A 21 64 110 237
Evergreen Special Equity Fund, Class A 24 73 126 269
INVESCO Blue Chip Growth Fund, Investor Class 21 65 112 241
Janus Adviser Worldwide Fund 23 70 120 258
Janus Fund 19 59 102 222
Lou Holland Growth Fund 24 75 128 273
MAS Mid Cap Growth Portfolio, Adviser Class 19 60 104 225
Putnam Global Growth Fund, Class A 22 67 115 248
Putnam New Opportunities Fund, Class A 20 62 106 230
Putnam OTC & Emerging Growth Fund, Class A 21 63 109 235
Sit Mid Cap Growth Fund 21 64 110 237
Sit Small Cap Growth Fund 26 79 135 288
Templeton Asset Strategy Fund, Class 1 21 65 111 240
Templeton Foreign Fund, Class A 22 68 117 251
Vanguard LifeStrategy Conservative Growth Fund 16 50 86 187
Vanguard LifeStrategy Growth Fund 16 50 86 188
Vanguard LifeStrategy Moderate Growth Fund 16 50 86 188
Vanguard Long-Term Corporate Fund 14 42 73 162
Vanguard Long-Term Treasury Fund 13 42 72 159
Vanguard Wellington Fund 16 50 87 189
Vanguard Windsor II Fund 17 52 90 197
Warburg Pincus Small Company Growth Fund, Common
Class 25 76 130 278
</TABLE>

5
<PAGE>
EXAMPLE #2 -- If you surrender Portfolio Director 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>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund $63 $101 $138 $192
North American - AG Capital Conservation Fund 63 101 139 195
North American - AG Government Securities Fund 63 101 139 194
North American - AG Growth & Income Fund 65 108 151 218
North American - AG International Equities Fund 62 96 130 176
North American - AG International Government Bond Fund 63 101 138 192
North American - AG MidCap Index Fund 61 95 128 171
North American - AG 1 Money Market Fund 63 101 138 192
North American - AG Nasdaq-100-Registered Trademark- Index Fund 62 99 134 184
North American - AG Small Cap Index Fund 61 96 129 174
North American - AG Social Awareness Fund 63 101 138 192
North American - AG Stock Index Fund 60 93 125 164
North American - American Century Income & Growth Fund 65 108 151 219
North American - American Century International Growth Fund 68 115 163 244
North American Core Equity Fund 66 109 152 222
North American - Founders Large Cap Growth Fund 68 115 163 244
North American - Founders/T. Rowe Price Small Cap Fund 67 112 157 232
North American - Putnam Opportunities Fund 67 113 160 238
North American - T. Rowe Price Blue Chip Growth Fund 66 109 153 223
North American - T. Rowe Price Health Sciences Fund 68 115 163 244
North American - T. Rowe Price Science & Technology Fund 67 112 158 233
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle Fund 56 78 99 110
North American - AG Conservative Growth Lifestyle Fund 56 78 99 110
North American - AG Core Bond Fund 62 99 135 186
North American - AG High Yield Bond Fund 65 106 147 210
North American - AG Moderate Growth Lifestyle Fund 56 78 99 110
North American - AG 2 Money Market Fund 60 93 124 163
North American - AG Socially Responsible Fund 60 93 124 163
North American - AG Strategic Bond Fund 64 103 141 199
North American - Goldman Sachs Large Cap Growth Fund 63 102 140 196
North American International Growth Fund 65 106 148 212
North American - INVESCO MidCap Growth Fund 63 100 136 188
North American - J.P. Morgan Small Cap Growth Fund 66 111 155 228
North American - Neuberger Berman MidCap Value Fund 65 107 150 216
North American Small Cap Value Fund 63 100 137 189
North American - State Street Large Cap Value Fund 63 100 137 190
American Century Ultra Fund 67 114 162 241
Ariel Appreciation Fund 70 121 173 264
Ariel Fund 69 120 173 263
Dreyfus Basic GNMA Fund 72 129 188 293
Evergreen Growth and Income Fund, Class A 71 125 182 281
Evergreen Small Cap Value Fund, Class A 73 132 194 304
Evergreen Value Fund, Class A 67 113 160 237
Evergreen Special Equity Fund, Class A 70 122 176 269
INVESCO Blue Chip Growth Fund, Investor Class 67 114 162 241
Janus Adviser Worldwide Fund 69 119 170 258
Janus Fund 66 109 152 222
Lou Holland Growth Fund 70 123 178 273
MAS Mid Cap Growth Portfolio, Adviser Class 66 110 154 225
Putnam Global Growth Fund, Class A 68 116 165 248
Putnam New Opportunities Fund, Class A 66 111 156 230
Putnam OTC & Emerging Growth Fund, Class A 67 113 159 235
Sit Mid Cap Growth Fund 67 113 160 237
Sit Small Cap Growth Fund 72 127 185 288
Templeton Asset Strategy Fund, Class 1 67 114 161 240
Templeton Foreign Fund, Class A 68 117 167 251
Vanguard LifeStrategy Conservative Growth Fund 63 99 136 187
Vanguard LifeStrategy Growth Fund 63 100 136 188
Vanguard LifeStrategy Moderate Growth Fund 63 100 136 188
Vanguard Long-Term Corporate Fund 60 92 123 162
Vanguard Long-Term Treasury Fund 60 92 122 159
Vanguard Wellington Fund 63 100 137 189
Vanguard Windsor II Fund 63 102 140 197
Warburg Pincus Small Company Growth Fund, Common Class 71 125 180 278
</TABLE>

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 the descriptions of fees and charges
in each of the Fund's prospectuses. Any and all limitations on total charges and
expenses are reflected in this Fee Table.

6
<PAGE>
SUMMARY
------------------------------------------------------------------

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
Portfolio Director, please read the entire prospectus carefully.

FIXED AND VARIABLE OPTIONS

<TABLE>
<CAPTION>
FIXED ACCOUNT
OPTIONS
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
FIXED Fixed Guaranteed high current -- --
OPTIONS Account Plus interest income
------------------------------------------------------------------------------------------------------------
Short-Term Guaranteed current -- --
Fixed Account interest income
------------------------------------------------------------------------------------------------------------
Multi-Year Multi-year guaranteed interest income -- --
Enhanced Fixed (May not be available in all states)
Option(1)
-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER SUB-ADVISER
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
INDEX North American - Seeks long-term growth of capital through American General N/A
EQUITY AG International investments primarily in a diversified Advisers, a division
FUNDS Equities Fund* portfolio of equity and equity related of VALIC
securities of foreign issuers that, as a
group, are expected to provide investment
results closely corresponding to the
performance of the EAFE Index.
------------------------------------------------------------------------------------------------------------
North American - Seeks growth of capital through American General N/A(2)
AG MidCap investments primarily in a diversified Advisers
Index Fund*(3) 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-Registered Trademark- Index.
------------------------------------------------------------------------------------------------------------
North American - AG The Fund seeks long-term capital growth American General American General
Nasdaq-100-Registered through investments in the stocks that are Advisers Investment
Trademark-Index included in the Nasdaq-100 Management, L.P.
Fund* Index-Registered Trademark-.
------------------------------------------------------------------------------------------------------------
North American - Seeks growth of capital through investment American General N/A(2)
AG Small Cap primarily in a diversified portfolio of Advisers
Index Fund*(3) common stocks that, as a group, are
expected to provide investment results
closely corresponding to the performance
of the Russell 2000-Registered Trademark-
Index.
------------------------------------------------------------------------------------------------------------
North American - Seeks long-term capital growth through American General N/A(2)
AG Stock investment in common stocks that, as a Advisers
Index Fund*(3) group, are expected to provide investment
results closely corresponding to the
performance of the Standard & Poor's 500
Stock Index-Registered Trademark-.
-----------------------------------------------------------------------------------------------------------------------------
ACTIVELY North American - Seeks long-term growth of capital and, American General N/A
MANAGED AG Growth & secondarily, current income through Advisers
EQUITY Income Fund* investment in common stocks and
FUNDS equity-related securities.
------------------------------------------------------------------------------------------------------------
North American - The Fund seeks dividend growth, current American General American Century
American Century income and capital appreciation by Advisers Investment
Income & Growth investing in common stocks. Current income Management, Inc.
Fund* is a secondary consideration.
------------------------------------------------------------------------------------------------------------
North American - The Fund seeks capital growth through American General American Century
American Century investments primarily in equity securities Advisers Investment
International Growth of issuers in developed foreign countries. Management, Inc.
Fund*
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

* A series of North American Funds Variable Product Series I ("NAFVPS I").
(1) This Fixed Account Option is also referred to in this prospectus as the
Market Value Adjustment ("MVA") Option. For purposes of this limitation,
each MVA Band under the Multi-Year Enhanced Fixed Option will count as a
separate investment option. An MVA Band is established for each separate
investment for a new guarantee period. The minimum allocation to an MVA
Band, as described in the Contract, may be changed from time to time by the
Company. Availability of this Option is subject to regulatory approval
within the state in which your Contract is issued. It may not be available
under your Contract. See MVA Option herein.
(2) Bankers Trust Company ("Bankers Trust") previously served as sub-adviser to
the North American - AG MidCap Index Fund, the North American - AG Small
Cap Index Fund and the North American - AG Stock Index Fund. VALIC
re-assumed direct management of each Fund's investment portfolio on
October 1, 1999. Relative to the North American Small Cap Value Fund, VALIC
re-assumed that portion of the investment portfolio previously managed by
Bankers Trust as one of two sub-advisers to the Fund.
(3) "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-",
"S&P 500-Registered Trademark-" and "S&P MidCap 400-Registered Trademark-"
are trademarks of Standard and Poor's ("S&P"). North American - AG MidCap
Index Fund and North American - AG Stock Index Fund are not sponsored,
endorsed, sold or promoted by S&P and S&P makes no representation regarding
the advisability of investing in those Funds. The Russell 2000-Registered
Trademark- Index is a trademark/servicemark of Frank Russell Trust Company.
Russell-TM- is a trademark of the Frank Russell Company.

7
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER SUB-ADVISER
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
North American Seeks long-term growth of capital through American General Wellington
Core Equity investment primarily in equity securities. Advisers Management
Fund* Company, LLP(4)
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term growth of capital. The American General Founders Asset
Founders Large Cap Fund normally will invest at least 65% of its Advisers Management LLC
Growth Fund* total assets in common stocks of
well-established, high-quality growth companies.
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks to provide long-term capital American General Founders Asset
Founders/T. Rowe growth by investing primarily in the stocks of Advisers Management LLC and
Price Small Cap small companies. It will invest at least 65% of T. Rowe Price
Fund* its total assets in stocks of small companies. Associates, Inc.
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks capital appreciation through American General Putnam Investment
Putnam Opportunities investments in common stocks. It invests mainly Advisers Management, Inc.
Fund* in common stocks of large U.S. companies, with a
focus on growth stocks (those the manager
believes whose earnings will grow faster than
the economy, with a resultant price increase).
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term capital growth. Income American General T. Rowe Price
T. Rowe Price Blue is a secondary objective. The Fund pursues Advisers Associates, Inc.
Chip Growth Fund* long-term capital appreciation by normally
investing at least 65% of total assets in the
common stocks of large and medium-sized blue
chip growth companies.
------------------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth of capital through a American General Goldman Sachs
Goldman-Sachs broadly diversified portfolio of equity Advisers Asset
Large Cap Growth securities of large cap U.S. issuers that are Management
Fund** expected to have better prospects for earnings
growth than the growth rate of the general
domestic economy. Dividend income is a secondary
objective.
------------------------------------------------------------------------------------------------------------------
North American Seeks long-term capital appreciation by American General Thompson, Siegel &
International Growth investing in equity securities of non-U.S. Advisers Walmsley, Inc.
Fund** companies, the majority of which are expected to
be in developed markets. The Fund may invest
across the capitalization spectrum, although it
intends to emphasize smaller capitalization
stocks.
------------------------------------------------------------------------------------------------------------------
North American - Seeks capital appreciation principally through American General INVESCO Funds Group,
INVESCO investments in medium capitalization equity Advisers Inc.
MidCap Growth securities, such as common and preferred stocks
Fund** and securities convertible into common stocks.
Current income is a secondary objective.
------------------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth from a portfolio of American General JP Morgan
J.P. Morgan equity securities of small capitalization growth Advisers Investment
Small Cap Growth companies. Management Inc.
Fund**
------------------------------------------------------------------------------------------------------------------
North American - Seeks capital growth through investment in American General Neuberger Berman
Neuberger Berman equity securities of medium capitalization Advisers Management Inc.
MidCap Value companies using a value-oriented investment
Fund** approach.
------------------------------------------------------------------------------------------------------------------
North American Seeks maximum long-term return, consistent with American General Fiduciary
Small Cap Value reasonable risk to principal by investing Advisers Management
Fund** primarily in equity securities of small Associates, Inc.(2)
capitalization companies in terms of revenues
and/or market capitalization.
------------------------------------------------------------------------------------------------------------------
North American - Seeks total returns that exceed over time the American General State Street
State Street Russell 1000-Registered Trademark- Value Index Advisers Bank & Trust
Large Cap Value through investments in equity securities. Company/State
Fund**(3) Street Global
Advisors
------------------------------------------------------------------------------------------------------------------
American Century Seeks capital growth through investments American Century N/A
Ultra Fund primarily in common stocks that are considered Investment
to have better-than-average prospects for Management, Inc.
appreciation.
------------------------------------------------------------------------------------------------------------------
Ariel Appreciation The Fund seeks long-term capital appreciation by Ariel Capital N/A
Fund investing primarily in medium-sized company Management, Inc.
stocks.
------------------------------------------------------------------------------------------------------------------
Ariel Fund The Fund seeks long-term capital appreciation Ariel Capital N/A
primarily through investment in small company Management, Inc.
stocks.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* A series of NAFVPS I.
** A series of North American Funds Variable Product Series II ("NAFVPS II").
(2) Bankers Trust Company ("Bankers Trust") previously served as sub-adviser to
the North American - AG MidCap Index Fund, the North American - AG Small
Cap Index Fund and the North American - AG Stock Index Fund. VALIC
re-assumed direct management of each Fund's investment portfolio on
October 1, 1999. Relative to the North American Small Cap Value Fund, VALIC
re-assumed that portion of the investment portfolio previously managed by
Bankers Trust as one of two sub-advisers to the Fund.
(3) The Russell 1000-Registered Trademark- Value Index is a
trademark/servicemark of Frank Russell Trust Company. Russell-TM- is a
trademark of the Frank Russell Company.
(4) Wellington Management Company, LLP replaced T. Rowe Price Associates, Inc.
as sub-adviser to the Fund effective September 1, 1999. The investment
objective was also changed at that time.

8
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER SUB-ADVISER
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
Evergreen Growth Seeks capital growth in the value of its shares Evergreen Asset N/A
and Income Fund -- by investing in the securities of companies Management Corp.
Class A*** which are temporarily undervalued in the
marketplace but display characteristics of
growth such as high return on investment and
competitive advantage in their industry.
------------------------------------------------------------------------------------------------------------------
Evergreen Small Seeks current income and capital growth in the Evergreen Asset N/A
Cap Value Fund -- value of its shares by investing in common Management Corp.
Class A*** stocks of small U.S. companies (less than $1
billion in market capitalization).
------------------------------------------------------------------------------------------------------------------
Evergreen Value Seeks long-term capital growth with current Evergreen Investment N/A
Fund -- Class A*** income as a secondary objective by investing at Management
least 75% of its assets in common stocks of
medium and large-cap U.S. companies with
prospects for earning growth and dividends.
------------------------------------------------------------------------------------------------------------------
Evergreen Special The Fund seeks capital growth. It invests Meridian Investment N/A
Equity Fund primarily in equity securities of U.S. companies Company (a
with small market capitalizations. subsidiary of First
Union Corporation)
------------------------------------------------------------------------------------------------------------------
INVESCO Blue Chip The Fund tries to buy securities that will INVESCO Funds N/A
Growth Fund increase in value over the long-term; current Group, Inc.
income is a secondary goal. The Fund invests
primarily in common stocks of large companies
with market capitalizations of more than $15
billion and that have a history of consistent
earnings growth regardless of business cycles.
------------------------------------------------------------------------------------------------------------------
Janus Adviser The Fund seeks long-term growth of capital in a Janus Capital N/A
Worldwide Fund manner consistent with the preservation of Corporation
capital. It invests primarily in common stocks
of companies of any size throughout the world.
------------------------------------------------------------------------------------------------------------------
Janus Fund The Fund seeks long-term growth of capital in a Janus Capital N/A
manner consistent with the preservation of Corporation
capital. It invests primarily in common stocks
selected for their growth potential. Although
the Fund can invest in companies of any size, it
generally invests in larger, more established
companies.
------------------------------------------------------------------------------------------------------------------
Lou Holland Growth The Fund primarily seeks long-term growth of Holland Capital N/A
Fund capital. The receipt of dividend income is a Management, L.P.
secondary consideration. It invests primarily in
common stocks of growth companies.
------------------------------------------------------------------------------------------------------------------
MAS Mid Cap Growth The Portfolio seeks long-term capital growth. It Miller Anderson & N/A
Portfolio invests primarily in common stocks of companies Sherrerd, LLP
with capitalizations in the range of companies
included in the S&P MidCap 400 Index.
------------------------------------------------------------------------------------------------------------------
Putnam Global Seeks capital appreciation. Current income is Putnam Investment N/A
Growth only an incidental consideration in selecting Management Inc.
Fund -- Class A investments for the Fund. The Fund is designed
Shares for investors, seeking above-average capital
growth potential through a globally diversified
portfolio of common stocks. Dividend and
interest income is only an incidental
consideration.
------------------------------------------------------------------------------------------------------------------
Putnam New Seeks long-term capital appreciation. Current Putnam Investment N/A
Opportunities income is only an incidental consideration. The Management Inc.
Fund -- Class A Fund invests principally in common stocks of
Shares companies in sectors of the economy which the
Fund's investment adviser believes possess
above-average long-term growth potential.
------------------------------------------------------------------------------------------------------------------
Putnam OTC & Seeks capital appreciation by investing Putnam Investment N/A
Emerging Growth primarily in common stocks traded in the Management Inc.
Fund -- Class A over-the-counter market and common stocks, of
Shares "emerging growth" companies listed on securities
exchanges. The Fund is designed for investors
willing to assume above-average risk in return
for above average capital growth potential.
------------------------------------------------------------------------------------------------------------------
Sit Mid Cap Growth The Fund seeks to maximize long-term capital Sit Investment N/A
Fund appreciation. It invests at least 65% of its Management, Inc.
total assets in the common stocks of growth
companies with capitalizations of $2 billion to
$15 billion at the time of purchase.
------------------------------------------------------------------------------------------------------------------
Sit Small Cap Growth The Fund seeks to maximize long-term capital Sit Investment N/A
Fund appreciation. It invests at least 65% of its Management, Inc.
total assets in common stocks of small growth
companies with capitalizations of $2.5 billion
or less at the time of purchase.
------------------------------------------------------------------------------------------------------------------
Templeton Foreign Seeks long-term capital growth by investing Templeton Global N/A
Fund -- Class A primarily in the equity securities of companies Advisors Limited
outside the United States, including emerging
markets.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

*** A series of Evergreen Equity Trust.

9
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER SUB-ADVISER
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
Vanguard Seeks to provide long-term growth of capital by Vanguard N/A
Windsor II Fund investing mainly in the equity securities of
large and medium-size companies whose stocks are
considered by the Fund's advisers to be
undervalued and out of favor with investors. The
Fund's secondary objective is to provide some
dividend income.
------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small The Fund seeks capital growth by investing in Credit Suisse Asset N/A
Company Growth Fund the equity securities of small U.S. companies. Management, LLC
-----------------------------------------------------------------------------------------------------------------------------------
BALANCED Vanguard Seeks to conserve capital and provide moderate Wellington N/A
FUNDS Wellington Fund long-term growth in capital and income by Management
investing approximately 60% to 70% of its assets Company, LLP
in dividend-paying stocks of established, large-
and medium-sized companies that, in the
adviser's opinion, are undervalued but whose
prospects are improving. The remaining 30% to
40% of assets are invested primarily in
high-quality, longer-term corporate bonds with
some exposure to U.S. Treasury, government
agency, and mortgage-backed bonds.
-----------------------------------------------------------------------------------------------------------------------------------
INCOME North American - Seeks the highest possible total return American General N/A
FUNDS AG Capital consistent with preservation of capital through Advisers
Conservation Fund* current income and capital gains on investments
in intermediate and long-term debt instruments
and other income producing securities.
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks the highest possible return American General N/A
AG Core Bond Fund* consistent with conservation of capital through Advisers
investment in medium- to high- quality fixed
income securities.
------------------------------------------------------------------------------------------------------------------
North American - Seeks high current income and protection of American General N/A
AG Government capital through investments in intermediate and Advisers
Securities Fund* long-term U.S. Government debt securities.
------------------------------------------------------------------------------------------------------------------
North American - Seeks high current income through investments American General N/A
AG International primarily in investment grade debt securities Advisers
Government issued or guaranteed by foreign governments.
Bond Fund*
------------------------------------------------------------------------------------------------------------------
North American - Seeks the highest possible total return and American General American General
AG High Yield Bond income consistent with conservation of capital Advisers Investment
Fund** through investment in a diversified portfolio of Management, L.P.
high yielding high risk fixed income securities.
------------------------------------------------------------------------------------------------------------------
North American - Seeks the highest possible total return and American General American General
AG Strategic Bond income consistent with conservation of capital Advisers Investment
Fund** through investment in a diversified portfolio of Management, L.P.
income producing securities.
------------------------------------------------------------------------------------------------------------------
Dreyfus Basic GNMA The Fund seeks a high level of current income as The Dreyfus N/A
Fund is consistent with the preservation of capital. Corporation
To pursue this goal, the Fund normally invests
at least 65% of its net assets in GNMA
certificates (popularly called "Ginnie Maes"),
which are guaranteed as to timely payment of
principal and interest by the Government
National Mortgage Association.
------------------------------------------------------------------------------------------------------------------
Vanguard Long-Term Seeks a high level of current income consistent Wellington N/A
Corporate Fund with the maintenance of principal and liquidity Management
by investing in a diversified portfolio of Company, LLP
investment grade corporate and Government bonds.
------------------------------------------------------------------------------------------------------------------
Vanguard Long-Term Seeks a high level of current income consistent Vanguard N/A
Treasury Fund with the maintenance of principal and liquidity
by investing at least 85% of its total assets in
long-term securities backed by the full faith
and credit of the U.S. Government.
-----------------------------------------------------------------------------------------------------------------------------------
SPECIALTY North American - Seeks growth of capital through investment, American General N/A
FUNDS AG Social primarily in common stocks, in companies which Advisers
Awareness Fund* meet the social criteria established for the
Fund.
------------------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term capital growth. The American General T. Rowe Price
T. Rowe Price Health Fund pursues long- term capital appreciation by Advisers Associates, Inc.
Sciences Fund* normally investing at least 65% of total assets
in the common stocks of companies engaged in the
research, development, production, or
distribution of products or services related to
health care, medicine, or the life sciences
(collectively termed "health sciences").
------------------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth of capital through American General T. Rowe Price
T. Rowe Price investment primarily in the common stocks and Advisers Associates, Inc.
Science & equity-related securities of companies that are
Technology expected to benefit from the development,
Fund* advancement and use of science and technology.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* A series of NAFVPS I.
** A series of NAFVPS II.

10
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------

* A series of NAFVPS I.
** A series of NAFVPS II.
**** A series of Franklin Templeton Variable Insurance Products Trust.

11
<PAGE>
[SIDE NOTE]

TO LEARN MORE ABOUT THE INTEREST GUARANTEED DEATH BENEFIT, REFER TO THE SECTION
IN THE PROSPECTUS ENTITLED "DEATH BENEFITS."

MORE INFORMATION ON FEES MAY BE FOUND IN THE PROSPECTUS UNDER THE HEADINGS "FEES
AND CHARGES" AND "FEE TABLE."

[END SIDE NOTE]

SUMMARY -- (CONTINUED)
---------------------------------------------------

A detailed description of the investment objective of each Mutual Fund can be
found in the current prospectus for each Fund mentioned. These prospectuses are
available at www.valic.com.

INTEREST GUARANTEED DEATH BENEFIT

Portfolio Director offers a death benefit with an interest guarantee when death
occurs prior to your reaching age 70.

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 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 it 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.

Amounts invested in an MVA Option may be transferred to another investment
option at the end of an MVA term without application of a market value
adjustment.

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. Reductions in the account maintenance fee may be available if certain
conditions are met.

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 Charge." 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 from an MVA Option prior to the end of the applicable MVA term will
also be subject to a market value adjustment unless an exception applies. This
may increase or reduce the amount withdrawn. However, the market value
adjustment will not reduce the amount invested in the MVA Option below the
guaranteed amount.

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.

PREMIUM TAX CHARGE

Premium taxes ranging from zero to 3 1/2% are currently imposed by certain
states and municipalities on Purchase Payments made under the contract.

SEPARATE ACCOUNT CHARGES

Depending on the Variable Account Option you choose you may incur a mortality
and expense risk fee and an administration and distribution fee computed at an
aggregate annualized rate of 0.75% to 1.25% on the average daily net asset value
of VALIC Separate Account A. Reductions in the mortality and expense risk fee
and administration and distribution fee may be available for plan types meeting
certain criteria.

12
<PAGE>
[SIDE NOTE]

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.

FOR MORE INFORMATION ON PURCHASE PAYMENTS, REFER TO THE "PURCHASE PERIOD"
SECTION OF THE PROSPECTUS.

[END SIDE NOTE]

SUMMARY -- (CONTINUED)
---------------------------------------------------

FUND ANNUAL EXPENSE CHARGE

A daily charge based on a percentage of each Fund's average daily net asset
value is payable by each Fund to its investment adviser. In addition to the
management fees, each Fund incurs other operating expenses which may vary.

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.

SEPARATE ACCOUNT EXPENSE REIMBURSEMENT

The Company may, in its discretion, reimburse to certain Divisions some or all
of the fees it receives from the Mutual Fund or its affiliate or distributor for
providing the Mutual Fund administrative and shareholder services. In addition,
the Company currently reimburses certain Divisions a portion of the Company's
administration and distribution fee for providing Variable Account Options. Such
reimbursement arrangements are voluntary. For more information as to which
Variable Account Options have a Separate Account Expense Reimbursement see the
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.

PURCHASE REQUIREMENTS

Purchase Payments may be made at any time and in any amount, subject to plan
limitations. The minimum amount to establish a new Multi-Year Enhanced Fixed
Option guarantee period (MVA Band), as described in the Contract, may be changed
from time to time by the Company.

13
<PAGE>
SELECTED PURCHASE UNIT DATA
------------------------------------------------------------------

<TABLE>
<CAPTION>
DECEMBER 31, 1999 JANUARY 4, 1999 DECEMBER 31, 1998
----------------------- ------------------ ------------------------- SEPTEMBER 22,
PURCHASE PURCHASE PURCHASE PURCHASE 1998
UNITS PURCHASE UNITS UNIT UNITS PURCHASE PURCHASE
IN FORCE UNIT VALUE IN FORCE VALUE(1) IN FORCE UNIT VALUE UNIT VALUE(1)
----------- ---------- -------- -------- ------------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
North American - AG Asset Allocation
Division 5.......................... 61,240,667 $4.174280 -- -- 60,237,818 $3.772519 $ 3.401223
North American - AG Capital
Conservation Division 7............. 24,749,727 $2.056559 -- -- 28,751,662 $2.085846 $ 2.048533
North American - AG Government
Securities Division 8............... 45,292,728 $2.032753 -- -- 53,729,671 $2.111727 $ 2.098372
North American Core Equity Division
15.................................. 460,108,285 $2.582249 -- -- 494,997,997 $2.428587 $ 1.923891
North American - AG Growth & Income
Division 16......................... 124,329,201 $2.676995 -- -- 129,550,695 $2.201234 $ 1.772957
North American - AG International
Equities Division 11................ 94,415,343 $1.860227 -- -- 101,811,751 $1.454644 $ 1.205200
North American - AG International
Government Bond Division 13......... 90,136,603 $1.609098 -- -- 97,473,851 $1.728006 $ 1.653681
North American - AG MidCap Index
Division 4(2)....................... 151,317,931 $5.721920 -- -- 169,039,887 $5.029093 $ 3.941295
North American - AG 1 Money Market
Division 6.......................... 233,940,123 $1.807351 -- -- 147,547,688 $1.742617 $ 1.723944
North American - T. Rowe Price
Science & Technology Division 17.... 517,699,561 $6.398997 -- -- 418,601,069 $3.216190 $ 2.208120
North American - AG Small Cap Index
Division 14......................... 94,031,183 $2.522643 -- -- 107,321,015 $2.100506 $ 1.804083
North American - AG Social Awareness
Division 12......................... 136,226,993 $4.419383 -- -- 114,382,494 $3.762308 $ 3.138915
North American - AG Stock Index
Division 10......................... 766,975,696 $5.696582 -- -- 691,680,049 $4.772052 $ 3,972280
American Century Ultra Division 31.... 411,119,880 $2.359768 -- -- 209,221,513 $1.685503 $ 1.373875
North American - AG Conservative
Growth Lifestyle Division 50........ 203,221 $1.306897 -- -- -- $1.162045 $ 1.025412
North American - AG Core Bond Division
58.................................. 54,349 $1.009692 -- -- -- $1.029153 $ 1.012421
North American - AG Aggressive Growth
Lifestyle Division 48............... 139,443 $1.538200 -- -- -- $1.192541 $ 1.014416
North American - AG High Yield Bond
Division 60......................... 136,423 $1.075994 -- -- -- $1.053096 $ 1.000425
North American International Growth
Division 33......................... 167,387 $1.634943 -- -- -- $1.051722 $ 0.941455
North American - Goldman Sachs Large
Cap Growth Division 39.............. 519,825 $1.667518 -- -- -- $1.240768 $ 1.011419
North American - State Street Large
Cap Value Division 40............... 216,072 $1.302905 -- -- -- $1.246581 $ 1.070388
North American - INVESCO MidCap Growth
Division 37......................... 477,094 $1.423173 -- -- -- $1.347693 $ 1.069389
North American - Neuberger Berman
MidCap Value Division 38............ 223,437 $1.521699 -- -- -- $1.254723 $ 1.049399
North American - AG Moderate Growth
Lifestyle Division 49............... 215,575 $1.397661 -- -- -- $1.185441 $ 1.025411
North American - AG 2 Money Market
Division 44......................... 4,089,393 $1.053624 -- -- -- $1.013309 $ 1.002329
North American - J.P. Morgan Small Cap
Growth Division 35.................. 298,665 $2.272711 -- -- -- $1.349354 $ 1.075387
North American Small Cap Value
Division 36......................... 166,013 $1.080558 -- -- -- $1.165259 $ 1.035409
North American - AG Socially
Responsible Division 41............. 282,396 $1.497374 -- -- -- $1.277759 $ 1.065392
North American - AG Strategic Bond
Division 59......................... 2,324 $1.081981 -- -- -- $1.049867 $ 1.011421
Evergreen Equity Trust
Evergreen Growth and Income Division
56................................ 175 $1.132919 -- $1.00 -- -- --
Evergreen Small Cap Value Division
55................................ 244 $0.995515 -- $1.00 -- -- --
Evergreen Value Division 57......... 4,240 $1.034113 -- $1.00 -- -- --
Franklin Templeton Variable Insurance
Products Trust
Templeton Asset Strategy -- Class 1
Division 19(3).................... 137,266,658 $2.058095 -- -- 190,963,707 $1.695764 $ 1.403278
Putnam Global Growth -- Class A
Division 28......................... 181,916,991 $2.465895 -- -- 101,468,260 $1.512865 $ 1.237343
Putnam New Opportunities -- Class A
Division 26......................... 386,064,440 $2.376261 -- -- 280,523,297 $1,415175 $ 1.109266
Putnam OTC & Emerging Growth -- Class
A Division 27....................... 170,725,977 $2.408872 -- -- 129,463,792 $1.072660 $ 0.839928
Templeton Foreign -- Class A Division
32.................................. 219,168,378 $1.479830 -- -- 198,626,024 $1.069704 $ 0.923717
Vanguard LifeStrategy Conservative
Growth Division 54.................. 554,101 $1.153827 -- -- -- $1.084026 $ 1.006776
Vanguard LifeStrategy Growth Division
52.................................. 1,591,689 $1.352880 -- -- -- $1.168111 $ 1.006276
Vanguard LifeStrategy Moderate Growth
Division 53......................... 1,354,406 $1.244955 -- -- -- $1.125919 $ 1.002175
Vanguard Long-Term Corporate Division
22.................................. 49,616,245 $1.179657 -- -- 44,122,646 $1.271278 $ 1.253982
Vanguard Long-Term Treasury Division
23.................................. 110,102,115 $1.191635 -- -- 86,673,300 $1.318263 $ 1.310099
Vanguard Wellington Division 25....... 328,701,408 $1.528992 -- -- 253,840,498 $1.482836 $ 1.380127
Vanguard Windsor II Division 24....... 426,529,299 $1.566008 -- -- 372,737,595 $1.683226 $ 1.475161
</TABLE>

------------

(1) Purchase Unit Value At Date Of Inception.
(2) 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.
(3) Effective May 1, 2000 the Templeton Asset Allocation Fund merged with the
Templeton Global Asset Allocation Fund. At the same time as the merger, the
Templeton Asset Allocation Fund changed its name to the Templeton Asset
Strategy Fund. Accordingly, the Templeton Asset Allocation Fund Division 19
was renamed the Templeton Asset Strategy Fund Division 19. The Selected
Purchase Unit Data for the Division through December 31, 1999, reflects
units of the Templeton Asset Allocation Fund Division 19.

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.

14
<PAGE>
[SIDE NOTE]

MUTUAL FUND OR FUND -- THE INVESTMENT PORTFOLIO(S) OF A REGISTERED OPEN-END
MANAGEMENT INVESTMENT COMPANY, WHICH SERVES AS THE UNDERLYING INVESTMENT VEHICLE
FOR EACH DIVISION REPRESENTED IN VALIC SEPARATE ACCOUNT A.

FOR MORE INFORMATION ABOUT VALIC, SEE THE STATEMENT OF ADDITIONAL INFORMATION.

[END SIDE NOTE]

GENERAL INFORMATION
---------------------------------------------------

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 "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.

ABOUT VALIC

We were originally organized on December 21, 1955 as The Variable Annuity Life
Insurance Company of America, located in Washington, D.C. We re-organized in the
State of Texas on August 20, 1968, as The Variable Annuity Life Insurance
Company. Our main business is issuing and offering fixed and variable retirement
annuity contracts, like Portfolio Director. American General Advisers is the
investment advisor business division of VALIC. Our principal offices are located
at 2929 Allen Parkway, Houston, Texas 77019. We have Regional Offices throughout
the United States.

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, the District of Columbia, and Canada and collectively provide
financial services with activities heavily weighted toward insurance.

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." Sixty-four 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 North American - AG 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 on July 25, 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 ("Act").
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. When we discuss performance information in this prospectus, we mean
the performance of a VALIC Separate Account A Division.

15
<PAGE>
---------------------------------------------------
[SIDE NOTE]

THE DISTRIBUTOR'S ADDRESS IS 2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019.

FOR MORE INFORMATION ABOUT THE DISTRIBUTOR SEE "DISTRIBUTION OF VARIABLE ANNUITY
CONTRACTS" IN THE STATEMENT OF ADDITIONAL INFORMATION.

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.

[END SIDE NOTE]

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.

DISTRIBUTION OF THE CONTRACTS

American General Distributors, Inc. (the "Distributor"), an affiliate of VALIC,
acts as VALIC's Separate Account A distributor.

VALIC will pay the licensed agents who sell the Contracts a commission.
Currently, the commission paid by VALIC will range up to 6.0% of each Purchase
Payment. In addition, VALIC will pay managers who supervise the agents
overriding commissions ranging up to 1% of each Purchase Payment. These various
commissions are paid by VALIC and do not result in any charge to Contract Owners
or to the Separate Account.

VARIABLE ACCOUNT OPTIONS
---------------------------------------------------

Portfolio Director enables you to participate in Divisions that represent
sixty-four Variable Account Options. These Divisions comprise all of the
Variable Account Options that are made available through VALIC Separate Account
A. According to your retirement program, you may not be able to invest in all
sixty-four Variable Account Options described in this prospectus. You may be
subject to further limits on how many options you may be invested in at any one
time or how many of the options you are invested in may be involved in certain
transactions at any one time. See "About VALIC Separate Account A" in this
prospectus.

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:

- North American Funds Variable Product Series I (NAFVPS I) -- offers 21 funds
for which American General Advisers serves as investment adviser and, for 10
of such funds, have one of the following sub-advisers: American General
Investment Management, L.P., American Century Investment Management Inc.,
Founders Asset Management LLC, Putnam Investment Management , Inc., Wellington
Management Company, LLP and T. Rowe Price Associates, Inc.

- North American Funds Variable Product Series II (NAFVPS II) -- offers 15 funds
for which American General Advisers serves as investment adviser and, for 10
of such funds, have one of the following sub-advisers: American General
Investment Management, L.P., Fiduciary Management Associates, Inc., Goldman
Sachs Asset Management, INVESCO Funds Group Inc., J.P. Morgan Investment
Management Inc., Neuberger Berman Management Inc., State Street Bank & Trust
Company/State Street Global Advisors and Thompson, Siegel & Walmsley, Inc.

- American Century Mutual Funds, Inc. -- offers 1 fund for which American
Century Investment Management, Inc. serves as investment adviser.

- Ariel Investment Trust -- offers 2 Ariel mutual funds for which Ariel Capital
Management, Inc. serves as investment adviser.

- Dreyfus Basic GNMA Fund -- offers 1 mutual fund for which The Dreyfus
Corporation serves as investment adviser.

- Evergreen Equity Trust -- offers 3 funds for which either Evergreen Asset
Management Corp. or Evergreen Investment Management serves as investment
adviser.

- Evergreen Select Equity Trust -- offers 1 mutual fund for which Meridian
Investment Company (a subsidiary of First Union Corporation) serves as
investment adviser.

- Franklin Templeton Variable Insurance Products Trust -- offers 2 funds for
which Templeton Investment Counsel, Inc. serves as investment adviser.

- INVESCO Stock Funds, Inc. -- offers 1 mutual fund for which INVESCO Funds
Group, Inc. serves as investment adviser.

16
<PAGE>
---------------------------------------------------
[SIDE NOTE]

PURCHASE PAYMENTS -- AN AMOUNT OF MONEY YOU PAY TO VALIC TO RECEIVE THE BENEFITS
OF AN ANNUITY CONTRACT OFFERED BY PORTFOLIO DIRECTOR.

[END SIDE NOTE]

- Janus Adviser Series -- offers 1 mutual fund for which Janus Capital
Corporation serves as investment adviser.

- Janus Investment Fund -- offers 1 mutual fund for which Janus Capital
Corporation serves as investment adviser.

- The Lou Holland Trust -- offers 1 mutual fund for which Holland Capital
Management, L.P. serves as investment adviser.

- MAS Funds -- offers 1 mutual fund for which Miller Anderson & Sherrerd, LLP
serves as investment adviser.

- Putnam Investments -- offers 3 funds for which Putnam Investment Management
Inc., serves as investment adviser.

- Sit Mutual Funds -- offers 2 mutual funds for which Sit Investment
Management, Inc. serves as investment adviser.

- The Vanguard Group Inc. -- offers 7 funds for which Barrow, Hanley, Mewhinney
& Strauss, Inc., Equinox Capital Management, Inc., Tukman Capital Management,
Inc., Vanguard Core Management Group, Wellington Management Company, LLP and
Vanguard Fixed Income Group serve as investment advisers.

- Warburg Pincus Funds -- offers 1 mutual fund for which Credit Suisse Asset
Management, LLC serves as investment adviser.

Twenty-eight of the Mutual Funds offered through VALIC's Separate Account A are
also available to the general public.

For complete information about each of these Mutual Funds, including charges and
expenses, you should refer to the prospectus for that Fund. Additional copies
are available from VALIC at 1-800-448-2542 or on-line at www.valic.com.

Shares of certain of the Funds 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 may be discussed in each
Fund's prospectus.

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 after, 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 nonqualified contracts
("individual contracts").

Minimum initial and subsequent Purchase Payments are as follows:

<S> <C> <C>
INITIAL SUBSEQUENT
CONTRACT TYPE PAYMENT PAYMENT
---------------- ------ ----
Periodic Payment $ 30 $ 30
Single Payment $1,000 -0-
</TABLE>

Periodic Payment minimums apply to each Periodic Payment made. The Single
Payment minimum applies to each of your accounts.

Purchase Payments are received in VALIC's Home Office. When an initial Purchase
Payment is accompanied by an application, within 2 business days we will:

- 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;

- Reject the Application -- and return the Purchase Payment; or

17
<PAGE>
---------------------------------------------------
[SIDE NOTE]

PURCHASE UNIT -- A MEASURING UNIT USED TO CALCULATE OUR 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.

FOR MORE INFORMATION AS TO HOW PURCHASE UNIT VALUES ARE CALCULATED, SEE THE
STATEMENT OF ADDITIONAL INFORMATION.

[END SIDE NOTE]

- Request Additional Information -- to correct or complete the application. In
the case of an individual variable annuity contract, we will return the
Purchase Payments within 5 business days if the requested information is not
provided, unless you otherwise so specify.

If we receive Purchase Payments from your employer before we receive your
completed application or enrollment form, we will not be able to establish a
permanent account for you. If this occurs, we will take one of the following
actions:

RETURN PURCHASE PAYMENTS. If we do not have your name, address or social
security number, we will return the Purchase Payment to your employer unless
this information is immediately provided to us.

EMPLOYER-DIRECTED ACCOUNT. If we have your name, address and social security
number and we have an Employer-Directed Account Agreement from your employer,
generally we will deposit your Purchase Payment in an "Employer-Directed"
account invested in the Money Market Division, or other investment option
chosen by your employer. If your employer chooses another investment option
other than the Money Market Division, the value of your investment may
fluctuate and you could lose money. You may not transfer these amounts until
VALIC has received a completed application or enrollment form.

STARTER ACCOUNT. If we have your name, address and social security number, but
we do not have an Employer-Directed Account Agreement from your employer, we
will deposit your Purchase Payment in a "starter" account invested in the
Money Market Division option chosen by your employer. We will send you
follow-up letters requesting the information necessary to complete the
application, including your allocation instructions. Unless a completed
application or enrollment form is received by us within 105 days of
establishment of your starter account, the account balance, including
earnings, will be returned to your employer. We are not responsible for any
adverse tax consequences to you that may result from the return of your
employer's contributions.
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.)
Once we have established your account and have applied your initial Purchase
Payment as described above, any subsequent Purchase Payment that we receive at
our Home Office before the close of the Exchange will be credited the same
business day. If not, it 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:

<S> <C>
STEP 1: Calculate the gross investment rate:
Gross Investment Rate
= (EQUALS)
The Division's investment income and capital gains and
losses (whether realized or unrealized) on that day from
the assets attributable to the Division.
DIVIDED BY (DIVIDED BY)
The value of the Division for the immediately preceding
day on which the values are calculated.
</TABLE>

We calculate the gross investment rate as of 4:00 p.m. New York time on each
business day when the Exchange is open.

<S> <C>
STEP 2: Calculate net investment rate for any day as follows:
Net Investment Rate
= (EQUALS)
Gross Investment Rate (calculated in Step 1)
- (MINUS)
Separate Account charges and any income tax charges.
</TABLE>

<TABLE>
<S> <C>
STEP 3: Determine Purchase Unit Value for that day.
Purchase Unit Value for that day.
= (EQUALS)
Purchase Unit Value for immediate preceding day.
X (MULTIPLIED BY)
Net Investment Rate (as calculated in Step 2) plus 1.00.
</TABLE>

CHOOSING INVESTMENT OPTIONS

There are 64 investment options offered in Portfolio Director. This includes 3
Fixed Account Options and 64 Variable Account Options. The

18
<PAGE>
---------------------------------------------------
Funds that underlie the Variable Account Options are registered as investment
companies under and are subject to regulation of 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

The Fixed Account Plus and the Short-Term Fixed Account are part of the
Company's general assets. The MVA Option may be invested in either the general
assets of the Company or in a Separate Account of the Company, depending upon
state requirements. You may allocate all or a portion of your Purchase Payment
to the Fixed Account Options listed in the "Summary" section 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. With the exception of a market value adjustment which generally will be
applied to withdrawals or transfers from an MVA Option prior to the end of an
MVA term, we bear the entire investment risk for the Fixed Account Options. All
Purchase Payments and interest earned on such amounts in your Fixed Account
Option will be paid regardless of the investment results experienced by the
Company's general assets. The minimum amount to establish each new Multi-Year
Enhanced Fixed Option guarantee period (MVA Band), as described in the Contract,
may be changed from time to time by the Company.

<S> <C>
Here is how you may calculate the value of your Fixed Account
Option during the Purchase
Period:
Value of Your Fixed Account Options*
= (EQUALS)
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)
Amounts transferred or withdrawn from Fixed Account
Options
(including applicable fees and charges)
-----------------------------------------------------------------
* This value may be subject to a market value adjustment under
the MVA Option.
</TABLE>

VARIABLE ACCOUNT OPTIONS

You may allocate all or a portion of your Purchase Payments to the Variable
Account Options listed in this prospectus as permitted by your retirement
program. A complete discussion of each of the Variable Account Options may be
found in the "Summary" and "Variable Account Options" sections in this
prospectus and in each Fund's 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.

<S> <C>
Here is how to calculate the value of each Variable Account
Option in your account during the Purchase Period:
Value of Your Variable Account Option
= (EQUALS)
Total Number of Purchase Units
X (MULTIPLIED BY)
Current Purchase Unit Value
</TABLE>

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. The
value of the Purchase Units will continue to vary. Your Account Value will
continue to be subject to charges.

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. Any
such account closure will be subject to applicable distribution restrictions
under the Contract and/or under your employer's plan.

19
<PAGE>
[SIDE NOTE]

ACCOUNT VALUE -- THE TOTAL SUM OF YOUR FIXED ACCOUNT AND/OR VARIABLE ACCOUNT
OPTIONS THAT HAVE NOT YET BEEN APPLIED TO YOUR PAYOUT PAYMENTS.

PURCHASE PERIOD -- THE TIME BETWEEN YOUR FIRST PURCHASE PAYMENT AND YOUR PAYOUT
PERIOD (OR SURRENDER).

HOME OFFICE -- OUR PRINCIPAL OFFICE AT 2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019.

PAYOUT PERIOD -- THE TIME THAT STARTS WHEN YOU BEGIN TO WITHDRAW YOUR MONEY IN A
STEADY STREAM OF PAYMENTS.

[END SIDE NOTE]

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.

DURING THE PURCHASE PERIOD
During the Purchase Period, transfers may be made between Portfolio Director's
Fixed Account Options and Variable Account Options.

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:

<S> <C> <C> <C>
FIXED OTHER
ACCOUNT OPTION VALUE FREQUENCY RESTRICTIONS
-------------------- -------------------- --------------- ------------------------------------------------------------
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 Up to 100% At any time 90-day Holding Period
Account: If transfer was previously made into Short-Term Fixed
Account.(2)
Multi-Year Up to 100% At any time Withdrawals or Transfers subject to market value adjustment
Enhanced Fixed if prior to the end of an MVA term. Each MVA Band will
Option(3): require a minimum transfer amount, as described in the
Contract.(4)
</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.
(3) The MVA Option may not be available unless it has been selected as an option
for your employer's retirement plan.
(4) The minimum transfer amount may be changed from time to time by the Company.
From time to time we may waive the 20% transfer restriction on Fixed Account
Plus for transfers to the Multi-Year Enhanced Fixed Option or to other
investment options.

DURING THE PAYOUT PERIOD

During the Payout Period, transfers may be made between Portfolio Director's
investment options subject to the following limitations:

<S> <C> <C> <C>
% OF ACCOUNT
-------------------------------------------- OTHER
ACCOUNT OPTION VALUE FREQUENCY RESTRICTIONS
---------------------- -------------------- ---------------------- ------------
Variable: Up to 100% Once every 365 days None
Combination Fixed and Up to 100% Once every 365 days None
Variable Payout: 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.

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). All transfers to or from the
MVA Option will require written instruction.

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 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 the transaction. When you receive your confirmation, it is your duty to
verify the information shown, and advise us of any errors within one business
day.

20
<PAGE>
---------------------------------------------------
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 instructions 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:

- The date of receipt, if received in our Home Office before the close of
regular trading of the Exchange on a day values are calculated;

(Normally, this will be 4:00 P.M. New York time); otherwise

- The next date values are calculated.

MARKET TIMING

The Contracts are not designed for professional market timing organizations or
other entities using programmed and frequent transfers. We reserve the right at
any time and without prior notice to any party to terminate, suspend, or modify
our policies or procedures regarding transfer requests.

FEES AND CHARGES
---------------------------------------------------

By investing in Portfolio Director, you may be subject to six basic types of
fees and charges:

- Account Maintenance Fee

- Surrender Charge

- 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.

In addition, certain charges may apply to the MVA Option which are discussed at
the end of this section.

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, Surrender, Mortality and Expense Risk Fee or
Administration and Distribution Fee 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 CHARGE

When you withdraw money from your account, you may be subject to a surrender
charge that will be deducted from the amount withdrawn. 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.

21
<PAGE>
---------------------------------------------------
[SIDE NOTE]

PARTICIPANT YEAR -- THE FIRST TWELVE MONTH PERIOD AND THEN EACH YEARLY
ANNIVERSARY OF THAT PERIOD FOLLOWING THE ISSUE DATE OF THE CONTRACT OR
CERTIFICATE.

[END SIDE NOTE]

Amounts exchanged 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 CHARGE

A surrender charge may not be greater than:

- Five percent (5%) of the amount of all Purchase Payments received during the
past 60 months; or

- 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.

EXCEPTIONS TO SURRENDER CHARGE

No surrender charge will be applied:

- To money applied to provide a Payout Option;

- To death benefits;

- If no Purchase Payments have been received during the 60 months prior to the
date of surrender;

- If your account has been in effect for 15 years or longer;

- If your account has been in effect for 5 years or longer, and you have
attained age 59 1/2;

- To "No Charge Systematic Withdrawals";

- Under certain contracts, to withdrawals under the No Charge Minimum
Distribution provisions;

- 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; or

- 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.

VALIC may waive any otherwise applicable surrender charge if you reinvest the
surrender proceeds in another VALIC insurance product.You will, however, be
subject to a surrender charge in the newly acquired product under the same terms
and conditions as the original product. For purposes of calculating any
surrender charge due, you will be considered to have acquired the new product as
of the date you acquired the original product.

The surrender charge may also 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 a surrender charge may be reduced
or waived, see the "Reduction or Waiver of Account Maintenance Fee, Surrender,
Mortality and Expense Risk Fee or Administration and Distribution Fee 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 1/2%.

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:

- Adjust the amount deducted in error to reflect investment experience from the
date of the

22
<PAGE>
---------------------------------------------------
deduction to the date we determined the tax was not due; and

- 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 fee and an administration and
distribution fee applied to VALIC Separate Account A. This is a daily charge at
an annualized rate of 0.75% 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 fee 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 fee and on the
administration and distribution fee.

The administration and distribution fee is to reimburse the Company for our
administrative expenses for providing Variable Account Options. This includes
the expense of administration and marketing (including but not limited to
enrollment, participant communication and education).

For more information about the mortality and expense risk fee and administration
and distribution fee, see the Fee Table in this prospectus.

The mortality and expense risk fee or administration and distribution fee may be
reduced or waived if issued to certain types of plans that are expected to
result in lower costs to VALIC. To learn more about how we determine if the
mortality and expense risk fee or administration and distribution fee may be
reduced or waived, see the "Reduction or Waiver of Account Maintenance Fee,
Surrender, Mortality and Expense Risk Fee or Administration and Distribution Fee
Charges" section of this prospectus.

FUND ANNUAL EXPENSE CHARGES

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 its investment adviser. 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, SURRENDER,
MORTALITY AND EXPENSE RISK FEE OR
ADMINISTRATION AND DISTRIBUTION FEE CHARGES

We may, as described below, determine that the account maintenance fee,
surrender charges, mortality and expense risk fee or administration and
distribution fee 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:

- The type of retirement program.

Certain types of retirement programs because of their stability can result in
lower administrative costs.

- 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.

- Other factors of which we are not presently aware which could reduce
administrative costs.

23
<PAGE>
---------------------------------------------------
We review the following additional factors to determine whether we can reduce or
waive account maintenance fees:

- The frequency of Purchase Payments for your retirement program.

Purchase Payments received no more than once a year can reduce administrative
costs.

- 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.

We review the following additional factors to determine whether we can reduce or
waive surrender charges:

- The size of your retirement program.

A retirement program which involves a larger group of employees may allow us
to reduce sales expenses.

- The total amount of Purchase Payments to be received for your retirement
program.

Larger Purchase Payments can reduce sales expenses.

- The use of mass enrollment or related administrative tasks performed by your
employer for your retirement program.

We review the following additional factors to determine whether we can reduce or
waive the mortality and expense risk fee or administration and distribution fee:

- The frequency of Purchase Payments for your retirement program.

- The size of your retirement program.

- The amount of your retirement program's periodic purchase payment.

We will only do this if permitted by this Contract and by VALIC guidelines in
effect at the time. 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.

SEPARATE ACCOUNT EXPENSE REIMBURSEMENT

Some of the Mutual Funds or their affiliates may have an agreement with the
Company to pay the Company for administrative and shareholder services it
provides to the underlying Fund. The Company may, in its discretion, apply some
or all of these payments to reduce its charges to the Division investing in that
Fund. In addition, the Company currently reimburses certain Divisions a portion
of the Company's administration and distribution fee. Such reimbursement
arrangements are, however, voluntary, and may be changed by the Company at any
time. See the Fee Table in this prospectus for an identification of those Funds
for which a reimbursement applies and the amount of the reimbursement.

MARKET VALUE ADJUSTMENT

Under the MVA Option you may establish one or more MVA Bands with a minimum
amount, as described in the Contract, per MVA Band in states in which the MVA
Option has been approved. The Company may change the minimum from time to time.
Each MVA Band will be guaranteed to receive a stated rate of interest through
the end of the selected MVA term. We guarantee your MVA Option will earn at
least the lowest minimum interest rate applicable to any of the fixed interest
options in the contract. A withdrawal will generally be subject to a surrender
charge if it exceeds the amount of any free withdrawal amount permitted under
your contract. Withdrawals or transfers from an MVA Band prior to the end of the
MVA term will be subject to a market value adjustment, unless an exception
applies. This adjustment may be positive or negative, based upon the differences
in selected interest rates at the time the MVA Band was established and at the
time of the withdrawal. This adjustment will not apply upon the Owner's death,
or if the Owner is not a natural person, upon the death of the Annuitant. This
adjustment applies independently from surrender charges, and can still apply to
a 10% Free Withdrawal. The market value adjustment may be waived for
distributions that are required under your Contract. It will also be waived for
30 days following the end of an MVA term. Loans are not available from the MVA
Option. Please review your Contract for additional information on the MVA
Option.

24
<PAGE>
[SIDE NOTE]

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).

[END SIDE NOTE]

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:

- Type and duration of Payout Option chosen;

- Your age or your age and the age of your survivor (1);

- Your sex or your sex and the sex of your survivor (1) (IRAs and certain
nonqualified contracts);

- The portion of your Account Value being applied; and

- 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 from your existing 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 as allowed by state law.) 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 first payment.

COMBINATION FIXED AND VARIABLE PAYOUT

With a Combination Fixed and Variable Payout, you may choose:

- From your existing Variable Account Options (payments will vary); with a

- Fixed Payout (payment is fixed and guaranteed).

PAYOUT DATE

The Payout Date is the date elected by you 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 be when you attain age 59 1/2 or
separate from service, but must be no later than April 1 following the calendar
year you reach age 70 1/2 or the calendar year in which you retire. For
nonqualified contracts, the Payout Date may be 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 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:

- 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.

25
<PAGE>
---------------------------------------------------
[SIDE NOTE]

FOR MORE INFORMATION ABOUT PAYOUT OPTIONS OR ENHANCEMENTS OF THOSE PAYOUT
OPTIONS AVAILABLE UNDER THE CONTRACT, SEE THE STATEMENT OF ADDITIONAL
INFORMATION.

[END SIDE NOTE]

- 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.

- 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.

- 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.

- 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. 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, in the form of an
excise tax, if you do not meet an exception under 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,

- The payments will be guaranteed for a 10 year period,

- 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, and

- 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.

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, subject to any limitations under the
Contract or plan.

26
<PAGE>
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:

- allowed under federal and state law; and

- 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.

SURRENDER PROCESS

If you are allowed to surrender all or a portion of your Account Value as noted
above, then you must complete a surrender request form and mail it to our Home
Office. We will mail the Surrender Value to you within 7 calendar days after we
receive your request if it is in good order. Good order means that all paperwork
is complete and signed or approved by all required persons, and any necessary
supporting legal documents or plan forms have been received in correct form. For
example, a loan termination or loan payoff must be processed prior to
surrendering an account. If you are not 100% vested, forfeited dollars must be
removed prior to the Surrender transaction. Additionally, if your Plan
Administrator must approve a request for Surrender, the request will not be
considered in good order until the Plan Administrator approval is received. The
above examples may not be all-inclusive, but are illustrations of processes that
must be completed before a request is considered to be in good order.

We may be required to suspend or postpone payments if redemption of an
underlying Fund's shares have been suspended or postponed. See your current
Fund(s)' prospectuses for a discussion of the reasons why the redemption of
shares may be suspended or 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 in
accordance with the procedures above.

AMOUNT THAT MAY BE SURRENDERED

The amount that may be surrendered at any time can be determined as follows:

<S> <C> <C>
Your Account
Allowed Value(1)
Surrender = (EQUALS) -(MINUS)
Value Any Applicable
Surrender Charge
(1) Equals the Account Value next computed
after your properly completed request
for surrender is received in our Home
Office.
</TABLE>

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.

SURRENDER RESTRICTIONS

Generally, Internal Revenue Code Section 403(b)(11) permits total or partial
distributions from a 403(b) contract only on account of hardship (employee
contributions only without accrued interest), attainment of age 59 1/2,
separation from service, death or disability.

Under the TEXAS STATE OPTIONAL RETIREMENT PROGRAM, no surrender or partial
surrender will be allowed except attainment of age 70 1/2, retirement or other
termination of employment 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:

- death benefits; and

- certain small amounts approved by the State of Florida.

Under the LOUISIANA OPTIONAL RETIREMENT PLAN retirement benefits must be paid in
the form of a lifetime income, and except for death benefits, single sum
surrenders and partial surrenders out of the plan are not permitted.

Other employer-sponsored plans may also impose restrictions on the timing and
form of surrenders from the contract.

27
<PAGE>
---------------------------------------------------
PARTIAL SURRENDERS

You may request a partial surrender of your Account Value at any time, subject
to any applicable surrender restrictions. A partial surrender plus any surrender
charge will reduce your Account Value. Partial surrenders will be paid from the
Fixed Account Options first unless otherwise specified by you.

The reduction in the number of Purchase Units credited to your Variable Account
Option Account Value will equal:

<S> <C> <C>
The amount Your Purchase
surrendered from Units next
the Variable computed after the
Account Option DIVIDED BY written request
+ (PLUS) (DIVIDED BY) for 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:

- Payments to be made to you;

- Payment over a stated period of time (but not less than five years);

- 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.

DISTRIBUTIONS 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:

- Is made payable to you; and

- Does not exceed the amount required under federal tax law as determined by
the values in your Portfolio Director 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 and in the Statement of Additional
Information.

EXCHANGE PRIVILEGE
---------------------------------------------------

We issue other fixed and/or variable annuity contracts (other contracts) in
addition to Portfolio Director. These other contracts are listed below. We will
allow you, under certain conditions, to exchange from one of these other
contracts to Portfolio Director. If you elect to exercise one of these exchange
offers, you should contact any of our Regional Offices. An exchange may require
the issuance of a contract or may be subject to any other requirements that the
Company may impose.

RESTRICTIONS ON EXCHANGE PRIVILEGE

We will impose certain general restrictions and rules on the exchange
privileges.

- Partial exchanges are not permitted.

- Exchanges from Portfolio Director to other contract forms are not permitted,
except at the discretion of the Company.

- This exchange privilege is only available for those other contracts listed
below.

28
<PAGE>
---------------------------------------------------
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 existing surrender charges as a result of your
electing to exchange from one of the other contracts.

For purposes of determining surrender charges, we often consider time in the
contract. For SPQ181 and SPQ181-1 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 surrender charge purposes.

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.

EXCHANGE OFFERS FOR CONTRACTS OTHER THAN
PORTFOLIO DIRECTOR

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 Contracts

- SPQ181, SPQ181-1 Contracts

- CTA 978 Contract

- TFA-379 Contract

- SDA-578, SDA-773-T Contract

- IRA-579 Contracts

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 restrictions 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
a copy of any of these prospectuses or Statements of Additional Information,
please contact us at 1-800-44-VALIC.

29
<PAGE>
---------------------------------------------------
FEATURES OF PORTFOLIO DIRECTOR

In deciding whether you want to exercise these exchange privileges, you should
consider the following factors of Portfolio Director.

- Portfolio Director has more investment options to select from.

- Portfolio Director has 28 publicly available mutual funds as investment
options.

- 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.

- Portfolio Director has an Interest Guaranteed Death Benefit.

- Portfolio Director's Fund fees and charges are different than the other
contracts and in some cases may be higher.

- Different series of Portfolio Director may charge fees higher or lower than
other series of Portfolio Director.

- 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 and 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 and Independence Plus Contract.

- Leave current assets in the SA-1 Contract or Independence Plus Contract and
direct future Purchase Payments to Portfolio Director; or

- Transfer all current assets and future Purchase Payments to 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 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.

30
<PAGE>
[SIDE NOTE]

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.

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 IS NOT
REQUIRED TO BE. ALSO, A CONTINGENT CONTRACT OWNER MAY BE DESIGNATED.

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, SHORT-TERM FIXED ACCOUNT AND MULTI-YEAR ENHANCED FIXED OPTION. EACH OPTION
OF THIS TYPE IS GUARANTEED TO EARN AT LEAST A MINIMUM RATE OF INTEREST.

VARIABLE ACCOUNT OPTIONS -- INVESTMENT OPTIONS THAT CORRESPOND TO VALIC SEPARATE
ACCOUNT A DIVISIONS OFFERED BY PORTFOLIO DIRECTOR. INVESTMENT RETURNS ON
VARIABLE ACCOUNT OPTIONS WILL BE POSITIVE OR NEGATIVE DEPENDING ON THE
INVESTMENT PERFORMANCE OF THE UNDERLYING MUTUAL FUND.

PROOF OF DEATH -- 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.

[END SIDE NOTE]

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.

THE PROCESS

VALIC requires that complete and acceptable documentation and paperwork be
received from the beneficiary in order to begin the death benefit payment
process. First, Proof of Death is required. Proof of Death is defined as 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. Additionally, the
beneficiary must include an election specifying the distribution method and any
other form required by VALIC or a regulator to process the claim. The account
will not be valued and any payments will not be made until all paperwork is
complete and in a form acceptable to VALIC. You or your beneficiary may contact
your VALIC financial professional at 1-800-448-2542 with any questions about
required documentation and paperwork.

BENEFICIARY INFORMATION

The Beneficiary may receive death benefits:

- In a lump sum; or

- 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 and by the plan, if any.

BENEFICIARIES OTHER THAN SPOUSES.

If the Beneficiary is not the spouse of the Annuitant, death benefits must be
paid.

- In full within 5 years after the Annuitant's death; or

- By payments beginning within 1 year after the Annuitant's death under:

- A life annuity;

- A life annuity with payments certain; or

- An annuity for a designated period not exceeding the Beneficiary's life
expectancy.
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.

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 generally 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:

<S> <C>
STEP 1: Determine your Fixed Account Option Value by
taking the greater of:
Value of Fixed Account Option on date all
paperwork is complete and in a form acceptable
to VALIC
OR
100% of Purchase Payments placed in Fixed
Account Option
- (minus)
Amount of all prior withdrawals, charges and any
portion of Account Value applied under a Payout
Option
</TABLE>

31
<PAGE>
---------------------------------------------------
[SIDE NOTE]

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.

PURCHASE PAYMENTS -- AN AMOUNT OF MONEY YOU PAY TO VALIC TO RECEIVE THE BENEFITS
OF AN ANNUITY CONTRACT OFFERED BY PORTFOLIO DIRECTOR.

[END SIDE NOTE]

<S> <C>
STEP 2: Determine your Variable Account Option Value by
taking the greater of:
Value of Variable Account Option on date all
paperwork is complete and in a form acceptable
to VALIC
OR
100% of Purchase Payments placed in Variable
Account Options
- (minus)
Prior withdrawals (out of) or transfers (out of)
the Variable Account Option
+ (plus)
Interest at an annual rate of 3%
STEP 3: Add step 1 + 2 = DEATH BENEFIT
</TABLE>

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:

<S> <C>
Your Account Value on the date all paperwork is complete and in a form
acceptable to VALIC
OR
100% of Purchase Payments (to Fixed and/or Variable Account 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:

- Receive the present value of any remaining payments in a lump sum; or

- Receive the remaining payments under the same terms of the guaranteed
period option chosen by the deceased Participant; or

- 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.

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.

Some of the Divisions (and underlying Funds) offered in this prospectus were
previously available through other annuity or life insurance products or to the
general public before Portfolio Director was first available to you. We may
therefore, advertise investment performance since the inception of the
underlying Funds. In each case, we will use the charges and fees imposed by
Portfolio Director in calculating the Division's investment performance.

TYPES OF INVESTMENT PERFORMANCE
INFORMATION ADVERTISED

We may advertise the Division's Total Return Performance information and Yield
Performance information.

32
<PAGE>
---------------------------------------------------
[SIDE NOTE]

FOR MORE INFORMATION ON HOW TOTAL RETURN PERFORMANCE INFORMATION IS CALCULATED,
SEE THE STATEMENT OF ADDITIONAL INFORMATION.

[END SIDE NOTE]

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.

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, 5 and 10 year periods. If Standard
Average Annual Return for a Division is not available for a stated period, we
may show the Standard Average Annual Total Return since Division inception.

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. The SEC
staff takes the position that performance information of an underlying Fund
reduced by account fees for a period prior to the inception of the corresponding
Division is nonstandard performance information regardless of whether all
account fees and charges are 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, 5 and 10 year periods. If Cumulative Total Return for a
Division is not available for a stated period, we may show the Cumulative Total
Return since Division inception. 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 or since inception. This is calculated as follows:

- The Purchase Unit Value at the start of the year is subtracted from the
Purchase Unit Value at the end of the period or year;

- The difference is divided by the Purchase Unit Value at the start of the
period or 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.

33
<PAGE>
---------------------------------------------------

AN ASSUMED ACCOUNT VALUE OF $10,000

We may show annual values 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.

NORTH AMERICAN - AG 1 MONEY MARKET AND NORTH AMERICAN - AG 2 MONEY MARKET
DIVISIONS

We may advertise the North American - AG 1 Money Market and North American -
AG 2 Money Market Divisions' Current Yield and Effective Yield.

THE CURRENT YIELD refers to the income produced by an investment in the North
American - AG 1 Money Market or North American - AG 2 Money Market Divisions
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. For the North American - AG 1 Money Market
Division and the North American - AG 2 Money Market Division the 7-day Current
Yield for the last 7 days ended December 31, 1999 was 4.31% and 4.55%,
respectively.

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. For the North American - AG 1 Money Market Division and the North
American - AG 2 Money Market Division the 7-day Effective Yield for the last 7
days ended December 31, 1999 was 4.40% and 4.66%, respectively.

DIVISIONS OTHER THAN THE NORTH AMERICAN - AG 1 MONEY MARKET AND NORTH
AMERICAN - AG 2 MONEY MARKET DIVISIONS

We may advertise the standardized yield performance for each Division other than
the North American - AG 1 Money Market Money Market and North American - AG 2
Money Market Money Market Divisions. The yield for each of these Divisions will
be determined as follows:

- We will subtract the account maintenance fee from the average daily net
investment income per Purchase Unit;

- We will divide the remainder by the Purchase Unit Value on the last day of
the period; and

- We will annualize the result.

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:

- The Contract Owner;

- The Participant; and

- 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.

34
<PAGE>
---------------------------------------------------
[SIDE NOTE]

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.

[END SIDE NOTE]

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:

- Amend the Contract to conform with substitutions of investments;

- Amend the Contract to comply with tax or other laws;

- Make changes (upon written notice) to group Contracts that would apply only
to new Participants after the effective date of the changes;

- Operate VALIC Separate Account A as a management investment company under
the Act, in consideration of an investment management fee or in any other
form permitted by law;

- Deregister VALIC Separate Account A under the Act, if registration is no
longer required;

- 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 Plus 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.

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's other
affiliated insurance company separate accounts and retirement plans within the
American General group of companies and public shareholders.

35
<PAGE>
---------------------------------------------------
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 Separate Account A 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.

FEDERAL TAX MATTERS
---------------------------------------------------

Portfolio Director provides tax-deferred accumulation over time, but is 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, as a Section 408(b) Individual
Retirement Annuity ("IRA"), or is instead a nonqualified Contract. Portfolio
Director is used under the following types of retirement arrangements:

- Section 403(b) annuities for employees of public schools and Section
501(c)(3) tax-exempt organizations;

- Section 401(a), 403(a) and 401(k) qualified plans of for-profit employers
and other employers (including self-employed individuals);

- Section 408(b) IRAs;

- Section 457 deferred compensation plans of governmental and tax-exempt
employers;

- Section 408(k) SEPs;

- Section 408(p) SIMPLE retirement accounts.

The foregoing Contracts are "Qualified Contracts." Certain series of Portfolio
Director Plus may also be available through a nondeductible Section 408A "Roth"
individual retirement annuity ("Roth IRA").

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." Such Non-Qualified Contracts generally include unfunded,
nonqualified deferred compensation plans of corporate employers, as well as
individual annuity contracts issued to individuals outside of the context of any
formal employer or employee retirement plan or arrangement. Non-Qualified
Contracts generally may invest only in mutual funds which are not available to
the general public outside of annuity contracts or life insurance contracts.

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 Qualified 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.

36
<PAGE>
---------------------------------------------------
Transfers among investment options within a variable annuity contract generally
are not taxed at the time of such a transfer. However, in 1986 the Internal
Revenue Service (IRS) indicated that limitations might be imposed with respect
to either the number of investment options available within a contract, or the
frequency of transfers between investment options, or both, in order for the
contract to be treated as an annuity contract for federal income tax purposes.
If imposed, VALIC can provide no assurance that such limitations would not be
imposed on a retroactive basis to contracts issued under this prospectus.
However, VALIC has no present indications that the IRS intends to impose such
limitations, or what the terms or scope of those limitations might be. In
addition, based upon published guides issued by the IRS in 1999, it appears
likely that such limitations, if imposed, would only apply to 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 portion of a
distribution which is not considered a return of 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 or penalty taxes, under the
circumstances described 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.

It is the opinion of VALIC and its tax counsel that a Qualified Contract
described in Section 403(a), 403(b), or 408(b) of the Code does not lose its
deferred tax treatment if purchase payments under the contract are invested in
publicly available mutual funds. In 1999, the IRS confirmed this opinion,
reversing its previous position by modifying a contrary ruling it had issued in
1981.

In its ruling in 1981, the IRS had taken the position that, where purchase
payments under a variable annuity contract are invested in publicly available
mutual funds, the contract owner should be treated as the owner of the mutual
fund shares, and deferred tax treatment under the contract should not be
available. In the opinion of VALIC and its tax counsel, the 1981 ruling was
superseded by subsequent legislation (Code Section 817(h)) which specifically
exempts these Qualified Contracts, and the IRS had no viable legal basis or
reason to apply the theory of the 1981 ruling to these Qualified Contracts under
current law.

It is also the opinion of VALIC and its tax counsel that for each other type of
Qualified Contract an independent exemption provides tax deferral regardless of
how ownership of the Mutual Fund shares might be imputed for federal income tax
purposes.

Investment earnings on contributions to Non-Qualified Contracts which are not
owned by natural persons will be taxed currently to the owner and such contracts
will not be treated as annuities for federal income tax purposes.

EFFECT OF TAX-DEFERRED ACCUMULATIONS

The chart below compares the results from Premium Payments made to:

- Portfolio Director Contract issued to a tax favored retirement program
purchased with pre-tax premium payments;

- A non-qualified Contract purchased with after-tax Premium Payments and;

- Conventional savings vehicles such as savings accounts.

37
<PAGE>
---------------------------------------------------
THE POWER OF TAX-DEFERRED GROWTH

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
NONQUALIFIED
CONTRACT
CONVENTIONAL TAX-DEFERRED TAX-DEFERRED
SAVINGS ANNUITY ANNUITY
<S> <C> <C> <C>
10 YEARS $16,122 $18,128 $25,178
20 YEARS $44,347 $57,266 $79,536
30 YEARS $93,761 $141,761 $196,891
</TABLE>

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 options
incur mortality and expense risk fee charges and may also incur account
maintenance fees and surrender charges. The chart does not reflect the deduction
of any such fees. 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 generally 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 after-tax 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 reduces the actual amount saved in the conventional
savings account to $1,800 while the full $2,500 is contributed to the
tax-qualified program, subject to being taxed upon withdrawal. Stated otherwise,
to reach an annual retirement savings goal of $2,500, the contribution to a
tax-qualified 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-qualified 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.

38
<PAGE>

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
</TABLE>

Mail this form to any Regional Office or to the Home Office at the following
address: VALIC, Client Service A3-01, 2929 Allen Parkway, Houston, TX 77019.
<PAGE>

WE ARE PLEASED TO ANNOUNCE
A GREAT NEW WAY TO COMMUNICATE
AND
AN OPPORTUNITY TO SAVE SOME TREES AS PART OF THE PROCESS!
You may now elect to have electronic notification via e-mail that certain
regulatory documents (such as prospectuses, any supplements, semi-annual or
annual financial reports, or proxy statements) are available for viewing on-line
at WWW.VALIC.COM. Click on "products" and then click "Prospectuses Online". All
you need to do is complete the form below and drop it in the mail. In the
future, you will receive an e-mail notification with a link to view the
document.
Please note:
- You will receive e-mail notifications when the documents become available
on-line.
- This service will apply only to your VALIC annuity contracts.
- If your e-mail address changes, please notify customer service at VALIC.COM
or by calling 1-800-448-2542.
- This service is provided by VALIC at no charge, though you may have to pay
Internet service provider fees to access the Internet or to receive e-mails.
- This consent will be considered effective until revoked in writing.
...............................................................................
/ / Yes! Sign me up for electronic notification via e-mail that certain
regulatory documents for my VALIC annuity contracts, including the prospectuses,
supplements, semi-annual or annual financial reports, or proxy statements, are
available for viewing on-line.
I UNDERSTAND THAT I WILL RECEIVE AN E-MAIL NOTIFICATION WHEN THE DOCUMENT
BECOMES AVAILABLE ON-LINE. I ALSO UNDERSTAND THAT THIS SERVICE WILL REPLACE ANY
PAPER DOCUMENTS AND IS PROVIDED BY VALIC AT NO CHARGE, THOUGH I MAY HAVE TO PAY
INTERNET SERVICE PROVIDER FEES TO ACCESS THE INTERNET OR RECEIVE E-MAILS. I
AGREE THAT THIS CONSENT WILL BE EFFECTIVE BEGINNING FEBRUARY 1, 2001.
Printed Name ________________________________________ Signature ________________
e-mail address _________________________________________________________________
SS# ________________________________________
Address _____________________________________________
City, State, ZIP ______________________________________
Mail to:
VALIC
Client Services -- Electronic Delivery, L12-15
2929 Allen Parkway
Houston, Texas 77019
<PAGE>
(This page intentionally left blank)
<PAGE>
CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information................................................. 4
Marketing Information........................................... 4
Endorsements and Published Ratings.............................. 5
Types of Variable Annuity Contracts................................. 6
Federal Tax Matters................................................. 6
Tax Consequences of Purchase Payments........................... 6
Tax Consequences of Distributions............................... 8
Special Tax Consequences -- Early Distribution.................. 9
Special Tax Consequences -- Required Distributions.............. 10
Tax Free Rollovers, Transfers and Exchanges..................... 11
Exchange Privilege.................................................. 11
Exchanges From Portfolio Director............................... 12
Exchanges From Portfolio Director 2............................. 12
Exchanges From Independence Plus Contracts...................... 13
Exchanges From V-Plan Contracts................................. 14
Exchanges From SA-1 and SA-2 Contracts.......................... 15
Exchanges From Impact Contracts................................. 16
Exchanges From Compounder Contracts............................. 17
Information Which May Be Applicable To Any Exchange............. 18
Calculation of Surrender Charge..................................... 19
Illustration of Surrender Charge on Total Surrender............. 19
Illustration of Surrender Charge on a 10% Partial Surrender
Followed by a Full Surrender.................................. 19
Purchase Unit Value................................................. 20
Illustration of Calculation of Purchase Unit Value.............. 20
Illustration of Purchase of Purchase Units...................... 20
Performance Calculations............................................ 20
North American - AG 1 Money Market and North American - AG 2
Money Market Divisions Yields................................. 20
Calculation of Current Yield for North American - AG 1 Money
Market Division Six........................................... 20
Calculation of Current Yield for North American - AG-2 Money
Market Division 44............................................ 20
Illustration of Calculation of Current Yield for North
American - AG 1 Money Market Division Six and North
American - AG 2 Money Market Division 44...................... 20
Calculation of Effective Yield for North American - AG 1 Money
Market Division Six........................................... 21
Calculation of Effective Yield for North American - AG 2 Money
Market Division 44............................................ 21
Illustration of Calculation of Effective Yield for North
American - AG 1 Money Market Division Six and North
American - AG 2 Money Market Division 44...................... 21
Standardized Yield for Bond Fund Divisions...................... 21
Calculation of Standardized Yield for Bond Fund Divisions....... 21
Illustration of Calculation of Standardized Yield for Bond Fund
Divisions..................................................... 21
Calculation of Average Annual Total Return...................... 22
Calculation of MVA Option....................................... 22
Performance Information............................................. 23
Hypothetical $10,000 Account Value and Cumulative Return as
Compared to Benchmark Tables.................................. 23
Performance Compared to Market Indices.......................... 23
North American - AG Asset Allocation Division Five.............. 27
North American - AG Capital Conservation Division Seven......... 28
North American - AG Government Securities Division Eight........ 28
North American Core Equity Division Fifteen..................... 29
North American - AG Growth & Income Division Sixteen............ 29
North American - AG International Equities Division Eleven...... 30
North American - AG International Government Bond Division
Thirteen...................................................... 31
<CAPTION>
PAGE
----
<S> <C>
North American - AG MidCap Index Division Four.................. 31
North American - AG 1 Money Market Division Six................. 32
North American - T. Rowe Price Science & Technology Division
Seventeen.................................................... 33
North American - AG Small Cap Index Division Fourteen........... 33
North American - AG Social Awareness Division Twelve............ 34
North American - AG Stock Index Division Ten.................... 35
American Century Ultra Division Thirty-One...................... 35
North American - AG Conservative Growth Lifestyle Division
Fifty........................................................ 36
North American - AG Core Bond Division
Fifty-Eight.................................................. 37
North American - AG Aggressive Growth
Lifestyle Division Forty-Eight............................... 38
North American - AG High Yield Bond Division Sixty.............. 39
North American International Growth Division Thirty-Three....... 39
North American - Goldman Sachs Large Cap Growth Division
Thirty-Nine.................................................. 40
North American - State Street Large Cap Value Division Forty.... 41
North American - INVESCO MidCap Growth Division Thirty-Seven.... 41
North American - Neuberger Berman MidCap Value Division
Thirty-Eight................................................. 42
North American - AG Moderate Growth Lifestyle Division
Forty-Nine................................................... 42
North American - AG 2 Money Market Division Forty-Four.......... 43
North American - J.P. Morgan Small Cap Growth Division
Thirty-Five.................................................. 43
North American Small Cap Value Division
Thirty-Six................................................... 44
North American - AG Socially Responsible Division
Forty-One.................................................... 44
North American - AG Strategic Bond Division
Fifty-Nine................................................... 45
Evergreen Growth and Income Division Fifty-Six.................. 47
Evergreen Small Cap Value Division Fifty-Five................... 47
Evergreen Value Division Fifty-Seven............................ 48
Putnam Global Growth -- Class A Division Twenty-Eight........... 49
Putnam New Opportunities -- Class A Division Twenty-Six......... 50
Putnam OTC & Emerging Growth -- Class A Division Twenty-Seven... 50
Templeton Asset Strategy Division Nineteen...................... 52
Templeton Foreign Division Thirty-Two........................... 53
Vanguard LifeStrategy Conservative Growth Division Fifty-Four... 54
Vanguard LifeStrategy Growth Division Fifty-Two................. 55
Vanguard LifeStrategy Moderate Growth Division Fifty-Three...... 56
Vanguard Long-Term Corporate Division
Twenty-Two................................................... 56
Vanguard Long-Term Treasury Division
Twenty-Three................................................. 57
Vanguard Wellington Division Twenty-Five........................ 58
Vanguard Windsor II Division Twenty-Four........................ 59
Payout Payments..................................................... 60
Assumed Investment Rate......................................... 60
Amount of Payout Payments....................................... 60
Payout Unit Value............................................... 60
Illustration of Calculation of Payout Unit Value................ 61
Illustration of Payout Payments................................. 61
Distribution of Variable Annuity Contracts.......................... 62
Experts............................................................. 62
Comments on Financial Statements.................................... 62
</TABLE>
<PAGE>
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019
1-800-448-2542
FOR UNIT VALUE INFORMATION CALL: 1-800-42-VALIC & TDD 1-800-24-VALIC
FOR ASSET TRANSFERS BY TELEPHONE CALL: 1-800-621-7792
TDD 1-800-35-VALIC
EASYACCESS 1-800-42-VALIC
TDD EASYACCESS 1-800-24-VALIC

[LOGO]

The Variable Annuity Life Insurance Company
is a member of American General Financial Group.
American General Financial Group is the marketing
name for American General Corporation and its subsidiaries.
-C-The Variable Annuity Life Insurance Company, Houston, Texas
VA 10855 REV 12/00
<PAGE>
[LOGO]
SEPARATE ACCOUNT A
FIXED AND VARIABLE ANNUITY
FOR SERIES 1.20-12.20

Prospectus
May 1, 2000
as revised December 11, 2000

[LOGO]
<PAGE>
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
UNITS OF INTEREST UNDER GROUP AND INDIVIDUAL
FIXED AND VARIABLE ANNUITY CONTRACTS
PORTFOLIO DIRECTOR-REGISTERED TRADEMARK- PLUS AND PORTFOLIO DIRECTOR 2
SEPARATE ACCOUNT A
FOR SERIES 1.20-12.20 May 1, 2000
As Revised December 11, 2000

PROSPECTUS

The Variable Annuity Life Insurance Company ("VALIC") offers certain Series of
Portfolio Director Plus and Portfolio Director 2 (referred to collectively as
"Portfolio Director" in this prospectus), that consist of group and individual
fixed and variable annuity contracts (the "Contracts") to Participants in
certain employer sponsored retirement plans. Series 1.20 to 12.20 consists of
group variable annuity contracts that are offered by VALIC to participants in
certain employer sponsored retirement plans as well as for certain after-tax
arrangements that are not part of an employer's plan. 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 for
certain employer plans as well as for certain after-tax arrangements that are
not part of an employer's plan.

--------------------------------------------------------------------------------

This prospectus provides you with information you should know before investing
in Portfolio Director. Please read and retain this prospectus for future
reference.

THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
ABOUT THE PROSPECTUS......................... 1
FEE TABLE.................................... 2
SUMMARY...................................... 7
SELECTED PURCHASE UNIT DATA.................. 14
GENERAL INFORMATION.......................... 15
About Portfolio Director................. 15
About VALIC.............................. 15
About VALIC Separate Account A........... 15
Units of Interests....................... 16
Distribution of the Contracts............ 16
VARIABLE ACCOUNT OPTIONS..................... 16
PURCHASE PERIOD.............................. 17
Purchase Payments........................ 17
Purchase Units........................... 18
Calculation of Purchase Unit Value....... 18
Choosing Investment Options.............. 18
Fixed Account Options.................. 19
Variable Account Options............... 19
Stopping Purchase Payments............... 19
TRANSFERS BETWEEN INVESTMENT OPTIONS......... 20
During the Purchase Period............... 20
During the Payout Period................. 20
Communicating Transfer or Reallocation
Instructions........................... 20
Effective Date of Transfer............... 21
Market Timing............................ 21
FEES AND CHARGES............................. 21
Account Maintenance Fee.................. 21
Surrender Charge......................... 21
Amount of Surrender Charge............. 22
10% Free Withdrawal.................... 22
Exceptions to Surrender Charge......... 22
Premium Tax Charge....................... 22
Separate Account Charges................. 23
Fund Annual Expense Charges.............. 23
Other Tax Charges........................ 23
Reduction or Waiver of Account
Maintenance Fee, Surrender, Mortality
and Expense Risk Fee or Administration
and Distribution Fee Charges........... 23
Separate Account Expense Reimbursement... 24
Market Value Adjustment.................. 24
PAYOUT PERIOD................................ 25
Fixed Payout............................. 25
Variable Payout.......................... 25
Combination Fixed and Variable Payout.... 25
Payout Date.............................. 25
Payout Options........................... 25
Enhancements to Payout Options........... 26
Payout Information....................... 26
SURRENDER OF ACCOUNT VALUE................... 27
When Surrenders Are Allowed.............. 27
Surrender Process........................ 27
Amount That May Be Surrendered........... 27
Surrender Restrictions................... 27
Partial Surrenders....................... 28
Systematic Withdrawals................... 28
Distributions Required by Federal Tax
Law.................................... 28
<CAPTION>
PAGE
--------
<S> <C>
EXCHANGE PRIVILEGE........................... 28
Restrictions on Exchange Privilege....... 28
Taxes and Conversion Costs............... 29
Surrender Charges........................ 29
Exchange Offers for Contracts Other Than
Portfolio Director..................... 29
Comparison of Contracts.................. 29
Features of Portfolio Director........... 30
Agents' and Managers' Retirement Plan
Exchange Offer......................... 30
DEATH BENEFITS............................... 31
The Process.............................. 31
Beneficiary Information.................. 31
Special Information for Individual
Non-Tax Qualified Contracts............ 31
During the Purchase Period............... 31
Interest Guaranteed Death Benefit...... 31
Standard Death Benefit................. 32
During the Payout Period................. 32
HOW TO REVIEW INVESTMENT PERFORMANCE OF
SEPARATE ACCOUNT DIVISIONS................. 32
Types of Investment Performance
Information Advertised................. 32
Total Return Performance Information... 33
Standard Average Annual Total Return... 33
Nonstandard Average Annual Total
Return............................... 33
Cumulative Total Return................ 33
Annual Change in Purchase Unit Value... 33
Cumulative Change in Purchase Unit
Value................................ 33
Total Return Based on Different
Investment Amounts................... 33
An Assumed Account Value of $10,000.... 34
Yield Performance Information............ 34
North American - AG 1 Money Market and
North American - AG 2 Money Market
Divisions............................ 34
Divisions Other Than The North
American - AG 1 Money Market and
North American - AG 2 Money Market
Divisions............................ 34
OTHER CONTRACT FEATURES...................... 34
Changes That May Not Be Made............. 34
Change of Beneficiary.................... 34
Contingent Owner......................... 34
Cancellation -- The 20 Day "Free Look"... 35
We Reserve Certain Rights................ 35
Relationship to Employer's Plan.......... 35
VOTING RIGHTS................................ 35
Who May Give Voting Instructions......... 35
Determination of Fund Shares Attributable
to Your Account........................ 35
During Purchase Period................. 35
During Payout Period or after a Death
Benefit Has Been Paid................ 35
How Fund Shares Are Voted................ 35
FEDERAL TAX MATTERS.......................... 36
Type of Plans............................ 36
Tax Consequences in General.............. 36
Effect of Tax-Deferred Accumulations..... 37
</TABLE>

(i)
<PAGE>
[SIDE NOTE]

PARTICIPANT -- THE INDIVIDUAL, (IN MOST CASES YOU ARE THE PARTICIPANT) FOR WHOM
PURCHASE PAYMENTS ARE MADE.

[END SIDE NOTE]

ABOUT THE PROSPECTUS
---------------------------------------------------

<TABLE>
<CAPTION>
DEFINED TERMS PAGE NO.
------------- --------
<S> <C>

Account Value...................... 20

Annuitant.......................... 31

Assumed Investment Rate............ 25

Beneficiary........................ 31

Contract Owner..................... 31

Divisions.......................... 32

Fixed Account Options.............. 31

Home Office........................ 20

Mutual Fund or Fund................ 15

Participant........................ 01

Participant Year................... 22

Payout Period...................... 20

Payout Unit........................ 25

Proof of Death..................... 31

Purchase Payments.................. 17, 32

Purchase Period.................... 20

Purchase Unit...................... 18

VALIC Separate Account A........... 35

Variable Account Options........... 16, 31
</TABLE>

For specific information about the Variable Account Options, you may refer to
the mutual fund prospectuses, available at www.valic.com (or call
1-800-448-2542).

1
<PAGE>
FEE TABLE
------------------------------------------------------------------

<TABLE>
<CAPTION>
MORTALITY ADMINISTRATION SEPARATE TOTAL
AND EXPENSE AND DISTRIBUTION ACCOUNT EXPENSE SEPARATE
FUND RISK FEE(3) FEE(3) REIMBURSEMENT(4) ACCOUNT FEE
---- ------------ ---------------- ---------------- -----------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund 0.25% 0.55% -- 0.80%
North American - AG Capital Conservation Fund 0.25 0.55 -- 0.80
North American - AG Government Securities Fund 0.25 0.55 -- 0.80
North American - AG Growth & Income Fund 0.25 0.55 -- 0.80
North American - AG International Equities Fund 0.25 0.55 -- 0.80
North American - AG International Government Bond Fund 0.25 0.55 -- 0.80
North American - AG MidCap Index Fund 0.25 0.55 -- 0.80
North American - AG 1 Money Market Fund 0.25 0.55 -- 0.80
North American - AG Nasdaq-100-Registered Trademark-
Index Fund 0.25 0.55 -- 0.80
North American - AG Small Cap Index Fund 0.25 0.55 -- 0.80
North American - AG Social Awareness Fund 0.25 0.55 -- 0.80
North American - AG Stock Index Fund 0.25 0.55 -- 0.80
North American - American Century Income & Growth Fund 0.25 0.55 -- 0.80
North American - American Century International Growth
Fund 0.25 0.55 -- 0.80
North American Core Equity Fund 0.25 0.55 -- 0.80
North American - Founders Large Cap Growth Fund 0.25 0.55 -- 0.80
North American - Founders/T. Rowe Price Small Cap Fund 0.25 0.55 -- 0.80
North American - Putnam Opportunities Fund 0.25 0.55 -- 0.80
North American - T. Rowe Price Blue Chip Growth Fund 0.25 0.55 -- 0.80
North American - T. Rowe Price Health Sciences Fund 0.25 0.55 -- 0.80
North American - T. Rowe Price Science & Technology
Fund 0.25 0.55 -- 0.80
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle Fund 0.25 0.55 (0.25%) 0.55
North American - AG Conservative Growth Lifestyle Fund 0.25 0.55 (0.25) 0.55
North American - AG Core Bond Fund 0.25 0.55 (0.25) 0.55
North American - AG High Yield Bond Fund 0.25 0.55 (0.25) 0.55
North American - AG Moderate Growth Lifestyle Fund 0.25 0.55 (0.25) 0.55
North American - AG 2 Money Market Fund 0.25 0.55 (0.25) 0.55
North American - AG Socially Responsible Fund 0.25 0.55 (0.25) 0.55
North American - AG Strategic Bond Fund 0.25 0.55 (0.25) 0.55
North American - Goldman Sachs Large Cap Growth Fund 0.25 0.55 (0.25) 0.55
North American International Growth Fund 0.25 0.55 (0.25) 0.55
North American - INVESCO MidCap Growth Fund 0.25 0.55 (0.25) 0.55
North American - J.P. Morgan Small Cap Growth Fund 0.25 0.55 (0.25) 0.55
North American - Neuberger Berman MidCap Value Fund 0.25 0.55 (0.25) 0.55
North American Small Cap Value Fund 0.25 0.55 (0.25) 0.55
North American - State Street Large Cap Value Fund 0.25 0.55 (0.25) 0.55
American Century Ultra Fund 0.25 0.80 (0.21) 0.84
Ariel Appreciation Fund 0.25 0.80 (0.25) 0.80
Ariel Fund 0.25 0.80 (0.25) 0.80
Dreyfus Basic GNMA Fund 0.25 0.80 (0.25) 0.80
Evergreen Growth and Income Fund, Class A 0.25 0.80 (0.25) 0.80
Evergreen Small Cap Value Fund, Class A 0.25 0.80 (0.25) 0.80
Evergreen Value Fund, Class A 0.25 0.80 (0.25) 0.80
Evergreen Special Equity Fund, Class A 0.25 0.80 (0.25) 0.80
INVESCO Blue Chip Growth Fund, Investor Class 0.25 0.80 (0.25) 0.80
Janus Adviser Worldwide Fund 0.25 0.80 (0.25) 0.80
Janus Fund 0.25 0.80 (0.25) 0.80
Lou Holland Growth Fund 0.25 0.80 (0.25) 0.80
MAS Mid Cap Growth Portfolio, Adviser Class 0.25 0.80 (0.25) 0.80
Putnam Global Growth Fund, Class A 0.25 0.80 (0.25) 0.80
Putnam New Opportunities Fund, Class A 0.25 0.80 (0.25) 0.80
Putnam OTC & Emerging Growth Fund, Class A 0.25 0.80 (0.25) 0.80
Sit Mid Cap Growth Fund 0.25 0.80 (0.25) 0.80
Sit Small Cap Growth Fund 0.25 0.80 (0.25) 0.80
Templeton Asset Strategy Fund, Class 1 0.25 0.80 -- 1.05
Templeton Foreign Fund, Class A 0.25 0.80 (0.25) 0.80
Vanguard LifeStrategy Conservative Growth Fund 0.25 0.80 -- 1.05
Vanguard LifeStrategy Growth Fund 0.25 0.80 -- 1.05
Vanguard LifeStrategy Moderate Growth Fund 0.25 0.80 -- 1.05
Vanguard Long-Term Corporate Fund (5) 0.25 0.80 (0.25) 0.80
Vanguard Long-Term Treasury Fund (5) 0.25 0.80 (0.25) 0.80
Vanguard Wellington Fund 0.25 0.80 -- 1.05
Vanguard Windsor II Fund 0.25 0.80 -- 1.05
Warburg Pincus Small Company Growth Fund, Common Class 0.25 0.80 (0.25) 0.80
</TABLE>

2
<PAGE>
FEE TABLE -- (CONTINUED)
------------------------------------------------------------------

<TABLE>
<S> <C>
FUND ANNUAL EXPENSES
(as a percentage of net assets):
</TABLE>

<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
(AFTER FEE (AFTER EXPENSE (AFTER EXPENSE
FUND WAIVER) 12B-1 FEES WAIVER)(6) WAIVER)
---- ------------ ---------- -------------- --------------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund (7) 0.50% -- 0.07% 0.57%
North American - AG Capital Conservation Fund 0.50 -- 0.10 0.60
North American - AG Government Securities Fund 0.50 -- 0.09 0.59
North American - AG Growth & Income Fund 0.75 -- 0.07 0.82
North American - AG International Equities Fund 0.35 -- 0.08 0.43
North American - AG International Government Bond Fund 0.50 -- 0.07 0.57
North American - AG MidCap Index Fund 0.31 -- 0.07 0.38
North American - AG 1 Money Market Fund 0.50 -- 0.07 0.57
North American - AG Nasdaq-100-Registered Trademark- Index
Fund 0.40 -- 0.10 0.50
North American - AG Small Cap Index Fund 0.35 -- 0.06 0.41
North American - AG Social Awareness Fund 0.50 -- 0.07 0.57
North American - AG Stock Index Fund 0.26 -- 0.06 0.32
North American - American Century Income & Growth Fund 0.77 -- 0.06 0.83
North American - American Century International Growth
Fund 1.00 -- 0.06 1.06
North American Core Equity Fund 0.80 -- 0.05 0.85
North American - Founders Large Cap Growth Fund 1.00 -- 0.06 1.06
North American - Founders/T. Rowe Price Small Cap Fund 0.90 -- 0.05 0.95
North American - Putnam Opportunities Fund 0.95 -- 0.06 1.01
North American - T. Rowe Price Blue Chip Growth Fund 0.80 -- 0.06 0.86
North American - T. Rowe Price Health Sciences Fund 1.00 -- 0.06 1.06
North American - T. Rowe Price Science & Technology Fund 0.90 -- 0.06 0.96
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II (8)
North American - AG Aggressive Growth Lifestyle Fund (9) 0.10 -- -- 0.10
North American - AG Conservative Growth Lifestyle
Fund (9) 0.10 -- -- 0.10
North American - AG Core Bond Fund 0.50 -- 0.27 0.77
North American - AG High Yield Bond Fund 0.70 -- 0.29 0.99
North American - AG Moderate Growth Lifestyle Fund (9) 0.10 -- -- 0.10
North American - AG 2 Money Market Fund 0.25 -- 0.31 0.56
North American - AG Socially Responsible Fund 0.25 -- 0.31 0.56
North American - AG Strategic Bond Fund 0.60 -- 0.29 0.89
North American - Goldman Sachs Large Cap Growth Fund 0.55 -- 0.31 0.86
North American International Growth Fund 0.90 -- 0.11 1.01
North American - INVESCO MidCap Growth Fund 0.65 -- 0.14 0.79
North American - J.P. Morgan Small Cap Growth Fund 0.85 -- 0.31 1.16
North American - Neuberger Berman MidCap Value Fund 0.75 -- 0.30 1.05
North American Small Cap Value Fund 0.75 -- 0.20 0.95
North American - State Street Large Cap Value Fund 0.50 -- 0.31 0.81
American Century Ultra Fund (10) 1.00 -- -- 1.00
Ariel Appreciation Fund 0.75 0.25% 0.26 1.26
Ariel Fund 0.65 0.25 0.35 1.25
Dreyfus Basic GNMA Fund (11) 0.26 -- 1.29 1.55
Evergreen Growth and Income Fund, Class A 0.89 0.25 0.29 1.43
Evergreen Small Cap Value Fund, Class A (10) 1.00 0.25 0.42 1.67
Evergreen Value Fund, Class A 0.50 0.25 0.25 1.00
Evergreen Special Equity Fund, Class A (12) 0.90 0.25 0.16 1.31
INVESCO Blue Chip Growth Fund, Investor Class 0.53 0.25 0.26 1.04
Janus Adviser Worldwide Fund (13) 0.65 0.25 0.30 1.20
Janus Fund 0.65 -- 0.20 0.85
Lou Holland Growth Fund (14) 0.85 -- 0.50 1.35
MAS Mid Cap Growth Portfolio, Adviser Class 0.50 0.25 0.13 0.88
Putnam Global Growth Fund, Class A 0.63 0.25 0.22 1.10
Putnam New Opportunities Fund, Class A 0.48 0.25 0.20 0.93
Putnam OTC & Emerging Growth Fund, Class A 0.55 0.25 0.18 0.98
Sit Mid Cap Growth Fund (15) 1.00 -- -- 1.00
Sit Small Cap Growth Fund 1.50 -- -- 1.50
Templeton Asset Strategy Fund, Class 1 (16) 0.60 -- 0.18 0.78
Templeton Foreign Fund, Class A (10) 0.61 0.25 0.27 1.13
Vanguard LifeStrategy Conservative Growth Fund (10, 17) 0.28 -- -- 0.28
Vanguard LifeStrategy Growth Fund (10, 17) 0.29 -- -- 0.29
Vanguard LifeStrategy Moderate Growth Fund (10, 17) 0.29 -- -- 0.29
Vanguard Long-Term Corporate Fund (10) 0.28 -- 0.02 0.30
Vanguard Long-Term Treasury Fund (10) 0.25 -- 0.03 0.28
Vanguard Wellington Fund (10) 0.28 -- 0.02 0.30
Vanguard Windsor II Fund (10) 0.35 -- 0.02 0.37
Warburg Pincus Small Company Growth Fund, Common Class (18) 0.00 0.25 1.15 1.40
</TABLE>

3
<PAGE>
FEE TABLE -- (CONTINUED)
------------------------------------------------------------------
------------

<TABLE>
<C> <S>
(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,
Surrender, Mortality and Expense Risk Fee or Administration
and Distribution Fee Charges" and "Exceptions to Surrender
Charge" in this prospectus.
(3) Reductions in the mortality and expense risk fee or
administration and distribution fee may be available for
plan types meeting certain criteria. See "Reduction or
Waiver of Account Maintenance Fee, Surrender, Mortality and
Expense Risk Fee or Administration Fee Charges" in this
prospectus.
(4) For these Funds, the Total Separate Account Fee equals the
VALIC Separate Account A mortality and expense risk fee plus
the administration and distribution fee reduced by the
Separate Account Expense Reimbursement. Pursuant to the
Separate Account Expense Reimbursement the Company's charges
to these Divisions are reduced by certain payments received
from the underlying Fund and/or its affiliates or
distributors for administrative and shareholder services
provided by the Company. See "Fees and Charges -- Separate
Account Expense Reimbursement" in this prospectus for more
information.
(5) For these Funds the Total Separate Account Fee equals the
VALIC Separate Account A mortality and expense risk fee plus
the administration and distribution fee reduced by the
Separate Account Expense Reimbursement. The Separate Account
Expense Reimbursement reflects a voluntary expense
reimbursement made by the Company directly to the Division,
which may be terminated by the Company at any time without
notice.
(6) OTHER EXPENSES includes custody, accounting, reports to
shareholders, audit, legal, administrative and other
miscellaneous expenses. See each Fund's prospectus for a
detailed explanation of these fees.
(7) The North American - AG Asset Allocation Fund was formerly
known as the Timed Opportunity Fund.
(8) As of August 31, 1999, in the absence of management fee
waiver, other expense waiver and total annual portfolio
operating expense waiver, management fees, other expenses
and total annual portfolio operating expenses, respectively,
would be: North American - AG Core Bond Fund, 0.50%, 1.05%
and 1.55%; North American - AG High Yield Bond Fund, 0.70%,
1.05% and 1.75%; North American International Growth Fund,
0.90%, 1.03% and 1.93%; North American - Goldman Sachs Large
Cap Growth Fund, .055%, 0.98% and 1.53%; North American -
State Street Large Cap Value Fund, 0.50%, 1.02% and 1.52%;
North American - INVESCO MidCap Growth Fund, 0.65%, 1.03%
and 1.68%; North American - Neuberger Berman MidCap Value
Fund, 0.75%, 1.01% and 1.76%; North American - AG 2 Money
Market Fund, 0.25%, 1.02% and 1.27%; North American -
J.P. Morgan Small Cap Growth Fund, 0.85%, 1.01% and 1.86%;
North American Small Cap Value Fund, 0.75%, 1.03% and 1.78%;
North American - AG Socially Responsible Fund, 0.25%, 1.01%
and 1.26%; and North American - AG Strategic Bond Fund,
0.60%, 1.05% and 1.65%.
(9) Total Combined Operating Expenses based on estimated total
average weighted combined operating expenses for the North
American - AG Conservative Growth Lifestyle Fund is 0.95%,
for North American - AG Aggressive Growth Lifestyle Fund
1.04% and for North American - AG Moderate Growth Lifestyle
Fund 0.98%. Estimated Total Combined Operating Expenses of
each Lifestyle Fund is based on the Total Fund Operating
Expenses of the underlying Funds and the Lifestyle Funds,
assuming each Lifestyle Fund's projected asset allocation
among the underlying Funds is maintained.
(10) The American Century Ultra Fund was formerly known as the
American Century -- Twentieth Century Ultra Fund. The
Evergreen Small Cap Value Fund was formerly known as the
Evergreen Small Cap Equity Income Fund. The Franklin
Templeton Variable Insurance Products Trust was formerly
known as the Templeton Variable Products Series Fund. The
Templeton Foreign Fund -- Class A was formerly known as the
Templeton Foreign Fund -- Class 1. VALIC Separate Account A
purchases shares of the Templeton Foreign Fund -- Class A at
net asset value and without sales charges generally
applicable to Class A shares. The Vanguard Long-Term
Corporate Fund was formerly known as the Vanguard Fixed
Income Securities Fund -- Long-Term Corporate Portfolio; the
Vanguard Long-Term Treasury Fund was formerly known as the
Vanguard Fixed Income Securities Fund -- Long-Term U.S.
Treasury Portfolio; the Vanguard LifeStrategy Conservative
Growth Fund was formerly known as the Vanguard LifeStrategy
Conservative Growth Portfolio; the Vanguard LifeStrategy
Growth Fund was formerly known as the Vanguard LifeStrategy
Growth Portfolio; the Vanguard LifeStrategy Moderate Growth
Fund was formerly known as the Vanguard LifeStrategy
Moderate Growth Portfolio; the Vanguard Wellington Fund was
formerly known as the Vanguard/Wellington Fund and the
Vanguard Windsor II Fund was formerly known as the
Vanguard/Windsor II Fund.
(11) Dreyfus Basic GNMA Fund: During 1999, Dreyfus waived a
portion of its fee so that the effective management fee paid
by the fund was 0.26%. This waiver reflects an undertaking
by Dreyfus to limit fund expenses, exclusive of taxes,
brokerage, interest on borrowings and extraordinary
expenses, to 0.65%. This undertaking may be terminated upon
90 days' notice to shareholders.
(12) Evergreen Special Equity Fund: The Fund's investment advisor
may reduce or waive its fees or reimburse a fund for certain
expenses in order to reduce expense ratios. The Fund's
investment advisor may cease these waivers or reimbursements
at any time. Including fee waivers and expense
reimbursements and restating to reflect current fees,
estimated total fund operating expenses for the fiscal year
ending 6/30/2000 would be 1.31% for Class A shares.
(13) Janus Adviser Worldwide Fund: Janus Capital has
contractually agreed to waive the Fund's total operating
expenses (excluding brokerage commissions, interest, taxes
and extraordinary expenses) so that it will not exceed 1.20%
until at least July 31, 2003.
(14) Lou Holland Growth Fund: The Investment Manager has
contractually agreed to waive its fees and reimburse other
expenses of the Growth Fund to the extent that the Fund's
total operating expenses exceed 1.35%. This agreement may be
terminated only by the Fund's Board of Trustees.
(15) Sit Mid Cap Growth Fund: The Adviser voluntarily waived
0.25% of its fee. It may terminate this fee waiver at any
time after December 31, 2000.
(16) On February 8, 2000, shareholders of the Templeton Asset
Allocation Fund (previously offered under the Contract)
approved a merger and reorganization that combined the
Templeton Asset Allocation Fund with the Templeton Global
Asset Allocation Fund, effective May 1, 2000. At the same
time as the merger, the Templeton Asset Allocation Fund
changed its name to the Templeton Asset Strategy Fund. The
table shows restated total expenses for the Templeton Asset
Strategy Fund based on the new fund fees and the assets of
the Templeton Asset Allocation Fund as of December 31, 1999,
and not the assets of the combined fund. However, if the
table reflected both the new fund fees and the fund's
combined assets, the fund's expenses after May 1, 2000
would be estimated as: Management Fees 0.60%, Other Expenses
0.14%, and Annual Expenses 0.74%.
(17) The Vanguard LifeStrategy Funds did not incur any expenses
in fiscal year 1999. However, while the Funds are expected
to operate without expenses, shareholders in the Vanguard
LifeStrategy Funds bear indirectly the expenses of the
underlying Vanguard Funds in which the Funds invest. The
indirect expense ratios that the Vanguard LifeStrategy
Conservative Growth Fund, Vanguard LifeStrategy Growth Fund
and Vanguard LifeStrategy Moderate Growth Fund incurred for
the year ended December 31, 1999 was 0.28%, 0.29% and 0.29%,
respectively.
(18) Warburg Pincus Small Company Growth Fund: Fee waivers and
expense reimbursements or credits reduced expenses for the
Fund during 1999 but may be discontinued at any time.
</TABLE>

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund $14 $45 $ 77 $170
North American - AG Capital Conservation Fund 15 46 79 173
North American - AG Government Securities Fund 15 45 78 172
North American - AG Growth & Income Fund 17 52 90 197
North American - AG International Equities Fund 13 40 70 154
North American - AG International Government Bond Fund 14 45 77 170
North American - AG MidCap Index Fund 12 39 67 148
North American - AG 1 Money Market Fund 14 45 77 170
North American - AG Nasdaq-100-Registered Trademark- Index
Fund 14 42 73 162
North American - AG Small Cap Index Fund 13 40 69 152
North American - AG Social Awareness Fund 14 45 77 170
North American - AG Stock Index Fund 12 37 64 141
North American - American Century Income & Growth Fund 17 53 91 198
North American - American Century International Growth
Fund 19 60 103 223
North American Core Equity Fund 17 53 92 200
North American - Founders Large Cap Growth Fund 19 60 103 223
North American - Founders/T. Rowe Price Small Cap Fund 18 56 97 211
North American - Putnam Opportunities Fund 19 58 100 217
North American - T. Rowe Price Blue Chip Growth Fund 17 54 92 201
North American - T. Rowe Price Health Sciences Fund 19 60 103 223
North American - T. Rowe Price Science & Technology Fund 18 57 98 212
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle Fund 7 22 38 86
North American - AG Conservative Growth Lifestyle Fund 7 22 38 86
North American - AG Core Bond Fund 14 43 75 164
North American - AG High Yield Bond Fund 16 50 86 188
North American - AG Moderate Growth Lifestyle Fund 7 22 38 86
North American - AG 2 Money Market Fund 12 37 63 140
North American - AG Socially Responsible Fund 12 37 63 140
North American - AG Strategic Bond Fund 15 47 81 177
North American - Goldman Sachs Large Cap Growth Fund 15 46 79 174
North American International Growth Fund 16 51 87 190
North American - INVESCO MidCap Growth Fund 14 44 76 166
North American - J.P. Morgan Small Cap Growth Fund 18 55 95 207
North American - Neuberger Berman MidCap Value Fund 17 52 89 195
North American Small Cap Value Fund 16 49 84 184
North American - State Street Large Cap Value Fund 14 44 77 168
American Century Ultra Fund 19 59 102 221
Ariel Appreciation Fund 21 66 113 244
Ariel Fund 21 65 112 242
Dreyfus Basic GNMA Fund 26 79 136 289
Evergreen Growth and Income Fund, Class A 23 71 122 261
Evergreen Small Cap Value Fund, Class A 25 78 134 285
Evergreen Value Fund, Class A 19 58 100 216
Evergreen Special Equity Fund, Class A 22 67 115 249
INVESCO Blue Chip Growth Fund, Investor Class 19 59 102 221
Janus Adviser Worldwide Fund 21 64 110 237
Janus Fund 17 53 92 200
Lou Holland Growth Fund 22 69 118 253
MAS Mid Cap Growth Portfolio, Adviser Class 17 54 93 203
Putnam Global Growth Fund, Class A 20 61 105 227
Putnam New Opportunities Fund, Class A 18 56 96 209
Putnam OTC & Emerging Growth Fund, Class A 18 57 99 214
Sit Mid Cap Growth Fund 19 58 100 216
Sit Small Cap Growth Fund 24 73 125 268
Templeton Asset Strategy Fund, Class 1 19 59 101 219
Templeton Foreign Fund, Class A 20 62 106 230
Vanguard LifeStrategy Conservative Growth Fund 14 43 75 165
Vanguard LifeStrategy Growth Fund 14 44 76 166
Vanguard LifeStrategy Moderate Growth Fund 14 44 76 166
Vanguard Long-Term Corporate Fund 12 36 63 139
Vanguard Long-Term Treasury Fund 11 36 62 137
Vanguard Wellington Fund 14 44 76 167
Vanguard Windsor II Fund 15 46 80 175
Warburg Pincus Small Company Growth Fund, Common Class 23 70 120 258
</TABLE>

5
<PAGE>
EXAMPLE #2 -- If you surrender Portfolio Director at the end of the period
shown:
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES I
North American - AG Asset Allocation Fund $61 $ 95 $127 $170
North American - AG Capital Conservation Fund 61 96 129 173
North American - AG Government Securities Fund 61 95 128 172
North American - AG Growth & Income Fund 63 102 140 197
North American - AG International Equities Fund 60 90 120 154
North American - AG International Government Bond Fund 61 95 127 170
North American - AG MidCap Index Fund 59 89 117 148
North American - AG 1 Money Market Fund 61 95 127 170
North American - AG Nasdaq-100-Registered Trademark- Index
Fund 60 92 123 162
North American - AG Small Cap Index Fund 59 90 119 152
North American - AG Social Awareness Fund 61 95 127 170
North American - AG Stock Index Fund 59 87 114 141
North American - American Century Income & Growth Fund 63 102 141 198
North American - American Century International Growth
Fund 66 109 153 223
North American Core Equity Fund 64 103 142 200
North American - Founders Large Cap Growth Fund 66 109 153 223
North American - Founders/T. Rowe Price Small Cap Fund 65 106 147 211
North American - Putnam Opportunities Fund 65 108 150 217
North American - T. Rowe Price Blue Chip Growth Fund 64 103 142 201
North American - T. Rowe Price Health Sciences Fund 66 109 153 223
North American - T. Rowe Price Science & Technology Fund 65 106 148 212
NORTH AMERICAN FUNDS VARIABLE PRODUCT SERIES II
North American - AG Aggressive Growth Lifestyle Fund 54 72 88 86
North American - AG Conservative Growth Lifestyle Fund 54 72 88 86
North American - AG Core Bond Fund 60 93 125 164
North American - AG High Yield Bond Fund 63 100 136 188
North American - AG Moderate Growth Lifestyle Fund 54 72 88 86
North American - AG 2 Money Market Fund 58 87 113 140
North American - AG Socially Responsible Fund 58 87 113 140
North American - AG Strategic Bond Fund 62 97 131 177
North American - Goldman Sachs Large Cap Growth Fund 61 96 129 174
North American International Growth Fund 63 100 137 190
North American - INVESCO MidCap Growth Fund 61 94 126 166
North American - J.P. Morgan Small Cap Growth Fund 64 105 145 207
North American - Neuberger Berman MidCap Value Fund 63 101 139 195
North American Small Cap Value Fund 62 99 134 184
North American - State Street Large Cap Value Fund 61 94 127 168
American Century Ultra Fund 65 108 152 221
Ariel Appreciation Fund 68 115 163 244
Ariel Fund 68 115 162 242
Dreyfus Basic GNMA Fund 72 128 186 289
Evergreen Growth and Income Fund, Class A 69 120 172 261
Evergreen Small Cap Value Fund, Class A 72 127 184 285
Evergreen Value Fund, Class A 65 107 150 216
Evergreen Special Equity Fund, Class A 68 116 165 249
INVESCO Blue Chip Growth Fund, Investor Class 65 108 152 221
Janus Adviser Worldwide Fund 67 113 160 237
Janus Fund 64 103 142 200
Lou Holland Growth Fund 68 117 168 253
MAS Mid Cap Growth Portfolio, Adviser Class 64 104 143 203
Putnam Global Growth Fund, Class A 66 110 155 227
Putnam New Opportunities Fund, Class A 64 105 146 209
Putnam OTC & Emerging Growth Fund, Class A 65 107 149 214
Sit Mid Cap Growth Fund 65 107 150 216
Sit Small Cap Growth Fund 70 122 175 268
Templeton Asset Strategy Fund, Class 1 65 108 151 219
Templeton Foreign Fund, Class A 66 111 156 230
Vanguard LifeStrategy Conservative Growth Fund 61 93 125 165
Vanguard LifeStrategy Growth Fund 61 94 126 166
Vanguard LifeStrategy Moderate Growth Fund 61 94 126 166
Vanguard Long-Term Corporate Fund 58 86 113 139
Vanguard Long-Term Treasury Fund 58 86 112 137
Vanguard Wellington Fund 61 94 126 167
Vanguard Windsor II Fund 61 96 130 175
Warburg Pincus Small Company Growth Fund, Common Class 69 119 170 258
</TABLE>

6
<PAGE>
SUMMARY
------------------------------------------------------------------

FIXED AND VARIABLE OPTIONS

Portfolio Director offers a choice from among 64 Variable Account Options.
Depending upon the selection made by your employer's plan, if applicable, you
may not be able to invest in all of the Variable Account Options described below
within a single group or individual annuity contract. If your contract is a
tax-deferred nonqualified annuity that is not part of your employer's retirement
plan, those Variable Account Options that are invested in Mutual Funds available
to the public outside of annuity contracts or life insurance contracts will not
be available within your contract. If your contract is part of your employer's
retirement program, that program will describe which Variable Account Options
are available to you. Portfolio Director also offers three Fixed Account
Options. There may be certain limitations on how many investment options you may
invest in at any one time.(1)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED ACCOUNT
OPTIONS
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
FIXED Fixed Guaranteed high current --
OPTIONS Account Plus interest income
------------------------------------------------------------------------------------------------------
Short-Term Guaranteed current --
Fixed Account interest income
------------------------------------------------------------------------------------------------------
Multi-Year Multi-year guaranteed interest income --
Enhanced Fixed (May not be available in all states)
Option(1)
---------------------------------------------------------------------------------------------------------------------
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
SUB-ADVISER OBJECTIVE ADVISER
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
INDEX North American - Seeks long-term growth of capital through investments American General
EQUITY AG International primarily in a diversified portfolio of equity and Advisers, a division of
FUNDS Equities Fund* equity related securities of foreign issuers that, as a VALIC
group, are expected to provide investment results
closely corresponding to the performance of the EAFE
Index.
------------------------------------------------------------------------------------------------------
North American - Seeks growth of capital through investments primarily in American General
AG MidCap a diversified portfolio of common stocks that, as a Advisers
Index Fund*(3) group, are expected to provide investment results
closely corresponding to the performance of the
Standard & Poor's MidCap 400-Registered Trademark-
Index.
------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term capital growth through American General
AG investments in the stocks that are included in the Advisers
Nasdaq-100-Registered Nasdaq-100 Index-Registered Trademark-.
Trademark-Index
Fund*
------------------------------------------------------------------------------------------------------
North American - Seeks growth of capital through investment primarily in American General
AG Small Cap a diversified portfolio of common stocks that, as a Advisers
Index Fund*(3) group, are expected to provide investment results
closely corresponding to the performance of the Russell
2000-Registered Trademark- Index.
------------------------------------------------------------------------------------------------------
North American - Seeks long-term capital growth through investment in American General
AG Stock common stocks that, as a group, are expected to provide Advisers
Index Fund*(3) investment results closely corresponding to the
performance of the Standard & Poor's 500 Stock
Index-Registered Trademark-.
---------------------------------------------------------------------------------------------------------------------
ACTIVELY North American - Seeks long-term growth of capital and, secondarily, American General
MANAGED AG Growth & current income through investment in common stocks and Advisers
EQUITY Income Fund* equity-related securities.
FUNDS
------------------------------------------------------------------------------------------------------
North American - The Fund seeks dividend growth, current income and American General
American Century capital appreciation by investing in common stocks. Advisers
Income & Growth Current income is a secondary consideration.
Fund*
------------------------------------------------------------------------------------------------------
North American - The Fund seeks capital growth through investments American General
American Century primarily in equity securities of issuers in developed Advisers
International foreign countries.
Growth Fund*
---------------------------------------------------------------------------------------------------------------------

FIXED --
OPTIONS
--------------------------------------------------
--

-------------------------------------------------------------------------------------
--

---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
INDEX N/A
EQUITY
FUNDS

------------------------------------------------------------------------------------------------------ ------------
-----
N/A(2)

------------------------------------------------------------------------------------------------------ ------------
-----
American General
Investment
Management, L.P.

------------------------------------------------------------------------------------------------------ ------------
-----
N/A(2)

---------------------------------------------------------------------------------------------------------------------
ACTIVELY N/A
MANAGED
EQUITY
FUNDS
------------------------------------------------------------------------------------------------------ ------------
-----
American Century
Investment
Management, Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
American Century
Investment
Management, Inc.

---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
* A series of North American Funds Variable Product Series I
("NAFVPS I").
(1) This Fixed Account Option is also referred to in this
prospectus as the Market Value Adjustment ("MVA") Option.
For purposes of this limitation, each MVA Band under the
Multi-Year Enhanced Fixed Option will count as a separate
investment option. An MVA Band is established for each
separate investment for a new guarantee period. The minimum
allocation to an MVA Band, as described in the Contract, may
be changed from time to time by the Company. Availability of
this Option is subject to regulatory approval within the
state in which your Contract is issued. It may not be
available under your Contract. See MVA Option herein.
(2) Bankers Trust Company ("Bankers Trust") previously served as
sub-adviser to the North American - AG MidCap Index Fund,
the North American - AG Small Cap Index Fund and the North
American - AG Stock Index Fund. VALIC re-assumed direct
management of each Fund's investment portfolio on
October 1, 1999. Relative to the North American Small Cap
Value Fund, VALIC re-assumed that portion of the investment
portfolio previously managed by Bankers Trust as one of two
sub-advisers to the Fund.
(3) "Standard & Poor's-Registered Trademark-", "S&P-Registered
Trademark-", "S&P 500-Registered Trademark-" and "S&P MidCap
400-Registered Trademark-" are trademarks of Standard and
Poor's ("S&P"). North American - AG MidCap Index Fund and
North American - AG Stock Index Fund are not sponsored,
endorsed, sold or promoted by S&P and S&P makes no
representation regarding the advisability of investing in
those Funds. The Russell 2000-Registered Trademark- Index is
a trademark/servicemark of Frank Russell Trust Company.
Russell-TM- is a trademark of the Frank Russell Company.
</TABLE>

7
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
North American Seeks long-term growth of capital through investment American General
Core Equity primarily in equity securities. Advisers
Fund*
------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term growth of capital. The Fund American General
Founders Large Cap normally will invest at least 65% of its total assets in Advisers
Growth Fund* common stocks of well-established, high-quality growth
companies.
------------------------------------------------------------------------------------------------------
North American - The Fund seeks to provide long-term capital growth by American General
Founders/T. Rowe investing primarily in the stocks of small companies. It Advisers
Price Small Cap will invest at least 65% of its total assets in stocks
Fund* of small companies.
------------------------------------------------------------------------------------------------------
North American - The Fund seeks capital appreciation through investments American General
Putnam in common stocks. It invests mainly in common stocks of Advisers
Opportunities Fund* large U.S. companies, with a focus on growth stocks
(those the manager believes whose earnings will grow
faster than the economy, with a resultant price
increase).
------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term capital growth. Income is a American General
T. Rowe Price Blue secondary objective. The Fund pursues long-term capital Advisers
Chip Growth Fund* appreciation by normally investing at least 65% of total
assets in the common stocks of large and medium-sized
blue chip growth companies.
------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth of capital through a broadly American General
Goldman-Sachs diversified portfolio of equity securities of large cap Advisers
Large Cap Growth U.S. issuers that are expected to have better prospects
Fund** for earnings growth than the growth rate of the general
domestic economy. Dividend income is a secondary
objective.
------------------------------------------------------------------------------------------------------
North American Seeks long-term capital appreciation by investing in American General
International equity securities of non-U.S. companies, the majority of Advisers
Growth which are expected to be in developed markets. The Fund
Fund** may invest across the capitalization spectrum, although
it intends to emphasize smaller capitalization stocks.
------------------------------------------------------------------------------------------------------
North American - Seeks capital appreciation principally through American General
INVESCO investments in medium capitalization equity securities, Advisers
MidCap Growth such as common and preferred stocks and securities
Fund** convertible into common stocks. Current income is a
secondary objective.
------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth from a portfolio of equity American General
J.P. Morgan securities of small capitalization growth companies. Advisers
Small Cap Growth
Fund**
------------------------------------------------------------------------------------------------------
North American - Seeks capital growth through investment in equity American General
Neuberger Berman securities of medium capitalization companies using a Advisers
MidCap Value value-oriented investment approach.
Fund**
------------------------------------------------------------------------------------------------------
North American Seeks maximum long-term return, consistent with American General
Small Cap Value reasonable risk to principal by investing primarily in Advisers
Fund** equity securities of small capitalization companies in
terms of revenues and/or market capitalization.
------------------------------------------------------------------------------------------------------
North American - Seeks total returns that exceed over time the Russell American General
State Street 1000-Registered Trademark- Value Index through Advisers
Large Cap Value investments in equity securities.
Fund**(3)
------------------------------------------------------------------------------------------------------
American Century Seeks capital growth through investments primarily in American Century
Ultra Fund common stocks that are considered to have Investment
better-than-average prospects for appreciation. Management, Inc.
------------------------------------------------------------------------------------------------------
Ariel Appreciation The Fund seeks long-term capital appreciation by Ariel Capital
Fund investing primarily in medium-sized company stocks. Management, Inc.
------------------------------------------------------------------------------------------------------
Ariel Fund The Fund seeks long-term capital appreciation primarily Ariel Capital
through investment in small company stocks. Management, Inc.
---------------------------------------------------------------------------------------------------------------------

SUB-ADVISER
<S> <C>
---------------------------------------------------------------------------------------------------------------------
Wellington
Management
Company, LLP(4)
------------------------------------------------------------------------------------------------------ ------------
-----
Founders Asset
Management LLC

------------------------------------------------------------------------------------------------------ ------------
-----
Founders Asset
Management LLC
and T. Rowe Price
Associates, Inc.
------------------------------------------------------------------------------------------------------ ------------
-----
Putnam Investment
Management, Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
T. Rowe Price
Associates, Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
Goldman Sachs
Asset
Management

------------------------------------------------------------------------------------------------------ ------------
-----
Thompson, Siegel
& Walmsley, Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
INVESCO Funds
Group, Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
JP Morgan
Investment
Management Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
Neuberger Berman
Management Inc.

------------------------------------------------------------------------------------------------------ ------------
-----
Fiduciary
Management
Associates,
Inc.(2)
------------------------------------------------------------------------------------------------------ ------------
-----
State Street
Bank & Trust
Company/State
Street Global
Advisors
------------------------------------------------------------------------------------------------------ ------------
-----
N/A

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
* A series of NAFVPS I.
** A series of North American Funds Variable Product Series II
("NAFVPS II").
(2) Bankers Trust Company ("Bankers Trust") previously served as
sub-adviser to the North American - AG MidCap Index Fund,
the North American - AG Small Cap Index Fund and the North
American - AG Stock Index Fund. VALIC re-assumed direct
management of each Fund's investment portfolio on
October 1, 1999. Relative to the North American Small Cap
Value Fund, VALIC re-assumed that portion of the investment
portfolio previously managed by Bankers Trust as one of two
sub-advisers to the Fund.
(3) The Russell 1000-Registered Trademark- Value Index is a
trademark/servicemark of Frank Russell Trust Company.
Russell-TM- is a trademark of the Frank Russell Company.
(4) Wellington Management Company, LLP replaced T. Rowe Price
Associates, Inc. as sub-adviser to the Fund effective
September 1, 1999. The investment objective was also changed
at that time.
</TABLE>

8
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Evergreen Growth Seeks capital growth in the value of its shares by Evergreen Asset
and Income Fund -- investing in the securities of companies which are Management Corp.
Class A*** temporarily undervalued in the marketplace but display
characteristics of growth such as high return on
investment and competitive advantage in their industry.
------------------------------------------------------------------------------------------------------
Evergreen Small Seeks current income and capital growth in the value of Evergreen Asset
Cap Value Fund -- its shares by investing in common stocks of small U.S. Management Corp.
Class A*** companies (less than $1 billion in market
capitalization).
------------------------------------------------------------------------------------------------------
Evergreen Value Seeks long-term capital growth with current income as a Evergreen Investment
Fund -- Class A*** secondary objective by investing at least 75% of its Management
assets in common stocks of medium and large-cap U.S.
companies with prospects for earning growth and
dividends.
------------------------------------------------------------------------------------------------------
Evergreen Special The Fund seeks capital growth. It invests primarily in Meridian Investment
Equity Fund equity securities of U.S. companies with small market Company (a subsidiary
capitalizations. of First Union
Corporation)
------------------------------------------------------------------------------------------------------
INVESCO Blue Chip The Fund tries to buy securities that will increase in INVESCO Funds
Growth Fund value over the long-term; current income is a secondary Group, Inc.
goal. The Fund invests primarily in common stocks of
large companies with market capitalizations of more than
$15 billion and that have a history of consistent
earnings growth regardless of business cycles.
------------------------------------------------------------------------------------------------------
Janus Adviser The Fund seeks long-term growth of capital in a manner Janus Capital
Worldwide Fund consistent with the preservation of capital. It invests Corporation
primarily in common stocks of companies of any size
throughout the world.
------------------------------------------------------------------------------------------------------
Janus Fund The Fund seeks long-term growth of capital in a manner Janus Capital
consistent with the preservation of capital. It invests Corporation
primarily in common stocks selected for their growth
potential. Although the Fund can invest in companies of
any size, it generally invests in larger, more
established companies.
------------------------------------------------------------------------------------------------------
Lou Holland Growth The Fund primarily seeks long-term growth of capital. Holland Capital
Fund The receipt of dividend income is a secondary Management, L.P.
consideration. It invests primarily in common stocks of
growth companies.
------------------------------------------------------------------------------------------------------
MAS Mid Cap Growth The Portfolio seeks long-term capital growth. It invests Miller Anderson &
Portfolio primarily in common stocks of companies with Sherrerd, LLP
capitalizations in the range of companies included in
the S&P MidCap 400 Index.
------------------------------------------------------------------------------------------------------
Putnam Global Seeks capital appreciation. Current income is only an Putnam Investment
Growth incidental consideration in selecting investments for Management Inc.
Fund -- Class A the Fund. The Fund is designed for investors, seeking
Shares above-average capital growth potential through a
globally diversified portfolio of common stocks.
Dividend and interest income is only an incidental
consideration.
------------------------------------------------------------------------------------------------------
Putnam New Seeks long-term capital appreciation. Current income is Putnam Investment
Opportunities only an incidental consideration. The Fund invests Management Inc.
Fund -- Class A principally in common stocks of companies in sectors of
Shares the economy which the Fund's investment adviser believes
possess above-average long-term growth potential.
------------------------------------------------------------------------------------------------------
Putnam OTC & Seeks capital appreciation by investing primarily in Putnam Investment
Emerging Growth common stocks traded in the over-the-counter market and Management Inc.
Fund -- Class A common stocks, of "emerging growth" companies listed on
Shares securities exchanges. The Fund is designed for investors
willing to assume above-average risk in return for above
average capital growth potential.
------------------------------------------------------------------------------------------------------
Sit Mid Cap Growth The Fund seeks to maximize long-term capital Sit Investment
Fund appreciation. It invests at least 65% of its total Management, Inc.
assets in the common stocks of growth companies with
capitalizations of $2 billion to $15 billion at the time
of purchase.
------------------------------------------------------------------------------------------------------
Sit Small Cap The Fund seeks to maximize long-term capital Sit Investment
Growth Fund appreciation. It invests at least 65% of its total Management, Inc.
assets in common stocks of small growth companies with
capitalizations of $2.5 billion or less at the time of
purchase.
------------------------------------------------------------------------------------------------------
Templeton Foreign Seeks long-term capital growth by investing primarily in Templeton Global
Fund -- Class A the equity securities of companies outside the United Advisors Limited
States, including emerging markets.
---------------------------------------------------------------------------------------------------------------------

SUB-ADVISER
<S> <C>
---------------------------------------------------------------------------------------------------------------------
N/A

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
*** A series of Evergreen Equity Trust.
</TABLE>

9
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE ACCOUNT INVESTMENT
OPTIONS OBJECTIVE ADVISER
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Vanguard Seeks to provide long-term growth of capital by Vanguard
Windsor II Fund investing mainly in the equity securities of large and
medium-size companies whose stocks are considered by the
Fund's advisers to be undervalued and out of favor with
investors. The Fund's secondary objective is to provide
some dividend income.
------------------------------------------------------------------------------------------------------
Warburg Pincus The Fund seeks capital growth by investing in the equity Credit Suisse Asset
Small Company securities of small U.S. companies. Management, LLC
Growth Fund
---------------------------------------------------------------------------------------------------------------------
BALANCED Vanguard Seeks to conserve capital and provide moderate long-term Wellington Management
FUNDS Wellington Fund growth in capital and income by investing approximately Company, LLP
60% to 70% of its assets in dividend-paying stocks of
established, large- and medium-sized companies that, in
the adviser's opinion, are undervalued but whose
prospects are improving. The remaining 30% to 40% of
assets are invested primarily in high-quality,
longer-term corporate bonds with some exposure to U.S.
Treasury, government agency, and mortgage-backed bonds.
---------------------------------------------------------------------------------------------------------------------
INCOME North American - Seeks the highest possible total return consistent with American General
FUNDS AG Capital preservation of capital through current income and Advisers
Conservation Fund* capital gains on investments in intermediate and
long-term debt instruments and other income producing
securities.
------------------------------------------------------------------------------------------------------
North American - The Fund seeks the highest possible return consistent American General
AG Core Bond Fund* with conservation of capital through investment in Advisers
medium- to high- quality fixed income securities.
------------------------------------------------------------------------------------------------------
North American - Seeks high current income and protection of capital American General
AG Government through investments in intermediate and long-term U.S. Advisers
Securities Fund* Government debt securities.
------------------------------------------------------------------------------------------------------
North American - Seeks high current income through investments primarily American General
AG International in investment grade debt securities issued or guaranteed Advisers
Government by foreign governments.
Bond Fund*
------------------------------------------------------------------------------------------------------
North American - Seeks the highest possible total return and income American General
AG High Yield Bond consistent with conservation of capital through Advisers
Fund** investment in a diversified portfolio of high yielding
high risk fixed income securities.
------------------------------------------------------------------------------------------------------
North American - Seeks the highest possible total return and income American General
AG Strategic Bond consistent with conservation of capital through Advisers
Fund** investment in a diversified portfolio of income
producing securities.
------------------------------------------------------------------------------------------------------
Dreyfus Basic GNMA The Fund seeks a high level of current income as is The Dreyfus Corporation
Fund consistent with the preservation of capital. To pursue
this goal, the Fund normally invests at least 65% of its
net assets in GNMA certificates (popularly called
"Ginnie Maes"), which are guaranteed as to timely
payment of principal and interest by the Government
National Mortgage Association.
------------------------------------------------------------------------------------------------------
Vanguard Long-Term Seeks a high level of current income consistent with the Wellington Management
Corporate Fund maintenance of principal and liquidity by investing in a Company, LLP
diversified portfolio of investment grade corporate and
Government bonds.
------------------------------------------------------------------------------------------------------
Vanguard Long-Term Seeks a high level of current income consistent with the Vanguard
Treasury Fund maintenance of principal and liquidity by investing at
least 85% of its total assets in long-term securities
backed by the full faith and credit of the U.S.
Government.
---------------------------------------------------------------------------------------------------------------------
SPECIALTY North American - Seeks growth of capital through investment, primarily in American General
FUNDS AG Social common stocks, in companies which meet the social Advisers
Awareness Fund* criteria established for the Fund.
------------------------------------------------------------------------------------------------------
North American - The Fund seeks long-term capital growth. The Fund American General
T. Rowe Price pursues long- term capital appreciation by normally Advisers
Health Sciences investing at least 65% of total assets in the common
Fund* stocks of companies engaged in the research,
development, production, or distribution of products or
services related to health care, medicine, or the life
sciences (collectively termed "health sciences").
------------------------------------------------------------------------------------------------------
North American - Seeks long-term growth of capital through investment American General
T. Rowe Price primarily in the common stocks and equity-related Advisers
Science & securities of companies that are expected to benefit
Technology from the development, advancement and use of science and
Fund* technology.
---------------------------------------------------------------------------------------------------------------------

SUB-ADVISER
<S> <C>
---------------------------------------------------------------------------------------------------------------------
N/A

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
BALANCED N/A
FUNDS

---------------------------------------------------------------------------------------------------------------------
INCOME N/A
FUNDS

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

------------------------------------------------------------------------------------------------------ ------------
-----
American General
Investment
Management, L.P.

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
SPECIALTY N/A
FUNDS

------------------------------------------------------------------------------------------------------ ------------
-----
T. Rowe Price
Associates, Inc.

---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
* A series of NAFVPS I.
** A series of NAFVPS II.
</TABLE>

10
<PAGE>
SUMMARY -- (CONTINUED)
------------------------------------------------------------------

SUB-ADVISER
<S> <C>
---------------------------------------------------------------------------------------------------------------------
N/A

---------------------------------------------------------------------------------------------------------------------
MONEY N/A
MARKET
FUNDS
------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
LIFESTYLE N/A
FUNDS

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
ASSET N/A
ALLOCATION
FUNDS

------------------------------------------------------------------------------------------------------ ------------
-----
N/A

---------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C>
* A series of NAFVPS I.
** A series of NAFVPS II.
**** A series of Franklin Templeton Variable Insurance Products
Trust.
</TABLE>

11
<PAGE>
[SIDE NOTE]

TO LEARN MORE ABOUT THE INTEREST GUARANTEED DEATH BENEFIT, REFER TO THE SECTION
IN THE PROSPECTUS ENTITLED "DEATH BENEFITS."

MORE INFORMATION ON FEES MAY BE FOUND IN THE PROSPECTUS UNDER THE HEADINGS "FEES
AND CHARGES" AND "FEE TABLE."

[END SIDE NOTE]

SUMMARY -- (CONTINUED)
---------------------------------------------------

A detailed description of the investment objective of each Mutual Fund can be
found in the current prospectus for each Fund mentioned. These prospectuses are
available at www.valic.com.

INTEREST GUARANTEED DEATH BENEFIT

Portfolio Director offers a death benefit with an interest guarantee when death
occurs prior to your reaching age 70.

This contract provision is not available in some states.

LOANS

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

Amounts invested in an MVA Option may be transferred to another investment
option at the end of an MVA term without application of a market value
adjustment.

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.

FEES AND CHARGES

ACCOUNT MAINTENANCE FEE

SURRENDER CHARGE

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.

PREMIUM TAX CHARGE

Premium taxes ranging from zero to 3 1/2% are currently imposed by certain
states and municipalities on Purchase Payments made under the contract.

SEPARATE ACCOUNT CHARGES

Depending on the Variable Account Option you choose you may incur a mortality
and expense risk fee and an administration and distribution fee computed at an
aggregate annualized rate of 0.55% to 1.05% during the Purchase Period and 0.75%
to 1.25% during the Payout Period on the average daily net asset value of VALIC
Separate Account A. Reductions in the mortality and expense risk fee and
administration and distribution fee may be available for plan types meeting
certain criteria.

12
<PAGE>
[SIDE NOTE]

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.

FOR MORE INFORMATION ON PURCHASE PAYMENTS, REFER TO THE "PURCHASE PERIOD"
SECTION OF THE PROSPECTUS.

[END SIDE NOTE]

SUMMARY -- (CONTINUED)
---------------------------------------------------

FUND ANNUAL EXPENSE CHARGE

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.

SEPARATE ACCOUNT EXPENSE REIMBURSEMENT

PAYOUT OPTIONS

FEDERAL TAX INFORMATION

PURCHASE REQUIREMENTS

13
<PAGE>
SELECTED PURCHASE UNIT DATA
------------------------------------------------------------------

<TABLE>
<CAPTION>
DECEMBER 31, 1999 JANUARY 4, 1999 DECEMBER 31, 1998
------------------------ ------------------- ------------------------ SEPTEMBER 22,
PURCHASE PURCHASE PURCHASE PURCHASE 1998
UNITS PURCHASE UNITS UNIT UNITS PURCHASE PURCHASE
IN FORCE UNIT VALUE IN FORCE VALUE(1) IN FORCE UNIT VALUE UNIT VALUE(1)
----------- ---------- -------- -------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
North American - AG Asset Allocation
Division 5.......................... 673,135 $4.303891 -- -- 31,350 $ 3.882024 $ 3.497989
North American - AG Capital
Conservation Division 7............. 95,480 $2.112183 -- -- -- $ 2.138060 $ 2.098635
North American - AG Government
Securities Division 8............... 243,537 $2.087744 -- -- -- $ 2.164605 $ 2.149706
North American Core Equity Division
15.................................. 8,377,232 $2.608476 -- -- 4,324,799 $ 2.448443 $ 1.938540
North American - AG Growth & Income
Division 16......................... 660,621 $2.704358 -- -- -- $ 2.219368 $ 1.786564
North American - AG International
Equities Division 11................ 348,851 $1.898106 -- -- -- $ 1.481352 $ 1.226638
North American - AG International
Government Bond Division 13......... 1,058,856 $1.634588 -- -- 408,156 $ 1.751922 $ 1.675623
North American - AG MidCap Index
Division 4(2)....................... 523,908 $5.590887 -- -- -- $ 5.183213 $ 4.059808
North American - AG 1 Money Market
Division 6.......................... 9,613,663 $1.856681 -- -- 5,325,479 $ 1.786658 $ 1.766523
North American - T. Rowe Price
Science & Technology Division 17.... 11,744,052 $6.462689 -- -- 3,228,389 $ 3.241847 $ 2.224499
North American - AG Small Cap Index
Division 14......................... 522,127 $2.558263 -- -- 58,825 $ 2.125983 $ 1.824939
North American - AG Social Awareness
Division 12......................... 3,028,346 $4.502622 -- -- 1,218,871 $ 3.825649 $ 3.189972
North American - AG Stock Index
Division 10......................... 18,855,858 $5.830950 -- -- 6,859,835 $ 4.875028 $ 4.055730
American Century Ultra Division 31.... 20,827,045 $2.437771 -- -- 8,116,612 $ 1.737734 $ 1.415646
North American - AG Conservative
Growth Lifestyle Division 50........ 246,969 $1.310337 -- -- -- $ 1.162825 $ 1.025529
North American - AG Core Bond Division
58.................................. 10,700 $1.012353 -- -- -- $ 1.029846 $ 1.012533
North American - AG Aggressive Growth
Lifestyle Division 48............... 46,149 $1.542278 -- -- -- $ 1.193346 $ 1.014536
North American - AG High Yield Bond
Division 60......................... 2,397 $1.078842 -- -- -- $ 1.053808 $ 1.000539
North American International Growth
Division 33......................... 5,641 $1.639279 -- -- -- $ 1.052437 $ 0.941565
North American - Goldman Sachs Large
Cap Growth Division 39.............. 95,862 $1.671932 -- -- -- $ 1.241613 $ 1.011535
North American - State Street Large
Cap Value Division 40............... 221 $1.306351 -- -- -- $ 1.247414 $ 1.070508
North American - INVESCO MidCap Growth
Division 37......................... 1,244 $1.426935 -- -- -- $ 1.348594 $ 1.069509
North American - Neuberger Berman
MidCap Value Division 38............ 142,103 $1.525696 -- -- -- $ 1.255563 $ 1.049518
North American - AG Moderate Growth
Lifestyle Division 49............... 213,355 $1.401340 -- -- -- $ 1.186235 $ 1.025530
North American - AG 2 Money Market
Division 44......................... 1,844,830 $1.056406 -- -- -- $ 1.013993 $ 1.002447
North American - J.P. Morgan Small Cap
Growth Division 35.................. 119,661 $2.278700 -- -- -- $ 1.350262 $ 1.075508
North American Small Cap Value
Division 36......................... 232 $1.083393 -- -- -- $ 1.166035 $ 1.035526
North American - AG Socially
Responsible Division 41............. 106,148 $1.501310 -- -- -- $ 1.278609 $ 1.065511
North American - AG Strategic Bond
Division 59......................... -- $1.084842 -- -- -- $ 1.050579 $ 1.011533
Evergreen Equity Trust
Evergreen Growth and Income Division
56................................ 5,326 $1.135195 -- $1.00 -- -- --
Evergreen Small Cap Value Division
55................................ -- $0.997510 -- $1.00 -- -- --
Evergreen Value Division 57......... -- $1.036194 -- $1.00 -- -- --
Franklin Templeton Variable Insurance
Products Trust
Templeton Asset Strategy -- Class 1
Division 19(3).................... 485,669 $2.102090 -- -- -- $ 1.728553 $ 1.429596
Putnam Global Growth -- Class A
Division 28......................... 11,313,375 $2.530785 -- -- 6,153,771 $ 1.549587 $ 1.266657
Putnam New Opportunities -- Class A
Division 26......................... 19,231,737 $2.414279 -- -- 10,725,927 $ 1.434946 $ 1.124122
Putnam OTC & Emerging Growth -- Class
A Division 27....................... 6,570,152 $2.471391 -- -- 3,092,839 $ 1.098295 $ 0.859512
Templeton Foreign -- Class A Division
32.................................. 8,660,425 $1.617785 -- -- 5,437,288 $ 1.094954 $ 0.944980
Vanguard LifeStrategy Conservative
Growth Division 54.................. 375,819 $1.156739 -- -- -- $ 1.084591 $ 1.023206
Vanguard LifeStrategy Growth Division
52.................................. 1,468,333 $1.356289 -- -- -- $ 1.168716 $ 1.032908
Vanguard LifeStrategy Moderate Growth
Division 53......................... 2,152,244 $1.248092 -- -- -- $ 1.126506 $ 1.023505
Vanguard Long-Term Corporate Division
22.................................. 4,060,325 $1.220562 -- -- 2,949,044 $ 1.312731 $ 1.294131
Vanguard Long-Term Treasury Division
23.................................. 7,578,662 $1.222216 -- -- 3,682,809 $ 1.349397 $ 1.340270
Vanguard Wellington Division 25....... 28,195,817 $1.580569 -- -- 19,636,072 $ 1.529797 $ 1.423024
Vanguard Windsor II Division 24....... 20,846,053 $1.606241 -- -- 13,800,156 $ 1.723020 $ 1.509170
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<C> <S>
(1) Purchase Unit Value At Date Of Inception.
(2) 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.
(3) Effective May 1, 2000 the Templeton Asset Allocation Fund
merged with the Templeton Global Asset Allocation Fund. At
the same time as the merger, the Templeton Asset Allocation
Fund changed its name to the Templeton Asset Strategy Fund.
Accordingly, the Templeton Asset Allocation Fund Division 19
was renamed the Templeton Asset Strategy Fund Division 19.
The Selected Purchase Unit Data for the Division through
December 31, 1999, reflects units of the Templeton Asset
Allocation Fund Division 19.
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